2007 01 16 RDARedevelopment Agency agendas are
available on the City' web page
@ www.la-quinta.org
REDEVELOPMENT AGENCY
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
TUESDAY, JANUARY 16, 2007 - 3:00 P.M.
Beginning Resolution No. RA 2007-001
CALL TO ORDER
Roll Call:
Agency Board Members: Adolph, Henderson, Kirk, Sniff, and Chairman Osborne
PUBLIC COMMENT
At this time, members of the public may address the Redevelopment Agency on
any matter not listed on the agenda. Please complete a "request to speak" form
and limit your comments to three minutes.
CLOSED SESSION
NOTE: Time permitting the Redevelopment Agency Board may conduct Closed
Session discussions during the dinner recess. In addition, persons identified as
negotiating parties are not invited into the Closed Session meeting when acquisition
of real property is considered.
1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS
R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8
CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION
AND/OR DISPOSITION OF REAL PROPERTY IDENTIFIED AS APN
649-030-16, AND -017. PROPERTY OWNER/NEGOTIATOR: SANTA ROSA
DEVELOPMENT, MICHAEL SHOVLIN.
Redevelopment Agency Agenda 1 January 16, 2007 1001
RECESS TO CLOSED SESSION
RECONVENE AT 4:00 P.M.
PUBLIC COMMENT
At this time members of the public may address the Redevelopment Agency on any
matter not listed on the agenda. Please complete a "request to speak" form and
limit your comments to three minutes.
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
1. APPROVAL OF MINUTES OF DECEMBER 19, 2006
2. APPROVAL OF MINUTES OF JANUARY 2, 2007
CONSENT CALENDAR
NOTE: Consent Calendar items are considered to be routine in nature and will be
approved by one motion.
APPROVAL OF DEMAND REGISTER DATED JANUARY 2 AND 16, 2007.
2. RECEIVE AND FILE TRANSMITTAL OF TREASURER'S REPORT DATED
NOVEMBER 30, 2006.
3. RECEIVE AND FILE TRANSMITTAL OF REVENUE AND EXPENDITURES
REPORT FOR NOVEMBER 30, 2006 AND INVESTMENT SUMMARY REPORT
FOR THE QUARTER ENDING DECEMBER 31, 2006. .
BUSINESS SESSION - NONE
STUDY SESSION - NONE
CHAIR AND BOARD MEMBERS' ITEMS - NONE
Redevelopment Agency Agenda 2 January 16, 2601 f� O
v- V
PUBLIC HEARINGS
For all Public Hearings on the agenda, a completed "request to speak" form must
be filed with the City Clerk prior to consideration of that item.
1. JOINT PUBLIC HEARING BETWEEN THE CITY COUNCIL AND
REDEVELOPMENT AGENCY TO CONSIDER A REVISED AFFORDABLE
HOUSING AGREEMENT BETWEEN THE AGENCY AND SANTA ROSA
DEVELOPMENT, INC., TO INCREASE THE AGENCY'S FUNDING FOR THE
HOMEBUYER SILENT SECOND TRUST DEED MORTGAGE LOANS BY $4.5
MILLION, THUS EXPANDING THE INCOME LEVELS OF THE HOMEBUYERS
FOR THE PROPERTY LOCATED WITHIN THE WATERCOLORS HOUSING
PROJECT AT AVENUE 48 AND ADAMS STREET.
A. MINUTE ORDER ACTION
ADJOURNMENT
Adjourn to a regularly scheduled meeting of the Redevelopment Agency to be held
on February 6, 2007, commencing with closed session at 3:00 p.m. and open
session at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico,
La Quinta, CA 92253.
DECLARATION OF POSTING
I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that
the foregoing agenda for the La Quinta Redevelopment Agency meeting of January
16, 2007 was posted on the outside entry to the Council Chamber at 78-495 Calle
Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630
Highway 111, on January 12, 2007.
DATED,r January 12, 2007
iONICA J ONTECINO, City Clerk
City of La Quinta, California
6,O3
Redevelopment Agency Agenda 3 January 16, 2007
AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: January 16, 2007 BUSINESS SESSION:
ITEM TITLE: Demand Register Dated Jan. 02, 2007 CONSENT CALENDAR: /
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and File the Demand Register Dated Jan. 02, 2007 of which
$399,300.11 represents Redevelopment Agency Expenditures.
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
2
004
j
AGENDA CATEGORY:
COUNCIL/RDA MEETING DATE: January 16, 2007 BUSINESS SESSION:
ITEM TITLE: Demand Register Dated Jan. 16, 2007 CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and File the Demand Register Dated Jan. 16, 2007 of which
$567,353.65 represents Redevelopment Agency Expenditures.
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
E
C05
D 04zf 4"Arzi
c`0e OF
COUNCIL/RDA MEETING DATE: January 16, 2007 AGENDA CATEGORY:
BUSINESS SESSION:
ITEM TITLE: Transmittal of Treasurer's Report as of —^
November 30, 2006 CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
Receive and File.
PLEASE SEE RELATED BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
006
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cFM of Tttr'9
COUNCIL/RDA MEETING DATE: January 16, 2007
ITEM TITLE: Transmittal of Revenue and Expenditure
Report for November 30, 2006 and Investment
Summary Report for the Quarter Ending December 31,
2006
RECOMMENDATION:
Receive and File.
FISCAL IMPLICATIONS:
None.
CHARTER CITY IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING: _
Transmittal of the November 30, 2006 Statement of Revenue and Expenditures and
Investment Summary Report for the Quarter Ending December 31, 2006 for the La
Quinta Redevelopment Agency.
G 007
Respectfully submitted,
John M. Falconer, Finance Director
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachments: 1. Revenue and Expenditures Report, November 30, 2006
2. Investment Summary Report for the Quarter Ending
December 31, 2006
2
141 l H1onivi C1Y 1 1
LA OUINTA REDEVELOPMENT AGENCY
REVENUE SUMMARY
PROJECT AREA NO. 1:
LOW/MODERATE BOND FUND:
Allocated Interest
Home Sale Proceeds
Non Allocated Interest
Transfer In
TOTAL LOWIMOD BOND
LOW/MODERATE TAX FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Miscellaneous revenue
Non Allocated Interest
LORP-Rent Revenue
Home Sales Proceeds
Sale of Land
Sewer Subsidy Reimbursements
Rehabilibdion Loan Repayments
2nd Trust Deed Repayment
Transfer In
TOTAL LOWIMOD TAX
0710112006. 11/30MOOS REMAINING %
BUDGET RECEIVED BUDGET RECEIVED
000
0.00
0.00
0.000%
0.00
0.00
000
0.000%
000
000
000
0000%
000
0 00
0.00
0000%
000
000
000
0 000%
81915.100.00
302,432.79
8,612,66721
3.390%
333,300 00
'100,526.05
232,773.95
30.160%
0.00
7.216.71
(7,216.71)
0.000%
000
8197
(81,97)
0.000%
000
0.00
0.00
0.000%
252.00000
95,752.42
156,24758
38,000%
480,000.00
311.092 38
168,907.62
64 810%
000
0.00
0.00
0.000%
0.00
15,112.89
(15,11289)
0.000%
0.00
000
000
0000%
0.00
626,16626
(626,166.26)
0.000%
140 000 00
100 000 00
40,00000
71 A30%
10.120,400.00
1.558,381.47
8,562,018.53
15.4W%
DEBT SERVICE FUND:
Tax Increment
36,430.900.00
1,209.731.21
34,221,158.79
3.410%
Allocated Interest
93,100.00
154,643.13
(61,443,13)
166.000%
Non Allocated Interest
0.00
0.00
0.00
0,000%
Inlersl- County Loan
000
0.00
0.00
0.000%
Interest Advance Proceeds
0.00
0.00
0.00
0.000%
Transfers In
444830400
209614509
