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Home My WebLink Aboutrda min 1986/08/05 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Tuesday, August 5, 1986 Council Chamber 6:38 p.m. Public Services Building ROLL CALL MEMBERS PRESENT: Chairman Cox; Members Malcolm, Moore, Campbell, McCandliss MEMBERS ABSENT: None STAFF PRESENT: Executive Director Goss, Acting Agency Attorney Gill, Assistant Community Development Director Gustafson l. RESOLUTION 709 APPROVING LENDING AGREEMENT WITH THE ACQUISITION ASSOCIATION FOR ORANGE TREE MOBILEHOME OWNERS, INC. , AND AMENDING THE PARK'S RENT PROGRAM (Community Development Director) At a special Agency meeting on July 28 the Agency directed staff to return with a "Statement of Intent" concerning unsold spaces at Orange Tree Mobilehome Park after park conversion. The Agency expressed concern that they may at some point own unsold spaces at the park and thus desired a written statement that addressed the following: l. It is not the Agency's intention to own spaces at the park. 2. The Agency would, if necessary, exercise their right as lender to market any unsold spaces, and 3 . The Agency intends to issue guidelines for the management of unsold spaces in the event that the Agency finds itself in an ownership position, until such time as the spaces can be sold. In addition, they directed staff to have the loan documents reviewed by an outside attorney specializing in real estate law. Chairman Cox announced the City Clerk's office had received 51 letters regarding this item - 50 letters from 46 individuals in support of the loan document approval and one in opposition. .....--~~---~..- . --...-- -----------_._._.__.._--~----_.__. Redevelopment Agency Minutes - 2 - August 5, 1986 Assistant Community Development Director Gustafson discussed problems due to potential of unsold spaces ($500,000 invested may not be available to make transition loans to low/moderate income individuals); space rent program should be amended to allow pass-throughs on return on investments to occur at the 19th month; require if any unsold spaces at the 18th month, homeowners association could purchase them; lift restriction against outside investors purchasing spaces. Member Malcolm questioned staff's interpretation of Agency's direction on the 28th; explanation to moþilehome park renters about conversion process was confusing; homeowners should not be forced to buy spaces; complimented staff for efforts in coordinating this new procedure. Chairman Cox acknowledged the 28 individuals who supported Council's action to approve the loan documents for this project from Orange Tree Mobilehome Park, 521 Orange Avenue, Chula Vista: George Novak, Sp. 127; S. V. Klerowski, Sp. 81; Sidney and Rita Christianson, Sp. 31; A. R. and Millicent Herring, Sp. 38; Mr. & Mrs. John R. Blanski, Sp. 133; David & Patty Hugener, Sp. 153; Helen J. Wallace , Sp. 29; Kenneth, Betty E., Paul Thompson; Betty Beard; Leah Hepp, Sp. 26; E. A. Evans, Sp. 77; Lena Huber, Sp. 79; M. C. Smith, Sp. 76; Sue Sharp, sp. 36; Mary Frankee, Sp. 75; Clarence Allen, Sp. 9; William E. & Clare D. Claycomb, Sp. 118; George W. McCalvin, Sp. ll4; Darrell & Cecilia French, Sp. 98; Charlie Novak, Sp. 81; George L. Lovesee, Sp. 82. Sue LOftin, Senior Vice-President, Continental Associates, 7970 Convoy Court, San Diego 92ll1, stated she met with State officials this morning to discuss their requirements; State required sale of 151 spaces be closed simultaneously in escrow; State agreed to allow the conventional and cash basis to be closed simultaneously within a 90 day right of refusal timeframe; balance of the loan treated as a "co-op"; pro rata costs described; suggested item "J" of the lending agreement be revised; State requests the City to agree, in writing, to allow the house and duplexes be sold at the consensus of the homeowners for purpose of buying unsold spaces; balance of unpaid loans would not have interest due. Mar ie Malone, GSMOL President and State-wide Coordinator of the park conversion, discussed the results of a survey of 28 parks which are resident-owned/operated; all spaces in resident-owned park sold in one year; outside investors not allowed to purchase spaces in the park. In answer to Member Moore's question, Ms. Loftin stated the acquisition association remains in place until the last space is sold and Continental Associates is obligated to the park until 151 spaces are sold. ..,_...____...,'·___..___.,._.._.