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HomeMy WebLinkAbout100608 Exclusive Neg Agmt Goodwill Ind and Foundation for Affordable HsgREQUEST FOR AGENCY ACTION AGENCY BOARD MEETING DATE: OCTOBER 6, 2008 TITLE: EXCLUSIVE NEGOTIATION AGREEMENT WITH GOODWILL INDUSTRIES AND FOUNDATION FOR AFFORDABLE HOUSING r EXECUTIVE - • •- RECOMMENDED ACTION AGENCY SECRETARY USE ONLY: z�: 8�ss.Camd, Fe APPROVED 0 As Recommended ❑ As Amended ❑ Ordinance on 1m Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the Executive Director and Agency Secretary to execute the attached Exclusive Negotiation Agreement with a partnership to be formed between Goodwill Industries of Orange County and the Foundation for Affordable Housing for the sale and development of the property at 1600 Garden Grove Boulevard, subject to non - substantive changes approved by the Executive Director and Agency General Counsel. DISCUSSION The Community Redevelopment Agency (Agency) of the City of Santa Ana often acquires property for the purpose of furthering its goals of fostering affordable housing. The property at 1600 Garden Grove Boulevard (Exhibit 1) is a 2.93 acre vacant site that is currently zoned for open space. It was acquired by the Agency in November of 2004. Staff has been working with Goodwill Industries of Orange County and the Foundation for Affordable Housing (FFAH) to develop the site. Goodwill is a nonprofit corporation dedicated to helping persons with disabilities to achieve the highest level of independence. FFAH is also a nonprofit corporation that seeks to create high quality affordable housing. The proposed project is the development of a 41 unit rental complex for developmentally disabled adults. As part of the development, an approximate .5 acre area will be dedicated to open public space. A key issue in the discussions has been the identification of funding sources sufficient for both construction and operation of the facility. The 2.A. -1 Exclusive Negotiation Agreement with Goodwill and FFAH October 6, 2008 Page 2 current proposal calls for Goodwill and FFAH to apply for the $4.9 million State Multifamily Housing Program, Supportive Housing Program funds. In order to apply for these funds, they must be able to demonstrate that they have site control, either by means of outright ownership, a long term lease, or some other acceptable mechanism such as an exclusive negotiation agreement (ENA) for the purchase of the property from its current owner. Under the proposed ENA (Exhibit 2), Goodwill and FFAH will form a partnership that will negotiate the terms of a Disposition and Development Agreement with the Agency. Both the Agency and the partnership will have the unilateral right to suspend or terminate negotiations at any time. FISCAL IMPACT There is no fiscal impact associated with this action. Shelly ndry -Ba 1 Housing Manager Community Development Agency CJN /SLB /mlr 100608 EN Agree doc 3 2.A. - 2 i LORETTA LN. ........... MARCELLA LN. PARK LN. LN. MC EVOY LN. F 77 77T71 7- 1 2.A. - 3 H EXCLUSIVE NEGOTIATION AGREEMENT [Forest Paul Project — Special Needs Housing] This Exclusive Negotiating Agreement ( "Agreement ") is entered into on this 6th day of October, 2008, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a redevelopment agency pursuant to California Health & Safety Code section 33000 et seq. and a public body, corporate and politic (the "Agency "), and VISTA DEL RIO HOUSING PARTNERS, L.P., a California limited partnership (the "Developer "), each of which is referred to herein as "Party." RECITALS A. The Agency is responsible for implementation of the Redevelopment Plan for the Merged Project Area, which includes the area formerly known as the Bristol Redevelopment Project Area (the "Redevelopment Plan "). The Redevelopment Plan affects and controls development and use of all real property located within an area within the City of Santa Ana, California, more particularly described and set forth in the Redevelopment Plan (the "Project Area "). B. In furtherance of the objectives of the Community Redevelopment Law of the State of California, Health and Safety Code Section 33000, et seq., the Agency desires to review the feasibility and consider the redevelopment of certain parcel of vacant land, of approximately 3.2 acres, within the Project Area, located generally at 1600 Garden Grove Blvd., in the City of Santa Ana, as shown on the site map attached hereto as Attachment No. 1 (the "Site "). Attachment No. 1 also shows approximately 0.51 acres owned by the Agency immediately adjacent to the Site that is currently proposed to be transferred to the City of Santa Ana for park purposes. C. The Developer has submitted a proposal for development of the Site with a design and terms worthy of further exploration on the feasibility of the development of the Site (the "Project "). D. A central element of Developer's proposal is a MHP Supportive Housing Loan from the California Department of Housing and Community Development (the "MHP Loan "). The application for the MHP Loan requires that the Agency and Developer enter into this Agreement in order to demonstrate control of the Site. AGREEMENT NOW, THEREFORE, the Agency and Developer hereto mutually agree as follows: Section 1. Term of Agreement. The term of this Agreement shall commence on the date hereof and shall end on October 6, 2009, unless terminated earlier by either party as permitted in Section 5 of this Agreement (the "ENA Period "). Notwithstanding the foregoing, if a Disposition and Development Agreement ( "DDA ") is executed by the Agency and the Developer EXHIBIT 2 2.A. - 4 prior to the termination of this Agreement then, upon such execution, this Agreement shall terminate, and all rights and obligations of the Parties shall be as set forth in the executed DDA. Section 2. Exclusivity. During the ENA Period the Agency shall not negotiate with any person or entity other than the Developer for the sale, lease or development of the Site, nor shall it solicit proposals for development of an affordable housing project on the Site. In the event the Agency receives unsolicited