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HomeMy WebLinkAbout04 - JOINT DDA OLSON (3)REQUEST FOR COUNCIL! AGENCY ACTION MEETING DATE: NOVEMBER 17, 2008 TITLE: PUBLIC HEARING - DISPOSITION AND DEVELOPMENT AGREEMENT WITH OLSON URBAN HOUSING LLC ~ ~ `.`- CITY MANAGER EXECUTIVE DIRECTOR RECOMMENDED ACTION CITY COUNCIL ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 1st Reading ^ Ordinance on 2nd Reading ^ Implementing Resolution ^ Set Public Hearing For CONTINUED TO ~ ~~ ~~ FILE NUM6ER 1. Direct the City Attorney to prepare and authorize the City Manager and the Clerk of the Council to execute a purchase agreement with the Redevelopment Agency for the sale of real property located at 719-812 N. Concord for its appraised value plus normal escrow and closing costs. 2. Adopt a resolution regarding the sale of 2034 N. Bush, 2038 N. Bush, corner of N. Spurgeon and E. 22nd, 1314 Eastwood, 719 N. Concord, 812 N. Concord, 542 E. Central, 1029 McLean, 4010 & 4018 W. McFadden, 4106 W. McFadden, 4110 W. McFadden, 4809 W. Edinger to Olson Urban Housing LLC for the development of twenty affordable, single-family homes. COMMUNITY REDEVELOPMENT AGENCY ACTION 1. Authorize the Executive Director to execute a purchase agreement with the City of Santa Ana for the acquisition of real property located at 719-812 N. Concord for its appraised value plus normal escrow and closing costs. 2. Adopt a resolution approving a Disposition and Development Agreement between the Community Redevelopment Agency and Olson Urban Housing LLC for the development of twenty affordable, single-family homes at 2034 N. Bush, 2038 N. Bush, corner of N. Spurgeon and E. 22nd, 1314 4-21 Public Hearing - DDA with Olson November 17, 2008 Page 2 Eastwood, 719 N. Concord, 812 N. Concord, 542 E. Central, 1029 McLean, 4010 & 4018 W. McFadden, 4106 W. McFadden, 4110 W. McFadden, 4809 W. Edinger. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its Regular Meeting of October 21, 2008, by a vote of 6:0, the Community Redevelopment and Housing Commission approved the following recommendations: (1) that the recommendation be amended to include military veterans, who either work or live in the City, be given priority during the lottery process; (2) that the City Council hold a public hearing and approve a resolution regarding the sale of 2034 N. Bush, 2038 N. Bush, corner of N. Spurgeon and E. 22nd, 1314 Eastwood, 719 N. Concord, 812 N. Concord, 542 E. Central, 1029 McLean, 4010 & 4018 W. McFadden, 4106 W. McFadden, 4110 W. McFadden, 4809 W. Edinger to Olson Urban Housing LLC for the development of twenty affordable single-family homes; and (3) that the Community Redevelopment Agency adopt a resolution approving a Disposition and Development Agreement between the Community Redevelopment Agency and Olson Urban Housing LLC for the development of twenty affordable single-family homes at 2034 N. Bush, 2038 N. Bush, corner of N. Spurgeon and E. 22nd, 1314 Eastwood, 719 N. Concord, 812 N. Concord, 542 E. Central, 1029 McLean, 4010 & 4018 W. McFadden, 4106 W. McFadden, 4110 W. McFadden, 4809 W. Edinger. DISCUSSION A key objective of the Redevelopment Agency (Agency) is to expand and preserve affordable housing. As such, the Agency is proposing to convey eight Agency-owned sites to accommodate the development of 20 single- family homes. Many of these sites were acquired as a result of street and freeway widening activities. Olson Urban Housing LLC (Olson) was selected by means of a Request for Qualifications process. On October 1, 2007, the Agency directed staff to enter into negotiations with Olson for the preparation of a Disposition and Development Agreement (DDA) that would ensure construction and sale of quality affordable housing. Negotiations are now concluded and we are prepared to move forward with the DDA. The terms of the DDA provide that the Agency will sell eight developable sites to Olson and provide them with a $2.45 million construction loan. Of the 20 homes, 13 will be sold to moderate-income (1200 of area median income (AMI)) families and the remaining 7 will be sold