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HomeMy WebLinkAbout1982-3551 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 82-355 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZINGTHE EXECUTION OF DISPOSITION AND JOINT DEVELOPMENT AGREEMENT, LYTLE CREEK HOUSING DEVELOPMENT, WITH PEACOCK ENTERPRISES, LIMITED, FOR THE DEVELOPMENT OF PROPERTY LOCATED ON THE OLD METCALF SCHOOL SITE BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS; SECTION 1. Recitals. (a) The Mayor and Common Council previously requested proposals for development of the property located at the southwest corner of Eureka Avenue and Poplar Street in the City of San Bernardino, site of the old Metcalf School, to be developed into seven units of residential housing for persons of low income. Several proposals were received from prospective developers. (b) After evaluating all proposals received, the proposal of Peacock Enterprises, Limited, was determined to be the best and most suitable, and an exclusive right to negotiate a. Disposition and Joint Development Agreement between the City and Peacock Enterprises, Limited, was authorized by the Mayor and Common Council. (c) Negotiations between representatives of the City and Peacock Enterprises, Limited, and other interested parties, have resulted in a proposed Disposition and Joint Development Agreement satisfactory to both parties, a copy of which is annexed Hereto as "Exhibit 1" and incorporated herein by reference. (d) Government Code for the State of California, Section 37364, provides that notwithstanding any provision of a city's charter, or any other provision of law, whenever the legis- lative body of a city determines that any real property or inter- est therein owned by the city can be used to provide housing 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 affordable to persons and families of low or moderate income, as defined by Section 50093 of the Health and Safety Code or as defined by the United States Department of Housing and. Urban Development or its successors, and that such use is in the city's best interests, the city may sell, lease, exchange, quitclaim, convey, or otherwise dispose of such real property or interest therein at less than fair market value to provide such affordable housing under whatever terms and conditions the city deems best suited to the provision of such housing. SECTION 2. Findings. (a) The Mayor and Common Council of the City of San Bernardino do find that real property presently owned by the City, located at the southwest corner of Eureka Avenue and Poplar Street in the City of Sar. Bernardino, the legal description of which is set forth in "Exhibit 2" annexed hereto and incorporated herein by reference, can be used to provide housing affordable to persons and families of low income, as defined by Section 50093 of the Health and Safety Code or as defined by the United States Depart - 19 ent of Housing and Urban Development. 20 (b) The Mayor and Common Council do further find that 21 Iluse of such property for the development of seven units of resi- 22 dential housing for persons of low income as so defined is in the 23 City's best interests, and that the terms and conditions specified 24 in "Exhibit 1" for the sale and other disposition of such real 25 �property at less than fair market value to provide such affordable 27 housing are reasonable terms and are best suited to the provision of such housing. 28 II " ' . -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SECTION 3. Authorization. The Mayor is hereby authorized and directed to sign and execute on behalf of the City of San Bernardino the Disposition and Joint Development Agreement with Peacock Enterprises, Limited, a copy of which is annexed hereto and incorporated herein as "Exhibit 1". I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a regular meeting thereof, held on the 16th day of August 1982, by the following vote, to wit: AYES: Council Members Castaneda, Reilly, Hernandez, Quiel, Strickler NAYS. None ABSENT: Council Member Hobbs City Clerk The foregoing resolution is hereby approved this -C/ day of August , 1982. Approved as to form: ty Att(5rney -3- ity or bar bernaraino I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DISPOSITION AND JOINT DEVELOPMENT AGREEMENT LYTLE CREEK HOUSING DEVELOPMENT BETWEEN THE CITY OF SAN BERNARDINO AND PEACOCK ENTERPRISES, LTD. THIS DISPOSITION AND JOINT DEVELOPMENT AGREEMENT is made and entered into this,::' day of r� , 1982, by and between the CITY OF SAN BERNARDINO, a municipal corporation, herein called "City", and PEACOCK ENTERPRISES, LTD., a California limited partnership, whose address is 1313 West Civic Center Drive, Suite 4, Santa Ana, California, 92703, herein called "Developer". City and Developer agree as follows: 1. Recitals. (a) The parties recognize the objectives of the Community Redevelopment Law of the State of California (Health & Safety Code Sections 33000, et seq.) and the state policy that ?r_ovision of housing for all Californians is a concern of vitae statewide importance, and the stress thereon established by the Legislature in Government Code Section 37364 toward encouragement of the development of affordable housing for families of low or moderate income. (b) City has requested proposals for the development of affordable housing for persons of low and moderate income on certain property owned by the City known as the Metcalf property, located at the southwest corner of Poplar and Eureka Streets, comprising 1.28 acres, the legal description of which is set forth in full in Exhibit "I" which is annexed hereto and incorporated ;herein by reference. This property is hereinafter referred to as 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 "the Property". The proposal put forth