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HomeMy WebLinkAboutRDA Min 2000-02-28 2-14-00 / 2-28-00 I cautious optimism. with regard to a question relating to the County bankruptcy, the City Attorney explained that the City had an investment in the County pool of about $2 million, approximately ninety-four percent of that amount will be recovered, and again, the Agency had no investment yet the recovery is basically what had been withheld. ADJOURNMENT It was the order of the Chair, with consent of the Agency, to adjourn the meeting at 6:52 p.m. 'f.~~~ Seal Beach, California February 28, 2000 I The Redevelopment Agency of the City of Seal Beach met in regular session at 6:45 p.m. with Chairman Campbell calling the meeting to order. ROLL CALL Present: Chairman Campbell Agencymembers Boyd, Doane, Snow, Yost Absent: None Also present: Mr. Till, Executive Director Mr. Barrow, City Attorney Ms. Yeo, City Clerk APPROVAL OF AGENDA Boyd moved, second by Doane, to approve the order of the agenda as presented. I AYES: NOES: Boyd, Campbell, Doane, Snow, Yost None Motion carried PUBLIC COMMENTS Chairman Campbell declared Public Comments to be open. Mr. Gordon Shanks, Surf Place, said given the assumption that the public would not be commenting on the Trailer Park Acquisition item, he noted that the Trailer Park Association has offered $5,000 and the Redevelopment Agency will fund $10,000 from the LOW/Moderate Income Housing Fund to retain consultants to evaluate the infrastructure, etc. of the Park, 2-28-00 recollection of his last inquiry was that the tax increment funding for the low/moderate housing set-aside was an approximate three-quarters of a million, and inquired as to the current amount. The Executive Director estimated $1.6 million. To that Mr. Shanks said since that money is designated to assist low and moderate income persons, the Trailer Park being an outstanding example of low/moderate income housing in the City, it would seem that the Agency could fund the entire $15,000 rather than require the Park Association to contribute the $5,000. Ms. Sue Corbin, Seal Beach, indicated she had no objection to using this money to help the Trailer Park, however said there are other areas of the community that this set-aside should help, there have been recent cases of people being destitute yet help has been refused, the Agency is keeping the money in a bank account for collateral which is wrong, it exists to help a certain class of people, the money needs to be used for what it is meant and equally. Chairman Campbell noted that the Trailer Park is within the Redevelopment Agency area, that is the reason these funds can be used there, other areas are not within the Agency boundaries. The City Attorney agreed, also clarified that there are some instances where the Agency can use its funds for affordable housing outside the project area. Mr. Boychuck, Trailer Park resident, was informed that he could address the Agency during consideration of the Trailer Park item. There being no further comments, Chairman Campbell declared Public Comments closed. I WAIVER OF FULL READING Boyd moved, second by Doane, to waive the reading in full of all resolutions and that consent to the waiver of reading 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 TRAILER PARK ACQUISITION UPDATE The Executive Director presented the staff report and request that the Agency authorize expenditure of up to $10,000 for due diligence services which will be payable in the event the bond issue is successful. He said that considerable progress has been made in assisting the Trailer Park Tenants Association in evaluating the possibility of acquiring the Trailer Park from the current owner, Richard Hall and Associates. The Director reported that Ms. Patty Gorczyca, the financial advisor, has assisted in putting together a team of potential underwriters, working at present on a contingency basis, to test whether it is feasible for the residents of the Park to facilitate acquisition of the Park, essentially investing in their own future security. To do so would require that a non-profit housing corporation become the purchaser under a bond financing arrangement, only municipalities can issue bonds on behalf of such non-profit, therefore the City is basically the facilitator in trying to assess whether the level of rent that would be acceptable to the tenants could reach a point where the Park owner would I 2-28-00 I find it acceptable and mutually beneficial to him to sell the Park to the non-profit housing corporation. The Director noted that the financial advisor is also acting as advisor to the City for a possible sewer bond issue that will be brought to the Council sometime in the spring, assisting in assembling a consulting team to work with City staff and the consulting engineer, the costs on a contingency basis, and with regard to the Trailer Park they will evaluate the condition of the Trailer Park as to infrastructure and what type of capital expenses are likely in the future in that the bond investors would need to know