HomeMy WebLinkAboutR29-Economic Development Agency
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ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM:
"Maggie Pacheco, Deputy Director/Director
Housing & Community Development
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SUBJECT:
AMENDMENT NO.4 TO THE
NEIGHBORHOOD HOUSING
SERVICES OF THE INLAND
EMPIRE, INC. (NHSIE)
AGREEMENT-HOME CHDO
GRANT
DATE:
March 21, 2002
SvnoDsis of Previous Commission/Council/Committee Action(s):
On March 7, 2002 the Redevelopment Committee recommended approval of this item to the Community Development
Commission.
Recommended Motion(s):
(Community DeveloDment Commission)
MOTION:
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION APPROVING
AND AUTHORIZING THE AGENCY'S EXECUTIVE DIRECTOR TO EXECUTE
AMENDMENT NO.4 TO THE AGREEMENT BETWEEN THE REDEVELOPMENT
AGENCY AND THE NEIGHBORHOOD HOUSING SERVICES OF THE INLAND
EMPIRE (NHSIE) - ($65,000 HOME CHDO GRANT FOR PURCHASE AND
REDEVELOPMENT OF THE PROPERTY AT 1219 - 1227 RIALTO AVENUE).
Contact Person(s): Maggie Pacheco
Neighborhood Initiative Program Area
Project Area(s) #4
Phone:
663-1044
Ward(s):
3
Supporting Data Attached: ~ Staff Report ~ Resolution(s) ~ Agreement(s)/Contract(s) ~ Map(s) 0 Letter/Memo
SIGNATURE:
65,000
Source:
HO
e al Funds
Maggie Pacheco, Deputy Director/Director
Housing & Community Development
Commission/Council Notes:
'i2b-w<.l CO:: I d('<'Id-j S'
Stephanie! AgendalCDC/4-1-02 Amendment No. 4-NHSIE
COMMISSION MEETING AGENDA
Meeting Date: 04/1/02
Agenda Item Number: ~'1
I
Economic Development Agency Staff Report
Amendment No.4 to NHSIE
March 20, 2002
Page 2
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ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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AMENDMENT NO.4 TO THE NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE.
INC. CNHSIEl HOME AGREEMENT
BACKGROUND:
On September 7, 1999, the Community Development Commission approved an Agreement
between the Agency and Neighborhood Housing Services of the Inland Empire, Inc.(NHSIE),
wherein the Agency donated the property located at 571 Magnolia Street for development of a
single-family home. This Agreement was subsequently amended in 2000 in order to donate the
properties at: 1149 Rialto Avenue, 1556 Mountain View and 1662 Sierra Way and in February
2002, in order to donate the property at 1650 Sierra Way. In all instances, NHSIE paid for all the
associated acquisition transfer fees, such as escrow, title insurance, rehabilitation or construction
costs. NHSIE, uses the proceeds from the sale of the donated properties to buy other affordable
housing projects and to continue to operate their affordable housing activities and programs in
the City of San Bernardino pursuant to the terms of their Agreement with the Agency.
CURRENT ISSUE:
The property located at 1219-1227 Rialto Avenue (the "Property") consists of three (3)
substandard single family structures, containing less than 700 sq. ft of useable space, on one
single lot previously owned by HUD and the County (see Map). Under the Agency/County
Cooperative Agreement, the Agency was required to purchase the Property regardless of land use
and condition. Prior to the Agency's purchase of the Property, unbeknownst to the Agency and
ARR Partner, the Property was vacant for more than a year and subsequently had lost its
multifamily status. The ARR Partner, Schechtman Construction, purchased the Property from
the Agency on the premise that the Property would be used and marketed as a owner occupant
tri-plex. Schechtman Construction was the only ARR Partner interested in buying the Property
from the Agency and he possessed the expertise and wherewithal to purchase and rehabilitate the
Property. Given the circumstances under which the Agency and ARR Partner purchased the
Property, an attempt was made to obtain an exception to retain all three structures on the
Property from the Planning Commission. On January 8, 2002, the Commission denied the
appeal and found that only two structures could remain on the Property and that the third
structure would need to be removed from the Property.
The fact of the matter is that the Property is in very poor and dilapidated condition, and
it does not make sense to retain the three substandard size units. Consequently,
-----.--------------------------------------------------------..----.-----------------------------------------------------------------------
Stephanie/Agenda/CDC/4~1.02 Amendment No. 4-NHSIE
COMMISSION MEETING AGENDA
Meeting Date: 04/1/02
Agenda Item Number: ~
Economic Development Agency Staff Report
Amendment No.4 to NHSIE
March 20, 2002
Page 3
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Schechtman Construction, Staff and NHSIE, began having discussions about the
prospect of eradicating the substandard conditions and redeveloping the Property
instead. The Property is highly visible and it would be a detriment to the community to
continue the existing uses on the Property. The cost to demolish and rehabilitate far
exceed the economic life of the Property. Demolition and rehabilitation costs are
estimated at about $90,000. Schechtman Construction paid the Agency/County
approximately $65,000 for the Property. Schechtman Construction prefers not to
redevelop the Property as most of its experience is in the area of rehabilitation.
