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HomeMy WebLinkAboutRDA Min 2002-05-28 4-22-02 / 5-28-02 THE CITY OF SEAL BEACH ADOPTING AN IMPLEMENTATION PLAN FOR THE RIVERFRONT REDEVELOPMENT PROJECT AND THE SURFSIDE REDEVELOPMENT PROJECT." Agencymember Campbell seconded the motion. By unanimous consent, full reading of Resolution Number 02-2 was waived. AYES: NOES: ABSENT: Boyd, Campbell, Larson, Yost None Doane Motion carried I Chairman Yost mentioned that in 2002 the conflict of interest laws changed and have gone to a raw distance, he has been informed by the City Attorney that he is free to vote on this matter in that it is a citywide project however when specifics come back with regards to the Trailer Park he will not be able to participate in a public way. AGENCY COMMENTS Agencymember Larson said he can share the concern of Agencymember Campbell with regard to the State telling the City what to do, he goes back to them taking away the proposed golf course and giving back a swamp on the Hellman property. ADJOURNMENT It was the order of the Chair, with consent of the Council, to adjourn the meeting at 9:25 p.m. Chairma~ I Seal Beach, California May 28, 2002 The Redevelopment Agency of the City of Seal Beach met in regular session at 6:45 p.m. with Chairman Yost calling the meeting to order with the Salute to the Flag. ROLL CALL Present: I Chairman Yost Agencymembers Antos, Campbell, Doane, Larson Absent: None Also present: Mr. Bahorski, Executive Director Mr. Pieper, Assistant City Attorney 5-28-02 Mr. Whittenberg, Director of Development Services Ms. Yeo, City Clerk I APPROVAL OF AGENDA Campbell moved, second by Antos, to approve the order of the agenda as presented. AYES: NOES: Antos, Campbell, Doane, Larson, Yost None Motion carried I PUBLIC COMMENTS Chairman Yost declared the public comment period to be open. Mr. Jim Caviola, Seal Beach, stated his opposition to any further actions taken by the Agency, he,wants it abolished, he is a firm believer that the Agency is causing trouble, will cause more trouble in the future, it is felt it is costing the citizens money, he will oppose anything that goes outside the Redevelopment Agency territory. Mr. Caviola objected to the length of the staff reports. with regard to the Agency loan package, Mr. Caviola stated that the last time it was offered there were only five persons took advantage of it, the cost to the taxpayers for attorneys and planning people to develop that proposal had to have been enormous. He made reference to 1998 where it was said that the City wanted to improve aging homes existing within the community, the proposal is to make loans of up to $50,000 available on tear down homes that are currently selling for over $500,000, people do not have any interest is this proposed program. He again stated his opinion that the Agency should be abolished, the money should be given to the County, the normal tax system should be put in order, let the County assume the debt, a consultant is not needed, just go and talk to the County tax collector, they will be happy to take the cashflow and payoff the debt, get rid of the Agency, and take what the City would normally receive in property tax under normal circumstances which is going to increase significantly in the next ten years as seventy-seven percent of the wealth is in the hands of people over sixty- eight years old, any actuarial or insurance person can verify that, these people will pass away and the wealth will be transferred, Proposition 13 will have virtually no affect other than the one percent because the taxes are going to increase to market value. Mr. Caviola claimed that the Agency is just incurring debt, the lengthy staff reports are costing the citizens money, it is said that the Trailer Park was purchased by the tenants, it was not, it is not owned by those who live there, it is owned by LINC which he claimed'is a very suspect group. Mr. Alan Gouge, said as a resident of the Trailer Park for over twenty years and on behalf of over eighty percent of the residents of the Park, they agree that the plan for resident ownership of the Park is a great concept and greatly appreciated, and they would like to get it right. The Redevelopment Agency staff report of this date states that the conversion of the Seal Beach Trailer Park to tenant ownership has been completed, the residents trusted the City with assistance of the purchase of the Park but I 5-28-02 despite the written statement and numerous promises there is nothing in writing to clarify the so called tenant ownership, the residents have asked the City for assistance on a compromise to the issue yet polite and proper requests of eighty percent of the residents have been ignored, clarification is needed and it needs to be right. Mr. Gouge I said today they ask the City to endorse and promote the amendments that the residents attorney has copied to the City Manager, let it be assumed that a lack of written commitment to what was promised is only an oversight and it can be trusted that the City Council are the responsible and caring people for whom the people voted, the people depend upon Council integrity to do what is right. A local newspaper quoted a member of the Council with the statement that the Park sale to the tenants had been a big accomplishment, however he said the Park tenants have nothing in writing to verify ownership or control, the rent, which was restricted to seven percent over a six year period, 1993 to 1999, has now been increased one hundred percent in three years which they were told was to pay the Park payments, morale in the Park is very low as the policy of the Council support people is to misrepresent the truth and attempt to divide and conquer, the tenants can not and will not give up. It was previously said that the residents were purchasing the Park from Richard Hall, it was said this was a fantastic deal, a month later it was stated