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HomeMy WebLinkAboutRDA AG PKT 2005-08-08 #2 A /s.. W j x 1 AGENDA REPORT DATE: August 8, 2005 4 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: REQUEST FOR AGENCY DIRECTION AND DETERMINATIONS ON REQUEST FOR PAYMENTS FOR ATTORNEY COSTS INCURRED IN OBTAINING MPROP FUNDING SUMMARY OF REQUEST: The Agency has been requested to reimburse legal fees and costs incurred in connection with the Seal Beach Trailer Park MPROP Loan 01 -068 out the escrow account when said MPROP loan is funded by the State of California Department of Housing and Community Development. BACKGROUND: Agency Direction of July 11, 2005: The Agency considered this same issue on July 11 and requested Staff to report back on a "more thorough analysis of the appropriateness of the legal fees submitted for - reimbursement" and that the reimbursement matter would not be considered "until the "MPROP loan papers are signed and the money put in escrow before the Agency will decide on any reimbursement of legal fees." A copy of the Agency Minutes, Staff Report and Supplemental Staff Report, without attachments, regarding this matter is provided as Attachment 4. MPROP Loan Status: On July 28 the State of California Department of Housing and Community Development (HCD) forwarded to Hunter Johnson, as President of Seal Beach. Affordable Housing Corporation, by e-mail a "Request for Payment" to be executed that will allow HCD to place the $1,000,000.00 MPROP Loan amount into escrow with United Title Company of Glendale. Upon execution of the Request for Payment and return to HCD the funds will then be placed into the escrow account. The estimated date of closing of the escrow is August 12. Agenda Item 1W/9- ,2 Z:\My Documents \TRAILERP\MPROP Attorney Costs.RDA StaffReport.08- 08 -05.doc\LW\07 -29 -05 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 Please refer to Attachment 5 to review the e-mail message and the "Request for Payment" document. Staff Analysis of Appropriate Legal Fees and All Closing Costs: Previous Staff Direction to HCD re: Allowable Closing Costs: Staff has previously provided direction to the State Department of Housing and Community Development that certain costs will be paid out of the escrow account when the loan is funded. Those directions authorized the following disbursements from the escrow account (estimated amounts): TABLE 1 PREVIOSLY AUTHORIZED DISBURSEMENTS FROM ESCROW - MPROP STANDARD AGREEMENT 01- MPROP -68 AMOUNT AUTHORIZED TO DESCRIPTION BE PAID FROM ESCROW Title Fees $ 8,512.00 Escrow Fees $ 3,815.00 Bond Counsel $ 8,500.00 Miscellaneous & Contingency $ 5,000.00 TOTAL $25,827.00 Those previous directions included the statement that Seal Beach "will 'forgive' these transaction expenses and not require payment from LINC /SBAHC of these transaction expenses up to $30,000." Discussion regarding Legal Expense Reimbursements Related to MPROP Funding: As directed by the Agency on July 11, staff has completed a detailed line item review of the legal fee billing statements submitted by the various firms that have been involved in the MPROP funding process. Based on that review and discussions with L1NC, staff is proposing that the Agency determine that expenses should be paid out of escrow, as they are reasonably related to • the funding of the MPROP loan, when the disbursements of the MPROP funds occurs. By authorizing the expenditures noted below in Table 2 from the escrow account for MPROP Loan 01 -068, the Agency is guaranteed that the noted payments of closing expenses and legal fees will not occur unless the 2 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 MPROP is funded by the State of California and the funds are placed into the appropriate escrow account for disbursement. From the standpoint of staff this process will ensure the MPROP is funded and that the Agency will ultimately receive reimbursement for its assistance provided in the acquisition of the Trailer Park from Richard Hall. Hunter Johnson of LINC Housing Corporation will be available to address the Agency on this matter and respond to any questions that Agency members may have. The recommended legal expenses to be disbursed from escrow are set forth below: TABLE 2 PROPOSED LEGAL EXPENSE DISBURSEMENTS FROM ESCROW - MPROP STANDARD AGREEMENT 01- MPROP -68 AMOUNT AMOUNT AMOUNT TO DESCRIPTION REQUESTED DISSALLOWED BE PAID FROM ESCROW CMP &R LLP $ 55,307.31 $ 35,868.85 $ 19,438.46 PCH &S LLP $ 6,435.06 $ 845.25 $ 5,589.81 The Gibbs Law Firm $ 45,000.00* $ 45,000.00 SUB - TOTAL $106,742.37 $ 36,714.10 $ 70,028.27 LINC Reduction - $ 20,000.00 ** SUB - TOTAL $ 106,742.37 $ 16,714.10 Additional Legal $ 16,714.10*** • Payments Recommended*** TOTAL $ 86,742.37 * The Gibbs Law Firm has previously indicated the outstanding amount due is $50,187.36 and they have reduced the requested amount to $45,000.00 ** LINC has reduced their request fro reimbursement by $20,000; see "CMP &R LLP and PCH &S LLP Payment Request Overview ", immediately below, first bullet point * * * If Alternative 1 is selected by the Agency Note: CMP &R LLP = Carle, Mackie, Power & Ross LLP PCH &S LLP = Procopio Cory Hargreaves & Savitch LLP MPROP Attomey Costs.RDA Staff Report.08 -08 -05 3 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 CMP &R LLP and PCH &S LLP Payment Request Overview: Hunter Johnson of LINC indicated by e-mail on July 25, 2005, the following: ❑ "This confirms that we have reduced our request for reimbursement of legal bills for Carle, Mackie by $20, 000. We have not agreed to any further reduction of any other attorney's bills, and absent some mistake in the billing, we do not anticipate agreeing to any further reduction." ❑ "The legal bills are obligations of the current owner, LINC -CDC, or the proposed new owner, SBAHC, or perhaps even the residents' group, SBTPROA. As such, if they are not paid in full from the MPROP proceed at the time of closing, the park must pay them out of operations. This may require a special assessment for each resident." (Emphasis added) ❑ `LINC -CDC has deposited the grant deed conveying the property to SBAHC into the escrow. The only outstanding condition to the transfer is the consent from the City or Agency and the bond counsel opinion. Since the bond counsel opinion is given at the close, the major impediment today is the City/Agency approval. Although it makes more sense to transfer the park (con)currently with the MPROP loan closing, the uncertainty as to when, or even if, the MPROP loan might close, argues for transferring the park now and maybe close the MPROP loan at some later date." Staff is of the opinion that any unpaid legal expenses for these firms, less the $20,000 referred to by Mr. Johnson, would ultimately be paid by the Agency as a result of an assessment or a space rental increase on the resident's of the trailer park. This amount is • $16,714.10. In either scenario, the Agency would in all likelihood then be obligated to continue to subsidize the space rents up the current maximum amount as stipulated within the "Regulatory Agreement ". Therefore the Agency would still end up paying these costs over time. In this situation staff recommends that the Agency authorize the disbursements from the escrow account for the MPROP loan as specified above. This recommendation is discussed below under "Request for Agency Direction and Determinations on Requests for Payments