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1994 06 28 RDA MinutesP LA QUINTA CITY COUNCIL LA QUINTA REDEVELOPMENT AGENCY MINUTES JUNE 28? 1994 Special joint meeting of the La Quinta City Council and the La Quinta Redevelopment Agency was called to order at the hour of 12:00 Noon. PRESENT: Council Members Bangerter 12:02 P.M.), Perkins, Sniff, Mayor Pena ABSENT: Council Member McCartney MOTION It was moved by Council Members Sniff/Perkins to excuse Council Members Bangerter and McCartney. Motion carried unanimously. CONFIRMATION OF AGENDA Confirmed PUBLIC COMMENT None Council Member Bangerter joined the meeting at this time. BUSINESS SESSION None PUBLIC HEARINGS 1. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA APPROVING AND AUTHORIZING THE EXECUTION OF THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT AGENCY AND E. G. WILLIAMS DEVELOPMENT CORPORATION AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH. Mr. Herman, Planning Director, advised that the summary report and the draft Disposition and Development Agreement have been available for inspection at the Planning & Development counter for the past two weeks. Additionally, a notice of public hearing was published consecutively for two weeks. A sign-up sheet was provided, but no one came in to review the report or the DDA. Frank Spevacek, representing Rosenow, Specevek Group, this meeting culminates 18- months of effort to define a project, locate a site, negotiate with Williams Development and Desert Sands Unified School District and bring forward the Disposition and Development Agreement that provides for the project's implementation. The project BIB] 07-15-1996-U01 03:13:50PM-U01 RDAMIN-U02 06-U02 28-U02 1994-U02 PCity Council 2 June 28, 1994 Redevelopment Agency Minutes itself is part of a larger 35.23 acre site located just north of the Civic Center upon which the DDA would implement the construction of 62 single-family dwellings, 91 multi- family/senior citizens rental dwellings, a 5-acre detention basin/park, and 10 acres to be sold to Desert Sands Unified School District for the construction of an approximately 650 student elementary school. The project itself will cause the construction of the residential Units as well as the detention basin and provides a total of $4.5 million in Agency low- moderate income housing assistance to cause its implementation. Of that $4.5 million, $877,000 is the value of the property that will be conveyed to Williams Development for the construction of the improvements and an additional $3.6 million that will be provided to fund, or assist in funding on and off-site infrastructure improvements, permits, plans and fees. In return, the Agency will get affordable dwellings that are affordable to very- low, low and moderate income households. On the single-family product, there will be ownership units, constructed on 5,000 sq. ft. lots, with dwellings ranging from 1,200 to about 1,600 sq. ft. and will be sold for $106,900 to $111,900 to $115,900. That project will feature 42 moderate-income units, 10 low-income units and 10 very-low income units. The senior citizen housing units will include 44 very-low income unitS, 31 low-income units and 16 low-moderate income units. All 153 units will have affordability covenants recorded against them which will take us down the path toward achieving the Agency's housing production requirements as required by the California Community Redevelopment Law. The DDA provides various options for the conveyance of the property as well as the provision of on and off-site infrastructure assistance. The reason for these options is that the senior citizen component of the project is scheduled to employ low-income investment tax credits to partially fund approximately 33% of the project development costs. Because of that and because the process involves an allocation from the State's Allocation Board to grant these projects investment tax credit, the developer is moving forward to apply for them in the July 1994 cycle. If it is unsuccessful because the agenda is full, then the next cycle for the Tax Credit Allocation Board to review projects is scheduled for December 1994. In an effort to not hold up the entire project which includes the school, retention basin & single family units) the DDA provides for conveyance of either the multi-family site or the single-family site with detention basin or the conveyance of the entire site if they are successful at getting the tax credit allocation. Then different disbursement amounts for the land and improvement costs are provided for in the DDA to fund the necessary improvements associated with each conveyance. Mark Huebsch, Legal Counsel, stated that the most important aspect of the project has to do with the long-term affordability and that has implications for the