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HomeMy WebLinkAbout04/12/1999 - City Council Special Meeting - Redevelopment Agency1 1 SPECIAL JOINT MEETING OF THE CITY COUNCIL AND REDEVELOPMENT AGENCY CITY OF COSTA MESA APRIL 12, 1999 The City Council and the Redevelopment Agency of the City of Costa Mesa, California, met in special joint session on April 12, 1999, at 4:15 p.m., in the Council Chambers of City Hall, 77 Fair Drive, Costa Mesa, following the regularly scheduled Redevelopment Agency meeting which commenced at 4:00 p.m. Notice of the special meeting was given as required by law. ROLL CALL Council/Agency Members Present: Mayor/Agency Member Gary Monahan Mayor Pro Tem/Agency Chair- person Libby Cowan Council/Agency Member Joe Erickson Council/Agency Member Heather Somers Council/Agency Member Linda Dixon Council/Agency Members Absent: None Officials Present: City Manager Allan Roeder Agency Executive Director Donald Lamm Agency Attorney Tom Wood Redevelopment and Housing Manager Muriel Ullman Finance Director Marc Puckett Executive .Secretary Marie Thompson NEW BUSINESS The Redevelopment and Housing Manager summarized the Redevelopment Agenda Report dated April 9, 1999, by reviewing the Agency Financial background of the Redevelopment Agency's financial Issues issues. She noted that in the early years of the Deficit Reduction Plan, the Agency was able to make debt payments against their Promissory Note to the City of over one million dollars for three consecutive years (Fiscal Years 1995-96, 1996-97, and 1997-98) because there was no need for the Agency to utilize any set-aside funds. She reported that these payments were well above the amounts 'required in the original Deficit Reduction Plan. The Redevelopment and Housing Manager reported that the Deficit Reduction Plan was amended in November, 1997, and the repayment schedule for the Promissory Note was adjusted downward beginning in Fiscal Year 1997-98 since the utilization of Housing Fund set-aside money had increased. 211. 212 MOTION Received and Filed the Report AMENDED MOTION Referred to Council Study Session and Agency Meeting in May, 1999 PUBLIC HEARING First Amendment to Purchase Agreement with Habitat for Humanity of Orange County Mayor/Agency Mi budget will show debt payment to responded that it Manager suggeste report and debt i before adjustment it that plan is ' app 1999-2000 could A motion was mE seconded by Coui to receive and fil from Council ME Redevelopment issues for review or June, 1999. options be thoro a Study Session of Council N Council/Agency N include a directioi agendas for the i Redevelopment P motion carried 5-( The Redevelopm( Agenda Report original Purchase Orange County, I housing projects Wallace Avenue) .development 'of o (282 Del Mar Av( can be assemblec single-family. hon Housing AgreemE amendment to tl the funds for Pa year's budget. The Redevelopm terms of the agre of the loan, stat drafted, the City this project with to consider repa Note with the Cit does not obligat( Avenue or St recommended th after the Rede% reviewed and a 1999-2000. Agency Attorney to the Affordably the flexibility of properties at this mber Monahan asked if the upcoming a short -fall of $700,000.00 in a lower he general fund. The Finance Director vould. The Redevelopment and Housing J that the Finance Department prepare a 3duction plan for the Agency's review are made to the upcoming budget; and oved, the Agency budget for fiscal year )e adopted. ie by Council/Agency Member Erickson, cil Member/Agency Chairperson Somers, the report. In response to a question nber/Agency Chairperson Somers, the id Housing Manager stated that the vould be presented to the Agency in May rhe Finance Director suggested that all ighly reviewed and presented at both and Agency meeting. At the request )mber/Agency Chairperson Somers, ember Erickson amended the motion to to staff that this item be placed on the ext City Council Study Session and the lency meeting in May. The amended nt and Housing Manager reviewed the sated March 23, 1999, outlining the Agreement with Habitat for Humanity of ic. (Habitat) to construct new affordable She reported that Parcel 5 (2136 will be made available to Habitat for ie single-family home; and that Parcel 6 nue) and Parcel 7 (286 Del Mar Avenue) a.nd subdivided for development of three es pursuant to the original Affordable nt which has been modified by the first e agreement. She mentioned that only -cel 5 have been included in this fiscal Mt and Housing Manager outlined the ment, the first amendment, and structure ng that after the first amendment was Manager suggested funding a portion of ledevelopment and HOME funds in order ring a larger portion of the Promissory r.:. She reported that the first amendment the City or the Agency to the Del Mar ding Avenue properties; and staff it these parcels not be considered until 31opment Agency's financial report is 'iew budget is approved for fiscal year Nood confirmed that the first amendment Housing Agreement allows the Agency iot ;addressing the two Del Mar Avenue imp. 1 J 1 The