HomeMy WebLinkAboutR37-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM:
Maggie Pacheco, Director
Housing and Community Development
SUBJECT:
ARDEN-GUTHRIE DISPOSITION
PLAN BY AND BETWEEN THE U.S.
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT (HUD)
DATE:
August 24, 2000
OR' /"0 " r.~ L
I~ll~ii
Svnonsis of Previous Commission/Council/Committee Action(s):
On August 10, 2000, the Redevelopment Committee recommended that the Community Development Commission
approve the extension to the HUD and Agency Agreement.
Recommended Motion(s):
(Community Develonment Commission)
MOTION:
That the Community Development Commission approve a six (6) month extension,
and if possible a one (I) year extension, to the Arden-Guthrie Disposition Plan
Agreement between HUD and the Agency.
Contact Person(s): Gary Van OsdellMaggie Pacheco
Project Area(s) N/A
Phone:
663-1044
7th
Ward(s):
Supporting Data Attached: It] Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) It] LetterlMemo
FUNDING REQUIREMENTS Amount: $
N/A
Source:
Budget Authority:
N/A
N/A
SIGNATURE:
Maggie Pac e , Director
Housing and Community Development
Commissioo/ConnciI Notes:
-------.-------------------------..._----------------------------------------------------------.--------------------------------------------
GVO:MP:lag:09-05-00 Arden-Guthrie Disp
COMMISSION MEETING AGENDA
Meeting Date: 09/05/2000
Agenda Item Number: ..831.-
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
Arden-Guthrie Disposition Plan By And Between The U.S. Department Of Housine: and
Urban Development (HUD)
BACKGROUND
On November 15, 1999, the Community Development Commission authorized entering into an
Agreement with HUD for the purposes of acquiring four-plexes in the Arden Guthrie Area. (see
attached Agenda Report and HUD/Agency Agreement). The Arden Guthrie Area is bounded by
Highland on the north, Sunrise on the South, Argyle on the west and Arden A venue on the east
(see attached map).
Under this Agreement, the Agency has acquired four (4) four-plexes from HUD on the north side
of Arden Guthrie and has demolished all but one. This one property will be demolished within
the next 30 days. On the south side of Arden Guthrie, the Agency has purchased 14 four (4)
plexes from HUD and concurrently sold them to Paul Chiavatti, a Participant, under the
Acquisition, Rehabilitation and Resale (ARR) Program and in accordance with the provisions of
the ARR Agreement between the parties. Two (2) of the four-plexes have been sold to fIrst time
homebuyers who have participated in Neighborhood Housing Service's homebuyer education
and the City's Police Department Crime Free Multi Family Property Management Program. The
remaining complexes are in the rehabilitation stages and pending sale.
Current Issue
The Agreement between the Agency and HUD expired August 23,2000. In light of the fact that
there are still FHA insured units remaining in the area that could possibly go into default and
foreclosure, thus providing an opportunity for the Agency to purchase at a considerable discount,
Staff has contacted HUD and requested an extension to the Agreement. Although, staff will be
attempting to obtain a one (1) year extension, HUD has agreed to a 6-month extension at this
time (see attached letter).
Accordingly, staff is requesting that the Community Development Commission approve a
minimum 6-month extension and if successful possibly up to a year extension to the
HUDI Agency Agreement depending on the outcome of a scheduled meeting between HUD and
Agency Staff.
-------------------------------------------------------------------------------------------------------------------------------------.------
GVO:MP:lag:09-05-00 Arden-Guthrie Disp
COMMISSION MEETING AGENDA
Meeting Date: 09/0512000
Agenda Item Number: R. 3 7
Economic Development Agency Staff Report
Arden-Guthrie Disposition Plan
August 9, 2000
Page Number -2-
Fiscal Impact:
The fiscal impact to the Agency remains the same as noted in the Agenda Report dated
November 15, 1999. There is no additional financial impact to the Agency.
Recommendation:
That the Community Development Commission approve a six (6) month extension, and if
possible, a one (I) year extension, to the Arden-Guthrie Disposition Plan Agreement between
HUD and the Agency.
