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HomeMy WebLinkAbout07-25-1995 ORA MinutesORANGE REDEVELOPMENT AGENCY MINUTES OF A REGULAR MEETING ORANGE, CALIFORNIA July 25, 1995 The Orange Redevelopment Agency of the City of Orange, California convened on July 25, 1995 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 ABSENT Murphy, Barrera, Coontz, Spurgeon, Slater None 1.1 APPROVALOF MINUTES Regular Meeting - July 11, 1995.MOTION SECOND AYES Barrera Murphy Murphy, Barrera, Coontz, Spurgeon, Slater ACTION: Approved.2, CONSENT CALENDAR 2.1 Declaration of the Assistant Clerk of the Orange Redevelopment Agency, Cassandra J. Cathcart,declaring posting of Orange Redevelopment Agency Agenda of regular meeting of July 25,1995 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 theAgencyClerk.2.2 Authorize Chairman and Director of Finance to draw warrants on Agency's Fiscal Agent in payment of demands.ACTION: Approved. 2.3 Request Agency Board approveaudit contract services with Ernst and Young for the City and Redevelopment Agency in an amount not to exceed $75,000.00. (Continued from 6-27 and 7-11-95.) (RA2100.0. Agr.2423)FISCAL IMPACT: Funds to come from various Accounts (9XX-9XXX-426300 Accounting and Auditing Services).ACTION: Continued to August 8, 1995 in order to provide Staff time to complete information requested by Directors.PAGE 1 ORANGE REDEVELOPMENT AGENCY MINUTES July 25, 1995 2. CONSENT CALENDAR (Continued) 2.4 Request authorization to approve Code Enforcement Grant in the amount of $4, 100.00 and authorize the Finance Department to prepare a warrant. (RC2500.G.1.3.2) FISCAL IMPACT: Funds have been appropriated and are available for this purpose in Account No. 911-9802-465802-9107 (Code Enforcement Grant). Case No. 590. ACTION: Approved. MOTION SECOND AYES Murphy Spurgeon Murphy, Barrera, Coontz, Spurgeon, Slater All items on the Consent Calendar were approved as recommended.END OF CONSENT CALENDAR 3. REPORTS FROM DIRECTORS - None 4, REPORTS FROM BOARDS, COMMITTEES AND COMMISSIONS - None 5. ADMINISTRATIVE REPORTS TAPE 650 5. 1 Consideration of proposed Financial Assistance to Forest City Properties Corporation for Acquisition and Rehabilitation of ViDa Santiago, (R3500.0)The Director of Community Development reported the total estimated project is $27,000,000 which includes an estimated relocation cost of$4,500,000. Forest City is requesting assistance from the Redevelopment Agency in the amount of $7,500,000. The Agency's financial contribution would be capped at $7,500,000 unless the relocation costs exceed $4,500,000. In this case the amount which exceeds $ 4,500,000 would be shared equally between the Agency and Forest City. As relocation benefits will be paid in accordance with State Law and be based upon a project specific relocation plan completed by a relocation consultant. It is staff's opinion that it is unlikely that relocation costs will exceed the 4, 500,000.Recent discussion has ensued that Forest City would include within those relocation costs the admInistration costs, to make sure the relocation program is operated in a legal and equitable manner.In return for the Agency's financial participation, 100% of the units will be rented at affordable rents to low income households for a 55 year period. Affordable rent for a 2-bedroom unit is $762 excluding utilities. Based upon Forest Cities other funding sources, a low income household is defined as one whose income does not exceed 60% of the County's median income. With a $7.5 mIllion contribution to PAGE 2 ORANGE REDEVELOPMENT AGENCY MINUTES July 25, 1995 5, ADMINlSTRATIVE REPORTS (Continued) the $27 million dollar project, the per unit cost for the Agency for provision of the long term affordability housing would be $28,846.00. It is proposed the Agency assistance be provided in the form ofa $3.75 million dollar grant and a $3.75 million dollar loan. Since this report was prepared there have been additional discussion with Greg Vilkin of the Forest City Company who has made a request that the terms of the loan agreement be modified. In place of the 55 year term of that loan, it has been suggested it be a 30 year term. Additionally, that the loan would be assumable by a qualified buyer one which the Agency would have approval. The Agency's financial participation in the project was negotiated assuming the following funding sources: I) an equity contribution from Forest City in the amount of over $6 million, a portion of which would be funded by tax credits, 2) construction financing in the amount of$13.5 million, and 3) tax exempt mortgage revenue bonds in the amount of $13.5 million issued by the City to pay the Union Bank loan after project completion. The bonds will be backed by a credit enhancement provided by the Federal National Mortgage