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Home My WebLink About1996-08-14 HC Regular Meeting Agenda Packet PALM DESERT REDEVELOPMENT AGENCY INTEROFFICE MEMORANDUM DATE: AUGUST 6, 1996 TO: HOUSING ADVISORY COMMITTEE MEMBERS FROM: MARIA HUNT SUBJECT: NOTICE OF COMMITTEE MEETING The next regularly scheduled meeting of the Housing Advisory Committee will be held on Wednesday, August 14, at 3:30 p.m. in the North Wing Conference Room. Enclosed is the agenda packet for your review. • Please call me at 776-6306 and let me whether or not you will be able to attend the meeting. Thanks. 40 POSTED AGENDA HOUSING ADVISORY COMMITTEE AUGUST 14, 1996 - 3:30 P.M. NORTH WING CONFERENCE ROOM * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * I. CALL TO ORDER II. ORAL COMMUNICATIONS A. Any person wishing to discuss any item not otherwise on the Agenda may address the Committee at this point by giving his/her name and address for the record. Remarks shall be limited to maximum of five minutes unless additional time is authorized by the Committee. B. This is the time and place for any person who wishes to comment on nonhearing Agenda items. It should be noted that at Committee discretion, these comments may be deferred until such time on the Agenda as the item is discussed. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Committee. III. APPROVAL OF JULY 10, 1996 MEETING'S MINUTES IV. NEW BUSINESS A. Jean M. Benson Child Care Center Proposal V. CONTINUED BUSINESS A. Portola Palms Mobilehome Park Guest: Ron Halstead VI. REPORTS A. Desert Rose Update VII. ADJOURNMENT .••.......... ........ •••• 1 u es R � :' HOUSING ADVISORY COMMITTEE CONVENE 3:45 p.m., Wednesday, August 14, 1996 ROLL CALL Members Present: J. Richards, R. Murphy Members Absent: G. Holmes, W. Winfield Others Present: J. Benson, T. LaRocca, C. Ortega, M. Hunt ORAL COMMUNICATIONS None. MINUTES It was moved by R. Murphy and seconded by J. Richards to approve the July 10 meeting minutes as submitted. Motion was unanimously carried. NEW BUSINESS JEAN M. BENSON CHILDCARE CENTER PROPOSAL Ms. LaRocca reported that the YMCA had submitted a proposal for the operation of the Childcare Center. It will be presented to Agency Board on August 22 with request for authorization to prepare and enter into a lease agreement with the YMCA ($1 per year); approve a grant in the amount of $15,000 as start-up funds contingent upon reprogramming of Fiscal Year 1996-97 Community Development Block Grant Funds (CDBG); grant a subsidy for the first year of operation in the amount of $40,000 to provide financial assistance to low income families contingent upon reprogramming of Fiscal Year 1996-97 CDBG Funds. Committee recommended that the following items be included in the lease agreement: (1) YMCA submit a budget each year showing how the funds were used; AUGUST 14, 1996 HOUSING ADVISORY COMMITTEE NEW BUSINESS (CONTD) (2) RDA ability to reopen funding negotiations if CDBG phased out; (3) YMCA to continue pursuing alternate funding for the Center; (4) add wording clarifying that child care grant funds are a separate appropriation from other city contributions to the YMCA. Staff noted that these issues and others would be included in the lease agreement. It was moved by R. Murphy and seconded by J. Richards to recommend to the Agency Board the Committee's approval of the YMCA's Proposal submitted to the Agency for operation of the Childcare Center at Desert Rose. Motion was unanimously carried. CONTINUED BUSINESS PORTOLA PALMS MOBILE HOME PARK Ms. LaRocca noted that Mr. Ron Halstead and Ms. Raye Wolfe had been invited to attend today's meeting as requested by the Committee. Mr. Halstead is out of town and unable to attend, but has sent Mr. Worley as his representative. Mr. Dean Worley was introduced and asked by the Committee to provide them with background regarding events that have taken place at the Park between the Management, the HOA/ Acquisition Board of Directors and park residents. Mr. Worley provided the Committee with his personal experiences, both past and current, relative to issues and concerns at the Park. Mr. Worley was excused after his presentation. Ms. Raye Wolfe was not in attendance as had been expected. Ms. LaRocca explained that she had contacted Ms. Wolfe earlier and was advised by Ms. Wolfe that she was working today but would ask for 2 AUGUST 14, 1996 HOUSING ADVISORY COMMITTEE CONTINUED BUSINESS time off to attend and be present at 4 p.m. Committee (CONTD) requested that she be invited to attend the September 11 meeting. Committee reviewed the letter and questionnaire which will be sent to all residents of the Park. The following changes to the questionnaire were recommended by the Committee: Question No. 1 - Need to inform the residents that our marketing contacts have advised that it would be better to reduce the sales prices of the Acquisition Association owned lots due to the downturn in the real estate market. Sale of the lots should be done in phases., e.g., first phase at a certain price, and increase the prices for the second phase. Staff advised that they would change the question accordingly. Add the following question: Are you aware that the State of California has designated this Park as a "family park" as a result of loans made to residents, which prohibits a change in designation? It was moved by R. Murphy and seconded by J. Richards to direct Staff to mail the letter and questionnaire with recommended changes to all residents of the Park via certified return receipt requested mail, and to allow them 14 days to respond to request. Motion was unanimously carried. 