02-01-1994 - Joint Public Hearing - Birtcher Disposition & Development Agreement0
Ciry of "%esr Covina
Memorandum
TO:
FROM:
SUBJECT:
City Council and City Manager
Redevelopment, Agency Staff .
AGENDA
ITEM NO.
JOINT PUBLIC HEARING -
BIRTCHER DISPOSITION AND DATE February 1, 1994
DEVELOPMENT AGREEMENT
(REFER TO AGENCTY AGENDA ITEM NO. n
SUMMARY: Transmitted for City Council and Agency consideration are resolutions and
findings which approve a Disposition and Development Agreement (DDA)
between the Redevelopment Agency of the City of West Covina and Birtcher
Senior Properties ("Developer"). The DDA memorializes the obligations of the
Agency and the Developer with respect to the sale and development of Agency -
owned property located at 130-138 S. Barranca Street. Birtcher Senior
Properties is proposing to purchase the site for the development of 51
condominiums restricted to occupancy by senior citizens.
BACKGROUND
In June 1992, the Redevelopment Agency purchased a 1.3-acre parcel from the City of West
Covina for the purpose of developing a senior apartment complex. The property was purchased
with Housing Set -Aside funds for $594,000, with the intent that a portion of the units would be
restricted to rental rates affordable to qualifying seniors. The restricted units would be counted
toward the Agency's replacement housing obligation.
In April 1993, the Agency executed an Exclusive Negotiating Agreement with Birtcher Senior
Properties. The Developer worked with City and Agency staff and neighbors adjacent to the site
to complete the project design and secure entitlements for a 51-unit senior citizen condominium
project. The Developer and Agency staff also began negotiations toward a Disposition and
Development Agreerlent for the sale of the property. In December 1993, the Planning
Commission approved a General Plan Amendment, East Hills Specific Plan Amendment, zone
change, and Negative Declaration of Environmental Impact and Precise Plan for the project.
DISCUSSION
The terms of the DDA state that the Developer will purchase the property from the Agency for
$600,000. The first installment of $300,000 shall be due to the Agency after the repayment of
the Developer's construction loan. The balance of $300,000 shall be due to the Agency after
the repayment of the Developer's equity loan. Profits from the project will not be disbursed to
the Developer until after full payment to the Agency of the $600,000 purchase price.
Five of the 51 units will be restricted for sale to low-income persons or households as defined
in Health & Safety Code Sections 50052.5 and 50079.5. The five units will be offered by the
Developer at a reduced price. The difference between the market rate of the units and the
affordable rate will be characterized as a "silent second". Buyers of these . units will enter into
an agreement with the Agency to secure the second, which is payable to the Agency if the unit
is resold within ten years to a non -qualifying buyer.
The full amount of the second is forgiven if the unit is owner -occupied by the income -eligible
buyer for the ten-year period. If the unit is offered for sale during the first ten years and sold
to a qualified low-income senior, the note and deed of trust may be assumed by the new buyer.
If the unit is sold to a non -qualified senior (above low income), then the principal and accrued
interest plus. an equity share are due and payable to the Agency. The equity share will be
calculated in relation to the original loan -to -value ratio. For example, if the market value of the
unit was $80,000 and the affordable housing cost was $70,000, a promissory note for $10,000
plus simple interest and 12.5 percent of equity is due at time of sale.
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City Council and
City Manager
-2-
February 1, 1994
The Developer will make reasonable efforts to sell all units in conformance with the provisions
of the DDA. However, if the Developer is unsuccessful, the units may be leased to qualified
senior citizens. In the event the Developer leases any of the condominium units, 30 percent of
the gross rental proceeds shall be due to the Agency on a monthly basis in partial repayment of
the amount of the Promissory Note.
The Agency has caused a "Phase I" environmental assessment of the site to be conducted, dated
October 19, 1991. The Phase I report concluded that there is no indication of hazardous
materials contamination on the site, and did not recommend any further investigation or action.
However, the Developer may, at its option, pay for an additional environmental study of the
site. If, based upon the resulting environmental report, contamination is found and the Agency
estimates that remediation cost exceeds $100,000, the Agency may terminate this Agreement.
However, if the Developer agrees to pay the remediation cost (over $100,000 and subject to
reimbursement outlined below), the Agency may not terminate the Agreement. The _Developer
will fund any remediation costs above $100,000, and these costs shall be deducted (up to
$200,000) from the amount of the purchase price of the site. The total exposure to the Agency
with respect to environmental remediation is $300,000. Based upon the results of the Phase I
environmental analysis, the risk of incurring any environmental costs is minimal.
An important component of the entitlement process and the ultimate approval of entitlements by
the Planning Commission was the continuing dialogue between the Developer and the adjacent
homeowners with respect to project design. The commitment of the Developer to minimize view
corridors through an extensive landscape buffer between the senior development and the homes
is memorialized in the DDA. The process will be monitored through the review and approval
of the finj landscape plan by the Planning Department.
