HomeMy WebLinkAboutAcquisitions - Falcon Crest and Desert RosePALM DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: AUTHORIZE THE EXECUTIVE DIRECTOR TO INITIATE
ACQUISITIONS IN THE DEVELOPMENTS OF FALCON CREST
AND DESERT ROSE IN THE EVENT THE AGENCY IS ALLOWED
TO CONTINUE SUCH OPERATIONS FROM JULY 1, 2011
THROUGH AUGUST 25, 2011 IN ANTICIPATION OF THE
EXPIRATION OF THE FIRST RIGHT OF REFUSAL PERIOD
SUBMITTED BY: Janet M. Moore, Director of Housing
DATE: July 14, 2011
Recommendation
By Minute Motion,
1) Authorize the Executive Director to initiate acquisitions in the
developments of Falcon Crest and Desert Rose, in the event the
Agency is allowed to continue such actions either by judicial "stay" or
adoption of an Agency "Continuance Ordinance", from July 1, 2011
through August 25, 2011 in anticipation of the expiration of the first
right of refusal period; and
2) Authorize the Executive Director to execute any documents
necessary to initiate the acquisitions.
Executive Summary
The Agency has the first right of refusal to purchase homes that may become available in
the developments of Falcon Crest and Desert Rose. These timeframes vary from 45 to 60
days. During the summer there are occasions when an owner decides to sell and the
Agency Board does not have another scheduled meeting prior to the expiration of these
periods. Although the enactment ofABX126 prohibits the Agency from entering into
any new agreements, staff is optimistically expecting the courts to grant a stay and
we can continue to operate until a decision is made. In light of this, staff requests
that the Executive Director be authorized to initiate acquisitions during that time.
Background
The current economy has caused owners in both developments to decide to sell their
homes. The reasons range from job loss, change in composition of household, change in
the desire to participate in the program, foreclosure, and moving out of state.
Staff Report
Authorization for Executive Director to Initiate
Desert Rose and Falcon Crest Acquisitions
July 14, 2011
Page 2 of 2
With every Notice of Intent to Sell from an owner, Agency staff attempts to coordinate a
direct sale from the owner to a new purchaser from a waitlist. Currently there are no
income eligible households on the list for Falcon Crest and only a few for Desert Rose.
Because of this, the Agency has had to purchase back most of the houses that are coming
available for sale.
If the Agency does not exercise its option, the house may be sold on the open market and
while the Agency would `share' equity in the sale, the Agency would lose its affordability
covenant on that home and any additional investment over the cost of construction.
Staff therefore recommends acquiring homes that become available during the
authorization period if the Agency is allowed to continue to operate either by a court issued
"stay or adoption of a Continuance Ordinance". When the Agency does acquire any
homes that become available, in order to re -sell them when eligible buyers are identified for
the inventory available the Agency must hold a duly noticed public hearing.
Fiscal Analysis
The fiscal impact to the Agency to acquire homes that become available is the
maintenance, homeowner's association dues, acquisition and carry costs. If the homes are
not acquired the potential impact is the loss of affordability covenants and construction
costs.
Submitted by: Department Head:
G (%
Oi—an,6tM. Moor , Director of Housing
Approval:
-� 1100
Paul S. O O_ D�
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G
ti McCarthy, AC F.edevelopment
of Finance n M. Wohlmuth, Executive Director
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