1552168.91
65110%
TOTAL DEBT SERVICE
39,972,304.00
4,260,41943
35.711,88467
10660%
CAPITAL IMPROVEMENT FUND -NON-TAXABLE
Pooled Cash Allocated Interest
12,500.00
58,777A4
(46,277.44)
470.220%
Non Allocated Interest
500,000 00
414,796.22
85,203.78
82.960%
Litigation Settlement Revenue
0.00
000
000
0.000%
Loan Proceeds
0.00
000
000
0000%
Rental Income
0.00
0.00
0.00
0.000%
Transfers In
2,500,000 00
000
2500000.00
0.000%
TOTAL CAPITAL IMPROVEMENT
3,012,60000
4773.66
35
2,538,926.34
16,720%
CAPITAL IMPROVEMENT FUND -TAXABLE
Pooled Cash Allocated Interest
000
0.00
000
0.000%
Non Allocated Interest
000
0.00
0.00
0.000%
Litigation Settlement Revenue
0.00
0.00
000
0.000%
Bond Proceeds
0.00
0.00
0.00
0000%
Rental Income
000
0.00
0.00
0,000%
Transfers In
000
0.00
0.00
0.000%
TOTAL CAPITAL IMPROVEMENT
0.00
0.00
0.00
0000%
3
LA OUINTA REDEVELOPMENT AGENCY 0710112000-1113012008 REMAINING
EXPENDITURE SUMMARY BUDGET EXPENDITURES ENCUMBERED BUDGET
PROJECT AREA NO. 1:
LOWIMODERATE BOND FUND
PERSONNEL
000
0.00
000
000
SERVICES
000
0.00
000
000
REIMBURSEMENT TO GEN
000
aDO
0.00
000
HOUSING PROJECTS
000
000
0.00
000
TRANSFERS OUT
0.00
000
000
000
TOTAL LOWINIOD BOND
000
000
LOWIMODERATE TAX FUND:
PERSONNEL
4.0000
2,12040
000
2,779.60
SERVICES
30.88100
89,052.22
000
279,82878
BUILDING HORIZONS
250,000.00
0.00
000
260.00000
LQ RENTAL PROGRAM
200,00000
110.82774
000
80.11226
2n0 TRUST DEED PROGRP
500.00000
000
000
500,00000
LAND ACQUISITION
8,800,000.00
108,60000
000
8,691.40000
FORECLOSURE
75Q000.00
0.00
0.00
150,00000
REIMBURSEMENT TO GEN
484,12700
201,71905
000
282.40795
TRANSFERS OUT
4,44Q30400
2,89Q/4101
000
1,552,15891
TOTAL LOWIMOD TAX
00
,484
0
T4760
DEBT SERVICE FUND:
SERVICES
457,30000
9.02000
000
448,280.00
BOND PRINCIPAL
2,640.00000
2,640,00000
000
000
BONOINTEREST
7,658,90000
3,887,59213
000
3,791,30787
INTEREST CITY ADVANCE
1,020,00000
425,00000
0.00
595000.00
PASS THROUGH PAYMENT
17,108.64600
627,06430
000
16.481,58170
ERAF SHIFT
0.00
0,00
000
000
TRANSFERSOUT
6,608,51500
2,800,9309TB
000
4.007,68402
TOTAL DEBT SERVICE
3 A
00
_
CAPITAL IMPROVEMENT FUND:
PERSONNEL
4,90000
2,12040
000
2,77960
SERVICES
541,71000
210,58765
000
331,12235
LAND ACQUISITION
000
000
000
000
ASSESSMENT DISTRICT
000
000
000
000
ADVERTISING -ECONOMIC
000
000
0.00
000
ECONOMIC DEVELOPMEN
000
000
0.00
000
BOND ISSUANCE COSTS
0.00
000
000
000
CAPITAL - BUILDING
000
000
000
000
REIMBURSEMENT TO GEN
213,01600
88756.65
000
124,25935
TRANSFERS OUT
22,992,70600
2,280,930 92
000
20711,1]508
TOTAL CAPITAL IMPROVEMENT
J•
CAPITAL IMPROVEMENT FUNDITAXASLE BOND
BOND ISSUANCE COSTS
000
000
000
000
TRANSFERS OUT
(42807001
000
000
(42,00]00)
TOTAL CAPITAL IMPROVEMEN(42.00700)
0w
w [noi wl
C 010
a
LA OUINTA REDEVELOPMENT AGENCY
REVENUE SUMMARY
PROJECT AREA NO.2:
BOND FUND:
Allocated Interest
Non Allocated Interest
Bond proceeds (net)
Transfer In
TOTAL LOWIMOD BOND
LOW/MODERATE TAX FUND:
Tat: Increment
Allowed Interasl
Non Allocated Interest
Developer funding
Vista Dunes MHP Rental Rev
2nd Trust Deed Repayment
ERAF Shift - Interest
Sale of Land
Tmnsfer In
TOTAL LOWIMOD TAX
2004 LOWIMODERATE BOND FUND:
Allocated! Interest
Home Sale Proceeds
Non Allocated Interest
Transfer In
TOTAL LOWIMOD BOND
DEBT SERVICE FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Interest Advance Proceeds
Trnsfer In
TOTAL DEBT SERVICE
07101/2006 - 1113012006 REMAINING %
BUDGET RECEIVED BUDGET RECEIVED
0.00
0.00
0.00
0.000%
0.00
0.00
000
0.000%
0.00
0.00
000
0.000%
0.00
0.00
D.00
0.000%
0.00
0.00
000
0.000%
4.870,40000
155,941.07
4,714.468.93
3.200%
275.300 00
95,993.28
179,306 72
34 870%
0.00
000
Doc,
0000%
000
0.00
0.00
0000%
0.00
0.00
0.00
0.000%
0.00
69.409.08
(59,409.08)
0,000%
000
0.00
0.00
0.000%
13,994,301.00
0.00
13,994,30100
0.000%
000
0.00
000
0.000%
19,140,001.00
311,343.43
18,828,657.57
1.630%
0 00
000
000
0.000%
000
0.00
000
0.000%
2,000,000 00
1,251,217.89
748,782 11
62 560%
000
0.00
0.00
0.000%
2,000.00000
1,251,217.89
748,782.11
62660%
19,658,60000
623,764.26
19,034,83574
3.170%
273,90000
81,965.76
191,934.24
29,930%
0.00
0.00
0.00
0000%
000
0.00
0.00
0000%
1,954,642 00
1,231,80183
722,840 17
63 020%
21.887.142 00
1,937,531.85
19,949,610.15
8 850%
CAPITAL IMPROVEMENT FUND:
Allocated Interest
105,600.00
25,649.11
79,950 89
24 290%
Non Allocated Interest
0.00
000
0.00
0.000%
Developer Agreement
0.00
0.00
0.00
0.000%
Tm. nsfam In
0.00
0.00
0.00
0.000%
TOTAL CAPITAL IMPROVEMENT
106,60000
25,649.11
79,960.89
24.29D%
5
LA QUINTA REDEVELOPMENT AGENCY 07M1l2000-11/3012006 REMAINING
EXPENDITURE SUMMARY BUDGET EXPENDITURES ENCUMBERED BUDGET
PROJECT AREA N0, 2:
LOWIMODERATE BOND FUND
2nd TRUST DEEDS
000
0.00
000
0.00
LAND
000
000
000
000
BOND ISSUANCE COSTS
000
0A0
000
0.00
'TRANSFERS OUT
000
000
000
000
TOTAL LOW/MOD BOND
LOWIMODERATE TAX FUND:
PERSONNEL
2,90000
1.28319
000
1,61881
SERVICES
324,11100
74.57506
0.00
249,53594
2ND TRUST DEEDS
000
000
000
000
FORECLOSURE ACQUISITI
15Q00000
000
000
150,COOD0
REIMBURSEMENT TO GEN
264,52300
110,21735
000
154,30&m
TRANSFERS OUT
1,993,08]00
1,231.0183
0.00
761,19617
TOTAL LOW/MOD TAX
,61
2004 LOWIMODERATE BOND FUND
HOUSING PROGRAMS
6,283A0000 643,00000
000 6,940,00000
LAND
000 000
000 0OD
TRANSFERSOUT
53,111,79500 2,701,86).98
111 50,389.92702
TOTAL LOW/MOD BOND655
DEBT SERVICE FUND:
SERVICES
176,10000
6,05000
000
170,050.00
BOND PRINCIPAL
205,00000
105,00000
000
100,000.00
SONDINTEREST
314,785.00
158,52125
000
156,2075
INTEREST CITY ADVANCE
1,000,00000
416.0662
000
583,333.38
PASS THROUGH PAYMENT
16,419,46500
87,6B6 B4
000
16,331,77816
TRANSFERS OUT
1,954,64200
1,231,80183
000
722,84017
TOTAL DEBT SERVICE
20
,0
CAPITAL IMPROVEMENT FUND:
PERSONNEL
2,90000
1,03027
000
1,869.73
SERVICES
133,04300
13,41376
000
119,62924
ADVERTISING -ECONOMIC
000
000
000
000
ECONOMIC DEVELOPMEN
000
000
000
000
REIMBURSEMENT TO GEN
36,53400
15,221%
000
21,31205
TRANSFERS OUT
197,60600
45,3]900
"1
152,22700
TOTAL CAPITAL IMPROVEMENT
30,083
5,
80
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COUNCIL/RDA MEETING DATE: January 16, 2007
ITEM TITLE: Continued Joint Public Hearing Between
the City Council and Redevelopment Agency to
Consider a Revised Affordable Housing Agreement
Between the Agency and Santa Rosa Development,
Inc., to Increase the Agency's Funding for the
Homebuyer Silent Second Trust Deed Mortgage Loans
by $4.5 Million, Thus, Expanding the Income Levels of
the Homebuyers for the Property Located Within the
Watercolors Housing Project at 48th Avenue and
Adams Avenue
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION: _
PUBLIC HEARING:
Adopt a Resolution of the Redevelopment Agency approving Amendment No. 4 to the
Affordable Housing Agreement, and appropriate $4,500,000 to fund additional silent
second trust deed homebuyer mortgages from the Project Area No. 2 Housing Fund
Reserves (Account No. 246-0000-290-0000).