that the residents would get their equity back, a year later at a meeting it was said the I residents already owned the Park, at that time the request was if that could be put in writing, the response was it was uncertain, it was then said that since the person who made that statement was upset the City would no longer do anything to help the Trailer Park residents, it is hoped that is not true. Mr. Gouge offered that in April of this year Mr. Johnson of LINC Housing said he never told anyone that the residents would own or control the Park, to that there was shock on the part of a member of the Council and it was said they would look into it, it is hoped they have, another member of the Council also said that the residents would own the Park, that the rents would go away and the residents could eventually create their own rent structure, when the Council was asked to help obtain clarification a townhall meeting was called in the Park, it was stated. that the members would return each week until resolved, nothing has happened, it was also suggested that the residents should voice their anger at another member of the Council for working with the then Park seller, there are two members of the Council who continue to support Mr. Boychuck and Mr. Clark with the full knowledge of their refusal to share I records with the residents which is a requirement of the bylaws, that is unprofessional and unethical. Mr. Gouge again asked for help with what has been said, conversion of the Trailer Park to tenant ownership has been completed, that is what is said in the report, asked again that the Agency endorse and promote the request for the amendment that the tenants attorney has submitted to the City Manager and put the matter to rest. Mr. Cline Dominguez, Huntington Beach, stated he was pleased to read the article with regard to abolishing the Redevelopment Agency, he lost his home because 5-28-02 I of an Agency, almost every project, past and present, has been a financial disaster, they have lost great amounts of money, in the latest project they anticipate giving the developer about $24 million with a $9 million return in twenty-five years, a terrible investment, agencies continue to receive tax increment then they can in turn borrow more money, they do not care if a project is good or bad, the only people who benefit from redevelopment are developers, those who sell the bonds, and attorneys, the taxpayer realizes nothing, financial accounting is difficult to understand, there is never a accurate answer as to how much money will be made. Mr. Dominguez said if there is thought of doing away with redevelopment, something that does not work, it would do Orange County a favor. Ms. Sue Corbin, Seal Beach, submitted a motion from the floor to allow the public to speak on agenda items "B, C, and D", the response of the Chair was that will be at the discretion of the newly selected Chairperson. Ms. Corbin stated that it was not the former Councilman that gave records to the prior owner of the Trailer Park, it was legal counsel that provided a report from an outside attorney that revealed that the Covenant was not enforceable, therefore as this issue moves towards the Grand Jury claimed it would be a conflict of interest for legal counsel to represent the City, that is how conflict of interest is defined. She claimed that the Agency was to have monitored the federal money being used for the Park over the years, that was a third cause of action in the lawsuit brought by Mr. Hall, the City did not even answer the lawsuit, now the Agency wants to use another $l million as this moves towards the Grand Jury for prosecution, possibly of the Agency members, it would be foolish to try to manipulate the Trailer Park boards, people, or try to represent the public, the Agency is putting egos before reality. Ms. Joyce Parque, 6th Street, requested that the Agency service no more debt for the Redevelopment Agency until some of the current matters are cleared up. She made reference to the staff responses to issues raised by the public, noted the statement that the units in the Park have no bearing on the issue of the City's obligation to provide new affordable units outside the Park, affordable housing that exists within the Trailer Park or anywhere else in the City does not provide any credit for meeting identified needs within the Housing Element, and made further reference to the Implementation Plan 2000/2005, the section relating to replacement requirements states 'that certain low and moderate income units destroyed or removed as part of a redevelopment project must be replaced with an affordable unit', another section relating to existing affordable housing production requirements states that 'the limited residential development in the Surfside project Area has generated a small affordable housing production requirement, this requirement can be met by the one hundred deed restricted units in the Seal Beach Trailer Park located in the Riverfront Project Area, these units can be counted on a two for one basis in the Surfside Project Area for a total of fifty units which would more than offset the requirements generated by the limited residential development', to that she stated that the City gave away twenty low income units, I I 5-28-02 the report says it does not matter. Ms. parque noted that the Plan also states that five percent of the housing setaside funds must be expended on housing that is available to families with children. She said again that no further monies can be spent until some of these issues are cleared up, not too many families could live in the smaller trailers, twenty affordable units have been taken away, so where are they going to go, her suggestion is that they go in the area of the community of each member of the Council, not just in Old Town, and as shown on the internet LINC Housing owns the Seal Beach Trailer Park. Ms. Karen Tarascio, Trailer