for Attorney Costs relative to MPROP — Alternative 1 ". Again, if the MPROP loan is not funded by HCD, there will no payments for any of the expenses set forth in Tables 1 or 2. Staff concurs that the transfer of the trailer park from LINC -CDC to SBAHC should occur concurrently with the funding of the MPROP and recommends that this position be maintained, as the documentation from HCD indicates the loan will be with SBAHC. Gibbs Law Firm Billings: The Gibbs Law Firm has provided additional information to Staff that indicates that they have two separate accounts for costs incurred relative to the MPROP and assistance to SBTPROA regarding the MPROP. One account has a total charge of $26,616.11 that has never been billed in anticipation of the account being reimbursed at the time of the MPROP funding, with a balance due of $26,616.11. The other account has had a total of $44,474.94 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 4 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 of incurred costs; payments of $20,903.69 by SBTPROA or written off by the firm, and a balance due of $23,571.25. The total outstanding billing of the Gibbs Law Firm total $50,187.36. They are requesting payment of $45,000.00 and will write off the remaining costs of $5,187.36. These amounts are exactly the same as was provided to the Agency on July 11, 2005. Please refer to Attachment 6 to review the additional correspondence from Jerry Gibbs on this matter. The Agency received a letter from Alan Goudge of the Seal Beach Trailer Park Resident Owners' Association on July 25 supporting the payments of costs incurred by Richard Power (CMP &R LLP) and Jerry Gibbs (The Gibbs Law Firm) and Ken Williams of the Seal Beach Trailer Park also spoke in favor of these payments at the July 25 Agency meeting. A copy of the letter from Alan Goudge is provided as Attachment 7. Request for Agency Direction and Determinations on Requests for Payments for Attorney Costs relative to MPROP: Based on the above information, it appears that the Agency has four basic alternatives before it for consideration at this time. Those alternatives are as follows: ly Alternative 1 - Concurrence with Staff Recommendations: Acceptance of this alternative would authorize Agency staff to instruct HCD to set up the escrow instructions for the MPROP loan to authorize disbursements as set forth above in Tables 1 and 2. Agency concurrence with this alternative should be through the adoption of Resolution 05 -_, provided as Attachment 1 for the information of the Agency. Alternative 2 - Modification of Staff Recommendations re: Amounts to be paid from Escrow as Determined by the Azency Board: Acceptance of this alternative would authorize Agency staff to instruct HCD to set up the escrow instructions for the MPROP loan to authorize disbursements in the amount set forth in Table 1 and in amounts other than those amounts set forth above in Table 2. Agency concurrence with this alternative would require the Agency to stipulate agreed upon amounts for each item presented in Table 2 and should be through the adoption of Resolution 05 -_, provided as Attachment 2 for the information of the Agency, with the determined revisions to be incorporated after Agency determination. Alternative 3 - Modification of Staff Recommendations re: Amounts to be paid by A,eency after receipt of MPROP Loan proceeds as Determined by the Agency Board: Acceptance of this alternative would authorize Agency staff to instruct HCD to set up the escrow instructions for the MPROP loan to authorize disbursements in those amounts that have previously been provided to HCD as set forth in Table 1, and does not include any payments to The Gibbs Law Firm; Carle, Mackie, Power & Ross LLP; or Procopio Cory Hargreaves & Savitch LLP. This alternative would then clearly indicate that all remaining MPROP Attorney Costs.RDA Staff Report.08 -08 -05 5 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 legal reimbursement costs would be paid by the Agency from the loan proceeds after receipt of those funds by the Agency. The Agency is requested to determine the amount of those reimbursements for legal expenses. Agency concurrence with this alternative would require the Agency to stipulate agreed upon amounts for each item presented in Table 2 and separate out those costs to be paid directly by the Agency upon receipt of the loan proceeds from HCD from the MPROP loan. This alternative should be through the adoption of Resolution 05-, provided as Attachment 3 for the information of the Agency, with the determined revisions incorporated after Agency determination. Alternative 4 - Maintenance of Agency Position of July 11: The Agency should receive and file this Staff Report if it determines that this alternative is the desired action of the Agency. The action to receive and file would maintain the current directions to staff as set forth above under "Agency Direction of July 11, 2005 ". FISCAL IMPACT: Upon determinations and direction of the Agency on the requested disbursements from escrow for legal expenses related to the MPROP, the directions will result in the reduction of funds to ultimately be utilized for various housing assistance programs by an amount to be determined, up a maximum reduction of $112,569.73. RECOMMENDATION: Pleasure of the Agency. Staff has prepared alternate resolutions for Agency consideration that will formalize any determinations regarding this matter that the Agency may determine to finalize this evening under Alternative 1, Alternative 2, or Alternative 3. Only one Resolution will need to be adopted if either Alternative 1, 2, or 3 is ultimately approved by the Agency Board. Approval of Alternative 4 would be by "Receiving and Filing" the Staff Report. NOTED AN ►r ' PROVE e Whittenberg John . Bahorski, xecutive Director Director of Development Services Re • e elopment Agency Attachments: (7) MPROP Attorney Costs.RDA StaffReport.08 -08 -05 6 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 Attachment 1: Alternative 1 - Resolution Number , A Resolution of the Seal Beach Redevelopment Agency Directing the Executive Director to Instruct the State of California Department of Housing and Community Development to Authorize Payments from the Escrow Account for the Funding of Standard Agreement 01- MPROP -68 for Legal Expenses Incurred as Stipulated Attachment 2: Alternative 2 - Resolution Number , A Resolution of the Seal Beach Redevelopment Agency Directing the Executive Director to Instruct the State of California Department of Housing and Community Development to Authorize Payments from the Escrow Account for the Funding of Standard Agreement 01- MPROP -68 for Legal Expenses Incurred as Stipulated Attachment 3: Alternative 3 - Resolution Number , A Resolution of the Seal Beach Redevelopment Agency Directing the Executive Director to Authorize Payments from Redevelopment Agency Account 061 - 081 -45050 Upon Receipt of Funds From Standard Agreement 01- MPROP -68 for Legal Expenses Incurred in Obtaining Funding of Standard Agreement 01- MPROP -68 as Stipulated Attachment 4: July 11, 2005 Agency Minutes, Staff Report and Supplemental Staff Report re: Request for Agency Direction and Determinations On Remaining Issues re: Linc Housing Corporation Request for Payments for Attorney Costs Incurred by L[NC Attachment 5: E -mail message from Linda Ng, Department of Housing and Community Development to Hunter