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Home My WebLink AboutDDA - Palm Desert Development Company - Occupancy StandardPALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVE THE AMENDMENT TO THE DISPOSITION DEVELOPMENT AGREEMENT BY AND BETWEEN PALM DESERT REDEVELOPMENT AGENCY .AND PALM DESERT DEVELOPMENT COMPANY REQUIRING PALM DESERT DEVELOPMENT TO COMPLY WITH AGENCY BOARD RESOLUTION NO. 484 REGARDING OCCUPANCY STANDARDS SUBMITTED BY: JANET M. MOORE, SENIOR MANAGEMENT ANALYST DATE: MAY 13, 2004 CONTENTS: AMENDMENT Recommendation: By Minute Motion: APPROVE THE AMENDMENT TO THE DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE PALM DESERT REDEVELOPMENT AGENCY AND PALM DESERT DEVELOPMENT COMPANY, REQUIRING PALM DESERT DEVELOPMENT COMPANY TO COMPLY WITH AGENCY BOARD RESOLUTION NO. 484 ON OCCUPANCY STANDARDS; 2. AUTHORIZE CHAIRMAN DDA AND ANY OTHER SUCH AMENDMENT. Executive Summarv: TO EXECUTE THE AMENDMENT TO THE DOCUMENTS NECESSARY TO FACILITATE While the DDA requires the developer to rent units to very low and low income persons and families, there is currently no minimum or maximum occupancies prescribed for the units. Approval of this request will require Palm Desert Development to follow the Agency's recently adopted Occupancy Standards by Resolution No. 484. Denial of this request will allow the developer to rent units to families whose composition is such that units may be underutilized. Discussion: On June 14, 2001, the Agency Board approved a Disposition and Development Agreement between Palm Desert Redevelopment Agency and Palm Desert Development Company, wherein the Agency agreed to make a low interest loan to the developer in the amount $7,659,437 to assist with the construction of 162 units tax credit apartment project now known G \RDA\Patty Leon\Wpdocs\JMM\staff report\PDRA - PDHA Budget 2004-2005 - 051204.doc as Hovley Gardens. In turn, the developer agreed to construct the project and provide 55-year affordability covenants to the Agency. Final Certificates of Occupancy were issued in October of 2003. The project was completely leased in December 2003. The project provides the City with much needed three- and four - bedroom units that are available to larger families of very low and low income. It is important that we do not underutilize these larger units. Although the developer is not required to follow such guidelines with respect to the tax credit allocation, he agreed that the Agency's Occupancy Standards as set forth in Resolution No. 484 are similar to his current occupancy policies, but due to the slight difference he would prefer the request in the form of an amendment. Although Resolution No. 484 pertains to residential units owned by the Agency in its low and moderate income housing program, the developer has agreed to follow the Standard through attrition once the amendment is fully executed. A draft of the amendment has been prepared by Agency legal counsel, and reviewed and approved by legal counsels for the developer and his investors. Staff is requesting that the Agency Board approve the amendment to the DDA and authorize the Chairperson for the Redevelopment Agency Board to sign any documents necessary to facilitate such amendment. Submitted by: Depa ent H '`Jane . Moore, Senior Management Analyst Ta��a La Rocca, Director of Housing pl Approval: G u in McCarthy, ACM/Re opment Carlos Ortega, cutive Director WRDA\Patty Leon\Wpdocs\JMM\staffreport\PDRA - PDHA Budget 2004-2005 - 051204.doc RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Palm Desert Redevelopment Agency 73-510 Fred Waring Drive Palm Desert, California 92260 Attention: Director of Housing [Space.Above For Recorder's Use Only] The undersigned declares that this Amendment to Disposition and Development Agreement is exempt from Recording Fees pursuant to California Government Code Section 27383. AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT THIS AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (this "Amendment") is made as of , 2004 (the "Effective Date"), by and between the PALM DESERT REDEVELOPMENT AGENCY, a California public body, corporate and politic ("Agency"), and PALM DESERT DEVELOPMENT COMPANY, a California corporation ("Developer"), with respect to the following: RECITALS: A. Agency and Developer