value of the land. The land would have very substantial value, but in effect, the affordability covenants take the value out economically by muting the income stream. The summary report, which has been on display, goes through the economic analysis. He noted that the components BIB] 07-15-1996-U01 03:13:50PM-U01 RDAMIN-U02 06-U02 28-U02 1994-U02 PCity 3 June 28, 1994 Redevelopment Agency Minutes that can be conveyed. In each case with a conveyance occurring, the Agency would be paying out money only for infrastructure improvements and in each case, the Agency would have security in the form a Second Deed of Trust on the property, so there is some security. Regarding the tax credit possibility, Williams Development is contemplating an assignment along the way to a non-profit housing corporation. The rationale is that a non-profit housing corporation is practically essential to obtain housing tax credit. The affect of housing tax credit is that it functions like equity dollars and helps to make the project feasible with the affordability mix as presently configured. He added that there are a number of remedies that the Agency has under the document for non-performance or inadequate performance with the construction or use of property. In response to Mayor Pena, Mr. Huebsch advised that there are portions of the agreement that run with the property, parts only relate to construction and not in perpetuity, but the affordability limitations run until 2029. Mayor Pena asked if the property could become so valuable in thirty years, that the Agency might wish to repurchase the property or do something else with it, can the Agency re-purchase it? Mr. Huebsch advised that there is a provision of right of first refusal but that's more of a defensive technique. If there is an opportunity where the owner is attempting to re- market it, that would allow the Agency to preserve the affordability. The way the agreement is written, it looks to restricting the use of these properties for a very significant period of time. As the party imposing these covenants and as the Agency's affiliation with the City, there would be a lot the City/Agency could do practically speaking, to unwind covenants; however, that would also have implications as to the long-term affordability housing production of the Agency. In further response to Mayor Pena, Mr. Spevacek, referred to Attachment 13, Page 4 of 6 in Section 5 of the agreement which sets forth if the Agency is dissatisfied with the services then it can either terminate the agreement or perform such services and charge same to the developer, which charges shall be paid by the developer within fifteen days after receipt of the bill. The Mayor/Chairman declared the PUBLIC HEARING OPEN. There being no one wishing to speak, the PUBLIC HEARING WAS CLOSED. BIB] 07-15-1996-U01 03:13:50PM-U01 RDAMIN-U02 06-U02 28-U02 1994-U02 PCity Council 4 June 28, 1994 Redevelopment Agency Minutes RESOLUTION NO.94-44 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, APPROVING AND AUTHORIZING THE EXECUTION OF THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN TIlE LA QUINTA REDEVELOPMENT AGENCY AND E. G. WILLIAMS DEVELOPMENT CORPORATION AND MAKING CERTAIN FINDINGS IN CONNECTION TIIEREWITH. It was moved by Council Members Sniff/Bangerter that Resolution No. 94-43 be adopted. Motion carried unanimously. RESOLUTION NO. RA 94-10 A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING AND AUTHORIZING THE EXECUTION OF THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY AND E. G. WILLIAMS DEVELOPMENT CORPORATION AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH. It was moved by Mr. Pena, seconded by Mrs. Bangerter that Resolution No. RA 94- be adopted. Motion carried unanimously. The Redevelopment Agency portion of the meeting was adjourned upon motion by Mrs. Bangerter, seconded by Mr. Perkins and carried unanimously. CLOSED SESSION 1. Discussion of negotiations with the La Quinta City Employees Association pursuant to Government Code Section 54957 Meet and Confer Process. The Council reconvened and the City Attorney announced that the City Council has concluded a Closed Session under Government Code Section 54957 and has authorized a 2% Cost of Living Adjustment for all employees not represented by the La Quinta Employees Association and in addition, a decision was made to accept the Department Directors offer to have a 0% of Cost of Living Adjustment at this time. BIB] 07-15-1996-U01 03:13:50PM-U01 RDAMIN-U02 06-U02 28-U02 1994-U02 PCity Council 5 June 28, 1994 Redevelopment Agency Minutes There being no flirther business, the meeting was adjourned Res ctftllly submitted AUNDRA L. JUHOLA LA, City Clerk/Secretary City of La Quinta/La Quinta Redevelopment Agency BIB] 07-15-1996-U01 03:13:50PM-U01 RDAMIN-U02 06-U02 28-U02 1994-U02