___m....__ Redevelopment Agency Minutes - 3 - August 5, 1986 Assistant Community Development Director Gustafson suggested the following changes to the lending agreement to make the document reflect the Agency's desires: Page 3 : Delete first sentence under item 7 (F) ; Page 4: Delete paragraph 7 (J) ; revise paragraph 4 of ·Exhibit B, . this paragraph would read the same wi th the exclusion of ·reasonable return on pass-throughs after the 36th month...· MSUC (Malcolm/McCandliss) delete requirement for the Homeowners Association to acquire the unsold spaces (according to staff - deletion of item J) and include any other references that need to be corrected (as stated above). MS (Cox/Malcolm) provide staff or Chairman authority to execute final documents incorporating changes. Discussion on the motion followed with Members concurring that staff be authorized to provide additional verbage/conditions necessary to explicitly state liability for unsold spaces. Acting Agency Attorney Gill remarked since the Agency has previously reviewed these documents, specific authorization to the Chairman should now be conveyed in order to execute those documents. Assistant Director Gustafson commented this loan is contingent upon the state completing their loans; with this action, Redevelopment Agency will have completed its process; loan is for 3 years; if Acquisition Association were not required to acquire spaces at the end of 36 months, they would be in default and the Agency would be responsible. Amos Sommers, representing Continental Associates, remarked the interests of low and moderate-income residents need to be protected; State contends loan is interest-free during conversion process; interest-free loan should not be provided to other than low/moderate-income citizens. The motion authorizing staff to provide necessary verbage to loan documents passed unanimously. In answer to Member Malcolm's question regarding the funding of unsold spaces, Miss Loftin explained the 18 and 36 month timeline, suggesting if the Agency assists owners, a timeline be reconsidered. The State would like all low and moderate take out loans in place as soon as possible. MS (Malcolm/Cox) change the purchase to the 18 month period of time. Redevelopment Agency Minutes - 4 - August 5, 1986 Discussion followed concerning at what point Agency assumes liability for unsold spaces; 18 month commi tmen t; first 18 months of 3-year loan is interest free, thereafter, institutional loan rate appli es; renters receive a lifetime lease regardless of qualif ications; pass-throughs allowed after 18 months; rent could increase due to increased debt service, taxes or homeowners fees; additional pass-throughs on a return on investment could be allowed after the 36th month. The motion to change the purchase period passed unanimously. It was moved by Member Malcolm to disallow outside investors. The motion died for lack of a second. Assistant Community Development Director Gustafson, referring to Member Malcolm's motion, pointed out this is provided for if the Agency eliminates all but the first sentence in paragraph "f." MSUC (Cox/ ) delete reference to return on investment in paragraph 4 of "Exhibit B" adding new paragraph " for the 37th month and beyond it identifies all those pass-throughs including return on investment. " In answer to Chairman Cox' queston, Ms. Loftin noted the CC&R'S stipulate in order to maintain integrity of a resident-owned park, there will be no subletting or subleasing (unless hardship case exists). MSUC (Malcolm/Moore) agreement should include intent or resolution (saying) after the initial closing of the conventional and cash buyers that the remaining gap funding will be pro rated per space as qualified. MSUC (Malcolm/McCandliss) City make a commitment that residents be allowed, if they so vote, to sell the single-family dwelling on the separate parcel and/or the duplex units for the purposes of obtaining money to buy unsold spaces. MSUC (Malcolm/Moore) to amend the resolution as needed. RESOLUTION OFFERED BY MEMBER MALCOLM, as amended, the reading of the text was waived by unanimous consent, passed and approved unanimously. Helen Hallace, 521 Orange, Sp. 29, Chula Vista, thanked the Agency and the Chairman for the time and consideration in this process. ADJOURNMENT AT 8:46 p.m. to Thursday, August 7, 1986 at 7:00 p.m. Úiú/;/ fl. J~ Adele A. Sarmiénto Deputy City Clerk 0856C " .__..~,--_._---- --_.._,._--_.~.._----~-~