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HomeMy WebLinkAbout04-19-1990 Minutes City of San Bernardino, California April 19, 1990 This is the time and place set for an Adjourned Regular Meeting of the Mayor and Common Council of the City of San Bernardino at their Regular Meeting held at 8: 35 a.m., Monday, April 16, 1990, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. The City Clerk has caused to be posted the order of adjournment of said meeting held on April 16, 1990, and has on file in the office of the City Clerk an affidavit of said posting together with a copy of said order which was posted at 10: 30 a.m., Tuesday, April 17, 1990, on the door of the place at which said meeting was held. The Adjourned Regular Meeting of the Mayor and Common Council of the City of San Bernardino was called to order by Mayor Holcomb at 9:40 a.m., in the Management Information Center (MIC), Sixth Floor of City Hall, 300 North "D" Street, San Bernardino, California. ROLL CALL Roll Call was taken by City Clerk Clark with the following being present: Mayor Holcomb; Council Members Estrada, Reilly, Flores, Maudsley, Minor, Pope-Ludlam, Miller; Sr. Assistant City Attorney Barlow, City Clerk Clark, City Administrator Julian. Absent: None. PUBLIC COMMENTS There were no public comments. (1) RES. 90-142 - RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF A JOINT DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE CITY OF SAN BERNARDINO, CALIFORNIA AND DUKES - DUKES AND ASSOCIATES, INC., A CALIFORNIA CORPORATION REGARDING ORANGEWOOD ESTATES. (R-1) City Clerk Clark read the title of the resolution. In a memorandum dated April 4, 1990, Kenneth J. Henderson, Director of Community Development, explained that the Mayor and Common Council selected Dukes - Dukes and Associates to build out the remaining seventy-six lots of Orangewood Estates. Dukes- Dukes and Associates were to finance the project in its entirety at no further cost to the City or the Redevelopment Agency. However, they were not able to identify construction financing, so the Community Development Commission appropriated $1.6 million 1 4/19/90 to payoff the assessment bonds, reimburse the City General Fund for advances made to keep the bondholders whole, protect the City's credit rating and reimburse the Community Development Department for its acquisition and weed abatement costs. Mr. Henderson set forth the eight deal points. He stated that the deal secures RDA's interest with a mortgage against each lot, limits the Agency's and Dukes-Dukes' financial exposure, provides the developer a normal rate of return and adheres to commercial norms for risk, rate of return and security. Robert Temple, Acting Executive Director, Redevelopment Agency, distributed copies of the development agreement. Mr. Ken Henderson, Director, Communi ty Development, outlined the deal points which were agreed upon and explained provisions of the agreement, which call for three phases for a total of 114 homes. The City will be making temporary construction loans, ranging from 1.1 to 1.3 million dollars for various phases, which will include construction of not less than twelve nor more than fourteen homes in a group. He explained that Phase I consists of groups of thirteen and fourteen homes, Phase II consists of thirteen, thirteen and twelve, and Phase III consists of twelve, twelve, twelve and thirteen homes. The purpose of this planning is to limit the City's exposure in the construction loans and limit the number of homes brought onto the market at any given time. It will also allow Dukes & Dukes Associates to experience momentum in this project. Mr. Henderson explained that Dukes and Dukes will pay 1.5 points for loan administration and disbursement fees which would be between $17,000 and $19,000 for each construction loan. They will also pay 1.5 points over prime (floating). That rate will be set by Bank of America. If the prime rate changes during the course of the construction loan, the City will have the interest accrue at 12% and the day after the point of the change, the interest would accrue at the higher rate. He also explained that there are affordability covenants on all 114 homes as a result of the use of 20% set aside funds. Those affordability covenants require that the home remain affordable for a period of at least ten years. These covenants run with the land. Mr. Henderson pointed out that certain development standards are included in the agreement: either the Verdemont Area Plan Development Standards or the new City