Loading...
HomeMy WebLinkAboutRDA COSMOPOL. APTS 07-06-93AGEND DATE: JULY 6, 1993 ,." ' RDA NO. 5 7-6-93 Inter-Com TO: FROM: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR · COMMUNITY DEVELOPMENT DEPARTMENT SUBJECT: STATUS OF COSMOPOLITAN APARTMENTS RECOMMENDATION Receive and file. FISCAL IMPACT This is a status report on the progress of the Resolution Trust Corporation (RTC) activity in selling the Cosmopolitan Apartments. There are no costs to the City or Redevelopment Agency at this time. BACKGROUND AND DISCUSSION The Cosmopolitan Apartments has been a serious concern for the City of Tustin and the southwest neighborhood of the City for a number of years, but particularly since the property was vacated apprcximately 3~ years ago. In 1991, the property went into foreclosure and was taken back by Home Fed Bank. Home Fed Bank was placed under the conservatorship of the Resolution Trust Corpcration (RTC) in July of 1992. As the City Council is sware, the Tustin Redevelopment Agency made a purchase offer to HomeFed and the RTC as conservator in Septe~ber, 1992 to purchase the property at a sale price reflecting its real value and requested RTC seller financing. Unfortunately, HomeFed rejected all bids. In response to the bid rejections, the City became actively involved in trying to ensure that the RTC and HomeFed were really mobilized to ensure an expeditious decision on the disposition of the ~roperty. With letters of support from Congressman Cox and Congressman Dornan's office, the City Manager and Assistant City Manager met with representatives from RTC in early April. As a resui~ of these meetings, the City was assured that the RTC would coordinate with the City on their anticipated marketing plan for the subject project. The RTC also agreed to cooperate with the City in securing a buyer who would work with the City in City Council Report Status of Cosmopolitan Apartments July 6, 1993 Page 2 formulating a plan for restoring or rebuilding the complex consistent with the City's goals and objectives. A fact sheet was subsequently prepared by the City and submitted to the RTC in late April. Our fact sheet provided general guidelines as to the City's desire for the property. It also included the land use regulations applicable to the property. Staff has also made City files available to any potential bidders during the RTC marketing of the property. The City's fact sheet was used by the RTC in the due diligence package made available to all prospective purchasers of the subject property. In response to receipt of the City's disclosure information, the RTC opened up a standard liquidation process on the subject property in late April and requested sealed bids for purchase and revitalization of the site. The deadline for sealed bids from potential purchasers was June 18th. Twelve offers were received by the RTC and were reviewed the week of June 21st. Of the twelve offers, eight offers met all of the terms and conditions required by the RTC. The RTC has indicated to staff that the eight proposals were all also very comparable in the price and terms offered. On June 25th the RTC sent letters to the eight bidders who had · complied with the original information request asking for their best and final offer. Bidders have been giVen forty-eight hours in ~hich to respond. The RTC expects to take approximately one week to review the final and best offers. At this stage, City staff is requesting that the RTC coordinate with us prior to making, a final decision. Once a final decision is made, the RTC will then enter into escrow with one bidder. A non-refundable deposit of 5% of the purchase price was' required with the bid. The full 25% downpayment must be deposited with the RTC at the time of the opening of escrow. The RTC expects to be able to close escrow within thirty days of opening escrow. The RTC was not willing to give the Staff specific details of the various bids at this time. They did indicate that a majority of prospective purchasers are seeking RTC financing, although there are some cash offers. They also indicated some of the bids were for the complete demolition of the project while others called for extensive rehabilitation. City Council Report Status of Cosmopolitan Apartments July 6, 1993 Page 3 CONCLUSION The RTC is nearing the end of its efforts to dispose of the property. Upon the close of escrow, the property will have a new owner who will, undoubtedly, begin work with City staff to either rehabilitate or rebuild the complex but consistent with the City's Christine A. S~ Assistant City Manager predefined goals and objectives. / / ~ck Zil edevel RZ: CAS\7693cosm. rz lmer ~pment Program Manager