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Home My WebLink About12- Development Department DEVELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J. HENDERSON SUBJECT: ARROW VISTA HOUSING Executive Director DEVELOPMENT PROJECT DATE: February 16, 1994 --------------------------------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s): On September 20, and in October 1993, the Community Development Commission and Redevelopment Committee considered various delinquent Agency notes with Dukes-Dukes and Associates. On October 7, 1993, the Committee submitted two (2) recommendations to the Community Development Commission regarding this project. On November 1, 1993, the Community Development Commission agreed to reconsider disposition of this development project in sixty (60) days. Synopsis Continued to Next Page... --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: That the Community Development Commission consider disposition of the Arrow Vista Housing Development Agreement pertaining to Phase I and Phase IIA standing inventory. A Admini rator KENNE H J. HE ERSON Executive Director --------------------------------------------------------------------------------------------------------------------------------------------- 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: Attachments "A" and "B" FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A Budget Authority: N/A --------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: -------------------------------------------------------------------------------------------------------------------------- KJH:DRE:paw:arovsta.cdc COMMISSION MEETING AGENDA MEETING DATE: 02/21/1994 Agenda Item Number: REQUEST FOR COMMISSION/COUNCIL ACTION ARROW VISTA HOUSING DEVELOPMENT PROJECT FEBRUARY 15, 1994 PAGE NUMBER -2- ---------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s) Continued: On January 10,1994, the Community Development Commission discussed the current status of the marketing and sales activity regarding Arrow Vista Phase I and Phase HA standing inventory. On January 24, 1994, the Community Development Commission authorized staff to develop a formal agreement based on the previously executed "Agreement in Principle" regarding disposition of the Arrow Vista housing development standing inventory. -------------------------------------------------------------------------------------------------------------------------- KJH:DRE:paw:arovsta.cdc COMMISSION MEETING AGENDA MEETING DATE: 02/21/1994 Agenda Item Number: I r DEVr: LOPMENT DEPARTM — NT STAFF REPORT --------------------------------------------------------------------------------------------------------------------- Arrow Vista Housing Development Proiect On January 24, 1994, the Community Development Commission considered disposition of the Arrow Vista Housing Development Phase I and Phase II standing inventory. Discussions regarding disposition of this development project focused primarily on the validity of the eleven (11) then currently opened escrows and three (3) sales reservations. As previously documented, the existing project standing inventory consisting of thirty (30) homes and three (3) models represents a significant expenditure of Agency resources (approximately $4,000,000) which when sold could be utilized towards other worthwhile housing projects. Absent sales activity on behalf of the Developer, however, Agency resources remain both "tied up" and solely dependent on performance by the Developer for ultimate recapture and reuse within the Community. In an effort to expeditiously facilitate disposition of the Arrow Vista project standing inventory to the mutual satisfaction of both the Agency and the Developer, an Agreement in Principle was presented for consideration to the Community Development Commission on January 24, 1994. The Agreement in Principle was developed and executed by Agency staff, the Developer and the Developer's legal counsel on Friday, January 21, 1994 (Attachment "A"). Following discussions regarding execution of the proposed Agreement, the Commission directed staff to proceed with development of a formal agreements implementing those provisions contained within the Agreement in Principle. On Thursday, January 24, 1994, Sabo and Green, Agency Special Counsel, provided Dukes- Dukes and Associates with a draft copy of the "Agreement for Relinquishment of Rights and Forgiveness of Obligations" pertaining to the Arrow Vista Housing Development Phase I and Phase IIA standing inventory. In order to meet the agreed to execution deadline of Monday, January 31, 1994, Sabo and Green requested that comments be received from the Developer prior to 6:00 p.m., on Sunday, January 30, 1994. During the week of January 31, 1994, staff from the Agency and Mayor's Office and Councilwoman Pope-Ludlam met with the developer to discuss the above referenced agreement. At that meeting, it was agreed formal proposed amendments to the agreement drafted by Sabo and Green would be submitted by Dukes-Dukes and Associates on February 2, 1994. This deadline and a subsequent deadline of February 9, 1994 was not met by the developer