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ARA2006/01/10 ANAHEIM, CALIFORNIA ANAHEIM REDEVELOPMENT AGENCY MEETING January 10, 2006 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 January 6, 2006 on the City Hall outside bulletin board. At 5:10 P.M., Chairman Pringle called the regular meeting of the Anaheim Redevelopment Agency to order for a joint session with Anaheim Council. ADDITIONS/DELETIONS TO THE AGENDA: None PUBLIC COMMENTS: No remarks offered during the joint Agency/Council public comment session related to the Anaheim Redevelopment Agency. CONSENT CALENDAR ITEMS 1 - 4: Agency Member Galloway requested Item No's. 1 and 2 be removed from the consent calendar for further discussion. Chairman Pringle indicated he would abstain on Item No. 3 due to a conflict of interest. Agency Member Sidhu moved to approve the balance of the consent calendar, seconded by Agency Member Hernandez. Roll Call vote: Ayes- 5; Chairman Pringle, Agency Members: Chavez, Galloway, Hernandez, and Sidhu. Noes - O. Motion carried. Recorded abstention by Chairman Pringle. 3. Approve and authorize the Executive Director to execute a Professional Service 3454 Agreement between the Anaheim Redevelopment Agency and Bryan A. Stirrat & Associates, Inc., for the purpose of providing environmental remediation services. Mayor Pringle abstained; Vote: Ayes - 4. 4. Approve minutes of the Agency meeting of December 6, 2005 and December 20, 2005 I ANAHEIM REDEVELOPMENT AGENCY MINUTES January 10, 2006 Page 2 1. Approve and authorize the Executive Director to execute an Exclusive Negotiation 3885 Agreement between the Anaheim Redevelopment Agency and Brandywine Homes for the purpose of acquiring property at 1287 E. Lincoln Avenue to develop a multi- family rental project. Community Development Director Elisa Stipkovich announced Item No. 1 was a recommendation by staff to enter into an exclusive right to negotiate with the Brandywine Homes Corporation. She indicated the Agency owned a property on Lincoln Avenue and Brandywine was in the process of acquiring the parcel adjacent to that property and in an effort to come up with a more efficient site plan, staff was requesting the Redevelopment Agency approve the agreement. The result, she stated, would be a new site plan that would still accommodate the same amount of units possible but also give the developer an opportunity to increase their ability to develop the site utilizing joint access and sharing of driveways. Agency Member Galloway asked for details on the proposed plans for the property; Ms. Stipkovich replied a multi-family affordable rental project was proposed on the 2.5 acre Agency site with Brandywine proposing market rate condominiums on their property. She believed the negotiation process would help both projects. The next step in the process, noted Ms. Stipkovich, was to go out with a Request for Proposal (RFP) within 30 to 60 days for developers to build an affordable housing project on the Agency site. Agency Member Sidhu moved to approve the exclusive negotiation agreement with Brandywine Homes, seconded by Agency Member Galloway. 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 3886 Agreement between the Anaheim Redevelopment Agency and the City of Anaheim for the purpose of acquiring property for the Cherry Orchard Affordable Housing project at 2748 West Lincoln Avenue (Lincoln Inn); approve the Exclusive Negotiation Agreement and Assignment and Assumption Agreement between the Agency and Anaheim Supportive Housing for Senior Adults, Inc.; and authorize the Executive Director to execute all documents necessary to finance the acquisition and implement the management of the property. (See Council Item #14). Ms. Stipkovich stated staff was recommending the Agency acquire a property that Anaheim Supportive Housing for Senior Adults (ASHA) had been working on for some time. She stated ASHA had an agreement to purchase the property and was proposing a rehabilitation project on the site that would be a combination of housing for homeless seniors and multi-family units for low income families. She explained the property was currently a 117 room motel. As staff believed the project had merit, the Agency would work with ASHA in getting the tax credits and other necessary funding. She indicated ASHA was not able to close escrow and purchase the property which was why staff recommended the Agency step into their position with ASHA willing to assign the purchase and sale agreement to the Agency. The Agency would establish a management agreement with ASHA to operate the facility in the interim and Ms. ANAHEIM REDEVELOPMENT AGENCY MINUTES January 10, 2006 Page 3 Stipkovich added staff was asking the Agency to approve an exclusive right to negotiate