Redevelopment and Housing Manager mentioned that the surplus City -owned property at 2135 Sterling Avenue was out to bid; and bids received would be presented to the City Council in order for the property to be set aside for redevelopment purposes. In reply to Mayor Pro Tem/Agency Vice Chairperson Cowan's question, the Redevelopment and Housing Manager outlined the possible funding sources that could be used to fund the projects. Council Member/Agency Chairperson Somers questioned the time constraints within which to spend the HOME funds. The Redevelopment and Housing Manager responded that the City is on schedule; however, the issue would be how quickly the City could spend down the funds for fiscal year 1999-2000 to prevent a precarious position with HUD, but tw.-Aelay action until May would not be an issue. r Mayor/Agency Member Monahan asked for clarification of several issues: if it were decided to proceed with the Habitat project on the two Del Mar Avenue properties, and to pay the appraised price of $445,000.00 with Agency funds, then this payment would go to the Gas Tax Fund and not to the General Fund as would also be the case if the City went out to bid on the properties; on the other hand, if the properties were not purchased by the Agency, then its budget would have more money with which to make a debt payment to the General Fund. The Redevelopment and Housing Manager stated that the Mayor/Agency Member's understanding was correct. Woodrow Lewis, 3740 Campus Drive, Suite 100, Newport Beach, owner of four units at 280 Del Mar Avenue, spoke in opposition to the Habitat project. Mark Korando, 582 Park Drive, Costa Mesa, a representative of Habitat, submitted conceptual drawings of the proposed project for Parcel 5 (2136 Wallace Avenue), as well as a color palette. He indicated that Habitat would like to proceed with the Wallace Avenue project and asked if the City Council and Redevelopment Agency were willing to proceed with other Habitat projects. Mr. Korando reported that it would take approximately 12 weeks to complete the project once the property is acquired; and Habitat would like to construct 3 additional houses on Parcels 6 and 7 in order to meet the Southern California Association of Governments (SCAG) requirement to provide low-income housing. He commented that if the DelMar- Avenue properties were not made available, then Habitat would be interested in the parcel at 2135 Sterling Avenue. He mentioned that immense positive publicity was received from the neighborhood and the philanthropic community in Orange County for Habitat's project at 212 Del Mar) Avenue. Mayor Pro Tem/Agency Vice Chairperson Cowan asked if a delay_ in the decision would result in a loss of support for Habitat. Mr. Korando responded that Habitat had firm promises for two houses pending a decision by the City Council and Redevelopment Agency concerning acquisition 21 214 of the property. Mayor Pro Tem/Agency Vice Chairperson Cowan reported that the City is required to provide low- income housing, and 'that SCAG and Orange County HUD are presently reviewing regional housing needs. She asked if a report could be provided showing how the City is meeting its obligations in this area. Mayor/Agency Member Monahan asked that 'the. report include estimates for the 2135 Sterling Avenue site. Mayor Pro Tem/Agency Vice Chairperson Cowan supported the efforts of Habitat, and depending upon the financial situation; believed that constructing 3 units on Parcels 6 and 7 would go toward the City's obligation to provide low-income housing. Special Counsel Celeste Brady, of Stradling, Yocca, Carlson & Rauth, noted that the first amendment to the Affordable Housing Agreement, Section 8, provides exclusive negotiating rights` to Habitat with regard to 282 and 286 Del Mar Avenue 1 (Parcels 6 and .7). She advised that should the City Council and Redevelopment Agency decide not to provide those rights, this section should be removed from the document and the resolutions of approval. She also advised that other parcels may be substituted or completely deleted,, but the draft agreement allows the Agency to commit to, negotiation only with Habitat for the potential development of the Del Mar Avenue sites. She recommended deleting any reference to 282 and 286 Del Mar_ Avenue at this time as general recitals relate to these properties, and contractual obligations are contained in Section 8. Council/Agency Member Dixon requested clarification of the meaning of "affordable housing". The Redevelopment and Housing `.Manager explained that based on Redevelopment Law, low-income applies to households at 80 percent of the median income; 50 percent would be considered very 'low; and 80 to 120 percent would be considered. moderate income; with all income levels adjusted for . family size. Special Counsel Brady reported that there is a provision in Community Redevelopment Law which requires the Redevelopment Agency to set aside not less than 20 per cent of its tax increment to affordable housing; and those funds are required to be used to improve, increase, and preserve affordable housing. She outlined the Agency's powers to expend its funds. The City Manager stated that the City received bids for the 2135 Sterling Avenue parcel which will be presented to the City Council at its meeting of May 3, 1999. He reported that at that time, the City Council could set aside this property for Habitat. He felt there was an ethical obligation to inform the bidders that the property was no longer available so they could ' withdraw their bids and the City could refund.;their deposits. In response to Council/Agency Member Dixon's question, the City Manage I stated that any developer can build on the subject properties in accordance with the General Plan and in any manner that is consistent with the zoning. 