by Developer for such a project has been determined to be the most favorable proposal, and extended negotiations have been conducted between City and Developer for the purpose of establishing all terms and conditions under which the development of affordable housing on the Property can be best completed. (c) The Property was obtained by City with Community Development funds, provided by the federal government, and disposition of the Property therefore must be in compliance with federal regulations. (d) The provisions of Government Code Section 37364 have preempted the provisions of the City's Charter as to sale of real property where the purpose of such sale is to provide affordable housing to persons and families of low or moderate income, and said law provides that the City may sell, lease, exchange, (quitclaim, convey or otherwise dispose of such real property or interest therein at less than fair market value to provide such affordable housing under whatever terms and conditions the City deems best suited to the provision of such housing, subject to restrictions that the Property must remain continually affordable to such persons and families for a period of not less than thirty, nor more than forty, years pursuant to a method prescribed by the City. (e) The parties have reached agreement as to the manner in which the Property which is the subject of this agreement can best be developed for purposes of providing affordable housing to persons and families of low or moderate income, and City desires to sell and Developer desires to purchase the Property in -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 accordance with the provisions of this agreement. 2. Implementation. Now, therefore, it is agreed between the parties hereto as follows: (a) Sale of Property, Conveyance Terms. Subject to all terms, covenants and conditions of this agreement, City agrees to convey the Property to Developer at a total acquisition price of Dne Dollar ($1.00). j (b) Housing Units. Developer agrees to develop a seven - unit "factory built" housing subdivision on the Property, complete with irrigation, landscaping and fencing. (c) Deed; Conditions for Delivery. The grant deed to the Property shall be delivered to Developer upon submission by Developer and the approval by City of (1) Final subdivision plans, (2) Sales agreement or accepted purchase order between Developer and Hallmark Southwest Corp. for the purchase of seven factory built housing units, (3) A faithful performance bond or letter of credit in the amount of $200,000.00, or an unconditional and irrevocable commitment for a construction loan to assure repayment of the loan provided for in (d) below, (4) Evidence of permanent "take out" financing or other commitment for permanent financing from a private lending institution or any other reliable lending source. (d) Loan; Terms; Repayment. At the time that Cite executes its grant deed to the Property, City agrees to provide an interest-free construction loan in an amount not to exceed $190,000 from the joint City/County Community Development Block -3- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Grant Revolving Loan Fund administered by the County Housing Authority of Sari Bernardino County. City shall make such loan available at such time as Developer executes a promissory note in form satisfactory to Developer and City's City Attorney assuring repayment of the loan in full no later than eight months from the date of the loan. (e) Property; Vacation of Alley. City shall forthwith proceed to abandon or vacate the alley running north to south through the Property. (f) Fees; Reimbursement. City agrees to reimburse Developer, following payment by Developer of such fees, an amount equal to the development fees paid by Developer to City for development of this project. Reimbursement of such funds shall be accomplished through the establishment of a fund to be known as the Lytle Creek Housing Development Fund for the purpose of debiting permit, inspection and other service based fees. (g) Sales; City Subsidy. Upon completion of the construction contemplated by this agreement, Developer agrees to sell each of the units to low income families whose gross annual family incomes do not exceed eighty percent of the San Bernardino County median family income, which has been established at $22,150.00. Each unit shall be sold for a price not exceeding $40,000.00 except that, at his or her sole option, any qualified buyer who has financial means to pay a larger down payment than would be required for the $40,000.00 price shall be permitted to 26 contract for a price in excess of $40,000.00, with any part of the 27 price over $40,000.00 deducted from City's subsidy interest which 29 11will be secured by a second and subordinate trust deed or other 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 security interest. The City agrees to use Community Development funds to subsidize the difference between that amount paid by buyer and the market value of each of such homes, or the cost to develop each (including the developer's profit), whichever is less, provided, however, that the total subsidy for all units shall not exceed the sum of $122,150.00, nor shall the subsidy exceed $20,000.00 for any one unit. (h) Security for Subsidy; Subordination. Each deed to be issued by Developer shall be subject to a second and subordinate mortgage or trust deed, which mortgage or trust deed shall be subordinate to the primary financing arranged for the purchase of each of the homes. The exact form of such trust deed shall be in form acceptable to Developer and the City Attorney of City, and shall be in a form of equity sharing, contingent interest, shared appreciation, or other suitable mortgage or trust deed structure. (i) Affordability