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Home My WebLink About09 HA34970 Notice of TerminateSTAFF REPORT PALM DESERT HOUSING AUTHORITY COMMUNITY DEVELOPMENT DEPARTMENT MEETING DATE: February 11, 2021 PREPARED BY: Jessica Gonzales, Senior Management Analyst REQUEST: Consideration for approval to Deliver a Notice to Terminate Contract No. HA34970 with Allied Real Estate Partners, LLC ("Allied RE"), a California limited liability company, regarding vacant property owned by the Authority and known as APN 622- 370-014 Recommendation By Minute Motion, that the Authority Board, 1) Consent to deliver to Allied RE as tenant, under that certain Ground Lease by and between the Palm Desert Housing Authority ("Authority") and Allied RE dated as of January 14, 2016 (Contract HA 34970), a notice of termination and quitclaim deed pursuant to Section 1.4 thereof and pertaining to the proposed development of the Arc Village Project ("Project") at the vacant property owned by the Authority and known as APN 622-370-014; and 2) Authorize the Chairman and/or Executive Director or their respective designee to take any and all necessary actions and execute all related documents necessary to facilitate the actions taken herein. Strategic Plan This request does not apply to a specific strategic plan goal. Backaround Analvsis On January 14, 2016, the Authority approved the Ground Lease with Allied Affordable Housing, LLC, a California limited liability company ("Allied"), for the purpose of developing the Project, a 36 unit affordable housing project at the Authority owned property known as APN 622-020-096 and located behind Desert Arc, 73-255 Country Club Drive. Thereafter, on May 17, 2016, the City's Planning Commission approved entitlements to allow Allied to construct an 8,579-square-foot community center building, and the Project. Allied's leasehold interest as tenant was subsequently assigned by Allied to Allied RE on January 9, 2020. February 11, 2021 - STAFF REPORT PDHA Consent to Deliver a Notice of Termination and Quitclaim Deed (Contract No. HA34970) Page 2 of 2 In order to consider the timing of the award of the HOME funds, and at the request of Allied and Allied RE, the Authority has consented to four (4) extensions of the deadline by which Allied RE must have satisfied the conditions of Section 1.4 of the Ground Lease and the entitlements for the Project. The last of those extensions expired on December 30, 2020 without Allied RE having satisfied the Section 1.4 conditions. Section 1.4 provides that the Ground Lease may now be terminated as herein requested at the discretion of the Authority. The Community Development Planning Division has confirmed that the entitlements for the Project will terminate concurrently with the termination of the Ground Lease. Staff has prepared the necessary documents and recommends that the Authority Board approve the delivery of the Notice of Termination and Quitclaim Deed as requested and authorize staff to take all such actions and execute all such documents as are necessary to effectuate the termination of the Ground Lease. Fiscal Analysis There is no fiscal impact to the Authority in connection with the proposed request. There is also no impact to the General Fund. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER J.G. �aY,�r. �r��z� .Andy Firestine Ryan Stendell Jim Grayson Director of Community Janet Moore Andy Firestine Special Counsel I Development Director of Finance Assistant City Manager Interim City Manager/Executive Director, Randy Bynder )Vandy $ynde-f - ATTACHMENTS: Draft Notice of Termination Draft Quitclaim Deed Aw-axd BY HOUSING AU HOWiY 3 9 VERIFIED BY: a S Original on file with City rlee Onto Aq NOES,, &U(nW1 No -and k-e.c[y -2- P6401-0001 \249713M.doc DRAFT FOR DISCUSSION February 11, 2021 Allied Real Estate Partners, LLC 409 Santa Monica Blvd, Suite E Santa Monica, CA 90401 Attn: Yvonne Delgadillo, VP Community Development Re: Termination of that certain Ground Lease by and between the Palm Desert Housing Authority, as landlord, and Allied Real Estate Partners, LLC, as tenant and successor -in -interest by assignment, and dated as of January 14, 2016 (as amended, the "Ground Lease") Dear Ms. Delgadillo: This letter constitutes notice to you of the termination of the Ground Lease for failure of Allied Real Estate Partners, LLC, as tenant, to satisfy the conditions of Section 1.4 of the Ground Lease pertaining to the "Lease Commencement Date", as defined therein, on or prior to December 30, 2020. Enclosed is a form of quitclaim deed conveying all of the interests, if any, of Allied Real Estate Partners, LLC to its leasehold interest pursuant to the Ground Lease and the "Property", as defined therein. You are hereby requested pursuant to Section 2.11.4 of the Ground Lease to promptly execute the quitclaim deed, have it notarized and returned to the undersigned as soon as possible. Please contact the undersigned if you should have any questions or comments. Sincerely, Ryan Stendell Community Development Director [This page has intentionally been left blank.] DRAFT FOR DISCUSSION RECORDING REQUESTED BY: Palm Desert Housing Authority And When Recorded Mail To: Palm Desert Housing Authority 73 -5 10 Fred Waring Drive Palm Desert, CA 92260-2578 