development standards contained in the Development Code, whichever are higher. Dukes and Dukes have agreed to meet or exceed those standards. Mr. Henderson stated that it is anticipated that the entire 2 4/19/90 construction of the 114 units will be months to two years. However, there agreement that will allow a shorter based upon market demand. completed in eighteen are provisions in the period of construction By the time the remaining 76 homes are sold, the City will have realized 1.9 million dollars from the sale of the land. Another important issue is that the City and Agency will realize approximately $140,000 to $150,000 in gross profit, based upon the eight construction loans. The combination of gross land sales and gross on eight construction loans will provide the City with approximately $350,000 to $400,00, depending on interest rates and how long actual construction takes. Mr. Henderson answered questions regarding the loan financing. He explained that it is a revolving construction loan, and the maximum exposure to the City is about 1.2 million dollars at any given time. He explained that there are provisions that require that prior to a loan on a subsequent phase, 2/3 of the homes in the preceding phase must have been sold. Therefore, when the City receives $25,000 payment for 2/3 of the homes in the preceding phase, then another construction loan can be made for the succeeding phase. This provides that there will never be a break in construction Mayor Holcomb explained that the funds being loaned come from 20% set aside increments and must be used for low and moderate income housing. They cannot be used for any other purpose. If the money isn't spent in five years, it has to be turned over to the County. Mr. Dukes answered questions, stating that the price range for homes up to 2,000 square feet is from $120,000 to $135,000. Mr. Henderson answered questions and affirmed that there is a requirement that the units must be owner-occupied, and cannot be used as rentals or leased units. Sr. City Attorney Barlow answered questions, explained the provisions relating to the owner-occupied requirement, and stated that the affordability covenants run for ten years. Mr. Henderson stated that the model homes cost about $275,000 and these expenses are being amortized over the cost of the remaining projects. Council Member Pope-Ludlam made a motion, Council Member Miller and unanimously carried, reading of the resolution be waived and said adopted. seconded by that further resolution be 3 4/19/90 Sr. effective 20, 1990. Assistant City Attorney Barlow suggested that the date of the agreement on page 19 be specified as April Resolution No. 89-142 was adopted by the following vote: Ayes: Council Members Estrada, Reilly, Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Absent: None. RECESS MEETING - CLOSED SESSION At 10:00 a.m., the Mayor and Common Council closed session in the Management Information Center Floor, City Hall, 300 North "D" Street, San California, for the following: recessed to (MIC), Sixth Bernardino, (2) a. to give instruction to the City's/Commission's negotiator on the purchase of property pursuant to Government Code Section 54956.8. The real property which the negotiations concern is generally located at: Second Street; Fifth Street, "E" Street; and Highland Avenue. b. to consider personnel matters pursuant to Government Code Section 54957; c. to meet with designated representatives regarding labor relations matters pursuant to Government Code Section 54957.6; d. to confer with the Chief of Police on matters posing a threat to the security of public buildings or a threat to the public's right of access to public services or public facilities pursuant to Government Code Section 54957; e. to confer with the li tigation pursuant to 54956.9(b)(1), as there litigation; attorney regarding pending Government Code Section is significant exposure to f. to confer with the attorney regarding litigation pursuant to Government Code 54956.9(c), so that Council/Commission may whether to initiate litigation; pending Section decide g. to confer wi th the attorney regarding pending litigation which has been initiated formally to which the City is a party pursuant to Government Code Section 54956.9(a) as follows: City of San Bernardino vs. San Bernardino Baseball Club. Inc. - San Bernardino Superior Court Case No. 239193; 4 4/19/90 Stubblefield Construction Companv. et al vs. Citv of San Bernardino. et al - San Bernardino Superior Court Case No. 232998; San Bernardino Superior