for Thirty Years as Condition. Each deed issued by Developer shall establish, as a condition running with the land, the requirement that such home shall continue to be affordable as required by Government Code Section 37364 for a period of not less than thirty, nor more than forty, years pursuant to the method prescribed by the City, which shall be incorporated in the restrictions. The form of this restriction shall be designated by the City Attorney, with approval of Developer. (j) Construction According to Approved Proposal. The homes to be developed pursuant to this agreement shall be constructed by or under the direction of Developer in full and -5- 1 2 3 4 5 6 7 8 complete compliance with the plan proposed by Developer by letter dated May 3, 1982, except as modified by written agreement between the parties. For purposes of plan changes only, approval on behalf of the City may be granted by the Executive Director of the Community Development Commission. (k) Obligations of City. The City shall have no obligation whatsoever toward Developer, other than as specifically set forth in this agreement. Upon satisfactory completion of the 9 project, and sale of all homes to families of low income, City 10 shall release the faithful performance bond or letter of credit 11 12 13 14 15 16 ovided to City, provided that satisfactory evidence is given at all liens and claims have been paid in full. (1) Obligations of Developer. Developer shall forthwith commence the design of the project, and, within forty-five days after signing of this agreement, shall submit tentative plans to City and thereafter promptly and continuously prosecute to 17 completion, the planning review process, and cooperate fully with 18 City in securing approval of plans. Following final approval of 19 plans, and delivery of the deed, Developer shall complete the 20 project within eight months from the date of such final approval. 21 All improvements shall be constructed in accordance with 22 Japplicable state and local laws and regulations and shall conform 23 to the provisions of this agreement. All work performed by 24 Developer shall be in accordance with the proposal of Developer 25 dated May 3, 1982, a copy of which is on file with the 26 JRedevelopment Agency of the City of San Bernardino, and which is 27 J�incorporated herein by reference. Any change from the 28 JIspecifications of that proposal shall be approved by the Executive 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Director of the Community Development Commission. Time is of the very essence of this agreement. The method of selection of buyers of the subsidized housing shall be established by Developer by written proposal within six months from the date of this agreement. Such method is subject to approval by the Executive Director of the Community Development Commission. (m) Access to the Property. Prior to delivery of the deed to the Property to Developer, City shall permit Developer access thereto, whenever and to the extent necessary to carry out the provisions of this agreement; subsequent to such delivery, Developer shall permit access to the property to the City whenever sand to the extent necessary to carry out the provisions of this agreement. In no case shall there be any compensation payable or charge made in any form by or to either party for any such access. (n) Certificate of Completion. Promptly after completion of the improvements in accordance with the provisions of this agreement, City will furnish Developer with an appropriate certificate of completion. Said certificate by the City shall be a conclusive determination of satisfactory performance of this agreement, except that this agreement shall remain in full force and effect until all homes have been sold in accordance herewith. (o) Restrictions on Use. The Developer agrees for itself and its successors and assigns, and every successor in interest to the property, or any part thereof, that the Developer and such successors and assigns shall (1) Devote the property to, and only to and in accordance with the uses specified in this agreement. (2) Not discriminate upon the basis of race, sex, -7- 1 2 3 4 5 S 7 8 9 10 11 12 13 14 marital status, color, creed, religion, national origin or ancestry in the sale, lease, sublease, rental or transfer or in the use, occupancy, tenure or enjoyment of the Property or any improvements erected or to be erected thereon, or any part thereof, nor shall the Developer itself or any person claiming under or through it, establish or permit any such practice or practices of discimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Property, or any part thereof. (3) The parties recognize that this is a project funded in part with funds from the United States Department of Housing and Urban Development, pursuant to a certain grant agreement for a Community Development Block Grant Program, and the 15 Ilparties hereto agree that the terms and conditions of the grant 16 agreement imposed by the United States Department of Housing and 17 Urban Development are hereby made a part hereof, and Developer 18 accepts full responsibility for compliance with all terms and 19 conditions of said grant agreement, as fully and effectively as if 20 IDeveloper had itself executed such agreement. Violation of the 21 Ilterms of such grant agreement shall constitute a default in this 22 Ilagreement. 