FISCAL IMPLICATIONS:
Implementing Amendment No. 4 would result in the expenditure of up to $4,500,000 of
Housing Fund balance. While the Agency would not secure additional affordable housing
covenants, these funds would increase the individual second trust deed mortgage
amounts and expand the number of households that may qualify to purchase one of
these dwellings. Also, doing so would expand the affordability of the project to include
low-income households.
BACKGROUND AND OVERVIEW:
In December 2002 the Agency approved an Affordable Housing Agreement with Santa
Rosa Development, Inc. (Michael Shovlin is the General Partner) to facilitate the
development of 149 single-family courtyard homes. Known as Watercolors, this
neighborhood is located on Avenue 48, east of Adams Street. All 149 homes must be
sold to moderate -income households aged 55 years and older. Per the Agreement, the
Agency will provide $8,886,138 in financial assistance, of which $7,000,000 is funding
second trust deed mortgage loans. In June 2006 Mr. Shovlin contacted staff regarding
difficulties he was experiencing selling the first phase homes given the sales price
limitations (moderate -income restrictions) and the $67,000 maximum amount of
the second trust deed loans. These limitations were impacting his sales volume e6d"61
his ability to repay his construction loan.
Mr. Shovlin requested that the Agency consider two options to address these
circumstances as follows:
• Increase the Agency's financial contribution by $36,000 per unit for the dwellings
that remain to be sold so that the second trust deed loans may be increased to a
maximum of $103,000. This would require up to an additional $4,500,000 of
Agency funds. Mr. Shovlin anticipates the additional funding would be required
by the summer of 2007, after the current second trust deed loan allocation has
been used. Their projections indicate the larger second trust deed mortgage loan
would allow them to further buy down the sales prices and thus qualify additional
senior households.
• Release 45 of the remaining 125 homes from the moderate -income affordability
requirements and sell them at market prices. The additional sale income would
then be pledged to replace the reduced income they receive from the affordable
units.
Mr. Shovlin indicates the softening housing market combined with increasing
construction labor and materials costs results in his needing one of these modifications.
Staff evaluated this request and while we do not want to increase funding for an
existing development without gaining additional affordable dwellings, staff recommends
the Agency increase the second trust deed mortgage loans and fund up to $4,500,000.
The rational is that:
• Our experience with combining market -rate and affordable for sale homes in the
same development generates numerous requests by the restricted home owners
to repay the second trust deed mortgages and the shared appreciation penalties in
order to gain the appreciation their neighbors are enjoying from selling the non-
restricted homes; and
The Agency has lost 75 covenant restricted affordable homes to date that the
Agency will have to replace in order to achieve its housing production mandate.
These homes were secured prior to 2002 when the Agency's second trust deed
loan program allowed homeowners to repay their second trust deed loans and
shared appreciation penalties, and release their dwelling from the affordability
covenant. The Agency;s second trust deed program has been modified to
eliminate the ability to release dwellings from affordability covenants. While this
modification will reduce the likelihood that owners will request covenant releases,
appreciating home values will continue to generate requests for releases.
• Increasing the second trust deed loans to a maximum of $103, 000 will allow
Santa Rosa to expand their target market to include households who earn
��-015
$35,000 to $45,000 per year. A househo.ld with a $35,000 annual income is a
low-income household; the Agency will gain both low- and moderate -income
credits from this development as a result of increasing maximum second trust
deed loan amount.
Attachment 1 to this report (Amendment No. 4) presents a summary that highlights the
changes to the Affordable Housing Agreement. Basically, the funding the Agency will
provide for second trust deed mortgage loans is increased up to a maximum
$4,500,000, the maximum second trust deed mortgage loan amount is increased to
$103,000, and additional documents are added to accommodate sales to low-income
households.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Adopt a Resolution approving Amendment No. 4 to the Affordable Housing
Agreement;
2. Do not adopt the Resolution approving Amendment No. 4 to the Affordable
Housing Agreement; or
3. Provide staff with alternative direction.
Respectfully submitted,
Dou as R IEvans
Community Development Director
Approved for submission b .
r-?LV
C-� AXK'C_V�
Thomas P. Genovese, Executive Director
Attachment: 1. Amendment No. 4
016
SUMMARY REPORT
FOR
AMENDMENT NO.4
TO THE
AFFORDABLE HOUSING AGREEMENT
BETWEEN THE
LA QUINTA REDEVELOPMENT AGENCY
AND
SANTA ROSA DEVELOPMENT, INC
December 5, 2006
INTRODUCTION
This document is the Summary Report ("Report") for Amendment No. 4 to the
Affordable Housing Agreement ("Agreement") by and between the La Quinta
Redevelopment Agency ("Agency") and Santa Rosa Development, Inc.
("Developer"). The Agreement facilitated the sale of a 20.04-acre Agency -owned
parcel ("Property") to the Developer who is building and selling a149 single-family
dwellings that are affordable to moderate -income households aged 55 years and
older ("Development").
This Report has been prepared pursuant to Section 33433 of the California Health
and Safety Code (the California Community Redevelopment Law or "Law") and
addresses the following:
• A summary of the proposed Development.
• The cost of the Agreement to the Agency.
• The estimated value of the interest to be conveyed, determined at the highest
and best uses permitted by the Agency's Redevelopment Plan.
• The estimated value of the interest to be conveyed determined at the use with
the conditions, covenants, and development costs required by the Agreement.
• An explanation of why the sale of property pursuant to the Agreement will
assist in the elimination of blight.
• Conformance with the Agency's Five Year Implementation Plan.
It should be noted that this Report does not address all of the aforementioned
items. The Agency prepared a Summary Report in December 2002 that detailed
the land sale and development transaction facilitated by the original Affordable
Housing Agreement; the December 2002 Summary Report is attached for reference
("Attachment 1 ").
C; 017
P\Reports-CC0007\1.16-0Matercdcma Summary Repotl doc I
THE DEVELOPMENT
The Agency purchased the Property in 1995 in order to reserve land for affordable
housing development. The Property was part of a larger 50 acre parcel; .5 acres
was transferred to the Coachella Valley Water District in 1999 to satisfy well site
requirements for the Mira Flores affordable housing development, 14 acres were
sold to the A.G. Spanos Corporation in February 2000 for a 200 unit apartment
development that includes 20 affordable units, 11.9 acres was sold to the
Developer at market value for a 36 dwelling market rate single family development,
and the remaining 20.04 acres was sold to the Developer in 2003 who is
constructing the Development.