Johnson re: Seal Beach Trailer Park MPROP Status and "Request for Payment" form — July 27, 2005 Attachment 6: Letter re: Seal Beach Trailer Park Accounting from The Gibbs Law Firm, Dated July 26, 2005 Attachment 7: Letter from Alan Goudge, Seal Beach Trailer Park Resident Owner's Association, dated July 25, 2005 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 7 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 ATTACHMENT 1 ALTERNATIVE 1 RESOLUTION NUMBER , A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY DIRECTING THE EXECUTIVE DIRECTOR TO INSTRUCT THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO AUTHORIZE PAYMENTS FROM THE ESCROW ACCOUNT FOR THE FUNDING OF STANDARD AGREEMENT 01- MPROP-68 FOR LEGAL EXPENSES INCURRED AS STIPULATED MPROP Attorney Costs.RDA Staff Report.08 -08 -05 8 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 RESOLUTION NUMBER A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY DIRECTING THE EXECUTIVE DIRECTOR TO INSTRUCT THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO AUTHORIZE PAYMENTS FROM THE ESCROW ACCOUNT FOR THE FUNDING OF STANDARD AGREEMENT O1- MPROP -68 FOR LEGAL EXPENSES INCURRED AS STIPULATED WHEREAS: The Redevelopment Agency of the City of Seal Beach (hereinafter referred to as "the Local Public Entity "), a public body, corporate and politic, pursuant to Community Redevelopment Law, Section 33100, organized and operated under the Constitution and laws of the State of California, is eligible to receive a commitment of funds and participate in the Mobilehome Park Resident Ownership Program (hereinafter referred to as "MPROP "); and WHEREAS: The California Department of Housing and Community Development (hereinafter referred to as the "Department ") is authorized to make loans for the purpose of financing mobilehome park conversion costs and to reduce the monthly housing costs for low- income residents to an affordable; and WHEREAS: The Local Public Entity as a co- applicant with Seal Beach Trailer Park Residents Association submitted to the Department an application for participation in the MPROP and requested a commitment of funds for a mobilehome park conversion project located at 313 Welcome Lane, Seal Beach, California, and WHEREAS: Such application for participation in the MPROP has been approved and the City Council authorized the Mayor to execute Standard Agreement 01- MPROP-68 with the Department on March 14, 2005 by adopting Resolution 5313; and WHEREAS: The Local Public Entity in approving the sale of bonds for the acquisition of the Seal Beach Trailer Park in 2000 contemplated eventual ownership of the Seal Beach Trailer Park by a resident organization; and MPROP Attorney Costs.RDA Staff Report.08 -08 -05 9 Determination of Payment of Legal Costs incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 WHEREAS: The Local Public Entity has been aware of the proposed transfer of the Seal Beach Trailer Park to Seal Beach Affordable Housing Corporation, and has supported that eventual transfer; and WHEREAS: The Local Public Entity has received detailed invoices from legal counsel for the purpose of substantiating requests for reimbursement of such fees related to the closing of the MPROP Loan and the transfer of ownership of the Seal Beach Trailer Park to Seal Beach Affordable Housing Corporation. THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: 1. The Seal Beach Redevelopment Agency directs the Executive Director to instruct the State of California Department of Housing and Community Development to authorize payments from the escrow account upon the funding of Standard Agreement 01- MPROP-68 for expenses incurred as set forth below: AMOUNT AUTHORIZED TO DESCRIPTION BE PAID FROM ESCROW Title Fees $ 8,512.00 Escrow Fees $ 3,815.00 Bond Counsel $ 8,500.00 Miscellaneous & Contingency $ 5,000.00 CMP &R LLP $ 35,307.31 PCH &S LLP $ 6,435.06 The Gibbs Law Firm $ 45,000.00 TOTAL $112,569.37 2. By authorizing the expenditures indicated above in Item 1from the escrow account for MPROP Loan 01 -MPROP -068, the Agency is guaranteed that the noted payments of closing expenses and legal fees will not occur unless the MPROP is funded by the State of California and the funds are placed into the appropriate escrow account for disbursement. 3. The Executive Director is hereby authorized to forward a copy of this Resolution to the State of California Department of Housing and Community Development and LINC -CDC. 10 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach at a meeting thereof held on the day of , 2005, by the following vote: AYES: Agency Members NOES: Agency Members ABSENT: Agency Members • ABSTAIN: Agency Members Chairman ATTEST: City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devine, City Clerk of Seal Beach, California, do hereby certify that the foregoing resolution is the original copy of Resolution Number on file in the office of the City Clerk, passed, approved, and adopted by the Redevelopment Agency of the City of Seal Beach, at a regular adjourned meeting thereof held on the day of , 2005. City Clerk 11 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 ATTACHMENT 2 ALTERNATIVE 2 RESOLUTION NUMBER 9 A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY DIRECTING THE EXECUTIVE DIRECTOR TO INSTRUCT THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO AUTHORIZE PAYMENTS FROM THE ESCROW ACCOUNT FOR THE FUNDING OF STANDARD AGREEMENT 01- MPROP-68 FOR LEGAL EXPENSES INCURRED AS STIPULATED 12 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 RESOLUTION NUMBER A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY DIRECTING THE EXECUTIVE DIRECTOR TO INSTRUCT THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO AUTHORIZE PAYMENTS FROM THE ESCROW ACCOUNT FOR THE FUNDING OF STANDARD AGREEMENT 01- MPROP -68 FOR LEGAL EXPENSES INCURRED AS STIPULATED WHEREAS: The Redevelopment Agency of the City of Seal Beach (hereinafter referred to as "the Local Public Entity "), a public body, corporate and politic, pursuant to Community Redevelopment Law, Section 33100, organized and operated under the Constitution and laws of the State of California, is eligible to receive a commitment of funds and participate in the Mobilehome Park Resident Ownership Program (hereinafter referred to as "MPROP "); and WHEREAS: The California Department of Housing and Community Development (hereinafter referred to as the "Department ") is authorized to make loans for the purpose of financing mobilehome park conversion costs and to reduce the monthly housing costs for low- income residents to an affordable; and WHEREAS: The Local Public Entity as a co- applicant with Seal Beach Trailer Park Residents Association submitted to the Department an application for participation in the MPROP and requested a commitment of funds for a mobilehome park conversion project located at 313 Welcome Lane, Seal Beach, California, and WHEREAS: Such application for participation in the MPROP has been approved and the City Council authorized the Mayor to execute Standard Agreement 01- MPROP-68 with the Department on March 14, 2005 by adopting Resolution 5313; and WHEREAS: The Local Public Entity in approving the sale of bonds for the acquisition of the Seal Beach Trailer Park in 2000 contemplated eventual ownership of the Seal Beach Trailer Park by a resident organization; and MPROP Attomey Costs.RDA Staff Report.08 -08 -05 13 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 