HomeMy WebLinkAboutRS1- Redevelopment Agency DE `" EL0 P M E N T DE PAR TM NT
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTIOft
From: KENNETH J. HENDERSON Subject: ARROW VISTA
Executive Director HOUSING DEVELOPMENT
DDA MODIFICATIONS
Date: February 11, 1993
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Synopsis of Previous Commission/Council/Committee Action(s)
None
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Recommended Motion(s):
(Community Development Commission)
MOTION That the Community Development Commission authorize staff to
amend the existing Arrow Vista Housing Development Disposition
and Development Agreement (DDA) by and between Dukes-Dukes and
Associates and the Economic Development Agency (EDA) as it
relates to providing homebuyers assistance, and authorize the
Executive Director and Mayor to make all necessary changes and
execute any and all documents to accomplish this modification.
�i.
Administrator KE J. HENDERSOft
Exe utive Director
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Contact Person(s): Kenneth J. Henderson/David R. Edgar Phone: 5081
Project Area(s): _ Northwest (NW) Ward(s): Six (6)
Supporting Data Attached: Staff Report
FUNDING REQUIREMENTS: Amount: $ Source:
Budget Authority: Requested
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Commission/Council Notes:
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KJH:DRE:paw:0193c ----'-'---
COMMISSION MEETING AGENDA
Meeting Date: 02/15/1993
Agenda Item Number:
D F i e E L O P M E N T D E P A R T 3 N T
OF THE CITY OF SAN BERNARDINO
STAFF REPORT
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ARROW VISTA HOUSING DEVELOPMENT DDA MODIFICATIONS
On April 6, 1992, the Community Development Commission amended the
existing Disposition and Development Agreement (DDA) between Dukes-Dukes
and Associates and the Economic Development Agency. This amendment
Included the addition of a Homebuyer Assistance Program Component to the
Arrow Vista Housing Development project (Please see attached Section 3.11).
As designed, the homebuyers assistance program calls for the Agency to
reduce its escrow demand statement by $5,000, and instead receive a Deed
of Trust (second position) and Promissory Note in that amount. The
purpose and intent of this program is to both facilitate the sale of these
homes and to promote homeownership opportunities.
Pridemark Homes has indicated that the assistance program as designed, is
extremely ineffectual at addressing the significant financial needs of
potential homebuyers. The combination of additional liens against the
property, with no additional resources actually being provided into
escrow, makes this program critically unattractive and in many cases
virtually unuseable. There are several properties currently in escrow
which could be closed immediately, if the existing homebuyer assistance
program could be modified.
To facilitate sales of Phase IIA properties, PrideMark Homes is proposing
that the Arrow Vista Homebuyer Assistance Program be redesigned. It is
proposed that the Assistance now be structured as a direct grant to the
homebuyer, and not be secured in any fashion against the property. The
funds would be credited towards the homebuyer's closing costs or down
payment at the close of escrow, and would not actually be handled
(directly or indirectly by the borrower).
This action would subsequently result in the Agency receiving $5,000 less
per property ($107,000 vs $102,000). It is the opinion of both Pridemark
Homes and the staff that this action, however, would serve to
significantly enhance the marketability and saleability of the existing
housing stock.
It is important to underscore that the sole purpose and intent of this
proposed action is to stimulate sale of the existing Phase IIA Arrow Vista
inventory. The subsequent sales enable the Agency to both repay a
proposed Bank of San Bernardino note and to utilize these valuable
resources on other high quality housing development opportunities.
Staff recommends adoption of the form motions.
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0/2 2. ''F" 011 L.a- Z
MNNETHee. HENDE , Exe-ftTlie Director
Development Department
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KJH:DRE:paw:0193c COMMISSION MEETING AGENDA
Meeting Date: 02/15/1993
Agenda Item Number: C3 J
z
1 amount into escrow for the sale of each such unit, and an amount
2 equal to the actual customary and typical closing costs shall be
3 deducted from said $25,000 deposit to pay such actual customary
4 and typical closing costs of the homebuyer.
5 The closing cost loan shall be subject to approval by
6 Agency Staff and will be evidenced by a note to the Agency
7 executed by the homeowner and secured by a second deed of trust
8 on such unit. Such closing cost loan as so approved by Agency
9 Staff will bear interest at a fixed or variable rate equal to
10 that rate of interest per annum as set forth in this first
11 mortgage loan of such homebuyer. Such closing cost loan will be
12 due and payable both as to (i) principal and (ii) accrued and
13 unpaid interest upon each refinancing of such unit and any unpaid
14 principal and interest amounts shall be paid in full upon sale.
15 As an alternative, each homebuyer shall have the option to have
16 the interest rate on the Agency's closing cost loan reduced by
17 one (1) percentage point for every five percent (5%) of the total
18 equity obtained by the homebuyer in such unit ("equity" as used
19 herein shall mean the amount that remains upon sale or
20 refinancing after payment of all sale or refinancing costs and
21 payment of the outstanding principal balance of the first
22 mortgage loan and all principal and interest due and owing on the
23 closing cost loan) . The Note and Deed of Trust shall contain
24 such interest rate and equity participation provisions as elected
25 by the homebuyer and shall be due and payable as to (i)
26 principal, (ii) accrued and unpaid interest and (iii) equity
27 participation amount upon sale or refinancing of such unit in the
28 same manner as provided above. "
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C
1 7. Except as amended herein, said Joint Development
2 Agreement shall remain in full force and effect.
3 IN WITNESS WHEREOF, the parties hereto have executed this
4 amendment to the Joint Development Agreement on the day and date
5 first'• above shown.
6 ATTEST: CITY OF SAN B ERN ARDINO
7
i Clerk B
ayor
City of fWan Be nardino
10
11
ATTEST: REDEVELOPMENT AGENCY/ ITY
DEVELOPMENT CO ISSI
12 J
Be�_arm
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13 —Se 4ea ry W. qHCOmB,
14
15 DUKES-DUKES AND ASSOCIATES, INC.
16 By:
17 By: �-
18 Approved as to form
19 and legal content:
JAMES F. PENMAN
20 City Attorney
21
22 By.
23 Approved as to form
24 and legal content:
25 By-
3
26 Agency Counsel
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