3 AUGUST 14, 1996 HOUSING ADVISORY COMMITTEE REPORTS DESERT ROSE UPDATE Ms. LaRocca provided the Committee with the Desert Rose Update Report and a Month-End Report. She reported that they are advertising at local theaters (Indio, Palm Desert and Palm Springs). Marketing is going very well. Committee suggested advertising at the Cathedral City theaters. Also, staff may want to look into attending a CVMACC meeting and doing a presentation to employers about Desert Rose for their employees. Staff will look into doing this. ADJOURNMENT Motion was made by R. Murphy and seconded by J. Richards and unanimously carried to adjourn the meeting at 5:00 p.m. Carlos L. Ortega Secretary mh/ 4 MONTH-END REPORT . ` '!; (IIIOVERALL SUMMARY OF TRAFFIC 0---1EreitT DEVELOPER SALES NETWORK ,�C''`r March 1 through August 6, 1996 ,` J 1996 Gross Net Summary Traffic: 2063 Sales: 78 Cans: 37 Sales 41 Closings 23 To-Date Open Summary Sales 41 Closed 23 Escrows 18 Released 100 Available 59 Source of Sales c Media Source of Sales SOURCE # Signs"Drive-by Desert Sun-PR 17°° Desert Sun-Ad 2 370 0 Desert Sun-PR 16 Television Signs/Drive-by 7 0°0 Referral- Friend 10 Referral-Employer 2 Referral- i Desert Sun-Ad Friend h' Radio 5 5% Radio Referral- 15°0 12°/0 i`'' Employer ll Television 0 5°,0 , i Source of Traffic IP Source Sat San Mon Tue Wed Thr Fri Total 0 > 0 T 0 A 2 T v >. 0 > 40„ >, m .1t •1 t r1 m :1 m E m m 1 Cumin Desert Sun 32 52 18 23 13 25 8 13 12 9 9 15 11 15 255 12% Billboards/Signs 77 136 45 101 27 74 47 55 41 50 46 48 35 62 844 41% Referrals 25 56 10 23 5 38 10 48 16 31 11 25 8 28 334 16% Nearby Project 0 0 1 2 0 0 0 0 0 0 0 1 0 1 5 0% Be-Back 4 88 6 74 9 38 8 37 13 18 1 35 11 39 381 18% Radio 26 61 6 25 3 24 5 10 5 8 3 13 6 16 211 10% Television 5 7 0 3 0 2 1 0 0 0 0 0 0 0 18 1% Other 3 10 0 0 0 1 0 0 0 0 0 0 0 1 15 1% 0 0% TOTAL 172 410 86 251 57 202 79 163 87 116 70 137 71 162 2063 100% Active Interest 10 41 4 20 5 22 5 16 1 6 1 16 6 14 167 S°0 Sit Downs 1 40 11 41 6 26 3 30 4 22 12 31 4 29 260 1300 Sales 0 17 1 10 1 10 2 9 2 7 1 9 2 7 78 4°0 Mature= 30% Families= 70°'0 I gefarials Media Source of Traffic Be-Back Desert sun 16% 18% 12% Nearby Project Television 0% 1°° Other 1°° Radio Billboards/Signs 10°%° 42% 1 r t III FAMILY YMCA OF THE DESERT PROPOSAL JEAN M. BENSON CHILD CARE CENTER Family YMCA of the Desert 43-930 San Pablo Ave. Palm Desert, CA 92260 619-341-9622 619-779-9651 FAX The Family YMCA of the Desert is a California non-profit corporation. It was incorporated in July of 1982 to provide programs and services to the residents of Eastern Riverside County. The Family YMCA of the Desert is affiliated with the YMCA of the USA and is in good standing as a member. The organization has grown rapidly and with a budget of $1. 7 million, employs over 100 staff members . The YMCA's Board of Directors has authorized staff to prepare this proposal to operate the Jean M. Benson Childcare Center located in the Desert Rose project at 75-424 Orange Blossom Lane in Palm Desert, Ca. This proposal is a suggested plan for operation of this center by the YMCA and includes : 1. YMCA childcare history and experience 2 . Suggested lease arrangement and operational guidelines 3 . Childcare philosophy, curriculum and staffing 1110, 4 . Method for recruiting, enrollments and promotion 5 . Finances, fees, third-party payments, and financial assistance 6 . Assistance from Redevelopment Agency 1 . YMCA CHILDCARE: In 1995-96 childcare has been the fastest growing program in YMCA's across the country. The Family YMCA of the Desert has been providing licensed childcare in the Coachella Valley since 1988 when we licensed the first "Y" after-school childcare program at Lincoln School in Palm Desert. Since that time, the program has grown markedly with 50% of the budget devoted to childcare alone. Our six school-age programs are at elementary schools and pre-school centers in La Quinta and Indio. These programs serve over 400 school-age and 180 pre-schoolers each day. The YMCA employs 50 childcare staff which includes administrators, center directors, teachers and teacher aids . Each of these staff has been reference checked and fingerprinted and has been licensed by the Department of Social Services . All staff receive additional child development and program training from both state and local agencies, as well as YMCA and community colleges . YMCA Mission: To put Christian principles into practice through 41 programs that build healthy body,mind and spirit for all. C United Way of the Desert 1 111 Recently, the YMCA of the USA has devoted more resources to staff i development and curriculum development. These staff experts develop materials which are available to our local YMCA at any given time. An example would be the attached "Facts on YMCA Preschool and School-Age Child Care. " The YMCA of the Desert has an excellent reputation as a child care provider and has the knowledge of the community and all resources to operate this center. The YMCA executive director serves on the Coachella Valley Childcare Council as an officer and as a member of the Riverside County Childcare Consortium. YMCA staff also serve on the La Quinta Kids-Line Advisory Board and the Indio Youth Task Force. 2 . Lease Agreement A Attached is a copy of a lease used for the YMCA pre-school child care center in La Quinta, California that was just renewed a, for an additional 5 years . This document is now being used as model for a facility owned by the City of Rancho Mirage that will be leased to the YMCA for child care. The YMCA now leases 4 facilities from cities in the Coachella Valley with 3 of these @ licensed for childcare. These partnerships have been the vehicle that has allowed the YMCA to provide affordable, quality child care in neighborhoods where it is needed. The enclosed lease is only a model but with minor changes could be used for this Ilt project. The YMCA would like to lease the facility for $1. 00 per year, provide all program(s) , be responsible for the day to day operations, including staffing and general maintenance. 