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HomeMy WebLinkAbout15 ORANGE GARDENS 04-06-98DATE: APR--. 6, 1998 NO. 15 4-6-98 TO: FROM: SUBJECT: WILLIAM A. HUSTON, CITY MANAGER REDEVELOPMENT AGENCY STAFF ORANGE GARDENS APARTMENTS - REGULATORY AGREEMENT RECOMMENDATION It is recommended that the City Council approve a Supplemental Regulatory Agreement between the City and Westchester Park LP (the "Developer") on the Orange Gardens Project and authorize the Assistant City Manager to execute the Agreement. FISCAL IMPACT No fiscal impact. Developer will be responsible for all discretionary filing fees and plan check and permit fees. BACKGROUND/DISCUSSION The County of Orange has recommended the terms of financing to authorize issuance of Apartment Development Revenue Bonds in the amount of $11,000,000 to finance the acquisition and rehabilitation of Orange Gardens Apartments located at 1602 Nisson Road. The City of Tustin and the County have previously entered into a Cooperative Agreement necessary for this type of financing within the City of Tustin. On January 28, 1998, the California Debt Limit Allocation Committee (CDLAC) approved a private activity bond allocation in the amount of $11,000,000 subject to the County's issue of bonds by Apri!28, 1998. William A. Huston Orange Gardens Apartments - Regulatory Agreement April 6, 1998 Page 2 Orange Gardens Apartments was originally constructed and financed as a federal Department of Housing and Urban Development (HUD) Section 236 project which was also assisted with HUD Section 8 existing rental unit certificates. Since the HUD Section 236 contract expired in 1994 and was not renewed, Tustin's General Plan identified the Orange Gardens project as "at risk" and recommended preservation of affordable units in the project if at all possible. Details of the proposed project include the following: The widening of the I-5 Freeway resulted in the loss of approximately 17,178 square feet of the original apartment site including 27 parking spaces and 8 covered parking spaces. All residential properties affected by the freeway widening are required to restore their properties to the original ratio of required parking spaces per dwelling unit that existed prior to the Caltrans taking. In order to comply with the City's parking requirements for this development, the Developer will reduce the number of units in the project from 160 to 150 units. Construction of the improvements on the remaining 150 units and common areas will be completed in approximately two years. The property currently suffers from deferred maintenance. The Developer will cure the deferred maintenance and make project enhancements. The proposed renovation includes: complete repair and replacement of any damaged concrete; resurfacing the asphalt driveway; installation of a pool, pool furniture, landscaping and wrought iron fencing, and; installing playground equipment and fencing. Additionally, the rental office and recreation room will be renovated. Interior renovations will include new dishwashers, all new refrigerators, gas ranges and garbage disposals. All units will have new carpeting and vinyl flooring, kitchen and bathroom counters will be resurfaced, and the kitchen and bathroom cabinets will be refurbished. Additional improvements include: new light fixtures; electrical wiring repair; replacement of hot water heaters; combination of new HVAC compressors and completely new systems; interior painting; sub,floor and ceiling repairs, and; window and slider door replacement. Pursuant to requirements of the Iow-income housing tax credits to be utilized for this project, units will need to be occupied by households having incomes not to exceed 60% of area median incomes which the Developer expects to achieve by the time of construction completion in two years. William A. Huston Orange Gardens Apartments - Regulatory Agreement April 6, 1998 Page 3 Based on a review of federal and state relocation laws, the County and Developer are of the opinion that the issuance of bonds and any subsequent move by households from the project would not be considered displacement pursuant to federal and state relocation laws which would require the provision of relocation assistance. Developer has agreed to indemnify and hold the City harmless against any relocation costs. The Developer will nonetheless still offer services to any affected households, including: a) a minimum of 60 days advance notice to vacate which exceeds the 30-day advance notice legally required; b) information on comparable housing available in the area; and c) during the last two (2) days and the initial two (2) days of any calendar month, Developer will make available a commercial rental moving truck to be operated by the tenant at no cost to the tenant. The Developer intends to work with individual residents to minimize the inconvenience caused by the move. In consideration of the City's support for this project, a Supplemental Regulatory Agreement has been prepared and will be honored by the County. 