Park resident, made reference to the agenda documents, one being the Seal Beach Trailer Park Response to Issues Raised by the Public in which it is said that 'the Covenant provisions have been modified as indicated above in accordance with the fiscal structuring of the acquisition of the Seal Beach Trailer Park by a non-profit housing corporation,' a second document states that 'conversion of the Park to tenant ownership was completed in December, 2000, she is confused as to the interpretation, does LINC own the Park or do the tenants own the Park, and requested clarification. With regard to discussion of the expenditure of low and moderate housing funds to upgrade housing in the Park she stated her opinion that that is a good idea, to that she offered photos of much of the dilapidated housing in the Trailer Park, to an earlier comment that $50,000 does not represent much buying power in this City, Ms. Tarascio said for those who occupy this type of housing it can buy a new home that would be in accordance with health and safety standards which is something that the Park is mandated to operate under, California Mobile Home Law, therefore there are a number of violations of that Law in the Park today. Ms. Tarascio mentioned that when the Park was created many of the homes that are in need of replacing are in the green belt area and the lots are too small to accommodate what today is a manufactured home, therefore to upgrade the housing one would have to do customized homes. with regard to LINC Housing being a management firm where the residents could have any dialog, that has not turned out to be reality, the Park is still waiting to see the improvements identified in the Physical Needs Report that was done prior to the transfer of the property from Hall to LINC and whereby $100,000 was earmarked for those improvements, there were at least ten items listed in the Needs Category that were to be done within one year, she reported having a letter from Hunter Johnson that stated there was no date requirement for the expenditure of the $100,000, also a newsletter circulated through the Trailer Park made reference to the City repairing its pump station therefore the Park can not have the repairs as promised with the possibility of a delay of up to eighteen months, which is unacceptable. Ms. Trascio said they would like to request that things be slowed down until the situation with the former member of the Council is clarified before proceeding further. Mr. Paul Jeffers, Trailer Park, expressed appreciation for the City providing the reports relating to the financing of the Park, that clarified a number of issues, he now understands the setaside loan which is being administered by an outside firm, he now sees that I I I 5-28-02 I the subsidies are for twelve rather than three years yet there is concern as to what will happen after the twelve years. Mr. Jeffers said another concern is the way LINC Housing is operating, Mr. Boychuck is representing the Trailer Park yet he was voted out of office last August as well as Mr. Glen Clark who has now been voted out of office yet both sit on the Board, another concern lies with the meetings of the Seal Beach Affordable Housing Committee, Hunter Johnson was at the meeting over a month ago yet would not let the attorney representing the residents attend after the attorney had requested to attend at least ten days prior, nor would he allow the meeting to be recorded, then at the meeting in this facility he allowed Mr. Clark to record the meeting, there are no set agenda or rules when these meetings are held. He mentioned that in April there was a meeting of the Affordable Housing Corporation, which LINC is setting up, at which the people were told that LINC will hold the title to the land of the Seal Beach Trailer Park but Seal Beach Affordable Housing will hold the title eventually and that the seats on the Board would be shared, however before that meeting Hunter Johnson had written a letter to the residents stating that Seal Beach Affordable Housing Corporation was up and running, yet the attorney for the residents could not find it on file with the Secretary of State, Mr. Johnson was informed of that and in turn stated they were using a different corporation while waiting to get the Seal Beach Affordable Housing Corporation in place, a request of Mr. Johnson has been made to tell the residents what corporation he was using which he has thus far refused to answer. Mr. Jeffers stated further that it has just been learned that they could not find the Corporation filing with the State as it was listed as LINC Seal Beach Affordable Housing Corporation, and it was Mr. Johnson who personally set up the Seal Beach Affordable Housing Corporation before Richard Hall ever bought the Park, that was November, 1997, it has also been found that Mr. Hall, Mr. Johnson, and Mr. Gibbs were working on another trailer park purchase at the same time, which leaves the goal of LINC Housing questionable at least, it is now known why Mr. Johnson included ownership or control of the Board of the Seal Beach Affordable Housing Corporation as one of several topics that were not allowed to be discussed at the meeting in April, if someone did try to discuss those issues the people were told he would cancel the meeting. Mr. Jeffers concluded that Mr. Johnson was given the title to the land at no cost and censors the residents while others who misled the residents to believe that they were buying the Park, ignored the questions of the residents and quietly observed, LINC was the rescuer, the residents are paying for LINC to own the Park that the residents were told they would own, the rents are up one hundred percent, the people were given a false thirty-four year lease that the attorneys say is worthless, help is needed to resolve some of these problems. Mr. Jeff McMorrow, Trailer Park resident and attorney in Long Beach, said his comments relate to corruption and vindication. He mentioned that the City has heard various citings of the facts involving the purchase of the Park and ownership, there is no reason to again reflect on those, yet a struggle continues and that is the reason I I 5-28-02 this issue will not go away. He said corruption is one of those vague concepts that is known when it is happening, it can be felt, it is believed that the SBAHC and the members on that Board pretty much reflect the situation, there are two persons serving on that Board that have been voted out of prior offices, there are a couple of Redevelopment Agency members, the last indication he got from them was that the City would not be held hostage, that the residents must approve the MPROP funding from Sacramento, and based on that the new loan agreement reflects that certain monies will not be released until the MPROP money is available, this has ramifications that are shocking to him, it is felt the residents exercised constitutional rights by not approving the MPROP funding until the present situation reflects the understanding of what was promised. Mr. McMorrow stated he was pleased to see so many people, many of whom are taking some chances to make this deal reflect what was promised, he has seen their names as well as his being slandered, liabled, denounced, the Park is presently not a happy place to live. Mr. McMorrow said he took it upon himself in early March to file a demand on the City, he received a rapid response two days later basically saying that his claim was late as defined by the Tort Claims Act of the Government Code, his feeling was that the language falls a bit short of the statutes as he reads them for rejection, what is obvious is that there are theories of liability that he does not believe were adequately considered. He said it has come down to what he had been afraid would happen, there is now no possible recourse, there was a hope by many people for negotiations short of court action could resolve the conflict as it sits, but it does not appear that will happen now, many people are unhappy, therefore this is his way of saying that in the next couple of months a complaint will be filed against the Seal Beach Redevelopment Agency, LINC Housing the title holder of record of the Park, and the former Board and their attorneys of record. There being no further comments, Chairman Yost declared Public Comments to be closed. I I AGENCY REORGANIZATION SELECTION OF CHAIRMAN Chairman Yost nominated Mrs. Campbell as Chairman for year 2002/2003. Agencymember Larson seconded the motion. No other nominations were made. AYES: NOES: Antos, Campbell, Doane, Larson, Yost None Motion carried Chairman Campbell assumed the conduct of the meeting. I SELECTION OF VICE CHAIRMAN Agencymember Doane nominated Mr. Antos as the Vice Chairman for year 2002/2003. Agencymember Yost seconded the motion. AYES: NOES: Antos, Campbell, Doane, Larson, Yost None Motion carried 5-28-02 I RESOLUTION NUMBER 02-3 - CONSULTANT SERVICES - DISSOLUTION OF REDEVELOPMENT AGENCY - BUDGET AMENDMENT 28 The Director of Development Services noted that the report presented by staff is the result of a request to bring back to the Agency suggestions as to how to look at dissolving the Redevelopment Agency. He reported that Requests for Proposals were distributed, two proposals were submitted, also a letter from a firm that received a proposal indicating that unless the City was willing to take on the obligations of the Agency they did not see any reason for the City to even consider such an action therefore did not submit a proposal, that letter and both proposals provided with the agenda report. The Director mentioned that interviews were conducted with both firms, based thereon they were requested to submit a revised letter proposal that focused more on the issues of getting to the point of whether or not the City wanted to proceed to formal hearings to consider dissolving the Agency, should that be the determination a number of additional, more detailed studies will be required to take such action, both firms have sent back proposals for the limited scope of work that outlines what basic actions would be necessary to dissolve the Agency, the obligations of the Agency and how those obligations would be resolved, as well as the issue of what will happen to the assets that are owned by the Agency, properties, leases, etc. The Director noted that representatives of both firms were present, it is the opinion of staff that either firm is qualified to do the work, both have a clear understanding of Redevelopment Law, and although both indicated this type of action is not one that they have a number of requests to consider it is something that they feel they can deal with. The cost of the first phase of services are $11,500.00 for the firm of Keyser Marston Associates, Inc., and $17,500.00 for A. C. Lazzaretto & Associates, should the Agency determine to retain one of these firms a Resolution has also been prepared to amend the Agency consultant budget to reflect a cost amount of up to $25,000.00, and noted that the interview panel consisted of the City Manager, City Attorney, and Director of Development Services. I I In response to a question of Agency, staff confirmed that it is felt that both firms have the expertise to handle this type of request. Agencymember Antos noted that a suggestion was heard earlier that the City check with the County to see if they would be willing to assume the obligation of debt of the Agency, and should the Agency take an action to hire one of the consulting firms, he asked if it would be possible for the City Manager or City Attorney to check on that with the County as an alternative. Agencymember Yost said he too thought that was an interesting suggestion, it could be looked into. The Director said he felt certain those issues could be addressed with the County, it needs to be kept in mind however that Redevelopment Agency actions are governed by State law and there needs to be certainty that those provisions are complied with. Chairman Campbell mentioned that prior to the last meeting she met with the Finance Administrator to obtain some bottom line facts, the City has an assessed valuation of $2.6 billion, it receives a little 5-28-02 over $2.8 million in regular property taxes, that could be higher however there:is a large percentage of pre-Proposition 13 residences, about I thirty to thirty-five percent, which are not going away, the situation is that the second generation is moving back to the parents home, living there and taking advantage of the property tax benefits by being placed on the I deed and the parents 'have moved to Leisure World with the second generation paying for the new residence. The City also received $1.38 million from the Riverfront Project Area, that is twenty-seven!percent of the property tax received, the City can not afford to lose that money, the key issue is that those properties are in the Redevelopment Agency and it takes about $740,000ito $750,000 per year to service the debt, the remainder of the tax increment is money that can be used on other projects, given that this is a City that is in need of recurring revenues that is important. She noted that , Redevelopment funds in past have gone to build the Mary Wilson Library, bought land for the Public Works Yard, and about to build a pump station behind the Trailer Park which will keep Old Town ,from flooding. As a point of information, there are three libr~ries in the City, one in Leisure World where when the library system was in financial difficulty Leisure World purchased it from the County, there is the Mary Wilson Library in Ola Town and the Rossmoor/Los Alamitos Library in the Rossmoor Shopping Center yet technically in Seal Beach, the people of College Park East use the Rossmoor/Los Alamito~ Library yet the CPE property taxes do I not go to service that library rather the Mary Wilson Library, to that she inquired of the Orange County librarian what would happen if the CPE taxes were to go to the library they use, the response was that the Mary Wilson Library would need to be closed, that she did not pursue further. Chairman Campbell said it is likely there are some cities that may abuse the Redevelopm~nt Agency however Seal Beach is not one of them, the letter from the Davis Company basically states that the Agency could be dissolved if the Agency has no outstanding bonded indebtedness or unpaid loans, indebtedness or advances....if th~ City agrees to assume Hall outstanding bonded indebtedness, unpaid loans and advances and legally binding contractual obligations it could be dissolved,H however there is no ~ay the City could take on $750,000 in loan services, and if the Agency were given to the County the City would then be giving up all of the additional money that is received, no addi~ional land is being placed into the Redevelopment Agency'. Given the information she received from the Finance Administrator she could see no reason to spend $17,000 or $20,000 to hire a consultant to tell the City and Agency the same facts, the firm that did not submit I a proposal has set fbrth what the guidelines are, which is what the others will also say, she can not support spending _ " that kind of money for something that is already known, her feeling is that that- money can be put to better use by helping the residents of this community. Yost moved, second by Antos, to allow the public to comment. There was no objection voiced. Mr. Jim Caviola, Seal Beach, said Chairman Campbell just provided the answer to this whole issue, it was mentioned 5-28-02 I that the Agency brings in $1 million in increment, the debt service is $750,000, that is a net of up to $300,000 remaining, the Agency needs to spend twenty percent on low income housing, that is the problem, that is $200,000 per year, that leaves $100,000, if the Agency were dissolved then the City would receive the regular property tax, about $150,000. Mr. Caviola claimed that in any debt situation there is always an end user that will assume the debt because the cash flow will always pay for the debt, this whole thing deprives the County of the incremental tax, that is why the County of Los Angeles is getting ready to sue the City of Los Angeles because the cities can not keep depriving the counties of this money, at present Long Beach can not pay its minimum debt, in the case of Seal Beach it is paying $750,000 out of $1 million, that is a misuse. The people who come into town are taking the cities, Mr. Johnson as an example owned Seal Beach Affordable Housing fifteen months before Mr. Hall closed escrow. By the numbers stated this community would receive more money if they would assume the debt based upon the cash flow, this would not require lawyers or consultants, and he personally intends to go to the County and talk to the Tax Assessor, it is common for people to assume debt, this City will net more money without the Agency. Agencymember Larson countered that the a previously stated that the City spends so much money on consultants why not hire a firm to find out if this is a good idea or not, now the argument is that the City should not spend the money, it is not understood. Mr. Caviola stated that he agreed with Agencymember Larson, said he is learning as he goes, he was pushed into this because the proposal was to put the low/moderate income housing next to his home, during the last month he took his personal time to get more educated so he is willing to change, he is witnessing what is going on, from the budget it is clear that the money is going out the door to lawyers. An unnamed member of the audience noted the $750,000 annual debt, and if the Agency is dissolved, is it known how much the Agency assets will bring, would those resources then cure the debt. The response of Chairman Campbell was that the assets are not going to be sold. Ms. Reva Olson, Seal Beach, stated that the problem with the Redevelopment Agency is that the monies do not go into the City revenues, it is a slush fund for developers, the Agency continues to go into debt, it owes $9 million, the Agency and City are making the decisions as to how to spend the tax increment, it is not with a vote of the people, it also diverts money from schools, roads, and services. Ms. Joyce parque, Seal Beach, noted the continued reference to the pump station keeping Old Town from flooding, yet her recollection was that the last flood was of the Bridgeport homes not Old Town, the flood of 1983 however flooded the areas of 14th to 17th Street, the pump station by the Trailer Park has nothing to do with keeping Old Town dry. Her feeling is that the talk about the libraries is dividing the City, the beach front properties likely funds the majority of the City employees, the utility tax is about $4 million, the property taxes are only about $3 million. Ms. Sue Corbin, Seal Beach, said Old Town does not need a cure, it is not blighted, and continued with comments relating to recurring debt. Ms. Corbin said I I 5-28-02 she took this issue to a constitutional researcher/scholar and that person took1a cursory look at the issue, commerce is the overriding reasod for the Constitution, redevelopment violates that even t~ough it has not been tested, whenever the flow of commerce lis stopped it is a violation of the Constitution, that is what redevelopment does. She said I people have a right ~o petition their government, they have been prevented from gaining documents for years, this City government has not been properly managed, the City needs proper representatio~ and protection. Chairman Campbell requested that the speakers address the issues under consideration. Ms. Karen Tarascio, Trailer Park, said if the I payment for the Trai+er Park was overpaid by $2 million, if that money could be recovered the low-income residents of the park'would not need ~ubsidies. , Agencymember Antos noted that the Agency owns the ballfield at Zoeter Place, he ~as uncertain whether it is the Agency or I the City that owns the commercial parcel, and one of the I items mentioned in the letter from the firm that did not submit a proposal wa~ the selling of Agency assets, if however it is the Ag~ncy rather than the City that owns the commercial then that should be determined before retaining a consultant, evaluate what it might be worth, also determine whether any of the bpnds that have been sold in the past have prepayment penalties~ in some instances they may not, if those questions wereianswered then the Agency would be in a I better position to determine whether to retain a consultant, that would provide ihformation to balance out the Agency's books, and if a requ~st is going to be proposed to the County as to their interest~ if the Agency could sell something that is not a park or a library as an example, that could be used to pay down the bond~ without a prepayment penalty, that could possibly put tre Agency in a different position in talking with the County, suggesting that possibly this could I be held over until the next Agency meeting. The Executive I Director confirmed that it is the Agency that owns Zoeter field, there are not~s in the audit that reflects the Zoeter debt, there is typic~lly a prepayment penalty on all bonds, , there is a leaseholdl on Zoeter by Rodi properties that comes due about 2004, the property is split between commercial and the two daycare cent~rs, one of the things that the consultant would be ~equested to look at is Agency assets as well as the issues r~ised by the public and Council. Agencymember Yost asked if the consultants would possibly , consider looking intp whether the County would be willing to assume the Agency ob~igations as part of the RFP. An indication of the copsultants from the audience was that that I could likely be done:. Chairman Campbell expressed her opinion that much ofi this the City could do in-house therefore save the p~oposed expenditure, which in turn could be used to assist re'sidents. with regard to Zoeter she noted that at the time th~t Seal Beach joined the Los Alamitos School District the ~esidents of the Hill and Old Town pushed for the City to acqu~re that entire property in that the Los Alamitos School District was going to sell the site, the City did purchase it, it ~ill be of interest to see if the feelings remain the 'same. 5-28-02 I Mr. Caviola made the statement that his thought was to not get rid of any property. He proceeded with his explanation that the Redevelopment Agency incremental tax goes to the Agency, not the City General Fund, and if it is given to the County it will be in perpetuity, to that he would suggest going directly to the tax assessor and explain that the Agency wants to keep its property, have the County assume the Agency debt whatever it may be, and show the cash flow in perpetuity that the County will receive, the debt will be paid in about ten years, then the County will be collecting the increment forever. Mr. Caviola said redevelopment agencies are not a favorite subject with the County, Seal Beach could be could be a pioneer in such a transfer if the County can be shown that they will receive the cashflow forever, this has nothing to do with giving up property. Councilman Yost pointed out that at present only $.13 on the dollar of sales tax comes back to this community, with the State budget coming up things may not look well for the counties as well, the State could look at attacking their property tax too, the County gets a much larger share than does the City, and it is obvious that there is a positive cashflow although is subject to the whims of State law as well, however he would be willing to look at the concept. Mr. Caviola stated again that the incremental tax goes to the Agency, if the Agency is disbanded then the money that comes to the City will go to the General Fund, there will no longer be the obligation of the twenty percent setaside and the City will net more money long term, members of the Council merely need to go to the assessor, not staff as that is a conflict, the City should go back to natural progression. Ms. Sue Corbin spoke to the Zoeter Place frontage lease, said the lessor will have the ability to buy the frontage in 2004 for very little money, this agreement never should have been signed. Agencymember Larson said he did not know if any of the speakers are knowledgable of the law, he dislikes spending money for things that could be used for something else, yet these people will not believe the Agency if on its own brings forth an answer to this situation, the only way this can be done is to have independent experts prepare answers to these questions, if the response were to be that there is no way to disband the Agency then the people would be as unhappy as they are at this meeting so he could not see that delaying this issue for a couple of weeks or even months is going to make any difference, the people do not believe the Agency or the staff so let the experts advise as to what can and can not be done. Agencymember Larson said the next issue that he would raise is that if the people do not have title to the Trailer park, and if someone else owned it, sold it, the Agency helped the residents buy it by putting in $1 million, it did not work out, therefore he would speak for selling the property, getting the $1 million back, and if the Park residents want to buy it that would be fine, why should the Agency put up $1 million, treat it like a public debt when it is not. I I Larson moved, second by Yost, to select the consulting firm of Keyser Marston Associates, Inc., authorize the Executive Director to negotiate and execute the contract in accordance 5-28-02 with the proposal of the selected consultant, and adopt Resolution Number 02":'3 entitled "A RESOLUTION OF THE , REDEVELOPMENT AGENCYIOF THE CITY OF SEAL BEACH AUTHORIZING BUDGET AMENDMENT NUMBER 28 FOR THE 2001/2002 FISCAL YEAR." By unanimous consent, full reading of Resolution Number 02-3 was waived. AYES: NOES: Antos, Doane, Larson, Yost Campbli!l1 I Motion carried SEAL BEACH TRAILER PARK - RESPONSE TO ISSUES RAISED The Director of Development Services stated the staff report has tried to respondjto various issues raised at previous Agency and City Council meetings, also offered to respond to questions from the Agency. The Director noted the one issue heard during public comments was who owns the Trailer Park, to that it is clear that the Trailer Park was acquired by LINC Housing, the terms of the agreements are that once the bon~s are paid then the property reverts to ownership by the residents of the Park, yet until the bonds are paid it is LINC that owns the p~rk, and pointed out that certain language that was quoted from the AB 1290 Plan was somewhat different and incorrect. with regard to the question as to where the twenty hou~es have gone, Chairman Campbell explained that initially there were one hundred twenty-five units in the Park, one hundred twenty were low to moderate housing, five were not, under the new bonding the requirement , was for eighty percent to be low to moderate income housing, that is one hundred units, the units did not go away merely reclassified, that was twenty units. With regard to her understanding of the1way the ownership of the Trailer Park is structured, LINC Housing bought the property and put it into one of their 501C-3 corporations, that was necessary because of the tax exempt status of the bonds, the issue was for municipal bonds, typlcally municipal bonds pay less than regular bonds, about 4.5 percent, regular bonds pay 5 percent and up, the reason is that the interest is tax free, in discussions with the' bond consultants, and they looked over the income of the residents, the maximum they could qualify for bonding was abou~ $6.5 million, the City with the MPROP loan brought the amo~nt to $7.5 million, $7.4 million was the purchase price, the City also paid the closing costs which was in the range of $900,000, that was all that could be done with the financing. Chairman Campbell mentioned that application has also' been made for tax exempt status for the Seal Beach Affordable Housing Corporation, which takes some time, however once the tax exempt status is realized then title will be transferred from LINC Housing to the Seal Beach Affordable Housing Corporation. She used as an example the purchase of a condominium unit which allows a vote for that condominium for the Board of Directors, that is somewhat the same manner in which the Trailer Park has been structured, there will be a seven member Board, according to the Corporation and the MPROP loan it is necessary that two members be from the ~railer Park, two are from the community at large, and three are from the LINC Housing Board, once the bonds are paid, which LINC has said and it is in writing, LINC will be gone, then the remaining four members will vote I I 5-28-02 I on those they want to fill the seats on the Board, there has also been talk of extending the Affordable Housing Corporation to fifty-five years, the bonds would be paid off in about thirty-four or less years, yet the low/moderate requirement would be extended to fifty-five years. Chairman Campbell mentioned that if a date certain were to be added for payment of the bonds it would impact the ability to refinance the bonds if for some reason interest rates were to go lower, one wants the ability to take advantage of that, there is also the problem of 'for profit', if deemed to be 'for profit' then one can not get the 501C-3, that is the goal, then the title will be transferred. She emphasized that LINC did not form the Seal Beach Affordable Housing corporation