4 1 3 . CHILD CARE CURRICULUM, PHILOSOPHY AND STAFFING A. CURRICULUM The program would use a curriculum similar to the other childcare centers operated by the YMCA in the Coachella Valley. All existing programs use a curriculum suggested by College of the Desert's child development experts called "High Scope" . The staff would have the option to use some of the components of the National YMCA curriculum and other ideas from the trainings they attend. A copy of these curriculum is available as requested. B. PHILOSOPHY The philosophy of the YMCA child care is to provide the physical and social environment for the child to explore and direct his/her own play. Young children learn by doing, by having opportunities to be creative, and from experiences that stimulate curiosity and inquiry. The teacher nurtures and facilitates the development of intellectual competence by alerting the child to the learning opportunities in each situation. The learning environment is to be challenging without being frustrating. The curriculum supports and encourages the cognitive, social-emotional, motor, perceptual, creative and language development of the child. The child's parent is recognized as essential in each child's development and parents are encouraged to be a part of the program and parent resource center. The culture the child brings to the program is supported and honored. Parents are encouraged to share special talents, family traditions, stories, songs and special foods . Our approach and philosophy is identical for all priority groups and children. The YMCA is experienced in providing age appropriate activities in centers that promote social, emotional, cognitive, linguistic, physical and creative development. YMCA program centers are encouraged to include cultural competency, developmental appropriate practices, recognition of child/family values and encourage parent community partnerships . Development of self esteem and positive reinforcement techniques are of primary concern with all participants . All participants will be provided memberships to the YMCA to encourage and enhance community participation. The YMCA will provide leadership, support, accountability, advocacy planning and evaluation to meet exemplary program standards . C. STAFFING The YMCA has begun the recruitment of a qualified Childcare Adminstrator to supervise it 's valleywide childcare programs . This staff position will directly supervise all YMCA Childcare Center Directors and provide better supervision and quality of care. The Goal is to have this person employed by September, 1996 . The YMCA staff will recruit a qualified director who will be responsible for recruitment, selection and training of any staff needed to operate this program. Support services for staff, employee benefits, training, payroll, etc . , will be provided by the YMCA corporate office in Palm Desert. Staff will be encouraged to attend ongoing training provided by the region YMCA, the Child care council, County and State agencies and the College of the Desert. Annual review of all staff and their credentials will be performed by the center director. All staff will have access to the National YMCA career development process for training and certification and be encouraged to participate in professional child development organizations . Supervision of the center director will be provided by the YMCA Childcare Administrator or his/her designee. 4 . METHODS FOR RECRUITING, ENROLLMENTS AND PROMOTION Families who live in Desert Rose would have priority when enrolling their children. Based on current trends and our experience, we would suggest that spaces be available for the general public in this center. The YMCA would like to suggest, that if pre-school enrollments are low based on capacity, a room be set aside for school-age children (K-5) . They could be bussed to this center for after-school care and possibly a summer day camp program. Transportation would be a topic of discussion with the Desert Sands School District or perhaps a van be purchased by the center. Promotional material would be developed for distribution to prospective buyers and for the community as needed. The YMCA will survey each new family in Desert Rose to inform them about program opportunities for their families, and if they enroll for child care, an in-depth need assessment will be done on each child which will place them is the appropriate group. Evaluations by staff, parents and the YMCA program committee will be done annually, and/or when participants leave the program. (See attached sample) . In addition to the care for children, other optional enrichment programs that could be provided are gymnastics, swim lessons, ballet, biddy sports, etc . Each family member would receive a YMCA membership for parents and children under the age of 18 . Enrollments would be done at the Jean M. Benson Center by the YMCA staff. Families that need financial assistance would be interviewed and a sliding scale fee used to provide assistance based on family income and size. Documentation of income would be required. The application and fee scale are attached. The families would also be encouraged to apply for other programs for which they may be eligible such as the Riverside County Coordinated Childcare program or the GAIN program. These programs fund the childcare fees of eligible families . The YMCA has experience with the agencies that administer these funds and knows the process for collecting fees . Reports of enrollments, financial assistance sent to the YMCA Board of Directors could be forwarded to the Redevelopment Agency on a quarterly basis . 