In December 2002, the Agency approved an Affordable Housing Agreement with
the Developer to facilitate the Development. Known as Watercolors, this
neighborhood is located on Avenue 48, east of Adams Street. All 149 homes must
be sold to moderate -income households aged 55 years and older. The Agency
provided $8,886,138 in financial assistance to insure that the home sales prices
are affordable to moderate income households; $7,000,000 of this assistance is
funding homebuyer second trust deed mortgage loans.
In June 2006 the Developer contacted staff regarding difficulties he was
experiencing selling the first phase homes given the moderate -income sales price
limitations and the $67,000 maximum amount of the second trust deed loans.
These limitations were impacting his sales volume and thus his ability to repay his
construction loan. The Developer also indicated that the softening housing market
combined with increasing construction labor and materials costs resulted in his
request for one of the following modifications:
• Increase the Agency's financial contribution by $36,000 per unit for the
dwellings that remain to be sold so that the second trust deed loans may be
increased to a maximum of $103,000. This would require an additional
$4,500,000 of Agency funds. The additional funding would be needed by
the summer of 2007, after the current second trust deed loan allocation has
been used. The larger second trust deed mortgage loans would allow the
Developer to further buy down the sales prices and thus qualify additional
senior households.
Release 45 of the remaining 125 homes from the moderate -income
affordability requirements and sell them at market prices. The additional sale
income would then be pledged to replace the reduced income the Developer
receives from the affordable units.
Staff evaluated this request and while not wanting to increase funding for an
existing development without gaining additional affordable dwellings, recommended
C1) 018
PARepons-CC@007N46-0]\WatercolorsGSummary Reporl.doc 2
that the Agency increase the second trust deed mortgage loans and provide up to
$4,500,000 in additional financial assistance. The rational is that:
Staff's experience with combining market -rate and affordable homes in the
same development generates numerous requests by the restricted home
owners to repay the second trust deed mortgages and the shared
appreciation penalties in order to gain the appreciation their neighbors are
enjoying from selling the non -restricted homes;
• The Agency has lost 75 covenant restricted affordable homes to date that
the Agency will have to replace in order to achieve its housing production
mandate. These homes were secured prior to 2002 when the Agency's
second trust deed loan program allowed homeowners to repay their second
trust deed loans and shared appreciation penalties, and release their dwelling
from the affordability covenant. The Agency's second trust deed program
has been modified to eliminate the ability to release dwellings from
affordability covenants. While this modification will reduce the likelihood
that owners will request covenant releases, appreciating home values will
continue to generate requests for releases;
Increasing the second trust deed loans to a maximum of $103,000 will allow
the Developer to expand their target market to include households who earn
$35,000 to $45,000 per year. A household with a $35,000 annual income
is a low-income household; the Agency will gain both low- and moderate -
income credits from this development as a result of increasing maximum
second trust deed loan amount.
THE COST OF THE AGREEMENT TO THE AGENCY
The Agreement would obligate the Agency to underwrite an additional $4,500,000
in silent second trust deed mortgage loans. These loans will allow both moderate
and low income households to purchase these homes.
ESTIMATED VALUE OF INTEREST TO BE CONVEYED
No property interests will be conveyed per the Agreement. A financial analysis of
the value of the original conveyance is presented in Attachment 1 .
ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED, DETERMINED AT THE
USE AND WITH THE CONDITIONS, COVENANTS, AND DEVELOPMENT COSTS
REQUIRED BY THE AGREEMENT
019
P1Repons CC00071l-I"AWate=lors\Summary Repon.doc 3
No property interests will be conveyed per the Agreement. A financial analysis of
the original conveyance is presented in Attachment 1.
EXPLANATION OF WHY THE SALE OF THE PROPERTY PURSUANT TO THE
AGREEMENT WILL ASSIST IN THE ELIMINATION OF BLIGHT
No property interests will be conveyed per the Agreement. An analysis of the
original conveyance is presented in Attachment 1.
CONFORMANCE WITH THE AGENCY'S FIVE YEAR IMPLEMENTATION PLAN
An analysis of conformance with the Agency's Five Year Plan is presented in
Attachment 1.
A copy of the proposed Agreement is attached to this Report (Attachment 2) and is
available for review at the Community Development Department located at the La
Quinta City Hall. The proposed Agreement will be the subject of a joint public
hearing of the Agency and City Council on January 16, 2007, at 7:00 p.m. in the
City Council Chambers located at the La Quinta City Hall, 78-495 Calle Tampico,
La Quinta, California.
G 020
P\Reports-CC@007\1-16-07\Waterwlors\Summary Report Eoc 4
SUMMARY REPORT
FOR THE
AFFORDABLE HOUSING AGREEMENT
BETWEEN THE
LA QUINTA REDEVELOPMENT AGENCY
AND
SANTA ROSA DEVELOPMENT, INC
December 26, 2002
INTRODUCTION
This document is the Summary Report ("Report") for the Affordable Housing
Agreement ("Agreement") by and between the La Quinta Redevelopment Agency
("Agency") and Santa Rosa Development, Inc., a development partnership
comprised of Desert Cities Development and the RecreActions Group of Companies
(RGC) ("Developer"). The Agreement facilitates the sale of a 20.04-acre Agency -
owned parcel ("Property") to the Developer who will construct and sell 149 single-
family dwellings that will be affordable to moderate -income households aged 55
years and older ("Development").
This Report has been prepared pursuant to Section 33433 of the California Health
and Safety Code (the California Community Redevelopment Law or "Law") and
addresses the following:
• A summary of the proposed Development.
• The cost of the Agreement to the Agency.
• The estimated value of the interest to be conveyed, determined at the highest
and best uses permitted by the Agency's Redevelopment Plan.
• The estimated value of the interest to be conveyed determined at the use with
the conditions, covenants, and development costs required by the Agreement.
• An explanation of why the sale of property pursuant to the Agreement will
assist in the elimination of blight.
• Conformance with the Agency's Five Year Implementation Plan.
THE DEVELOPMENT
The Agency purchased the Property in 1995 in order to reserve land for affordable
housing development. The Property was part of a larger 50 acre parcel; .5 acres
was transferred to the Coachella Valley Water District in 1999 to satisfy well site
requirements related to the development of the Mira Flores affordable housing
development, 14 acres were transferred to the A.G. Spanos Corporation in
021
P\Reports-CCU007\i-06-07\Waters om\Summary RepoO.Eoc 5
C'
February 2000 for the development of a 200 unit apartment community that
includes 20 affordable units, 11.9 acres is proposed to be sold to the Developer at
market value for the development of 36 market rate single family dwellings, and
the disposition of the remaining 20.04 acres is the subject of this Report.
The Developer first contacted the Agency in May 1998 regarding their interest in
developing both affordable and market rate housing on the 50-acre parcel. The
Agency delayed moving forward with their request until a majority of the dwellings
in the Mira Flores community (located east of the Property at Avenue 48 and
Jefferson Street) were sold. This occurred in March 2002; the Agency
subsequently entered into negotiations with the Developer to determine if a
mutually acceptable transaction could be consummated. Negotiations concluded in
August 2002 and the Agreement was subsequently drafted.
In order to insure compatibility with the surrounding single-family neighborhoods
the Developer proposes a development program that locates market rate homes
adjacent to the existing single-family neighborhoods located west of Adams Street
and south of Avenue 48, and affordable homes on a larger square shaped segment
of the Property located east of the market rate homes. The market rate units will
be three and four -bedroom 36 single story homes that will be priced from
$265,000 to $360,000. The affordable component entails 149 one and two
bedroom single story court homes ranging from 1,175 to 1,300 square feet in size.
The average home price will be $177,320. The home sales will be restricted to
buyers aged 55 years and older who have moderate household incomes (defined as
households earning from 81 % to 120% of the Riverside County median income).
The Property includes a 22,500 square foot section that will be parcelized, partially
improved, and transferred to the Coachella Valley Water District for a well site.
This requirement will result in the Developer retaining 19.5 acres of the 20.04-acre
Property for the Development.
Per the Agreement the Developer will have up to 180 days after the Agreement is
executed to prepare and process the entitlements and tract map required for
Property development. The Agency will provide up to $800,000 during this period
to underwrite costs associated with these activities.