RECOMMENDATION
Staff recommends that the City Council adopt the following resolution:
RESOLUTION NO. _&34 - A RESOLUTION OF THE
CITY COUNCIL OF WEST COVINA APPROVING THE
SALE OF LAND PURSUANT TO A DISPOSITION AND
DEVELOPMENT AGREEMENT BY AND BETWEEN THE
WEST COVINA REDEVELOPMENT AGENCY AND
BIRTCHER SENIOR PROPERTIES, INC. AND MAKING
CERTAIN FINDINGS IN CONNECTION THEREWITH
ester Yoshiza1/i/ager
'
Redevelopment
CY/SE/bh
BAR129SE
APPROVED:
teven W. Wylie
Director of Redevel ent Services
RESOLUTION NO.
A RESOLIMON OF THE CITY COUNCIL OF WEST
COVINA APPROVING THE SALE OF LAND PLMSUANT
rM A DISPOSMON AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE WEST COVINA
REDEVELOP:I7ENT AGENCY AND BIRTCHER SENIOR
PROPERTIES, INC. AND MAKING CERTAIN FINDINGS IN
CONNECTION TIIEREWITH
WHEREAS, the West Covina Redevelopment Agency (the "Agency") is engaged in
activities necessary to carry out and implement the Redevelopment Plan (the "Redevelopment
Plan") for the West Covina Redevelopment Project (the "Project"); and
WHEREAS, in order to carry out and implement such Redevelopment Plan the Agency
proposes to enter into that certain Disposition and Development Agreement (the "Agreement")
with Birtcher Senior Properties, Inc., a California corporation (the "Developer"), for the
disposition and development of certain property (the "Site"), all as described in the Agreement;
and
WHEREAS, pursuant to Section 33433 of the Community Redevelopment. Law.
(California Health and Safety Code Section 33000, et M.), the Agency is authorized, with the
approval of the City Council after public hearing, to sell the Site for redevelopment pursuant to
the Redevelopment Plan upon a determination by the City Council that the sale of the property
will assist in the elimination of blight and that either (1) the consideration for such sale is not less
than fair market value at its highest and. best use in accordance with the Plan, or (2) Ilia
consideration is not less than the fair reuse value at the use and with the covenants and conditions
and development costs authorized by the sale, and
WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize
and direct the Agency to expend a certain percentage of all taxes which are allocated to the
Agency pursuant to Section 33670 for the purposes of increasing, improving and preserving the
community's supply of low and moderate income housing available at affordable housing cost to
persons and families of low- and moderate -income, lower income, and very low income; and
WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate
Income Housing Fund (the "Housing Fund"); and
WHEREAS; pursuant to Section 33334.2, in carrying out its affordable housing activities,
the Agency is authorized to convey real property either inside or outside the Project Area and to
proviide subsidies to or for the benefit of very low income and lower income households, or
persons.and families of low or moderate income, to the extent those households cannot obtain
housing at affordable costs on the open market; and
NX HEREAS, the Agency has determined by resolution that the We of real property '
outside of the Project Area for affordable housing purposes of benefit to the Project Area; and
WHEREAS, pursuant to Section 33413(b), the Agency is required to ensure that at least
15 percent of all new and substantially rehabilitated dwelling units developed within a project
area under the jurisdiction of an agency by private or public entities or persons other than the
agency shall be available at affordable housing cost to persons and families of low or, moderate
income; and
WHEREAS, the Agency is authorized to meet the requirements of Section 33413 by
making available at an affordable housing cost two housing units outside of the project area for
each unit which would be required to be provided within a project area; and
WHEREAS, a joint public hearing of the Agency and City Council on the proposed
Agreement was duly noticed in accordance with the requirements of Health and Safety Code
Section 33433; and
WHEREAS, the proposed Agreement, and a summary report meeting the requirements of
Health and Safety Code Section 33433, were available for public inspection consistent with the
requirements of Health and Safety Code Section 33433; and
WHEREAS, on February 1, 1994, the Agency and City Council held a joint public '
hearing on the proposed Agreement at which time the Agency and the City Council reviewed and
evaluated the proposed Agrccment; the summary prepared pursuant toaScalth__and_.Safety.Code.
