HomeMy WebLinkAbout80A - TRANSIT CODE AND STATION DISTRICT - EXHIBIT K
EXHIBIT K
80A-335
u~~A~~r ~E~ol~r ~u ~ uANT T~
ECTI~N 3343
~F THE
DALIFORN~A F~EALTH AID SAFETY CEDE
ONA
DlPO~TI~N AND DEIIE~.DP~IENT AREEIVIENT
BY AND ~ETwEEN
TIE D~t~IIVIUNITY REDEIIEL~PMENTAENY OF THE CITY DF ANTAANA
AND
SANTA ANA STAT~~N D~STI~I~T, LLD
The following Summary Depart Ira been prepared pursuant to ~aliforr~ia Health ar~d Safety
Cade Section 3343 ~Secfion X34}. The report sets forth certain details of the proposed
Disposition and Development Agreemept ~Agreement~ between the edevelapr~enf Agency of
the City of Santa Ana {Agency} and Santa Ana Station DlstrictF LLC {Developer}~
The purpose of the Areeept is to effectuate the Redevelopment Plan far the verged Project
Redevelopment Dian} by developing several Agency-o~vned scattered parcels ~Si#e~ within the
Station District area with affordable rental and for~sale hauling Project}.~ Certain additional
third-party properties ~Addifianal Properties} may he acquired subsequently y the Agency far
inclusion in the development site. The Agency will convey the Si#e and any Additional Properties
to the Developer to allow far the development of the Project.
The Project v~ili be developed in multiple phases that may be financed anal constructed
separately, with separate closings for each Phase. The Project gill include the fallowing rnix of
residential units
Phase R~~ will captain sevepty~three ~1~~ muiti,far~iiy rental unify restricted to very low
and extremely low incarr~e households pius ope manager unitfor a total ofsevepty-
four ~?4} units;
2, Phase R~~ gill contain thirtyyseven X37} multiRfamily yenta! units restric#ed fo very law
and extremely lave income households plus one }manager unit for a total of thirty-eight
X38} units; and
Phase 1=Swill contain thirfy~#wa X32} for~sale townhome units, of which six gill be
restricted to rnaderate income households.
~ The Sate includes three parcels that are currently under contract, but wili not have been conveyed #o the
Agency prior to the execution of the Agreement Segura Properties.
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The following Summary Report is based upon information contained within the Agreement, and
is organized into the following seven sections:
I~ Salient Points of the~4greement: This section summarizes the major responsibilities
imposed an the Agency and Developer by the Agreement.
I1. Cost of the Agreementto the Agency; This section details the total cast to the
Agency associated with implementing the Agreemen#.
Ill. Estimated Value of the Interests to be Conveyed or Leased Determined at the
Highest and Best Uses Permitted urrde~ the Redevetoprrrent Plan: This section
estimates the value of the interests to be conveyed determined t the highest and best
use permitted under the Site's zoning and the requirements imposed by the
Redevelopment Plan,
lV, Bstimated Reuse Value of the Interests to be Conveyed or Leased: This section
summarizes the valuation estimate for the Site based an the required scope of
development, and the other conditions and covenants required by the Agreement,
V, Consideration Received and Domparison with the Established Value: This section
describes the carnpensatian to be received by the Agency, and explains any difference
between the compensation to be received and the established value of the Site
111. Blight Elimination; This sectian describes the existing blighting conditions on the Site,
and explains how the Agreement will assist in alleviating the blighting influence
1111. Conformance with the A6~90 irnplernentation Plan: This sectian describes how the
Agreement is in oonformance with the Agency's adopted ABA Aga Implementation Klan,
This report and the Agreement are to be made available for public inspection prior to the
approval of the Agreement
I. SALIENT P~If~TS ~F THB AGREEMENT
Project Description
The Agreement requires the Developer to complete the fallowing Scope of Development;
Phase R~~ gill be developed an approximately acres on the black bounded by
Santa Ana Boulevard, Lacy Street, Sixth Street, and Minter Street, and will contain the
fallowing elements:
a, A total of seventy~four ~74~ multi-family residential units, alloca#ed to the following
unit mix:
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i, fifty-arre ~ two-bedroom units; and
ii. Twenty-three ~~3} threeRbedroon~ units,
b, The Phase R-~ income and affordability restrictions can be described as fal~ows;
i. Pi#tyReight ~8} units will be reserved far very law income households;
ii. Fifteen 5} units will be reserved far extremely low income households;
and
iii. Dr~e manager unit will be unrestricted.