5 . FINANCES, FEES, THIRD-PARTY PAYMENTS AND FINANCIAL ASSISTANCE A. Finances: The Jean M. Benson Childcare Center would become a separate department of the YMCA with line item accounting similar to the proposed budget attached. The center director would be responsible for monitoring revenue and monthly expenses making adjustments as needed. The YMCA finance committee reviews the YMCA income and expense reports monthly making a full report to the general Board of Directors . This project, would be the first by the YMCA, in a housing development with only low and moderate income families as a market. The YMCA is concerned about the ability of this center to operate at a "break even" each year. We have enclosed a financial analysis of a similar school that the YMCA operates in La Quinta and based on our experience, we believe another source of funding would be needed to subsidize this operation. We would suggest that annual reviews be done to study the market, the demographics of the participants, the revenue and expenses with any necessary adjustments made in the program or the fees . The suggested fees** charged to the parents would be: All day care (preschoolers) 5 days per week ( 7AM - 6PM) $80 per week. Kindergarten care (split day) 5 days per week $60 per week. (This would also be for 5 1/2 days) $20 per week. **These are estimates; some adjustments could be made by staff before opening. All families who cannot afford these fees are interviewed and provided a sliding scale. These funds normally are provided by the United Way, YMCA fundraisers and programs referred to earlier such as GAIN and the Riverside County Childcare Consortium. 6 . FUNDING ASSISTANCE This funding needed to subsidize this center is estimated at $40, 000 to $50,000 annually. About 20% to 35% of the families enrolled will need financial assistance for them to continue to work outside the home and afford the fees . This figure will adjust based on how many low income families are enrolled and if we are allowed to register children from outside Desert Rose or the City of Palm Desert. Our experience indicates there are many parents who live in other cities but work in Palm Desert or the nearby Indian Wells resorts who would want to enroll their children if space was available. We would ask that the Redevelopment Agency help the YMCA with an annual grant to provide this assistance and on a regular basis the amount could be monitored and adjusted. We would suggest a minimum of quarterly audits and payments be made. The YMCA's concern would be the amount of financial assistance needed to subsidize low income families . In addition to subsidy funding for low income parents, the YMCA would require some start up funding to recruit and retain staff as well as computer equipment that would interface with our current system. This estimated cost would be $15,000 . The director would need to be recruited by September 1st as the name and credentials would be needed for the license application. If you reference the attached report that shows the La Quinta Center's financials for the last five years, you will notice that the financial assistance has consistantly exceeded $30,000 . These two centers would be serving approximately the same number of children (La Quinta ( licensed for 90 children) and Jean M. Benson (licensable for 98 children) and therefore the cost of operations would be much the same. If we assume the income levels of the parents would be the same or lower for the Palm Desert facility, it would require more subsidy. Factors such as the economy, competition, local business growth and demographics all affect these childcare operations . Regular review of the financing for this center should be part of the agreement included in this partnership. In conclusion, the YMCA would be willing to discuss any of the items proposed. We feel that each program needs to be custom fit to the community which it serves, based on need, income, etc . The opportunity to operate this center provides the YMCA the chance to accomplish one of it's goals from the five year plan. PROPOSED 12 MONTH BUDGET JEAN M. BENSON CHILDCARE CENTER START UP COSTS STAFF DIRECTOR(2 months) $ 5,000 CLERICAL (2 months) $ 2,000 COMPUTERS EQUIPMENT UPGRADE $ 4,000 LICENSING/TRAINING/RECRUITING $ 4,000 TOTAL $ 15,000 INCOME REGISTRATION FEES $ 3,000 CHILDCARE FEES PRESCHOOL/FULL&PART TIME $150,000 SCHOOL AGE (SEPT - MAY) $ 30,000 SCHOOL AGE (SUMMER) $ 20,000 GRANTS UNITED WAY $ 10,000 REDEVELOPMENT AGENCY $ 40,000 TOTAL INCOME $253,000 EXPENSES SALARIES PRESCHOOL/DIRECTOR/STAFF $150,000 SCHOOL AGE (SEPT - MAY) $ 12,000 SCHOOL AGE (SUMMER) $ 16,000 SUPPLIES $ 15,000 CONTRACTS CLEANING/SECURITY $ 5,000 UTILITIES $ 15,000 EQUIPMENT $ 5,000 INSURANCE $ 5,000 ADMINISTRATION $30,000 GRAND TOTAL $253,000 b C.) in0 0 U'in otnotnoot.0N l0 4) 00 0 00 CD es to N00MM N N 01 O M l0 •r•l •r4 01 01 Ln lO CO Ln Is M Ln in in Ol en . . . , . in in r--I 'Cy N t.0 CO 01r-Ir-101f0101N . g l0 lO N H H M 0 M M LQ N N N M M M ' v to OLn U U N 01Od' 001r•Ir- 0 M M 010 01 0101 0 0 [- latnaldr000d. 0 N N .44tn 01 d4d' •r1 •r41 ri d' MMOONON in in N r-I H . ► ► ► ► ► ► . . ► ► ► NN N d' NHOHMLnd' N N 'd s ri FA M t` M M a) a) N N N N -... > '0 a) F • U) r-1 O R1 a) •r•1 $a U 'd 0 CD CO U U trl r-I0C') Nc0OtnN N co r-I oa d' 01 CV L.'' 0O l00 [- N1-4ON01 0 Ol •r•I 0 0 Ol tn01 •r1 •r101 V' 01d' CsN Cr) LnCr) d' N .0 •rl 0 01 . ► . . . . ► ► . ► ► ► o w - .O H .)' 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H U a 40El' N r) C) 0 CZ I" 0 X IZ 0 0 4-) 01 0 0 Z •r1 ri 0 1-1 v> : Z [:-4P.4Pa ;-1 G:] U) (I) CO Pi) H4H H La •1< UUH --- RICHARDS, WATSON & QERSHON ATTORNEYS AT LAW A URQREE/K7NAL GOIMOMTON OLENN R WATEION OMIT E OLAND RQOERT O.BEVERLY JOHN J.MAPIMm RIOwARp RICMIARDi MARRY L.OEAIMON KMN S awsa (11110.10010 0440L4E W.ASO UE ROM D HAMIO MMKL.LAMKEN MIONAEL ESTRADA R I MIMON LAUFEPICE S WIENER THIR?Y♦KEtiTT1 FLA;A C E fl WI MN N E.ADLEP. ETEVEN R OIIR DAAOLD D.RIIrER MIGNAEL a CO,LANTUDNO ssE SOUTH HpP9 STREET ALLEN I.RENNETT C.GDWARD CRASS August 8, 1996 LOG ANOELA,OALMORNIA DOW,-1AN EVEN L.DORSEY PETER M THOROON W. ANI L. [MU" SOOTS K i R kTANI j21I)s=a.