HomeMy WebLinkAbout1986-482
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RESOLUTION NO. 86-482
RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING AND
DIRECTING THE ACCEPTANCE OF ASSIGNMENT OF CONTRACTS FROM THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO THE CITY OF
SAN BERNARDINO COMMUNITY DEVELOPMENT DEPARTMENT.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
6 SECTION 1. Findinqs.
7 A. The Community Development Division of the Redevelopment
8 Agency of the City of San Bernardino formerly administered
9 certain infill housing agreements entered into by and between the
10 Redevelopment Agency of the City of San Bernardino and various
11 private entities, including an agreement with San Bernardino
12 Neighborhood Housing Services, Inc., and an agreement with SSLM
13 Ventures, Inc., doing business as Pacific Land Investments.
14 B. The Community Development function has been transferred
15 from the Redevelopment Agency of the City of San Bernardino into
16 a separate Community Development Department of the City of San
17 Bernardino, and the Redevelopment Agency of the City of San
18 Bernardino now desires to transfer all responsibility and
19 obligations under those certain contracts with SSLM Ventures,
20 Inc., dba Pacific Land Investments, and with San Bernardino
21 Neighborhood Housing Services, Inc., to the City of San
22 Bernardino, and the Community Development Department desires to
23 accept such responsibilities.
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SECTION 2. Implementation.
A. The Mayor of the City of San Bernardino is hereby
26 authorized and directed to accept, on behalf of the City, the
27 assignment and transfer of all rights, duties and obligations
28 from the Redevelopment Agency under those certain contracts
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1 between the Redevelopment Agency of the City of San Bernardino
2 and SSLM Ventures, Inc., dba Pacific Land Investments, and San
3 Bernardino Neighborhood Housing Services, Inc., to the City of
4 San Bernardino, forthwith. All outstanding obligations of the
5 Redevelopment Agency are assumed by the City of San Bernardino
6 and all rights of the Redevelopment Agency under those certain
7 contracts are assumed by the City of San Bernardino, and said
8 contracts shall be administered by the Community Development
9 Department. The Acceptance to be executed as to each of the
10 contracts mentioned hereinabove, shall be in form annexed hereto
11 as Exhibits "A" and "B".
12 I HEREBY CERTIFY that the foregoing resolution was duly
13 adopted by the Mayor and Common Council of the City of San
14 Bernardino at an adjonrnf>c'l rf>g111 i'lrmeating thereof, held on the
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25 of
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8th
day of
Dp-CAmhpr
, 1986, by the following vote, to
AYES:
Council Members
Estrada. Reillv. Hernanc'lf>z
Marks, Frazier
NAYS:
None
ABSENT:
Council Members Quiel, Strickler
The foregoing
Decemb~r
, 1986.
~;;W~~
/ City Clerk
approved this rc~ day
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1 ~pproved as to form:
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ASSIGNMENT OF RIGHTS AND DELEGATION OF DUTIES
AND ACCEPTANCE THEREOF
Assianment of Riahts and Deleaation of Duties: The
Redevelopment Agency of the City of San Bernardino, pursuant to a
resolution of the Community Development Con~ission of the City of
San Bernardino, does hereby assign and transfer to the City of
San Bernardino, all of its rights under that certain agreement
between the Redevelopment Agency of the City of San Bernardino
and San Bernardino Neighborhood Housing Service, Inc., and does
hereby delegate to the City of San Bernardino, all obligations
and responsibilities under that same agreement.
Upon acceptance
of this assignment and delegation by the City of San Bernardino,
the Redevelopment Agency shall be relieved of all further
obligations and responsibility for performance of this agreement,
and shall have no further rights under this agreement.
IN WITNESS WHEREOF, the Redevelopment Agency of the City of
San Bernardino has executed this document the
fI-e1..- day of
December, 1986.
By
By
Secretary
Approved as to form:
AGENCY COUNSEL
BY IlA 4! #J7J~
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ACCEPTANCE OF ASSIGNMENT AND DELEGATION
Pursuant to a resolution duly adopted by the Kayor and
Common Council of the City of San Bernardino, the City of San
Bernardino does hereby accept the foregoing assignment of rights
and delegation of duties from the Redevelopment Agency of the
City of San Bernardino, and agrees to hold the Redevelopment
Agency of the City of San Bernardino harmless from any and all
further obligations under that agreement.