Association. Disbursement of the Agency's funding would be subject to the receipt by Forest City of all of the financing commitments described. Mayor Coontz commented these housing units have been a problem to the City since 1989. It is a complex that is a dysfunctional living environment. It is estimated that there have been 200 notices of violation for substandard living conditions and overcrowding over the past five years. The Police Department has estimated over 200 calls for service during this time. Mayor Coontz publicly thanked the staff and the Council Ad Hoc Committee, Councilman Murphy and Slater for their work on this project. Greg Vilkin, 949 S. Hope St., Los Angeles, President of Forest City Properties, commented this project has been ongoing for one year. This project has had many complexities. Problems have been worked out and the area will be revitalized. Mayor Coontz recognized the following people who spoke in favor: Rokeya Roston-Lee, 184 N. Prospect Carole Walters, 534 N. Shaffer Bob Bennyhoff, 10642 Morada Dr.Scott Thayer, AIbertsons Regional Manager, 1822 Lambert Rd., Brea Lee Podolak, 3804 E. Del Valle, spoke in opposition Barbara DeNiro, 1118 E. Adams, expressed concerns Their concerns were expressed as follows:PAGE ORANGE REDEVELOPMENT AGENCY MINUTES July 25, 1995 5. ADMINISTRATIVE REPORTS (Continued) The apartments have been a problem for some time - it should be cleaned up for the surrounding neighborhood. Barbara DeNiro on behalf of Lois Barke asked the following questions:Do we know the track record of Forest City Properties? Will all the construction be done at one time?Aren' t many of the units currently uninhabited? If those units are vacant, there would not be relocation costs for those unoccupied units - is that correct? Why would you need these high relocation fees?Would all existing tenants need to be relocated, couldn't they go back into the same unit? Could construction for remaining tenants be done in stages and asked to relocate to other units as completed when the redeveloped units are finished? If all remaining tenants, as many as there are, need to be relocated, what specific amounts are included per family to relocate? Where else would relocation take place? If you move these families to other areas of the City that are already over-impacted what are you accomplishing? Would we be creating the same problems we already have? What are the number of units after completion and the number of bedrooms in each? Will the same parking requirements be the same as the rest of the City for this project?Mr. Vilkin gave the following responses:Forest City is 74 years old, based in Cleveland, Ohio and is one of the ten largest developers and owners of real estate in the United States. The Los Angeles headquarters has been at that location for 21 years.Forest City is a long term holder of property and has built and developed over 60,000 units of residential housing and currently own and manage 33,000 units. They are a fully integrated vertical developer which means they develop it and manage it themselves, and only for their account. They are currently operating in 28 states.Construction will be a rolling phase over an approximate eight month period. This is to accommodate the relocation which will be done in three phases. Under the law, the Federal Relocation Act and the State Relocation Act, people will be placed in a new housing unit. All of the new housing is by law to be safe and clean, affordable housing. It can be within the project or it can be within the general area. There are currently 260 units, 520 bedrooms which will be the same number after the rehabilitation of the project.The exact count on parking spaces is unknown, however they are over two to one in ration of parking and will remain the same after the project is completed.Mr. Vilkin was asked to explain the relocation plan. The relocation is not done by unit but by family size.Now there are over 1,039 residents living in 128 units, average of nine people per unit. It will take approximately 243 new units to replace the families in new housing. Pacific Relocation Services have been retained by the City to manage the relocation plan. Forest City and the City will closely monitor this plan. Forest City will be managing the apartments and not use a third party. Forest City currently operates 33, 000 apartment units throughout the United States and are very competent managers.PAGE 4 ORANGE REDEVELOPMENT AGENCY MINUTES July 25, 1995 5, ADMINISTRATIVE REPORTS (Continued) Mr. Vilk:in was asked about relocation costs and who is eligible. Forest City is restricted by State and Federal law as to how someone qualifies. They do not need to be a citizen, they do not even need to be a legal resident of the United States and Forest City cannot withhold funds. They