Attn: City Clerk With copy to: Richards, Watson & Gershon 350 S. Grand Ave., 37th Floor Los Angeles, CA 90071 Attn: Jim G. Grayson, Esq. APN: SPACE ABOVE THIS LINE FOR RECORDER'S USE The undersigned declares that this Quitclaim Deed is exempt from Recording Fees pursuant to California Government Code Sections 6103 and 27383 and Documentary Transfer Tax pursuant to California Revenue and Taxation Code Section 11922. QUITCLAIM DEED FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, ALLIED REAL ESTATE PARTNERS, LLC, a California limited liability company (the "Grantor'), does hereby remise, release and forever quitclaim to the PALM DESERT HOUSING AUTHORITY, a public body, (the "Authority"), all of Grantor's rights and interest in or pertaining to that certain real property located in the County of Riverside, State of California, more particularly described on Exhibit "A" attached hereto and incorporated herein by reference, including without limitation all of such rights or interests with respect to that certain Ground Lease and that certain Regulatory Agreement and Declaration of Restrictive Covenants, each by and between the Authority and Grantor, and dated as of January 14, 2016. IN WITNESS WHEREOF, the Grantor has executed and notarized this Quitclaim Deed as of the date set forth below. 2021 ALLIED REAL ESTATE PARTNERS, LLC, a California limited liability company By: Name: Title: Chief Executive Officer P6401-0001 \2494899v1.doc _ 1 _ DRAFT FOR DISCUSSION CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On , before me, , (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument 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 the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) P6401-0001\2494899vl.doc _2_ DRAFT FOR DISCUSSION CERTIFICATE OF ACCEPTANCE (California Government Code Section 27281) This is to certify that the interest in real property conveyed by the Quitclaim Deed dated , 2021, from Allied Real Estate Partners, LLC, a California limited liability company (the "Grantor") is hereby accepted by the undersigned officer or agent on behalf of the Authority pursuant to the authority conferred by its Board of Directors by Resolution No. adopted on and the Authority consents to the recordation thereof by its duly authorized officer. Dated: , 2021 PALM DESERT HOUSING AUTHORITY, a public body WE P6401-0001\2494899v1.doc _3_ DRAFT FOR DISCUSSION CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of Riverside On , before me, , (insert name and title of the officer) Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument 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 the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) P6401-0001\2494899vl.doc _4_ EXHIBIT "A" Legal Description of the Property THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PALM DESERT, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: •.'omr_\ THE SOUTHERLY 323.50 FEET OF THE WEST 7-1/2 ACRES OF THE WEST ACRES OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 8, TOWNSHIP 5 SOUTH, RANGE 6 EAST, OF THE SAN BERNARDINO MERIDIAN, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ACCORDING TO AN OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE. PARCEL 2A AN EASEMENT FOR PEDESTRIAN AND VEHICULAR ACCESS FOR CONSTRUCTION AND EMERGENCY ACCESS PURPOSES OVER THAT PORTION OF THE WEST 7-1/2 ACRES OF THE WEST 15 ACRES OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SECTION 8, TOWNSHIP 5 SOUTH, RANGE 6 EAST, SAN BERNARDINO MERIDIAN, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ACCORDING TO AN OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE, DESCRIBED AS FOLLOWS: COMMENCING AT THE WEST 1/16 CORNER OF SAID SECTION 8, SAID CORNER BEING ON THE CENTERLINE OF COUNTRY CLUB DRIVE, SAID CORNER ALSO BEING THE NORTHWEST CORNER OF THE WEST 7-1/2 ACRES OF THE WEST 15 ACRES OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID SECTION 8; THENCE ALONG THE WEST LINE OF THE WEST 7-1/2 ACRES OF THE WEST 15 ACRES OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID SECTION 8, S 0° 10' 27" W 124.00 FEET; THENCE S 890 49' 33" E 33.88 FEET TO THE EAST LINE OF THAT CERTAIN EASEMENT TO THE CITY OF PALM DESERT FOR PUBLIC ROADWAY PURPOSES DESCRIBED IN DOCUMENT NO. 2003-461172 RECORDED JUNE 23, 2003, RECORDS OF SAID COUNTY OF RIVERSIDE, AND TO THE TRUE POINT OF BEGINNING; THENCE S 890 49' 33" E 30.28 FEET; THENCE S 00 13' 14" E 874.45 FEET TO A LINE PARALLEL WITH AND 323.50 FEET NORTHERLY OF THE SOUTH LINE OF THE WEST 7-1/2 ACRES OF THE WEST 15 ACRES OF THE NORTHEAST QUARTER OF THE NORTHWEST QUARTER OF SAID SECTION 8; DRAFT FOR DISCUSSION THENCE ALONG SAID PARALLEL LINE S 890 41' 04" W 24.00 FEET; THENCE N 0° 13' 14" W 831.65 FEET; THENCE N 890 49' 33" W 8.74 FEET TO THE EAST LINE OF SAID EASEMENT TO THE CITY OF PALM DESERT PER DOCUMENT NO. 2003-461172 AND TO THE BEGINNING OF A CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 187.50 FEET, A RADIAL LINE THROUGH SAID BEGINNING OF CURVE BEARS S 810 07' 08" E; THENCE NORTHERLY 28.49 FEET ALONG SAID EAST LINE AND ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 80 42' 25"; THENCE CONTINUING ALONG SAID EAST LINE N 00 10' 27" E 13.62 FEET TO THE TRUE POINT OF BEGINNING. 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