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Home My WebLink AboutRes 2021-271 1 RESOLUTION NO. 2021-27 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT DECLARING A CITY -OWNED PARCEL LOCATED ON THE NORTH SIDE OF GERALD FORD DRIVE BETWEEN COOK STREET AND PORTOLA AVENUE TO BE EXEMPT SURPLUS LAND PURSUANT TO GOVERNMENT CODE SECTION 54221(f)(1)(A) AND AUTHORIZING THE CITY MANAGER TO ENTER INTO AN EXCLUSIVE NEGOTIATION AGREEMENT WITH PALM COMMUNITIES WITH RESPECT TO THE PROPOSED SALE OF THE PARCEL TO PALM COMMUNITIES AND THE DEVELOPMENT OF AN AFFORDABLE HOUSING PROJECT THEREON RECITALS: WHEREAS, the City of Palm Desert ("City") is the owner in fee simple of that certain real property in the City located on the north side of Gerald Ford Drive between Cook Street and Portola Avenue and described on Exhibit "A" and depicted on Exhibit "B", which are attached hereto and incorporated herein by reference ("Property"). The Property is currently vacant and is approximately 10 acres in size; and WHEREAS, the City desires to sell the Property for the development of an affordable housing project thereon to meet the objective of Land Use Housing and Open Space, Priority 2, which is to facilitate development of high quality housing for people of all income levels; and WHEREAS, pursuant to Section 54221(b)(1) of the Surplus Land Act (Government Code Sections 54220-54234), the City Council must declare the Property to be "surplus land" or "exempt surplus land" before the City Council takes action to dispose of the Property; and WHEREAS, Government Code Section 54221(f)(1)(A) defines "exempt surplus land" to include surplus land that is transferred pursuant to Government Code Section 37364; and WHEREAS, Government Code Section 37364 authorizes a city to sell, lease, exchange, quitclaim, convey, or otherwise dispose of real property to provide housing affordable to persons and families of low or moderate income provided that the following conditions are met: (a) Not less than 80 percent of the area of the parcel will be used for the development of housing; and (b) Not less than 40 percent of the total number of those housing units developed on the parcel shall be affordable to households whose incomes are equal to, or less than, 75 percent of the maximum income of lower income households, and at least half of which shall be affordable to very low income households; and RESOLUTION NO. 2021-27 (c) Dwelling units produced for persons and families of low or moderate income under Government Code Section 37364 shall be restricted by regulatory agreement to remain continually affordable to those persons and families for the longest feasible time, but not less than 30 years, with such regulatory agreement recorded in the office of the county recorder in which the housing development is located; and WHEREAS, Palm Communities previously submitted a proposal to the City to purchase the Property for the purpose of developing an affordable housing project on the Property consisting of 240 multi -family units, with 100 percent of the units restricted for rental to very low and low income households at affordable rents ("Proposal"); and WHEREAS, the City and Palm Communities previously entered into an Exclusive Negotiation Agreement for the purpose of negotiating on an exclusive basis to establish the terms and conditions of an agreement for the sale of the Property to Palm Communities and the construction of a housing development on Property by Palm Communities in accordance with the Proposal; and WHEREAS, the Exclusive Negotiation Agreement expired on March 5, 2021; and WHEREAS, staff has recommended that the City enter into a new Exclusive Negotiation Agreement with Palm Communities for the purpose of negotiating on an exclusive basis the terms and conditions of an agreement for the sale of the Property to Palm Communities and the construction of a housing development on the Property by Palm Communities that complies with the Proposal and Government Code Section 37364; and WHEREAS, because the proposed housing development will meet the requirements of Government Code Section 37364, staff has also recommended that the City Council declare the Property to be exempt surplus land