HomeMy WebLinkAboutDA 86-1 Ownership Transfer for Villa at Palm DesertCITY OF PALM DESERT
Department of Community Development
STAFF REPORT
REQUEST: Consent of ownership transfer for Villa at Palm Desert as required
by Development Agreement
SUBMITTED BY: Krista Colson, Planning Intern
.;ITY COUNCIL ACTION:
APPLICANT: ARVIM, Inc. APPROVED DENIED
2725 N. Penn Avenue RECEIVED OTHER
Roswell, NM 88201 MEETING DATE 7 - fo
AYES : (, KM', spi.e6yei au r_i feett,Vii
CASE NOS. DA 86-1 NOES: e
ABSENT: JSJM.P_
DATE: July 13, 2006 ABSTAIN: AfITYIe
VERIFIED BY:_
CONTENTS: A. Staff Recommendati8Niginal on File witW City Clerk 's 0ffic(
B. Background
C. Attachments; Letter requesting assignment consent, Consent to
Assignment Agreement, Ordinance No. 635, DA 86-1
A. Recommendation:
By minute motion approve assignment of ownership from Health Care Property
Investors, Inc. to ARVIM, Inc. and direct the Mayor to execute an assignment
agreement.
B. Background:
The Villa at Palm Desert project, a 77 unit assisted living senior complex located
at 44-300 San Pasqual, is currently owned by Health Care Property Investors,
Inc. ARVIM is the current lessee and operator of the Property.
The Property was constructed pursuant to a Development Agreement
implementing affordable housing provisions of a Senior Overlay, (a $100,000
payment to Palm Desert's Redevelopment Agency and 5 units dedicated for SSI
recipients). Conditions also require the City's consent for a transfer of
ownership. ARVIM has operated the Property since 1995 and has remained in
full compliance with the conditions of approval in the original and amended
Development Agreement.
Subrnptt�d By:
A (Ili
Krista Colson, Planning Intern
Approval:
AC for Development Services City Manager
G:\Planning\Krista Colson Word Files\staff_report_DA 86-1 .doc
Dep
ent Head:
4riefilo
Phil Drell, Director of Community Development
Fried, Frank, Harris, Shriver & Jacobson LLP
One New YOrK Plaza
New York, NY 10004-1980
Tel: 212.859.8000
Fax: 212.859.4000
wvvw.friedfrank.com
BY FEDERAL EXPRESS
City of Palm Desert
Palm Desert Housing Authority
73-510 Fred Waring Drive
Palm Desert, CA 92260
Attn: Janet Moore
RECEWED
JUN 15 2006
Direct Line: 212-859-8146
Fax: 212-859-4000
londojo@ffhsj.com
June 14, 2006
Re: Affordable Senior Housing Development Agreement (the
"Development Agreement") dated as of July 15, 1988 between The
City of Palm Desert and Sanborn and Rylee Developers (City of Palm
Desert Ordinance No. 461), as amended by that certain Senior Housing
Development Agreement Amendment (the "Amendment") dated as of
February 28, 1991 between The City of Palm Desert and Palm Desert
Retirement Villas Ltd. (City of Palm Desert Ordinance No. 635)
Dear Ms. Moore:
We represent ARVIM, Inc. ("ARVIM"), the current lessee and operator of the
property (the "Property") subject to the above -captioned Development Agreement and
Amendment, and ARV Assisted Living Inc. ("ARV"), the sole shareholder of ARVIM.
As Rick Atlas explained when he spoke to you, ARV (or an affiliate) will be acquiring
the Property. However, under the Development Agreement, as amended, the rights of
the "Property Owner" thereunder may not be transferred without first obtaining the
written consent of the City of Palm Desert.
Enclosed for your review and execution please find a Consent which will allow
ARV (or an affiliate) to acquire the rights of the "Property Owner" under the
Development Agreement, as amended. If the foregoing is acceptable to you, please
arrange to have the enclosed Consent executed. Upon execution, please fax or pdf a
copy of the executed Consent to my attention, with the original to follow via overnight
mail. As our client is seeking to close this transaction in early July, we appreciate your
attention to this matter.
A Delaware Limited Liability Partnership
New York • Washington • London • Paris • Frankfurt
ffny01 \hayesjo\556503.2
EM' Fffl HMN�S�gM & Jacobson LLP June 14, 2006
�Y Page 2
Please let me know if you have any questions or comments.
Best regards,
/Joe/lLondon
ffn y0 11h ayesj o',5 56503.2
CONSENT TO ASSIGNMENT
THIS CONSENT TO ASSIGNMENT (this "Consent") is made this ! day of ,
2006 by THE CITY OF PALM DESERT (the "Cit '), a municipal corporation organized and
exiting under the laws of the state of California, having an address at 73-510 Fred Waring Drive,
Palm Desert, California 92260.
WHEREAS, as of the date hereof, the City is a party to that certain Affordable Senior
Housing Development Agreement (the "Development Agreement") dated as of July 15, 1988
between The City of Palm Desert and Sanborn and Rylee Developers (City of Palm Desert
Ordinance No. 461), as amended by that certain Senior Housing Development Agreement
Amendment (the "Amendment") dated as of February 28, 1991 between The City of Palm Desert
and Palm Desert Retirement Villas Ltd. (City of Palm Desert Ordinance No. 635), with respect to
that certain real property located within the City of Palm Desert, California, which property is
described on Exhibit A attached hereto and made a part hereof (together with developments
constructed thereon, the "Provertv");
WHEREAS, as of the date hereof, Health Care Property Investors, Inc. ("HCPI") is the
owner of the Property, and ARVIM, Inc. ("ARVIM") is the lessee and operator of the Property
pursuant to that certain Facility Lease Agreement dated as of February 26, 1997 between
Meditrust Acquisition Corporation III (as predecessor -in -interest to HCPI) and ARVIM;
WHEREAS, ARVIM is a subsidiary of ARV Assisted Living Inc. ("ARV"), and ARV, or
an affiliate thereof, intends to acquire the Property and wishes to obtain the benefits of the
Development Agreement and the Amendment;
WHEREAS, pursuant to Section 4 of the Amendment, the rights of "Property Owner"
under the Development Agreement and the Amendment may not be transferred or assigned
without first obtaining the written consent of the City; and
WHEREAS, the City is willing to grant its consent to the transfer or assignment to ARV
(or any affiliate thereof) of the "Property Owner's" rights under the Development Agreement and
the Amendment.
NOW THEREFORE, in consideration of the foregoing and for ten dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the City hereby consents to the transfer or assignment to ARV (or any affiliate
thereof) of the "Property Owner's" rights under the Development Agreement and the
Amendment.
THE CITY OF PALM DESERT
Name:
Title:
ffny01\hayesjo\556404 3
ORDINANCE NO. 635
A ORDL._.CE OF THE CITY COUNCIL OF THE C ? OF
PALM DESERT, CALIFORNIA, APPROVING AN
AMENDMENT TO AN AFFORDABLE SENIOR HOUSIM
DEVEL OFMWr AGREEMENT RELATING TO AFFORDABLE
HOUSDr.v REDJIRE ENTS.
CASE NO. DA 86-1 AMEND ' Wr
WHEREAS, the City Council of the City of Palm Desert, California, did
on the 28th day of February, 1991, hold a duly enticed public hearing to
consider the request by PALM DESERT RETIREMENT VILLAS LTD. for approval of
DA 86-1 ORD 461 Amendment.
WHEREAS, at said public hearing, upon nearing and considering all
testimony and arguments, if any, of all i&,Lc,cPuLad desiring to be
heard, said city council did find the following facts and reasons to exist
to justify granting approval of said c c..4..c.,L:
1. Theis consistent with the intent and purpose
of the Senior overlay zoning and the General Plan
Housing Element.
NOW, aisr c=vm, BE IT ORDINANC D by the City Cot=:Ll of the City of
Palm Desert, California, as follows:
1. That the above recitations are true and and constitute the
findings of the commission in this case.
2. That c ,b,..val of DA 86-1 exhibit "A" is hereby approved.
3. The City Cleric of the City of Palm Desert, California, is hereby
-- directed to publish this ordinance in the Palm Desert Post, a
newspaper of general circulation, published and circulated in the
City of Plam Desert, California, and shall be in full force and
effect thirty (30) days after its adoption.
PASSED, APPROVED and ADOPTED at a regular meeting of the Palm Desert
City Council, held on this 28th day of February, 1991, by the following
vote, to wit:
AYES: BENSON, CRITES, KELLY, WILSC N, SNYDEi
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
i
H. SNYDER,
A►TrEST:
SHE LA R. GILLMAN, City Merk
•Z.6) 1 ZQ , • 3GESM
ri1u31o1i "A"
PALM DESEEtr a.zA"ira4EW VILLAS LTD
THIS AGREQuw is cater-4 into this 28th day of February, 1991, between
Palm Desert Retirement Villas LTD, (hereinafter "Property Owner") and the
City of Palm Desert, (hereinafter "City"), a municipal .1..,.,c Uon organized
and existing under the laws of the state of California.
RECITALS
This is predicated upon the following facts:
A. Gos,�....c.,t Code Sections 65864-65859.5 authorize the City to enter
into binding development with km�--w-.b* having legal or equitable
interests in real k—wm& ly for the development of such t.. Ly;
B. Owner is owner of certain real k�..j,� ly located with the
City of Palm Desert, California, developed as 77 unit care senior
housing project (hereinafter "project") pursuant to a development
City of Palm Desert Ordinance No. 461.
C. Sections 1, 2, and 3 of ORD. 461 requires the. LY owner to
provide 15 units affordable by low and moderate income units onsite or 20
low and moderate in me affordable units offsite by March 1, 1991.
D. Owner has requested the city to consider amending ORD 461
in Wxrorrdance with Code Section 65864-65869.5 specifying an
alternative method for satisfying the 15 unit affordable housing
requirement.
E. The City Council of City has found that the development
is consistent with the general plan ( and the Palma Village
2
Specific Plan), and senior overlay; and
F. on February 28, 1991 the City Council of The City of Palm Desert
adopted Ordinance No. 635 approving the development with
Fl-,-- Ly Owner and the ordinance thereafter took effect on February 28,
1991.
NCW, THEREFORE, the parties agree:
1. Definitions. In this Ar.t, unless the context otherwise
requires:
(a) "City" is the City of Palen Desert.
(b) "Project" is the development constructed City pursuant to
Precise Plan 85-39 and DA 86-1 ORD 461.
(c) Owner" means the pexsot having a legal or equitable
interest in the real b--,x-- L.� as described in ayl ,i. (3) and includes the
Fll Ly Owner's in interest;
(d) "Real is the real property referred to in r*� Cv akA►
(2).
(e) "Useful Life of the Project" is the greater of thirty (30)
years or the period of time which the Project remains habitable, with
reasonable care and maintenance, as 36i,b"..4ned by City.
M "Senior Citizen Household" means a maximum two person
household of which all .::.. �, are 62 years of age or older.
2. DesCripticn of real property. The real which is the
subject of this Ay.. a: :-t is described in Exhibit A.
3. Interest of Owner. L, Owner t erica aL0 that he has
a full legal and equitable interest in the real and that all other
�.� holding legal or equitable interests in the k,..,Aa Ly are to be bound
by the ayl ve+r.o.aL.
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4. Assignment. The rights of the F.LLy Owner under this Agreement
may not be transferred or assigned unless the written consent of the City if
first obtained.
5. Binding effect of The burdens of this bind
and the benefits of the Ay���..�..L irnse to the sucoessars in interest to the
parties to it.
6. Relationship of parties. It is that the contractual
relationship between the City and Firma Lk Owner is such that the owner is
an independent LL a, L and not the agent of the City.
7. AM-dC&,.a..L by F-%4,c:A. Lv Owner and city. in place of the requirements
described in sections 1, 2, and 3 of exhibit A of ORD 491 the following
e—y.� a„ shall be deemed to satisfy the 15 unit low/moderate income housing
requitvmecnts of chapter 25.52 of the Palm Desert zoning ordinance.
a. Ten (10) units of the 15 unit requirement shall be satisfied by
an in -lieu payment of $10,000 per unit totaling $100,000 to the city to be
used for the purpose of providing low income senior housing. Payment shall
be made to the city on or before March 1, 1991.
b. Five units (hereinafter SSI units) shall be reserved beginning
March 1, 1991 within the project for occupancy by aged recipients of
Supplemented Security Income (SSI) as adninistered by the United States
Social Security Aduinistration. The maximum charge for full roan, board and
care services as offered by the project owner to SSI recipient shall not
exceed the maximum applicable SSI benefit less 550.00 per person per month.
For 1991, the maximuan charges shall be:
Single Occupancy - $659/month.
Double occupancy - $1318/nnnth.
4
r,0Lo • .
These rates may be adjusted according to am al cost of living increases
granted to SSI recipients by Social Security Administration.
c. A maximum of two may occupy each of the five units.
d. SSI recipients shall receive identical basic care
services available to other residents of the project.
e. F.LA�Ly Owner or its assigned management agent shall be
responsible for detennining the eligibility of prospective SSI tenants.
f. F4.wVr.L L.1 Owner Shall not discriminate on the basis of race,
color or creed, sex, or national origin.
g. Property Owner or its successors in interest shall reserve the
five (5) SSI units as set forth in this for the Useful Life of the
Project and Project owner small not sell or otherwise change the use of the
Project wie=t prior written consent of city.
h. Age limits. The minimum age for all Project occupants shall be
62 years old.
8. Change in project. No change, modification, revision or alteration
may be made in the.. :1 precise plan without review and....,.al by
those agencies of the City approving the plan in the first instance. A
orange, modification, revision or alteration in the :1 precise plan is
not effective until the parties amend this Aa-.....L to it.
9. Hold Harmless. F.wwc, Ly Owner agrees to and shall hold the City,
its officers, agents, employees and +-v--d..Latives harmless from liability
for damage or clam for damage for injury including death and
claims for.. Ly damage which may arise from the direct or indirect
operations of the Owner or those of his sU ..... A a ^box ,
agent, employee or other person acting on his behalf which relate to the
project. Owner agrees to and shall defend the City and its
5
rez.60111.1. 0
officers, agents, employees and from actions for damages
caused or alleged to have been caused by reason of Property Owner's
activities in with the project.
This hold harmless applies to all damages and claims for
damages suffered or alleged to have been suffered by reason of the
operations referred to in this paragraph, regardless of or not the
City.], supplied, or plans or specifications or bath for the
Project.
Property Owner further agrees to indemnify, hold harmless, pay all
costs and provide a defense for City in any action challenging the validity
of the Development Agreement.
10. Periodic Review of Compliance With A.wc..,-..L.
(a) City Planning Commission shall review this Development
Ay.C,.:*d.M..L whenever substantial evidence exists to indicate a possible breach
of the terms of this Ate. r...t..
(b) At least once each year, FL.,k,eu LY Owner shall good
faith compliance with the term of this Development Ay.. , , Property
Owner agrees to furnish such evidence of good faith compliance as City, in
the exercise of its discretion, may require. City shall have the right to
audit the books and +,o...xdb of FiwvsiLy Owner's cost and expense upon
request and at least wrwally.
11. or Cancellation of A .zc..,—L. This Development Ay..,�..,...L
may be c....—Z.1 or cancelled in whole or in part by mutual .,.,...L of the
parties and in the mariner provided for in Code, sections 65868,
65867 and 55867.5.
12. Unless amw4ed or cancelled as provided in paragraph
11
ORDI NO. 635
11, this Development Agreement is enforceable by any party to it
notwithstanding a change in the applicable general or specific plan, zening,
subdivision or building regulations adopted by City which alter or amend the
rules, regulations or policies governing permitted uses of the land,
density, design, im movement and construction standards and specification.
13. Events of default. Property Owner is in default under this
Agreement upon the happening of one or more of the following events or
..*. ._�.
(a) If a warranty, representation or statement made or furnished
by Property Owner to City is false or prmv to have been false in any
material when it was made;
(b) A finding and determination by City made following a periodic
review under the provided for in Gotir.:_:..t Code, section 65865.1,
that upon the basis of substantial evidence Fiv,-aA.ty Owner has not complied
in good faith with any of the terms or ocnditic ns of this
(c) RL,-� tY Owner's failure to maintain the Real in
substantially the same condition as it existed on the date that City issued
the Certificate of O=4k- cxy with & a�*},c, t to the Project of the , w U,, o
aptly in good and workmanlike manner any building which may be damaged or
destroyed.
(d) Owner's failure to appear in and defend any action
or proceeding purporting to effect the rights or powers of City under the
terms of this Development and to pay all costs and expenses,
including attorney's fees in a reasonable sum, in any such action or
proceeding in which City may appear.