agreement in order to finalize terms on the proposed rehabilitation project. She explained if staff could not finalize terms or if ASHA was not successful in getting tax credits, it was recommended an RFP be utilized to see what other developers might be able to do with the site. Additionally, Ms. Stipkovich indicated staff was also recommending the City allocate $2 million of HOME money earmarked for affordable housing to the Agency in order to put $2 million down on the property. She explained there was a lender willing to loan ASHA a portion of the purchase price and she was requesting the Agency give her authority to enter into a loan agreement with that lender in order to borrow a portion of the asking price. The loan, she stated, would be collateralized by the property, did not tie up any other revenue and was at a seven percent interest rate, five year term amortized over 30 years. Council Member Galloway asked how the property would be managed under ASHA; Ms. Stipkovich indicated it would be operated in terms of rent, similarly to what was being currently charged, however ASHA wanted to work with the City and the Motel Coordinator to help these families find permanent housing or help them create a credit history. If ASHA received funding for the permanent project, they would also be providing social services but the units would be permanent rentals. She also added that ASHA had an allocation from Orange County for 50 Section 8 vouchers that could go with this property specifically for homeless seniors. Council Member Galloway inquired how many rooms would remain after the rehabilitation and Ms. Stipkovich indicated there would be 75 configured from the 117 room hotel. She pointed out the ultimate project would be a substantial rehabilitation, reconfiguration of rooms, and adding of amenities which reduced the number of available units. Agency Member Sidhu asked if ASHA had built similar properties for seniors. Ms. Stipkovich replied ASHA had built the Tyrol Plaza building in Anaheim as a partner with two other non-profit groups. That facility was comprised of approximately 80 senior apartments on State College and Vermont. She commented that in the current project, ASHA would also partner with Acacia Housing but would be required to bring in a third partner with more experience than ASHA before staff recommended they move forward. Agency Member Sidhu asked what rent was currently being received from the motel units; Ms. Stipkovich indicated some tenants were weekly and some longer term but that the rent was roughly $180 to $200 per week or $700 to $800 per month, including maid service. Agency Member Sidhu felt the purchase price of $5.3 million seemed to be high for 1.7 acres and wondered how seniors could afford the rents. Responding to Agency Member Sidhu's comment, Ms. Stipkovich stated there was an appraisal for the property and the highest received was slightly more than the City was paying and the appraisal had been based on revenue received from the property. Agency Member Sidhu pointed out with regular long term tenants versus the weekly tenants, the revenue would be less and the appraisal value would then be less. Ms. Stipkovich concurred however commenting the Agency had to go with the fair market value of the property. With regard to the affordability of rents by seniors, Ms. Stipkovich pointed out if the final project was approved, the apartments would be affordable and any senior would be paying 30 percent of whatever their income was for rent due to the tax credits and funding received and the Section 8 subsidy. Agency Member Sidhu wanted to cap the City's cost at $2 million feeling that any higher investment was not economically feasible and supported the decision to go with an RFP if agreement or progress was not made with ASHA. Ms. ANAHEIM REDEVELOPMENT AGENCY MINUTES January 10, 2006 Page 4 Stipkovich noted ASHA would have 90 days with two 30 day extensions if staff felt the organization was making progress but if terms were not met or tax credits not received, staff would return to the Agency for approval of an RFP. Agency Member Hernandez commended ASHA for their endeavor and remarked he was aware of the Tyrol Plaza facility and believed it to be well run. Agency Member Chavez thanked ASHA for taking on one of the toughest properties in the City to develop given the blighted conditions of the motel property and moved to approve the cooperation agreement between the City and the Agency, the exclusive negotiating agreement and the assignment and assumption agreement with Brandywine Corporation, seconded by Agency Member Galloway. 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 6:05 P.M. h~ Sheryll Schroeder, MMC Secretary, Anaheim Redevelopment Agency I