HomeMy WebLinkAboutRES HA-128RESOLUTION NO. HA-128
A RESOLUTION OF THE PALM DESERT HOUSING AUTHORITY
APPROVING AN AMENDMENT TO DISPOSITION, DEVELOPMENT AND
LOAN AGREEMENT BETWEEN THE AUTHORITY AND CHELSEA
INVESTMENT CORPORATION, (OR IT’S DESIGNEE) PURSUANT TO
HEALTH AND SAFETY CODE SECTION 33433
RECITALS:
A. Pursuant to Health and Safety Code Section 34175(b) and the California Supreme
Court’s decision in California Redevelopment Association, et al. v. Ana Matosantos, et al.
(53 Cal. 4th 231 (2011), on February 1, 2012, all assets, p roperties, contracts, leases,
books and records, buildings, and equipment of the former Palm Desert Redevelopment
Agency (the “Agency”) transferred to the control of the Successor Agency to the former
Agency (the “Successor Agency”); and
B. By its Resolution No. 2012-07 the City Council of the City of Palm Desert elected that
all assets, rights, powers, liabilities, duties, and obligations associated with housing
activities of the former Agency be transferred from the Successor Agency to the Palm
Desert Housing Authority (the “Authority”); and
C. By its Resolution No. HA-47, the Authority accepted the housing functions and assets
of the former Agency.
NOW, THEREFORE, BE IT RESOLVED by the Housing Authority Board of the
Palm Desert Housing Authority, as follows:
SECTION 1. The Authority owns an approximately 1.84 acre lot located off
Country Club Drive in the City of Palm Desert, California described as APN No. 622-370-
014 (the “Property”). The Authority proposes to convey the Property to Chelsea
Investment Corporation (or its designee) (“Chelsea”) for the purpose of Chelsea
constructing forty (40) units of housing, thirty-nine (39) of which will be made available for
rental to qualified households of low-income, very-low income and extremely low-income,
(10) of which shall be designated for use by individuals with developmental disabilities
and one (1) of which shall be used for on -site management pursuant to the Disposition
and Development and Loan Agreement (the “Agreement”), dated June 13, 2024, which
was approved by the Authority pursuant to its Resolution No HA-122 and entered into by
the Authority and Developer.
SECTION 2. The Authority and Chelsea desire to amend the Agreement in
accordance with the Amendment to Disposition, Development, and Loan Agreement,
attached hereto and incorporated herein and on file in the office of the Agency Secretary
and City Clerk (the “Amendment”).
SECTION 3. Following notice duly given, the Authority and City Council of the City
of Palm Desert have held a full and fair joint public hearing on the conveyance by the
Authority of the Property to Chelsea pursuant to Health and Safety Code Section 33433.
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The Authority has made available to the public through the offices of the Authority
Secretary and City Clerk a copy of the Agreement and the Amendment, and a Summary
Report (the “Report”) describing, among other matters, the cost of the Agreement, as
amended by the Amendment, to the Authority prior to the joint public hearing as required
by Health and Safety Code Section 33433.
SECTION 4. Health and Safety Code Section 33433(a) and (b) generally provide
that before any property of the former Agency, acquired in whole or in part, directly or
indirectly, with tax increment moneys is sold for development pursuant to the
redevelopment plan, the sale must first be approved by the legisla tive body by resolution
after a public hearing and the resolution must contain certain findings. Pursuant to its
Resolution No. 2013-11, the City Council authorized the Authority, as housing successor
to the former redevelopment agency, to convey property for the development of housing
projects pursuant to Health and Safety Code Section 33433.
SECTION 5. On the basis of the Report and other information received by the
Authority at the hearing, the Authority hereby finds and determines (i) that the
consideration received by the Authority pursuant to the Agreement, as amended by the
Amendment, for the conveyance of the Property is not less than the fair market value of
the Property at its highest and best in accordance with the redevelopment plan as
described in the Agreement, as amended by the Amendment, and (ii) that the conveyance
of the Property pursuant to the Agreement, as amended by the Amendment, will provide
housing for low-income persons consistent with the implementation plan adopted by the
former Palm Desert Redevelopment Agency pursuant to California Health and Safety
Code Section 33490.
