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RA2005/06/07 ANAHEIM, CALIFORNIA ANAHEIM REDEVELOPMENT AGENCY MEETING JUNE 7, 2005 The Anaheim Redevelopment Agency met in regular session in the Chambers of the Anaheim City Hall located at 200 South Anaheim Boulevard. Present: Chairman Curt Pringle, Agency Members: Richard Chavez, Lorri Galloway, Bob Hernandez, and Harry Sidhu Staff Present: City Manager David Morgan, City Attorney Jack White, and Secretary Sheryll Schroeder A copy of the agenda for the meeting of the Anaheim Redevelopment Agency was posted on June 3, 2005 at the City Hall outside bulletin board. At 5: 16 P.M., Chairman Pringle called the regular meeting of the Anaheim Redevelopment Agency to order for a joint session with Anaheim Council and Anaheim Housing Authority. ADDITIONSIDELETIONS TO THE AGENDA: None PUBLIC COMMENTS: No remarks offered during the joint Agency/Council/Housing Authority public comment session related to the Anaheim Redevelopment Agency. The Housing Authority and Council meeting were recessed to consider the Agency Consent Calendar. CONSENT CALENDAR ITEMS 1 - 4.1: Chairman Pringle requested continuation of Item 4.1, along with a companion measure added to the Council agenda and with no objection from the Agency members, the item was continued to June 14, 2005. Agency Member Chavez removed Item 1 for separate discussion. Agency Member Hernandez moved to approve the balance of the consent calendar, seconded by Agency Member Sidhu. Roll Call vote: Ayes - 5; Chairman Pringle, Agency Members: Chavez, Galloway, Hernandez, and Sidhu. Noes - O. Motion carried. 2. Approve and authorize the Executive Director to execute a Cooperation 3516 Agreement with the City to facilitate the development of public utilities facilities and implement redevelopment of the Downtown area (related to Agency Item #24). 3. Approve and authorize the Executive Director to execute a Cooperation 3517 Agreement with the City and the Anaheim Housing Authority for the purpose of acquiring land for future housing projects (OCT A Crescent and Wilshire remnant housing parcels) (related to Agency Item #6 and Agency Item #23). ANAHEIM REDEVELOPMENT AGENCY MINUTES June 7, 2005 Page 2 4. Approve minutes of the Agency meeting held May 24, 2005. 4.1 Approve and authorize the Executive Director to execute the Cooperation Agreement dated June 1,2005 between the City of Anaheim, City of Yorba Linda and the Redevelopment Agency for the Savi Ranch/Weir Canyon Traffic Improvements (related to Agency Item #36.1). Item 4.1 continued to June 14, 2005. END OF CONSENT CALENDAR: 1. Approve and authorize the Executive Director to execute a Purchase and Sale and 3515 Loan Agreement with Orange County Transportation Agency, in the amount of $14,441,000, for the purchase of 19 freeway remnant parcels. Chairman Pringle indicated this item was a purchase and sale and loan agreement with Orange County Transportation Authority for 19 parcels that aCTA owned adjacent or near the 1-5 Freeway. These parcels were part of the widening project which aCTA or Caltrans had purchased and now were in the possession of aCTA and were before the Agency for consideration in one single purchase agreement with OCT A. Agency Member Chavez asked for clarification as Item 1 listed 19 parcels for purchase while Item 3 referred to an additional purchase of another parcel and yet the additional purchase was listed as one of the 19 parcels in Item 1. Elisa Stipkovich, Director of Community Development, explained Item 1 was actually the agreement between the Agency and OCTA while Item 3 was an inter-City agreement between the City of Anaheim and the Redevelopment Agency and the Housing Authority. She commented the Redevelopment Agency purchased the property in Item 1, and in Item 3 there was a transfer of affordable housing funds for the purchase. Chairman Pringle pointed out this was the first time aCTA had bundled properties and sold them under such an agreement and that City staff worked to get them grouped to insure all the remnant properties were purchased by the City. He also remarked in most cases the parcels would be available for private use and in some cases, a specific City use with three, if not more sites, available for housing. Responding to Chairman Pringle, Ms. Stipkovich confirmed parcels two and three would be put out for a Request for Proposal to ask developers to propose ideas for affordable housing as was mentioned earlier in the affordable housing workshop. The RFP would go out specifically to non- profit developers and specifically for multi-family rental for low income families. Chairman Pringle inquired why these would be restricted to non-profit groups and Ms. Stipkovich responded that previous RFP's were limited to