HomeMy WebLinkAboutHA34970 - PP-CUP 16-102 Extnsn - Arc VillageContract No. HA34970
STAFF REPORT
JOINT CONSIDERATION
CITY OF PALM DESERT/PALM DESERT HOUSING AUTHORITY
COMMUNITY DEVELOPMENT and HOUSING DEPARTMENTS
MEETING DATE: September 24, 2020
PREPARED BY: Eric Ceja, Principal Planner
Jessica Gonzales, Senior Management Analyst
REQUEST: Consideration for approval of a request to extend Case No
PP/CUP 16-102 entitlements for the proposed development of the
Arc Village Project and Contract No. HA34970 at the Authority
vacant property known as APN 622-370-014
Recommendation
By Minute Motion, that the City Council and Authority Board:
1) Consider a request to extend Case No. PP/CUP 16-102 entitlements and
Contract No. HA34970 with Allied Real Estate Partners, LLC, a California
limited liability company, as assignee, through December 30, 2020 for the
proposed development of the Arc Village Project at the Authority vacant
property known as APN 622-370-014; and
2) Authorize legal counsel to prepare and finalize an extension contract; and
3) Authorize the City Manager/Executive Director or their respective designee
to terminate the lease pursuant to Section 1.4 of Contract No. HA34970
and, concurrently, the entitlements in the event the Allied Real Estate
Partners, LLC, is NOTsuccessful in obtaining award of HOME funds for the
Arc Village Project.
4) Authorize the Mayor/Chairman and/or City Manager/Executive Director or
their respective designee to execute any necessary actions including
execute the extension contract, termination and all related documents
necessary to facilitate the actions taken herein for the benefit of the Arc
Village Project.
Strategic Plan
One of the priorities of the City of Palm Desert ("City") Envision Palm Desert Strategic
Plan as part of Land Use, Housing and Open Space is to facilitate development of high
quality housing for people of all income levels. This request meets that objective by
September 24, 2020 - STAFF REPORT
City/Authority - Consider Extension of Case No. PP/CVP 16-102 entitlements and
Contract No. HA34970
Page 2 of 3
diversifying the City's housing stock and pursuing development of housing for low income
households.
Executive Summary
Approval of staffs request will allow an extension to the Arc Village Project ("Project")
entitlements and Contract No. HA34970, the Ground Lease and Regulatory Agreement
("Lease"), in order for Allied Real Estate Partners, LLC, ("Allied RE"), as assignee, to
secure funding needed for the Project.
Staff is recommending an extension of both the entitlements and Lease through
December 30, 2020, in anticipation of the pending award of Home Investment
Partnerships Program (HOME) funds for the Project.
Background Analysis
On January 14, 2016 the Authority approved the 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 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.
On May 2019, the City Council and Authority Board considered a request from Allied and
approved an extension of the entitlements and Lease for the Project through May 17,
2020. Allied decided to then pursue funding from the California State Department of
Housing and Community Development ("HCD") in August of 2019. Unfortunately, HCD
disqualified the application submitted by Allied due to lack of site control.
On January 9, 2020, the City Council and Authority Board approved Allied's request of an
assignment of the lease to Allied Real Estate Partners, LLC, a California limited liability
company ("Allied RE"), in order to address the previous disqualification. Subsequently,
on January 22, 2010, Allied RE submitted a new application to HCD for HOME funds.
HCD announced late spring that they would not be releasing award of funding until
May/June 2020. In order to consider the timing of the award of the HOME funds, staff
requested a four (4) month extension to both the Lease and entitlement for the Project
through September 30, 2020.
With the current Project extension of the entitlements and the Lease nearing expiration,
and with the delivery of award of HOME funds pending, Allied RE has requested an
additional extension through December 30, 2020. Allied is optimistic after receiving
preliminary scoring from HCD and finds that this additional extension will provide the extra
time to await HCD's notification of award of funds that will secure the financing gap
needed to develop this Project.
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September 24, 2020 - STAFF REPORT
City/Authority - Consider Extension of Case No. PP/CVP 16-102 entitlements and
Contract No. HA34970
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Staff considers the request of an extension of both the entitlements and the Lease for the
Project to be extended through December 30, 2020 to be acceptable given the delivery
of award of funds is out of Allied RE's control. In the event Allied RE is NOT successful
in obtaining award of HOME funds through the current application submitted for the Arc
Village Project, staff recommends that the City Manager/Executive Director or their
respective designee terminate the lease pursuant to Section 1.4 of Contract and,
concurrently, the entitlements.
Staff therefore recommends that the City Council and Authority Board approve this
request and related actions.
Fiscal Analvsis
There is no fiscal impact to the City and the Authority in connection with the proposed
request. There is also no impact to the General Fund.
LEGAL REVIEW DEPT. REVIEW FINANCIAL
REVIEW
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Ryan Stendell
Jim Grayson Director of Janet Moore
Special Counsel Community Director of Finance
Development
Interim City Manager/Executive Director: Randy Bynder Rcwdy Bynder
ASSISTANT CITY
MANAGER
.Andy Firestine
Andy Firestine
Assistant City
Manager
LESSEE/APPLICANT: Allied Real Estate Partners, LLC ("Allied")
ATTACHMENTS: Allied Lease Extension Request Letter dated September 10, 2020.
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AKALLIEDARGENTA
VV
Allied Real Estate Partners, LLC
Allied Affordable Housing, LLC
Argenta Construction Group, LLC
Argenta Property Management Group, LLC
September 10, 2020
Mrs. Jessica Gonzalez
City of Palm Desert
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
RE: Lease Extension for Arc Village Apartments Development
Dear Mrs. Gonzalez,
On March 11, 2019, the City Council approved the extension of the lease agreement and entitlements for Arc
Village to secure the funding needed for the project. As identified at that time, the development team has been
exploring Multifamily Housing Program and HOME funding opportunities to leverage these funds with 4% Low
Income Housing Tax Credits/Bond Allocation from the California Tax Credit/Debt Allocating Committees.
The last funding request was submitted to the California Housing and Community Development Department (HCD)
on January 2020 for HOME funds. Award announcements were expected May/June 2020; however, due to the
Pandemic and HCD staff turnover those announcements have not been made. Allied Real Estate Partners, LLC
(AREP) continues to reach out to HCD to see when those funds will be announced. Based on an initial conversation
with HCD, when the initial scores were released, AREP is cautiously optimistic that Arc Village is in a solid
position to secure HOME funds. AREP will be in communication with the City as soon as we get any further
insight from HCD.
Enclosed is a schedule from CTCAC that we are looking at to get a sense of timing for the 4% LIHTCs once HOME
funds are announced. We are hoping that we will be able to make the January 15, 2021 meeting since the December
9, 2020 meeting requires all application materials by September 24, 2020 and no awards have been made yet.
AREP is committed to this project and sees this application for HOME funds as our last attempt to move this project
forward. Thank you in advance for your continuous support, guidance, and consideration. We hope that the Council
will consider extending the lease to allow us to move this project forward pending a HOME award followed by an
allocation of 4% LIHTCs.
Should you have any questions you can reach me at (520) 270 4365.
Sincerely,
Yvonne Delgadillo
VP, Community Development
409 Santa Monica Blvd, Suite E www.alliedargenta.com OFFICE 310 394 9090
Santa Monica, CA 90401 FAX 310 394 3030