HomeMy WebLinkAboutHA34970 Extend Contract & Entitlements - ARC Village PrjctSTAFF REPORT
JOINT CONSIDERATION
CITY OF PALM DESERT/PALM DESERT HOUSING AUTHORITY
HOUSING and COMMUNITY DEVELOPMENT DEPARTMENTS
MEETING DATE:
PREPARED BY:
REQUEST:
Recommendation
August 23, 2018
Jessica Gonzales, Senior Management Analyst
Eric Ceja, Principal Planner
Consider a request by Allied Affordable Housing, LLC to extend
Contract No. HA34970 and Case No. PP/CUP 16-102 entitlements
for the proposed development of the Arc Village Project at the
Authority vacant property known as APN 622-020-096
By Minute Motion, that the City Council and Authority Board,
1) Consider a request by Allied Affordable Housing, LLC to extend Contract
No. HA34970 and Case No. PP/CUP 16-102 entitlements through May 17,
2019 for the proposed development of the Arc Village Project at the
Authority vacant property known as APN 622-020-096; and
2) Authorize legal counsel to prepare and finalize an extension contract; and
3) Authorize the Chairman and/or Executive Director or his designee to
execute any necessary actions including execute the negotiated extension
contract and any documents necessary to facilitate the contract and the
Arc Village Project.
Planning Commission Recommendation
At its regular meeting of June 5, 2018, the Planning Commission recommended
approval to the City Council of a one-year time extension for Case Nos. PP/CUP 16-
102. The motion carried by a 3-0-2 vote with Commissioners DeLuna and Greenwood
absent.
Strategic Plan
One of the priorities of the City's 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 diversifying the City's
housing stock and pursuing development of housing for low income households.
August 23, 2018 — STAFF REPORT
City/Authority —
Consider Extension to Contract No. HA34970 and Case No. PP/CUP 16-102 entitlements
Page 2 of 3
Executive Summary
Approval of this request will allow an extension to Contract No. HA34970, the Ground
Lease and Regulatory Agreement ("Lease"), and the Arc Village Project ("Project")
entitlements in order to align the expiration dates of both as requested by the
lessee/applicant, Allied Affordable Housing, LLC ("Allied").
Staff is recommending an extension of both the Lease and entitlements for the Project
through May 17, 2019.
Background Analysis
On January 14, 2016 the Authority approved the Lease with Allied for the purpose of
developing the Project, a 36 unit affordable housing project for adults with special needs
including developmental disabilities 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.
After three (3) separate attempts for tax-exempt financing with the State's Tax Credit
Allocation Committee and receiving a perfect score each time, Allied was not successful
in securing the original intended financing monies for the Project. However, Allied, with
staff's assistance, have identified additional funding sources and is in the process of
application submittals.
In order to allow Allied more time for submittal of application and notification of award to
the newly identified funding sources, Allied provided a written request to the City and
the Authority for consideration of an extension to both the Lease and entitlements for
the Project. In addition to the extensions, Allied requested that the expiration dates to
align for both the City's planning entitlements and Lease.
Currently the Lease term will expire January 14, 2019 and the Project entitlements
expired May 17, 2018. On June 5, 2018, Community Development staff recommended
a one-year time extension of the Project to the Planning Commission. The Planning
Commission voted 3-0-2, with two Commissioner's absent, with a recommendation to
grant a one-year extension of the project entitlements to the City Council. With the
Project extension recommendation and the extension of the Lease through May 17,
2019, Allied will be able to seek additional funding sources and secure the financing
needed to develop this Project.
Staff considers Allied's request of an extension of both the Lease and entitlements for
the Project to be extended through May 17, 2019 acceptable. Staff therefore
recommends that the City Council and Authority Board approved this request and
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August 23, 2018 — STAFF REPORT
City/Authority —
Consider Extension to Contract No. HA34970 and Case No. PP/CUP 16-102 entitlements
Page 3 of 3
related actions.
Fiscal Analysis
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
Robert W. Hargreaves
City Attorney
DEPT. REVIEW DEPT. REVIEW
Janet Moore
Ryan Stendell
Director of Community k.slar(et Moore
Director of Finance Development Director of Finance
FINANCIAL
REVIEW
LESEE/APPLICANT: Allied Affordable Housing, LLC ("Allied").
ATTACHMENTS:
Allied Affordable Housing, LLC Request for Extension.
CITY
MANAGER
1 ea
Lauri Aylaian
City Manager
C \ Users \ecejaVWpData\LocaMlicrosoft\Windows\Temporary Internet Fies\Content Outtook\2MA08J4Z\PDHA — Staff Report - Arc Village Extension doc
AN AlliedArgenta
Vv ALLIED AFFORDABLE HOUSING
June 22, 2018
Mr. Eric Ceja
City of Palm Desert
Planning Commission
73-510 Fred Waring Drive
Palm Desert, CA 92260
Dear Mr. Ceja and Mrs. Gonzalez,
Mrs. Jessica Gonzalez
City of Palm Desert
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
On January 14, 2016 the Palm Desert Housing Authority granted Allied Affordable Housing, LLC a ground
lease for the property located at 73-255 Country Club Drive, for the purpose of developing an affordable
housing project on the property. On May 17, 2016, the Planning Commission of the City of Palm Desert,
California, approved entitlements to allow Allied Real Estate Partners to construct an 8,579-square-foot
community center building, and 36 dwelling units for Special Needs Adults at 73255 Country Club Drive
(Resolution #: 2669). We would like to request to have an extension of these entitlements and ground
lease considered at the August 23'd City Council meeting. In addition to the extensions, we would like to
request that we modify the approval dates to align both requests: planning entitlements and ground
lease.
Thank you in advance for your continuous support, guidance, and consideration. The Arc Village
Development Team has been working diligently to secure the financing needed to develop this project.
We have attempted the 9% LIHTC application process in California three times now, unsuccessfully.
Despite spending more than $185,000 in predevelopment costs, we have not given up. We are now
exploring a 4% LIHTC application, which tend to be non-competitive, in combination with California HCD
HOME funds. The Notice of Funding Availability for the HOME funds was released June 5`t', we are
currently working on this application to submit in August.
Once again thank you for your support. Should you have any questions you can reach me at (310) 906
4936.
Sincerely,
Yvonne Delgadillo
VP, Community Development
409 Santa Monica Blvd, Suite E OFFICE 310 394 9090
www.alliedargenta.com
S,+nta IMo^Ica, CA 90401 FAX 310 394 3030