Court Case No. 252058; Sock Dawson. et al vs. Ci tv of San Bernardino. et al- United States District Court Case No. SA 88-461 AHS (RWRx); Revnolds vs. City of San Bernardino Superior Court Case No. 248752; San Bernardino Dudlev Brewster. et al vs. Southern Pacific Railroad. et al - San Bernardino Superior Court Case No. 249736; Save San Bernardino vs. Citv of San Bernardino San Bernardino Superior Court Case No. 250425; C.F.B. Investments. Ltd. vs. City of San Bernardino - United States District Court - Case No. SA CV89-862 JSC (RWRx); Randall vs. City of San Bernardino - San Bernardino Superior Court Case No. 250472; Gradv vs. Citv of San Bernardino - San Bernardino Superior Court Case No. 243287; Southern Pacific Transportation Comoany. et al vs. Citv of San Bernardino San Francisco Superior Court Case No. 877359 ; Charles H. Brown vs. Citv of San Bernardino. et al - United States District Court Case No. SACV 88-495 (AHS); Charles Hudson Brown vs. Domino. et al - San Bernardino Superior Court Case No. 243087; Hayes vs. Delanev. et al - San Bernardino Superior Court Case 240268; Carl B. Alston vs. City of San Bernardino, et al - United States District Court - Case No. CV90-0012 WPG (GHKx). Harris vs. City of San Bernardino - U. S. District Court Case No. CV87-04882(JSL) CLOSED SESSION At 10:00 a.m., the closed Mayor Holcomb in the Management Floor, City Hall, 300 North California. session was called Information Center "D" Street, San to order by (MIC), Sixth Bernardino, 5 4/19/90 ROLL CALL Roll call was taken by City Clerk Clark with the following being present: Mayor Holcomb; Council Members Estrada, Reilly, Flores, Maudsley, Minor, Pope-Ludlam, Miller; Sr. Assistant City Attorney Barlow, City Clerk Clark, City Administrator Julian. Absent: None. Also present: Phil Arvizo, Executive Assistant to the Council; Acting Fire Chief Newcombe; William L. Wright. EXECUTIVE ASSISTANT TO THE MAYOR VELARDE ARRIVED At 10:15 a.m., Lorraine Velarde, Executive Assistant to the Mayor, arrived at the closed session. DEPUTY CITY ATTORNEY SIMMONS ARRIVED At 11:25 a.m., Deputy City Attorney Simmons arrived at the closed session. COUNCIL MEMBER POPE-LUDLAM EXCUSED At 12:05 p.m., Council Member Pope-Ludlam left the closed session. ADJOURN CLOSED SESSION At 12:08 p.m., the closed session adjourned to the Adjourned Regular Meeting of the Mayor and Common Council in the Management Information Center (MIC), Sixth Floor, City Hall, 300 North "D" Street, San Bernardino, California. RECONVENE MEETING At 12:08 p.m., the Adjourned Regular Meeting of the Mayor and Common Council of the City of San Bernardino reconvened in the Management Information Center (MIC), Sixth Floor, City Hall, 300 North "D" Street, San Bernardino, California. ROLL CALL Roll call was taken by City Clerk Clark with the following being present: Mayor Pro Tempore Minor; Council Members Estrada, Reilly, Flores, Maudsley, Minor, Miller; Sr. Assistant City Attorney Barlow, City Clerk Clark, City Administrator Julian. Absent: Mayor Holcomb; Council Member Pope-Ludlam. RES. 90-143 - RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING MEMBERSHIP OF THE SOLID WASTE TASK FORCE REQUIRED UNDER A. B. 939 (STATS. 1989) AND RELATED MATTERS. City Clerk Clark read the title of the resolution. City Administrator Julian explained that adoption of this resolution is an urgency matter which arose after posting of the agenda. 6 4/19/90 Mr. Julian answered questions regarding the makeup of the Solid Waste Task Force. Council Member Maudsley made a motion, seconded by Council Member Minor and unanimously carried, that the resolution be considered as an urgency item. Council Member Maudsley made a motion, seconded by Council Member Minor and unanimously carried, that further reading of the resolution be waived and said resolution be adopted. Resolution No. 90-143 was adopted by the following vote: Ayes: Council Members Estrada, Reilly, Flores, Maudsley, Minor, Miller. Noes: None. Absent: Council Member Pope-Ludlam. BUDGET RETREAT City Administrator Julian reported that a budget retreat will be held at the Highland Springs Conference Center, Beaumont, California, from 10:00 a.m., Wednesday, May 2, 1990, to 3:30 p.m., Friday, May 4, 1990. ADJOURNMENT At 12:15 p.m., Council Member Minor made a motion, seconded by Council Member Reilly and unanimously carried, that the meeting be adjourned to 10:00 a.m., Wednesday, May 2, 1990, at the Highland Springs Conference Center, Beaumont, California. h/;?,?'/~~/ / City Clerk No. of items: 3 No. of hours: 3 7 4/19/90