that there is some reasonable assurance that the Park will be self-sustaining under the rents imposed through this arrangement. The Director explained that there was an attempt to purchase the Park in the 1980's however that did not succeed, over the years conditions have changed significantly, there has been legislation that makes acquisition of the Park from a private interest to a not-for-profit entity viable now where it was not at that time, the tenants and the Park owner are aware of the analysis that has been on-going for several months, and it is understood that at this point both are at least receptive to receiving the price and terms to determine if it could be mutually beneficial. The Director stated that neither the Agency or City has made any commitment of funds or entered into any binding contracts with underwriters, bond counsel, disclosure counselor other consultants on this matter, services to date are on a contingency basis, then, if the transaction does occur the non-profit corporation would be required, on behalf of the residents, to come to terms with the current owner of the Park, if all of that occurs, when the bonds are issued all of the costs for the underwriters, bond counsel, etc., as well as the initial costs of $5,000 and $10,000, would become part of the bond issue payable over a twenty-five year period, the specific terms of that are currently being looked at. He mentioned that there has been considerable anxiety and uncertainty on the part of the residents since the Park was purchased a little over a year ago, the Agency went through the rent increase process, there is concern with the future of the Park, and the only way to address the question of whether the tenants or a non-profit organization could credibly make an offer to the Park owner is to test it on the open market, which is what is being done at no cost to the Agency or the tenants at this time, rather, folded into the bonds if issued, however, if the non-profit did not come to terms with the seller then these costs would be payable, currently estimated at a little less than $13,000. He noted too that there are expenses associated with legal and staff services, and the process as a whole, progress has been made in the interest of the Park residents. To the question as to why the Park residents were asked to participate financially given that the Agency does have funds set aside for this purpose it was said it is primarily to develop a partnership and commitment to the process, also, although the Agency has accumulated low and moderate housing funds they are being spent throughout the City in the form of the housing improvement program through rehabilitation grants and low interest loans as well as a commitment to the first-time home I I 2-28-00 buyers program to meet the requirements of the City to provide new low to moderate income housing, more than $1 million has been earmarked for that purpose, about a half million is designated for the housing assistance program, the intent of the contribution by the Park residents was not to take the limited funds of the Resident Association rather to pool resources and formulate a partnership. The Director recommended approval of the $10,000 expenditure as the Agency's share of expenses. I Mr. Frank Boychuck, Trailer Park resident, confirmed that the City has allowed the residents of the Park to participate in every step of this procedure including direct contribution to selecting the non-profit agency, there are three contenders that are being looked at to determine which would best fit into the culture of the Trailer Park as far as new owners go, he has been assigned the task of obtaining references from other trailer parks as well as participating in meetings at the City with the various underwriters and consultants. He thanked the City Manager for his assistance in this effort. Mr. Boychuck said the Park does want to show their commitment, it is felt this is a difficult situation that the residents want to get out of, let the people get back to their lives, feel secure, and have their property and property values maintained, this is a serious situation, since the residents formed there have been many ways tried to raise money such as bake sales, rummage sales, a golf tournament is forthcoming, over the term of the year approximately $15,000 has been raised which is wonderful given the financial condition of some of the Park residents. He said he understands what the Director said with regard to a partnership, it is desirable that that be maintained, yet at the same time about ninety-eight percent of the money raised has gone to legal fees in that there are a number of areas to which the Covenant does not apply, the rules and regulations being one, the fact that a new unit can not be brought in, units can not be sold, the travel trailers, which constitutes about eighty percent of the Park, are in jeopardy, the owner stating that they are valueless, the Covenant covers none of this. Mr. Boychuck noted comments over the past months about the income nature