pursuant to Government Code Section 54221(f)(1)(A); NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS: SECTION 1. The above recitals are true and correct and are a substantive part of this Resolution. SECTION 2. The City Council hereby declares pursuant to Government Code Sections 54221(b) and 54221(f)(1)(A) that the Property is exempt surplus land because the City intends to sell the Property pursuant to Government Code Section 37364 for the development of an affordable housing project on the Property that complies with the requirements of Section 37364. SECTION 3. The ENA attached hereto as Exhibit "C" is hereby approved. The City Manager, with the consent of the City Attorney, is hereby authorized to execute and deliver, for and in the name of the City, the ENA substantially in the form attached as Exhibit "C". -2- P6401-000112533730v2.doc RESOLUTION NO. 2021-27 1 1 1 SECTION 4. Staff is hereby authorized and directed to provide a copy of this Resolution to the Department of Housing and Community Development ("HCD") in the manner required by HCD. SECTION 5. The staff and officers of the City are hereby authorized, jointly and severally, to take such actions as they deem necessary or proper to effectuate the purposes of this Resolution and all actions previously taken are hereby ratified. SECTION 6. The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, on this 27th day of May, 2021, by the following vote, to wit: AYES: HARNIK, JONATHAN, NESTANDE, QUINTANILLA, and KELLY NOES: NONE ABSENT: NONE ABSTAIN: NONE ATTEST: /� M. GLd 1 NCHEZ(AC1'1NG CITY CLERK CITY OFF ALM DESERT, CALIFORNIA -3- ditA KATHLEE KELLY, MAYO1 P6401-000112533730v2.doc RESOLUTION NO. 2021-27 EXHIBIT A LEGAL DESCRIPTION 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: Parcel 8 of Parcel Map No. 36792, in the City of Palm Desert, County of Riverside, State of California, as shown by map on file in Book 239 of Parcel Maps, Page 9 through 15, in the office of the County Recorder of said County. APN: 694-120-028 -4- P6401-000112533730v2.doc RESOLUTION NO. 2021-27 1 THIS MAP WAS PREPARE° FOR ASSESSMENT PURPOSES OW HOLM$OY I5 ASSUMED FOR THE ACCURACY OF IRE OW 5510M11 AAAOASr9S PAIMPL WY 1.101 COMPLY W11H LOCAL LOYSP01 OR WALMIG VIE LYW4UNCES PARE EXHIBIT B ASSESSOR'S MAP S 1/2 SEC. 28, T.4S R.6E -G CITY OF PALM DESERT / 30.18AC !3 as a"1.0,0yl GERALD 4S9E580R1S MAP &(64 PC 12 Rbplsgs County Colt I 00kr. POR PAR 3 FORD 1 EAU 1 _. RS 5O1 RS 5/51, RS T118 R623/60, RS 2756. 651(169 RS 108116 ST RAW RN I6E PM230'100 PARS p1+ 28 E% Pfra 10.00 AC 3R WA Pp 19 -5- MAp Marano. S6 115035 • 76 TRACT NO 15405 FM 1681. 64 PARCEL IMP NO 15181 IM23019 • 15 PARCEL MAP NO 39192 TRA 01 &073 0187392 . 061.011061.1441 �061T165� /t 694-12 653-26 LsypM RHMa.W.I Ow Wawa euts...1-1c Mtn 2"IP //�\, r / � ,1 r...l. p`11 P6401-000112533730v2.doc RESOLUTION NO. 2021-27 EXHIBIT C EXCLUSIVE NEGOTIATION AGREEMENT -6- P6401-000112533730v2.doc RESOLUTION NO. 2021-27 1 1 1 CONTRACT NO. C41550 EXCLUSIVE NEGOTIATION AGREEMENT THIS EXCLUSIVE NEGOTIATION AGREEMENT (the "Agreement") is entered into May 27, 2021, by and between the City of Palm Desert, a municipal corporation (the "City") and Palm Communities, a California corporation (the "Developer"), on the terms and provisions set forth below. THE CITY AND THE DEVELOPER HEREBY AGREE AS FOLLOWS: I. [§100] Negotiations A. [§101] Good Faith Negotiations The City and the Developer, acknowledging that time is of the essence, agree for the Negotiation Period (as defined below) to negotiate diligently and in good faith the terms and conditions pursuant to which the City may dispose of and the Developer may develop a certain +/- 10 acre of real property (the "Site"). The Site is more particularly described in Exhibit A, "Legal Description," attached hereto and incorporated herein by reference, and is shown on the "Map of the Site," attached hereto as Exhibit B and incorporated herein by reference. Except as otherwise provided below, the City agrees, that during the Negotiation Period it will not negotiate with any other person or entity regarding development of the Site or any portion thereof. Among the issues to be addressed during the Negotiation Period are: (1) the terms and