for-profit developers and the decision was made to submit to non-profit for these proposals and was staff's recommendation at this point, however, Council had the ability to change that decision. Chairman Pringle felt the Agency should get as big a list of potential developers as possible but would not be averse to giving preference to a non-profit provider if a similar proposal was offered. Agency Member Sidhu concurred in not restricting the RFP to one group of developers and opening it up the largest number of offers. ANAHEIM REDEVELOPMENT AGENCY MINUTES June 7,2005 Page 3 Chairman Pringle inquired if each parcel was going to be offered individually through the RFP process. Ms. Stipkovich indicated she was proposing to put three parcels together in one RFP for multi-family rental units, included two of the 19 parcels listed and one other the City owned. She indicated developers would have the option to submit on all three or on only one parcel. This combining was done as staff had found when the Agency combined a larger site with a smaller site, better cost efficiencies were received although the RFP would clearly state it would not be an obligation for a developer to submit proposals on all three parcels. Agency Member Chavez moved to approve Item 1, seconded by Agency Member Hernandez. Roll Call vote: Ayes - 5; Chairman Pringle, Agency Members Chavez, Galloway, Hernandez and Sidhu; Noes - O. Motion Carried At 5:56 P.M., Chairman Pringle recessed the Anaheim Redevelopment Agency to reconvene the Anaheim Housing Authority. At 6:00 P.M. Chairman Pringle reconvened the Redevelopment Agency in a joint session with the Council and Housing Authority for a public hearing. PUBLIC HEARING: 8. A joint public hearing to consider an Amended and Restated Cooperation 2809 Agreement between the Anaheim Housing Authority, Anaheim Redevelopment Agency, and Anaheim City Council for affordable housing on South Vine Street between East Broadway and East Santa Ana Street. Approve and authorize the Executive Director of the Redevelopment Agency to execute a Cooperation Agreement with the Housing Authority and the City to acquire properties for future affordable housing on South Vine Street between East Broadway and East Santa Ana Street. Elisa Stipkovich, Director of Community Development, reported Item 8 was an amendment to a cooperative agreement between three entities, the Housing Authority, the Redevelopment Agency and the City Council. She explained the Redevelopment Agency had been acquiring properties on the site on South Vine Street between East Broadway and East Santa Ana Street over the last couple of years finalizing the acquisition process in October 2004. The Housing Authority was the entity to ultimately own the property acquired for the purpose of constructing very low income multi-family rental housing. She remarked the City had an exclusive right to negotiate with Mercy Housing and had been working with them for some time and that the amendment was to allow additional funding, if needed, to go into the project. She explained if extraordinary costs were incurred in the development of this project, $700,000 of HOME funds and $1.4 million of Redevelopment set aside monies would be added. In addition, the property was to be conveyed to the Housing Authority and approval was requested of a Disposition and Development Agreement between the Housing Authority and Mercy Housing. The Agreement would authorize a long-term ground lease to Mercy Housing to develop 60 units of very low income housing for families contingent upon their receipt of tax credits being allocated in July 2005. ANAHEIM REDEVELOPMENT AGENCY MINUTES June 7,2005 Page 4 Ms. Stipkovich further stated if extraordinary costs were incurred and additional funding needed, the agreement authorized the first $350,000 to be taken from the developer fee to be repaid out of cash flow, and authorized the additional funding up to $2.1 million, if necessary, to be put in the form of a loan to be paid back over the 55-year period. Ms. Stipkovich indicated the total cost for the Redevelopment Agency both for land, demolition and relocation was approximately $3.4 million which included some interest costs on the source of funding for the acquisition and if the $2.1 million was needed, the total would reflect $5.5 million for the project. The Community Development Director recommended approval of the amendment to the Cooperative Agreement and also approval of the Housing Authority Disposition and Development Agreement with the precaution included in the agreement that the Housing Authority would have the right to modify plans and specifications to insure cost containment. Agency Member Sidhu asked why the cost increased from the $700,000 originally estimated to $1.4 million for the project. Ms. Stipkovich did not feel the costs had increased but that the request for additional funding related to the developer's level of confidence in the cost estimate used by Keyser Marston, the City's real estate economist who prepared the estimate. Mercy Housing was concerned that the estimate was too low and costs were difficult to project due to the fluctuation in commodities and labor. In exchange for agreeing to additional funding if needed, Ms. Stipkovich requested the City have the ability to bring the project in as reasonable as possible to which the developer agreed. Agency Member Sidhu questioned whether other bids were received and if not, why the exclusive contract with Mercy Housing. Ms. Stipkovich indicated the City had been working with Mercy Housing for a multi-family project in West Anaheim but due to changes that had occurred, the site was no longer able to accommodate multi-family units. Rather than try to change the overlay zoning for that site, the City indicated they would work with Mercy Housing to locate another suitable site in the City. Agency Member Sidhu asked how the City would know if reasonable costs were received for the 60 units. Ms. Stipkovich indicated this would be an open book project, the City would be reviewing every subcontractor, would work with Mercy Housing on the design development drawings to go out to bid and get on-going cost estimates during the process. Agency Member Sidhu asked what the developer would receive to build the project and Ms. Stipkovich replied Mercy Housing would receive $1.4 million. She indicated she had discussed reducing the developer fee when the costs increased from $700,000 to $1.4 million and Mercy Housing had preferred not to do so at the time. Agency Member Sidhu stated he did not object to Mercy Housing as the developer but preferred a competitive bid process to get the best cost for the City. Ms. Stipkovich indicated she was recommending approval of the agreement due to the time frame for the State tax credit allocation in July as there would not be adequate time to seek other proposals at this point. Chairman Pringle opened the public hearing. Ben Phillips, Regional Associate Director for Mercy Housing, stated their mission was to provide quality, affordable, program-enriched housing specifically for families who had very low incomes. As to the reason for additional funding for this project, Mr. Phillips pointed to the impact booming economy in China had on construction materials and the ANAHEIM REDEVELOPMENT AGENCY MINUTES June 7,2005 Page 5 impacts of the war in Iraq, as well as increased workers compensation insurance. Because of those increased costs and Mercy Housing's conservative cost estimating practices, the firm had come to an agreement with the City which put control over the cost of the project as much in the City's hand as in Mercy Housing with the total amount being capped and any dollars beyond that amount would be at the risk of Mercy Housing. Scott Darrell, Director of Kennedy Commission, reported that many members of the community were present during the earlier workshop on affordable housing and asked that he express their support for this project. With no other comments offered, Chairman Pringle closed the hearing. Agency Member Hernandez indicated he was pleased with the Mercy Housing work product and felt the final negotiations were inventive and showed the commitment on both parties to come to agreement toward providing affordable housing without imposing constraints on building contractors. Agency Member Chavez thanked staff and Mercy Housing for coming to agreement and moved to approve the Amended and Restated Cooperation Agreement and to authorize the Executive Director to execute the Cooperative Agreement with the Housing Authority and the City. Chairman Pringle remarked that he might not have been supportive of this project if it was not for the innovative elements drafted by Ms. Stipkovich which allowed the City greater oversight as to cost containment. He pointed out over $5 million of property tax dollars would be invested in this single project for 60 units and was necessary for the very low income families but that Council should ensure opportunities were available for people all across the housing spectrum. Agency Member Sidhu confirmed that if the tax credit allocation was not received on this go-around, the entire project would then go out to bid. Roll Call vote: Ayes - 5; Chairman Pringle, Agency Members Chavez, Galloway, Hernandez and Sidhu; Noes - o. Motion Carried ADJOURNMENT: There being no further business, Chairman Pringle adjourned the Anaheim Redevelopment Agency meeting at 6:25 P.M. ~~~~ Sheryll Schroeder, MMC Secretary, Anaheim Redevelopment Agency