c. Residential parking will be provided within an at-grade podium, Retail and guest
parking will be provided on site along sixth street.
2. Phase R-~ will be developed an approximately acres an three scattered parcels,
arrd will contain the following elements.
a. A total of thlrt~r~eight X38} multi-family residential units that will be distributed as
follows
i. Twenty~six ~~~3 two-bedroom unitsx and
ii. Twelve three~bedraam units,
b. The Phase R-2 income and affordability restrictions can be described as fallaws;
i, Twenty~nine X29} units will be reserved far very lover income households;
ii, light ~S~ units will be reserved for extremely law Income households; and
iii. one manager unit gill be unrestricted,
c~ Residential parking will be provided through a cornbinatian of detached and tuck-
undergarages,
Phase F will be developed an six ~G} parcels encompassing approximately 2,~ acres.
This development gill contain the following elements:
a. Twenty-six ~2~~ market rate far~sale townhornes; and
b, fix ~G~ tawnhomes that will be Bald to moderate income households,
4. The Developer will be required to construct the fallowing additional improvements:
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a. ~n~site management off ce {Phase R~~
b. Interior resident community space, including unimproved area to be made
available far a childcare facility {Phase R-~
c. ground floor commercial retail space on the corner of Lady and Sixth Streets
{Phase R-~}}
d. All utility connections;
e. Landscaping designed to maximize opportunities for an-side storm water
detention; and
f. Public improvements including curb, gutter, and sidewalk replacement and all
necessary dedications and ~mprover~ents to comply with accessibility
requirements at street intersections.
Additional Pr~pert~e
The Additional Properties are owned by third parties, and are located within or in the vicinity of
the Project, Some or all of these properties nay be acquired subsequently by the Agency,
within the timeframe specified in the Agreement If parcels are acquired, they will be conveyed
to the Developer for inclusion in the Project. The Additional Properties include the faliawing~
Phase R-1; ~g7 East Sixth Street ~ Acquiitian of this property may allow forthe parking
and landscaping for this phase to be reconfigured. The unit count and parking ratio
would be unchanged
Phase l~-~: 8~ East Santa Ana Boulevard --Acquisition of this property may allow far
up to four {4~ additional apartment units,
Phase FS: If the fallowing properties are acquired, up to seven ~7~ additional units may
be developed in the for-sale housing portion of the Project;
a. ~ ~ Brown;
b~ 5gg East Pifth Streetx
c~ Gg~ and ~g~ East Fifth Street; and
d. 409 and 1 Minter Street;
Agency responsibilities
The Agreement requires the Agency to accept the following responsibilitias;
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~ . Relocate all existing tenan#~ on the bite at the Agency's sole cost and expense, in
accordance with ell existing federal, state, end local laws.
Demolish all existing improvements on the i#e,
3. Remove and aba#e all debris from the i#e in compliance with all appiicable federal,
state, and local Curs, and deliver to the Developer an Abatement Report tha# confirms
tha# all hazardous rnaterials have been properly removed end abated from the bite.
4. on~rey to the Developer far ~ .a0, fee title to the parcels included in each Phase of the
Project. closings for each Phase may occur separately.
5~ Indemnify the Developer again# any damage ar expense in connection with the
Agency's relocation and demolition obligations, including any claims associated with the
removal ar remediation of hazardous ma#erials.
Approve and retard documents prepared by the Developer to impose easements,
covenants, conditions and restrtc#ions on the Project or Phases of the Project to ensure
orderly development in accordance with the Agreement.