Upon receiving the entitlements, the Agreement provides that the Agency will sell
and transfer the Property to the Developer for $1.00.
Once the homes receive a certificate of occupancy from the City of La Quinta, the
Agency will provide up to $7,000,000 in assistance to fund homebuyer silent
second trust deed loans. The Agreement provides the latitude to fund second trust
deed loans that range from $23,000 to $67,000 per homebuyer. This latitude is
being provided to afford the greatest number of moderate -income households the
P �Repons-CC2001k1-16-o7\WatercolorslSummary Repon.doc 6 V 1„ , 022
opportunity to purchase these units. Agency staff will work with the Developer to
qualify prospective homebuyers to insure that homebuyers requiring the largest
mortgage amounts are not the only ones funded, thus exhausting the funds
allocated for second trust deed loans before all of the units are sold.
The second trust deed loans will also feature covenants that require the dwellings
to remain affordable to moderate -income households for 45 years. Further, unlike
past Agency second trust deed loans, the affordability covenants will not afford the
homeowner the option to sell their dwelling at prevailing market values and release
the unit from the affordability covenant. Instead, the homeowner must sell their
dwelling to either another qualified buyer (a moderate income households that is 55
years or older), or if a qualified household cannot be found, as a last resort to the
Agency.
THE COST OF THE AGREEMENT TO THE AGENCY
The Agreement obligates the Agency to fund a total of $8,886,138 or $59,638 per
unit to obtain 149 affordable for sale housing units. These costs are as follows:
Property Purchase Costs - $1,086,138
The Property cost the Agency $1,086,139; $764,887 in land acquisition costs and
$321,252 in interest carry costs associated with the bond proceeds used to
acquire the Property. The Agency purchased the larger 50-acre parcel in 1995 for
$1,909,300. The Property's pro rata share of the total purchase cost is $764,887.
1995 Housing Bond proceeds were used to fund this purchase, which feature a
blended interest rate of 6%. The interest expense associated with the $764,887
purchase cost is $321,252. Per the Agreement the Developer will purchase the
Property for $1.00, leaving $1,086,138 in land acquisition and interest carry costs
that the Agency must fund to obtain the affordable units.
Entitlement and Municipal Fee Costs - $800,000
Prior to transferring the Property to the Developer, the Agency will fund the costs
associated with planning, engineering and environmental studies, and municipal and
building permit fees. The draw schedule for these funds is as follows:
• $250,000 upon executing the Agreement to reimburse the Developer for funds
they expended to plan and replan this project since 1998 (including preparing a
specific plan and paying over $10,000 in application fees) and to fund some of
the costs of revising the specific plan to reflect the new development program;
P\Rep ft-CC\2007\i-16.07\Waters orslSummary Report.doc 7 1" J 023
• $200,000 upon filing the entitlements to fund the remaining architectural,
engineering, planning, environmental costs, and fees associated with submitting
a revised specific plan and tract map;
• $200,000 upon receipt of entitlements to fund costs associated with preparing
construction drawings and some municipal fee costs; and
• $150,000 upon receiving building permits to fund the remaining municipal fee
expenses.
Homebuyer Second Trust Deed Mortgages — Up to $7,000,000
In order sell the units at costs affordable to moderate income households the
Agreement provides that the Agency will fund 149 second trust deed mortgages.
The mortgages will cover each dwelling's pro rate share of land ($5,133) and
entitlement/municipal fee ($5,369) costs, and $12,498 to $56,498 of development
costs. The total second trust deed mortgage will range from $23,000 to $67,000
per household, with the average per unit mortgage projected to be $50,000. This
range will permit households aged 55 years or older who earn from 81 to 120
percent of the Riverside County median income to purchase these homes.
The Agency's Redevelopment Consultant has reviewed and verified the costs
associated with the Development. Total development costs are projected to be
$26,420,593, which includes a developer profit of 4.46% or $1,228,497. This
equates to an average per unit cost of $177,320. The Agency second trust deeds
combined with the homebuyer down payments of 3% will reduce the first trust
deed mortgage to $110,320 to $154,320, a level affordable to moderate income
households.
ESTIMATED VALUE OF INTEREST TO BE CONVEYED
The Agency's Redevelopment Consultant reviewed comparable land sales for
property designated for single-family development that was not yet entitled. This
review identified per acre land values ranging from $38,660 to $75,000. The
Agency is selling the Developer an adjoining parcel for market rate residential
development at a per acre price of $67,347. Using this value, the 20.04-acre
parcel would have a current market value of $1,349,633.
ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED, DETERMINED AT THE
USE AND WITH THE CONDITIONS, COVENANTS, AND DEVELOPMENT COSTS
REQUIRED BY THE AGREEMENT
P \Repons - CC\2007\i-16. Mate=lomNSummery Report doc 8 v w 024
The Agreement requires the Developer to construct 149 dwellings that must be
sold at affordable housing costs to moderate -income households. In order achieve
affordable housing costs the units must have first trust deed mortgages that range
from $110,320 to $154,320. Selling the Property for $1.00, plus providing
additional financial assistance to reduce overall development costs, will achieve
this.
9 ` - (1 rJ
P\Reports-CC\2007tl-16071Watercolors\Summary Report tloc _
EXPLANATION OF WHY THE SALE OF THE PROPERTY PURSUANT TO THE
AGREEMENT WILL ASSIST IN THE ELIMINATION OF BLIGHT
The Property conveyance and construction of the Development does not directly
eliminate blight. Instead, the conveyance will facilitate the development of
dwellings that will increase and improve the supply of affordable housing within La
Quinta Redevelopment Project No. 2. Per the Second Five Year Implementation
Plan, the Agency has an obligation to facilitate the production of over 1,500
affordable units by 2004. In order to accomplish this task the Agency must
provide incentives to private developers and non-profit organizations to construct
units that will generate less than market value returns. The Property conveyance
and the Development will further the Agency's efforts to promote affordable
housing development within Project No 2.
CONFORMANCE WITH THE AGENCY'S FIVE YEAR IMPLEMENTATION PLAN
The Second Five Year Implementation Plan and the Second Amended Housing
Affordability Plan identifies a combination of market rate and affordable housing
development for the Property. The conveyance of the Property and the subsequent
development of affordable housing conform to the provisions of both these Plans.
A copy of the proposed Agreement is attached to this Report or is available for
review at the Community Development Department located at the La Quinta City
Hall. The proposed Agreement will be the subject of a joint public hearing of the
Agency and City Council on January 7, 2003, at 7:00 p.m. in the City Council
Chambers are located at the La Quinta City Hall, 78-495 Calle Tampico, La Quinta,
California.
026
PUepo s-CCUOM1-16-0TWatem IMNSummaryRepad.doc 10
RESOLUTION RDA NO.
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT
AGENCY APPROVING AMENDMENT NO. 4 TO
AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN
THE AGENCY AND SANTA ROSA DEVELOPMENT, INC.