µµ N.E.DREVVRY ECO'/TK SHINTANI M� E.ASAOTT B.TILDEN KIM EACfi(M16E Ell E)EyO.Op7E 'hMOTMV L.NCU1 W� dREQQ n%W.mTETANIOKSM IIAIKIA T. ,401"yRA or cemAitill. RDOhULLE EROWNE KAYSER O.SLIME "^'�M K W,ANERDONALD EERN .AL A MICHAEL JENKINE OFWQ A.STEGJE CONFIDENTIAL WIUJAM I.IUDELL T.OITEP P.GAGE DU INN M.IARSOW BENJAMIN SARNOUW OAROL W.LYNCH Ter A. IOUA THIS MATERIAL IS SUBJECT TO 149008E1.2 VYRET A.RABIN DoualAit DIABAKORY M.KUNE'R" OMIIEL L SINES THE ATTORNEY-CLIENT AND/OR THE ouR Pau NUMec, THOMAS M.AMINO UEA M.DOND MICHELE SEAL EAONeRIB WINNIE TEEN ATTORNEY WORK PRODUCT PRIVILECfES, P64 0 2-0 0 0 01 AMANDA E EUEEIOND doom ARKOW mMON ROBERT0 DECIODN SOY A.IDLARKE DO NOT DISCLOSE THE CONTENTS SAYRE WEAVES ROIANNI M.DIAL HEREOF. DO NOT FILE WITH W TCRIM DIRECT OW.NVMNR ErEvw M wALMANN PUBLICLY ACCESSIBLE RECORDS. (213) 253-0279 VIA TELECOPIER (619) 346-0611 Ms. Teresa La Rocca Housing Programs Coordinator Palm Desert Redevelopment Agency 73- 510 Fred Waring Drive Palm Desert, California 92260-2578 Reference ; Portola, Palms Project Dear Ms . La Rocca, The purpose of this letter is to review the Agency' s potential risks and liabilities that may be presented if the Agency were to foreclose on the deed of trust the Agency holds encumbering the approximately 40 mobile home lots at the Portola Palms Mobilehome Park . I . Facts The Agency is the present holder of a $3 , 000, 000 Promissory Note secured by a Deed of Trust encumbering approximately 40 mobile home lots (the "Property") at the Portola Palms Mobilehome Park. This Deed of Trust was originally made by the Portola Palms Mobilehome Park Acquisition Association, Inc. , as trustor, for the benefit of Ring Financial, Inc . The Agency acquired Ring Financial' s interest in such Deed of Trust on March 2, 1994 . (The Agency is the beneficiary of two other subordinate deeds of trust encumbering the Property. ) The Acquisition Association io not current on its obligations on such Promissory Note . Also, the Acquisition has apparently been very lax about marketing the mobile home lots. We understand that the Agency would like to determine the most prudent course of action available to protect its interests . RICHARDS, WATSON&GERSHON CONFIDENTIAL THIS MATERIAL IS SUBJECT TO THE ATTORNEY-CLIENT AND/OR THE ATTORNEY WORK PRODUCT PRIVILE3E6. August 9, 1996 DO NOT DISCLOSE THE CONTENTS HEREOF. Page 2 DO NOT FILE WITH PUBLICLY ACCESSIBLE RECORDS. In order to evaluate the Agency's options with respect to the potential foreclosure of the 40 lots currently controlled + by the Acquisition Association, at your request, we have reviewed (i) the Ring Financial Deed of Trust executed by the Acquisition Association now held by the Agency, and (ii) the Declaration of Establishment of Covenants, Conditions for the Portals Palms Park (the "CCRs") II . Agency Rights Pursuant to the Deed of Trust The Deed of Trust provides the Agency with broad powers to protect the Agency' s security. Under the Deed of Trust, the Agency is entitled to the rents and profits generated by the Property. In the event of a default, the Agency is also entitled to seek the judicial appointment of a receiver to collect and account for the rents and profits, thereby protecting the Agency's beneficial interest . A. Mortgagee in Possession The Agency can protect against waste and reach the rents and profits by becoming a "Mortgagee in Possession. " A If creditor typically becomes a Mortgagee in Possession by entering into possession of encumbered property with the borrower' s consent (because forcible or non-consensual entry may subject a creditor to liability for trespass) . As a Mortgagee in Possession, the Agency can collect the rents and profits from any leased spaces; however, this right carries certain obligations . Mortgagees in Possession may be held liable for failing to act in a businesslike manner and have a duty to keep the premises in good repair. For this reason, • most conventional lenders do not wish to assume the additional responsibility of maintaining the premises and are careful to avoid becoming a Mortgagee in Possession. S. Receiver Following an event of default, the Agency may petition the court to appoint a receiver. A receiver is obligated to preserve and manage property during the period of receivership and may, pursuant to court order, sell real and personal property as a court appointed agent . The Agency would not be held liable for the acts of the receiver and generally would not be charged with the status of a Mortgagee in Possession. Receivers, as private property managers, are entitled to compensation for their services . Depending on the Project's cash flow, length of receivership, and the complexity of the matter, the appointment of a receiver may be expensive . RICHARDS, WATSON & GERSHON CONFIDENTIAL THIS MATERIAL 18 SUBJECT TO THE ATTORNEY-CIJENT AND/OR THE ATTORNEY WORK PRODUCT PRIVILEGES. August 9, 1996 DO NOT DISCLOSE THE CONTENTS HEREOF. Page 3 DO NOT FILE WITH PUBUCLY ACCESSIBLE RECORDS. III . Foreclosure A. Judicial or Nonjudicial Foreclosure In the event of a default, the Agency may enforce its lien on the Property either (i) judicially by obtaining a judgment ordering the sale of the Property, or (ii) non- judicially by exercising a power of sale under the Deed of Trust. The Agency may bid for the Property at time of sale and take title to Property. This bid is called a "credit bid, " because the lender uses the "credit" of the existing debt in "payment" of the purchase price bid at the foreclosure sale . Judicial actions to foreclose a deed of trust are complex legal proceedings and may involve significant costs . They are also time consuming. Therefore, most lender foreclose non--judicially, utilizing the power of sale set forth in the deed of trust, which is a simple procedure that results in a foreclosure in about 4 months . B. Deed in Lieu of Foreclosure In order to avoid an inevitable foreclosure, the Acquisition Association may offer to convey the Property to the Agency by executing a deed in lieu of foreclosure. Although "deeds in lieu" have minimal transaction costs, the Agency should not accept a deed in lieu without the express release of liens held by all junior lien holders, because nonconsenting junior lien holders still retain a lien against the subject property when a senior lienholder accepts a deed in lieu. If the Agency proceeds by this method, the Agency should require receipt of a policy of title insurance insuring that the Property is free of all liens (other than those held by the Agency) . IV. Potential_ IJiebility to a Foreclosing Lender A. Toxt Liability as a Propery Owner As a general rule, all property