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HomeMy WebLinkAboutCDC/1999-12 RESOLUTION NO.: CDC/1999-12 2 3 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION APPROVING THE PURCHASE OPTION AGREEMENT (THE "AGREEMENT") BY AND BETWEEN THE REDEVELOPMENT AGENCY AND COOPERATIVE SERVICES, INC., A NON-PROFIT COOPERATIVE CORPORATION RELATIVE TO THE PROPERTY LOCATED AT 1530 BASELINE STREET, SAN BERNARDINO, FOR DEVELOPMENT OF A SENIOR HOUSING PROJECT, AND AUTHORIZE THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE THE AGREEMENT ON BEHALF OF THE AGENCY (NORTHWEST PROJECT AREA) 4 5 6 7 8 9 WHEREAS, the Community Development Commission of the City of San Bernardino 10 (the "Commission") on behalf of the Redevelopment Agency of the city of San Bernardino (the 11 "Agency"), is a redevelopment agency, a public body of the State of California, organized and 12 existing pursuant to the Community Redevelopment Law (Part 1 of Division 24) commencing 13 with Section 33000 of the Health and Safety Code of the State of California (the "Act"); and 14 WHEREAS, the Redevelopment Plan provides for the redevelopment of real property 15 pursuant to the Redevelopment Plan both within and outside of the redevelopment project area 16 which is subject to the Redevelopment Plan (the "Project Area") by owners thereof or by parties 17 seeking to acquire real property from the Agency; and 18 WHEREAS, Section 33391 of the Act provides that a redevelopment agency may acquire 19 any interest in real or personal property within a redevelopment project area or for the purpose 0 20 redevelopment and Section 33430 of the Act provides that a redevelopment agency may dispose 21 of any interest in real or personal property within a redevelopment project area or for the 22 purposes of redevelopment; and 23 WHEREAS, the Agency and Cooperative Services, Inc., a non-profit cooperative 24 corporation "Optionee") deem it desirable to enter into a certain Purchase Option Agreement (the 25 "Agreement"), a copy of which is attached hereto as Exhibit "A" and incorporated herein by this -1- Res CDC/1999-12 reference, pursuant to which, among other matters, the Optionee will acquire from the Agency 2 certain real property (the "Property") which is located in the Project Area. The transaction is for 3 the purposes of causing the redevelopment of the Property, including construction thereon by the 4 Optionee of an 70-75 rental senior housing development (the "Project"); subject to the 5 provisions of a Disposition and Development Agreement; and 6 WHEREAS, the Agency and the City have noticed and conducted a public hearing in 7 accordance with the requirements of Health and Safety Code Sections 33431 and 33433 8 concerning the proposed Purchase Option Agreement relative to the potential sole disposition of 9 the Property by the Agency to the Optionee pursuant to the Agreement; and 10 WHEREAS, based upon evidence submitted to the Agency, it is reasonable and 11 appropriate for the Agency to approve the proposed Agreement. 12 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION, 13 ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN 14 BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 15 Section 1. The Agency finds and determines that the disposition and development of 16 the Property as described in the proposed Agreement is within the scope, terms and provisions of 17 the Redevelopment Plan, is consistent with the Agency's previously approved Implementation 18 Plan and will help eliminate blighting conditions in the Project Area by and creating affordable 19 rental housing opportunities for low and moderate income seniors. 20 Section 2. The Agency authorized the Director of the Agency to execute the 21 Agreement and to execute such other documents as may be necessary to implement the 22 Agreement and to make any necessary non-substantive changes in the Agreement as may be 23 approved by Agency Special Counsel. 24 Section 3. A Program Environmental Impact Report was certified in connection with 25 the adoption of the Redevelopment Plan. The Agency finds that no new effects could occur in -2- Res CDC/1999-12 connection with the Project and no new mitigation measures are required and therefore no new 2 environmental document is required pursuant to Section 15168 of the CEQA guidelines. 3 Furthermore, prior to the actual construction of the Project, the Optionee will be required 4 to insure that it has complied with all CEQA guidelines. 5 Section 4. This Resolution shall take effect upon the date of its adoption. 6 IIII 7 IIII 8 IIII 9 IIII 10 IIII 11 IIII 12 IIII 13 IIII 14 IIII 15 IIII 16 IIII 17 IIII 18 IIII 19 IIII 20 IIII 21 IIII 22 IIII 23 IIII 24 IIII 25 IIII -3- Res 1999-12 2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION APPROVING THE PURCHASE OPTION AGREEMENT (THE "AGREEMENT") BY AND BETWEEN THE REDEVELOPMENT AGENCY AND COOPERATIVE SERVICES, INC., A NON-PROFIT COOPERATIVE CORPORATION RELATIVE TO THE PROPERTY LOCATED AT 1530 BASELINE STREET, SAN BERNARDINO, FOR DEVELOPMENT OF A SENIOR HOUSING PROJECT, AND AUTHORIZE THE EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE THE AGREEMENT ON BEHALF OF THE AGENCY (NORTHWEST PROJECT AREA) 3 4 5 6 7 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 8 Development Commission/Mayor and Common Council of the City of San Bernardino at a 9 . . reconvene Jo:mt regular! meeting thereof, held on the 19th day of April , 1999, by the 10 following vote to wit: 11 Commission/Council Members: Abstain Aves Navs Absent 12 ESTRADA 13 LIEN MCGINNIS 14 SCHNETZ DEVLIN 15 ANDERSON MILLER x ~ x --X-- -x- x 16 x 17 18 19 The foregoing resolution is hereby approved this ~ \ 'S t- day of April . ~~~- 1999. 