1997 09 23 RDA MinutesA# LA *UlNTA REDEVELOPMENT AGENCY
SPECIAL MEETING
MINUTES
SEPTEMBER23, 1997
Special meeting of the La Quinta Redevelopment Agency was called to order by
Chairman Sniff.
PRESENT: Board Members Adolph, Henderson, Holt, Perkins, Chairman Sniff
ABSENT: None
PUBLIC COMMENT None
CONFIRMATION OF AGENDA Confirmed
BUSINESS SESSION None
STUDY SESSION
1. DISCUSSION REGARDING STATUS OF AGENCY'S AFFORDABLE HOUSING
PROGRAMS.
Mr. Frank Spevacek, with Rosenow, Spevacek Group, Consultants for the
Redevelopment Agency, advised that the purpose of this report is to update the
Board on the efforts to-date regarding pursuing our affordable housing
production requirements and to seek the Board's direction as it relates to the
Agency's rental housing program and resale housing program.
As background, Mr. Spevacek advised that the law requires that 20% of the
annual tax increment revenues be set aside to increase and improve the supply
of affordable housing in both project areas. Currently, the Agency is receiving
$1.5-$1.8 million annually that is put into the housing fund. A majority of
those funds are used to retire debt service on the $22 million affordable housing
bonds that the Agency issued in 1 995. We did that because law also requires
that 1 5% of all new or substantially rehabilitated housing units in both project
areas be affordable to very low, low and moderate income households.
Additionally, 40% of those units must be available to very low income
households. Those units must have covenants attached to them to guarantee
that the units will remain affordable for the life of the project areas 26 years
for No.1 and 32 years for No.2).
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In 1994, Redevelopment Law was.modjfied to require that the Agency adopt
a 10-year plan that projects how the Agency will achieve the mandated housing
production requirements. The law further requires that the housing plan be
updated when the Agency's Five-Year Implementation Plans are reviewed 2 Y2
years after adoption. In October, staff will be before the Board with the Five-
Year Plan in a public hearing format. Since 1 994, the Agency has invested
$10.3 million in affordable housing production efforts which have produced a
total of 21 8 covenant restricted units of which 1 62 are affordable to very low
income households and 56 are affordable to low and moderate income
households. The Agency has a remaining projected housing production need of
1,361 units by 2004 470 very low income and 891 low and moderate
income. Accounting for the projects currently being discussed, the Agency will
have a housing production deficit in 2004 of 845 to 885 units.
Mr. Spevacek then reviewed the Agency's Rental Housing Program, advising
that the Agency currently owns 49 units which are rented to very low income
households that receive Section 8 rental assistance from the County. They are
currently managed by La Quinta Real Estate. They generate $20,000 in net
monthly income and as of July 1 997, they have generated a total of $41 5,000
in net rental income. The original direction of the Board was to retain them for
a period of time until the Cove residential resale market stabilized and then begin
selling them. However, the Cove real estate values have declined and market
conditions have not been favorable to sell the units. Redevelopment Law
restricts the Agency from owning real property for an extended period of time
unless eventually they're going to be used for another purpose, i.e, be
demolished and used for new construction; so if the Agency elects to retain the
units as rentals, it would be appropriate to establish a housing authority, of
which there are two forms to consider. One involves establishing a separate
entity that could involve a combination of Council Members and renters serving
as the governing body; and the second would involve reconstituting the
Redevelopment Agency as a Community Development Commission which would
provide the existing Redevelopment Agency both redevelopment and housing
authority powers and the board would be the same as the Agency Board is
currently constituted.
In response to Board Member Henderson, Mr. Spevacek advised that a
Commission would still have the same restrictions on use funds such as for
library services.
Board Member Henderson didn't think that she could support placing any of the
rental units on the market for at least the next two years because of the impact
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it could have on the Cove housing market. Therefore, she would be looking for
a direction that would allow the Agency to maintain ownership for a period of
time. She wasn't sold on the housing authority idea, and wished to have more
information on the commission format.