to low-income (80o AMI) families. Exhibit 1 shows the current maximum household income as adjusted for household size, as well as the current maximum affordable sales prices. The homes will be sold through a lottery process to be organized and conducted by Olson. Preference 4 - 22 Public Hearing - DDA with Olson November 17, 2008 Page 3 a lottery process to be organized and conducted by Olson. Preference will be given to households, including veterans, who live or work in Santa Ana. The future sale of these properties will be income restricted for a period of forty-five years in accordance with California Redevelopment Law. Although Exhibit 1 reflects the maximum allowable by State law, the proposed sales prices for the moderate income homes are $240,000 - $299,000 due to current market conditions and sales listings/comparables in their specific location. These prices will be evaluated prior to sale to determine if the fair market value has increased. Exhibit 2 shows the phases, addresses, and affordability level of each proposed home. Per the DDA, Olson will begin the entitlement process within 30 days and anticipates commencing construction in August 2009. The sites will be conveyed in two separate phases. Of the 20 homes, twelve have three bedrooms and two baths. The remaining eight homes have four bedrooms and two baths. The homes are either 1200 square feet or 1435 square feet. The homebuyers will be responsible for obtaining their own first mortgage financing. Low income homebuyers may be eligible for second mortgage, down payment assistance loans offered by the City through the federal American Dream Down Payment Initiative Program (ADDI). The Agency will record a trust deed (silent-second) on each property in an amount equal to the difference between the fair market value of the home and the affordable sales price. The property at 719 and 812 N. Concord is currently owned by the City of Santa Ana and was recently appraised for the amount of $730,000. Before it can be sold to Olson as contemplated in the DDA, it must first be purchased by the Agency. ENVIRONMENTAL COMPLIANCE Developer negotiations and preparation of a conceptual development plan do not constitute a project under CEQA guidelines. 4 - 23 Public Hearing - DDA with Olson November 17, 2008 Page 4 FISCAL IMPACT Funds for the Agency acquisition are available in the Low and Moderate Income Housing Fund Infill New Construction account (no. 507-936-6611). Proceeds from the sale of the property to the Community Redevelopment Agency will be deposited in the Capital Outlay Fund revenue account (no. 051-01-5721). Funds for the DDA are available in the Tax Increment Housing Set-Aside account (no. 507-936-6631). Proceeds from the sales of the homes shall be deposited in the Tax Increment Housing Set-Aside Sale of Land Revenue account (no. 507-O1-5721). APPROVED AS TO FUNDS AND ACCOUNTS: Shelly Landry-Bayle ~/~ Housing Manager r Community Development Agency ~~~~~~ Francisco Gutierrez ~ Executive Director Finance and Management Services CJN/SLB/mlr 111708 JT P H CC-CRA Scattered Infill Lots (3) 4 - 24 Income Ranges Max. Low Income Max. Mod. Income One Person $47,100 $70,600 Two Persons $53,800 $80,700 Three Persons $60,600 $90,800 Four Persons $67,300 $100,900 Five Persons $72,700 $109,000 Six Persons $78,000 $117,000 Seven Persons $83,400 $125,100 Eight Persons $88,800 $133,200 Affordable Sales Prices Income Level Sales Price Three Bedrooms Sales Price Four Bedrooms Moderate Income $336,700 $361,700 Low Income $160,700 $171,700 Exhibit 1 4 - 25 LA VETA AV. ~~ • ---- 22 id 55 Gn'RDEN GRJ'iE 3L. i o, ~ ~ trr* J C r 22~; ~ z i; v C` ', ` ~ sariTa CLARa : ~ TRAS~c A ~ , _ , . ~ ~ A © 4. r ~, 77TH ST ! ' ~ ~ ~ © e ~ GVASHirEuTG?