Section 33433, the staff report prepared on this matter; and all of the information, testimony, and
evidence presented during the joint public hearing; and
WHEREAS, the City Council on January 4, 1994, and the Planning Commission on
December 14, 1994, have approved and certified a negative declaration with respect to the
development of the Site pursuant to the requirements of the California Environmental Quality
Act, and this Agreement is consistent in all, respects with the project which was reviewed therein;
and
WHEREAS, all actions required by; all applicable law with respect to the proposed
Agreement have been taken in an appropriate and timely manner; and
WHEREAS, the City Council has duly considered all terms and conditions of the
proposed AgrFement and helieves that the disposition of the Site pursuant thereto is in the best
interests of the City of West Covina and the health, safety, and welfare of its residents, and in
accord with the public purposes and provisions of applicable state and local laws and.
requirements.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West
Covina as follows:
Segion 1, The City Council hereby finds and determines, based upon substantial
evidence provided in the record before it, that (a) the consideration for the disposition of the Site
vuaL:11268_113191B2740.12 2
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pursuant to the leans a -Lid conditions of the Agreement is established at the fair market value of
the Site at its highest and best use in accordance with the Plan, (b) that the sale and development
of the Site will eliminate physical and economic blight within the Project Area by expanding the
supply of housing affordable to low- and moderate -income households in the City, which is of
benefit to the Project Area, and (c) that the sale of. the Site and development thereof will be of
benefit to the' Project Area.
Section The City Council hereby hereby approves the sale of the Site by the
Agency to the Developer pursuant to the Agreement.
Section 3. The City Clerk shall certify to the adoption of this Resolution,
APPROVED AND ADOPTED this day of , 1994.
Mayor, City of west Covina
ATTEST:
City Clerk
APPROVED. AS TO FORM.
City Attorney
PUBL: 11269-113191 B2740.12 3
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STATE OF CALIFORNIA >
COUNTY OF LOS ANGELES )
CITY OF WEST COVINA )
i t
City Clerk of the City of West Covina, do herehy certify that the
foregoing Resolution No. . was introduced and. adopted at a regular meeting provided by law
of the City Council of the City of West Covina held on the 1st day of February, 1994, by the
following vote of the members thereof:
AYES: COUNCIL. MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
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PURL! 112b3_113191EM740.12 4
SUMARY REPORT
This Summary Report has been prepared by the West Covina
Redevelopment Agency ("Agency") pursuant to Section 33433 of the
California Health and Safety Code. This report sets forth certain
details of a proposed Disposition and Development Agreement
("Agreement"), by and between the West Covina Redevelopment Agency
and Birtcher Senior properties ("Developer"), for the disposition
and development of certain Agency -owned property situated within
the City of West Covina, as an affordable senior citizen
condominium housing project.
This Report describes and specifies:
1. The cost of the agreement to the agency, including land
acquisition costs, clearance costs: relocation costs, the
costs of any improvements to be provided by the agency, plus
,the expected interest on any loans or bonds to finance the
agreements.
2. The estimated value of the interest to be conveyed or leased,
determined at the highest and best uses permitted under the
plan.
3. The estimated value of the interest to be conveyed or leased,
determined at the use and with the conditions, covenants and
development costs required by the sale or lease. The purchase
price or sum of the lease payments which the lessor will be
required to make during the term of the lease. If the sale
price or total rental amount is less than the fair market
value of the interest to be conveyed or leased, determined at
the highest and best use consistent with the redevelopment
plan, then the agency shall provide as part of the summary.an
explanation of the reasons for the difference.
4. An explanation of why the sale or lease of the property will
assist in the elimination of blight, with reference to all
supporting. facts and materials relied upon in making this
explanation.
This Report and the proposed Agreement are made available for
public inspection.prior to the approval of the Agreement pursuant
to -Section 33433 of the Health and Safety Code.
COST OF THE AGREEMENT TO THE AGENCY
The Disposition and Development. Agreement by and between the West
Covina Redevelopment, Agency and Birtcher Senior Properties assigns
all project costs to the Developer, including all on and off -site
improvement costs. The subject site. consists of 1.29 acres of
undeveloped land and therefore the' proposed project does not
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generate clearance or relocation costs. The Agency's cost to
acquire the land from the -City of West Covina was $594,000, which
amount was.funded through the Agency's Housing Set -Aside fund.
The estimated fair market (value_ of the lease of the site,
determined at the highest use permitted under the redevelopment
plan is $600,000.
The developer will pay $600,000 for land acquisition.
ELIMINATION OF BLIGHT.
The subject site is not in alredevelopment project area, and has
not been analyzed with respect to blighting conditions. However,
Health and Safety Code Section 33071 emphasizes. the provision of
affordable housing as a basic responsibility of redevelopment;
The Legislature--further-finds- and- declares that a fundamental
purpose of redevelopment is to expand the supply of low- and
moderate -income housing,j ... and to provide an environment for
the social, economic, and psychological growth and well-being
of all citizens.
Further, Section 313334.2 (a) states that;
Not less than 20 percent of all taxes which -are allocated.to
the agency pursuant to '!Section 33670 shall be used by the
agency for the purposes of increasing, improving,' and
preserving the communityis supply of low -,and moderate -income
housing available at affordable housing cost, as defined by
Section 50052.2, to persons and families of low or moderate
income, as defined in !Section 50093 and very low income
households, as defined ip Section 50105...