23 (p) Minimum and Prevailing Wage Rates for Laborers and 24 Mechanics and Penalty. All laborers and mechanics employed under 25 the work covered by this agreement shall be paid unconditionally 26 lland not less often than once each week, and without subsequent 27 deduction or rebate on any account (except such payroll deductions 28 as are made mandatory by law and such other payroll deductions as 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 are permitted by the applicable regulations issued by the Secretary of Labor, United States Department of Labor, pursuant to the Anti -Kickback Act), the full amounts due at time of payment computed at wage rates not less than those contained in the wage determination decision of said Secretary of Labor regardless of any contractual relationship which may be alleged to exist between the Developer, any contractor or subcontractor and such laborers and mechanics. Developer further agrees that this Section shall inure to the benefit of the City and all laborers and mechanics employed upon the work covered by this agreement as third party beneficiaries and that the City or any aggrieved employee may filel an action in any court of competent jurisdiction against Developer or any of its contractors or subcontractors for the recovery of the difference between wage rates actually paid and the wage rates] legally required to be paid under the provisions of this section and the applicable regulations, statutes and laws, and further agrees to pay reasonable attorney fees and court costs if the Cityl or employee prevails. (q) Prohibitions Against Assignment and Transfer. Developer represents and agrees that its acquisition of the property, and its other undertakings pursuant to this agreement, are and will be used for the purpose of development of the property under the terms of this agreement, and not for 24 11speculation in land holding. The Developer further recognizes the 25 11importance of the development of the property to the general 26 27 ku fare of the community, that the qualifications and identity of the Developer are of particular concern to the community and to the City, and that Developer was selected because of its -9- 1 2 3 4 5 5 7 8 9 10 11 12 particular qualifications as well as the terms of its proposal. Developer represents and agrees for itself and its successors and assigns that the Developer has not made or created, and that it will not, prior to the proper completion of the improvements as certified by the City, make or create, or suffer to be made or created, any total or partial sale, assignment, conveyance, or any trust or power, or transfer in any other mode or form of, or with respect to, this agreement or the Property, or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the City except that, by way of security for, and only for the purpose of obtaining financing necessary to enable the Developer or any 13 11successor in interest to the property, or any part thereof, to 14 11perform its obligations with respect to making the improvements 15 under this agreement, and for any other purpose authorized by this 16 agreement, and except as to any individual parts or parcels of the 17 roperty upon which the improvements to be constructed thereon 18 1 ave been completed, and which, by the terms of this agreement, 19 (�Developer is authorized to convey as such improvements are 20 ompleted. However, prior to the issuance by the City of the 21 ertificate provided for herein as to the completion of the 22 onstruction of the improvements on the Property, Developer may 23 nter into any agreement to sell or otherwise transfer, after the 24 issuance of such certificate, the Property or any part thereor or 25 'nterest therein, under the specific terms of this agreement for 26 J�ow income housing. The parties contemplate that the Developer 27 Itself, and not any assignee or transferee thereof, shall be the 28 Darty performing this agreement. No change in the principal -10- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 hereof shall be permitted except with the consent of City, and under such terms and conditions as City may approve. (r) Default Prior to Conveyance. In the event of any default in, or breach of this agreement by Developer or any successor prior to conveyance hereof, City may institute such proceedings as may be necessary or desirable in its opinion to cure or remedy such default or breach, including, but not limited to, proceedings to compel specific performance, or in the event that prior to the conveyance of the Property to the Developer and in violation of this agreement, the Developer or any successor in interest assigns or attempts to assign this agreement or any rights therein or in the Property, or the Developer does not submit evidence that it has the necessary capital and financing, iin satisfactory form and in the manner and by the date respectively provided in this agreement therefor, or the Developer does not in a timely manner perform the other undertakings of this agreement, then this agreement, any rights of the Developer, or any assignee or transferee in this agreement, or rights arising from this agreement, with respect to the Property, shall, at the option of the City, be terminated by the City, in which event the Property and any and all improvements made thereon shall be retained by the City as liquidated damages and as its property without any deductions, offset or recoupment whatsoever, and neither the Developer or assignee or transferee nor the City sha1L have any further rights against or liability to the other under this agreement, except entitlement to repayment of the funds loane if such funds have not been expended on improvements to the Proper (s) Default by Developer Subsequent to Conveyance. In -11- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the event that subsequent to conveyance of the Property, or any part thereof, to the Developer and prior to completion of the improvements as certified by the City, the Developer (or successor in interest) shall default in, or violate, .its obligations with respect to the construction of the improvements (including the nature and dates for