Provide financial assistance #o the Developer to fill the affordability gap associa#ed with
the ran#al units in Phases R-~ and R-~ Agency Lawns - Rental ompanent}, The
Agency Loans ^ Rental ompanent far each Phase wild be secured by a Deed of Trust,
and are repayable from the cash flaw ~Resldual Receipts} genera#ed by Phases R~~ and
R-~, The Agency Loans -Rental component gill be made in the fallowing amounts;
a, ~0,$ million for Phase R-~; and
b, X4,77 r~illian for Phase R-~.
8, Provide approximately ~ ,~8 million in financial ssis#ance to the Phase F
developrnen#. This assistance will be structured as follows:
a. A .5 million loan will be provlde~i to the Developer Agency Lawn ~ Phase
The Agency Loan ~ Phase F will be repaid with any excess sales revenues
generated by the Phase F development.
b. Assis#ance totaling $3a,a~0 gill be provided to each qualified han~ebuyer of an
Affordable For-dale Unit ~Hornebuyer Assistance Laar~s~.
1. Each FlomeboyerAsistnce Laan rr~ust be funded safely tram the Low
and lUladerate income Housing Fund; and
ii. Each loan will be secured by a Deed of Trust recorded against the
Affordable For-Sale Unit
Developer ~esponsbilit~e
the Agreer~ent requires the Developer to complete the following activities;
~ . Develop the Project in accordance with the Scope of the Development and Schedule of
Performance attachments to the Agreement.
obtain all the required land use approvals, entitlements and permits necessary far the
development of the Project.
Prepare and submit the following dacurnent to the Agency for approval, in accordance
with the Schedule of Performance, for each Phase;
a. Basic concept drawings and final construction drawings;
Proof of insurance as required by the Agreement;
c. Evidence that sufficient financing has been obtained to construct the Developer
Improvements
d. Valid and binding construction contract between the Developer and one ar more
alifarnia-licensed general contractors ar a construction budget if the Developer
intends to act as the general contractor; and
e, Dampletion guaranty for the construction of each applicable Phase.
4. Indemnify the Agency from and against any loss, damage, claim, or action arising from
the Agreement or its implementation; the construction ofthe Project; or the direct ar
indirect operations of the Developer after the closing date,
The Agreement requires the Developer to accept the fallowing responsibilities specifically
related to the rental portion of the Project:
~ . Fulfill the following requirements regarding the Tax Dredit Funding far Phases and
P-2.
a. The Developer must use goad faith efforts to solicit at least two competitive
bids from tax credit investors far each of Phase R-~ and Phase R~~, and must
select as the investor ~,irnited Partner for each Phase the investor offering overall
the vast beneficial rates and terms, as approved by the Agency,
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b. The developer must subrr~it the Partnership Agreement or similar document far
each Phase which demonstrates sufficient equity for completion of construction
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c. The Developer must submit a cagy of the preliminary Tax credit Allocation
committee ~TA~} reservation letter.
2, Approve the ~nviranmental condition and Soil and ealogical Condition of the portion of
the Site applicable to each Phase within the time set forth in the Schedule of
Performance,
3r Covenant and agree to rent the affordable units I~1 Phases l~-~ and R-2 to extremely low
and very law Income households, far a period of fifty-foe ~b~ years. The rents must not
exceed the more restrictive of;
a, The very~law income rents as defined by California Health and Safety Code
Section ~D~3~b}~}; or
b, The standards set forth by TCAC.
~4, >~und public art with a oast of not less than ,5~1~ of the building permit valuation for
Phases - end 1~~~. The Agency and community organizations selected by the Agency
will identify the locations and the local artistic resources available to provide the public
art.