Maggie Pa co, Director
Housing and Community Development
-------------~._---------------------------------------------------------------------------------------------------------------------------
GYO:MP:lag:09-05-00 Arden-Guthrie Disp
COMMISSION MEETING AGENDA
Meeting Date: 09/0512000
Agenda Item Number: A.3 7
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Santa Ana HomeowtlemsljiB.nt.!J 1 7
1600 BroadwaYtS1Jite100
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August3,2000
RE: Direct Sales Program - City of San Bernardino Participation
Maggie Pacheco, Housing and Community Development Director
City of San Bernardino
201 North E Street, #301
San Bernardino, CA 92401
Dear Ms. Pacheco:
In response to the City of San Bernardino's request for an extension to the Arden Guthrie
agreement, HUD will agree to extend said agreement for an additional 6 month period from the
date of the agreements expiration. We will draft an extension letter and forward it to you. In
addition, for our files, please provide an accounting for each property as required under "Basic
Provisions # 8", and verification of homebuyer pre, and post closing training given to prospective
homebuyers as referenced in "Basic Provisions # 9".
Pursuant to your letter dated February 22, 2000 addressed to Lily Lee, and the subsequent e-mail
and phone conversations between yourself and HUD REO principals, I know that you are aware
that the extension of the $2,500.00 per property discount previously granted to the City of San
Bernardino under the now defunct ARR agreement, has expired as of May 30, 2000.
You have asked HUD to grant the City additional discounts within the County of San Bemardino
ACA area, or to count ACA purchases toward a calculation of a "bulk sale". For purposes 'of
further clarification, the City of San Bemardino and it's Redevelopment Agency must abide by the
program requirements of the Direct Sales Program when purchasing discounted properties from
HUD. These requirements are more fully described in Housing Notice 94-74. HUD can not grant
the City of San Bemardino waivers of either its rights or obligations under the Direct Sales
Program.
We ask that the City conduct an audit of closing statements for properties sold to the City of San
Bernardino since May 30, 2000. If the audit finds that the $2,500.00 discounts continued beyond
the May 30, 2000 grace period, HUO asks that the City take the appropriate corrective measures.
As part of our current quality control audit we also request the City to forward to my attention, the
final HUD 1 forms for the 30 most recent first time homebuyer purchases. More specifically these
would be the sales completed by the City of San Bernardino rehabilitation 'partners" or the City
itself to first time homebuyers. Please provide this documentation to me on or before August 18,
2000.
Your anticipated cooperation is appreciated.
SinCerelY~ Q...~
Thomas A. Rose, Director REO
Santa Ana Homeownership Center
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ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Maggie Pacheco, Director
Housing & Community Development
SUBJECT:. APPROVAL OF THE AGREEMENT
BETWEEN U.S. DEPARTMENT OF
HOUSING & URBAN DEVELOPMENT
(HUD) AND REDEVELOPMENT
AGENCY -. ARDEN/GUTHRIE AREA
DATE: NovemberS, 1999
Svnopsis of Previous Commission/Council/Committee Aetion(sllBaek2round:
Since 1990, the Redevelopment Agency has been actively engaged in the restoration of the Arden-Guthrie
Neighborhood through the implementation of a host of neighborhood and housing programs. The actions, the Agency
has undertaken to restore the Arden-Guthrie neighborhood are several. It included programs such as fonnation of an
Owner's Association, repair and restoration of buildings, general neighborhood improvements, acquisition of several
buildings, the creation of a community center, and the placement of Frazee Community Center, etc.
Recommended Motion(s):
(Communitv De,'elonment Commission)
MOTION:
That the Community Development Commission: (I) ratify the Redevelopment Agency Committee's
Recommendation approving the Arden Guthrie Disposition Plan as outlined in the anached Letter
Agreement from the U.S. Depanment of Housing and Urban Development (HUD); (2) authorize the
Executive Director of the Agency to execute said Lener Agreement and all necessary documents to
implement such Plan and (3) Appropriate the sum of $60,000 from CDBG Administration funds to pay
for closing COSIS related 10 the acquisition of HUD units.
.--...------.
. .;.