have to provide proof of income and residency in the project. Ms. Podolak voiced concerns regarding the economics of the project, asked if there had been a marketing survey in order to know if people can afford the proposed rents. Ms. Podolak wondered if the proposed project would switch to a lot more Anglo and a lot less Hispanic. Has the proposed proponent checked vacancies? Mr. Vilkin commented marketing studies have been completed on this project. Forest City is confident there is a large enough market place of people who would pay $762 which is the maximum rent chargeable for 60% of the median income in the County of Orange. This is $32-36,000 per year per household. Market rent in the area is approximately $825-875 for a similar sized 2-bedroom. Forest City will never discriminate; they are fair housing advocates and follow the fair housing practices.Director Barrera asked if the adjacent schools had been contacted.The Director of Community Development indicated he contacted the school secretary to bring them up to date on the process. Mr. Vilkin will be contacting the Principal, Tom Saenz.Mr. Vilkin indicated the project would begin on or about September 15, 1995.Director Slater, member of the ad hoc committee, commented he strongly supports the project which was one of the worst blighted areas in the City and this project will do something positive for the are Director Murphy, member of the ad hoc committee, commented this area has been a drain on City resources, private entities and anyone that has invested in that area. The project will be a permanent,positive solution.Chairman Coontz thanked Directors Murphy and Slater as well as staff members that contributed to the process that brought this plan to this final stage. MOTION SECOND AYES Murphy Slater Murphy, Barrera, Coontz, Spurgeon, Slater Moved to consider and accept the proposed financial assistance to be provided by the Agency to Forest City Properties Corporation (Forest City) for the acquisition and permanent rehabilitation of Villa Santiago. Authorized staff to finalize an Affordable Housing Agreement between the Agency and Forest City for the acquisition and rehabilitation of Villa Santiago based upon the proposed financial assistance. PAGE 5 ORANGE REDEVELOPMENT AGENCY MINUTES July 25, 1995 6. REPORTS FROM EXECUTIVE DIRECTOR The Executive Director commented the proposed Redevelopment project for 1995/96, Item 10.1, requested this be continued to the August 8, 1995 Redevelopment meeting. There is additional information that should be included in the report, for example; benefit derived, is it job creation or is it getting ready for development and is it sales tax. Mayor Coontz commented the following questions need to be answered: 1) What criteria is being established for all the projects on the list? 2) The financial status of the businesses that are applying and, 3) How eligibility is determined? 7, LEGAL AFFAIRS - None 8, ORAL PRESENTATIONS - None 9, RECESS MOTION SECOND AYES Murphy Barrera Murphy, Barrera, Coontz, Spurgeon, Slater NOTE: Director Slater did not participate in the Closed Session due to a conflict of interest.The Redevelopment Agency Board recessed at 5:50 p.m. to a Closed Session for the following purpose:Acquisition of real property pursuant to Government Code Section 54956.8 Property: 370 North Glassell Street.Negotiating Parties: Economic Development Director and Orange Unified School District, and Property: Property generally located at Lemon and Cypress Streets at Maple, Parcel Nos.: 386-451-33,39-161- 03,39-161-17, 39-161-18,39-162-23.Negotiating Parties: Economic Development Director and Steven MassmanlMorris Pynoos.Under negotiation: Price and terms of payment.The Redevelopment Agency recessed at 6:30 p.m. to the 7: ORANGE REDEVELOPMENT AGENCY MINUTES July 25, 1995 10, REPORTS FROM EXECUTIVE DIRECTOR 10,1 PROPOSED REDEVELOPMENT PROJECTS FOR 1995/96: Report from the Executive Director concerning the proposed Redevelopment Project appropriations for 1995/96 (continued from June 27, 1995 Fiscal Year budget public hearing). (RC2500.1.1.1) See discussion ofthis item under Reports from Executive Director, Item 6.) MOTION SECOND AYES Spurgeon Barrera Murphy, Barrera, Coontz, Spurgeon, Slater Moved to continue the Redevelopment Project Appropriations for 1995/96 to August 8, 1995 Redevelopment meeting.10, PUBLIC HEARINGS - None 11, ORAL PRESENTATIONS - None 12. ADJOURNMENT MOTION SECOND AYES Murphy Barrera Murphy, Barrera, Coontz, Spurgeon, Slater The Redevelopment Agency adjourned at 8:11 p. m.MARILYN J. JENSEN MARILYN 1. JENSEN, CMC, CLERK OF THE REDEVELOPMENT AGENCY I ,/j ,J.{.JLj'/jf .,u/( ~ t#-.r;: lb JOANNE C. COONTZ,OF THE REDEVELOPNTAGENCY1~/'-{~~ kCUi/'d ,{7 CASSANDRA 1. ATHCART, CMC ASSISTANT CLERK OF THE REDEVELOPMENT AGENCY PAGE 7