5. Include commercial retail space in Phase that is made available at belov~r market
rate rents. The Developer must provide priority to local residents before marketing the
space to the general marketr
. Complete the following additional requirements.
a, Prepare and obtain approval from the Agency a farketing Program for the
leasing of the rental units within Phases R- and R~~;
b. Prepare and obtain approval tram the Agenc~r a lUlanagernent Plan far Phases R-
~ and R~~;
c. Satisfy the annual monitoring, recordkeeping, and reporting requirements a
outlined in the Agreement, in compliance with Health and Safety Code Section
34~~; and
d. Comply with the requirements in the »egulatory Agreement and record a lWatice
of Affordability Restrictions an the Transfer of Property as to Phase I~-~ and 1~~~~
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repay the Agency Loans - Rental or~ponent Pram g°Io of the Residual Receipts
generated by Phases and
the Agreerent requires the Develaper fa fulfill the fallawir~g requirements related to the far sale
component of the Project:
'i. Satisfy the fallowing re~uirernents related to the provisian of affordable far-sale housing
in Phase F;
a. or~struct one maderate income tanhor~e unit on each of the six ~G} parcels
containeai in Phase F, far a fatal of six ~~}income restricted units,
b. avenant and agree that each of the Affordable Far~ale Units will be sold at an
Af€ardable Hauling host,
c. Prepare and submit #o the Agency a NiarlCeting and Outreach Plea.
d~ aordinate ~ public lottery with respect to the Affordable Far-aie Units, with
preference given as follows;
i. Households displaced ~rithin the station District;
ii. Households who live ar warp in Santa Ana; and
iii. All other households.
e. Provide, or cause to be provided, a one-an-one hauling counseling with each
prospective homebuyer.
2, satisfy the following re~uiren~ents prior to the sale of each Affordable Far-dale Unit and
the disbursement by the Agency of each Homeboyer Assistance Laan:
a. Provide the Agency minimum of ten 0}days notice of the estimated closing
dote of each Affordable For~ale Unit;
h. Approve and retard the covenants, onditians, end Restrictions far the
homeowners asaciation~
c. Complete the construction of the Affordable For-dale Unit, as evidenced by a
certificate of occupancy;
d~ inter rota and deliver to the escrow holder the Hornebuyer Loan Agreement and
all related loan dacur~ent;
e. submit sufficient evidence of the issuance a homeowners insurance palMCy; and
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f, Obtain approval from the agency that the homebuyer rneets the applicable
Moderate income requirements of the California Redevelopment Law and that
the monthly housing cost far the Affordable For-dale knit i no greater than the
rnaxin~un~ allaable affar~lable housing cost,
Repay the Agency Lawn -Phase F frorr~ ~°l~ of the sales proceeds generated by
Phase F in excess of a ~2°lo deveiopment profit,
I~~ CST ~F THEACR~~~l~NTTO THE ANY
The costs incurred by the Agency to implement the Agreement are broken dawn into goes
Costs and Potential Additional Casts, The goes Casts represent the Agency costs associated
with developing the residential units currently being proposed, The Potential Additional
Costs represn# the estimated Agency casts to assemble the Additional Properties, identified
previously in this report, far development with 1 ~ residential units. The Agency casts are
estimated a follows;
gale Casts
Property Acquisition Cast ,44,004
Other Property Assemblage Costs x,841,000
direct Financial Assistance ~ 1,54,000
Total goes Casts $0,54G,g00
Potential Addi#ional Costs
Property Acquisition ~,0~~,p00
Other Property Assemblage Casts 780,DOD
Direct Financial Asis#ance 7~8,0a0
Total Potential Additional Casts , ~ 00,000
Maximums Agency„,ots
Total goes Costs 30,46}004
Ta#al Potential Additional Costs , 60#000
Total Maximum Agency Costs $39,7 6,040
The Agreement includes three lawns to the Developer that fatal approximately rnillionx and
Homebuyer Assistance Lawns to moderate Income households totaling X84,000. It is
anticipated that the Agency will receive substantial repayment proceeds from these lawns.
