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HomeMy WebLinkAboutRDA 04 REDEV PROP 06-07-99DATE: RDA NO. 4 6-7-99 JUNE 7, 1999 WILLIAM A. HUSTON, EXECUTIVE DIRECTOR REDEVELOPMENT AGENCY STA_FF APPROVAL OF .~vlENDMENT NO. 1 TO DISPOSITION AND DEVELOPMENT AGREEMENTS FOR THE REDEVELOPMENT OF PROPERTY LOCATED IN THE VIC~TY OF FI. CAMINO REM. ANrD NqEWPORT AVENUE SUMMARD Agency approval is requested for Amendment No. 1 to the Ford Commercial Rehabilitation Project Disposition and Development Agreement (DDA) for a site to be redeveloped in the Town Center Project Area. RECOMMENDATION Staff recommends the Redevelopment Agency take the following actions: Approve Amendment No. 1 to the DDA 'between the Tustin Community Redevelopment Agency, Ford Family Trust ("Owner"), DeBeikes Investment Company ("Developer") and Warmington Homes California ("Contractor") for rehabilitation of the commercial properties located at 715 - 765 E1Camino Real. , Appropriate an additional amount of $25,000 out of the Town Center Redevelopment Project tax increment funds, thereby increasing the total amount to $190,000 for the rehabilitation of the commercial properties. FISCAL IMPACT The Agency Assistance for the commercial rehabilitation project is estimated not to exceed $190,000 from Town Center Redevelopment Project tax increment funds. BACKGROUND AND DISCUSSION On September 21, 1999 the Agency approved two Development and Disposition Agreements for the redevelopment of the property commonly referred to as the Tustin Meadows Apartments, a 56-unit apartment complex at 120- 250 Sixth Street and commercial property at 715 - 765 E1 Camino Real. The Residential Project DDA with Warmington Old Town Associates, L.P. called to the acquisition of the Tustin Meadows Apartments, demolition of the existing improvements and construction of a small lot, single family project, which is currently under construction. The William A. Huston Amendment No. 1 Ford Commercial Rehabilitation DDA June 7, 1999 Page 2 Ford Commercial Rehabilitation Project DDA with the Family Trust calls for the substantial renovation of commercial properties along E1 Camino Real to ensure compatibility with the proposed single family development. The Commercial Rehabilitation Project DDA requires DeBeikes Investment Company as Developer and Warmington Homes California as Contractor for the Ford Family Trust and signatures to the DDA between the Agency and the Ford Family Trust to construct certain rehabilitation improvements to the commercial properties. The improvements will be constructed in compliance with all provisions of the DDA and with all "Conditions of Approval" stipulated by the Tustin Planning Commission, the City Council and other applicable governmental agencies having jurisdiction. Under the DDA, the total rehabilitation budget was estimated to be $227,319 with total Agency assistance to be in the sum up to $165,000. The Owner's obligation for the improvements is the sum up to $50,435 with an additional amount not less than $12,000 to be paid from the land development budget provided in the Residential DDA between the Agency and Warmington Old Town Associates, L.P. If actual construction bids indicate a potential cost overrun, the Agency and the Owner were to use their best efforts and good faith to identify either a suitable alternative improvement to hold to the original budget or agree to a cost sharing between the parties for such cost overrun. The Owner and Developer have obtained responsible subcontractor bids for the Rehabilitation Project, which total $258,650. In accordance with the DDA, the Owner and Agency identified suitable alternative improvements within the budgeted amount but were unable to completely eliminate the cost overruns without substantially diminishing the quality of the improvements originally described in the DDA. The Owner and Agency have negotiated a proportional share increase to their contributions to cover the increased costs for the Rehabilitation Project. 'The Owner's contribution would increase to the sum up to $56,650 and Agency's contribution would increase to the sum up to $190,000, while not less than $12,000 will continue to be paid from the Land Development budget described in the Residential Project DDA between Warmington Old town Associates, L.P. and the Agency. Agency financial assistance is to be provided as progress payments to reimburse the Owner for the construction of the Rehabilitation Improvements. The Agency assistance for the commercial rehabilitation is in the form of a loan evidenced by a separate Promissory Note and secured by a Deed of Trust to be recorded as a lien against the commercial property when subdivided per the DDA. The terms of the commercial rehabilitation loan provide for the forgiveness of the principal and interest amounts by the Agency within 7 years after the Agency's issuance of a Certificate of Compliance. William A. Huston Amendment No. 1 Ford Commercial Rehabilitation DDA June 7, 1999 Page 3 CEQA CERTIFICATION OF NEGATIVE DECLARATION The Redevelopment Agency passed and adopted Resolution No. RDA 98-6, approving a Negative