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2012 04 18 OBF N OF TKF OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY AGENDA La Quinta City Council Chambers 78-495 Calle Tampico, La Quinta, California Regular Meeting WEDNESDAY, APRIL 18, 2012 2:00 p.m. Beginning Resolution No. 2012-008 CALL TO ORDER Roll Call: Board Members: Ellis, Marshall, Maysels, McDaniel, Nelson, Osborne and Chairperson Pena PLEDGE OF ALLEGIANCE PUBLIC COMMENT This is the time set aside for public comment on any matter not listed on the agenda. Please complete a "Request to Speak" form and limit your comments to three minutes. When addressing the Oversight Board, please state your name and address. CONFIRMATION OF AGENDA PRESENTATIONS — None APPROVAL OF MINUTES 1. Approval of Oversight Board Minutes of Regular Meeting on April 4, 2012 WRITTEN COMMUNICATIONS — None CONSENT ITEMS - None BUSINESS ITEMS 1. Consideration of. Adoption of a Resolution Authorizing the Transfer of Housing Properties from the Former La Quinta Redevelopment Agency to the La Quinta Housing Authority 2. Consideration of Adoption of a Resolution Approving the Sale of Homes to Income -Qualified Buyers That Were Purchased Under the Home Foreclosure Purchase Program STUDY SESSION - None REPORTS AND INFORMATIONAL ITEMS - None DEPARTMENT REPORTS - None CHAIR AND BOARD MEMBERS' ITEMS - None ADJOURNMENT DECLARATION OF POSTING I, Lori Lafond, Executive Assistant of the City of La Quinta, do hereby declare that the foregoing Agenda for Oversight Board for the Successor Agency to La Quinta Redevelopment Agency meeting of April 18, 2012, was posted on the outside entry to the Council Chamber, 78-495 Calle Tampico, the bulletin board at the La Quinta Post Office located at 51-321 Avenida Bermudas, La Quinta, California and 78-630 Highway 111, La Quinta, California on April 12, 2012. Dated: April 12, 2012 C L RI LAFOND Oversight Board Secr ry Public Notices The La Quinta City Hall Council Chambers is handicapped accessible. If special equipment is neede for the hearing impaired, please call the City Clerk's office at (760) 777-7123, twenty-four (2' hours in advance of the meeting and accommodations will be made.. If special electronic equipment is needed to make presentations to the Oversight Boari arrangements should be made in advance by contacting the City Clerk's office at (760) 77" 7123. A one (1) week notice is required. If background material is to be presented to the Oversight Board during a Board meeting, please t advised the ten (10) copies of all documents, exhibits, etc., must be supplied to the Oversight Boai Secretary for distribution. It is requested that this take place prior to the beginning of the meeting. Any writings or documents provided to a majority of the Oversight -Board regarding any item on th agenda will be made available for public inspection at the City Clerk's counter at City Hall located 78-495 Calle Tampico, La Quinta, CA 92253, during normal business hours. Oversight Board Agenda April 18, 201 2 OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY MINUTES APRIL 4, 2012 A regular meeting of the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency was called to order at 2:00 p.m. by Chairperson Pena. PRESENT: Board Members Ellis, Marshall, Maysels, McDaniel, Osborne and Chairperson Pena Absent: Board Member Nelson PUBLIC COMMENT - None CONFIRMATION OF AGENDA - Confirmed PRESENTATIONS - None APPROVAL OF MINUTES MOTION: A motion was made by Board Members Maysels/Ellis to approve the minutes of the March 7, 2012 meeting. Motion carried unanimously. BUSINESS ITEMS 1. Consideration of Adoption of a Resolution Adopting a Conflict of Interest Code for the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency Kathy Jenson, Rutan & Tucker, Counsel to the Successor Agency, presented staff report. Jenson indicated that all public agencies are required to have a Conflict of Interest Code in place and although there is no clear legislation indicating whether or not this requirement applies to the Oversight Board, she recommended that the Board adopt a Conflict of Interest Code. MOTION: A motion was made by Osborne/Ellis to adopt a resolution adopting a Conflict of Interest Code for the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency. Motion carried by a vote of 6 ayes, 0 nays, 1 absent. RESOLUTION NO. OB 2012-004 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY ADOPTING A CONFLICT OF INTEREST CODE FOR THE OVERSIGHT BOARD 2. Consideration of Adoption of a Resolution Approving Recognized Obligation Payment Schedules (BOPS) of the Former La Quinta Redevelopment Agency for the periods of January 2012 through June 2012 and July 2012 through December 2012 Staff presented staff report. MOTION: A motion was made by McDaniel/Osborne to approve the ROPS of the Former La Quinta Redevelopment Agency for the periods of January 2012 through June 2012 and July 2012 through December 2012. Motion carried by a vote of 6 ayes, 0 nays, 1 absent. RESOLUTION NO. OB 2012-005 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY ADOPTING RECOGNIZED OBLIGATION PAYMENT SCHEDULES FOR THE PERIODS OF JANUARY 2012 THROUGH JUNE 2012 AND JULY 2012 THROUGH DECEMBER 2012 3. Consideration of Successor Agency Administrative Budget for the periods of February 2012 through June 2012 and July 2012 through December 2012 Staff presented staff report. Board Member McDaniel pointed out that it appears that the total administrative budget exceeds the administrative allowance. Staff indicated that the State requires all administrative items to be included in the budget even though some items are covered in the Recognized Obligation Payment Schedule ("ROPS"). McDaniel asked if the State does allow it to be part of the BOPS and staff indicated that they prefer this particular type of format. Board Member Maysels asked if the administrative budget that was given to the Board to approve for February to June is $501,127 and the budget for July to' December totals $648,197. Staff stated that the $501,127 is the administrative allowance for February to June, and the $648,197 is the total OVERSIGHT BOARD MINUTES 2 APRIL 4, 2012 administrative budget for July to December, including the BOPS. Maysels pointed out that without the BOPS, the administrative allowance for July to December would be $391,373. MOTION: A motion was made by Ellis/Maysels to approve the Successor Agency Administrative Budget for the periods of February 2012 through June 2012 and July 2012 through December 2012. Motion carried by a vote of 6 ayes, 0 nays, 1 absent. 4. Consideration of an Owner Participation Agreement Between the Former La Quinta Redevelopment Agency and Mega Dealer LLC/Robert N. La Torre, Inc. (dba Torre Nissan) Frank Spevacek, Principal, RSG, Inc., presented staff report. Chairperson Pena asked Mr. Spevacek what would happen if the dealership is sold or no longer operating. Mr. Spevacek explained that the way this transaction is structured, there is a ten-year operating covenant that has been agreed to by Torre Nissan and affirmed by Nissan Motors to keep this point in La Quinta for a ten-year period. He indicated that instead of getting repaid principal and interest on the loan in terms of Torre Nissan paying the loan as if they were paying a mortgage, the net increase in sales tax and property tax revenue over a 2012 base towards the obligation is being credited to retire this obligation. Mr. Spevacek further explained that projections have shown that given the percentage of increase in sales due to the new lines of business as well as the new look, this obligation should be repaid through those funds in an 11 year period. Chairperson Pena asked if Torre Nissan could accelerate the payments if they do better than expected and could the loan be extended if they do not do as well as expected. Mr. Spevacek indicated that they certainly could accelerate the loan. If they do not do as well as expected, this is a non - recourse loan so the period may be extended or if the ten-year period threshold is not met, the remaining balance would be forgiven as long as they were still in operation. Board Member McDaniel asked when the increased sales tax comes in, does it come in as city revenue or does it go back to redevelopment to repay the loan. Mr. Spevacek stated that would be city revenue. Michael Reinhardt, Executive Manager of Torre Nissan, addressed the Board. Mr. Reinhardt informed the Board that the reason for entering into this project was to improve Torre Nissan's business and the results of their business in La Quinta. He stated that Torre Nissan strongly believes in the OVERSIGHT BOARD MINUTES 3 APRIL 4, 2012 city and the community such as schools and other organizations in the Valley. Mr. Reinhardt explained that with the new Nissan image, the anticipation is over 22% increase in sales, which is the experience nationwide. He indicated that they expect an increase in sales and therefore, early payment of the loan is possible. Due the economy turning around, the general businessmen (pool service, air conditioning repair) are now in need of new vehicles. As soon as the expansion is