However, the amount and tiering of the repayment is too speculative to predict at this t~rne,
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III, ESTIMATED VALUE DF THE INTERESTS T~ ~E CONVEYED ~R t,EAED
DETERMINED AT THE RICHEST AND BEST USES PERMITTED BY THE
REDEVELOPMENT PLAh~
Section 33433 requires the Agency to identify the value of the interests being conveyed at the
highest and best uses allo~red by the Redevelopment Plan The valuation must also be based
an the requirements impaled by the Site's zoning, and the assumption that near~term
development i required, The valuation does not take into consideration any extraordinary use,
qualify and~or income restrictions being imposed on the development by the Agency.
The Agency recently acquired six vacant parcels ~vifhin the Site, The purchase price for these
parcels vas determined based on highest and best use appraisals, The Freighted average
value far these parcels totaled ~ per square foot of land area. ~JUhen Phis is applied to the
.52~acre Site, the total value at the highest use permitted by the Redevelopment Plan is
estimated at 7,~ million, This value Frill increase commensurately if any of the Additional
Properties are ultimately acquired and included in the scope of development,
iV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
The fair reuse value is defined as the value of the interests to be conveyed, based on the
specific terms and conditions unposed by the Agreer~ent. Keyser Marston Associates, lnc,
~KMA~, the Agency's financial consultant, prepared a reuse valuation analysis ofthe Project
based on the currently proposed scope of development, This analysis concluded that the fair
reuse value of the Site is negative X7,25 million, This means that the Site Frauld have to be
donated in a developable state at no cost to the Project, and that ~ 7,25 million indirect
financial assistance Frauld have to be provided, to make the Project financially feasible,
I~CMA also prepared an analysis of the reuse value that Frould be supported if the Additional
Properties are included in the development finder this scenario the fair reuse value is
estimated at negative ~ x,79 million.
V. CONSIDERATION RECEIVED AND COMPARISON 111TH THE ESTABLISHED
VALUE
The Agreement imposes extraordinary controls an the Project. Specifcally, the Developer must
accept long-term income and affordability covenants on 'i ~ ~ of the ~ 44 units in the Project, The
impacts created by these requirements reduce the Site's value from 7,~ n~iilian at the highest
use permitted under the Redevelopment Plana to the established fair reuse value of negative
7,25 million.
The orr~pensation to be received by the Agency can be described as falla~rs;
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The ~~,~7 million in Agency ~.oans -Rental amponent will accrue 3°lo sirnple interest
annually, The developer must make annual debt service payr~ents on #his obligation
using the Residual Receipts generated by the Project, At the end of the loan term, the
~evelaper must repay any outstanding principal and interest balance on the lawn,
2, The $~.5 million Agency ~.oan ~ Phase F must be repaid by the Developer with ~5~10 of
any sales proceeds generated by Phase F above the amount required tv provide a
~~lo development profit.
The Agreement requires the Agency to provide 80,800 in Hvrnebuyer Assistance
Loans #a moderate income households. The principal balance of these lawns, plus a
share of the equity appreciation, will be paid to the Agency when the units are resold at
unrestricted market rate prices,
The repayment proceeds received by the Agency will he greater than the established fair reuse
value of negative million. Thus, it can be concluded that the Agency is receiving fair
consideration far the interests being conveyed #o the ~evelvper,
111 ~LICHT ELINlIhIATI~N
The Project includes ~ ~ ~ units that gill be subjec# to long-term income and affordability
covenants, in accordance with California Redevelopment Law, as portrayed in the California
Health and safety bode ectian 88438, the sale of property that results in the provision of
hauling far iov~- or moderate income persons satisfies the blight elimination criteria imposed by
Section 8~83~ Thus, the Project fult~lls the blight elimination requirement,
V~~. ~~N~RMANC~ VIIITH THE ABA 29D IMPL~M~NTATI~N PLAN
The proposed Project is included in the PrajectArea's Implementation Plan far2DQ~-~0~0. In
addition, the Project fulfills the Agency`s general goal of increasing the affordable hauling stack
within the Project Area. Thus, it can be concluded that the Project is in conformance with the
AB~~00 lmplernentatian Plan.
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