owners are liable to third parties for injuries which stem from the failure to use ordinary care in the management of an owner' s property. If the Agency takes title to any developed lots with existing mobile homes, the Agency could also be held liable for injuries stemming from a dangerous condition within a foreclosed unit . Thus, assuming the Agency takes title to the Property as a result of a foreclosure sale, the Agency should inspect the Property and repair any dangerous conditions existing within same . RICHARDS, WATSON &OERSHON CONFIDENTIAL THIS MATERIAL IS SUBJECT TO THE ATTORNEY-CLIENT AND/OR THE ATTORNEY WORK PRODUCT PRIVILEGES. August 9 , 1996 DO NOT DISCLOSE THE CONTENTS HEREOF. Page 4 DO NOT FILE WITH PUBLICLY ACCESSIBLE RECORDS. B. Liability for Real Property Taxes It is unlikely that the Agency would be liable for real property taxes if the lots are vacant. If the lots are leased, then the Agency may be liable for possessory interest taxes . C. PotentialEnvironment Exposure as an Owner/Operator Under federal environmental law, the owner or operator of property may be held responsible for environmental contamination on the property notwithstanding the owner or operator' s lack of involvement in the use or disposal of the contaminating material . Although there does not appear to be a significant risk of contamination on the Property, the Agency should inspect the Property prior to any foreclosure in order to verify that there has not been any unknown or illegal disposal of hazardous material. D. Obligations under the CC&Rs Pursuant to the CC&Rs, the Association is empowered to levy assessments for various purposes including, without limitation, nonsegregated taxes, maintenance, utilities, management services, and other matters which promote the welfare of the owners . In the event the Agency takes title to the Property following a foreclosure sale, the Agency would be liable, as any other property owner, for future assessments to the Property. In addition, the CC&Rs provide that all liens imposed pursuant to the CC&Rs are subject to and subordinate to any "first deed of trust upon the entire Project or upon any Mobilehome Space therein. " Thus, to the extent any Agency security interests are not first priority security instruments, the purchaser at a foreclosure sale of these instruments may be subject to any past assessments encumbering the Property. V. Operational concerns A. Redeveldnment Agency Control of the Aasociat Q In the evert the Agency purchases the Property at a foreclosure sale, the Agency will, by virtue of its ownership of 40+ units, have the ability to elect many members of the Association' s Board of Directors and possibly control the Association. Although ordinarily the ability to control the Association would be considered a benefit , the Agency may not wish to have an active role in the management of the Association. Association members not satisfied with management decisions may attempt to raise their concerns at the Agency' s public hearings or at City Council meetings . Such mee:ir. s are not an RICHARDS,WATSON &GERSHON C O N F I D E N T I A L THIS MATERIAL IS SUBJECT TO THE ATTORNEY-CLIENT AND/OR THE ATTORNEY WORK PRODUCT PRIVILEOEB. August 9, 1996 DO NOT DISCLOSE THE CONTENTS HEREOF. Page 5 DO NOT FILE WITH PUBLICLY ACCESSIBLE RECORDS. , appropriate forum for ordinary neighborhood disputes . Thus, the Agency should consider the potential for disruption of unrelated Agency or City business prior to asserting control of the Association . B. Staff workload In the event the Agency purchases the Property at a , foreclosure sale, Agency staff may need to take an active role in the management of the Property, the Association, or both. Prior to any foreclosure sale, the Agency should consider the feasibility of managing the Property. VI . Cooperative Arrangement for Sale of L^gte . If the Acquisition Association is cooperative, it might be possible to enter into an agreement that would allow the Agency to take a stronger role in the sale of the lots, in consideration for a relief from the debt attributable to the lot in the event of a sale for a price less than the pro-rata amount of the debt . The Agency has little to lose if the lot is sold for less than the amount of the lot' s pro-rata share of the debt, because the most the Agency could receive following a foreclosure is the fair market value of the lot . Thus, it might be preferable to craft an agreement with the Acquisition Association providing the Agency with the ability to direct and control the sale of the lots, and creating incentives for the Acquisition Association to cooperate in such sales, while the ownership and control of the lots remain with the Acquisition Association. We have attempted to provide the Agency with a framework in order to evaluate the Agency' s available options . If you have any questions regarding the forgoing or require further information, please call me. V= ru yours, alithr°7' affe ' cc. Jeffrey A. Rabin SJ:cbp 1490083.2 I r. 4, gedit Yeoeze,A ,76"e-Ae-F 6•...21 toe73-510 FRED WARING DRIVE, PALM DESERT, CALIFORNIA 92260-2578 TELEPHONE (619)346-0611 FAX(619)340-0574 August 12, 1996 Resident Portola Palms Mobile Home Park 43-155 Portola Avenue Palm Desert, CA 92260 Dear Resident: In response to a number of inquiries relative to rumors and activities at the park, the following information is being provided in an attempt to answer some of the questions. As you may be aware, the Palm Desert Redevelopment Agency (PDRDA) became involved in the conversion of Portola Palms Mobile Home Park by virtue of making low interest loans to low income residents who qualified, for purchase of their individual spaces. In addition, the PDRDA holds a Promissory Note from the park's Acquisition Association on 37 spaces owned by the Acquisition Association. The Acquisition Association Board is composed of park residents who are charged with the responsibility for marketing and sales of the spaces in their ownership. The sale of each lot pays