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HomeMy WebLinkAbout02-27-1996 ORA MinutesAPPRCVED BY AGENCY DIRECTORS ON MARCH 12, 1996 ORANGE REDEVELOPMENT AGENCY MINUTES OF A REGULAR MEETING ORANGE, CALIFORNIA February 27, 1996 The Orange Redevelopment Agency of the City of Orange, California convened on February 27, 1996 at 4:30 p.m. in a Regular Meeting in the Council Chambers, 300 E. Chapman Avenue, Orange, California. 4:30 P.M. SESSION 1. ROLLCALL PRESENT-Murphy, Barrera, Coontz, Spurgeon, Slater ABSENT - None 1.1 APPROVAL OF MINUTES Regular Meeting - February 13, 1996.MOTION SECOND AYES Murphy Barrera Murphy, Barrera, Coontz, Spurgeon, Slater ACTION: Approved.2. CONSENT CALENDAR 2.1 Declaration of the Clerk of the Orange Redevelopment Agency, Cassandra 1.Cathcart, declaring posting of Orange Redevelopment Agency Agenda of regular meeting of February 27, 1996 at Orange Civic Center, Main Library, the Police Facility at 1107 N. Batavia and the Eisenhower Park Bulletin Board; all of said locations being in the City of Orange and freely accessible to members of the public at least 72 hours before commencement of said regular meeting.ACTION: Accepted Declaration of Agency Posting and authorized its retention as a public record in the Office of the Agency Clerk.2.2 Request Agency confirmation of warrant registers dated February 9 and 13, 1996.ACTION: Approved.AGREEMENTS/ CONTRACTS REMOVED AND HEARD SEP ARATEL Y)2.3 Request AgencyBoard approve a contract with GRC Associates, Inc. for financial consulting services to assist the Agency in its fimmcial analysis of the project related to the Orange Mills Project in an amount not to exceed $35,000 (Southwest Project Area). (RA2100.0.Agr.2558)FISCAL IMP ACT: Sufficient funds are budgeted in Account No. 920-9811-426700-0000- 19820 Other Professional Services - Southwest Project Area). PAGE 1 ORANGE REDEVELOPMENT AGENCY MINUTES February 27, 1996 2. CONSENT CALENDAR (Continued) Barbara DeNiro, 1 1 18 E. Adams, requested an explanation of the item. The Interim Economic Development Director explained the proposal from the Mills Corporationisexpectedtobereviewedthismonth, based on the MOD that was negotiated last year, on their request for assistance to redevelop the shopping center. At that time it was proposed to haveundercontractanexpertwhohadexperienceinevaluatingthesekindsofeconomicanalysisinordertomoreaccuratelyinvestigateandmakeadecisionabouttheimpactandassistancetheymightrequire. MOTION SECOND AYES Murphy Barrera Murphy, Barrera, Coontz, Spurgeon, Slater Moved to authorize the Chairman and Agency Clerk to execute on behalf of the Agency.2.4 a. RESOLUTION NO. ORA-0305 A Resolution of the Orange Redevelopment Agency indicating its intention to proceed with proposed Multifamily Revenue Refunding Bonds (palmyra Apartments Project).b. Request Agency Board approve a Borrower Deposit Agreement to refinance $2,500,000 VariableRateDemandMultifamilyHousingRevenueBondsforthePalmyraSeniorsApartments.RA2100.0.AGr.2559)FISCAL IMP ACT: The agreement does not involve any financial commitment by the Agency.Allfinancingcostsanddebtservicecommitmentsareanobligationofthedeveloper.ACTION: Adopted Resolution No. ORA-0305 and authorized the Agency Chairman and AgencyClerktoexecutetheagreement. MOTION SECOND AYES Murphy Slater Murphy, Barrera, Coontz, Spurgeon, Slater Item 2. 3 was removed and heard separately; all remaining items on the Consent Calendar were approved asrecommended.END OF CONSENT CALENDAR 3. REPORTS FROM DIRECTORS - None 4. REPORTS FROM BOARDS, COMMITTEES AND COMMISSIONS _ None PAGE 2 ORANGE REDEVELOPMENT AGENCY MINUTES February 27, 1996 5. ADMINISTRATIVE REPORTS 5.1 Report from the City Attorney regarding the proposed joint settlement agreement as it relates to the Orange County Bankruptcy. MOTION SECOND AYES Coontz Murphy Murphy, Barrera, Coontz, Spurgeon, Slater Moved to approve the joint agreement of the County of Orange the official Investment Pool's Participant Committee and each Option A pool participant for resolution of all claims against the County of Orange joint agreement) and authorize the Mayor to execute same.5.2 Report from the Director of Community Development regarding a request from Southern Cal Investment Company to provide a grant in the amount of Sl,215,750 for the acquisition and rehabilitation of the Parklane Garden Apartments located at 928 North Highland Avenue.RA2100.0.Agr. 2557)The Director of Community Development reported the developer intends to purchase the 255 unit project from Great WesternBankatatotalprojectcostofover $9.6 million. A combined Agency and City grant in the amount of$I.985 million is being requested. The funding sources are from H.O.M.E. funds,federal funds for affordable housing projects. The balance would be from housing set-aside funds which are Redevelopment increment funds. 