SECTION 6. The Authority hereby approves the Amendment and the Executive
Director is hereby authorized and directed, for and in the name and on behalf of the
Authority, to execute and deliver any and all necessary documents and instruments and
to do all things which he deems necessary or proper in order to effectuate the purposes
of this Resolution and the transactions contemplated hereby; including the Agreemen t
and Amendment, and exhibits, on file with the Authority Secretary and the City Clerk, with
such additions thereto or changes or insertions therein as may be approved by the
Executive Director in consultation with legal counsel (such approval to be conclusively
evidenced by such execution and delivery).
SECTION 7. The officers of the Authority are hereby authorized and directed,
jointly and severally, to execute and deliver any and all necessary documents and
instruments and to do all things which they may deem necessary or proper in order to
effectuate the purposes of this Resolution and the transactions contemplated hereby; and
any such actions previously taken by such officers are hereby ratified, confirmed and
approved.
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ADOPTED ON MARCH 27, 2025.
I, Anthony J. Mejia, Secretary of the Palm Desert Housing Authority, hereby certify
that Resolution No. HA-128 is a full, true, and correct copy, and was duly adopted at a
regular meeting of the Authority Board of the Palm Desert Housing Authority on March
27, 2025, by the following vote:
AYES: NESTANDE, PRADETTO, QUINTANILLA, TRUBEE, AND HARNIK
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
RECUSED: NONE
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of Palm Desert, California, on ___________________.
ANTHONY J. MEJIA
SECRETARY
JAN C. HARNIK
CHAIRPERSON
ATTEST:
ANTHONY J. MEJIA
SECRETARY
PALM DESERT HOUSING AUTHORITY
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EXHIBIT A
AMENDMENT TO DISPOSITION, DEVELOPMENT, AND LOAN
AGREEMENT
THIS AMENDMENT TO DISPOSITION, DEVELOPMENT, AND LOAN
AGREEMENT (this "Amendment") is dated as of March 27, 2025, and is entered into by
and between the PALM DESERT HOUSING AUTHORITY (“Authority”) and CHELSEA
INVESTMENT CORPORATION, a California corporation ("Developer").
RECITALS:
A. Authority and Developer entered into a Disposition, Development, and Loan
Agreement dated June 13, 2024 (“DDLA”).
B. Authority and Developer desire to amend the DDLA as hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other
consideration, the sufficiency of which is hereby acknowledged, the parties hereby agree
as follows:
1. Purchase Price. The purchase price for the Property shall be $1,680,000
(which is the fair market value of the Property as determined by a recent appraisal).
2. New Purchase Money Loan; Increase in Authority Loan Amount; Interest Rate.
The purchase price shall be loaned by Authority to Developer as a purchase money loan
on the terms of the Authority Loan and pursuant to the Authority Loan documents;
consequently, the Authority Loan amount is hereby increased from $3,000,000 to
$4,680,000.
For the $3,000,000 loan for city fees and construction costs, the interest rate
shall be 3% simple interest; for the remainder of the Authority Loan (the $1,680,000
purchase money loan), the interest rate shall be the long-term annual adjusted applicable
federal rate (AFR) published for April 2025 with unpaid, accrued interest being added
annually to principal (i.e., interest compounding annually).
3. No Density Bonus; No Density Bonus Agreement. Section 2.18 of the DDLA is
hereby deleted. All references to a density bonus agreement in the DDLA are hereby
deleted.