Contact Person(s): Gary Van OsdellMaggie Pacheco
Project Area(s)
--------------.---.---------.---...-.--------...----
Phone:
5081
7'" Ward
Ward(s):
Supponing Data Attached: 0 Staff Repon 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 LetterlMemo
FUNDING REQUIREMENTS
Communit), Development Block Grant (CDBG)
Administration Funds
Amount:
$
60,000
Source:
SIGNATURE:
rn .(?~
Maggie Pacheco, Director
Housing & Community Development
Commission/Council Notes:
-----------------------------------------------------------------------------------------..-------------------------
GVO:MP:1ag:99- J 1-15 Arden-Guthrie
COMMISSION MEETING AGENDA
Meeting Date: 11/15/1999
Agenda Item Number: R...?...Co
cf
.
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ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
---------------------------------------------------------------------------------------------------------------------
Approval oftbe Al!reement Between U.S. Department of Housinl! & Urban Development
mum and Redevelopment Al!encv - Arden/Guthrie Area
CURRENT ISSUE:
In its continued efforts to acquire a majority interest in the Arden Guthrie Area ( the "Area"),
over the past several months, Staff and HUD representatives have been working together to
come to an agreement on the acquisition of HUD owned units or future HUD o\'.'I1ed units in the
Area.
North Arden-Guthrie:
Specifically, at it pertains to the northern part of the Area, HUD has agreed to convey three (3)
parcels (see attached map of Area) that are currently o\'.'I1ed by HUD to the Agency at HUD's
costs. These properties are:
2029 McKinley Street (vacant parcel)
2051 Dumbarton Street (4 units)
2391 20th Street (4 units)
The estimated per parcel costs are not expected to exceed $] 0,000. It is proposed that the sum
of up to $30,000 will come from unused CDBG Administration funds. HUD has agreed to deed
' ,~
these parcels to the Agency on the condition that Agency cease to use the properties for
residential purposes. Furthermore, HUD has agreed that for any additional units that they take
title to in the north Area between now and August 2000, they will agree to convey title to the
Agency under the same terms and conditions as the first three parcels to be acquired under the
Agreement. Two of the above properties contain structures that must be demolished. The
demolition costs are estimated to be $30,000 and these costs will be paid from the CDBG
Demolition fund.
Staff is also recommending that an additional $30,000 be appropriated to acquire any future
O\\'I1ed HUD units. In addition, staff recommends that the Commission direct staff to appropriate
future CDBG funds (not to exceed $60,000) for this disposition plan.
It should be noted that out of approximately 92 parcels bounded by 20th Street on the south,
Arden Avenue on the east, Highland Avenue on the north, and Guthrie Street on the west, the
Agency o\'.'I1S 40 parcels. With the recent approval by the Commission, the Agency has
demolished all units on these parcels. The acquisition of any HUD units, at a nominal cost,
...---------------------------......--------....----..---..---.......---------------------------------..--------------------------
GVO:MP:lag:99-1 1-15 Arden-Guthrie
COMMISSION MEETING AGENDA
Meeting Dale: I illS!! 999
r;
Agenda Item Number:
R~
"
:
Economic Development Agency StaffRepon
, HUD - Arden-Guthrie
November 4, 1999
Page Number -2-
-------------------------------------------------------------------------------------------------------------
provides the Agency an opportunity to continue its acquisition program in anticipation of
eventually attracting a developer to develop the Area with a development consistent with the
recent land use change. Moreover, staff is funher exploring with Frazee Community Center the
possibility of relocating their transitional program elsewhere in the City so that the Agency may
also acquire their three four-plexes in the Area (see Map).
South- Arden-Guthrie:
With respect to the South Arden Guthrie Area, HUD has agreed to sell eleven (II) existing HUD
four plexes and any future owned HUD units to an approved ARR Panicipant, Paul Chiavatti, at
$64,000 each, (less the $2500 per unit discount) which presents a discount greater than 50%.
The Panicipant has over thirty (30) years of experience in residential development and working
with distressed communities like Arden-Guthrie. The Panicipant has already acquired and begun
to rehabilitate two four- plexes in the Area separate and apan from the HUD Agreement. This
ARR Panicipant will acquire, rehabilitate and resell the units to homebuyers. They will also be
required to insure that their respective buyers panicipate in the City's Multi-Family Crime Free
and the Homebuyers Education Programs. The eleven (I I) properties to be acquired are depicted
in the attached Map.