conditions of conveyance of the Site to Developer (2) sale price for the Site; (3) Developer's program to develop the Site; (4) design and aesthetic considerations of the development of the Site, including but not limited to configuration of the development, site density, site circulation and access to surrounding properties including a draft specific plan; (5) all planning and land entitlement processes and requirements, including preparation of a master plan and a specific plan approval process; (6) all permitting and environmental reviews and processes; and (7) other City and Palm Desert Housing Authority requirements pertaining to the development and use of the Site including affordability restrictions. B. [§102] Duration of this Agreement; Effective Date 1. This Agreement (the "Negotiation Period") shall expire on December 31, 2021. 2. The City Manager may, in his or her sole discretion, agree to extend the Negotiation Period for up to sixty (60) days to allow additional time for the parties to come to an agreement on the issues described in Section 101, as well as any other relevant issues. 3. In the event the Developer has not continued to negotiate diligently and in good faith, the City shall give written notice thereof to the Developer who shall then ENA for APN 694-120-028 - Palm Communities Page 1 of 7 136401-000112535632v3.doc RESOLUTION NO. 2021-27 have ten (10) working days to commence negotiating in good faith. Following the receipt of such notice and the failure of the Developer to thereafter commence negotiating in good faith within such ten (10) working days, this Agreement may be terminated by the City Manager. 4. This Agreement will be superseded upon approval by the City and the Developer of a Disposition and Development Agreement ("DDA"). C. [§103] Deposit The City and Developer acknowledge that the Developer has deposited with the City a deposit (the "Deposit") in the amount of two thousand five hundred dollars ($2,500.00) which shall be used by the City to pay for the cost of an appraisal of the Site. II. [§200] Development Concept A. [§201 ] Scope of Development The negotiations undertaken pursuant hereto shall be based on a development concept that shall include the development on the Site as an affordable multi -family residential subdivision which complies with Government Code Section 37364. Not later than 60 days of the date of execution, the Developer shall do the following: • Perform due diligence on the Site. • Submit a high-level conceptual design plan for an affordable housing multi- family development on the Site that is integrated with the 27-acre regional park site depicted on Exhibit B hereto (APNs 694-12-0031 and 694-12- 0029), and which shall include at a minimum a site design with parking layout, landscape, open space, building locations, and street network and pedestrian connections. • Submit a preliminary schedule of a proposed dosing and construction timeline. • Submit a preliminary pro forma, including funding sources. • Reimburse the City for any amount by which the cost of the appraisal exceeds $2,500.00. B. [§202] Developer's Findings. Determinations Studies and Reports. Upon reasonable notice, and as from time -to -time requested by the City, the Developer agrees to make oral and written progress reports advising the City on all matters and all studies being made by the Developer. In the event the City and the Developer do not enter into a DDA, the City may request that the Developer submit to the City copies of all studies and reports prepared for the proposed development of the Site by or for the Developer, to the extent the Developer is legally able to do so, and the City may request the right to the use and benefit from all such studies and ENA for APN 694-120-028 - Palm Communities Page 2 of 7 P640I-000112535632v3 doe RESOLUTION NO. 2021-27 reports. The Developer shall not unreasonably withhold or delay its consent to the City's access and use of such studies and reports. III. [§300] Sale of the Site The sale price and/or other consideration to be paid by the Developer for the Site under the DDA will be equal to at least the appraised fair market value of the Site, and will be subject to approval by the