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RDA Resolution 2006-012 RESOLUTION NO. RA 2006-012 A RESOLUTION OF THE LA QUINT A REDEVELOPMENT AGENCY APPROVING A PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS BY AND BETWEEN THE AGENCY AND FRANK R. GOODMAN AND ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP, FOR THE AGENCY'S PURCHASE OF AN EXISTING AFFORDABLE HOUSING DEVELOPMENT FRANK R. GOODMAN AND ASSOCIATES PURCHASE AND SALE AGREEMENT WHEREAS, the La Ouinta Redevelopment Agency (" Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000, et seq.) ("CRL"); and WHEREAS, pursuant to the CRL, the City Council. of the City of La Ouinta ("City" or "City Council," as applicable) approved and adopted the Redevelopment Plan ("Redevelopment Plan") for Project Area No. 2 ("Project Area"), on May 16, 1989, by Ordinance No. 139; and WHEREAS, a fundamental purpose of the CRL is to expand the supply of low- and moderate-income housing (Health & Saf. Code, ~ 33071); and WHEREAS, the Agency staff has negotiated a Purchase and Sale Agreement and Escrow Instructions ("Agreement") with Frank R. Goodman and Associates, a California limited partnership ("Seller"), for the Agency's purchase of an existing 73-unit affordable housing apartment complex, commonly known as the Washington Street Apartments (the "Project"), located at 42-800 Washington Street, in unincorporated territory in the County of Riverside, State of California (the "Property"), for Six Million One Hundred Twenty Thousand Dollars ($6,120,000) (the "Purchase Price"); and WHEREAS, the Project is covenanted for occupancy by low income persons who are either senior citizens or handicapped persons for 26 additional years; and WHEREAS, the Project is encumbered with a loan from the United States of America, acting through the Farmer's Home Administration, United States Department of Agriculture ("USDA"), as holder, in the original principal amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the "USDA Loan"), and Resolution RDA No. 2006-012 Frank R. Goodman and Associates Purchase and Sale Agreement Adopted: September 5, 2006 Page 2 a loan from Provident Savings Bank ("Provident"), as holder, in the original principal amount of One Million Six Hundred Ninety-Six Thousand Dollars ($1,696,000) ("Provident Loan"). The outstanding amount of the USDA Loan is approximately Eight Hundred Twenty-Two Thousand Six Hundred Twenty-Two Dollars ($822,622), and the outstanding amount of the Provident Loan is approximately One Million Six Hundred Seventeen Thousand Five Hundred Dollars ($1,617,500). The Purchase Price is all-inclusive, and includes the Agency assuming the USDA Loan and the Provident Loan; and WHEREAS, concurrently with the consideration of this Agreement, the Agency Board is considering (i) an Agreement for Purchase and Sale and Escrow Instructions by and between the Agency and The Testa Family Limited Partnership (the "T esta Agreement") for the Agency's purchase of certain adjacent real property that is also located in the unincorporated territory in the County of Riverside (the "Testa Property"), and (ii) a Financing Agreement by and between the Agency and the City that provides for the City to loan funds to the Agency to pay for all costs incurred by the Agency pursuant to the Agreement prior to the City's annexation of the Property into City limits (the "Financing Agreement"); and WHEREAS, the conditions to the closing under the Agreement include (i) that the closing under the Testa Agreement will occur simultaneously, and (ii) that the City has completed annexation proceedings for the Property and the Testa Property, and that such annexation has occurred, will occur simultaneously with the closing, or is imminent; and WHEREAS, the Agreement requires the Seller to provide the Agency with various documentation pertaining to the Project and Property, including a "rent roll" and information regarding the income status of the tenants, and provides the Agency with' a due diligence period during which the Agency will (i) inspect the Project and Property and the information and documentation provided by the Seller, (ii) negotiate the Agency's assumption of the USDA Loan and Provident Loan, and (iii) process the annexation of the Property and the Testa Property into the City; and WHEREAS, subsequent to the City's annexation of the Property and the Testa Property into the City and the Agency's acquisition of said properties, the Agency Board contemplates commencing the necessary actions to amend the Redevelopment Plan to include the Property and the Testa Property in the Project Area; and Resolution RDA No. 2006-012 Frank R. Goodman and Associates Purchase and Sale Agreement Adopted: September 5,2006 Page 3 WHEREAS, the Agency has determined that, pursuant to Health and Safety Code Section 33334.4, the Agency's expenditure of Low and Moderate Income Housing Funds over the ten-year period set forth in the Agency's housing implementation plan will assist housing for persons of low income and housing for persons of very low income in at least the same proportion as the total number of housing units needed for each of those income groups bears to the total number of units needed for persons of moderate, low, and very low income within the City as those needs have been determined for the City pursuant to Section 65584 of the Government Code; and WHEREAS, the Agreement is in accordance with the Redevelopment Plan and is of benefit to the Project Area and the City of La Ouinta. . NOW, THEREFORE, BE IT RESOLVED BY THE LA OUINTA REDEVELOPMENT AGENCY AS FOLLOWS: Section 1. That the above recitals are true and correct and incorporated herein. Section 2. The Agreement, a copy of which is on file with the Agency Secretary, is hereby approved, subject to (i) the Agency's approval of the Testa Agreement and (ji) the Agency's and City Council's approval of the Financing Agreement. The Agency Executive Director and Agency Counsel are hereby authorized and directed to make final modifications to the Agreement that are consistent with the substantive terms of the Agreement approved hereby, and the Agency Executive Director is authorized to thereafter sign said Agreement on behalf of the Agency. Section 3. The Agency Executive Director is authorized and directed, on behalf of the Agency, to (i) sign such other and further documents, including but not limited to escrow instructions that require the Agency's signature, and (ii) take such other and further actions, as may be necessary and proper to carry out the terms of the Agreement.:. PASSED, APPROVED, AND ADOPT.ED at a regular meeting of the La Ouinta Redevelopment Agency held this 5th day of September, 2006, by the following vote: Resolution RDA No. 2006-012 Frank R. Goodman and Associates Purchase and Sale Agreement Adopted: September 5,2006 Page 4 AYES: Members Adolph, Henderson, Kirk, Chair Osborne NOES: None ABSENT: Member Sniff ABSTAIN: None ATTEST: ~~L-:tl-~I 0 CL_ DEBORAH H. POWELL, Interim Agency Secretary La o.uinta Redevelopment Agency (SEAL) APPROVED AS TO FORM: