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HomeMy WebLinkAboutRDA Min 1999-03-22 3-22-99 Seal Beach, California March 22, 1999 The Redevelopment Agency of the City of Seal Beach met in regular session at 6:46 p.m. with Chairman Campbell calling the meeting to order with the Salute to the Flag. I ROLL CALL Present: Chairman Campbell Agencymembers Doane, Snow, Yost Absent: Agencymember Boyd Also present: Mr. Till, Executive Director Mr. Barrow, City Attorney Mrs. Stoddard, Director of Administrative Services Mrs. Yeo, City Clerk/Secretary Agencymember Boyd, having been in the Administration Building, joined the meeting at 6:48 p.m. APPROVAL OF AGENDA Agencymember Yost requested to move Agency Comments before Public Comments. Doane moved, second by Yost, to approve the agenda as revised. I AYES: NOES: Boyd, Campbell, Doane, Snow, Yost None Motion carried AGENCY COMMENTS Agencymember Yost reported that he and the City Manager met with Mr. Hall, the new owner of the Trailer Park, about a week ago at which time Mr. Hall indicated he wanted to bring a rental increase before the Agency, to this point he has not. He mentioned that a number of Trailer Park residents have posed questions to him, he can respond to some, additional questions will be answered if they can be, otherwise they will be held until the meeting on Saturday, March 27th at 10:00 a.m. in the Park clubhouse for discussion between the new owners, the Park residents, and possibly the new Park manager. Agencymember Yost said in essence the new owner wanted to raise the rental amount for new people moving into the Park, it was indicated to him that the Covenants are in force, that is a document that controls the Trailer Park, and if that were his desire it would be necessary to bring the issue before the Redevelopment Agency. In response to some of the questions posed by Park residents, Agencymember Yost cited one as adequate notice relating to the sale of the Trailer park, the City Attorney has advised that there may be an issue with that, however that would be an issue between the Park residents and the new owners, not an issue that the Agency would be involved in, a second question was whether the organization set up in 1993 had provided a first right of refusal over the sale of the Trailer Park, to that the response was similar, there may be an issue, however again I 3-22-99 I the Agency would not be involved as that is not an issue that is covered by the Covenants, that could be litigated with the new owners, again, as to the issue of a rental increase, the owner was advised that it is believed the Covenants apply, some cost of living increase may be due yet it is specified in the Covenants as to what that would be and the process. It was verified that copies of the Covenants and Agreement for the Trailer Park may be obtained from the City Clerk. I PUBLIC COMMENTS Chairman Campbell declared Public Comments open. Mr. Bill Orton, Trailer Park resident since 1980, offered that in 1980 the Park was managed by Mrs. Dawson, owned by Bill Dawson, noted that Mr. Dawson was always respectful to him, even though he opposed motions that were brought to the Agency for rent increases and the reworking of the loan, pointing out that Mr. Dawson had difficulty coming to the City for rent increases because the Covenants make it difficult, they were established some twenty years ago by Agreement for the redevelopment of that area, this being part of the City's Housing Element to assure that Seal Beach has low and moderate income housing. He stated that the Covenant is in place until 2049, the Agreement, according to the City Manager and Agencymember Yost, is in place and protects the homeowners of the Park from arbitrary rental increases, as evidently has been suggested by the new owner. Mr. Orton said it may be that the new owner bought something that he did not realize what it was, yet the Trailer Park is a beautiful community of a hundred twenty-five homes, the Park has an operating agreement, he is heartened by the comments that the Agency is going to abide by the Covenants, he has full confidence that there will be fairness even if a rent increase is requested under the rules, he would have difficulty opposing a fair rent increase if it were brought before the Agency. He noted that in the twenty years he has resided in the Park his rent has increased just forty percent total, so long as the Agreement and Covenants are in place it is felt the residents are protected. Ms. Victoria Seaborne, Trailer Park resident, said since the new owners did not come to this meeting, yet they may come to the next meeting, how would the residents know what is forthcoming. Agencymember Yost responded that the agendas are posted, they are in the libraries, on the web page, or one may call the City Clerk to inquire about items on the Redevelopment Agency agenda. Mr. Gordon Shanks, Surf Place, said in looking at the audience there are a few persons present that have been involved with the Park for years, he too was involved as chairman of the Relocation Appeals Board, stated there are things that he does not have an understanding of the legality, one, if ownership changes now under Proposition 13 the property tax rises rapidly, if that is true, then under the Agreement for the Trailer Park that would allow a rent increase because the cost to the owner has risen. He said he was uncertain as to the claim of the older Park residents that they had a right of first refusal for purchase of the Park, it would seem that is paramount, suggesting that possibly the legal counsel that should be discussing this matter would be Mr. Parrington, the last he knew he was still the Agency's legal counsel for the I 3-22-99 Park, again stating that if the property taxes have increased upon the sale of the Park then it would seem there is no question that expenses have increased which affects what can be charged for rent, in that case everyones rent will increase. Mr. Shanks said the problem with this type of thing is that there is some sort of proprietary right for these people, an obligation to overlook, the Agency spent somewhere between one to two and a half million dollars to make this Park work, his feeling is that the attorney for the Trailer Park should be answering the questions, and personally did not necessarily agree that only the residents are responsible to look after their benefit, if there was a viable agreement made at a given time by the past owner, Mr. Dawson, that the resident's association had full rights of first refusal to purchase, it is then an obligation, it seems that once such obligation is taken on and the Agency expended tax payers money, then the Redevelopment Agency has the responsibility to look after the residents benefits and obligations, not the owners. Agencymember Yost said he understands that Mr. Parrington was retained because of a prior conflict of interest, his name has been passed along for the purpose of contacting him for background information, however, the attorney of record for the Agency and Park is Richards, Watson and Gershon. As to the Proposition 13 issue said he would seek an answer to that question, and with regard to the first right of refusal, offered that if it is not specifically part of the Covenant it may be something else, and as he understands from the organization that was set up in 1993 it is not necessarily something that the City would be involved in, agreed that there is a responsibility with regard to the Trailer Park, but there are limits, and said he will do his best to assure that the Covenants remain in place and that all aspects are covered. Mr. Shanks expressed again his feeling that once one takes on a responsibility it is there, once you use tax payer and HUD money the responsibility goes far beyond the normal City responsibility. As to an impact from increased property tax, the City Attorney advised he had no information at this point, it will be necessary to determine what type of property exchange occurred, confirmed that it is quite possible the taxes will increase, and offered to look into the issue. Agencymember Yost said he had told Mr. Hall that he was sorry that he bought a property that was encumbered, as it is by the Covenants. Mr. Paul Jeffers, Cottonwood Lane, said he has lived in the Park since before it was redeveloped. He mentioned that this is not the first time that an owner has said they are no longer restricted by the Covenants because they purchased the property, that was an issue with Mr. Dawson at one time, said he has received assurance in the past from the City that the term will go on until the expiration of the master lease, and requested a response from the City now that the Park residents are still covered by the Covenants. The City Attorney responded that that remains their position. He recalled that about five years ago there were two separate entities, there was a technical change of ownership, the attorney for Mr. Dawson claimed that the Covenants did not apply, his firm took the position that they did, that the Covenants run with the land, I I I 3-22-99 I thereafter the issue was dropped, however has evidently resurfaced again with this change of ownership. Mr. Jeffers agreed, said from his reading of the Covenants it is the 'site' under the master lease, the Covenants also state that the City is to check the records of the Park and report to the Coastal Commission once a year. Agencymember Yost noted that there was an audit of the Park last year and offered to go over that report with Mr. Jeffers. Mr. James Howard, Cottonwood Lane, said he had been interested in buying a trailer or prefab house to place on the lot at 24 Cottonwood, he then met with the office manager of the Park and a representative of what is thought to be the property management company, they wanted him to sign a lease agreement to pay $400 per month for the lot, however the previous tenant was charged $304, said he did not sign the agreement as he knew that.was not part of the Covenants, and he too requested that the monthly expenses of the Park be audited, not for just low or moderate eligibility. The Executive Director said there has been no request for rent increase since 1993, an audit for eligibility was done about a year ago. Agencymember Boyd said he would like a direction to staff to prepare a summary of the Covenant so that the Agency members can be more knowledgeable of its provisions, and be more aware of the impact on the Park residents of a potential rent increase. Mr. Steve Craig, Welcome Lane, said he too was heartened by the comments of the Agency, he had no idea there was such an Agreement in place, and since there has not been a rent increase for a period of time the concern had not occurred to him until having heard the stories of the new owner wanting a flat $500 per month from each resident. With regard to the Covenants, asked if his understanding is correct that there is no difference between long term and new tenants, are each guaranteed the same protection, also, reported having put a second story on his home and he