14. Procedure upon default. If, as a result of periodic review, or
other review of this the Planning Commission or City finds and
7
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determines, on the basis of substantial evidence, that F,." Ly Owner has
not complied with the terms or oanditicns of this ,�..�,, the Commission
shall notify the Owner or successor in interest as to the specific
nature of and describe the remedies required to achieve
compliance. Property Owner has thirty (30) days upon receipt of
notification to take remedial actions. If F4.y1.mLLy Owner fails to take
remedial action within thirty (30) days, the Planning Comnissicn of City
Shall to the City Council of City that this Development
be modified, terminated, or that the remedies set forth in this paragraph be
exercised by the City. If the City Oouncil of City concurs with the
recommendation of the City's Planning Canedssicn, the City Council may
modify this Development Ay....,,, ,,,,t,, terminate this Development Ay�z�.�. t, or
may employ one or more of the remedies set forth in this paragraph.
proceedings before the City Council shall be by noticed public hearing
pursuant to Chapter 25.86 of the Municipal code of the City of Palm Desert.
In the event of a default, City may employ on or more of the following
remedies, in its sole discretion:
( i ) City may revoke all previous entitlements and
permits &&aL,LcZ by the City to Owner with respect to this project
and the subject Real FA.�,Q.. Ly.
(ii) City may pursue all other legal or equitable remedies
City may have under California law or as set forth in this Development
Ay-WeRKI..L and City shall be entitled to specific performance and enforcement
of each and every term, condition and covenant set forth herein.
15. Dac�na es upon cancellation, termination of A In no event
shall &A.%A.=LLy Owner be entitled to any damages against the City upon
modification, termination of this Development Ad-10"6406:.. or exercise by City
8
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ciRDnPP1M NC). 635
of its rights under this Development
16. Attorneys fees and costs. If legal action by either party is
brought because of breach of this or to enforce a provision of
this the prevailing party is entitled to reasonable attorneys
fees and court cost.
17. Notices. all notices required or provided for under this
Development shall be in writing and delivered in person or sent by
certified mail, postage prepaid. Notice required to be give to City shall
be addressed as follows: City of Palm Desert, 73-510 Fred Waring Drive,
Palm Desert, California 92260
Notices required to be given to F&SLY Owner shall be addressed
as follows:
A party may change the address by giving notice in writing to the
other party and therefore notices shall be addressed and transmitted to the
18. Rules of fiction and miscellaneous tends.
(a) The singular ar includes the plural; the masculine gender
includes the feminine; "shall" is mandatory, "may" is permissive.
(b) If a part of this Aye. r : , :,,,,t is held to be invalid, the
reak inder of this is not affected.
(c) If there is more than one signer of this their
obligaticns are joint and several.
(d) The time limits set forth in this A, ,,t...4,.t may be extended
by mutual consent of the parties in aco=danoe with the procedures for
adoption of an
19. Duration of A. �`�.t�� . %his Agreement shall expire only upon
total destruction of the ,e— L...L project which is the subject of this
9
•nA9,21 Q Z • juam
Development Ad-ac,.Ciit.
20. Applicable Law. this Agreement shall be .a U jed according t0
the laws of the State of California.
21. Severability. If any portion of this Atl�,oa,..C..L is for any reason
held to be enforceable, such detezminaticn shall not effect the validity
of the remaining portions.
22. Authority. Each of the panties hereto covenant and agrees that
it has the legal capacity to enter into this Ate,.. << :.,,L contained herein,
that each cv a be c smm it is binding upon that party and that this Agreement is
executed by a duly authorized official acting in his official capacity.
IN WITNESS WHEREOF this Development Av. c.=.=,..L has been executed by the
parties on the day and year first above written.
A.,3 as to form: CITY OF PALM DESERT
A Mzdcipal Corporation
By:
AQMM
:. ..,
Attest:
PALM DESERT RETIREM Nr VILLAS LTD
BY:
By:
STATE OF MLIMMA )
COLM'Y OF RIVERSIDE )
On this day of , 1991, before me, a
Notary Public in and for said State, personally a�,c-c-,a0
blown to me or proved to me on the basis of
satisfactory evidence to be the person who executed the within
instmmnent on behalf of , and acknowledged
to me that executed the same.
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ORDINANCE NO. 635
DEVELOPMENT AGREEMENT
EXHIBIT "A"
Lot 16 of Palma Village Groves, M.B. 20, Page 51