'The Agreement is attached for the City Council's approval. Christine A. Shingleton Assistant City Manager CAS:kd\rdarepor\ogardns.doc Attachment RECORDING REQUESTED BY AND WHEN RECORDED RETLFRN TO: CITY CLERK CITY OF TUSTIN 300 CENTENNIAL WAY TUSTIN, CA 92780 SUPPLEMENTAL REGULATORY AGREEMENT By and Between CITY OF TUSTIN And WESTCHESTER PARK, L.P. SUPPLEMENTAL REGULATORY AGREEMENT ORANGE GARDENS PROJECT THIS SUPPLEMENTAL REGULATORY AGREEMENT (the "Supplemental Regulatory Agreement") is made and entered into a0 of April __., 1998 by and between the City of Tustin, a municipal corporation and public body corporate and politic of the State of California (the "City") and the Westchester Park, L.P., a California limited partnership (the "Developer"). WITNESSETH WHEREAS, the City and the County of Orange (the "County") have entered into that certain Cooperative Agreement dated as of October 1, 1996, pursnar~t to which the City has agreed to cooperate with the County in connection with the issuance by the County of $11,000,000 in Development Revenue Bonds (The Orange Gardens Apartments), Issue C of 1998 (the "Bonds"), to finance the acquisition and rehabilitation by the Developer of a 160 unit multifamily housing project (the "Project") located at 1602 Nisson Road (the "Project site"); and WHEREAS, in consideration of the City's agreement to support the Project pursuant to the Cooperative Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Developer hereby agree as follows: Section 1. Inspections. During the rehabilitation of the Project site, the City shall have the right to inspect all dwelling unit interiors and the grounds of the Project site for City and/or State of California (the "State") building, housing and fire code and safety violations and all violations shall be corrected. Upon completion of the rehabilitation work, the City shall have the right to conduct annual inspections of the dwelling unit interiors and Project site grounds for City and/or State building, housing and fire code and safety and occupancy violations. All rental agreements and contracts with the tenants in the Project shall include the right to inspect the interior of the dwelling units upon 48 hours notice. The City agrees to use its best efforts to coordinate annual inspections in conjunction with armnal inspections by other agencies. Section 2. Zoning Compliance. The widening of the I-5 Santa Aaa Freeway resulted in the loss of approximately 17,178 square feet of the original project site for the Orange Gardens Project. Although no apartment buildings were lost as a result of the taking. The property lost 27 parking spaces and 8 covered parking spaces. All residential property affected by the freeway widening are obligated to comply with the original milo of required spaces per dwelling unit that existed prior to the taking by Caltrans. Current Project site conditions are not in compliance with the parking requirements and must be modified to meet the Zoning Code requirements for the original 160 unit Orange Gardens Apartment project. As part of the proposed renovation of the Project, the Developer agrees to resolve the parking concerns by reducing the total number of units in the Project fi:om 160 to 150 with a totai of 110 one and two bedroom units and 40 three bedroom units. This reduction of units will require a minimum of 150 covered and 95 open parking spaces to serve the 150 remaining dwelling units in the Project. The Developer agrees to file a Design Review application and to obtain ail required City approvals and building permits prior to any rehabilitation construction requiring a building permit occurring for the Project in order to conform to the parking requirements in effect at the time of the taking and ail other City of Tustin Municipai Code requirements. The Developer agrees to complete all construction by January 1, 2000. Section 3. Affordabilitv Reouirements and Relocation. Pursuant to legai requirements of the low income housing tax credits to be utilized for this project, ail of the units must be affordable for households having incomes not to exceed 60% of area median income which the Developer expects to achieve by the time of construction completion in two years. Developer shail provide advance notice to those residents above this income limit who will be required to move from the Project site. Bo Based on a review of federal and state relocation laws, the County and Developer are of the opinion that the move of the households fi:om the Project site would not constitute displacement which would require the provision of relocation assistance. Although it is anticipated that no residents will be considered displaced pursuant to federai and