Declaration for the Ford Commercial Rehabilitation Project DDA on September 21, 1999. FINDING OF BENEFIT The site is located in the Town Center Project Area. On December 5, 1994 the Tustin Community Redevelopment Agency adopted a five-year Implementation Plan for the Town Center and South/Central Redevelopment Project areas for fiscal years 1995-1996 through 1999- 2000. The Implementation Plan was composed of two parts, a five-year plan for redevelopment activities and a five-year plan for housing activities. The proposed commercial rehabilitation project is consistent with the Implementation Plan's five-year plan for redevelopment activities for the Town Center Project Area. The Agency's assistance will rehabilitate the existing substandard and deteriorating structures to improve building conditions,' increase functionality and desirability, and to integrate design characteristics with the aim of creating a cohesive commercial district in the Project Area. The project will remove a blighting influence in the Project Area due to deterioration, age and obsolescence, and stimulate expansion and retention of existing and new business in the Project Area. Attachments Jan~/~es A. I~ghon (._.// Senior Redevelopment Project Manager AMENDMENT NO. 1 TO FORD COMMERCIAL REHABILITATION PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT by and among THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, as Agency and THE FORD FAMILY TRUST, as Owner 'and DEBEIKES INVESTIMENT COMPANY, as Developer AMENDMENT NO. 1 TO FORD COMMERCIAL REHABILITATION PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT This Amendment is entered into by and among the Tustin Community Redevelopment Agency, a public body and politic, to wit, a California community redevelopment agency ("Agency"), and the Ford Family Trust dated September 21, 1984 ("Owner"), DeBeikes Investment Company, a California corporation ("Developer"), and Warmington Homes California, a California corporation ("Contractor"), with reference to the following facts: A. On September 15, 1998, Agency, Owner, Developer and Contractor entered into a Disposition and Development Agreement (the DDA) with regard to the rehabilitation of the commercial Site as more fully described therein and known as the Ford Retail Center. B. Under the provisions of the DDA, Owner and Developer is required to construct or cause the construction of rehabilitation improvements as described more fully therein. In addition, the DDA identifies the estimated costs for such improvements to be $227,319.00, and that the costs for the Rehabilitation Project to be borne as follows: (1) the sum up to $50,435.000 by Owner; (2) the sum up to $165,000.00 by Agency; and (3) not less than $12,000.00 to be paid from the Land Development budget described in that certain Residential Project Disposition and Development Agreement between Warmington Old Town Associates, L.P, and Agency. C. Owner and Developer have obtained responsible subcontractor bids for the Rehabilitation Project, which total $258,650.000 and under the provisions of the DDA the Owner and Agency agreed to increase their contributions to cover the increased costs for the Rehabilitation Project. D. The Agency has an interest in seeing the rehabilitation improvements substantially as originally proposed. NOW AND THEREFORE, the parties hereto agree as follows: 1. Agency agrees to increase its' contribution to the costs to be borne by the Agency in the sum up to One Hundred Ninety Thousand Dollars ($190,000.00). 2. Owner agrees to increase the costs to be borne by the Owner up to the sum of Fifty Six Thousand Six Hundred Fifty Dollars ($56,650.00). 3. ExCept as expressly amended herein, the DDA shall remain in full force and effect. 3. Not less than $12,000.00 shall continue to be paid from the Land Development budget described in Section 6D of that certain Residential Project DDA between Warmington Old Town Associates and Agency, pertaining to the development of certain property adjacent to the Site that was formerly owned by Owner. 4. Except as expressly amended herein, all other provisions of the DDA shall remain in full force and effect. 5. The effective date of the Amendment No. 1 shall be the date when it shall have been signed by Agency. IN WITNESS WHEREOF, Agency, Owner, and Developer and Contractor have each signed this Amendment No. I on the respective dates set forth below. Dated: "Agency" TUSTIN COMMINITY REDEVELOPMENT AGENCY, a California community redevelopment agency APPROVED AS TO FORM: By: By: Lois E. Jeffrey, Agency Counsel ATTEST: Recording Secretary Dated: "Developer" DEBEIKES INVESTMENT COMPANY, a California corporation Richard A. DeBe~Pr~'~dent AMENDMENT NO. 1 TO FORD COMMERCIAL REHABILITATION PROJECT DISPOSITION AND DEVELOPMENT AGREEMENT [signatures, continued] "Owner" FORD FAMILY TRUST, DATED, September 21, 1984 Charles W. Ford, Trustee patricia H. Ford,'Trustee " By its signature below, the Contractor makes only those agreements, representations and warranties described in Section 1D(4) in the DDA. Dated: "Contractor" Brian L. Sinderhoff, Preside"~ Southern California Division