of the Park, to that, at a meeting of the Residents Association the people were requested to fill out an 'F' form, basically an income statement, issued by Sacramento to help people on their IMPROV, that being an agency to help trailer park residents with the purchase of a Park however they have to qualify, about eighty percent or more of the residents contributed their information, the forms were sent directly to the Park attorney, they are confidential, the residents have not been privy to them, the attorney summarized the information and it can be seen that contrary to what has been said in the past, about ninety-four percent of the eighty percent fall into the low to moderate income level and thirty-six percent fall into the very low income level, that a critical number because in order to get the non-profit to qualify for the tax exempt bonds there needs to be at least twenty percent in the low level. He mentioned that there are only twelve owners in the Park that rent their unit, they were not included. Mr. I I 2-28-00 Boychuck, on behalf of the Park residents, offered a check of $2,500 towards the effort of purchasing the Park, and thanked all for helping with this cause. I With regard to selection of the non-profit, Chairman Campbell proposed a sub-committee of the Agency to work with Mr. Boychuck, possibly Agencymember Yost and herself, and so moved. The Chairman also proposed that the Agency pay the full $15,000. Agencymember Yost seconded the motion. Agencymember Boyd asked if there has been any recent communication with the Park owner or his representatives, his inquiry because it appears to be a consensus that this transaction take place as quickly as possible, timing is critical, ninety days is likely the window of opportunity. In response to the inquiry of Agencymember Boyd, the Executive Director confirmed that the Park owner has said they would consider an offer. Agencymember Boyd indicated support for the motion and that the amount for due diligence be increased to $20,000, if the bonds are approved the amount will be wrapped into the issue, explaining that this is not a general obligation bond rather a productivity bond whereby rather than paying rent to someone it is paying for the ownership of the Park. Agencymember Yost asked if a sub- committee would be helpful to the selection of the non- profit, to that the Director said it could be, thus far interviews have been conducted with three of the four potential firms, for a sub-committee to benefit from that it may be desirous to redo those interviews. The Chairman said the intent is to participate in the meetings with Mr. Boychuck and other Park residents in the selection of the non-profit, and Agencymember Boyd stated his support for a sub-committee yet it should not slow the process, and if need be the Agency could meet prior to each Council meeting to expedite this process. I AYES: NOES: ABSTAIN: Boyd, Campbell, Doane, Yost None Snow Motion carried Campbell moved, second by Boyd, to increase the amount of due diligence on behalf of the Agency to $20,000. AYES: NOES: Boyd, Campbell, Doane, Snow, Yost None Motion carried I Agencymember Boyd inquired as to the time frame for selection of the non-profit, bond counsel, etc. The Director responded that the schedule would need to be reviewed, believed to be sixty days. Ms. Gorczyca, the financial advisor, stated that at the point of making the determination of the not-for- profit the due diligence consultants would commence immediately given the Agency actions at this meeting, it will take between one to ten months to complete their process, once the not-for-profit is selected they will be paralleling, the plan is that at that point the process be in a position to generate numbers to commence negotiations with the Park owner in about sixty days, once a price is agreed to then the structuring of the financing can commence and be ready within 2-28-00 I 3-27-00 thirty to sixty days. Ms. Gorczyca pointed out that the most difficult of the process will be reaching a price agreement with the property owner, negotiations as to price for trailer park acquisition often takes considerable time. APPROVAL OF MINUTES Boyd moved, second by Campbell, to approve the minutes of the regular meeting of January 24, 2000. I AYES: NOES: ABSTAIN: Boyd, Campbell, Doane, Snow None Yost Motion carried Boyd moved, second by Doane, to approve the minutes of the special meeting of February 14, 2000. AYES: NOES: Boyd, Campbell, Doane, Snow, Yost None Motion carried AGENCY COMMENTS Agencymember Boyd requested an update relating to the housing assistance program that was authorized with Civic Stone. ADJOURNMENT It was the order of the Chair, with consent of the Agencymembers, to adjourn the meeting at 7:20 p.m. 'f~~~ I ~'Clerk/secretar Seal Beach, California March 27, 2000 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. ROLL CALL Present: Chairman Campbell Agencymembers Boyd, Doane, Snow, Yost I Absent: None Also present: Mr. Till, Executive Director Mr. Barrow, City Attorney Ms. Yeo, City Clerk ..