There is no cost to the Agency under this arrangement since the ARR Panicipant, under the ARR
Agreement, is required to pay for all costs associated with the acquisition of any HUD unit.
FISCAL IMPACT
Staffh'l:i appropriated $60,000 from CDBG Administration in order to acquire units on the north
end. There is no direct fiscal impact to the Agency relative to the acquisition of units on the
south end.
REDEVELOPMENT AGENCY COMMITTEE:
On October 21, 1999, the Redevelopment Agency Committee reviewed and approved the
proposed disposition plan by and between the Agency and HUD.
RECOMMENDA TION
That the comm7' evelopment Commission approve the above noted motion.
~.' ~----
Maggie Pacheco, Housing & Communi/)'
Denlopment Director
COMMISSION MEETING AGENDA
Meeting Date: 11115/1999
if
GVO:MPJag:99- J 1- I 5 Arden-Guthrie
-----------------------------------------..------------------------------------------------------------------------
Al:!('nda Item ~l1mh,.r~ 0 1 (,
.: 10;2(,:'99 WED 17:36 FAX 714 796 1285
U. S. ilJ::Pl'. of HUD
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U.S. Departmanl of lIQusirig and Urban Development
Santa Ana HomeownarhGip Center
1600 BroadWay, SuIIe 100
Santa Ana. CA 92706
October 20, 1999
RE: Arden Guthrie Disposition Plan - City of San Bernardino
Maggie Pacheco, Housing and Community Development Director
City of San Bernardino
201 North E Street, #301
San Bernardino, CA 92401
Dear Ms. Pacheco:
This letter agreement represents the culmination of HUD's continuous effort to
work closely with the City of San Bernardino on your requests for special pricing
on HUD's REO inventory; in particular, those properties located in the Arden
Guthrie neighborhood of the City of San Bernardino.
The Asset Control Area (ACA) Partnership Program was designed to help cities
target revitalization efforts in neighborhoods eXhibiting the characteristics similar
to those in Arden Guthrie. In a letter to HUD dated July 29, 1999, the City made
it clear that it would only participate in an Asset Control Area Partnership Pilot
Agreement, if HUD would guarantee that the city would in fact be selected for a
pilot. HUD is not able to make such guarantees. However, when the HUD
Santa Ana HOC was able to offer the City an Asset Control Area for the Arden
Guthrie portion of the City of San Bernardino, the City declined HUD's second
offer.
Nevertheless, at this juncture, HUD has agreed to the following disposition plan.
HUD understands that the City of San Bernardino has allocated extensive
resources targeted for this neighborhood. The City/Agency has made clear to
HUD that it intends to work deliberately to tum around the Arden Guthrie
neighborhood. Further, HUD understands the City/Agency will provide pre and
post home buyer education and training to the new low/moderate income
homebuyer's who will be homeowner's and landlords, once they purchase a four
unit complex in the Arden Guthrie neighborhood.
1-
10/2Q/99 WED 17:36 FAX 714 796 1285
U. S. UBPf. of HUU
141003
I
San Bemardlno Arden Guthrie
letter Agreement
Page:l
Arden Guthrie North:
The subject area, bounded by Guthrie Street(E). Highland Out Highway(N),
Arden Ave.CN). and 20th Street(S) was rezoned by the city to non-residential
uses and open space. This action, in effect, reduced the value of the subject
properties.
As such. HUD agrees to sell the three properties held in HUD's inventory which
are located in the subject area to the City of San Bernardino. HUD also agrees
to sells additional HUD REO properties in the future, should any become
.C!....ail~b'-e. within the subject area per the term and conditions of the first three
homes in question. However, this agreement is contingent on the
Redevelopment Agency of City agreeing to certify, via CC&Rs in the title for each
of the subject properties, to HUn that each property acquired, will from the date
of transfer from HUD, no longer be utilized for any residential purposes, and will
be utilized for pUrposes which are in keeping with the City's current zoning. In
retum HUD will agree to sell these properties to the Agency at HUn's costs.