entered into that certain Disposition and Development Agreement dated as of June 14, 2001 (the "DDA"), regarding the sale of certain unimproved real property and the development of the same with one hundred sixty-two (162) affordable housing rental units (individually, a "Unit" and collectively, the "Units"), a manager's unit, a community building and common area amenities including a swimming pool and a children's play area (collectively, the "Project") as more particularly described in the legal description attached as Exhibit A. All initially capitalized terms used herein shall have the meanings given thereto in the DDA unless expressly defined herein. B. As required by the DDA, Agency and Developer entered into that certain Regulatory Agreement and Option dated as of October, 5, 2001, and recorded in the Official Records of Riverside County, California, on October 25, 2001, as Document No. 2001-523500 (the "Regulatory Agreement"), pursuant to which Developer agreed, among other things, that the Units would remain as affordable housing for a period of not less than fifty-five (55) years. C. The purpose of this Amendment is to effectuate Agency's Low and Moderate Income Housing Program (the "Program") pursuant to the Community Redevelopment Law of the State of California. GARMPatty Leon%Npdocs\JMMlstaff reporhamendment for PDRA-PDHA Budget.DOC D. Certain occupancy standards were recently added to the Program pursuant to Resolution No. 484, which was approved and adopted by Agency on October 23, 2003, a copy of which is attached hereto as Exhibit B (the "Occupancy Standards"). E. Agency has requested, and Developer has agreed, to make the Occupancy Standards applicable to the Units in accordance with the purposes and goals of, and so the Project will remain consistent with, the Program, all as more particularly provided herein. AGREEMENT: NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants contained herein, the parties hereto agree as follows: 1.1 Section 1.2.56. The following definition of "Occupancy Standards" is hereby added to the DDA as Section 1.2.56: "The Restricted Units are not specifically assigned, they may change as units become vacant and others are occupied. Occupancy Standards shall mean Resolution No. 484 approved and adopted by Agency on October 23, 2003 (as the same may be amended from time to time, and any successor resolutions thereto)." , 1.2 Section 6.2.3. Section 6.2.3 of the DDA is hereby deleted in its entirety and replaced with the following: "Once a household has been determined to be eligible for a particular Restricted Unit pursuant to subsection 6.4.2, it may remain in occupancy thereof so long as (a) its household income does not exceed 140% of the then current maximum allowable income for the applicable income category, and (b) its household size complies with the Occupancy Standards." 1.3 Section 6.4.2. Section 6.4.2 of the DDA is hereby deleted in its entirety and replaced with the following: "Developer shall be solely responsible for the selection of the tenants of the apartment units. Developer shall use commercially reasonable efforts to ensure that the Restricted Units are leased to Very Low or Lower Income Households that (a) consist of appropriate numbers of persons to prevent the underutilization or overcrowding of such units in accordance with the Occupancy Standards, and (b) are able to lease such units at an Affordable Rent without any loan or subsidy from Agency." GARDA\Patty Leon\Wpdocs\JMM\staff report\amendment for PORA-PDHA Budget.DOC 1.4 Section 6.5.2. Subsection (e) of Section 6.5.2 of the DDA is hereby deleted in its entirety and replaced with the following: "Lease Agreement: Developer shall submit a copy of the proposed lease or rental agreement to be used in the Development annually on June 30th and at such time as necessary revisions are made", which lease shall include the Occupancy Standards and parking rights provisions Reaulatory Aareement. 1.5 Section 1. The definition of "Qualified Persons" is subsection (b) of Section 1 of the Regulatory Agreement is hereby deleted in its entirety and replaced with the following: "Qualified Persons means Persons and Families of Very Low or Lower Income, as defined in California Health and Safety Code Sections 50052.5 and 50093 (as such statues may be amended from time to time, and any successor statues thereto), with a household size that is appropriate for the number of bedrooms in the available unit in accordance with the Occupancy Standards, and otherwise meeting the requirements hereof." 