ATTEST:
::T4~:'{;;0
( ayor .
~#~~V;
tity Clerk
Approved as to form:
/z:,;~ II~ ~
City Attorney
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NOTICE TO CONTRACTOR
TO: San Bernardino Neighborhood
Housing Services, Inc.
1296 N. Mt. Vernon Avenue
San Bernardino, CA 92411
PLEASE TAKE NOTICE THAT the Redevelopment Agency of the City
of San Bernardino has transferred, assigned and delegated to the
City of San Bernardino, Community Development Department, all
rights and obligations that the Redevelopment Agency had under a
10 contract with your organization. A copy of the Assignment is
11 attached hereto for your information. All future correspondence
12 in this matter should be addressed to:
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Kenneth J. Henderson, Director
Community Development Department
City of San Bernardino
300 North "D" Street
San Bernardino, CA 924lB
CO~~UNITY DEVELOPMENT DEPARTMENT
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Kenneth J. Henderson, Director
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Commission of the City of San Bernardino. A copy of the program,
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as approved by the City and Commission, is incorporated herein by
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f'~J7S
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AGREEMENT FOR INFILL HOUSING PROGRAM
THIS AGREEMENT, made and entered into effective the
(p ~ day of /VCJt!+1fl1./JPVl986, by and between THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO,.. public body
5 corporate, hereinafter .Agency., and SSLM VENTURES, INC., a
6 California Corporation doing business as PACIFIC LAND
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INVESTMENTS, hereinafter .Contractor., sets forth the agreement
of the parties hereto.
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R~t'!it:alA.
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program has been approved by both the Mayor and Common Council of
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A.
The Agency, in qooperation with the City of San
Bernardino, has developed an Infill Housing Program, which
the City of San Bernardino and by the Community Development
reference and a copy of such program has been provided to
Contractor.
Agency and Contractor acknowledge that this
agreement is intended to implement that program, and that this
contract shall be interpreted, in event of dispute, in a light
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by the City and Commission.
intended to best implement the Infill Housing Program as adopted
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housing units commencing forthwith and shall proceed without
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B.
The parties contemplate that Contractor shall develop
delay until this agreement is terminated.
Agency anticipates
that approximately 40 to SO homes can be developed by Contractor
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and others contracting with Agency for infill housing and that
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the Contractor shall continue to develop infill housing units as
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1 rapidly as feasible. The parties acknowledge that the Agency's
2 total funding commitment for all take-out financing for all such
3 contractors at this point is limited to $2,000,000 in below
4 market rate mortgages derived from City's 1985 Single Family
5 Mortgage Revenue financing. Agency will reserve for Contractor,
6 upon request, at the time of commencement of construction, funds
7 for take-out financing up to $40,000 for any home, or any higher
8 amount that the Executive Director may determine to be
9 appropriate and available at the time. Contractor shall be
10 authorized to utilize conventional or any other available
11 financing, but covenants to release any reservation of take-out
12 financing as soon as a commitment has been received for such
13 alternate financing. Agency-provided financing shall be utilized
14 only in strict compliance with applicable laws and published
15 guidelines, particularly as to income limitations and loan
16 approval standards affecting the ultimate borrower. The
17 provisions of Section II, Paragraph C, shall apply to such
18 financing.
19 C. The parties acknowledge that five target areas have been
20 established in the Infill Bousing Program as adopted, and that
21 Contractor's development shall be within the five target areas.
22 The target areas have been identified to Contractor. Target Area
23 1 shall be deemed to be of higher priority than Target Area 2,
24 Target Area 2 shall be deemed to be of higher priority than
25 Target Area 3, Target Area 3 shall be deemed to be of higher
26 priority than Target Area 4; and Target Area 4 shall be deemed to
27 be of higher priority than Target Area 5. Contractor is not
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1 encouraged to do so. It is the intent of the parties that
2 eventually all five target areas shall receive the benefit of the
3 Infill Housing Program.
4 II. Implementation. In order to implement the Infill
5 Housing Program., the parties hereto agree as follows:
6 A. Contractor shall forthwith proceed with acquiring
7 options to purchase land within any of the five target areas,
8 sufficient to provide housing sites for the Contractor's planned
9 infill housing units, and Contractor shall obtain such additional
10 options to purchase housing sites within the target areas as
11 Contractor may deem prudent, for the construction of additional
12 infill housing units.