completed, Torre will be able to offer commercial vehicles with a large selection. Mr. Spevacek added that one of the aspects that will be beneficial to the various taxing agencies is that the increased property tax revenue these improvements will generate will be broadly disbursed to the city, county and school districts. Redevelopment agencies were the benefactor of those funds, now the other taxing agencies will be the benefactor of the increased property values. Board Member Maysels asked if the payments for this loan are coming only from the City of La Quinta's property tax and sales tax portion. Mr. Spevacek answered yes. MOTION: A motion was made by Maysels/Ellis to approve a resolution approving a change to the Schedule of Performance to an Owner Participation Agreement between the former La Quinta Redevelopment Agency, Mega Dealer, LLC, and Robert N. LaTorre, Inc. and authorizing the continued administration and implementation of same with requested changes: Page 1, after fourth "WHEREAS" should be "unanticipated" delays Page 2, Section 4 should read..."The Oversight Board has determined not to terminate or renegotiate the DDA pursuant to its authority under Health and Safety Code Section 34181(e)." Motion carried by a vote of 6 ayes, 0 nays, 1 absent. RESOLUTION NO. OB 2012-006 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY APPROVING A CHANGE OVERSIGHT BOARD MINUTES 4 APRIL 4, 2012 TO THE SCHEDULE OF PERFORMANCE TO AN OWNER PARTICIPATION AGREEMENT BETWEEN THE FORMER LA QUINTA REDEVELOPMENT AGENCY, MEGA DEALER, LLC, AND ROBERT N. LA TORRE, INC., AND AUTHORIZING THE CONTINUED ADMINISTRATION AND IMPLEMENTATION OF THE SAME 5. Consideration of Disposition and Development Agreement Between the Former La Quinta Redevelopment Agency and Coral Mountain Partners, L.P. Frank Spevacek presented staff report. John Durso, Coral Mountain Partners, LLC, explained that they have been working on this deal with the City for about 3'/2 years. Coral Mountain Partners, LLC is responsible for in excess of approximately 300 affordable housing units, all of which were under the same type of public/private partnership as this particular deal, so there is familiarity with the process. This project would give the City of La Quinta another 176 affordable housing units that are really needed. The last affordable housing project in La Quinta was a 218 unit project, with very similar rent and income restrictions and all 218 units actually leased up in four months. This indicates a huge demand for affordable housing. All architects and engineers are locally -based. Coral Mountain Partners believes in hiring local companies and all the money from the redevelopment agency used so far has, therefore, been recycled back into the local economy. The hope is to continue to be able to do that by using the funds to hire qualified local sub -contractors. Mr. Durso indicated that, if it weren't for the holiday schedule and the DDA being signed four days after the first of the year, they may not be standing in front of this Board requesting that the Board concur with the fact that the DDA is truly enforceable and that the land is actually a housing asset. This project is ready, building permits are secured and ready to go, all architecture and engineering is completed. He further stated that it would really be a disservice to this community to allow this project not to be built and not to be able to provide the housing that the community needs. Board Member Marshall asked if any members of the public appeared when the DDA was discussed at the council meeting. Successor Agency Counsel Jenson indicated that there was no opposition to the project at the DDA hearing or the subsequent site development permit application meeting. Successor Agency Counsel Jenson added that everyone in the area received notice, including surrounding businesses. Mr. Durso indicated that they have received great feedback and have incredibly supportive neighboring housing projects and businesses. OVERSIGHT BOARD MINUTES 5 APRIL 4, 2012 Board Member Marshall asked Mr. Durso how long ago were the 300 other affordable housing units that Coral Mountain Partners, LLC built and were they local. Mr. Durso indicated that those projects were built about three years ago and have gone in phases since then and were all local projects. Board Member McDaniel asked if the Board is only approving funds that are readily available and not obligating any funds beyond that which have already been allocated for this project. Mr. Spevacek indicated that was correct and that the