1 1 1 1 1 1 Woodrow Lewis referred to a development on Mesa Drive which has 120 apartment units and felt there were certainly enough affordable units in the area. The City Manager responded that this particular project is being constructed by the County Redevelopment Agency and a private partner within a County project area. MOTION A motion was made by Mayor Pro Tem Cowan, seconded Adopted Council by Council Member Dixon, to adopt Resolution 99-21, A Resolution 99-21 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF Approving the COSTA MESA, CALIFORNIA, APPROVING THE PURCHASE Purchase and Sale AND SALE AGREEMENT BETWEEN THE CITY OF COSTA Agreement and MESA AND THE COSTA MESA REDEVELOPMENT Amendment AGENCY; CONSENTING TO THE AFFORDABLE HOUSING AGREEMENT BETWEEN THE COSTA MESA REDEVELOPMENT, AGENCY AND HABITAT FOR HUMANITY; AND'"fMAKING CERTAIN OTHER FINDINGS IN CONNECTION THEREWITH, approving the necessary Grant Deed to transfer City -owned property at 2136 Wallace Avenue, authorizing staff to complete the conveyance of the parcel, and consenting to the First Amendment to the Affordable Housing Agreement between the Agency and Habitat. Mayor Monahan asked if the intent of the motion was to enter into an agreement to negotiate for Parcels 6 and 7 (282 and 286. Del Mar Avenue, respectively), and the maker of the motion responded in the affirmative. Mayor Monahan stated that he could not support the motion because there were financial issues to be reviewed. He added that he would be willing to consider the parcel at 2135 Sterling Avenue, and perhaps Parcels 6 and 7, after the financial review has been completed. He asked that a decision on Parcels 6 and 7 be postponed for 30 days, and expressed his support for the project at 2136 Wallace Avenue. Mayor Pro Tem Cowan responded that Section 8 of the First Amendment to the Affordable Housing Agreement identified a 90 -day period for negotiations with Habitat, and would not preclude the City from negotiating at this point. Special Counsel Brady confirmed this statement; however, she emphasized that there would be an obligation to negotiate exclusively with Habitat on those parcels. In response to a question from Council Member Somers, Special Counsel Brady stated that on the 91s' day, the agreement is automatically terminated unless extended by the Executive Director; on the other hand., Section 8 can be deleted from the document. She also noted that there are several ways to place the funds into alternative projects that meet the HOME -match requirement. Council Member Erickson requested that the motion reflect that any bidders on the Sterling Avenue property be advised that the City is entertaining the idea of Habitat receiving the property and this should be reflected in their bids and in the deposit requirements. The City Manager stated again that the City has already received bids for the Sterling Avenue property, and he 21-5 , 216 AMENDED MOTION Staff Directed to Notify Bidders of the Status of Sterling Avenue Property MOTION/Adopted Redevelopment Agency Resolution 213-99, Approving the Purchase and Sale Agreement and Amendment ADJOURNMENT would like to give advance notice to the bidders that at its meeting in May, the Council could take the property off the market and hold it for Habitat. He stated that this would give the bidders an opportunity to rescind their offers, and for the City to release; the bidders' cash deposits. Mayor Pro Tem iCowan amended her motion to reflect Council Member Erickson's request to inform bidders for the Sterling Avenue property that Council may take the parcel off the market and hold it for Habitat. The amended motion was seconded by Council Member Dixon, and carried 4-1, Mayor Monahan voting no. A motion was made by Agency Vice Chairperson Cowan, seconded by Agency ,Chairperson Somers, and carried 4-1, Agency Member Monahan voting no, to adopt Resolution 213-99: A RESOLUTION OF THE COSTA MESA REDEVELOPMENT AGENCY APPROVING THE FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE COSTA MESA REDEVELOPMENT AGENCY AND HABITAT FOR HUMANITY; APPROVING THE PURCHASE AND SALE AGREEMENT BETWEEN THE CITY AND AGENCY;. AND MAKING CERTAIN OTHER FINDINGS IN CONNECTION THEREWITH. Mayor Monahan adjourned the special joint meeting at 5:05 p.m. Mayor of the City of Costa Mesa ATTEST of the City of Costa Mesa. 1