13 B. Upon acquisition of options to purchase such sites,
14 Agency shall advance to Contractor, through purchase escrow on
15 such sites, the acquisition costs of such property, not to exceed
16 $7,000 per site, with the Contractor to provide to Agency,
17 through escrow, a promissory note for all funds so advanced,
18 secured by a trust deed on such property. Such trust deed shall
19 be made expressly subordinate to any construction financing
20 arranged or to be arranged by Contractor, provided, however, that
21 any such construction loan shall not exceed in value the actual
22 cost to Contractor for materials, labor and other costs directly
23 associated with the construction of the home on the particular
24 site. For this purpose, the Executive Director of Agency is
25 expressly authorized to execute such documents as may be required
26 by the construction financing entity to specifically subordinate
27 the Agency's trust deed to that of the construction financing
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C. Agency shall provide and make available below market
rate mortgages for permanent financing, to any purchaser of such
infill housing, provided that such purchaser meets Agency's
lending criteria, as duly established. At the time of close of
escrow, Contractor shall payor cause to be paid to Agency, the
amount advanced for purchase of the property, plus interest as
specified. The interest rate charged by Agency on the purchase
price of the lot or lots shall, in most instances, be at 7.5%,
but in no event shall such interest rate exceed 8%. The interest
rate shall be established at the time escrow is closed on the
purchase of any particular lot or the lots, but for the initial
five lots to be developed, the interest rate shall be 7.5%. The
entire principal balance on the property acquisition loan shall
be due and payable with accrued interest at time of close of
escrow on the sale of the developed home.
D. Contractor has been selected by Agency for this project
for the Infill Housing Program based upon Contractor's
acknowledged expertise in this type of development, and Agency
relies explicitly upon Contractor's qualifications and experience
in this regard. Contractor assures Agency that Contractor is
willing to work in the target areas as designated by the Agency,
and will make available its full resources to assure the success
of the program.
E. Coincident with the execution of this agreement,
Contractor shall provide to Agency performance guarantees
satisfactory to the Executive Director and Agency Counsel, in the
27 form of a performance bond, letter of credit, certificate of
28 deposit or collateralized note in an amount not less than
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$10,000, assuring Agency of Contractor's faithful performance
hereunder. If a collateralized note is proffer red by Contractor,
the collateral supporting such note shall not exceed 90% of the
value of the property used as collateral, and evidence shall be
provided of the true value of such collateral property. The
Executive Director of Agency is authorized, in her discretion,
from time to time, to release any particular collateral from such
note, upon substitution of other suitable collateral. The
parties recognize that the infill housing to be built by
Contractor shall not necessarily be low cost housing, but shall
be of such quality and price as Contractor, in the exercise of
its business judgment, deems can best be sold. Contractor
warrants all new housing constructed shall meet or exceed the
standards required by all applicable building, plumbing,
electrical, mechanical and similar codes.
F. The parties acknowledge that security measures may be
required to protect the homes under construction, and after
completion of construction until they have been sold. Upon
request, Agency shall reimburse Contractor for reasonable costs
of such security, provided, however, that in the event that the
Agency is called upon to reimburse Contractor for such security
costs, upon termination of this agreement or upon completion of
any portion thereof followed by cessation of work of Contractor
for thirty (30) or more days, Agency shall have the right to
audit or have audited the costs of Contractor, and in the event
the profit of Contractor from the project contemplated by this
agreement exceeds 13.7%, any profit in excess of 13.7% shall be
applied 50% to additional profit to Contractor, and 50% to
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1 reimburse Agency for security costs paid by it, but in no event
2 shall amounts payable to agency exceed reimbursement of 100% of
3 such security costs to Agency.