funds have been accrued by the redevelopment agency to underwrite this and two other affordable housing projects that were underway. This is money on hand, not money that would be anticipated to come in. Chairperson Pena asked Mr. Spevacek if the 4% tax credit assures the developer, of those credits from the State. Mr. Spevacek indicated that Mr. Durso has been in discussions with California Tax Credit Allocation Committee ("CTAC") and basically they have the allocation but want assurances through this action and Department of Finance review that these funds will be available. There are also title issues with the project because after the legislation was upheld, title companies have basically drawn back and have put clouds on all titles of all properties associated with redevelopment agencies. So, part of this action is to also affirm that this is a legitimate use that the Oversight Board would approve so we can deal with the title company. Mr. Spevacek went on to explain that if this project is approved, it would be beneficial to have direction from the Chairperson of the Board to write a letter to the DOF, which can possibly assist in removing cloud from the title. Chairperson Pena asked if in the event of cost overruns or the contingency is exceeded, where any additional funds would come from. Mr. Durso explained that as part of the tax-exempt bond financing, the tax-exempt bond company is very conservative so contingencies are relatively high to start with; next in line are developer fees, which run approximately $2,000,000; then behind that are personal guarantees from Mr. Shovlin. So when they guarantee to the bond holders, they are guaranteeing completion on budget or' within contingency or basically Coral Mountain Partners, LLC has to come up with the difference. Board Member Marshall made a comment that based on what she has read and the history of the involvement with this project, she feels very confident that the DOF will approve the project just based on when it was started, when the land was purchased, when the DDA and the ENA were signed, all of the environmental - in combination, all of those things will ensure that the DOF will agree that it is an enforceable obligation. OVERSIGHT BOARD MINUTES 6 APRIL 4, 2012 MOTION: A motion was made by Marshall/Osborne to adopt a resolution approving the Disposition and Development Agreement Between the Former La Quinta Redevelopment Agency and Coral Mountain Partners, L.P. with requested changes: Page 2, Section 6 should read..."The Oversight Board has determined not to terminate or renegotiate the DDA pursuant to its authority under Health and Safety Code Section 34181(e)." Motion carried by a vote of 6 ayes, 0 nays, 1 absent. RESOLUTION NO. OB 2012-007 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY MAKING CERTAIN ACKNOWLEDGMENTS AND APPROVALS WITH RESPECT TO THE CORAL MOUNTAIN PROPERTY AND DISPOSITION AND DEVELOPMENT AGREEMENT AND AUTHORIZING THE CONTINUED ADMINISTRATION AND IMPLEMENTATION OF THE SAME MOTION: An additional motion was moved by Osborne/Maysels authorizing Chairperson Pefla to send a letter to the Department of Finance indicating that the Board has adopted this resolution and requesting that the Department of Finance affirmatively respond authorizing the project to proceed. Motion carried by a vote of 6 ayes, 0 nays, 1 absent. REPORTS AND INFORMATIONAL ITEMS 1. Update on the Debts and Obligations of the Former La Quinta Redevelopment Agency Staff presented staff report. Chairperson Pena asked if who is liable to make the pass -through payments if the County fails to make them. Successor Agency Counsel Jenson stated that it is the County's responsibility under the law to make the payments. There is no liability on the City to make the payments. Successor Agency Counsel Jenson made a clarification with regard to the deeds of trust on the Washington Street Apartments when the Agency OVERSIGHT BOARD MINUTES 7 APRIL 4, 2012 owned it - the former Redevelopment Agency (Successor Agency) is still responsible for the deeds of trust even though the property has been transferred to the La Quinta Housing Authority. DEPARTMENT REPORTS 1. Response to Public Comment Interim City Manager, Mark Weiss, indicated that Ms. Wolff has an appointment next week with staff to further discuss the matter. CHAIR AND BOARD MEMBERS' ITEMS - None ADJOURNMENT - 2:44 p.m. There being no further business, it was moved by Board Members Osborne/Marshall to adjourn. Motion carried unanimously. Respectfully submitted, LORILAFOND Oversight Board Secretary OVERSIGHT