as more fully described in Attachment "B". -------------------------------------------------------------------------------------------------------------------------- KJH:DRE:paw:arovsta.cdc COMMISSION MEETING AGENDA MEETING DATE: 02/21/1994 Agenda Item Number: REQUEST FOR COMMt6SION/COUNCIL ACTION Arrow Vista Housing Development Project February 15, 1994 Page Number -2- ---------------------------------------------------------------------------------------------------------------------- Based upon the foregoing, staff recommends adoption of the form motion. KEN ETH J. 4ENDERSON, Executive Director Development Department -------------------------------------------------------------------------------------------------------------------------- KJH:DRE:paw:arovsta.cdc COMMISSION MEETING AGENDA MEETING DATE: 02/2111994 Agenda Item Number: AGREEMENT IN PRINCIPLE ARROW V :A HOUSING PROJECT STANDIN INVENTORY January 21, 1994 1. That Dukes-Dukes and Associates remain in the project as a principal in a consultant capacity. 2. That the Joint Development Agreement between the City/Agency be terminated by mutual agreement with the understanding that no damage will be done to Dukes-Dukes and Associates or the Agency's reputation or the incurring of additional legal liability- by Dukes-Dukes and Associates or the Agency. 3. That Dukes-Dukes and Associates be retained as a consultant to the Agency for the following purposes: A. Provide technical assistance to the Agency, the Agency's designated marketing and sales agent and prospective home buyers. B. Market the Arrow Vista project through word of mouth, public presentations and ensuring, to the maximum extent possible , the positive promotion of the Arrow Vista standing inventory. - C. Work with the Agency's Housing Division in carrying out the goals and objectives of the Agency's Neighborhood Spirit Program in enhancing the area immediately surrounding the Arrow Vista standing inventory. 4. That Dukes-Dukes and Associates work with, coordinate with and cooperate with the Agency's designated Marketing/Sales Agent. S. That Dukes-Dukes and Associates be compensated in an amount not to exceed $120,000, payable in 12 monthly installments of$10,000. 6. That the termination agreement will be executed by no later than January 31, 1994 or this Agreement in Principle becomes null and void. KE TH J. HE ERSON, Executive Director HN UKES velopment Dep ent Dukes-Dukes and Associ s DAVID R EDGAR, Housing ivision Manager AMIvi>E DUKES Development Department Dukes-Dukes and Associates ATTACHMENT "A" J� 'N'S BE City of San Bernardino Economic Development Agency Kenneth J. Henderson x DEVELOPMENT DEPARTMENT Executive Director �4'n 1 10 February 15, 1994 Mr. John Dukes DUKES-DUKES AND ASSOCIATES 1875 West Highland Avenue San Bernardino, California 92405 RE: AGREEMENT FOR RELINQUISHMENT OF RIGHTS AND FORGIVENESS OF OBLIGATIONS Dear John: I am writing in reference to the Agreement noted above which, as you know, was our proposal to implement a substantial portion of the Agreement in Principle negotiated by you, your brother Sammie Dukes, David Edgar and myself. During our meeting the week of January 31, 1994 attended by yourself, Sammie Dukes, Councilwoman Pope-Ludlam and staff from the Agency and the Mayor's Office, you agreed to submit your proposed amendments to the above referenced agreement by February 7, 1994. After not receiving your proposed amendments and in response to a telephone call from Agency staff, you agreed to submit the document by Wednesday, February 9, 1994. As you know these submission dates were established to allow sufficient time to review and discuss the proposed Agreement prior to the matter being considered by the Community Development Commission on February 21, 1994. Staffs most recent telephone conversation with you revealed you anticipate submitting your proposed amendments to the Agreement for Relinquishment of Rights and Forgiveness of Obligations on February 16, 1994. It is important that you understand this late submission (late will largely prevent any substantive and productive discussion of the issues prior to the February 21, 1994 Community Development Commission meeting. As an aside, please understand that this most recent anticipated submission date is the same day the February 21, 1994 Community Development Commission agenda is disseminated. Although disposition of the Arrow Vista standing inventory will be scheduled for consideration on February 21, 1994, staff will not be in the position to recommend any action related to the previously executed Agreement in Principle, nor your proposed amendments to the Agreement for Relinquishment of Rights and Forgiveness of Obligations. ATTACHMENT "B" 201 North E Street, Third Floor•San Bernardino, Calitomia 92401-1507•(909)384-5081 •(800)232-1267•FAX(909)888-9413 1 MR. JOHN DUKES February 15, 1994 Page Number Two John, we remain committed to implementing the Agreement in Principle, subject to Community Development Commission approval. We will, however require timely and effective action on your part to bring this about. Please call me or David R. Edgar, Housing Division Manager, at (909) 384-5081 if you have any questions. Sincerely, 04W' KENNETH I HE DERSON, Executive DIrector Development Department KJI I:lag:94-02-0 I.ltr cc: Mayor Minor Councilwoman Pope-Ludlam Administrator•EDA Housing Division Manager M 1" .,�. .V f .' A.f..