state relocation law as a result of this Project, the Developer shail offer services to the affected households, including: 1) a minimum of 60 days advance notice to vacate which exceeds the 30-day advance notice legaily required; 2) information on comparable housing available in the area; and 3) during the last two (2) days and the initial, two (2) days of any calendar month, Developer will make available on a 24 hour basis a commerciai rentai moving track to be operated by tenant at no cost to the tenant. The Developer shall work with individual residents to minimize the inconvenience caused by any move. Developer has agreed that should the City be approached by any tenants seeking relocation assistance or information, and provided that the City immediately refers that tenant to the Developer, then Developer shall meet with that tenant and review their concerns and complaints, and further Developer shall defend indemnify and hold harmless the City and ail of its officers, agents and employees from any and all claims and demands, actions, proceedings, losses, costs and judgments associated with the relocation claim including expenses incurred in defending against any legai actions that may arise directly or indirectly from relocation matters on the Project. Section 4. Reimbursement. Developer shall pay an annual administrative fee to the City of Tustin during the term of the Bonds or the Regulatory Agreement for the Project with the County, whichever is longer. The fee for the first year shall be $4,265 and shall be payable by April 30, 1999. Each year thereafter on the anniversary of the first payment due date, the administrative fee shall be increased by two percent (2%). The administrative fee shall be payable to the office of the City of Tustin Finance Director at 300 Centennial Way, Tustin, California 92780-1089, or at such other place or places as the City from time to time may designate by written notice to lessee. The administrative fee shall be due as specified in this Agreement. A 10 percent default penalty shall be added to any late payment, together with interest from the date such payment was due at the rate of seven percent (7%) per annum until paid. Section 5. Notice. Notice is required to be given under the terms of this Agreement or any law applicable thereto must be either personally delivered or placed in a sealed envelope, poStage prepaid, addressed to the person on whom it is to be served with remm receipt requested, and deposited in the United States mall. Personal service shall be deemed complete upon delivery and service by mail shall be deemed complete upon receipt as reflected by the return receipt. The address to be used for any notice served by mail upon the parties shall be as follows: To Developer: Attention: Christopher Hashioka F.F. Westchester Park, LLC 5510 Morehouse Drive,Suite 200 San Diego, CA 92121 To City: Attention: Assistant City Manager City of Tustin 300 Centennial Way Tustin, CA 92780 Randy Babish Rutan Tucker 611 Anton Blvd., 14~ Floor Costa Mesa, CA 92626 Section 6. Counterparts. This Supplemental Regulatory Agreement may be executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to be an original. Section 7. Term. The term of this Supplemental Regulatory Agreement shall remain in effect as long as the multifamily housing revenue Bonds issued for the Project remain outstanding or for the term of any Regulatory Agreement for the Project with the County, whichever is greater. 1N WITNESS WHEREOF, the City and the Developer have executed this Supplemental Regulatory Agreement by duly authorized representative, all as of the date first written above. CITY OF TUSTIN By: Assistant City Manager APPROVED AS TO FORM: By: City Attorney WESTCHESTER PARK, L.P. a California limited partnership By: F.F. Westchester Park, LLC Administrative General Partner CAS:kd~'da~r~ogardns State of California County of On ,199 , before me, (name, title of officer, e.g., "Jane Doe, Notary Public") Personally appeared (name(s) of signer(s)) [] personally known to me, OR, [] proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instnmaent and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity/ies, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. Wimess my hand and official seal. (signature of notary) Capacity claimed by signer: (This section is OPTIONAL) [] Individual [] Corporate Officer(s): [] Partner(s): [] General [] Limited [] Attorney-in-fact [] Trustee(s) UI Guardian/Conservator [] Other: Signer is representing: (name of person(s) or entity(ies)) Attention Notary: Although the information requested below is OPTIONAL, it could prevent fraudulent attachment of this certificate to an unauthorized document. THIS CERTIFICATE · MUST BE ATTACHED TO THE DOCUMENT DESCRIBED AT RIGHT: Title or Type &Document Number of Pages __ Date of Document Signer(s) Other than Named Above