20 21 22 ,Esther R. Estrada Kayor Pro Tempore City of San Bernardino 23 Approved as to form and Legal Content: James F. Penman, City Attorney 24 -4- 25 By: CDC 1999-12 1999 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO PURCHASE OPTION AGREEMENT (Affordable Senior Citizen Rental Housing Project) THIS 1999 PURCHASE OPTION AGREEMENT (the "Agreement") is made and entered into as of this ~ day of ~ I ~ 1999, by and between the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, a public body, corporate and politic (the "Agency"), and COOPERATIVE SERVICES, INC., a Michigan nonprofit cooperative corporation (the "Optionee""). RECITALS: Whereas, the Agency is the owner of certain unimproved real property located in the City of San Bernardino, County of San Bernardino, State of California, specifically described on Exhibit "A" attached hereto and incorporated herein (the "Property") . Whereas, the Optionee proposes to acquire the Property and to develop and improve thereon using a special source of funds as may be obtained through a program known as a "HUD Section 202 Grant," as described below, an affordable senior rental housing complex which shall be reserved for occupancy by senior citizens (the "Project"). The Project is more particularly described in Exhibit "B" attached hereto and incorporated herein by this reference. Whereas, the Optionee desires to have the right to acquire the Property subject to its receipt of a "Final Reservation" and the approval of a "DDA" for the Project as these terms are more fully defined below and the Agency is willing to grant Optionee an option to acquire the Property for the development of the Project subject to the satisfaction of all of the terms, conditions and provisions of this Agreement. Whereas, this Agreement shall materially assist the Agency to effectuate one of the goals of the Northwest Redevelopment Plan (the "Plan") by fostering in the development of the Project that will benefit the low-and moderate income housing needs of the City as well as the redevelopment project area. SBEO/0001/DOC/3474 4/8/99515 td 1 CDC 1999-12 NOW, THEREFORE, the parties hereto agree as follows: ARTICLE I - OPTION TO ACQUIRE THE PROPERTY Section 1.1 - Grant of Option. The Agency hereby grants Optionee an option for the term set forth in the following sentence (the "Option") to acquire the Property for a purchase price of TWO HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($275,000.00) (the "Purchase Price"), subject to the satisfaction of all of the other terms, covenants and conditions contained in this Agreement and in a Disposi tion and Development Agreement to be negotiated by the Agency and Optionee pursuant to the provisions of Section 2.3, below ("DDA"). The term during which the Optionee may satisfy the condi tions of this Agreement and complete the purchase of the Property from the Agency shall commence on the date when this Agreement is fully executed by the parties and continue shall continue until the first of the following events to occur: (i) the parties have executed the DDA in the form mutually acceptable to each of them as set forth in Section 2.3; or (ii) 4:00 p.m. on May 27, 2000; or (iii) on the date Optionee is given notice by the United States Department of Housing and Urban Development (HUD) that the Optionee's application for a fund reservation under Section 202 of the Housing Act of 1959 (12 U.S.C. Section 1701q) (the "Fund Reservation") for the acquisition of the Property and the development of the Project has been rejected or denied. The period of time during which this Agreement is in effect is referred to herein as the "Option Period." Section 1.2 - Consideration. (a) As consideration for the grant of the Option to purchase the Property as set forth in Section 1.1, the Optionee hereby agrees: (i) to submit a completed application for the Fund Reservation for the Project to HUD by a date no later than May 27, 1999, and thereafter to exercise best efforts to secure the Fund Reservation for the Project from HUD as promptly SBEO/0001/DOC/3474 4/8/99 515 td 2 CDC 1999-12 as feasible, but in no event by a date later than May 27, 2000; and (ii) to finalize the terms of the DDA as set forth in Section 2.3 in consultation with the Agency as promptly as feasible following submission of the completed application for the Fund Reservation and receipt of notification from HUD of an award of the Fund Reservation for the Project, but in no event by a date later than May 27, 2000; and (iii) subject to the satisfaction of subparagraph (ii) above, the Optionee shall complete the final design and engineering specifications for the Project, acquire the Property from the Agency for the Purchase Price, and commence the improvement and operation of the Project using the proceeds of the HUD Section 202 Grant all on the terms and conditions set forth in the DDA. The Optionee hereby authorizes the Agency to contact HUD from time-to-time as may be necessary or appropriate in connection with the evaluation and approval