BOARD MINUTES 8 APRIL 4, 2012 AGENDA CATEGORY: OVERSIGHT BOARD MEETING DATE: April 18, 2012 BUSINESS SESSION: ITEM TITLE: Consideration of Adoption of a Resolution Authorizing the Transfer of Housing Properties from the CONSENT CALENDAR: Former La Quinta Redevelopment Agency to the La STUDY SESSION: Quinta Housing Authority PUBLIC HEARING: RECOMMENDATION: Adopt a resolution of the Oversight Board affirming that certain properties are housing assets and approving the transfer of the housing assets to the La Quinta Housing Authority. FISCAL IMPLICATIONS: The properties subject to this action include 28 affordable rental houses in the Cove area, Washington Street Apartments, and various vacant affordable housing parcels purchased by the former redevelopment agency with low/mod housing funds (Attachment 1). BACKGROUND AND OVERVIEW: ABx1 26 allows for the designation of a "Housing Successor" to the former La Quinta Redevelopment Agency. Both the City and the La Quinta Housing Authority elected the La Quinta Housing Authority to be the Housing Successor, and as such, assumed all rights, powers, assets, duties, and obligations associated with the housing activities of the former La Quinta Redevelopment Agency. In certain provisions, ABx1 26 provides that all housing assets of former redevelopment agencies are automatically transferred to the housing successors by operation of law. However, the Department of Finance recently opined that the transfers are not automatic, and must be approved by Oversight Boards. Therefore, staff is requesting that the Oversight Board review and approve these transfers. A list of housing assets is attached to the resolution. When staff learned of the State's intention to dissolve redevelopment, the Redevelopment Agency Board directed staff to transfer all housing assets to the La Quinta Housing Authority — this occurred in March 2011. The La Quinta Housing Authority had been established in 2009 specifically for the purpose of holding and operating the housing assets that had been purchased by the Agency. In regards to the Coral Mountain Apartment property, the City of La Quinta as the Successor Agency to La Quinta Redevelopment Agency quitclaimed the property to the La Quinta Housing Authority on March 7, 2012, at the request of the title company in order to facilitate the issuance of a title policy. Therefore, the Housing Authority already owns this property, but staff is including it in the resolution for Oversight Board approval. The Oversight Board on April 4 made several of the findings in the resolution (specifically, the findings in Sections 1-4 of the resolution), but did not expressly approve the transfer as stated in Section 5 of the resolution. FINDINGS AND ALTERNATIVES: The alternatives available to the Oversight Board include: 1. Adopt a resolution making certain acknowledgements and approvals with respect to certain housing properties previously owned by the La Quinta Redevelopment Agency; or 2. Do not adopt the resolution; or 3. Provide staff with alternative direction. Respectfully submitted, la 00 Debbie Powell Economic Development/Housing Manager Approved for submission by: Vk11 �,\& �, Mark Weiss, Interim Executive Director of the Successor Agency to La Quinta Redevelopment Agency Attachments: 1. Site Map of Subject Properties 2 RESOLUTION NO. OB 2012- A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY MAKING CERTAIN ACKNOWLEDGMENTS AND APPROVALS WITH RESPECT TO CERTAIN HOUSING PROPERTIES PREVIOUSLY OWNED BY THE LA QUINTA REDEVELOPMENT AGENCY WHEREAS, the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency ("Oversight Board") has been established to direct the City of La Quinta, in its capacity as "successor agency," to take certain actions to wind down the affairs of the former La Quinta Redevelopment Agency ("Agency") in accordance with the requirements of Assembly Bill 26, also known as chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 and Part 1.85 of Division 24 of the California Health and Safety Code ("ABx1 26"); and WHEREAS, in fulfilling its purpose of expanding the supply of low- and moderate -income housing in the City of La Quinta, the former Agency, utilizing funds from its Low- and Moderate -Income Housing Fund, acquired ownership of several single family homes ("Affordable Homes"), certain vacant parcels designated for future development of low- and moderate -income housing (the "Vacant Affordable Parcels"), and a rental apartment project commonly known as Washington Street Apartments (Washington St. Apts."); and WHEREAS, the Affordable