Section 33334.2 (e);
In carrying out the pu
exercise any or all of
1) " Acquire real prc
.Section 33334.16.
Section 33334.2 (g)
es of this section, the agency may
powers, including the following:
or building sites subject to
The agency may use these' funds inside or outside the project
area. The agency may only use these funds outside the project
area upon a resolution of the agency and the legislative body
that such use will I
determination by the ac
final and conclusive a:
area. The Legislature
of replacement housing
benefit to a project.
e of benefit to the project. The
'ency and the legislative body shall be
to the issue of benefit to the project
finds and declares that the provision
pursuant to Section 33413 is always of
The five units restricted through the Agreement to sale to low-
income persons or households will partially satisfy the Agency's
responsibilities with regard to replacement housing. Further, on
October 19, 1993, the City Council and the Agency Board of the City
of West Covina adopted resolutions which stated that the use* of
taxes allocated from the Project Area for the purpose of improving
and increasing the community's supply of low- and moderate -income
housing available at affordable housing costs outside the Project
Area and within the City of West Covina will be of benefit to the
Project.
Finally, the Redevelopment Plan for the West Covina Project
identifies the Agency's goal to improve, preserve and increase the
community's supply of low and moderate income housing. The Plan
further states that the Agency may, to the extent permitted by law
and land use designations, inside or outside the Project Area,
acquire land, sell or lease land, donate land, improve sites, or
construct or rehabilitate structures in order to,provide housing
for persons and families of very low, low or moderate income. The
Agency may also provide subsidies to, or for the benefit of, such
persons and families or households to assist them in obtaining
housing within the City.
•
SAN GABRIEL VALLEY TRIBUNE
1210 N. Azusa Canyon Road
West Covina, CA 91790
(Space below for use of County Clerk only)
RECEIVED
FE3 01 1994
CITY CLERK'S OFFICE
CITY OF WEST COVINA
PROOF OF PUBLICATION
(2015.5 C.C.P.)
STATE OF CALIFORNIA
County of Los Angeles
1 am a citizen of the United States, and a resident
of the county aforesaid; I am over the age of
eighteen years, and not a party to or interested
in the above -entitled matter. I am the principal
clerk of the printer of SAN GABRIEL VALLEY TRIBUNE,
a newspaper of general circulation printed and
published daily in the City of West Covina, County
of Los Angeles, and which newspaper has been
adjudged a newspaper of general circulation
by the Superior Court of the County of
Los Angeles, State of California, on the'
date of September 10, 1957, Case Number
684891. The notice, of which the annexed
is a true printed copy, has been published
in each regular and entire issue of said
newspaper and not in any supplement thereof
on the following dates, to wit:
1/18,25/94
I declare under penalty of perjury that the
foregoing is true and correct.
Executed at'West Covina, LA Co. California
this day of TANi1ARY 1dci 9�1�
��7'� ,;_
Signature
Proof of Publication of
NOTICE OF JOINT PUBLIC HEARING BY THE
CITY COUNCIL AND THE REDEVELOPMENT
AGENCY OF .THE CITY OF -WEST COVINA' ON
THE PROPOSED DISPOSITION •,- *AND
DEVELOPMENT AGREEMENT BETWEEN THE
REDEVELOPMENT, AGENCY AND BIRTCHER
SENIOR PROPERTIES '.- ,,.'ti h�,'4
NOTICE IS HEREBY. GIVEN that the'City Council of
the City of West Covina (the "City Council"):and the
Redevelopment'Agency,of the City'of-West-C&M6
(the"Agency':) `will .hold a'�loint Public he6Nng:on
-The following' documents are "available fo
review and copying Monday through Friday, f
- 4:00 P.M. at the West Covina Redevel
Agency, 1444 West Garvey Avenue; Room,?
"ovina, CA 91793 s :
I. Disposition and Development Agreement''
Agreement by% pnd between the Agency,
Birtcher;Senior. Properties, J
i• A Summaty Report Which describes and s
a. The •',Costs o ,be. incurred by, the ;Ag
under ?•;the roposed Dispostion
Development �ti'reement, = , ;'r
b. The estimated Nlalue of the ii teresfcony
pursuant to the' proposed Disposition
Development 'Agreement, determined al
highest uses permitted under the City of
Covina General Plan (NOTE: THE PARCI
LOCATED OUTSIDE THE-,WEST:CON
REDEVELOPMENT PROJECT AREA);
c. The purchase price is to be paid for the P
under •the Disposition -and 'Developr
Agreement,
& • Other, pertinent economic analysis
explanation of the; purchase price; and
e. Explanation of, why.,the sale Of .tttprol
above address on or before February 1,
appearing at the `above'notico_Public
Persons wishing to question, comment
heard at the public hearing will be given a