by HUD of the application for the Fund Reservation for the Project. (b) The Agency acknowledges that it deems the disposi tion and reuse and redevelopment of the Property to be necessary and that the Optionee is qualified to undertake the task of finalizing the logistical details relating to the acquisition, reuse and redevelopment of the proj ect in a manner which is compatible with the redevelopment objectives of the Plan. As consideration for the covenant of the Optionee to complete and submit the application for the Fund Reservation for the Project to HUD and the other promises of the Optionee contained herein, during the Option Period, the Agency shall not negotiate wi th any other person or entity for the purpose of considering either the disposition of the Property or considering the reuse and redevelopment of the Project on the Property. The term "negotiate" as used herein shall be deemed to preclude the Agency from accepting any other proposal from third parties to either acquire any interest in the Property (in whole or in part) or from accepting any other development proposal affecting the Property from persons or entities other than the Optionee, and from discussing other reuse and redevelopment plans for the Property with third persons or entities; provided however, any person may SBEO/OOOI/DOC/3474 4/8/99 515 td 3 CDC 1999-12 submit and the Agency may consider any proposal for the disposition and/or redevelopment of any lands adjacent to the Property. During the Option Period, the Agency shall not be precluded, however, from furnishing to other persons or entities unrelated to the Optionee information in the possession of the Agency relating to the Plan and the implementation of the Plan, shall remain within the sole and exclusive purview of the Agency to administer. The Agency may also provide any other information in its possession which would customarily be furnished to persons requesting information from the Agency concerning its activities, goals, and matters of a similar nature. Section 1.3 Automatic Termination. In the event Optionee cannot for any reason exercise the Option in the manner set forth in Article II, below, on or before the date when the Option Period expires as set forth in Section 1.1 above, this Agreement shall automatically terminate without any further notice to either party, and all of the rights of Optionee in this Agreement shall cease and be of no further force or effect. ARTICLE II - EXERCISE OF OPTION TO ACQUIRE Section 2.1 - Conditions on Exercising Option. Optionee acknowledges that its right to acquire the Property and complete the exercise of the Option as granted in this Agreement is subject to the approval and timely execution by the parties of the DDA prior to the end of the Option Period in accordance with Section 2.3 below, which condition must be satisfied prior to the Optionee having the right to purchase the Property from the Agency. Nothing in this Agreement shall abridge or infringe upon the legislative and administrative discretion reserved to the City of San Bernardino and/or the Agency as a public agency with respect to any actions as may be required prior to the approval of the DDA of the issuance of development permits and other entitlements to the Optionee for the improvement of the Project. The parties to this Agreement each reserve the right to approve the final terms of the DDA in the sole and absolute discretion of each of them. Section 2.2 - Method of Exercising Option. In the event Optionee desires to exercise the Option and has performed all acts in the time and manner as required by the terms hereof and is not in default under any provision of this Agreement, the Optionee shall exercise the Option by delivering to the Agency, on or before 4:00 p.m. on the day on which the Option Period would otherwise expire, written notice of Optionee's election to acquire the SBEO/0001/DOC/3474 4/8/99 515 td 4 CDC 1999-12 Property together with a copy of HUD' s approval of the Fund Reservation. Section 2.3 -Disposition and Development Agreement. Optionee shall give the Agency written notice of approval of the Fund Reservation as promptly as feasible, after receipt of such notice, the Agency will prepare and deliver a draft DDA to Optionee for review. The Agency and Optionee hereby agree to negotiate the final terms of the DDA in good faith. The final terms of the DDA shall incorporate the applicable provisions for the disbursement of the HUD Section 202 Grant funds to the Optionee for the acquisition and improvement of the Project and shall contain the other customary terms and provisions of the Agency's standard form disposition and development agreements. The DDA shall also provide for the following: (a) The transfer of the Agency's title in the Property to the Optionee shall be administered by an escrow holder which is mutually acceptable to the parties. The Purchase Price (which is presently set as $275,000 based upon a written appraisal) for the Property shall be equal to the fair market value as determined in accordance with applicable regulations of HUD; (b) Optionee shall have the right to review and approve the condition of title to the Property prior to the close of escrow; provided, however the Agency shall not be obligated to cure or correct any title defect as may be found therein except that the Agency shall discharge