4. Definition of Residual Receipts. The definition of “Residual Receipts” in Section 1
of the DDLA is hereby deleted and the following is substituted in lieu thereof:
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“Residual Receipts” in a particular calendar year for a Phase shall mean the cash
(without regard to the source) derived from the operation of the Project minus the following
determined on a cash basis: (i) all real estate and personal property taxes and
assessments, insurance premiums and reasonable costs of maintenance, operation and
management incurred by the Developer in connection with the operation and
maintenance, (ii) property management fees not to exceed four and one-half percent
(4.5%) of the gross revenue of the Project, (iii) the costs of servicing the senior
construction loan/financing ( and any approved refinancing thereof) and other sources of
permitted financing; (iv) amounts necessary to maintain a guaranty or other form of
security or bond for an operation reserve account, (v) amounts deposited into a
replacement initially capitalized reserve account in the minimum sum of Two Hundred
Fifty Dollars ($250.00) per unit per annum, increasing by three percent (3%) annually, (vi)
the repayment of any amounts loaned by the Developer for material development costs,
operating deficits or tax credit adjusters or other payments to the investor which costs
were not reasonably anticipated, (vii) deferred developer fees, (viii) a limited partner
monitoring fee in the annual amount of Five Thousand Dollars ($5,000.00), increasing by
ten percent (10%) every five years, unless fully paid on a permanent loan conversion; (ix)
a managing general partner fee in the annual amount of Five Thousand Dollars
($5,000.00), increasing three percent (3%) annually; (xi) an administrative general partner
fee in the annual amount of Five Thousand Dollars ($5,000.00), increasing three percent
(3%) annually; and (xii) a monitoring fee of Five Thousand Dollars ($5,000.00), increasing
three percent (3%) annually and payable annually in advance to the Authority. In no event
shall depreciation/amortization be deducted from cash revenues. Residual Receipts shall
be determined by the Developer and the Authority on a cash basis without regard to any
carry-over profit or loss from any prior calendar year, and shall be determined annually,
on or before June 1st for the preceding calendar year. Any deferred developer fee, limited
partner monitoring fee, managing general partner fee, and administrative general partner
fee may not accrue interest.
5. Additional Permitted Transfer. Section 7.4 of the DDLA is hereby
amended by adding the following subparagraph (g) as an additional permitted
transfer:
"(g) The removal and replacement of the general partner of Developer by the
tax credit investor in accordance with the terms of the amended and restated
agreement of limited partnership of the Developer."
6. One Month Extension of Completion Deadline. Item 9 of Exhibit G to the
DDLA is hereby amended by extending the September 1, 2026, completion date to
October 1, 2026.
7. Scope of Development. The scope of development attached as Exhibit F
to the DDLA is hereby deleted and the updated scope of develop ment attached
hereto (designated Exhibit F) is hereby substituted in lieu thereof.
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8. Financing Plan. The financing plan/proposal attached as Exhibit H to the
DDLA is hereby deleted and the updated financing plan attached hereto (designated
Exhibit H) is hereby substituted in lieu thereof.
9. Affordability Mix; Manager’s Unit. With respect to the 59% AMI income
category, there will be seven (7) 59% AMI one-bedroom units, four (4) 59% AMI two-
bedroom units, and four (4) 59% AMI three-bedroom units. The manager’s unit will
be a one-bedroom unit.
10. No Other Changes. Except as otherwise modified herein, the terms and
provisions of the DDLA shall remain unchanged and are hereby ratified and
confirmed.
11. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original, but all of which, together, shall constitute one
and the same instrument.
12. Electronic/Email Delivery. Executed originals of this Amendment may be
delivered by email/PDF.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
DEVELOPER:
CHELSEA INVESTMENT CORPORATION,
a California corporation
By: _______________________
Cheri Hoffman
President
AUTHORITY:
PALM DESERT HOUSING AUTHORITY
By: _______________________________
Chris Escobedo
Interim City Manager
APPROVED AS TO FORM:
By: _______________________________
Bruce Galloway
Richards Watson Gershon
Special Counsel to Authority
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EXHIBIT “F”
UPDATED SCOPE OF DEVELOPMENT
A 40-unit apartment complex, with 20 one-bedroom apartments, 10 two-bedroom
apartments, and 10 three-bedroom apartments (including one (1) one-bedroom manager
unit).
50 total off-street parking spaces, of which 40 will be carport covered spaces.
The Developer shall develop a 40 multi-family rental housing development, with
20 one-bedroom apartments, 10 two-bedroom apartments, and 10 three-bedroom
apartments (including 1 one-bedroom manager unit). All capitalized terms not defined
herein shall have the meaning ascribed to such terms in the Agreement,
The Project shall conform to plans approved by the City, including all conditions
and mitigation measures imposed by the City in connection with the
entitlement/development approval process of the City.
The Project shall be constructed on the Property (such property consisting of
approximately 1.84 acres of vacant land located off of Country Clu b Drive in the City of
Palm Desert). The Project, which will be called “Arc Village”, will be built as a single
phase. The quality of construction shall be of a high level.
HOUSING TYPE
Arc Village will construct forty (40) multi-family rental units, thirty-nine (39) of which
shall be made available to and occupied by households with incomes less than 60% AMI,
and ten (10) of which shall be designated for use by individuals with developmental and/or
intellectual disabilities and/or Desert Arc participants. Units will consist of a mix of one,
two and three-bedroom units, and be restricted by a recorded Housing Agreement. One
of the units shall be used for on-site management.
SITE AMENITIES
1. Attached 1,543 square-foot community lounge with:
a. On-site office area
b. Communal Kitchen
c. Lounge
d. Restrooms
2. BBQ Gathering Space
3. Laundry Facilities
4. Enclosed Tot-Lot with Play Structure, Shade Structure and Benches
5. On-Site Property Management
6. 49 off-street parking spaces, 40 of which will be carport covered spaces.
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CONSTRUCTION TYPE & ARCHITECTURAL GOALS
The Construction Type will be Type VB Construction with NFPA 13 fire sprinklers
(1-hour walls between occupancy separations). This project to be construction of a two-
story multi-family apartment building consisting of (40) residential dwelling units. The
Architectural goal is to blend into the existing development using neutral tones as well as
provide articulation of the exterior with recesses and different materials.
SUSTAINABLE BUILDING / GREEN BUILDING PRACTICES
This project will comply with all applicable ‘Green Building Standards’ and
‘Minimum Sustainable Building Specifications’ required by the State of California and the
City of Palm Desert. The project will meet the State of California Title 24 Requirements
and provide both solar power and EV charging.
UNIT AMENITIES
1. Energy Star Appliances
a. Stove/Oven
b. Refrigerator
c. Dishwasher
d. Garbage Disposal
2. Solid Surface Countertops
3. Upgraded Cabinets
4. Central Air Conditioning/Heating
5. Window Blinds
6. Carpet, Vinyl or Tile
7. Patio or Balcony
8. Storage Closet, to be located on patio/balcony.
SOCIAL SERVICE PROGRAMS
1. Social Service Programs will be conducted on site and available for all
residents free of charge. A program coordinator will be hired, or a contract will be
executed with a local nonprofit, to provide family appropriate classes for the residents, as
well as collaborate with outside nonprofits and agencies to expand program options.
Residents will have input as to which classes and programs are offered at the center.
Typically, the classes and programs will include adult educational and skill building
classes to include computer literacy, ESL and art classes, job counseling, financial
literacy, health and wellness workshops and a food distribution program.
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The Developer shall commence and complete the Project in accordance with the
Schedule of Performance. The Project shall conform to and shall complete and satisfy
any and all conditions from the City’s entitlement approval of Project.
I. DEVELOPMENT STANDARDS
The improvements shall conform to all applicable Governmental Requirements,
including without limitation, local subdivision, zoning, building code and other applicable
ordinances, resolutions, policies, applicable general and Specific Plans, and regulations
of the City of Palm Desert (“City Ordinances”) and the following development standards:
A. General Requirements:
1. Vehicular Access. The placement of vehicular driveways shall be
coordinated with the needs of proper street traffic flow as approved by the City in
accordance with City Ordinances. In the interest of minimizing traffic congestion, the City
of Palm Desert will control the number and location of curb breaks for access to the
Project for off street parking and truck loading. All access driveways shall require written
approval of the City.