proposals for an affordable housing development on the Site, the Agency shall advise any proponent of an unsolicited proposal of the existence and nature of this Agreement. Nothing contained herein shall prohibit the Agency from studying non - affordable housing alternatives for the Site. Section 3. Negotiations /Limitations of Agreement: During the ENA Period, the Agency and the Developer shall meet from time to time in an attempt to agree upon a DDA based upon the major terms of acquisition and development set forth in Attachment No. 2 to this Agreement. However, this Agreement shall not obligate either the Agency or the Developer to enter into a DDA or to enter into any particular subsequent agreement. In executing this Agreement, Developer expressly acknowledges that it has no expectation whatsoever that a DDA will be successfully negotiated or executed. Rather, Developer is only obtaining Agency's commitment to forego negotiations with any other entity or person for development of the Property and the Agency retains its sole and absolute discretion whether to consider a DDA on the terms in Attachment No. 2 or any other terms. Either party shall likewise have the right to unilaterally suspend or terminate negotiations altogether, but such action shall not relieve the Agency of its obligation to refrain from negotiating with anyone else while this Agreement is in effect. Section 4. Economic Feasibility Analysis. The Parties agree and acknowledge that no determination has been made regarding the Developer's ability to fund the Project and to ensure its long tenor fiscal viability, and that the MHP Loan sought by Developer is a single element of the Project's overall funding requirements. The Parties further agree and acknowledge that this Agreement shall not be interpreted to obligate the Agency to provide any financial assistance to the Project beyond the terms set forth in Attachment No. 2. Section 5. Early Termination (a) The Developer may terminate this Agreement at any time upon written notice to the Agency as provided for in Section 8 of this Agreement. (b) The Agency may terminate this Agreement in the event the Developer's MHP Loan application is denied, or if the Developer fails to file a complete MHP Loan application within one hundred eighty (180) days of the effective date of this Agreement, or pursuant to Section 1 of this Agreement. Section 6. Compliance with City Standards. The project shall be subject to the City of Santa Ana's normal development and approval processes, and nothing contained herein shall be deemed an approval by the City of any aspect of the Project whatsoever. 2 2.A. - 5 Section 7. Conditions on DDA Annroval. Any DDA resulting from negotiations pursuant to this Agreement shall become effective only if and after such DDA has been considered and approved by the Agency Board of Directors in its absolute discretion following conduct of all legally required procedures, and executed by duly authorized representatives of the Agency and the Developer. Until and unless a DDA is signed by the Developer, approved by the Agency Board of Directors, and executed by the Agency, no agreement drafts, actions, deliverables or communications arising from the performance of this Agreement shall impose any legally binding obligation on either Party to enter into or support entering into a DDA or be used as evidence of any oral or implied agreement by either Parry to enter into any other legally binding document. Section 8. Notices. Formal notices, demands and communications between the Agency and the Developer shall be sufficiently given if, and shall not be deemed given unless, dispatched by certified mail, postage prepaid, return receipt requested, or sent by express delivery or overnight courier service, to the office of the Parties shown as follows, or such other address as the Parties may designate in writing from time to time: To Agency: Community Redevelopment Agency of the City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attention: Cynthia J. Nelson, Agency Executive Director Telephone: (714) 647 -5489 Email: cnols ana.ca.tus With a Copy to: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attention: Office of the City Attorney Telephone: (714) 647 -5201 To Developer: Vista Del Rio Housing Partners, L.P. c/o Foundation for Affordable Housing V, Inc. 30950 Rancho Viejo Road, Suite 100 San Juan Capistrano, CA 92675 Attention: Thomas E. Willard Telephone: (949) 443 -9101 Email: tom @ffah.org Any Delivered Notices shall be deemed effective upon actual receipt. Section 9. Waiver of Lis Pendens. It is expressly understood and agreed by the Parties that no lis pendens shall be filed against any portion of the Site with respect to this Agreement or any dispute or act arising from it. 2.A. - 6 Section 10. Right of Entry. The Agency shall cooperate with the Developer to provide the Developer the right to enter upon the Site, as necessary, for purposes of conducting investigations to further the objectives of this Agreement. Section 11. Costs and Ex el uses. Each Party shall be responsible for its owns costs and expenses in connection with any activities and negotiations undertaken in connection with this Agreement, and the performance of each Party's obligations under this Agreement. Section 12. Remedies for Breach. (a) In the event of a default by the Agency, the Developer's sole remedy shall be to terminate this Agreement. Following such termination, neither party shall have any further right, remedy or obligation under this Agreement, except that the Developer's obligations pursuant to Section 9 shall survive such termination. Developer expressly waives any claim or entitlement to compensatory or other monetary damages resulting from a breach of Agency's obligations under this Agreement. (b) In the event of a default by the Developer, the Agency's sole remedy shall be to terminate this Agreement. Following such termination, no Party shall have any right, remedy or obligation under this Agreement, except that the Developer's obligations pursuant to Section 9 shall survive such termination. Agency