Hun anticipates that it's costs per property shall not exceed $10,000.00.
Agency shall agree to absorb all costs of any demolition, and to lift and forgive
any liens. permit fees, and/or other encumbrances placed on the properties.
Agency is actively working to obtain Mayor and City-Council approval for the
subject properties as described in this North section.
Arden Guthrie South:
The boundaries of Arden Guthrie South are Argyle' Ave. CN), 19th St. (N),
McKinley St. (E), and Sunrise Lane (S).
HUD will agree to make a bulk sale of a minimum of 11 properties (currently in
HUD's inventory) to the Redevelopment Agency of the City of San Bernardino. If
the Agency executes all 11 sales contracts within 7 days. and the properties
close on or before 30 days from the date this fetter agreement is signed.. HUD
shall honor a sales price of $64,000.00 per property. The Agency shalf also
receive a $2,500.00 discount per property, (except on properties located at: 2094
19111 Street; and 2255 Sunrise Street) if all 11 properties close on the same day.
HUD shall provide no other discounts. If the properties close within 30 days, but
not on the same day, the price shall be $64.000.00 each.
2
if
1U/2q~99 WED 17:36 FAX 714 79u 1265
U. S. vBY!'. of HUD
1(1)004
San Bernardino Arden GlIIhrie
LeUer Agreement
Page 3
The Agency will certify to HUD that no FHA insured financing will be used by any
subsequent rehabilitation partner, if any, or their subsequent homebuyers in the
Arden Guthrie area. Such certification would be prepared by Arrowhead Escow
and provided to the Agency for signature with all other eScrow instructions.
Basic Provisions:
1. Agency shall bear all closings costs, recording fees, taxes, etc., and agree to
liff and forgive all City placed liens on all HUD owned properties in the subject
. -- a~ea (Arden Guthrie north and south) as of the date of the execution of this
agreement.
2. HUD shall deliver marketable title.
3. Final list of properties will be delivered to Agency, by HUD, within 48 hours of
Agency's acceptance of this agreement for both south and north areas.
4. Agency shall purchase all future HUD acquisitions in North and South Arden
Guthrie from the date of this agreement through August 23, 2000. Property
available to the Agency will be noticed to the Agency by HUD, as ready for
acquisition, and the Agency will have 45 days from the date of notice to close
escrow. All other terms and conditions outlined in this agreement shall apply
to future Agency acquisitions within Arden Guthrie north and south,
respectfully.
5. All contract penalties for failure to perform shall be due and payable at
closing, or on the 60'" day (from date of execution) if a closing never occurs.
6. HUD's research shows that there may be several properties in "default"
status which fall within the boundaries of Arden Guthrie. Agency understands
that "default" status is not necessarily an indication of future HUD ownership,
and that these properties mayor may not be made available to the Agency
under the terms of this agreement.
7. Agency agrees to monitor the rehabilitation, and resale efforts of the
properties described herein to insure compliance with all codes.
8. Reporting - City shall provide an accounting for each property as required in
the Agency ARR agreement.
3
4-
. iQ/2P/9~ WED 17:37 ~~ 714 796 1285
U. ~. VEYf. of HUD
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San Bernardino Alden Guthrle
laller Agreement
Pege 4
9. Agency agrees to provide pre and post home buyer training and education to
all prospective homebuyers and potential landlords within the subject area.
10.Agency agrees to close within 30 calendar days of this letter agreement on
.. the initial 11 properties being contemplated for p~rchase.
,
11. The sole and only parties to this agreement are HUD and the Redevelopment
Agency of the City of San Bernardino.
.-... .... - .....
12. Any violation of the terms and conditions in this basic provision section, shall
.. - bl; s.llfficient cause to permit the aggrieved party to terminate this agreement.
We look forward to the Cfty/Agency's successful rehabilitation of the Arden
Guthrie neighborhood.
Sincerely,
Thomas A. Rose
Director of REO Division
Santa Ana Home Ownership Center
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(JarrV Otdel, Direc r
Eco mic Developm t Agency
City of San Bernardino
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