Any gated access shall comply with the requirements of the City and will be
subject to review.
2. Building Signs. Signs shall be limited in size, subdued and
otherwise designed to contribute positively to the environment. Signs identifying the
building use will be permitted, but their height, size, location, color, lighting and design
will be subject to City approval, and signs must conform to the City Ordinances.
3. Screening. All outdoor storage of materials or equipment shall be
enclosed or screened to the extent and in the manner required by the City.
4. Landscaping. The developer shall provide and maintain
landscaping within the project area and within setback area along all street frontages and
internal property boundaries and conforming to the plans as hereafter approved by the
City. Landscaping shall consist of trees, shrubs and installation of an automatic irrigation
system adequate to maintain such plant material. The type and size of trees to be
planted, together with a landscaping plan are to be determined by the Developer and in
accordance with applicable ordinances and requirements.
5. Utilities. All utilities on the Property provided to service the units
constructed by the Developer shall be underground at the Developer’s expense.
6. Building Design. Buildings shall be constructed such that the
improvements shall be of high architectural quality and shall be effectively and
aesthetically designed and in conformance with City approvals.
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7. Energy Considerations. The design of the improvements shall
include, where feasible, energy conservation construction techniques and design,
including co-generation facilities and active and passive solar energy design. The
Developer shall be required to demonstrate consideration of such energy features during
the design review process and to consistency with energy conservation provisions of the
building code.
8. Site Preparation. The City of Palm Desert, at its cost and expense,
shall prepare the Property for development. Such preparations shall consist of the
complete demolition and removal of all existing improvements, if any.
9. Environmental Impact Mitigation Measures. To the extent
required under the terms of the DDLA, the Developer shall implement any and all
mitigation measures and/or mitigation monitoring requirements as identified in any
certified environmental document, certified or mitiga ted negative declaration adopted in
connection with the project.
10. Construction Fence. The Developer shall install a temporary
construction chain link fence with opaque screening. The construction fence shall be
maintained free of litter and in good repair for the duration of its installation.
11. Development Identification Signs. Prior to commencement of
construction on the Property, the Developer shall prepare and install, at its cost and
expense, one sign on the barricade around the Property which identifies the
Development. The sign shall be at least four (4) feet by six (6) feet and be visible to
passing pedestrians and vehicular traffic. The design of the sign, as well as the proposed
location, shall be submitted to the City and the Authority for review and approval prior to
installation. The sign shall, at a minimum, include:
- Illustration of development
- Development name
- Logo of the City of Palm Desert
- List of City Council Members
- Information number
- Completion Date
B. Design Features:
The following design features are considered essential components to the
improvements:
Accessible Units – An agreed upon number of units are to be fully handicap
accessible in compliance with State Housing Code – Title 24 requirements.
Overall Design Quality, Materials, Colors, Design Features – Quality of design is
important, materials and colors are to be approved by the City.
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All southern-facing windows, located on the second floor of the southernmost
elevation of the building shall be privacy windows. Said privacy windows shall be
designed to obscure views through the glass by window treatments including, but not
limited to, frosted glass, patterned glass, or other acceptable methods which visually
obstruct views through the glass. The use of external window treatments, such as an
applied film or self-adhesive material to alter light transmission through the window shall
not be used. Final construction plans shall provide sufficient information to demonstrate
compliance with this condition of approval and shall be subject to approval by the
Development Services Department.
II. SPECIAL AMENITIES
The Developer shall undertake all improvements required by the City as a
condition of development of the Property, as more particularly provided in the City
approvals given for the Property.
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EXHIBIT “H”
UPDATED FINANCING PROPOSAL/PLAN
(Attached.)
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