off a proportionate share of the Promissory Note held by the PDRDA. As of late, the Acquisition Association has listed the spaces for sale with a local realtor who will be marketing in appropriate publications. The loan payments on the Promissory Note are current as of this date. The potential for the Acquisition Association becoming delinquent on the loan could become a problem in the future due to non-sale of spaces. This concern has been brought to the attention of the PDRDA by the Acquisition Association members. Should this occur, the PDRDA will have to take legal action to remedy the default. One possibility will be foreclosure on the Note putting the PDRDA in an ownership position of 37 spaces. Given this, the PDRDA would have 37/142 voting rights in the park along with ownership of a proportionate share of the common areas attributed to the 37 spaces. Should the Acquisition Association remain current on payments on the Promissory Note, then the PDRDA has no legal grounds for foreclosure. Page 1 of 2 RECYCLED PAPER �ti Resident, Portola Palms Mobile Home Park August 12, 1996 With respect to the Home Owner Association and the make-up of its board, the PDRDA has not been and is not responsible for appointment and/or election of members to this Board. That responsibility rests with the residents of the park. The Home Owners Association is responsible for the selection of their Board of Directors, onsite management, and offsite management firm. The onsite managers are responsible for the day to day operations of the park and are responsible to the Board of Directors. The PDRDA merely holds a Promissory Note that is secured by deed of trust on 37 spaces thereby serving in the capacity of a lender to the Acquisition Association. This being the case, the PDRDA holds no responsibility for the management nor the day to day operation of the park. Should foreclosure, as a result of non payment, become an issue in the future, the PDRDA, prior to taking legal action, will advise the residents of their intent and request input from the Board of Directors at that time. I hope that this information helps to answer some of the questions and responds to some of the concerns currently being expressed by park residents. It is our understanding that election of a new Board of Directors will take place in February of 1997, as a result of a vote held on April 1, 1996, to ammend the bylaws. At that time, you are all encouraged to participate in the voting process so that the Board that is elected is representative of you and is selected by majority vote of the residents. Please complete and return the enclosed questionnaire within the next seven (7) days in the enclosed self-addressed envelope. The purpose of the questionnaire is to provide the RDA a clean understanding of your feelings on these issues. Sincerely, TERESA L. LA ROCCA Housing Programs Coordinator TLR:lw Enclosure : Questionnaire Page 2 of 2 CITY OF PALM DESERT PORTOLA PALMS MOBILE HOME PARK RESIDENTS' QUESTIONNAIRE 1. Are you in favor of reduction in sales price of Redevelopment Agency owned spaces in order to encourage sales and fill vacant lot? YES / NO 2. Do you support a review of current Homeowners Association fees? YES / NO 3. If Homeowners Association fees are determined to be too low, do you support an increase? YES / NO 4. Are Park amenities, i.e. pool and clubhouse, etc., in good condition? YES / NO 5. If not, what improvements need to be done? Please list: 6. Is outside management a help or hindrance to residents? Please explain: 7. Per ballot released in February 1996, the annual meeting and election of the Homeowners Association Board was moved from June 1996 to February 1997. Do you support the change in dates? YES / NO 8. Do you feel that Casa Management is doing a satisfactory job of handling the Park's finances and keeping the residents informed? YES / NO - of/ � DRAFT.4) ik)(-, • A/31- DRAFT July 10, 1996 DRAFT Resident Portola Palms Mobile Home Park 43-155 Portola Avenue Palm Desert, CA 92260 Dear Resident: In response to a number of inquiries relative to rumors and activities at the park, the following information is being provided in an attempt to answer some of the questions. Nip As you may be aware, the Palm Desert Redevelopment Agency (PDRDA) became involved in the conversion of Portola Palms Mobile Home Park by virtue of making low interest loans to low income residents who qualified, for purchase of their individual spaces. In addition, the PDRDA holds a Promissory Note from the park's Acquisition Association on 37 spaces owned by the Acquisition Association. The Acquisition Association Board is composed of park residents who are charged with the responsibility for marketing and sales of the spaces in their ownership. The sale of each lot pays off a proportionate share of the Promissory Note held by the PDRDA. As of late, the Acquisition Association has listed the spaces for sale with a local realtor who will be marketing in appropriate publications. 1 1 'a. 1,' • 3 The loan payments on the Promissory Note are current as of this date. The potential for the Acquisition Association becoming delinquent on the loan could become a problem in the future due to non-sale of spaces. This concern has been brought to the attention of the PDRDA by the Acquisition Association members. Should this occur, the PDRDA will have to take legal action to remedy the default. One possibility will be foreclosure on the Note putting the PDRDA in an ownership position of 37 spaces. Given this, the PDRDA would have 37/142 voting rights in the park along with ownership of a proportionate share of the common areas attributed to the 37 spaces. Should the Acquisition Association remain current on payments on the Promissory Note, then the PDRDA has no legal grounds for foreclosure. With respect to the Home Owner Association and the make-up of its board, the PDRDA has not been and is not responsible for appointment and/or election of members to this Board. That responsibility rests with the residents