4 G. The parties contemplate that Contractor will, in
5 addition to constructing new infill housing, utilize its presence
6 in the neighborhood to advantage in attempting to arrange for
7 rehabilitation of homes in the immediate surrounding area, and
8 Agency will cooperate fully in providing rehabilitation loans in
9 accordance with its established rehabilitation loan policies and
10 procedures. Agency shall expedite any such application for
II rehabilitation loans made in conjunction with Contractor's
12 development of infill housing, and such rehabilitation loan
13 applications shall be given high priority by Agency staff in
14 processing of such applications. Agency staff shall cooperate
15 fully with Contractor in advertising, marketing and expanding
16 knowledge of availability of this and other such rehabilitation
17 financing tools.
18 H. Contractor shall provide to Agency, at time of execution
19 of this agreement, a bar chart showing the target dates for
20 acquisition, construction, and offering for sale of each phase of
21 the infill bousing contemplated bereby. Such bar chart shall
22 provide for the completion of the infill housing not later than
23 two years from the date of execution of the agreement.
24 I. The parties recognize that this agreement is preliminary
25 in nature, because the parties have moved quickly to implement
26 the Infill Housing Program and have not had tbe time or
27 experience upon which to base a careful and valued judgment as to
28 the various elements of the Infill Housing Program. The parties
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1 agree to work together to modify this agreement, in any
2 particulars reasonably necessary, to assure the success of the
3 program. However, unless modified by agreement in writing
4 executed by both parties, this agreement shall remain in full
5 force and effect, and shall be specifically enforceable, to the
6 extent authorized by law.
7 J. In the event that Contractor fails to institute land
8 acquisition within the time schedule contemplated on the bar
9 chart, or fails in any respect to meet any of the time lines
10 specified therein without good cause, Agency shall be entitled to
11 declare this contract to be in default. In the event Agency has
12 reason to believe the contract may be in default, Agency shall
13 service notice of possible default upon Contractor, and potify
14 Contractor of a time and place at which the Community Development
15 Commission will consider evidence as to whether the contract is
16 in fact in default. At such time and place, or at any time to
17 which the hearing shall be continued, Agency and Contractor shall
18 be given a reasonable opportunity to present evidence to the
19 Community Development Commission of the City of San Bernardino,
20 as to the existence of a default, and the Commission shall
21 determine the matter. The decision of the Commission shall be
22 binding upon both parties. In the event a default is determined,
23 Contractor shall forfeit the $10,000 performance guarantee, and
24 all amounts outstanding on any promissory notes issued by
25 Contractor to Agency shall forthwith become due and payable in
26 full. The parties hereto acknowledge that the provision for
27 forfeiture of the performance guarantee shall be treated as
28 liquidated damages. For this purpose, the parties agree that, in
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:ontractor' s4
initials for
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the event of a breach of this agreement, Agency shall suffer
2 damages far in excess of $10,000, since the Infill Housing
3 Program is such a vital element of the City's plans for the
rehabilitation and development of the area designated as the
Enterprise Zone of the City of San Bernardino, in which the City
and Agency have already invested funds well in excess of
7 $200,000; the parties further agree that from the nature of the
8 case, it would be impracticable or extremely difficult to fix the
9 actual damage, and therefore, the parties have agreed that
10 $10,000 will represent a fair estimate of the damages actually
11 sustained by the Agency in event of a default by Contractor. The
12 decision of the Community Development Commission of the City of
13 San Bernardino in regards to whether a default has occurred shall
14 be final and binding upon the parties hereto.
15 K. This contract shall terminate two years from the date
16 first entered above. The contract may be terminated earlier by
17 either party upon completion of any phase of the construction for
18 which a performance guarantee has been given, upon thirty (30)
19 days written notice to the other party.
20 IN WITNESS WHEREOF, the parties have executed this agreement
21 effective the day and year set forth above.