Chairman Sniff agreed.
In response to Board Member Perkins, Ms. Honeywell, Agency's Legal Counsel,
advised that the Agency shouldn't hold property for more than a year. In the
past what we've done is adopt a plan where we propose to sell a few of the
units every year for a certain number of years until they're eventually all sold
one has been sold). Therefore, we've taken the position that having a plan to
sell them has met the concerns but we should be somewhat more aggressive
in selling them). But if the Board now wishes to take the position of not
wanting to sell them for awhile, then some other direction needs to be given.
Mr. Spevacek said that we could indicate to the management firm that we wish
to actively pursue the selling of a couple of the units.
Chairman Sniff felt that we should indicate to the agent that we want to sell
two or three and to place them on the market then next year review it again and
see where we are.
Board Member Perkins disliked the connotation of a housing authority. In
response to his questions, Mr. Spevacek advised that reconstituting the Agency
to a Commission would result in the Agency no longer being in existence and
they would gain more authority. The State would continue to have control.
Board Member Henderson wished to have more information on the Commission
and to direct staff to place two units on the market.
Board Member Holt said that she tends to shy away from a housing authority
also. She felt that when it comes to the whole housing program, when we are
looked at, we are looked at for our efforts. She was supportive of putting two
units on the market. She believed that we are on top in making progress in
fulfilling this need.
Mr. Spevacek advised that is correct, that a State report listing the top ten
agencies in meeting this requirement, La Quinta was in the top five.
Board Member Adolph expressed the same feelings about a housing authority.
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Staff was directed to indicate to our agent to place two units on the market this
year and to come back with a more detailed report on the formation of a
commission and what it would entail.
La Quinta Rental* Housing Program Maintenance Mr. Spevacek advised that
several homes have been identified by staff as being in need of both interior and
exterior maintenance. A total of $200,000 of improvement costs were
identified. Staff proposed that the Agency Board consider authorizing these
improvements with funding being derived from the surplus rental income.
The Board concurred on giving such authorization.
Unit Purchase/Rehabilitation/Resale Mr. Spevacek advised that in 1 997, the
Agency adopted the La Quinta Housing Program that funded silent second trust
deed mortgages; rehabilitation loans of up to $25,000 per unit; and the
purchase of dilapidated single-family dwellings which would then be
rehabilitated and sold to low income households. He then showed slides of ten
units identified by staff which could be purchased, rehabilitated and sold. These
homes range in price from $50,000-$70,000. Staff was looking for direction
to acquire two of these units. The rehabilitation could be done by either the
Building Horizons Program or a private contractor. The homes would then have
the affordability covenant assuring their affordability for 26 years.
Board Member Henderson expressed concern that the Board just gave direction
to place two units on the market and now we're going to place two more.
Chairman Sniff felt that we can sell the two previously authorizing, pointing out
that these two won't be coming on-line for sale for some time.
The Board concurred in giving direction to purchase and rehabilitate two units
for sale and that both options for having the work done be explored.
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CLOSED SESSION
1. CONFERENCE WITH LEGAL COUNSEL PURSUANT TO GOVERNMENT CODE SECTION
54956.9(a) REGARDING EXISTING LITIGATION; LA QUINTA REDEVELOPMENT
AGENCY V. DIEHL EVANS & COMPANY, CASE NO.782308; CITY OF ORANGE V.
ALABAMA TREASURY ADVISORY PROGRAM, CASE NO. BC 106461; REFCO, CASE
NO. CV92-7626RJK.
2. CONFERENCE WITH LEGAL COUNSEL PURSUANT TO GOVERNMENT CODE SECTION
54956.9(b)3(E) REGARDING POTENTIAL LITIGATION ONE CASE).
The Board reconvened with no decision being made which requires reporting pursuant
to the Brown Act.
There being no further business, the meeting was adjourned.
Res ectfully submitted,
SAUNDRA L. JUHOLA, Secretary
La Quinta Redevelopment Agency
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