WHEREAS: The Local Public Entity has been aware of the proposed transfer of the Seal Beach Trailer Park to Seal Beach Affordable Housing Corporation, and has supported that eventual transfer; and WHEREAS: The Local Public Entity has received detailed invoices from legal counsel for the purpose of substantiating requests for reimbursement of such fees related to the closing of the MPROP Loan and the transfer of ownership of the Seal Beach Trailer Park to Seal Beach Affordable Housing Corporation. THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: 1. The Seal Beach Redevelopment Agency directs the Executive Director to instruct the State of California Department of Housing and Community Development to authorize payments from the escrow account upon the funding of Standard Agreement 01- MPROP-68 for expenses incurred as set forth below: AMOUNT AUTHORIZED TO BE PAID DESCRIPTION FROM ESCROW Title Fees $ 8,512.00 Escrow Fees $ 3,815.00 Bond Counsel $ 8,500.00 Miscellaneous & Contingency $ 5,000.00 CMP &R LLP (Amount to be determined by Agency) PCH &S LLP (Amount to be determined by Agency) The Gibbs Law Firm (Amount to be determined by Agency) TOTAL (As determined by Agency) 2. By authorizing the expenditures indicated above in Item lfrom the escrow account for MPROP Loan 01 -MPROP -068, the Agency is guaranteed that the noted payments of closing expenses and legal fees will not occur unless the MPROP is funded by the State of California and the funds are placed into the appropriate escrow account for disbursement. 3. The Executive Director is hereby authorized to forward a copy of this Resolution to the State of California Department of Housing and Community Development and LINC -CDC. 14 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach at a meeting thereof held on the day of , 2005, by the following vote: AYES: Agency Members NOES: Agency Members ABSENT: Agency Members ABSTAIN: Agency Members Chairman ATTEST: City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devine, City Clerk of Seal Beach, California, do hereby certify that the foregoing resolution is the original copy of Resolution Number on file in the office of the City Clerk, passed, approved, and adopted by the Redevelopment Agency of the City of Seal Beach, at a regular adjourned meeting thereof held on the day of , 2005. City Clerk 15 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 ATTACHMENT 3 RESOLUTION NUMBER , A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY DIRECTING THE EXECUTIVE DIRECTOR TO AUTHORIZE PAYMENTS FROM REDEVELOPMENT AGENCY ACCOUNT 061- 081 -45050 UPON RECEIPT OF FUNDS FROM STANDARD AGREEMENT 01- MPROP -68 FOR LEGAL EXPENSES INCURRED IN OBTAINING FUNDING OF STANDARD AGREEMENT 01- MPROP -68 AS STIPULATED MPROP Attorney Costs RDA Staff Report.08 -08 -05 16 Determination ofPayment ofLegal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 RESOLUTION NUMBER A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY DIRECTING THE EXECUTIVE DIRECTOR TO AUTHORIZE PAYMENTS FROM REDEVELOPMENT AGENCY ACCOUNT 061- 081 -45050 UPON RECEIPT OF FUNDS FROM STANDARD AGREEMENT 01- MPROP-68 FOR LEGAL EXPENSES INCURRED IN OBTAINING FUNDING OF STANDARD AGREEMENT 01- MPROP -68 AS STIPULATED WHEREAS: The Redevelopment Agency of the City of Seal Beach (hereinafter referred to as "the Local Public Entity "), a public body, corporate and politic, pursuant to Community Redevelopment Law, Section 33100, organized and operated under the Constitution and laws of the State of California, is eligible to receive a commitment of funds and participate in the Mobilehome Park Resident Ownership Program (hereinafter referred to as "MPROP "); and WHEREAS: The California Department of Housing and Community Development (hereinafter referred to as the "Department ") is authorized to make loans for the purpose of financing mobilehome park conversion costs and to reduce the monthly housing costs for low- income residents to an affordable; and WHEREAS: The Local Public Entity as a co- applicant with Seal Beach Trailer Park Residents Association submitted to the Department an application for participation in the MPROP and requested a commitment of funds for a mobilehome park conversion project located at 313 Welcome Lane, Seal Beach, California, and WHEREAS: Such application for participation in the MPROP has been approved and the City Council authorized the Mayor to execute Standard Agreement 01- MPROP-68 with the Department on March 14, 2005 by adopting Resolution 5313; and WHEREAS: The Local Public Entity in approving the sale of bonds for the acquisition of the Seal Beach Trailer Park in 2000 contemplated eventual ownership of the Seal Beach Trailer Park by a resident organization; and MPROP Attorney Costs.RDA Staff Report.08 -08 -05 17 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 WHEREAS: The Local Public Entity has been aware of the proposed transfer of the Seal Beach Trailer Park to Seal Beach Affordable Housing Corporation, and has supported that eventual transfer; and WHEREAS: The Local Public Entity has received detailed invoices from legal counsel for the purpose of substantiating requests for reimbursement of such fees related to the closing of the MPROP Loan and the transfer of ownership of the Seal Beach Trailer Park to Seal Beach Affordable Housing Corporation. THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: 1. The Seal Beach Redevelopment Agency directs the Executive Director to instruct the City of Seal Beach Director of Administrative Services to authorize payments from Redevelopment Agency account 061 - 081 -45050 upon receipt by the Agency of funds from Standard Agreement 01- MPROP -68 for expenses incurred as set forth below: AMOUNT AUTHORIZED TO BE PAID FROM AGENCY ACCOUNT DESCRIPTION 061 - 081 -45050 CMP &R LLP (Amount to be determined by Agency) PCH &S LLP (Amount to be determined by Agency) The Gibbs Law Firm (Amount to be determined by Agency) TOTAL (As determined by Agency) 2. By authorizing the expenditures indicated above in Item 1 from Agency Account 061- 081- 45050, the Agency is guaranteed that the noted payments of legal expenses will not occur unless the MPROP is funded by the State of California and the funds are placed into the appropriate Redevelopment Agency account for disbursement. 