of the park. The Home Owners Association is responsible for the selection of their Board of Directors, onsite management, and offsite management firm. The onsite managers are responsible for the day to day operations of the park and are responsible to the Board of Directors. The PDRDA merely holds a Promissory Note that is secured by deed of trust on 37 spaces thereby serving in the capacity of a lender to the Acquisition Association. This being the case, the PDRDA holds no responsibility for the management nor the day to day operation of the park. Should foreclosure, as a result of non payment, become an issue in the future, the PDRDA, prior to taking legal action, will advise the residents of their intent and request input from the Board of Directors at that time. I hope that this information helps to answer some of the questions and responds to some of the concerns currently being expressed by park residents. It is our understanding that election of a new Board of Directors will take place in February of 1997, as a result of a vote held on April 1, 1996, to ammend the bylaws. At that time, you are all encouraged to participate in the voting process so that the Board that is elected is representative of you and is selected by majority vote of the residents. PORTOLA PALMS MOBILE HOME PARK RESIDENTS' QUESTIONNAIRE 1. Are you in favor of reduction in sales price of Redevelopment Agency owned spaces in order to encourage sales and fill vacant lot? YES / NO 2. Do you support a review of current Homeowners Association fees? YES / NO 3. If Homeowners Association fees are determined to be too low, do you support an increase? YES / NO 4. Are Park amenities, i.e. pool and clubhouse, etc., in good condition? YES / NO 5. If not, what improvements need to be done? Please list: 6. Is outside management a help or hindrance to residents? Please explain: 7. Per ballot released in February 1996, the annual meeting and election of the Homeowners Association Board was moved from June 1996 to February 1997. Do you support the change in dates? YES / NO 8. Do you feel that Casa Management is doing a satisfactory job of handling the Park's finances and keeping the residents informed? YES / NO PORTOLA PALMS MOBILE HOME PAF ` (t(l q ,(c, RESIDENTS' QUESTIONNAIRE 1. Would you support an initial reduction in sales prices of Acquisition Association owned spaces as an incentive to potential buyers? YES / NO 2. As Acquisition Association spaces are sold, the remaining space prices can be increased slightly based on demand, do you agree? YES / NO 3. Do you support a review of current Homeowners Association fees? YES / NO 4. If Homeowners Association fees are determined to be too low, do you support an increase? YES / NO 5. Are Park amenities, i.e. pool and clubhouse, etc., in good condition? YES / NO 6. If not, what improvements need to be done? Please list: 7. Is outside management a help or hindrance to residents? Please explain: 8. Per ballot released in February 1996, the annual meeting and election of the Homeowners Association Board was moved from June 1996 to February 1997. Do you support the change in dates? YES / NO 9. Are you aware that the State of California has designated this Park as a `family park' as a result of loans made to residents, which prohibits a change in designation? YES / NO 0 I( k PALM DESERT REDEVELOPMENT AGENCY 4tei4d6 �••- INTEROFFICE MEMORANDUM DATE: August 13, 1996 TO: CARLOS ORTEGA, Executive Director RDA FROM: TERESA L. LA ROCCA, Housing Program ►. . l ator SUBJECT: DESERT ROSE UPDATE my Sales: 42 units (Phase 1 and 2) Average to date subsidy (exclusive of sales price reduction) Average mortgage subsidy $11,554 Average closing costs $ 2,300 Average interest buydown $ 2,975 i1* Escrows: Closed: 24 Currently opened: 18 Income Breakdown: 28 families of low income 14 families of moderate income u► Phase I: 12 units available • Phase II: 46 units available Phase III: Will not be offered until substantial number of units sold in Phase II n* Average Sales Rate: 10 sales per month in* Traffic: 45 walk-ins for week ending 08/06/96 38% mature prospective buyers 62% family prospective buyers 11y Summary of media source of sales: Desert Sun - Public Relations Stories 37% Desert Sun - Paid Advertisement 5% Radio 12% Referrals By Employer 5% Referrals By Friends 15% Signs and Drive-Bys 17% • Television 0% (Not Yet Begun) Advertising in local movie theaters -will begin the middle of August through the middle of September. Will evaluate after initial promotion for effectiveness. MONTH-END REPORT fr OVERALL SUMMARY OF TRAFFICDEVELOPER$ALES NETWORKMarch 1 through August 6, 1996OSr 1996 Gross Net Summary Traffic: 2063 Sales: 78 Cans: 37 Sales 41 Closings 23 To-Date Open Summary Sales 41 Closed 23 Escrows 18 Released 100 Available 59 Source of Sales Media Source of Sales SOURCE # Signs Drive-bv Desert Sun-PR 1 7„„ Desert Sun-Ad 2 370,0 Desert Sun-PR 16 Television Signs/Drive-by 7 0°o Referral- Friend 10 Referral-Employer 2 Referral- Desert Sun-Ad Friend Radio 5 5"o Radio Referral- 15„„ 12°° Employer Television 0 5"o 4/0 \,.. i Source of Traffic Source Sat Sun Mon Tue Wed Thr Fri Total 0 r 0 >, 0 >, 0 >, 0 >, '> _>. u >, J • 0 E E M E h E E ro 2 � Cumul „/o Desert Sun 32 52 18 23 13 25 8 13 12 9 9 15 11 15 255 12„ro Billboards/Signs 77 136 45 101 27 74 47 55 41 50 46 48 35 62 844 41% Referrals 25 56 10 23 5 38 10 48 16 31 Il 25 8 28 334 16„% Nearby Project 0 0 1 2 0 0 0 0 0 0 0 1 0 I 5 n% Be-Back 4 88 6 Radio 26 61 Television 5 Other TOT/ i POSTED AGENDA HOUSING ADVISORY COMMITTEE AUGUST 14, 1996 DECLARATION OF POSTING I, Maria Hunt, Secretary to the Executive Director of the Palm Desert Redevelopment Agency, do hereby declare that the foregoing agenda for Housing Advisory Committee meeting of Wednesday, August 14, 1996, was posted on the bulletin board by the outside entry to the Council Chambers, 73-510 Fred Waring Drive, Palm Desert, on August 7, 1996. Dated: August 7, 1996 MARIA HUNT, Secretary to Executive Director Palm Desert Redevelopment Agency