Homes, Vacant Affordable Parcels, and Washington St. Apts. are listed on Exhibit A to this Resolution, which is incorporated herein by this reference; and WHEREAS, to facilitate the development, operation, and/or use of the Affordable Homes, the Vacant Affordable Parcels, and the Washington St. Apts., for affordable housing purposes, in March 2011 the Agency (i) transferred fee title to the Affordable Homes and the Vacant Affordable Parcels to the La Quinta Housing Authority ("Authority"), and (ii) added the Authority to the title of the Washington St. Apts.; and WHEREAS, on March 7, 2012, to facilitate title insurance issuance for the Coral Mountain Apartment Housing Property, the City of La Quinta, acting as Successor Agency to the Former La Quinta Redevelopment Agency, quitclaimed the 9.89 acre Coral Mountain Apartment parcel to the La Quinta Housing Authority; and Resolution No. OB 2012- Approval of Property Transfers to Housing Authority Adopted: April 18, 2012 Page 2 WHEREAS, on January 2, 2012, the City Council of the City of La Quinta ("City Council" or "City," as applicable) adopted City Council Resolution No. 2012- 002, affirmatively electing to be the "successor agency" to the former Agency; and WHEREAS, on January 17, 2012, Resolution No. 2012-02, electing to be Agency. the Authority adopted Housing Authority the "housing successor" to the former NOW, THEREFORE, the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency does hereby resolve as follows: SECTION 1. The above Recitals are true and correct. SECTION 2. The City of La Quinta is the "successor agency" to the former La Quinta Redevelopment Agency. SECTION 3. The La Quinta Housing Authority is the "housing successor" to the former La Quinta Redevelopment Agency. SECTION 4. The Affordable Homes, Vacant Affordable Parcels, Coral Mountain Apartments Parcel, and Washington St. Apts. are "housing assets" of the former La Quinta Redevelopment Agency, as that term is used in Health and Safety Code Sections 34176(a) and 34177(g)• SECTION 5. The transfer of the "housing assets" to the La Quinta Housing Authority is hereby approved. PASSED, APPROVED and ADOPTED at a regular meeting of the Oversight Board of the Successor Agency to the La Quinta Redevelopment Agency held this 18`n day of April, 2012 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Resolution No. OB 2012 Approval of Property Transfers to Housing Authority Adopted: April 18, 2012 Page 3 JOHN PENA, Chairperson Oversight Board of the Successor Agency to La Quinta Redevelopment Agency ATTEST: LORI LAFOND Oversight Board Secretary EXHIBIT A List of Affordable Homes, Vacant Affordable Parcels, and Washington St. Apts. i d 21 E E E E E E E a aaaaaa m a a m 6 m m "g0000aaa y wyU�yU�WU YUIUU N N N N N N N x�a�aax ,fnunaana E E E E E E E a aunanw' t N N E m god E>3zc�ii > %s�z a'i S5 `o o'o x8 ic�w"'V cg ci c�c�c�c�c+u c�c�c�c4 c4 ci c4 c�c�c�S�UU88c4 �ca 2- MIMIAUIRI .xxxxxxx .xxxxxxx.. xxx xxxxxxx ss?��s���esggssss���sssgsss� a¢`rcrcrca 6T& ze x w rc¢aa�rc`rc`rc°rc¢¢rc¢¢rc rcm 9 �xaaa�� o aa¢wa mMIR EA Is"s s `e a S ¢¢ 5 5 5 5£ £¢g @@ @@ $ 5 5 5 5 5 gg gg 5 5 ¢¢ gg a'833a'3dda'a'��dd ¢g 5 5 S E.�F€€�F��€i�@€�@g 9eeega€€€€€g € gFa€aa as �5 3 3 `3 ., 9. �00 �50 c+xxxxxxx ¢rcx x xxx x xxxxxxxxxxxxxxxx... x�.x .xx.. xx x xxxxxx d o �arcd�a ¢� rc'3a� a rcaa arcrc�arc wrc�u������u���d�d`d & a¢ayna w9� 0$$ $$$�.q `4.`.1 d'm AAA dddd��^ddd.h `d `3 nrz i AGENDA CATEGORY: OVERSIGHT BOARD MEETING DATE: April 18, 2012 BUSINESS SESSION: a - ITEM TITLE: Consideration of Adoption of a Resolution Approving the Sale of Homes to Income- CONSENT CALENDAR: Qualified Buyers That Were Purchased Under the STUDY SESSION: Home Foreclosure Purchase Program PUBLIC HEARING: OTHER: RECOMMENDATION: Adopt a Resolution of the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency approving the sale of five homes to income -qualified buyers that were purchased under the Home Foreclosure Purchase Program and authorize the transmission of a letter signed by the Chair of the Oversight Board to the Department of Finance requesting its written concurrence with the sales if required by the title companies. FISCAL IMPLICATIONS: The Home Foreclosure Purchase Program was part of the former La Quinta Redevelopment Agency's ("Agency") overall affordable housing program. The Agency purchased dilapidated foreclosed homes, refurbished them, and sold them to income -qualified buyers. This eliminated blighting conditions in residential neighborhoods and provided affordable housing. Since the dissolution of the Agency, the program