Staff Rpt 2023-10-17 HA - Prop Acq PSA AMEND 1 Dune Palms Rd & Hwy 111 Stormwater ImprovCity of La Quinta
HOUSING AUTHORITY ME'
STAFF REPORT
October 17, 2023
CONSENT CALENDAR ITEM NO. 2
AGENDA TITLE• ADOPT RESOLUTION TO APPROVE AMENDMENT NO. 1 TO
AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS WITH BP
DUNE PALMS, LP, BY GENERAL PARTNER BLACKPOINT PROPERTIES, LLC,
REGARDING STORMWATER OUTFLOW IMPROVEMENTS RELATED TO THE
ACQUISITION OF A PORTION OF CERTAIN REAL PROPERTY COMPRISED OF 5.199
ACRES LOCATED ON THE NORTHEAST CORNER OF HIGHWAY 111 AND DUNE
PALMS ROAD (APN: 600-030-018); CEQA: THE PROJECT IS EXEMPT FROM
ENVIRONMENTAL REVIEW PURSUANT TO SECTION 15061 (b)(3) "COMMON SENSE
EXEMPTION"
RECOMMENDATION
Adopt a resolution to approve Amendment No. 1 to Agreement for Purchase and Sale and
Escrow Instructions with BP Dune Palms, LP, by General Partner Blackpoint Properties,
LLC, regarding stormwater outflow improvements related to the acquisition of a portion of
certain vacant real property comprised of 5.199 acres, located on the northeast corner of
Highway 111 and Dune Palms Road (APN: 600-030-018); and authorize the Executive
Director to execute the amendments substantially in the form attached, allowing for minor
and non -substantive changes.
EXECUTIVE SUMMARY
• On January 17, 2023, the Housing Authority (Authority) approved an Agreement for
Purchase and Sale and Escrow Instructions (Agreement) with BP Dune Palms, LP,
by General Partner Blackpoint Properties, LLC (Blackpoint) to purchase 5.199 acres
of vacant real property located on the northeast corner of Highway 111 and Dune
Palms Road (Property) for future development of affordable housing.
• Section 5.8.2 of the agreement required staff to bring for the Authority's review and
approval a "Stormwater Outflow Reimbursement Agreement," containing the
description of necessary stormwater outflow improvements to be constructed by
Blackpoint, and related costs to be reimbursed by the Authority, providing mutually
beneficial land improvements for the southerly properties to be owned by Blackpoint,
and the northerly property to be purchased by the Authority.
• Blackpoint and the Executive Director have agreed that, now, Blackpoint will
complete the construction of all stormwater outflow improvements at its own cost.
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FISCAL IMPACT
Pursuant to the Agreement, Property acquisition costs in January 2023 were estimated at
$3,624,192 ($16/SF for approx. 5.2 Acres), which did not include stormwater outflow
improvement costs.
As of October 17, 2023, actual acquisition costs for the Agreement, including proposed
Amendment No. 1 are $3,633,495, comprised of $3,623,495 ($16/SF for 5.199 Acres) and
$10,000 (escrow fees). Amendment No. 1 results in a total increase of $9,303.
Funds are available in the Authority's Land Acquisition account no. 249-0000-74010.
BACKGROUND/ANALYSIS
In January 2023, the Authority approved an Agreement to acquire approximately 5.2 acres
of vacant property. The Property is proposed to be developed as an affordable housing
development with a connecting thoroughfare to CV Link. Development of the Property
would support affordable housing development as part of the Regional Housing Needs
Assessment (RHNA) requirement for the City, while Blackpoint would develop to the
contiguous southerly parcels commercial opportunities for businesses, which furthers the
development of the Highway 111 Corridor Plan that emphasizes mixed-use development.
Section 5.8.2 of the Agreement required a "Stormwater Outflow Reimbursement
Agreement," to be entered into between the Authority and Blackpoint, containing the
description of necessary stormwater outflow improvements to be constructed by
Blackpoint, and related costs to be reimbursed by the Authority.
Since the initial approval, Blackpoint and Staff have agreed that now, Blackpoint will
complete the construction of all stormwater outflow improvements at its own cost. As this
does not change the originally agreed upon costs associated with the Agreement, this is
considered a non -substantive change.
A Conditional Final Parcel Map was approved by Council on September 19, 2023, which
defined the exact acreage to be purchased as 5.199 acres, resulting in a total $/SF amount
to be $3,623,495 ($697 less than the original January 2023 estimate). With the approval of
this Amendment, the Authority will be able to close escrow, which is anticipated to occur
on October 31, 2023.
kLTERNATIVES
The Authority may elect not to proceed with the proposed Amendment, though staff does
not recommend this as all costs have been determined to be fair and reasonable, and this
would allow for close of escrow.
Prepared by:
Approved by:
Attachment:
Doug Kinley, Management Analyst
Jon McMillen, Executive Director
1. Amendment No. 1 to Purchase and Sale Agreement
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