•! AU. • i 5' I CI"JIC CENTER DR ~ z oTH ST. NTH Ss • ---- - . __ ~ ~; SAt~iT AANA BL `' 4TH ST. • _ _ 1ST S'r. n o w i~ > = ~ I ~ 4 L ^ ~ C ~ ~ ~ ~ ~ m ~ ~ Z ~ ' i h1CFAD DEN kL`. ~ c i ^ • ~ PACFADDEN A"J -' ~ ~^ ^ ~ ~ I ~ ~ ~ EDINGER AW. s o w ~ a = ~ ~ +, f ST. AP1DRE lN PL. s ~ ~ ' 3 z w ! c S` 55 ~~ r ~ SEuERSTRONI DYER RD % ALTON Atii. n z ALTON A`v. ` \ ~ •~ ^ t:~IACARTHllR 3t. I + SU8dFL0'WER A'~:. ~ ~~ 2 i ii 405 z c~ Scattered Infill Lots PHASE I (11 houses) Site Location Unit Count AMI A 2034 N. Bush Street 2038 N. Bush Street 2 ao% B N. Spurgeon & E. 22~d St 3 120% C 1314 Eastwood Avenue 1 120% D 719 N. Concord Street 812 N. Concord Street 3 (2- 4 bdrms) 120% H 542 E. Central Avenue 2 (4 bdrms) gOgO PHASE II (9 houses} Site Location Unit Count AMI E 1029 McLean Drive 1 (4 bdrms) 120% F 4010 & 4018 W. McFadden Ave. 4106 W. McFadden Avenue 2 (4 bdrms) 80% 4110 W.McFadtlen Avenue 5 120% G 4809 W. Edinger Avenue 1 (4 bdrms) 80% 13 Total 120% AMI 7 Total 80% AMI Exhibit 2 4 - 26 RESOLUTION NO. 2008- A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE AGENCY AND OLSON URBAN HOUSING, LLC BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1: The Board of the Community Redevelopment Agency of the City of Santa Ana hereby finds, determines and declares as follows: A. The Community Redevelopment Agency of the City of Santa Ana (hereinafter referred to as the "Agency") is engaged in activities necessary to execute and implement the Redevelopment Plan for the Merged Redevelopment Project Areas (the "Redevelopment Plan"), including strengthening of public-private partnerships to provide more affordable housing, and particularly to provide decent, safe, sanitary, and affordable housing to the lower income citizens of the City of Santa Ana. B. In order to implement the Redevelopment Plan, the Agency has agreed, subject to the approval of the City Council, to sell certain real property located at: 2034 N. Bush, 2038 N. Bush, the corner of North Spurgeon and E. 22"d, 1314 Eastwood, 719 N. Concord, 812 N. Concord, 542 E. Central, 1029 McLean, 4010 & 4018 W. McFadden, 4106 W. McFadden, 4110 W. McFadden, 4809 W. Edinger (the Properties) pursuant to the terms and provisions of a Disposition and Development Agreement (hereinafter referred to as the "Agreement") between the Agency and Olson Urban Housing, LLC, a Delaware limited liability company, which is on file in the office of the Executive Director of the Agency, in which said real property, is described. C. Olson Urban Housing, LLC proposes to develop, construct, market and sell these twenty (20) single family homes to income qualified households. Of the twenty homes, thirteen will be sold to moderate income families, and the remaining eight will be sold to low income families. The term of affordability on each of the homes will be for forty- five years. 1 4 - 27 D. The Agreement contains all of the provisions, terms, conditions and obligations required by the state and local laws. E. Olson Urban Housing, LLC, possesses the qualifications and financial resources necessary to acquire and insure development of the Properties, in accordance with the purpose and objectives of the Redevelopment Plan. F. Pursuant to the provisions of the California Redevelopment Law, the Agency and the City Council have held a duly noticed joint public hearing on the proposed sale of the Properties. Section 2. The Disposition and Development Agreement is hereby approved, and the Executive Director of the Agency is hereby authorized to execute the Agreement, with such non-substantive changes as may be approved by Agency's General Counsel. Section 3. The Executive Director of the Agency is hereby authorized to take all steps, and to sign all documents and instruments necessary to implement and carry out the Agreement on behalf of the Agency. 2 4 - 28 ADOPTED this day of , 2008. Miguel A. Pulido Chair APPROVED AS TO FORM: Joseph W. Fletcher, General Counsel By: Lisa E. Storck Assistant General Counsel AYES: NOES: ABSTAIN: NOT PRESENT Boardmembers: Boardmembers: Boardmembers: Boardmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, JOHN P. REEKSTIN, Secretary of the Agency, do hereby attest to and certify the attached Resolution No. to be the original resolution adopted by the Community Redevelopment Agency of the City of Santa Ana on Date: Secretary Community Redevelopment Agency of the City of Santa Ana 3 4 - 29 THIS PAGE LEFT INTENTIONALLY BLANK 4 - 30