has been put on hold, and the Housing Authority has taken responsibility for selling the remaining five of thirteen homes purchased under this program. BACKGROUND AND OVERVIEW: In May 2009, the Agency created the Home Foreclosure Purchase Program. At the time, the housing market was inundated with homes that were bank -owned and in the foreclosure process. The goal was to purchase the most severely blighted homes at foreclosure sales, rehabilitate the homes to a level consistent with the surrounding neighborhood, then sell or rent the homes to income -qualified buyers at affordable sale prices or affordable rents. The program alleviates blight by rehabilitating substantially dilapidated homes, stabilize neighborhoods which have been impacted by foreclosures, sell or rent the rehabilitated homes to low-income households, and increase the community's supply of affordable housing. The program provides home ownership opportunities to those who may not otherwise be able to purchase a house. La Quinta Palms Realty was selected to negotiate the home purchases on the Agency's behalf, and City staff managed the rehabilitation process, hiring local contractors to perform the work. Between the months of February 2010 and March 2011, 13 foreclosed homes were purchased by the Agency with purchase prices varying from $68,100 to $124,000. Rehabilitation costs ranged from $6,600 to $91,000. (It should be noted that redevelopment law required the rehabilitation cost to be at least 25% of the purchase price:) Presently, six of the homes have already been sold; one is a rental property; one is in the rehabilitation process; and five are in escrow with income -restricted buyers. In March 2011, the homes were transferred from the Agency to the La Quinta Housing Authority. However, one house that is subject to this action was inadvertently left in the Agency's name, so the resolution includes Oversight Board approval for the transfer of the house to the La Quinta Housing Authority. Six properties were purchased by income -qualified buyers before the dissolution of the Redevelopment Agency. The five homes in escrow have come under scrutiny by the title companies, who are now wary of issuing title policies for fear that the State will use the claw -back provision for land assets. The law appears to exclude housing assets; however, title companies are requiring Oversight Board and DOF approval of the sales before they will issue title policies. Therefore, the title company is requesting Oversight Board and ultimately, Department of Finance approval of these sales: Purchase Purchase Repair % DfOw 2nd'.Trust Oat Trust 'Down Income Location Date: Price Cost, `Total Improved Sales Deed. Deed Payment APN Category Price IN ESCROW 54-120 Avenida Carranza 2/5/2010 $81,000 $91,182 $172,182 53% $135,000 $45,275 $85,850 $3,875 774-211-006 Low 52-050 Avenida Carranza 3/11/2011 $72,500 $57,436.$129,936 44% $135,000 $60,000 $70,275 $4,725 773-221-001 Low 77-330 Calls Sonora - 1/14/2011 $96,486 $55,1861 $151,672 36% $135,0001 $55,275 $75,000 $4,725 773-212-011-Ver Low 52-681 Avenida - Mendoza 2/14111 $81,853 $34,942 $116,795 30% $135,000 $60,000 $70,997 $4,003 773-302-020 Very Low 53-790 Avenida Madero 5/1312011 $80,100 $61,434 $141,534 43%8 1 65,000 $0 CASH 1 774-143-002 IVery Low 2 Before and after photos of these homes are included as Attachment 1 to this report. At the request of the title company, if the Oversight Board elects to approve these sales, staff will send a letter to the DOF requesting its written concurrence. FINDINGS AND ALTERNATIVES: The alternatives available to the Oversight Board include: 1. Adopt a resolution making certain acknowledgements and approvals with respect to the sale of certain single family homes by the La Quinta Housing Authority and authorize the transmission of a letter signed by the Chair of the Oversight Board to the Department of Finance requesting its written concurrence with the sales if required by the title companies; or 2. Do not adopt the resolution; or 3. Provide staff with alternative direction. Respectfully submitted, Debbie Powell Economic Development/Housing Manager Approved for submission by: Mark Weiss Interim Executive Director of the Successor Agency to La Quinta Redevelopment Agency Attachment: 1. Before and After Photos 3 ATTACHMENT 52-050 A VENI DA CARRANZA ` � n m m ^ c Al IA_�_f_'_d_R-R-,4=N=� A---= 1=i11=PE-R 10 R ° -5-2-- 5 8 1 A V E N-1=D-A=M-E=Nz&:-ZA=-�i=NV T-E-R / OR 2 e� A I n R A 77-sin CALLE SONORA - INTERIOR 5 3-=9=i3=#=t E ttf_f=F3�4==#4ti4 1= - IF a a . Yr OFFO ` k 4 1 T i TA c _ F ..s.6i�1Yi�Y4fl4.