77 units out of the 255 unit complex are guaranteed to be affordable for a period of 55 years. Staff is requesting a conceptual approval, to negotiate with the developer the necessary agreements which will return to Council for approval.The federal funds are to be acted upon by the City Council under Item 6.6 on the Council Agenda. The Redevelopment funds are listed under this item and are to be acted on by the Redevelopment Agency.The Police Chief reported that this area has been a significant drain on their resources and this project will make the quality oflife in this area much better.The Finance Director indicated both grants are a viable use of funds.Barry Cottle, Southern Cal Investment Company, gave a brief history of the property and presented the following:The plan is to invest a great deal of personal money, with investor's money. So Cal has a first trust deed from the seller and have $700,000 at the close of escrow to go into an escrow account to be used for part of therehaboftheproperty.The goal is to purchase the property, with escrow closing at the end of March, 1996, rehabilitate the property and implement strong and fair management.In the shortest time possible, make the Garden Court Apartments a desirable and safe place to live.900,000 for rehabilitation in year one.Contacted Stater Brothers to work together on the shopping cart problem.PAGE 3 ORANGE REDEVELOPMENT AGENCY MINUTES February 27, 1996 5. ADMINISTRATIVE REPORTS (Continued) The property is dense and needs more than repair and a facelift. Out of the 255 apartments, 81 are vacant. With the rehabilitation, the overcrowding can be handledonsite. No one would have to be relocated offsite. Within the next few weeks, the affordable housing authority agreement will be presented to Council andAgency. The Relocation Plan will be finalized along with completion of an appraisal report, and a management plan to include their own security for the units, budgeted at $35,000 per year. Barbara DeNiro, 1118 E. Adams, commented $35,000 is not a large sum of money for the problems inthisarea. Are all units affordable now? There are two sources of funds listed, are they taxpayer funds?There is a continual problem behind Luckys with graffiti, violence and gangs. Paul Dunlop, 802 W. Maple, gave the following comments: This property is dense and needs more than repair and a cosmetic facelift. There is daily deterioration inthisarea. $900,000 does not include painting. There are no courtyards and one abandoned pool.Would like to see the developer committing to improvements such as courtyards, tennis courts,additional pool and" recreation facilities for residents in order to attract quality residents and affect a longtennpositivechange. The appraisal is important and does not want Council to subsidize this project and pay for the fonnerowner's transgressions. An investor/developer is welcome to the neighborhood, and he would like to see a long termcommitment. There should be a lot consolidation that would ensure that the project would be one project and not parceledout.To ensure the developer's commitment to the area, see that some portion of this $2,000,000 grant,shouldthethedeveloperopttosellthreeyearsfromnow, that some portion of the grant funds are tied to arepaymentintheeventofresaleorrefinance.Mr. Cottle responded this is not a cosmetic facelift. In the first year $900,000 expenditure is planned,withacontingencyofapproximately $100,000 for the first year, if needed. Also, over and above the normalperformaandoperationsdepartmentbudgetof$140,000 additional every year, there is a 10 year performa.The price of the project is fair and has not been inflated. There are 32 lots now and it is not the intent to sellthemoff, but would like to have the flexibility of keeping the lots. There is a 10 year loan from Great Westernandwouldliketheflexibilitywithin7yearsorsotorefinance. These details will be reviewed by CitystaffbeforeitispresentedtotheAgency/Council for approval. It is hoped that this project will be a catalystintheneighborhoodtobeginchanges.PAGE 4 1 