+.J 7 1 400/7O.L uJ►.c.a-1J1JRL D a PkZ), tom. rPA= ui DUKES-DUKES AND AS OCIATES, INC. 1875 WW WQML I Z AVL . UM Wi tNo,C&vovm • MXMl0M 714/&B7.44Vl • FAX 714M7-"ll . t COKPANYs CD l PAX NO: FROM: G DATE: � TIME: -O to PAGES TO FOLLOW: REFERENCE: MESSAGEs VLV aVV J` a( yJ f L'.Vyf JVLG LfNfGJ-KJf�-.7 Ot f1JJ1Jy• rFT�. GIC SAND41E L DUK 3S Attorney at (510) 635-232S 675 Hegea er Rd.#20S (S10) 638-S138 FAX Oaklaud,C California 94621 February 18, 1994 Ken Henderson Executive Director Economic Development Dept. 201 North"E" Street 3rd Fl. San Bernardino,-Ca-92401 Dear Mr.Henderson: At a meeting with Dave Edgar, Bo Lemiey,Jahn Dukes, and myself on February 16, 1994 we di concerns that John had, and outlined his proposal for resolving ese concerns. As stated in my previous communications it is john to terminate the Joint Development Agreement(JDA) and to olve all issues included in the JDA, Dukes Proposal is as follaws: 1. . his loan will be paid off upon thk re-syndication of properties presently owned by Dukes. it is anticipated that this process will be complete on or before September 15, 1 t 94. 2. Steer C�anadly®gbm Ian The Agency made a loan to Dukes to purchase 87 sewer capacity rights from the Water Departn ienL These rights are to be transferred to the City and the obligation of Dukes to repay this loan Is to be canceled. 3 Dukes and The Agency wM enter nto a Consultant Agreement, wherein Dukes will provide services to i he Agency as outlined in the Agreement in Principle between Dukes ' d the Agency dated January 21, 1994, with the following m cations: 1 I. The Agreement will be entered into between San Bernardino Arrow Vista Corporation and the Agency. 2. The term of the agreerae a will be for six(6) months at $20„ = per month. 4. Discussions have been held betm m the Agency's financial consultant,Lender's and Dukes regardi ig the feasibility of the Agency pooling mortgages and selling t iem on the Secondary Market. This will allow the agency to n coup its investment within a Short period of time. There are a pool of applicants In siding the 10 previously submitted to You,who would qualify .w Lder this process.This would allow the agency to achieve the original objective without having a 1(mg term investment in the property. Under the consultant agreement Pukes would assist the Agency In putting together the-financial if desired. S. Anabws nf Amount owed The Agency sold Dukes 76 lots $25,000 each. In the first Phase, 27 houses were built of which 1 sold at an average price of S133,SS0,for a total of $2,537,450. $1 5,000 was for land cost and $1,740,435 was for payment of the co traction loan,including interest, $150,514 was for taxes,Insurance&mist. and $171,S11 was to Arrow Vista Corporation. (AMachment 1). The remaining 8 houses include the 3 models. In the 2nd Phase there are 25 houses which have not sold. 24 lots are being returned to the ty which include $6,000 per lot for additional site improvements as installation of utilities, grading,and fighting, etc. Attachment 2 is an analysis of the loans, repayments and Current values. 6. Modpla 2 Under the Analysis in amachment 2, the cost of the models were included in the construction loan. After deduction for the loan advanced,payments made, and proper y returned, the Agency will be made whole with a $355.685 surpl 7. All escroWs will be assigned to th Agency for disposition. After you have reviewed this we will ax et with you to discuss these and additional concerns and issues you may have, Sinpe rely, ..0 - . 5 Saziuie i.:'Dukes SD/tw Encl. cc: Mayo-Minor Councilwoman Pope-Ludlam Administrator-EDA Horsing Division Manager 3 'a S;� c � 1•L nil it '+ c�•�� ., �.it a •. ✓F„`_Il-. .•l •, a fit.. _ ITS ` ! � it:=r •,,;' , •�v I? \ s Y • �t� t • �j4 d•'Yi St 1 = ' Y 1 1 � > n.�_� 1 _ .iy� �' liys :i1 ^•'.t' r�'�,,.: , � � ,�:27t��•' 1 1 }.E.? E� ' �' Ni: �i■c'j�""ri' � `'k _ ��:. a i .JI'`• !of ��'.' �� a --!; 'A .�: t y, t,�jl•,31 BAs J .r k r �, t 1 St = S • i,T 1 t ! :M : �* �( " � ` � '� ,! �• a, .c' f is i. �� x t. is-.fit♦ � ;q y � -i� '• '. 1 1 i .r, • :C-'C?v— 'v �� , r s °. � � y `j •/ i �� i '<..Z ,'� ?yr2 ` .1 .qty'jl ;,�,�. r c: t t t • ilt ttih ., ,fit;I�,� � � �: S.l t � ; • �y.�s�._ �r = .�r�. x.15;F l{y. 1 Y Fir '1 f ,1. 'F: it •.t //4) - :wJ+Y � a ANALYM OFD PROPOSAL Invenbry 30 X $183.650 4,006,500 LEM: Saing Cod of 10% 3,605,850 Estimaud R&h* 30 X $10,000 300,000 Net 3,305,850 Previoudy Paid 2.215.435 'LESS: L.aml $31,000 X 24 7".000 Total 014W $6.265.285 Lftns by Agency Phase! -- ._ -_ - 2.335.500 Phase 2 - - 2,182,500. L.wd 0 X6,000 76 1,900,000 $6,398,000 Net ($132,715) Agency hand Cost 1,482.000 Agency Transfer 1e Dukes 1.800,000 LaW WrkuP $418.000 Net 10 Agony Lend 285,285 Sewer APPS VaNe 70,400 Tote! Net veiue to Agency $355,685 1nckudes $6,000 per lot for addltionai site improvement (i.e., grading, utilities and righting)