expressly waives any claim or entitlement to compensatory or other monetary damages resulting from a breach of Agency's obligations under this Agreement. (c) Except as expressly provided above, no Party shall have any liability to any other Party for damages or otherwise for any default, nor shall any Party have any other claims with respect to performance under this Agreement. Each Party specifically waives and releases any such rights or claims it may otherwise have at law or in equity. Section 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California and venue shall be proper in the County of Orange. Section 14, Integration. This Agreement contains the entire understanding between the Parties relating to the transaction contemplated by this Agreement, notwithstanding any previous negotiations or agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each Party is entering this Agreement based solely upon the representations set forth herein and upon each Party's own independent investigation of any and all facts such Party deems material. Section 15. Assignment. The qualifications and identity of the Developer are of particular concern to the Agency. It is because of those qualifications and identity that the Agency has entered into this Agreement with the Developer. Accordingly, this Agreement may 2.A. — 7 not be assigned by the Developer and no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement. Notwithstanding the foregoing, Developer may retain or join with consultants and/or financial partners in the Project, but such consultants or partners shall have no rights whatsoever in this Agreement. Section 16. No Third Party Beneficiaries. Except to the extent the City is given express rights hereunder, there are no third party beneficiaries of this Agreement. Section 17. No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other Party must be in writing and executed by the waiving Party to be enforceable and no such waiver shall be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. Section 18. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. Section 19. Severability. If any term, provision, condition or covenant of this Agreement or its application to a Party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 20. Legal Advice. Each Party represents and warrants to the other the following: it has carefully read this Agreement, and in signing this Agreement it does so with full knowledge of any right which it may have; it has received independent legal advice from its legal counsel as to the matters set forth in this Agreement, or has Imowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, it has freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party or its agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. IN WITNESS WHEREOF, this Agreement has been executed by the Parties on the date first above written. 2.A. -8 ATTEST: Patricia E. Healy Secretary APPROVED AS TO FORM: Joseph W. Fletcher, General Counsel Lm Benjamin Kaufman Assistant General Counsel COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA' ism Cynthia J. Nelson Executive Director VISTA DEL RIO HOUSING PARTNERS, L.P., a California limited partnership C Name: Its: 2.A. - 9 Attachment No. 1 —Site Plan 2.A. -10 Attachment No. 2 - Major Terms for Negotiations Sales Price: The purchase price for the property shall be $1.00, subject to confirmation by a fair reuse analysis as established by a report prepared pursuant to California Health and Safety Code section 33433. Should said report not support this sales price, then Developer may choose to (i) acquire the Site at the minimum level of support justified by said report, or (ii) terminate this Agreement. Additional Agency Assistance: The Agency shall pay for all application fees and permit fees or costs associated seeking City of Santa Ana entitlements. Additionally, the Agency will contribute an amount not to exceed $100,000.00 for an enhanced entryway to the development, with plans and materials subject to prior Agency approval. Economic Feasibility: The Developer will provide the Agency with a detailed cost estimate and pro forma to be utilized in the preparation of the DDA including financing sources including loans and tax credits. Pronosed Development: Went: The Developer will develop and build and own a 41 unit special needs housing project, made up of primarily one - bedroom and studio units with a multi use clubhouse, on the Site (herein referred to as the "Project "). The current concept plan of the Project, which is subject to modification as the Project moves forward, is attached hereto as "Exhibit A to Attachment No. 2." Income Limits: The Developer will certify the income levels of person(s) /households residing in the units to maintain extremely low, very low and low- income affordability for a 55 year period. Property Management: The Developer will utilize a full -time on -site property manager with qualifications reasonably acceptable to the Agency. Environmental Analysis: The project is subject to the California Environmental Quality Act ( "CEQA "), and nothing contained herein shall be deemed a determination by the Agency as to the impacts of the Project on the environment or a waiver of the Agency's rights and obligations with respect to the review of such impacts. The Project must comply with the requirements of CEQA. Full Compliance with City Standards: The Developer shall comply with all City of Santa Ana zoning and land use standards applicable to the Site, including but not limited to Santa Ana Design and Development Standards for Parking Lots. The Developer will be responsible for any offsite public work improvements necessitated by the development of the project (e.g., water and sewer hookups). Processing of Entitlements: The Developer will be responsible for submitting and processing needed applications for City entitlements, including site plan, general plan and zoning amendments, conditional use permit (CUP), tentative parcel map, environmental documentation and variance, if any. 2.A. -11 Exhibit A to Attachment No. 2 Concept Plan of Project 2.A. -12