had been instructed to send a notice to all others within one hundred feet seeking their approval, to that said his understanding is that the new owner wants to put in a new two story home at 24 Welcome Lane, it is understood he is making arrangements for the installation, yet notice has not been received as to that, and asked if he too is required to receive City approval. Agencymember Yost stated that general building issues are often heard before the Planning Commission, not the Redevelopment Agency, and offered that the owner would be subject to the same regulations as anyone else. Mr. Roger Gilliam, 113 Welcome Lane, said he wanted to point out that he is part of a third of the residents that not only own their homes but pay property taxes, in his case more than a thousand dollars a year. Mr. Jeffers noted that at the time of the last rent increase discussion it was understood that Mr. Dawson was selling long term leases, his understanding is that that can not be done as there is a State law whereby if thirty percent of the Park is leased the rent control is no longer valid, now that is being attempted again for new people to the Park, his understanding also is that the money brought into the Park is income and falls under the rental adjustment formula, the owner is allowed to bring in only so much money to the Park and in accordance with the schedule, that should be brought into accounting I I 3-22-99 along with the expenses. Councilmember Campbell pointed out that property taxes paid in the Trailer Park are for improvements to the land which is the building that sits on the land. There being no further speakers, Public Comments were closed. WAIVER OF FULL READING Boyd moved, second by Yost, to waive the reading in full of all resolutions and that consent to the waiver of reading shall be deemed to be given by all Agencymembers after reading of the title unless specific request is made at that time for the reading of such resolution. I AYES: NOES: Boyd, Campbell, Doane, Snow, Yost None Motion carried AGENCY ITEMS SETTLEMENT AGREEMENT - STULL vs BANK OF AMERICA The Director of Administrative Services presented the staff report, noted that the Agreement before the Agency outlines the settlement between the Bank of Ameriqa and various city, county and special districts, as stated in the report it is not possible at this time to provide an estimate of what the Agency may recover, the distribution is quite complicated, what is known is that the Settlement Agreement calls for $187,000,000 plus interest plus $200,000 to be distributed to I the cities, counties, and special agencies however the legal costs are yet to be determined and approved by various committees formed to decide these matters. She noted it will take some six to eight months to determine what recovery and damages the Redevelopment Agency may receive, basically, the participants in the litigation made debt service payments to the Bank of America between 1945 and 1995, in that period the Redevelopment Agency had two issues, the 1986 and 1991 Tax Allocation Bonds to which there was a debt service of approximately $900,000, not including the interest. The Director explained that after all claims are received the total debt service for all claimants will be used to calculate the percentage of each claimants debt service to the total, those percentages will be applied to the proceeds that have been set aside and stipulated in the settlement. Prediction as of last week was that this matter could take as long as a year to ~esolve, the State is involved, the City and County of San Francisco, various other cities and counties. Chairman Campbell noted recently receiving a brochure from the City Attorney's firm, Richards, Watson and Gershon, it stated that the law firm represented thirty-three other cities and the agencies represented by their firm will I be reimbursed for their attorney fees and will receive an additional $300,000 bonus for their contribution to the litigation, the bonus will be paid only to those agencies who were represented by Richards, Watson and Gershon and will be in addition to each agency's share of the total settlement based upon the agency's past debt service. The City Attorney responded that the bonus will be a portion of the $300,000 plus the attorney fees, that in addition to the settlement of whatever the Bank of America withheld. It was noted that 3-22-99 / 4-26-99 this same item will be considered as part of the City Council agenda. Boyd moved, second by Doane, to approve the formal Settlement Agreement with the Bank of America to disburse funds to the City and Redevelopment Agency held through the Corporate Trust Department. I AYES: NOES: Boyd, Campbell, Doane, Snow, Yost None Motion carried APPROVAL OF MINUTES Yost moved, second by Boyd, to approve the minutes of the January 25, 1999 regular Redevelopment Agency meeting. AYES: NOES: Boyd, Campbell, Doane, Snow, Yost None Motion carried ADJOURNMENT It was the order of the Chair, with unanimous consent of the Agency, to adjourn the meeting at 7:21 p.m. '-A Chairman I Seal Beach, California April 26, 1999 The Redevelopment Agency of the City of Seal Beach met in regular session at 6:48 p.m. with Chairman Campbell calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Chairman Campbell Agencymembers Boyd, Doane, Snow, Yost Absent: None I Also present: Mr. Till, Executive Director Mr. Barrow, City Attorney Mrs. Yeo, City Clerk/Secretary APPROVAL OF AGENDA Boyd moved, second by Snow, to approve the order of the agenda as presented.