FOR THE PROPERTY LOCATED AT THE NORTHEAST
CORNER OF AVENUE 48 AND ADAMS STREET
WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a public
body, corporate and politic, organized and existing under the California Community
Redevelopment Law ("Health & Safety Code § 33000 et seq.) ("CRL"); and
WHEREAS, pursuant to the CRL, the City Council of the City of La
Quinta ("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 & Safety Code, § 33071); and
WHEREAS, on or about January 22, 2003, the Agency and Santa Rosa
Development, Inc., a California corporation ("Developer") entered into that certain
Affordable Housing Agreement (the "Original AHA"), pursuant to which (i) the
Agency conveyed to the Developer certain real property located within the Project
Area ("Property") for the Developer's subsequent development thereon of One
Hundred Forty -Nine (149) single family homes for sale to senior citizens who are at
least 55 years of age and who are also "persons and families of moderate income"
(i.e., persons and families whose income does not exceed 120% of the median
income for Riverside County, adjusted for family size) (the "Project"); (ii) the Agency
agreed to provide certain financial assistance to Developer, including second trust
deed assistance to qualified buyers of units in the Project in an amount not to exceed
Seven Million Dollars ($7,000,000), from the Agency's Housing Fund (the
"Homebuyer Assistance"), all as more particularly described in the Original AHA; and
WHEREAS, Agency and Developer have amended the Original AHA on
three prior occasions (collectively, the "Amendments"); and
WHEREAS, the Original AHA, as amended by the Amendments, is
hereinafter referred to as the "AHA"; and
WHEREAS, Agency and Developer have negotiated a fourth amendment
to the AHA ("Amendment No. 4"), pursuant to which Agency would provide up to an
additional Four Million Five Hundred Thousand Dollars ($4,500,000) of Housing
027
Resolution No. RA 2007-
Santa Rosa Development
Adopted: January 16, 2007
Page 2
($4,500,000) of Housing Funds as Homebuyer Assistance and to enable Developer
to sell homes in the Project to senior citizens who are at least 55 years of age and
who are also "lower income households" (i.e., persons and families whose income
does not exceed 80% of median income for Riverside County, adjusted for family
size); and
WHEREAS, Amendment No. 4 also includes an amendment to the
recorded Declaration of Covenants, Conditions, and Restrictions for Property to
enable Developer to sell remaining homes in the Project to senior citizens who are at
least 55 years of age and who are also lower income households ("Declaration
Amendment"); and
WHEREAS, Health and Safety Code Section 33433 requires that the
Agency prepare a Summary Report to consider the Agency's proposed financial
contribution to the Project as set forth in the AHA and Amendment No. 4, that the
Agency Board and the City Council conduct a noticed joint public hearing with
respect to Amendment No. 4, and that the approval of Amendment No. 4 be
accompanied by certain findings and determinations as set forth herein; and
WHEREAS, a Summary Report for Amendment No. 4 has been prepared
and the joint public hearing has been conducted in accordance with applicable
requirements of law; and
WHEREAS, the City Council and the Redevelopment Agency have
considered all the information and evidence set forth in the Summary Report
presented by the City/Agency staff and presented by persons wishing to appear and
be heard concerning the impact of Amendment No. 4 on the Project Area and the
City as a whole; and
WHEREAS, Amendment No. 4 is in accordance with the Redevelopment
Plan and is of benefit to the Project Area and the City of La Quinta; and
WHEREAS, the Agency Board hereby determines that the Agency's
financial contribution pursuant to Amendment No. 4 is necessary to effectuate the
purposes of the Redevelopment Plan;
WHEREAS, Amendment No. 4 is in accordance with the Redevelopment
Plan and is of benefit to the Project Area and the City of La Quinta.
NOW, THEREFORE, BE IT RESOLVED BY THE LA QUINTA
REDEVELOPMENT AGENCY AS FOLLOWS:
,
Resolution No. RA 2007-
Santa Rosa Development
Adopted: January 16, 2007
Page 3
That the above recitals are true and correct and incorporated herein.
2. Amendment No. 4 effectuates the purposes of the Community
Redevelopment Law (Health & Safety Code § 33000 et seq.) and of the
Redevelopment Plan and is in the best interests of the citizens of the City of La
Quinta.
3. The Agency's sale of the real property identified herein will provide
housing for moderate income persons and is consistent with the Agency's Five -Year
Implementation Plan, based on the findings and conclusions of the Summary Report,
which is incorporated herein.
4. The consideration the Developer paid for the real property conveyed by
the Agency is not less than the fair reuse value at the use and with the covenants
and conditions and development costs authorized by the sale, based on the findings
and conclusions of the Summary Report.
5. That the La Quinta Redevelopment Agency hereby finds and determines
that Amendment No. 4 effectuates the purposes of the Community Redevelopment
Law (Health & Safety Code § 33000 et seq.) and of the Redevelopment Plan and is
in the best interests of the citizens of the City of La Quinta.
6. Amendment No. 4, a copy of which is on file with the Agency
Secretary, is hereby approved. The Agency Executive Director and Agency Counsel
are hereby authorized and directed to make final modifications to Amendment No. 4
that are consistent with the substantive terms of Amendment No. 4 approved
hereby, and the Agency Executive Director is authorized to thereafter sign
Amendment No. 4, including the Declaration Amendment, on behalf of the Agency.
7. 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
subordination agreements and 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 Amendment No. 4.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the La
Quinta Redevelopment Agency held this 16th day of January, 2007, by the following
vote:
Resolution No. RA 2007-
Santa Rosa Development
Adopted: January 16, 2007
Page 4
AYES:
NOES:
ABSENT:
ABSTAIN:
LEE M. OSBORNE, Chairperson
City of La Quinta, California
ATTEST:
VERONICA J. MONTECINO, Agency Secretary
City of La Quinta, California
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
City of La Quinta, California
G: �30
ATTACHMENT #11
AMENDMENT NO.4 TO AFFORDABLE HOUSING AGREEMENT
This AMENDMENT NO.4 TO AFFORDABLE HOUSING AGREEMENT
(`Amendment No. 4") is made and entered into as of , 2007 (the "Effective
Date") by and between the LA QUINTA REDEVELOPMENT AGENCY, a public body,
corporate and politic (the "Agency"), and SANTA ROSA DEVELOPMENT, INC., a California
corporation (`Developer").
RECITALS:
A. On or about January 22, 2003, the Agency and Developer entered into that certain
Affordable Housing Agreement (the "Original AHA'), pursuant to which Agency agreed to sell
to Developer, and Developer agreed to purchase from Agency, that certain real property located
at the corner of Avenue 48th and Adams Street, in the City of La Quinta, County of Riverside,
State of California (the "Site"), and to construct thereon a "senior citizen housing development,"
as defined in Civil Code Section 51.3(b)(4), consisting of not less than one hundred forty-nine
(149) single-family detached homes and related improvements (the "Project") to be sold to
Eligible Buyers at an Affordable Housing Cost.
B. On or about June 22, 2004, the Agency and Developer amended the Original
AHA by that certain Waiver and Replacement of Conditions for Closing for the Affordable
Housing Agreement and for the Option Agreement (`Amendment No. 1") to revise, among other
terms, various provisions related to the Project Entitlements.
C. On or about October 28, 2004, the Agency and Developer entered into that certain
Amendment No. 2 to Affordable Housing Agreement to further revise the provisions related to
the Project Entitlements (`Amendment No. 2").
D. On or about July 14, 2006, the Agency and Developer entered into that certain
Amendment No. 3 to Affordable Housing Agreement to extend certain timeframes set forth in
the Original AHA. The Original AHA, as amended by Amendment No. 1, Amendment No. 2,
and Amendment No. 3, is hereinafter referred to as the "AHA."
E. Developer and Agency now wish to further revise the AHA to provide for an
increase in the amount of financial assistance Agency is providing to Developer pursuant to the
AHA, and to enable Developer to sell Units in the Project to senior citizens who are at least 55
years of age and who are also either (a) "lower income households" (i.e., persons and families
whose income does not exceed eighty percent (80%) of median income for Riverside County,
adjusted for family size), or (b) "moderate income households" (i.e., persons and families whose
income does not exceed one hundred twenty percent (120%) of median income for Riverside
County, adjusted for family size").
r r,
'82/015610-0043
777448 01 a01/11/07
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by this reference, and for valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. The AHA is hereby amended to replace Section 202, in its entirety, with the following:
[202] Homebuyer Assistance
Agency shall provide as part of the Agency Assistance a loan to each
Eligible Buyer of a Unit in the Project ("Homebuyer Loan"). Each Homebuyer
Loan shall be composed of (i) a cash component that Agency shall, prior to or
concurrent with each close of escrow for the sale of a Unit to an Eligible Buyer,
deposit into said escrow to be applied towards the purchase price of such Unit (the
"Cash Component of Homebuyer Loan"); (ii) the Unit's pro-rata share of the
Acquisition Assistance, which equals Five Thousand One Hundred Thirty -Three
Dollars ($5,133) (the "Acquisition Assistance Component of Homebuyer Loan"),
and the Unit's pro-rata share of the entitlement and other municipal fees required
to develop the Project, which equals Five Thousand Three Hundred Sixty -Nine
Dollars ($5,369) (the "Entitlement Component of Homebuyer Loan"). The
Acquisition Component of Homebuyer Loan and the Entitlement Component of
Homebuyer Loan represent assistance that Agency will already have provided to
Developer to develop the Project, pursuant to this Agreement, and will be credited
by the Developer towards the purchase price of each Unit by an Eligible Buyer by
a reduction of the purchase price from the market price to the affordable purchase
price. The cumulative amount of the Cash Component of Homebuyer Loan for all
Units in the aggregate shall not exceed Eleven Million Five Hundred Thousand
Dollars ($11,500,000) (the "Homebuyer Assistance"). The amount of the Cash
Component of Homebuyer Loan for each individual Unit shall be an amount up
to, but not exceeding, One Hundred Three Thousand Dollars ($103,000).