City Council after a public meeting(s) or public hearing(s) as required by law. IV. [§400] The Developer A. [§401] Office of the Developer The Principal office of the Developer is: Danavon L. Horn, President Palm Communities 100 Pacifica, Suite 205 Irvine, CA 92618 Attn: Danavon Horn, President B. [§402] Members of the Developer The managing member of the Developer is: Danavon Horn, President C. [§403] Full Disclosure The Developer has made full disclosure to the City of its principals, officers, major stockholders, major partners, joint venturers, key managerial employees and other associates, and all other material information concerning the Developer and its associates. The Developer shall promptly notify the City Manager in writing of any significant change in the principals, associates, partners, joint venturers, negotiators, development manager, consultants, professional and directly -involved managerial employees of the Developer. Notwithstanding the foregoing, the Developer reserves the right at its discretion to join and associate with other entities in joint ventures, partnerships or otherwise for the purpose of developing the Site, provided that the Developer retains management and control of such entities and remains fully responsible to the City hereunder. V. [§500] Full Disclosure The Developer will be required to make and maintain full disclosure to the City of its methods of financing to be used in the acquisition and development of the Site. ENA for APN 694-120-028 - Palm Communities Page 3 of 7 P6401-0001\2535632v3.doc RESOLUTION NO. 2021-27 VI. [§600] Citv's Resaonsibilities A. [§601] City Assistance and Cooaeration The City shall cooperate fully in providing the Developer with appropriate information and assistance for development of the Site, including, but not limited to the following: • Appraisal of the Site, as funded by the Developer as herein provided. • Provide a copy of existing Title Report. • Provide a right of access to the Site for due diligence investigations, pursuant to a right of entry agreement. B. [§602] City and City Council's Public Meetina(s) or Public Hearina(s) A DDA resulting from the negotiations hereunder shall become effective only after and if the DDA has been considered and approved by the City Council at a public meeting(s) or public hearing(s), as applicable, called for such purpose. VII. [§700] Real Estate Commissions The CITY shall not be liable for any real estate commissions or brokerage fees which may result from this Agreement or a DDA. VIII. [§800] Limitations of this Aareement By its execution of this Agreement, the City is not committing itself to or agreeing to undertake: (1) the sale of land; or (2) any other acts or activities requiring the subsequent independent exercise of discretion by the City or any department thereof. This Agreement does not constitute a disposition of property or exercise of control over property by the City. Execution of this Agreement by the City is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof, reserving final discretion and approval by the City as to any DDA and all land decisions in connection therewith. [SIGNATURES ON FOLLOWING PAGE] ENA for APN 694-120-028 - Palm Communities Page 4 of 7 P6401-0001 \2535632v3.doc RESOLUTION NO. 2021-27 1 IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed on the day and year first above written. CITY OF PALM DESERT, a municipal PALM COMMUNITIES, a California corporation corporation By: By: L. Todd Hileman Danavon L. Horn City Manager President Attest: M. Gloria Sanchez Acting City Clerk APPROVED AS TO FORM: By: Best Best & Krieger LLP City Counsel Reviewed by: Andy Firestine Assistant City Manager Eric Ceja Interim Director of Development Services Department ENA for APN 694-120-028 - Palm Communities Page 5 of 7 P6401-000112535632v3.doc RESOLUTION NO. 2021-27 EXHIBIT A DESCRIPTION OF THE SITE 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: Parcel 8 of Parcel Map No. 36792, in the City of Palm Desert, County of Riverside, State of California, as shown by map on file in Book 239 of Parcel Maps, Page 9 through 15, in the office of the County Recorder of said County. 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