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2001 06 05 RDA Minutes LA QUINTA REDEVELOPMENT AGENCY MINUTES JUNE 5, 2001 A regular meeting of the La Quinta Redevelopment Agency was called to order by Chairperson Henderson. PRESENT: Board Members Adolph, Pe~a, Perkins, Sniff, Chairperson Henderson ABSENT: None PUBLIC COMMENT - None CLOSED SESSION 1. Conference with Agency's real property negotiator, Mark Weiss, pursuant to Government Code Section 54956.8 concerning potential terms and conditions of acquisition and/or disposition of real property located southeast of the Miles Avenue and Washington Street intersection and north of the Whitewater Channel. Property Owner/Negotiator: CW La Quinta. 2. Conference with Agency's real property negotiator, Mark Weiss, pursuant to Government Code Section 54956.8 concerning potential terms and conditions of acquisition and/or disposition of real property located at the terminus of Avenue 62 and west of Madison Street. Property Owner/Negotiator: Travertine. 3. Conference with Agency's real property negotiator, Mark Weiss, pursuant to Government Code Section 54956.8 concerning potential terms and conditions of acquisition and/or disposition of real property located on the west side of Washington Street, north of Avenue 48 (APN: 643-090-024). Property Owner/Negotiator: La Quinta Arts Foundation. The Agency recessed to Closed Session to and until the hour of 7:00 pm. 7:00 P.M. The Agency reconvened with Board Member Perkins absent due to illness. PUBLIC COMMENT - None -- CONFIRMATION OF AGENDA - Confirmed Redevelopment Agency Minutes 2 June 5, 2001 APPROVAL OF MINUTES MOTION - It was moved by Board Members Sniff/Adolph to approve the Minutes of May 15, 2001, as submitted. Motion carried unanimously with Board Member Perkins ABSENT. CONSENT CALENDAR 1. APPROVAL OF DEMAND REGISTER DATED JUNE 5, 2001. 2. AUTHORIZATION FOR OVERNIGHT TRAVEL TO NEW YORK, NY, JULY 18-22, 2001 FOR BOND TRANSACTION(S) FOR THE FOLLOWING: MAYOR, RDA CHAIRPERSON, EXECUTIVE DIRECTOR, ASSISTANT CITY MANAGER, COMMUNITY DEVELOPMENT DIRECTOR, AND FINANCE DIRECTOR. MOTION - It was moved by Board Members Sniff/Adolph to approve the Consent Calendar as recommended. Motion carried unanimously with Board Member Perkins ABSENT. BUSINESS SESSION 1. CONSIDERATION OF AN AFFORDABLE HOUSING REHABILITATION AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND LAWRENCE RAEL FOR THE PROPERTY LOCATED AT THE SOUTHEAST CORNER OF EISENHOWER DRIVE AND CALLE TAMPICO. Community Development Director Herman presented the staff report. In response to Board Member Sniff, Mr. Herman advised security gating will be utilized to secure the off-street parking for the apartment complex. Board Member Adolph voiced concern about spending $350,000 of taxpayer's money to obtain 14 affordable housing units. He questioned it being called a loan instead of a gift since the amount does not have to be repaid. Frank Spevacek, consultant with RSG, explained the loan structure provides a Second Trust Deed to secure the 14 units. The Second Trust Deed secures the maintenance and occupancy requirements, as well as Mr. Rael's performance in making th'e improvements and reserving the 14 units at affordable rents for 30 years. A grant would not provide a way for the City to enforce the affordable housing provisions. He advised the funds will be dispersed to the Redevelopment Agency Minutes 3 June 5, 2001 development entity instead of Mr. Rael and the funds will not be released until the property is purchased and the improvements have been made. He explained the Covenants stay with the property even if it's sold unless the new property owner chooses to pay off the loan amount plus interest. Any change in ownership must be approved by the Agency. In response to Board Member Adolph, Mr..Spevacek stated the First Trust Deed against the property is for $973,000. By providing the Second Trust Deed loan, the Agency obtains 14 affordable housing units and can impose maintenance requirements on the apartment complex. He noted the City will be audited in November by the Department of Housing and Community Development on how the City is meeting its housing production requirements and expending its affordable housing funds. In response to Board Member Pe~a, Mr. Spevacek confirmed the proposed loan agreement is similar to the one with Spanos for affordable housing units. Board Member Adolph noted the Spanos apartments are new units and these need rehabilitation. Board Member PeRa asked if the Agency would hold a first on the purchase of the parking lot since it's not a part of the current apartment complex. Agency Counsel Ramirez advised he would look into that issue. Board Member Sniff stated he felt the loan amount is high for what the City is getting. He questioned giving a 30-year loan for apartments that are in "dire" need of rehabilitation after 25 years and asked how the owner would do further improvements as the apartments continue to age before the 30-year period ends. He agreed the apartments need rehabilitation but noted they were poorly constructed and questioned them having basic construction value. Board Member Pe~a stated he felt there are other issues to consider such as the significant investment going in across the street. He felt it's a wise expenditure of redevelopment funds. Chairperson Henderson concurred. In response to Board Member Sniff, Mr. Spevacek stated there is no appraisal report but the estimated value based on rentals is approximately $1.4 million. Board Member Sniff noted that doesn't provide a lot of margin for value that the owner has in the property. Redevelopment Agency Minutes 4 June 5, 2001 Mr. Spevacek confirmed the owner has done some improvements to the interior of the apartments. He stated the Second Trust Deed loan brings the apartment complex to the 95% loan-to-value ratio defined in the agreement. Chairperson Henderson stated she felt the Agency's overall concern is to realize an increase of 14 affordable housing units for 30 years. RESOLUTION NO. RA 2001-01 A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING AN AFFORDABLE HOUSING REHABILITATION AGREEMENT BETWEEN THE AGENCY AND LA QUINTA 34 LLC (LA QUINTA PALMS APARTMENTS - LAWRENCE RAEL). It was moved by Board Member Peha and Chairperson Henderson to adopt Resolution No. RA 2001-01 as submitted. Board Member Sniff asked if the Agency has any other options for expenditure of these funds that would provide significant affordable housing units. Mr. Spevacek stated prior to the prevailing wage issue coming up, staff had been looking to change the Second Trust Deed Program wherein the amount for moderate-income units would be increased to $30,000 or $40,000 in order to gain more units north of Avenue 50. He stated in order to obtain affordable units on new construction, the moderate-income units are running approximately $80,000 per unit and very-low and Iow-income units are up to 9150,000 per unit. In response to Board Member Sniff, Mr. Spevacek advised the affordable housing units will rent for $850 to 1,200 a month - they currently rent for 91,000to 91,200 monthly. He stated the attorneys are still working out some minor details of the agreement and he recommended the Executive Director be authorized to make minor modifications to the agreement. Motion carried with Board Member Adolph voting NO and Board Member Perkins ABSENT. STUDY SESSION - None DEPARTMENT REPORTS - None Redevelopment Agency Minutes 5 June 5, 2001 CHAIR AND BOARD MEMBERS' ITEMS - None PUBLIC HEARINGS - None The Agency recessed to Closed Session as delineated on Page 1. The Agency meeting reconvened with no decisions being made in Closed Session which require reporting pursuant to Section 54957.1 of the Government Code (Brown Act). There being no further business the meeting was adjourned. Respectfully submitted, JUNE S. GREEK, Agency Secretary La Quinta Redevelopment Agency