2. The AHA is hereby amended to replace Section 401, in its entirety, with the following:
[401] Affordable Housing.
Developer hereby covenants and agrees, for itself and its successors and
assigns, to develop not less than one hundred forty-nine (149) residential housing
units on the Site to be sold to "Eligible Buyers" at an "Affordable Housing Cost,"
all as more fully described in the Declaration. For purposes of this Agreement,
the term "Eligible Buyer" shall mean a buyer of one of the Units in the Project
who satisfies all of the following requirements: (i) at least one person in
residence in the residential unit in question is a "qualifying resident" or "senior
citizen" who is 55 years of age or older, for purposes of residency in a "senior
citizen housing development" (as those terms are defined in California Civil Code
Sections 51.3(b)(1) and (4)); (ii) each other resident in the same dwelling unit is
either a "qualifying resident," "senior citizen," "qualified permanent resident" or
��._03
"permitted health care resident" (as those terms are defined in California Civil
Code Sections 51.3(b)(2), (3), and (7)); and (iii) such person or persons qualify as
either (a) "persons and families of moderate income" within the meaning of
California Health and Safety Code Section 50093 (i.e., households whose income,
adjusted for family size, do not exceed one hundred twenty (120%) of the
Riverside County Median Income) (each, a "Moderate Income Eligible Buyer"),
or (b) "lower income households" within the meaning of California Health and
Safety Code Section 50079.5 (i.e., households whose income, adjusted for family
size, do not exceed eighty percent (80%) of the Riverside County Median Income
(each, a "Low Income Eligible Buyer"). For purposes of this Agreement, the term
"Affordable Housing Cost" shall mean that purchase price which would result in
monthly housing payments, including the cost for a thirty (30) year mortgage for
that portion of the purchase price which is to be paid in the form of loan proceeds
under currently prevailing mortgage loan rates or the interest rate of any below -
market mortgage program for which such purchaser has obtained a first trust deed
loan, of (1) for Low Income Eligible Buyers, not more than thirty-five percent
(35%) of seventy percent (70%) of Riverside County Median Income adjusted for
family size appropriate for the Unit; or (2) for Moderate Income Eligible Buyers,
not less than twenty-eight percent (28%) of the gross income of the household,
nor more than thirty-five percent (35%) of one hundred ten percent (110%) of
Riverside County Median Income adjusted for family size appropriate for the
Unit.
3. Developer acknowledges and agrees that the Buyer Affordable Housing Documents
attached to the AHA as Attachment No. 10 are designed for use with Moderate Income Eligible
Tenants, and that at such time as Developer sells a Unit to a Low Income Eligible Tenant, such
Low Income Eligible Tenant will be required to sign a set of Buyer Affordable Housing
Documents that have been designed for use with Low Income Eligible Tenants.
4. Developer and Agency shall, concurrently with the execution hereof, execute the
Amendment No. 1 to Declaration of Covenants, Conditions, and Restrictions for Property, in the
form attached hereto and incorporated herein as Exhibit "A".
5. Unless otherwise specified herein, all defined terms herein shall have the meanings
ascribed thereto in the AHA.
6. Except as otherwise expressly provided in this Amendment No. 4, all of the terms and
conditions of the AHA shall remain in full force and effect.
7. In the event of any action between Agency and Developer seeking enforcement of any of
the terms and conditions to this Amendment No. 4, the prevailing party in such action shall be
awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses,
including without limitation its expert witness fees and reasonable attorney's fees.
8. This Amendment No. 4 shall be construed according to its fair meaning and as if
prepared by both parties hereto.
C ;; �i33
9. This Amendment No. 4 shall be governed by the internal laws of the State of California
and any question arising hereunder shall be construed or determined according to such law
without regard to conflicts of law. The Superior Court of the State of California in and for the
County of Riverside, or such other appropriate court in such county, shall have exclusive
jurisdiction of any litigation between the parties concerning this Amendment No. 4. Service of
process on Agency shall be made in accordance with California law. Service of process on
Developer shall be made in any manner permitted by California law and shall be effective
whether served inside or outside California.
10. Time is of the essence of this Amendment No. 4 and of each and every term and
provision hereof.
11. A waiver of a provision hereof, or modification of any provision herein contained, shall
be effective only if said waiver or modification is in writing, and signed by both Agency and
Developer. No waiver of any breach or default by any party hereto shall be considered to be a
waiver of any breach or default unless expressly provided herein or in the waiver.
12. Signatures of the parties transmitted by facsimile shall be deemed binding. However,
each party agrees to submit their original signature to the other party within five (5) business
days after execution hereof.
13. This Amendment No. 4 may be executed in counterparts, each of which, when this
Amendment No. 4 has been signed by all the parties hereto, shall be deemed an original, and
such counterparts shall constitute one and the same instrument.
14. The person(s) executing this Amendment No. 4 on behalf of each of the parties hereto
represent and warrant that (i) such party is duly organized and existing, (ii) they are duly
authorized to execute and deliver this Amendment No. 4 on behalf of said party, (iii) by so
executing this Amendment No. 4 such party is formally bound to the provisions of this
Amendment No. 4, and (iv) the entering into this Amendment No. 4 does not violate any
provision of any other agreement to which such party is bound.
[End of text — signature page follows]
u034
IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read
this Amendment No. 4, understands it, and hereby executes this Amendment No. 4 to be
effective as of the day and year first written above.
"Developer"
SANTA ROSA DEVELOPMENT, INC.,
a California corporation
Date: 2007
Michael Shovlin
Its: President
"Agency"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
2007 By:
Executive Director
ATTEST:
Veronica J. Montecino, Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By: _
M. Katherine Jenson, Agency Counsel
u 035
862/015610-0043
777448 01 a01/11/ 07
EXHIBIT "A"
AMENDMENT NO 1 TO DECLARATION OF COVENANTS, CONDITIONS, AND
RESTRICTIONS FOR PROPERTY
[See following document]
036
882/015610-0043
777449.01 a01/I1i07
REQUESTED BY
AND WHEN RECORDED MAIL TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: City Manager
Fee Pursuant to
AMENDMENT NO 1 TO DECLARATION OF COVENANTS
CONDITIONS AND RESTRICTIONS FOR PROPERTY
This AMENDMENT NO. 1 TO DECLARATION OF COVENANTS, CONDITIONS,
AND RESTRICTIONS FOR PROPERTY ("Amendment No. 1") is made and entered into this
_ day of 2007 ("Effective Date"), by and between SANTA ROSA
DEVELOPMENT, INC., a California corporation ("Covenantor"), and the LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency").
RECITALS:
A. Covenantor is the owner of certain real property located in the City of La Quinta,
County of Riverside, State of California, legally described in Exhibit "A" hereto (the
"Property").
B. On or about July 21, 2004, the Covenantor and Agency executed that certain
Declaration of Covenants, Conditions, and Restrictions for Property, which was recorded against
the Property and certain adjacent real property, on July 21, 2004, in the Official Records of the
County of Riverside, as Instrument No. 2004-0565214 (the "Declaration").
C. Covenantor and Agency now mutually desire to revise the Declaration with
respect to the Property to enable Covenantor to sell the remaining Units in the Project to senior
citizens who are at least 55 years of age and who are also either (a) "lower income households"
(i.e., persons and families whose income does not exceed eighty percent .(80%) of median
income for Riverside County, adjusted for family size), or (b) "moderate income households"
(i.e., persons and families whose income does not exceed one hundred twenty percent (120%) of
median income for Riverside County, adjusted for family size).