the current lien for taxes and any purchase money mortgage defect liens which may currently encumber the Property; (c) Optionee shall have the right to make a complete analysis of the Property consisting of such engineering, feasibility studies and soils tests as are sufficient to permit Optionee to determine the sui tabili ty of the Property for the Project and to obtain all necessary entitlements from the City for the improvement of the Project on the Property in a form satisfactory to the Optionee; (d) The Agency shall convey the Property to Optionee wi thout representation or warranty as to the condition of the Property or the suitability of the Property for Optionee's intended purposes. Optionee shall conduct its own due diligence investigations of the Property, including testing for hazardous substances, if necessary, and the Optionee shall accept the Property in its "As-Is," "Where-Is" and "With-All-Faults" SBEOIOOO I/DOC/34 7 4 4/8/99515 td 5 CDC 1999-12 condition. All escrow fees, costs, expenses related to the transfer of the Property shall be paid by the Agency; (f) Optionee shall construct all improvements on the Property in accordance with the plans and specifications approved by the Agency and the City of San Bernardino; (g) The DDA shall provide that the Agency shall assume the obligation of the Optionee to pay for the costs of certain public off-site improvements, development impact mitigating fees, public capital facilities charges and other off-site development costs associated with the improvement of the Project in a total amount not to exceed the sum of $100,000.00; (h) Prior to the close of escrow, prepare a legal description of the Property at cost and expense, which legal description shall exhibit to the Agency grant deed; the Agency shall the Agency's sole be attached as an (i) The Agency grant deed conveying the Property to Optionee shall contain a restriction that the Property is to be owned, managed and operated as the Project for a term of less than thirty (30) years from the date the construction of the Project is completed. Said restriction shall further provide that (A) all of the units shall be continuously occupied or held vacant and available for occupancy by low income or moderate income senior citizen tenants, as determined by criteria established by HUD, and (B) the Project shall comply with all HUD requirements with respect to rental rates, rental policies, availability to the general public, maintenance, reporting requirements and any other matter which is the subj ect of applicable HUD regulations. The deed restriction shall be subject to HUD approval and shall run with the land; (j) Prior to the close of escrow, the Agency, at its sole cost and expense, shall deliver a parcel map or certificate of subdivision compliance to the escrow holder which evidences that the Property consists of a legal parcel of land in accordance with the requirements of the Subdivision Map Act, if necessary. Such parcel map or certificate of subdivision compliance, as applicable, shall be recorded prior to the close of escrow; (k) In the event that thes amount of the HUD Section 202 Grant, plus the available equity contribution of the Optionee, are insufficient to provide for the purchase of the Property from the Agency and the improvement of the Project, nothing herein, or SBEO/OOO 1 /DOC/34 74 4/8/99 515 td 6 CPC 1999-12 the DDA, shall be deemed to obligate the Optionee to purchase the Property from the Agency. ARTICLE III - TERMINATION OF AGREEMENT AND OPTION Section 3.1 - Automatic Termination. This Agreement and the Option shall automatically terminate without notice to Optionee pursuant to Section 1.3 above; provided, however, that such termination shall not release Optionee from its obligations under Section 3.2, Section 4.1 and Section 4.3. Section 3.2 Document to Acknowledge Release of Agreement. This Agreement constitutes only an Option to acquire the Property, and although the Option granted hereby and all extensions thereof shall automatically terminate with respect to the Property unless exercised and/or extended wi thin the times provided for herein, or shall otherwise terminate as provided in this Article III, Optionee nonetheless in all events agrees to execute, acknowledge in recordable form and deliver to the Agency wi thin ten (10) days after the Agency I s request therefor, any quitclaim deed or other documents requested by the Agency in order to acknowledge the termination of this Agreement. ARTICLE IV - MISCELLANEOUS Section 4.1 - Attorneys' Fees. In the event of any dispute between the parties hereto involving the covenants or conditions contained in this Option or arising out of the subject matter of the Option, the prevailing party shall be entitled to recover, and the other party agrees to pay, all reasonable fees, expenses and costs, including, but not limited, to all attorneys' fees. Section 4.2 - Notices. Unless otherwise provided for herein, any notice to be given or other document to be delivered by either party to the other hereunder shall either be delivered in person to such party or may be deposited in the United States mail, duly certified and registered, or by a reputable next business day delivery service, with postage prepaid, addressed to the party for whom intended as follows: To Agency: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, CA 92401 Attn.: Gary Van Osdel, Executive Director SBEO/OOO 11DOC/34 74 4/8/99 515 td 7 CDC.1999-12 To Optionee: Cooperative Services, Inc. 25900 Greenfield Road, Suite 326 Oak Park, MI 48237 Attn: Mr. Fred Wood Either party may from time to time, by written notice to the other, designate a different address which shall be substituted for the one above specified, and/or specify additional parties to be notified. Notwithstanding anything to the contrary herein contained, any notices or documents which may be delivered by mail pursuant to this Section 4.2 must be actually delivered to the other party on the last business day immediately preceding any deadline date specified in this Agreement. Section 4.3 - Broker's Fee. Neither party has used the service of a real estate broker or finder in connection with the approval of this Agreement of the Option. Each party agrees to indemnify and hold the other harmless from and against all liabilities, costs, damages and expenses, including, without limitation, attorneys' fees, resulting from any claims or fees or commissions, based upon agreements by it, if any, to pay broker's commissions and/or finder's fees. Section 4.4 - Assignment. Except as set forth in this Section 4.4, Optionee shall have no right to assign this Agreement and the Option herein granted by operation of law or otherwise, without the prior written consent of the Agency, which consent may be withheld in the Agency's sole and absolute discretion. Any attempt by Optionee to make an assignment other than with the prior written consent of the Agency shall be null and void and shall automatically terminate the Agreement and the Option. The Agency's consent to an assignment by Optionee shall not relieve Optionee from its obligations under this Agreement. Notwithstanding the foregoing, without first obtaining the consent of the Agency, Optionee shall have the right to assign this Agreement to a non- profit public benefit corporation controlled by Optionee and formed for the sole purpose of owning and operating the proj ect as required by HUD. Prior to assigning this Agreement to such a non-profit corporation, Optionee shall submit to the Agency evidence that Optionee exercises control over the assignee. Section 4.5 - Time of the Essence. Time is of the essence with respect to the terms, covenants and conditions of this Agreement. SBEO/0001/DOC/3474 4/8/99 515 td 8 CDC 1999-12 Section 4.6 Binding on Assigns. Subj ect to the limitations set forth in Section 4.4 above, this Agreement shall be binding upon and inure to the benefit of the heirs, personal representatives, successors and assigns of the respective parties hereto. Section 4.7 - Entire Agreement. This Agreement contains the entire agreement of the parties hereto with respect to the matters covered hereby, and all negotiations and agreements, statements or promises between the parties hereto or their agents with respect to this transaction are merged in this Agreement, which alone expresses the parties' rights and obligations. No prior agreements or understandings not contained herein shall be binding or valid against either of the parties hereto. Section 4.8 Modification. Any amendment or modification to this Agreement must be in writing and executed by all the parties to this Agreement. Section 4.9 Interpretation: Governing Law. This Agreement shall be construed according to its fair meaning since the Agreement has been prepared by both parties hereto. This Agreement shall be construed in accordance with the laws of the State of California in effect at the time of the execution of this Agreement. Titles and captions are for convenience only and shall not constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. Section 4.10 - No Waiver. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions thereof. Section 4.11 - Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and SBEO/0001IDOC/3474 4/8/99 515 td 9 CDC 1999-12 each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. Section 4.12 - Authority to Execute. Each individual executing this Agreement on behalf of a party hereto represents and warrants that he or she is duly authorized to execute and deliver this Agreement on behalf of such party in accordance with the authority granted under the formation documents of such entity. Section 4.13 - Counterparts. This Agreement, including any exhibits attached hereto, may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original copy. Section 4.14 - No Recordation. Optionee shall not cause or allow this Agreement, short form, memorandum or assignment hereof to become of record in any public office without the Agency's prior written consent, which consent may be withheld in the Agency's sole and absolute discretion. Section 4.15 - Exhibits. Exhibit "A" and Exhibit "B" attached hereto are hereby incorporated herein by this reference. SBEO/OOOI/DOC/3474 4/8/99 515 td 10 CDC 1999-12 IN WITNESS WHEREOF, the parties hereto have executed this Purchase Option Agreement the day and year first above written. Date' 1$~1f7 I Approved as to Form: By: J. tJL Agency Special Counsel Date: Date: SBEO/0001/DOC/3474 4/8199 515 td AGENCY Redevelopment Agency of the City San Bernardino, a public body, corporate and politic OPTIONEE Cooperative Services, Inc., a Michigan nonprofit cooperative corporation By:J~l. Fred Wood {;) By: 11