ORANGE REDEVELOPMENT AGENCY MINUTES February 27, 1996 5. ADMINISTRATIVE REPORTS (Continued) The goals in rehabilitation are to do architectural enhancement, window treatment, trim, paint, take off solar and redo the roof, replace garage doors and springs, landscape, work with the pool area, have tot lots, work on parking problems, use a garage sticker system, and create smaller recreation areas throughout the project. A downstairs unit located at the north end of the project will be utilized for the security office and will work closely with the Orange Police Department. Director Slater suggested that more amenities need to be offered and the dogleg streets east of Highland be closed to provide more open space, sports courts or pool. The Director of Community Development commented the economic study on this project is underway and the appraisal will be initiated as soon as possible. This approval for funds is the first step, with the contract presented to Agency/Council for approval. The requested funds are available now. For the second year $300,000 is projected. Funds will be spread out during the normal course of the project. Directors' comments: Director Slater gave the following comments: "My concern is that this is the second biggest blighted area in the City and I want very badly to see it cleaned up. I have utmost confidence in the investors that they can do that. It's nice that we personally know them and the type of people they are. My concern is that we are moving ahead with this a little too quickly and I'm not comfortable at this point to even give it preliminary approval without the benefit of an appraisal or an economic analysis. Another concern of mine is that I think it's very important since those are all individual lots, we have to make a requirement, if and when this is approved, that all these lots will be consolidated on the west side of Highland as well as on the east side. I am uncomfortable pledging money we don't have now for the future which is the additional $300,000. I am also concerned that in the event ofa sale, that a portion ofthe funds might come back to the City so we're assured this is a long tenn investment. The bottom line at this point, is that we are moving too quickly, and I would like to have a lot more information before decisions are made. I feel this is a unique situation; it's bank owned now and they want aggressively to sell the property. I strongly feel that whoever potentially buys this property is going to come to the Agency for help, and feel we are in the driver's seat." Director Murphy commented this project will clean up the area and allow the Police and Fire Departments to spread their services more evenly throughout the City rather than concentrating it in certain areas. This approval will allow the parties to go to the table to negotiate. Encourage everyone involved to get the economic analysis and other documents to the Agency/Council within the two week time frame for a decision by the Agency/Council. Chairman Coontz remarked she was impressed with the knowledge of the area, apartment by apartment, which now happens to be the worst area in the City. As a preliminary activity, the applicant has done a great job. This will go far in its final form to clean up a very high crime area and begin to renovate the apartment areas of the City. PAGE 5 ORANGE REDEVELOPMENT AGENCY MINUTES February 27, 1996 5. ADMINISTRATIVE REPORTS (Continued) Director Spurgeon commented the Agency/Council has an obligation for quality oflife and public safety to get the ball rolling. No funds have been committed, but the negotiations can begin. MOTION SECOND AYES NOES Spurgeon Murphy Murphy, Barrera, Coontz, Spurgeon Slater Moved to consider the request for financial assistance in the amount of$I,215,750 from Southern Cal Investment company for the acquisition and rehabilitation of the Parklane Garden Apartments located at 928 North Highland Avenue; and authorize staff to negotiate the terms of the financial assistance and draft an Affordable Housing Agreement between the Agency and Southern Cal Investment Company.6. REPORTS FROM EXECUTIVE DIRECTOR - None 7. LEGAL AFFAIRS - None 8. ORAL PRESENTATIONS - None 9. ADJOURNMENT MOTION SECOND AYES Murphy Barrera Murphy, Barrera, Coontz, Spurgeon, Slater The Redevelopment Agency adjourned at 6:45 p. m.f /'I, ,I ,-, , .,L:"&I(J/M4 ~jf; i...-A-;[:/ z Ca , r eASSANDRAkAT!-:ICART, CMC, CLERK 01" THE REDEvhLOPMENT AGENCY PAGE 6