3. The Executive Director is hereby authorized to forward a copy of this Resolution to LINC -CDC and The Gibbs Law Firm. PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach at a meeting thereof held on the day of , 2005, by the following vote: MPROP Attorney Costs.RDA Staff Report.08 -08 -05 18 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 AYES: Agency Members NOES: Agency Members ABSENT: Agency Members ABSTAIN: Agency Members Chairman ATTEST: City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devine, City Clerk of Seal Beach, California, do hereby certify that the foregoing resolution is the original copy of Resolution Number on file in the office of the City Clerk, passed, approved, and adopted by the Redevelopment Agency of the City of Seal Beach, at a regular adjourned meeting thereof held on the day of , 2005. City Clerk MPROP Attorney Costs.RDA Staff Report.08 -08 -05 19 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 ATTACHMENT 4 JULY 11, 2005 AGENCY MINUTES, STAFF REPORT AND SUPPLEMENTAL STAFF REPORT RE: REQUEST FOR AGENCY DIRECTION AND DETERMINATIONS ON REMAINING ISSUES RE: LINC HOUSING CORPORATION REQUEST FOR PAYMENTS FOR ATTORNEY COSTS INCURRED BY LINC 20 MPROP Attorncy Costs.RDA Staff Report.08 -08 -05 Page Two - Redevelopment Agency Minutes - July 11, 2005 AYES: Antos, Larson, Levitt, Yost NOES: None ABSTAIN: Ybaben Motion carried Vice - chairman Ybaben was declared Chairman for 2005/2006 and resumed the conduct of the meeting. Chairman Ybaben presented out -going Chairman Antos with a commemorative gavel plaque from the Agency. SELECTION OF VICE - CHAIRMAN Chairman Ybaben declared nominations open for the position of Vice - chairman for 2005/2006. Yost moved, second by Antos, to nominate Member Levitt as Vice - chairman. No further nominations were made. AYES: Antos, Larson, Ybaben, Yost NOES: None ABSTAIN: Levitt Motion carried AGENCY MINUTES Yost moved, second by Antos, to approve the minutes of the regular meeting of April 25, 2005 and adjoumed regular meeting of May 9, 2005. AYES: Antos, Larson, Levitt, Ybaben, Yost NOES: None Motion carried Member Yost recused himself from any discussions on agenda items "3" and "4" due to the change of 300 feet to 500 feet in the conflict of interest code, he lives within the 500 feet of the properties being considered, will leave the Council Chambers, and for the record will abstain in agenda items "3" and "4 ". MOBILE HOME / SEAL BEACH TRAILER PARK / WELZ Director of Development Services stated that the Welz family had started the process in 2002 and in 2004 received City and Coastal Commission approval for acquisition and rehabilitation for a mobile home unit, total amount of $90,000. Due to a fire in the unit and the death of her husband the process was not completed and funds retumed. The staff request is for the Agency to authorize the payment up to $90,000 to provide assistance in purchasing and rehabilitating a mobile home in the Seal Beach Trailer Park for the Ms. Lori Welz. Larson moved, second by Antos, to adopt Resolution Number 05 -08 entitled 'A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY AUTHORIZING THE PAYMENT OF UP TO $90,000 TO PROVIDE ASSISTANCE IN PURCHASING AND REHABILITATING A MOBILE HOME IN THE SEAL BEACH TRAILER PARK (WELZ)." By unanimous consent, full reading of Resolution Number 05-08 was waived. AYES: - Antos, Larson, Levitt — — -- NOES: None ABSTAIN: Yost Motion carried REIMBURSEMENT / LINC / LEGAL FEES / SEAL BEACH TRAILER PARK The Director of Development Services stated the supplement that was provided to the Council was additional information received from the Gibb Law firm. He gave a brief overview of the staff report stating that LINC Community Development Corp. and the Seal Beach Affordable Housing Corporation incurred legal expenses in the processing of the MPROP loan application and in the finalization of the funding. They are requesting that those expenses of approximately $120,000 be reimbursed from the MPROP escrow account. Union Bank signed the letter consenting to the transfer of the Seal Beach Mobile Home Park from LINC to SBAHC. The Agency needs to provide authorization to pay for the legal expenses incurred regarding the funding of Standard Agreement 01- MPROP-68. Mr. Hunter Johnson from LINC Housing and Mr. Jerry Gibbs from the Gibbs law firm were present to answer any Agency questions. Page Three - Redevelopment Agency Minutes - July 11, 2005 Member Larson asked who would be on the new board and when would this all be done with? The City Manager responded that a letter was sent to LINC stating the consensus of the Agency was to have the Chairman of the Redevelopment Agency sit on the board as the govemment representative, the board make up would be three votes from LINC and three from SBAHC and they would confirm the City representative, at the July 25th meeting the regulatory agreements extending the term from 35 years to 55 years, the subordination agreements, etc. will be presented for approval, and the State deadline is July 31, 2005. Member Larson stated he would like Mr. Hunter Johnson to follow through to end this process. Member Antos commented that before the RDA takes a position to pay the fees he would request more thorough analysis on the appropriateness of the legal fees submitted for reimbursement, stated until the MPROP loan is funded the RDA should not agree to pay any expenses, and the only monies that should be approved are the funds needed to transfer the title from LINC to SBAHC. Would like to know if the current make up of the LINC board will be modified soon and part of the settlement agreement should be that the new board would consist 3 LINC representatives, 3 SBAHC, and 1 City representative. Chairman Ybaben said that until Mr. Johnson signs all the papers and the MPROP is completed, it is premature to assume that all the papers will be signed on time if the. expenses are approved. It was the consensus of the Agency to hold item "4" until the MPROP loan papers are signed and the money put into escrow before the Agency will decide on any reimbursement of legal fees. Member Yost returned to the Council Chambers. ADJOURNMENT It was the order of the Chair, with consent of the Agency, to adjoum the meeting to July 25, 2005, at 6:30 p.m. to meet in closed session, if deemed necessary. By unanimous consent, the meeting was adjoumed at 8:45 p.m. THESE ARE TENTATIVE MINUTES ONLY, SUBJECT TO THE APPROVAL OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH. Agency Minutes Approved: • AGENDA REPORT DATE: July 11, 2005 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: REQUEST FOR AGENCY DIRECTION AND DETERMINATIONS ON REMAINING ISSUES RE: LINC HOUSING CORPORATION REQUEST FOR PAYMENTS FOR ATTORNEY COSTS INCURRED BY LINC SUMMARY OF REQUEST: LINC is requesting that the Agency reimburse LINC for legal fees and costs incurred in connection with the Seal Beach Trailer Park. BACKGROUND: The Redevelopment Agency, LINC, and the State Department of Housing and Community Development have been working to finalize funding of an MPROP loan to assist in the acquisition of the Seal Beach Trailer Park for many years. In addition, LINC and Seal Beach Affordable Housing Corporation have almost completed all of the necessary steps to • complete the transfer of the Trailer Park to SBAHC. Both of these transactions have been clearly contemplated by the Agency during the past activities related to the Trailer Park. On March 14, 2005 the City Council adopted Resolution 5313, which approved MPROP Standard Agreement 01 -MPROP -068 and authorized the Mayor to execute the agreement on behalf of the City. On April 25, 2005 the Agency adopted Resolutions 05 -04 and 05 -05 that granted the following authorities to the Chairman of the Redevelopment Agency: ❑ Resolution 05 -04 authorized the Chairman to execute all documents necessary to complete the funding of Standard Agreement 01 -MPROP -068 for the funding of the MPROP loan between Seal Beach Affordable Housing Corporation and the State of California Department of Housing and Community Development (HCD), after review and approval of all necessary documents by Agency Counsel. ❑ Resolution 05 -05 authorized the Agency Chairman to execute all documents necessary to complete the following actions: ❑ Consent to reconfiguration of SBAHC Board. Agenda Item Z: \My Documents \TRAILERP\MPROP Attorney Costs.RDA Staff Report.07- 11- 05.doc \Iw\06 -30 -05 Determination of Payment of Legal Costs Incurred by LINC re: Standard Agreement 01 -MPROp -068 Loan Approval Redevelopment Agency Staff Report July 11, 2005 ❑ Amend the Regulatory Agreement to extend its term from 30 to 55 years. ❑ Finalization of Bridge Loan and Residual Receipts Loan Payment schedules. ❑ Determined to accept a proposal to allow for forgiveness of the Residual Receipts Loan of the amounts owed thereunder over time, provided no event of default occurs. ❑ Approve reimbursement to LINC and Agency of certain costs and expenses related to obtaining the MPROP loan. Status Update on Transfer of Trailer Park From Linc Community Development Corporation to Seal Beach Affordable Housing Corporation: Provided as Attachments 5 and 6 to this Staff Report are the "consent to transfer letters" from LINC Community Development Corporation to Seal Beach Affordable Housing Corporation from: ❑ Union Bank of California - the "Trustee" of the Bonds sold for the acquisition of the Seal Beach Trailer Park by Linc Community Development Corporation in December 2000; and ❑ ACA Financial Guaranty Corporation - the "Bond Insurer" of the Bonds sold for the acquisition of the Seal Beach Trailer Park by Linc Community Development Corporation in December 2000. At the July 25 regular Agency meeting Staff intends to present to the Agency the final documents for Agency approval and authorization for the Chairman to sign to finalize the transfer to Seal Beach Affordable Housing Corporation from the position of the Redevelopment Agency. Request for Agency Direction and Determinations on Remaining Issues Re: Payments for Attorney Costs Incurred by LINC: As the MPROP loan is nearing its funding, staff has provided direction to the State Department of Housing and Community Development that certain costs will be paid out of the escrow account when the loan is funded. Those directions authorize the following disbursements from the escrow account (estimated amounts): 1. Title $ 8,512.00 2. Escrow $ 3,815.00 3. Bond Counsel $ 8,500.00 4. Misc. & Contingency $ 5,000.00 TOTAL $25,827.00 The directions include the statement that Seal Beach "will 'forgive' these transaction expenses and not require payment from LINC /SBAHC of these transaction expenses up to $30,000." Therefore the Agency would receive between $970,000.00 and $1,000,000.00 from escrow to be placed into the Riverfront Project Area Low and Moderate - Income 2 MPROP Attorney Costs.RDA Staff Report.07 -11 -05 Determination of Payment of Legal Costs Incurred by LINC re: Standard Agreement 01 -MPROp -068 Loan Approval Redevelopment Agency Staff Report July 11, 2005 Housing Fund within the Redevelopment Agency Budget for use in funds allowable housing improvement projects within the City. In particular, the Agency board should focus on the following issue this evening: ❑ On June 30, 2005, LINC submitted an itemization of legal costs and expenses that have been incurred that it feels should be reimbursed out of the proceeds of the MPROP loan for the acquisition of the Seal Beach Trailer Park. A summary of those requested payments is provided below: ❑ The Gibbs Law Firm LINC states this firm did work on the MPROP and worked with the residents on gaining the resident approvals necessary for the MPROP to be approved by the State. (See Attachment 2 for detailed billing info) $ 45,000.00 ❑ Procopio Cory Hargreaves & Savitch LLP According to the invoices provided by LINC, this firm provided legal counsel to LINC on the necessary documentation to allow for the funding of the MPROP (See Attachment 3 for detailed billing info) $ 6,435.06 ❑ Carle, Mackie, Power & Ross LLP This firm provided legal counsel to LINC (See Attachment 4 for detailed billing info) $ 68,188.97 TOTAL $119,624.03 The Agency will need to determine whether it will reimburse LINC the amounts requested or any portion thereof after review of the provided detailed legal billing statements and discussion among the Agency members. Hunter Johnson of LINC Housing Corporation will be available to address the Agency on this matter and respond to any questions that Agency members may have. FISCAL IMPACT: Upon determinations and direction of the Agency on the requested payments for legal expenses related to the MPROP by LINC, the directions will result in the reduction of funds to ultimately be utilized for various housing assistance programs by an amount to be determined, up a maximum reduction of $119,624.03. The remaining funds available would then be available for many housing assistance projects that have been on hold due to a lack of available funds. MPROP Attorney Costs.RDA StaffReport.07 -11 -05 3 Determination of Payment of Legal Costs Incurred by LINC re: Standard Agreement 01 -MPROp -068 Loan Approval Redevelopment Agency Staff Report July 11, 2005 RECOMMENDATION: At the pleasure of the Agency. LINC is requesting that the Agency reimburse LINC for legal fees and costs incurred in connection with the Seal Beach Trailer Park. NOTED AND APPROVED: °"I Lee Whittenberg John B. Bahorski, Executive Director Director of Development Services Redevelopment Agency Attachments: (6) Attachment 1: Resolution Number , A Resolution of the Seal Beach Redevelopment Agency Directing the Executive Director to Authorize Payments for Legal Expenses Incurred Regarding the Funding of Standard Agreement 01- MPROP -68 as Stipulated Attachment 2: Detailed Legal Billings from The Gibbs Law Firm re: Standard Agreement 01 -MPROP -068 (Seal Beach Trailer Park) Attachment 3: Detailed Legal Billings from Procopio Cory Hargreaves & Savitch LLP Re: Standard Agreement 01 -MPROP -068 (Seal Beach Trailer Park) Attachment 4: Detailed Legal Billings from Carle, Mackie, Power & Ross LLP Re: Standard Agreement 01 -MPROP -068 (Seal Beach Trailer Park) Attachment 5: Letter re: Consent to Transfer from ACA Financial Guaranty Corporation, dated June 21, 2005 Attachment 6: Letter re: Consent to Transfer from Union Bank of California, dated June 27, 2005 MPROP Attorney Costs.RDA Staff Report.07 -11 -05 4 ITEM RDA -4 SUPPLEMENTAL AGENDA REPORT DATE: July 11, 2005 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: REQUEST FOR AGENCY DIRECTION AND DETERMINATIONS ON REMAINING ISSUES RE: LINC HOUSING CORPORATION REQUEST FOR PAYMENTS FOR ATTORNEY COSTS INCURRED BY LINC SUMMARY OF REQUEST: LINC is requesting that the Agency reimburse LINC for legal fees and costs incurred in connection with the Seal Beach Trailer Park. BACKGROUND: Additional Information Re: Payments for Attorney Costs Incurred The Gibbs Law Firm by LINC: As indicated in the initial Staff Report, the Gibbs Law Firm ( "Gibbs ") is requesting payment of $45,000.00 for costs incurred in working on the MPROP and working with the residents of the Trailer Park in gaining the necessary approvals for the MPROP to be funded by the State. The Gibbs Law Firm has provided a copy of the "Seal Beach Trailer Park Cooperation Agreement ", dated March 5, 2001 for the information of the Agency. This Agreement states in Section 25: "LINC CDC and SBTPROA recognize that the Gibbs Law Firm (Gibbs) has provided valuable advice and service related to the financing of the Park in an amount that has not been agreed upon by all parties. When a reasonable fee is agreed upon by all parties, LINC CDC and SBTPROA agree to pay Gibbs that amount from the proceeds of the MPROP loan at its closing to the extent there are funds available to do so. In the event that funds sufficient to pay Gibbs Agenda Item Z:\My Documents \TRAILERP\MPROP Attorney Costs.RDA Staff Report.Supp.07- 11- 05.doc\LW\07 -11 -05 Supplemental Redevelopment Agency Staff Report re: Determination of Payment of Legal Costs Incurred by LINC re: Standard Agreement 01 -MPROp -068 Loan Approval July 11, 2005 the agreed upon amount are not available at MPROP closing, LINC CDC and • SBTPROA agree that any remaining balance owed Gibbs shall be paid from the cash flow of the Park after paying all operating expenses and debt service as defined in the Financing Documents." (Please note that "LINC CDC" is defined as LINC Community Development Corporation and "SBTPROA" is defined as Seal Beach Trailer Park Resident Owners Association) Gibbs has also provided an additional invoice for services that inadvertently was not included with the initial submission package for consideration of the reimbursement of legal costs. This invoice does not alter the request for Gibbs for reimbursement of $45,000.00 of incurred legal expenses; it provides the missing information to justify the request. Please note that the information included as Attachment 2 of the initial Staff Report includes invoices for services from June 30, 1999 through June 30, 2005. The June 30, 2005 invoice Number 8682 incorporates all of previous invoices outstanding balances for a total amount of 23,511.25. The additional invoice for services, Invoice 8681, is for 26,616.11. The total of these two invoices is $50,127.36, and as noted in the July 1, 2005 letter from Jerry Gibbs, they are requesting payment of $45,000.00. A summary of all of the requested payments is provided below: ❑ The Gibbs Law Firm L1NC states this firm did work on the MPROP and worked with the residents on gaining the resident approvals necessary for the MPROP to be approved by the State. (See Attachment 2 for detailed billing info) $ 45,000.00 ❑ Procopio Cory Hargreaves & Savitch LLP According to the invoices provided by LINC, this firm provided legal counsel to LINC on the necessary documentation to allow for the funding of the MPROP (See Attachment 3 for detailed billing info) $ 6,435.06 ❑ Carle, Mackie, Power & Ross LLP This firm provided legal counsel to LINC (See Attachment 4 for detailed billing info) $ 68,188.97 TOTAL $119,624.03 The Agency will need to determine whether it will reimburse LINC the amounts requested or any portion thereof after review of the provided detailed legal billing statements and discussion among the Agency members. Hunter Johnson of LINC Housing Corporation and 2 MPROP Attomey Costs.RDA Staff Report.Supp.07-1 1-05 Supplemental Redevelopment Agency Staff Report re: Determination of Payment ofLegal Costs Incurred by LINC re: Standard Agreement 01 -MPROp -068 Loan Approval July 11, 2005 Jerry Gibbs of the Gibbs Law Firm will be available to address the Agency on this matter and respond to any questions that Agency members may have. FISCAL IMPACT: Upon determinations and direction of the Agency on the requested payments for legal expenses related to the MPROP by LINC, the directions will result in the reduction of funds to ultimately be utilized for various housing assistance programs by an amount to be determined, up a maximum reduction of $119,624.03. The remaining funds available would then be available for many housing assistance projects that have been on hold due to a lack of available funds. RECOMMENDATION: At the pleasure of the Agency. LINC is requesting that the Agency reimburse LINC for legal fees and costs incurred in connection with the Seal Beach Trailer Park. NOTED AND APPROVED: Ls/ /L Lee Whittenberg John B. Bahorski, Executive Director Director of Development Services Redevelopment Agency Attachments: (2) Attachment 1: "Seal Beach Trailer Park Cooperation Agreement ", dated March 5, 2001 Attachment 2: Detailed Legal Billings from The Gibbs Law Firm re: Standard Agreement 01 -MPROP -068 (Seal Beach Trailer Park), Invoice # 8681, dated June 30, 2005 MPROP Attorney Costs.RDA Staff Report.Supp.07-1 1-05 3 Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 ATTACHMENT 5 E -MAIL MESSAGE FROM LINDA NG, DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT TO HUNTER JOHNSON RE: SEAL BEACH TRAILER PARK MPROP STATUS AND "REQUEST FOR PAYMENT" FORM - JULY 27, 2005 21 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 Lee Whittenberg From: Linda Ng [Ing @hcd.ca.gov] Sent: Wednesday, July 27, 2005 4:19 PM To: hunter @linchousing.org Cc: John Bahorski; QBarrow @rwglaw.com; Lee Whittenberg; Lorraine French Subject: RE: Seal Beach Trailer Park MPROP Status REQPYMT.doc Good afternoon everyone, HCD has completed the review of the revised cash flow analysis and agrees to move forward with the Seal Beach Project by extending the closing date. The City will subordinate its existing Regulatory Agreement and Deed of Trust to HCD note and deed of trust. We will prepare the subordination agreement and forward it along with all other related loan documents to the title company for completion by August 12. Enclosed is a Request for Payment for Hunter to sign and return to my attention at: Department of Housing and Community Development 1800 Third Street, Room 390 -5 Sacramento, CA 95814 Upon receipt of the executed Request, we will order funds to place into escrow. I'll be out of the office starting tomorrow and returning next Monday. Meanwhile, please contact Lorraine if you have pressing issues. Linda Ng MPROP Loan Officer 916.322.1949 Original Message From: Lee Whittenberg [mailto:LWhittenberg @ci.seal - beach.ca.us] Sent: Wednesday, July 27, 2005 11:03 AM To: Linda Ng; Lorraine French; hunter @linchousing.org Cc: John Bahorski; QBarrow @rwglaw.com; jgrayson @hcd.ca.gov Subject: Seal Beach Trailer'Park MPROP Status Linda and Lorraine: Hunter has provided a new pro -forma and has also requested an extension to resolve the few remaining matters to allow for the funding of the MPROP. Can you please let us all know what the position of HCD is on: 1) the request for an extension. 2) the revised Cash Flow Pro -Forma submitted by Hunter. 3) the possibility of placing the funds into escrow while the final review of the appropriate documents is determined and approved. 1 Also, can Linda please call Jim Grayson, at our City Attorney's office to discuss the "reconveyance /subordination" issues regarding the Agency Deed of Trust and the Regulatory Agreement in order to finalize what document is necessary to prepare to accomplish the desires of HCD? Jim's phone number is (213) 253 -0260. Thanks, Lee ***************************************** * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** This email and any files attached are intended solely for the use of the individual or entity to which they are addressed. If you have received this email in error, please notify the sender immediately. This email and the attachments have been electronically scanned for email content security threats, including but not limited to viruses. 