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
SSLM VENTURES, INC.,
A California Corporation,
dba FIC INVESTMENTS
B
IS M. LACEY,
President
By
By.~~&~j'
Secretary
(Contractor shall also initial
in margin on this page where
indicated. )
B
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] Approved as to form:
2 AGENCY COONSEL
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o F SAN B ERN A R D I
INTEROFFICE MEMORANDUM
8610-314
TO:
Glenda
Agency
~EDEVELoqi,'~=~n~<. c')
R~a~eWerop~~n't' ,
Saul,
Executive
Director,
FROM:
Kenneth J. Henderson,
Development Dept.
Infill Housing Agreement
Director,
Community
SUBJECT:
SSLM Ventures, Inc.
DATE:
October 21, 1986
(6869)
COPIES:
Mayor Wilcox~ Ray Schweitzer~ Allen Briggs~ Maurice
Oliva~ File
-------------------------------------------------------------
I received your memorandum regarding the above on October 21,
1986. As you indicated, the take-out permanent financing
would potentially come from the City's 1985 Single Family
Mortgage Revenue Bond issue which is referenced in paragraph
I.B of the agreement. This is not a matter of dispute. The
same cannot be said, however, for the source of funds for
acquisition loans.
During the discussions on infill housing conducted by the
Redevelopment Committee, the Committee inquired about the
source of revenue for the proposed acquisition loans. The
staff response was "...the loan proceeds will likely come
from Mortgage I or Mortgage II". A similar statement was
made to the Mayor and Common Council at the time the Infill
Housing Program was adopted in November, 1985. This can be
corroborated by Agency Counsel and our Housing Consultant.
Since the time the program was adopted by the Mayor and
Common Council, the Agency made three (3) acquisition loans
to Execu-Systems Realtors of San Bernardino, Inc. Proceeds
from said loans did not corne from the CDBG Program. (Ac-
counting staff indicated on separate occasions that the loan
proceeds came from Mortgage 1/11 and the twenty-percent (20%)
set aside). You will recall that the block grant's partici-
pation in the infill program was financial assistance to San
Bernardino Neighborhood Housing Services for land acquisition
and the payment of points (4.75%) on the $2,000,000 allocated
to the infill program. Immediately prior to the RDAlCD
separation, I approved the payment of $95,000 for payment of
said points from the FY 1984/1985 and FY 1985/1987 CDBG
infill accounts.
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INTEROFFICE MEMORANDUM: 8610-314
Infill Housing Agreement
October 21, 1986
Page 2
Although I do not have a problem with the City being the
contracting party, I would recommend the current agreement
format be retained in order to expedite the agreement execu-
tion process, and because of previous and anticipated Agency
financial participation.
It is clear that acquisition loan proceeds are to be financed
by the Redevelopment Agency. Additionally, you have pre-
viously executed two (2) similar agreements with San
Bernardino Neighborhood Housing Services and Execu-Systems
relating to the infill program. I see no reason to treat
this agreement any differently.
I would appreciate your timely execution of the enclosed
agreements.
Please call me at 5065 if you have any questions.
~rnk you. ~
~~J~~ender~rector
Community Development Department
No. 118
Jan. 1984
MEMORANDUM
REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO, CALIFORNIA
DATE
October 20, 1986
TO
Kenneth J. Henderson
Community Development Department
D m:~;:.i ~
FROM Gl enda Sau I, Executi ve DI rector
SUBJECT SSLM VENTURES, INC. - INFILL
Ken, we are returning to you three copies of an agreement between the
Agency and SSLM Ventures for the Inflll Housing Program that were
approved by the Commission on July 7, 1986 (Resolution 4895).
We need to discuss this agreement with al Briggs. The funding for the
pending mortgage will be provided by the City's 1985 Single Family
Mortgage Issue. This Issue was one of the City's and transferred to
Community Development.
Another concern I have Is Section II, B, Page 3, wherein the Agency Is
agreeing to lend SSLM $7,000 per lot. As I recall, CDBG funds were
planned for these loans.
It is my feeling that this agreement (Resolution 4895) should be
rescinded an that the City should be the contracting party.
.7 1/
/~~~~ ,dd~< .
Glenda Saul
Executive Director
GS:SL:S:1655G
cc: Allen R. Briggs, Agency Counsel
Attachments
cc: Mayor
City Administrator
Chron File