~ E ,r �. .. '! 2c ?.Y D°AP 14.x .:lis♦ ✓h.Y"µ%i `.4F •� .. yf,. OE�451W. RESOLUTION NO. OB 2012- A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO LA QUINTA REDEVELOPMENT AGENCY MAKING CERTAIN ACKNOWLEDGMENTS AND APPROVALS WITH RESPECT TO THE SALE OF CERTAIN SINGLE FAMILY HOMES BY THE to QUINTA HOUSING AUTHORITY WHEREAS, the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency ("Oversight Board") has been established to direct the City of La Quinta, in its capacity as "successor agency," to take certain actions to wind down the affairs of the former La Quinta Redevelopment Agency ("Agency") in accordance with the requirements of Assembly Bill 26, also known as chapter 5, Statutes 2011, First Extraordinary Session, which added Part 1.8 and Part 1.85 of Division 24 of the California Health and Safety Code ("ABx1 26"); and WHEREAS, in early 2011, the Agency expended funds from its Low- and Moderate -Income Housing Fund ("Housing Funds") to acquire single family bank - owned homes that had been acquired by the various banks through foreclosure, located at 52-050 Avenida Carranza, 54-120 Avenida Carranza, 52-681 Avenida Mendoza, and 77-330 Calle Sonora (the "Agency Acquired Bank Homes"); and WHEREAS, in March 2011, the Agency transferred fee title to three of the Agency Acquired Bank Homes to the La Quinta Housing Authority ("Authority"); title to the Agency Acquired Bank Home located at 52-050 Avenida Carranza (the "Non -Transferred Agency Acquired Bank Home") was inadvertently left with the Agency; and WHEREAS, in May 2011, the Authority expended Housing Funds to acquire a single family bank -owned home that had been acquired by the bank through foreclosure, located at 53-790 Avenida Madero (the "Authority Acquired Bank Home"); and WHEREAS, the Authority expended Housing Funds to rehabilitate the Agency Acquired Bank Homes and the Authority Acquired Bank Home (collectively, the "Homes"); and WHEREAS, on January 2, 2012, the City Council of the City of La Quinta ("City Council" or "City," as applicable) adopted City Council Resolution No. 2012- 002, affirmatively electing to be the "successor agency" to the former Agency; and Resolution No. OB 2012- Approval of Housing Authority Resales Adopted: April 18, 2012 Page 2 WHEREAS, on January 17, 2012, the Authority adopted Housing Authority Resolution No. 2012-02, electing to be the "housing successor" to the former Agency; and WHEREAS, the Authority has entered into purchase and sale agreements (the "Authority P&S Agreements") with income -restricted households ("Eligible Households") to purchase the Homes; and NOW, THEREFORE, the Oversight Board of the Successor Agency to La Quinta Redevelopment Agency does hereby resolve as follows: SECTION 1. The above Recitals are true and correct SECTION 2. The City of La Quinta is the "successor agency" to the former La Quinta Redevelopment Agency. SECTION 3. The La Quinta Housing Authority is the "housing successor" to the former La Quinta Redevelopment Agency. SECTION 4. The Agency Acquired Bank Homes are "housing assets" of the former La Quinta Redevelopment Agency, as that term is used in Health and Safety Code Sections 34176(a) and 34177(g). SECTION 5. Pursuant to Health and Safety Code section 34175(b), added by Part 1.85 of Division 24 of the California Health and Safety Code ("Part 1.85"), on February 1, 2012, the Non -Transferred Agency Acquired Bank Home was transferred to the control of the City, in its capacity as "successor agency" to the former Agency. SECTION 6. The transfer by the City, in its capacity as "successor agency" to the former Agency, to the Authority, of the Non -Transferred Agency Acquired Bank Home, is hereby approved. SECTION 7. The Authority Acquired Bank Home is a housing asset of the Authority acquired with Housing Funds. SECTION 8. The sale of the Homes by the Authority to the Eligible Households is hereby approved. SECTION 9. The Oversight Board has determined to not terminate or renegotiate any of the Authority P&S Agreements pursuant to its authority under Health and Safety.Code Section 34181(e). Resolution No. OB 2012- Approval of Housing Authority Resales Adopted: April 18, 2012 Page 3 PASSED, APPROVED and ADOPTED at a regular meeting of the Oversight Board of the Successor Agency to the La Quinta Redevelopment Agency held this 18th day of April, 2012 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JOHN PENA, Chairperson Oversight Board of the Successor Agency to La Quinta Redevelopment Agency ATTEST: LORI LAFOND Oversight Board Secretary