2 REQUEST FOR PAYMENT (Disbursement of MPROP Blanket Loan Proceeds) State Contract No.: 00 -MPROP -068 Contractor: Seal Beach Affordable Housing Corporation Payment Request No.: 1 TO: Department of Housing and Community Development You are hereby requested to disburse funds in the total amount of $1,000,000, in accordance with the provisions of the Standard Agreement dated September 22, 2004 and executed between the Seal Beach Affordable Housing Corporation, and the Department. Said amount shall be made payable to: United Title Company 500 North Brand Blvd., Suite 1150 Glendale, CA 91203 The undersigned hereby certifies that: (1) this Request for Payment is in accordance with the Program of Assistance approved by the Department and adopted by Seal Beach Affordable Housing Corporation for the benefit of eligible low- income residents; (2) all work to be paid for pursuant to the Closing Budget and the contract documents has been satisfactorily completed; (3) all of the representations made by the undersigned in the contract documents are true and correct and that there is not any condition, event or act which would constitute an Event or Default thereunder, or which with notice, passage of time, or both, would constitute such an Event or Default. Date: Seal Beach Affordable Housing Corporation Name of Contractor By: Name /Title: Hunter Johnson, President The amount as shown on this requisition is hereby approved for disbursement. Department of Housing and Community Development Date: By: Name /Title: Linda Ng, MPROP Loan Officer Date: By: Name /Title: Lorraine French, MPROP Program Manager C:\MPROP\LOANDOCS\REQPYMT.BLK (rev. 7/94) Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval Redevelopment Agency Staff Report August 8, 2005 ATTACHMENT 6 LETTER RE: SEAL BEACH TRAILER PARK ACCOUNTING FROM THE GIBBS LAW FIRM, DATED JULY 26, 2005 22 MPROP Attorney Costs.RDA Staff Report.08 -08 -05 SUPPLEMENTAL AGENDA REPORT RDA AGENDA ITEM 2 DATE: August 8, 2005 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: REQUEST FOR AGENCY DIRECTION AND DETERMINATIONS ON REQUEST FOR PAYMENTS FOR ATTORNEY COSTS INCURRED IN OBTAINING MPROP FUNDING SUMMARY OF SUPPLEMENTAL INFORMATION: Updated MPROP Loan Status: On August 4 Hunter Johnson, as President of Seal Beach Affordable Housing Corporation, executed the "Request for Payment" that will allow HCD to place the $1,000,000.00 MPROP Loan amount into escrow with United Title Company of Glendale. The estimated date of closing of the escrow is August 12. Please refer to Attachment 1 to review the executed "Request for Payment" document. Updated Staff Analysis of Appropriate Legal Fees and All Closing Costs: The City Attorney provided additional comments on the recommended legal expenses to be paid from escrow if the Agency determines to not adopt Staff Alternative 1, as set forth in the initial Agenda Report. The recommended legal expenses to be disbursed from escrow are set forth below: Agenda Item / — z Z. \My Documents \TRAILERP MPROP Attorney Costs.RDA Staff Report 2 08- 08- 05.doc \LW\08 -05 -05 Supplemental Redevelopment Agency Staff Report re: Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval August 8, 2005 TABLE 2 PROPOSED LEGAL EXPENSE DISBURSEMENTS FROM ESCROW - MPROP STANDARD AGREEMENT 01- MPROP -68 AMOUNT AMOUNT AMOUNT TO BE DESCRIPTION REQUESTED DISSALLOWED PAID FROM • ESCROW CMP &R LLP $ 55,307.31 $ 35,868.85 $ 19,438.46 $ 33,771.35 $ 21,535.96 PCH &S LLP $ 6,435.06 $ 845.25 $ 5,589.81 The Gibbs Law Firm $ 45,000.00* $ 45,000.00 SUB -TOTAL $106,742.37 $ 36,714.10 $ 70,028.27 $ 34,616.60 $ 72,125. LINC Reduction -$ 20,000.00 ** SUB -TOTAL $ 106,742.37 $ 16,714.10 $ 70,028.27 $14,616.60 $ 72,125.77 Additional Legal $ 16,714.10*** Payments Recommended * ** $ 14 616.60 , TOTAL $ 86,742.37 * The Gibbs Law Firm has previously indicated the outstanding amount due is $50,187.36 and they have reduced the requested amount to $45,000.00 ** LINC has reduced their request for reimbursement by $20,000; see initial Agency Staff Report, "CMP &R LLP and PCH &S LLP Payment Request Overview ", first bullet point * * * If Alternative 1 is selected by the Agency Note: CMP &R LLP = Carle, Mackie, Power & Ross LLP PCH &S LLP = Procopio Cory Hargreaves & Savitch LLP The differences in the amount as recommended in the initial Staff Report and this Supplemental Staff Report is $2,097.50.00 FISCAL IMPACT: Upon determinations and direction of the Agency on the requested disbursements from escrow for legal expenses related to the MPROP, the directions will result in the reduction of 2 MPROP Attorney Costs.RDA Staff Report 2.08 -08 -05 Supplemental Redevelopment Agency Staff Report re: Determination of Payment of Legal Costs Incurred re: Standard Agreement 01 -MPROP -068 Loan Approval August 8, 2005 funds to ultimately be utilized for various housing assistance programs by an amount to be determined, up a maximum reduction of $112,569.73. RECOMMENDATION: Pleasure of the Agency. Staff has prepared alternate resolutions for Agency consideration that will formalize any determinations regarding this matter that the Agency may determine to finalize this evening under Alternative 1, Alternative 2, or Alternative 3. Only one Resolution will need to be adopted if either Alternative 1, 2, or 3 is ultimately approved by the Agency Board. Approval of Alternative 4 would be by "Receiving and Filing" the Staff Report. NI �� i �� ND AP.`" VED: ,) . CII e Whittenberg Jo • :. i Executive Director Director of Development Services R- velopment Agency Attachments: (1) Attachment 1: Request for Payment (Disbursement of MPROP Blanket Loan Proceeds), State Contract No. 00 -MPROP -068, Contractor: Seal Beach Affordable Housing Corporation, executed by Hunter L. Johnson, President on August 4, 2005 MPROP Attorney Costs.RDA Staff Report 2.08 -08 -05 3 Supplemental Redevelopment Agency Staff Report re: Determination of Payment of Legal Costs Incurred re: Standard Agreement 01-MPROP-068 Loan Approval August 8, 2005 ATTACHMENT 1 REQUEST FOR PAYMENT (DISBURSEMENT OF MPROP BLANKET LOAN PROCEEDS), STATE CONTRACT NO. 00 -MPROP -068, CONTRACTOR: SEAL BEACH AFFORDABLE HOUSING CORPORATION, EXECUTED BY HUNTER L. JOHNSON, PRESIDENT ON AUGUST 4, 2005 4 MPROP Attorney Costs.RDA Staff Report 2.08 -08 -05 .tea REQUEST FOR PAYMENT (Disbursement of MPROP Blanket Loan Proceeds) State Contract No.: 00 -MPROP -068 Contractor: Seal Beach Affordable Housing Corporation Payment Request No.: 1 TO: Department of Housing and Community Development You are hereby requested to disburse funds in the total amount of $1,000,000, in accordance with the provisions of the Standard Agreement dated September 22, 2004 and executed between the Seal Beach Affordable Housing Corporation, and the Department. Said amount shall be made payable to: United Title Company 500 North Brand Blvd., Suite 1150 • Glendale, CA 91203 • The undersigned hereby certifies that: (1) this Request for Payment is in accordance with the Program of Assistance approved by the Department and adopted by Seal Beach Affordable Housing Corporation for the benefit of eligible low- income residents; (2) all work to be paid for pursuant to the Closing Budget and the contract documents has been satisfactorily completed; (3) all of the representations made by the undersigned in the contract documents are true and correct and that there is not any condition, event or act which would constitute an Event or Default thereunder, or which with notice, passage of time, or both, would constitute such an Event or Default. Date: ? \ U3 Seal Beach Affordable Housine Corporation Name of Contractor 1110 IMO B Name/Title: - H.nter L. Johnson, President The amount as shown on this requisition is hereby approved for disbursement. Department of Housing and Community Development Date: By: • Name/Title: Linda Ng, MPROP Loan Officer Date: By: Name/Title: Lorraine French, MPROP Program Manager • C: \MPROP \LOANDOCS \REQPYMT.BLK (rev. 7/94)