TERMINATION:
In consideration of the foregoing Recitals, which are incorporated herein and made a part
hereof; and the covenants and promises hereinafter contained, and for good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:
I. The Declaration recorded in the Official Records of the County of Riverside, as
Instrument No. 2004-0565214, is hereby amended, with respect to the Property, as follows: 1^,
882/015610-0043 'V J V 37
77755401 a07/27/06
(a) To replace the definition of the term "Affordable Housing Cost" in
Section Lb, in its entirety, with the following:
"Affordable Housing Cost" shall be that purchase price which would
result in monthly housing payments, including the cost for a thirty (30) year
mortgage for that portion of the purchase price which is to be paid in the form of
loan proceeds under currently prevailing mortgage loan rates or the interest rate of
any below -market mortgage program for which such purchaser has obtained a
first trust deed loan, of (i) for Moderate Income Eligible Buyers, not less than
twenty-eight percent (28%) of the gross income of the household, nor more than
thirty-five percent (35%) of one hundred ten percent (110%) of Riverside County
median income adjusted for family size appropriate for the Unit; or (ii) for Low
Income Eligible Buyers, not more than thirty-five percent (35%) of seventy
percent (70%) of Riverside County median income adjusted for family size
appropriate for the Unit. A sample calculation of an Affordable Housing Cost for
a Moderate Income Eligible Buyer is set forth on Exhibit `B", which is attached
hereto and incorporated herein by this reference ("Calculation of Affordable
Housing Costs").
(b) To replace the definition of "Buyer Affordable Housing Documents," in
Section 1.c, in its entirety, with the following:
"Buyer Affordable Housing Documents" shall collectively refer to the
following documents, all of which shall be required to be executed by each buyer
of a Unit to assure the affordability of the Unit to Eligible Buyers: (i) an
affordable housing agreement that prohibits the resale of the Unit except to a Low
Income Eligible Buyer or Moderate Income Eligible Buyer (as applicable) and
grants the Covenantee an option to purchase the Unit ("Option of Purchase") in
the event the buyer is unable to locate a Low Income Eligible Buyer or Moderate
Income Eligible Buyer (as applicable) ("Buyer Affordable Housing Agreement");
(ii) a Memorandum reciting Covenantee's Option to Purchase ("Buyer
Memorandum re Option to Purchase"); (iii) a promissory note ("Buyer
Promissory Note") whose terms shall include a second deed of trust securing the
Buyer Promissory Note ("Buyer Second Trust Deed"); and (iv) a disclosure
statement acknowledging and consenting to all of the affordability and restrictions
contained in the aforementioned documents ("Buyer Disclosure Statement").
(c) To replace the definition of the term "Eligible Buyer," in Section Le, in its
entirety, with the following:
"Eligible Buyer" shall mean a buyer of one of the Units in the Project who
satisfies all of the following requirements: (i) at least one person in residence in
the residential unit in question is a "qualifying resident" or "senior citizen" for
purposes of residency in a "senior citizen housing development" (as those terms
are defined in California Civil Code Section 51.3(b)(1) and (4)); (ii) each other
resident in the same dwelling unit is either a "qualifying resident," "senior
citizen," "qualified permanent resident" or "permitted health care resident" within
882/015610-0043 _'2_ �d 038
77755401 a07/27/06
the meaning of California Civil Code Section 51.3(b)(2), (3), and (7); and (iii)
such person or persons qualify as either (a) "persons and families of moderate
income" within the meaning of California Health and Safety Code Section 50093
(i.e., households whose income, adjusted for family size, do not exceed one
hundred twenty (120%) of the Riverside County median income) (each, a
"Moderate Income Eligible Buyer"), or (b) "lower income households" within the
meaning of California Health and Safety Code Section 50079.5 (i.e., households
whose income, adjusted for family size, do not exceed eighty percent (80%) of the
Riverside County median income (each, a "Low Income Eligible Buyer").
2. Whenever the term "Eligible Buyer" is used throughout the Declaration, such
term shall refer to a Low hncome Eligible Buyer, for Units whose initial sale by the Covenantor
is to a Low Income Eligible Buyer, and such term shall refer to a Moderate Income Eligible
Buyer, for Units whose initial sale by the Covenantor is to a Moderate Income Eligible Buyer.
3. Whenever the term "Affordable Housing Cost" is used throughout the
Declaration, it shall refer to the Affordable Housing Cost applicable to the Eligible Buyer or
proposed buyer, as defined in Section 1 above.
4. Unless otherwise specified herein, all defined terms herein shall have the
meanings ascribed thereto in the Declaration.
5. Except as otherwise expressly provided in this Amendment No. 1, all of the terms
and conditions of the Declaration shall remain in full force and effect.
6. In the event of any action between Agency and Covenantor seeking enforcement
of any of the terms and conditions to this Amendment No. 1, the prevailing party in such action
shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and
expenses, including without limitation its expert witness fees and reasonable attorney's fees.
This Amendment No. 1 shall be construed according to its fair meaning and as if
prepared by both parties hereto.
8. This Amendment No. 1 shall be governed by the internal laws of the State of
California and any question arising hereunder shall be construed or determined according to such
law without regard to conflicts of law. The Superior Court of the State of California in and for
the County of Riverside, or such other appropriate court in such county, shall have exclusive
jurisdiction of any litigation between the parties concerning this Amendment No. 1. Service of
process on Agency shall be made in accordance with California law. Service of process on
Covenantor shall be made in any manner permitted by California law and shall be effective
whether served inside or outside California.
9. Time is of the essence of this Amendment No. 1 and of each and every term and
provision hereof.
10. A waiver of a provision hereof, or modification of any provision herein contained,
shall be effective only if said waiver or modification is in writing, and signed by both Agency
882/015610-0043
777554.01 a07/27 06
and Covenantor. No waiver of any breach or default by any party hereto shall be considered to
be a waiver of any. breach or default unless expressly provided herein or in the waiver.
11. Signatures of the parties transmitted by facsimile shall be deemed binding.
However, each party agrees to submit their original signature to the other party within five (5)
business days after execution hereof.
12. This Amendment No. 1 may be executed in counterparts, each of which, when
this Amendment No. 1 has been signed by all the parties hereto, shall be deemed an original, and
such counterparts shall constitute one and the same instrument.
13. The person(s) executing this Amendment No. 1 on behalf of each of the parties
hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly
authorized to execute and deliver this Amendment No. 1 on behalf of said party, (iii) by so
executing this Amendment No. 1 such party is formally bound to the provisions of this
Amendment No. 1, and (iv) the entering into this Amendment No. 1 does not violate any
provision of any other agreement to which such party is bound.
[end — signatures on next page]
882I015610-0043
G`G40
777554.01 a07/27106 _4_
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the
date first above written.
"AGENCY"
LA QUINTA REDEVELOPMENT
AGENCY, a public body, corporate and
politic ("Agency")
Date: 2007 By:
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the
La Quinta Redevelopment Agency
Date:
Executive Director
"COVENANTOR"
SANTA ROSA DEVELOPMENT, INC.,
a California corporation
2007 By:
Michael Shovlin
Its: President
041
"2/015610-0043 _
777554 01 a07/27106 _5
STATE OF CALIFORNIA )
) ss.
COUNTY OF RIVERSIDE )
On , before me, Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss.
COUNTY OF RIVERSIDE )
On before me, , Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
r
882/015610-0043
77755401 a07/27/06
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
All of that certain real property located in the City of La Quinta, County of Riverside, State of
California, and further identified as:
ALL OF TRACT NO. 31311, EXCEPT LOTS I THROUGH 25, INCLUSIVE, LOTS 27
THROUGH 29, INCLUSIVE, LOTS 31 THROUGH 34, INCLUSIVE, AND LOTS 36 AND
37, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,
AS PER MAP RECORDED IN BOOK 368 OF MAPS, PAGES 21 THROUGH 25,
INCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS, MINERALS, AND OTHER HYDROCARBON
SUBSTANCES LYING BELOW THE SURFACE OF SAID LAND, BUT WITH NO RIGHT
OF SURFACE ENTRY, AS PROVIDED IN DEEDS OF RECORD
C43
EXHIBIT "A"
'82/015610-0043 Page 1
777554.01 a07127/06 g