1.6 Section 1. The following definition ,of "Occupancy Standards" is hereby added as subsection (d) of Section 1 of the Regulatory Agreement: "Occupancy Standards means Resolution No. 484 approved and adopted by Agency on October 23, 2003 (as the same may be amended from time to time, and any successor resolutions thereto)." 2. Miscellaneous. 2.1 References. Each reference in the DDA, the Regulatory Agreement, the Agency Note and/or the Agency Trust Deed (collectively, the "Agency Documents") to the DDA and/or the Regulatory Agreement shall be deemed to be a reference to the DDA and/or the Regulatory Agreement as modified by this Amendment. 2.2 Modification. Except as specifically modified hereby, the Agency Documents shall each remain unaffected and unchanged by reason of this Amendment. 2.3 Ratification. The Agency Documents are hereby ratified and affirmed by Developer and shall remain in full force and effect as modified hereby. 2.4 Binding Effect. This Amendment shall bind and benefit the heirs, successors, and assigns of Developer and Agency, respectively. 2.5 No Third Partv Rights. Nothing contained in this Amendment shall be construed as giving any person or entity, other than the parties hereto, any right, remedy or claim under, or with respect to, the Agency Documents. GARDA\Patty Leon\Wpdocs\JMM\staff report\amendment for PDRA-PDHA Budget.DOC 2.6 No Waiver. Developer acknowledges and agrees that if and to the extent that Agency has not heretofore required Developer to strictly comply with the covenants, agreements and obligations contained in the Agency Documents, such action or inaction shall not constitute a waiver of, or otherwise affect or prejudice Agency's present or future rights, remedies, benefits or powers under the Agency Documents in any manner, including the right to require performance of such covenants, agreements and obligations strictly in accordance with the terms and provisions of the Agency Documents. 2.7 Final Agreement. This Amendment constitutes the final expression and the entire and exclusive agreement of the parties hereto with respect to the subject matter hereof, and supersedes in all respects any and all other negotiations between the parties hereto, whether oral or written. 2.8 Conflict. If there is any conflict between the terms and conditions of this Amendment and the terms and conditions of the Agency Documents, the terms and conditions of this Amendment shall prevail. 2.9 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of California. 2.10 Severabilitv. If any court of competent jurisdiction determines any provision of this Amendment to be invalid, illegal or unenforceable, that provision shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable provision had never been a part hereof. 2.11 Amendment. No provision of this Amendment may be changed, discharged, supplemented, terminated or waived except in a writing executed by the parties hereto. 2.12 Reliance. In executing this Amendment, neither party has relied on any inducements, promises or representations made by the other party or its attorney, other than those set forth herein. 2.13 Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. [This Space Intentionally Left Blank; Signatures Begin On The Next Page] GARDATatty Leon\Wpdocs\JMMlstaff repoMamendment for PDRA-PDHA Budgel.DOC IN WITNESS WHEREOF, the parties hereto have entered into this Amendment to Disposition and Development Agreement as of the day and year first above written. DEVELOPER: PALM DESERT DEVELOPMENT COMPANY, a California corporation AGENCY: ATTEST: Rachelle D. Klassen, Secretary By: Name: Its: PALM DESERT REDEVELOPMENT AGENCY, a California public body, corporate and politic Robert A. Spiegel, Chairperson GARDA\Patty Leon\Wpdocs\JMMlstaff reportlamendment for PDRA-PDHA Budget.DOC EXHIBIT A (Legal Description) G:\RDA\Patty Leon\Wpdocs\JMM\staff repotamendment for PDRA-PDHA Budget.DOC EXHIBIT B OCCUPANCY STANDARDS (See Attached) G:1RDA\Patty Leon\Wpdocs\JMM\staff report\amendment for PDRA-PDNA Budget.DOC