the beginning and completion thereof), or shall abandon or substantially suspend construction work, or the Developer (or successor in interest) shall fail to pay real estate taxes or assessments on the Property or any part thereof when due, or shall place thereon any encumbrance or lien not authorized by this agreement, or shall suffer any levy or attachment to be made, or any materialmen's or mechanic's lien or any other unauthorized encumbrance or lien to attach, and such taxes or assessments shall not have been paid, or the encumbrance or lien removed or discharged, or provision satisfactory to the City made for such payment, removal or discharge, within ten days after written demand by the City so to do; provided, however, the Developer shall have the right to contest, in good faith, by appropriate proceedings, any such lien or encumbrance, and to substitute an appropriate bond in lieu of the payment, removal, or discharge of such lien or encumbrance; or there is, in violation of this agreement, any transfer of the Property, or any part thereof, the City shall have the right to reenter and take possession of the Property and to terminate (and revest in the City) the estate conveyed by the deed to the Developer. It is the intent of this subsection, together with the other provisions of this agreement, (that the conveyance of the Property to the Developer shall be made , and that the deed shall contain a condition subsequent to -12- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 the effect that, in the event of any default, failure, violation, or other action or inaction by the Developer specified in this subsection, the City at its option may declare a termination in favor of the City of the title, and of all the rights and interest in the Property conveyed by the deed to the Developer. If the City records in the office of the County Recorder of San Bernardino County a written Declaration of Forfeiture referring to the deed by which the Property is conveyed to the Developer, then said deed and conveyance is null and void, and al?.', interest thereby conveyed shall forthwith and without further notice to the Developer become forfeited and shall revert to the City; provided, that such condition subsequent and any revesting of title as a result thereof in the City shall always be subject to and limited by, and shall not defeat, render invalid, or limit in any way (i) the lien of any mortgage authorized by this agreement and executed for the purpose of obtaining funds to acquire and/or develop the Property, and (ii) any rights or interests provided in this agreement for the protection of the holders of such mortgages. (t) Default by City Subsequent to Conveyance. In the event that the City is unable to comply with each and every condition hereinabove set forth, with the exception of those conditions which are to be performed by the Developer, the veloper and its successors and assigns may initiate an action to 25 compel the City to repurchase the Property at the purchase price 26 J specified in Section 2(a) with interest, and, in addition, to 27 11compel the City to reimburse the Developer for any and all sums 28 11reasonably expended by the Developer for development of the -13- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Property. (u) Interest of City Employees or Officers. No officer, official, or employee of the City, nor of the Community Development Commission of the City, shall have any financial interest, direct or indirect, in this agreement or the Property, nor shall any such officer, official or employee participate in any decision relating to this agreement or to the Property which affects his financial interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. No officer, official or employee of the City, nor of the Community Development Commission of the City, shall be personally liable to the Developer or any successor in interest in the event of any default or breach by the City or any amount which may become due to the Developer or successor or on any obligations under the terms of this condition. (v) Notices. Any notice to be given by either party to the other shall be given by certified mail, return receipt requested, postage prepaid, addressed as follows: City of San Bernardino Peacock Enterprises, Ltd. Community Development Com. 1313 West Civic Center Drive, Third Floor, City Hall Suite 4 San Bernardino, CA 92418 Santa Ana, CA 92703 (w) Modification, Termination, Amendment. This agreement may be terminated, extended, modified or amended as to all or any part thereof, with the consent of both parties. No such termination, extension, modification or amendment shall be effective until a written instrument setting forth the terms of the same has been executed and acknowledged by both parties. i j IN WITNESS WHEREOF, the parties have executed this agreement -14- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 on the date and year first above wr;ffan_ ATTEST: ty Cler proved as to form: j L��v/ � r ty 4ttorney CI Bfy PEACOCK. ENTERPRISES, LTD., a California Limited Partnership By -15- ■ t EXHIBIT LEGAL DESCRIPTION (METCALF SITE) Lots 1, 2, 3, 4, S, 6, 11 and 12, Block "D", W. A. Boren's Subdivision as per plat hereof recorded in Book 2 of Maps, page 9, records of the County Recorder of San Bernardino County, State of California. EXCEPTING THEREFROM, the East 10 feet of said Lots 1, 2, 3 and 4. L� U —� ao 40)9 wk i• 'A04K sr. EXHIBIT LEGAL DESCRIPTION (METCALF SITE) Lots 1, 2, 3, 4, S, b, 11 and 12, Block "D", W. A. Boren's Subdivision as per plat hereof recorded in Book 2 of Maps, page 9, records of the County Recorder of San Bernardino County, State of California. EXCEPTING THEREFROM, the East 10 feet of said Lots 1, 2, 3 and 4, 10 It 12 Jag. ' � 1 , gym.• 9� 10. Iwo •