eighteen months ago, that did not happen, and acknowledged that Hunter Johnson has been involved in other such projects in that low to moderate housing projects is what he does whereby people can run their own destiny, also, a San Juan Capistrano project was being worked on before the Seal Beach Park sale and still is. Larson moved, second by Doane, to receive and file the Response to Issues staff report. AYES: NOES: Antos, Campbell, Doane, Larson, Yost None Motion carried I HOME IMPROVEMENT PROGRAM GUIDELINES The Director of Development Services presented the staff report, explained that this is the implementation of the programs when the Agency approved the AB 1290 Plan in April, an owner occupied low interest loan and grant program for the rehabilitation of existing owner occupied homes in the community, the individuals making application would need to meet the income criteria as established in Orange County for low and moderate income families, that program was established by the City in 1998 at which time the Agency funds were used to subsidize an interest rate for what was then a Department of Housing and Urban Development Title I loan program offered nationwide by the federal government, in those cases the interest rates were reduced to three percent, the federal government ceased operating that program about a year and a half ago, what is proposed is that the Agency would provide the funding for the rehabilitation loans to a maximum of $50,000 and depending upon the length of the occupancy of the home once the loan is paid that loan could be forgiven after a certain period of time or the property is sold, then the Agency recoups certain portions of its loan amounts based on the sale of the property, the grants under this program are set up for exterior improvements necessary for health and safety issues, physical appearance, property maintenance, etc., and although properties in the community are expensive it has been found that there are situations where this type of program would be beneficial. The second program would impact the Trailer Park from two different standpoints, one would be a program to provide funds to assist certain tenants in the Park to acquire new units to live in based upon substandard conditions of some of the units that may currently exist, the second part is a first I 5-28-02 time home buyer program that would apply not only to the Trailer Park but throughout the community for moderate priced housing opportunities in the City, however those opportunities are basically only seen in the Trailer Park and there are also a number of condominium projects where the sales price is within the range of this type of program, most 1- - of those are on the westerly side of the Rossmoor Shopping Center and some condos on Lampson developed by Bixby a number of years ago, then there are a couple of condo projects in Old Town that were once conversions of apartment complexes. The Director confirmed that the Regency Terrace in Leisure World would qualify if it is a condominium project. The Director mentioned that within the guidelines the funding amounts that would be available for those programs, are set forth, and to an issue raised under public comments that some of the programs can not be funded until the MPROP loan is funded, the reason that they can not be funded at their full capacity is that the Agency has already expended the $1 million as the Bridge Loan and if the Agency is not refunded through the MPROP loan that money is not available to spend therefore the available amount in this account is reduced by $1 million, that is indicated in a different program guideline. It was noted that a representative of the Civic Stone firm was present, they will be the day to day manager of the program working with the owners of homes of potential first time homebuyers to ensure that they have all of their qualification work in place, if a rehab loan or grant program I they will work with contractors to prepare plans, specifications, and bids, doing disbursement requests, etc. Agencymember Yost noted that in 2002 the conflict of interest laws changed to a raw distance from a given area, given the fact that staff did not break out the Trailer Park portion of the guidelines so that it could be voted upon separately, the distance is now within five hundred feet of his residence, therefore he would abstain from this issue. Chairman Campbell stated she supports a plan that provides assistance to the residents to improve their homes and make Seal Beach a better place. A member of the audience complained that the pUblic was not being invited to give input, suggested that the way meetings are conducted be changed and that this matter be tabled to allow more time for the residents to review it to make sure it is what they want. As to a deadline for the guidelines, the City Manager responded that he believed the intent was to get these programs in place and under way, get the funds encumbered so as to avoid any excess penalty issues that may come back to trouble the City in the future, this is actually the implementation of the AB 1290 I Plan that was approved by the Agency and Council. Campbell moved, second by Doane, to approve the Home Improvement Program Guidelines for the City of Seal Beach. AYES: NOES: ABSTAIN: Campbell, Doane, Larson None Antos Motion carried I I .;1 5-28-02 / 6-24/02 / 7-22-02 It is hereby noted that Agencymember Yost excused himself from voting on this item. ADJOURNMENT It was the order of the Chair, with consent of the Agency, to adjourn the meeting at 8:20 p.m. t1f!:nkJj; fl ~ Seal Beach, California June 24, 2002 The Redevelopment Agency regular meeting scheduled for 6:45 p.m. was canceled due to the lack of business items for consideration. .' ., Seal Beach, California July 22, 2002 The Redevelopment Agency regular meeting scheduled for 6:45 p.m. was canceled due to the lack of business items for consideration.