Furthermore, the numbers do not work economically for Schechtman Construction.
The costs associated with the acquisition, demolition and rehabilitation far exceed the
potential fair market resale value. NHSIE on the other hand, as the City's non-profit
affordable housing partner, has the experience in new construction and has in place the
financing to construct a new home.
With this in mind, the parties determined that it would benefit the community to remove
the substandard structures from the Property and construct a new single family
affordable home. However, in order to make this project economically viable for the
community and NHSIE, it requires the Agency's financial assistance. NHSIE will need
a grant from the Agency to acquire the Property from Schechtman Construction at the
same purchase price and related costs under which Schechtman purchased the Property
from the Agency/County.
NHSIE will provide the financing to develop the Property (replicating the new 571 Magnolia
Avenue single family home) with a new single family home consisting of approximately 1,400
square feet, containing four bedrooms and two bathrooms with a two-car attached garage.
NHSIE will construct the project with local contractors in addition to providing a learning tool
for the Y outhBuild students. Upon completion, NHSIE will sell the property to an income
eligible buyer. Construction will commence within 90 days from approval of Amendment No.4
and completion is expected to occur within 180 days from said date.
ENVIRONMENTAL IMPACT:
Pursuant to Section 15332, Class 32, the Project is categorically exempt from the California
Environmental Quality Act (CEQA) and NEPA requirements.
FISCAL IMPACT:
The Agency will provide a grant of up to $65,000 to NHSIE to purchase the Property. These
funds will come from Agency's HOME federal program. NHSIE will finance the development
of the new home and related improvements.
...--------------...-----------------.----------------------------------------------------------------------.-------------------------------
StephanielAgenda/CDC/4-1-02 Amendment No. 4-NHSIE
COMMISSION MEETING AGENDA
Meeting Date: 04/1102
Agenda Item Number: ~
Economic Development Agency Staff Report
Amendment No.4 to NHSIE
March 20, 2002
Page 4
RECOMME N:
ommission adopt the attached Resolution.
Maggie Pac , eputy DirectorlDirector
Housing & Community Development
StephanielAgenda/CDC/4-J-02 Amendment No. 4-NHSIE
COMMISSION MEETING AGENDA
Meeting Date: 04/1102
Agenda Item Number: !lt2.1.-
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1223 West Rialto Avenue
1227 West Rialto Avenue
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Soard Member
Board Member
"Creatillg
Quality Living
EIl"virOlll1lellts"
www.nhsie.org
Veiglzborlzood HOllS' g Services
of the
Inland Empire, Inc.
1390 North "0" St.' San Bernardino. CA 92405 . (909) 884-6891. Fax (909) 884-6893
Febru.Jry 27, 20t)2
Ms ~Iaggle Pacheco
Director of Housing and Communily Development
City of San Bernardino
201 North "E" Street
SUite 301
San Bernardino. CA 92401-1507
,...:.
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Re: 1219. 1223. 1227 Rlalto
..,
Dear Maggie
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ThiS letter IS to express our in teres I III oblalnlng IIle above property from.Jhe City of .-
San Bern~rdlllO lor the purpose 01 bUilding two slngle-kunlly r~dences~
The proposed 110me IS ;] Single story, four bedroom, two b3throom reSidence The
squ3re loolage IS 1-10 I sq II and IS desluned With a Iwo'C3r. all3ched g3rage. Once
thIS prOject IS compJt~led, the reSidence would be elftl(~r SOld ttlrough our
Hom~Owner5fllp Center to a low to moder;J!e-lrlcome famIly 3S 3fford.JbJe hC'Js/i1g, or
rented 35 3f1 .Jlforn:1ble t10using rent3J property
Our non-profit .Jgency has committed fif13f1Cmg for tile constructIon from Provident
S3vlngs Bank.
Our Intent In obtaining thiS property from the City of S3n Bernardino Economic
oevetopment Agency is to further our commitment to proVide affordable hOUSing and
revitalize our neighborhoods,
We hope Ihal our Interest in the property IS well received We look forward to a
successful conclUSion to Ihls prOJect.
Sincerely.
('l/cw ~~ k ~ /!cy
~:klns K. Hodges
Executive Director
CC:
Chen Savoie. Operations Manager
('e!chra!ill\;Y 7~H'ent~~ }''t.'ars t~J' ~5'errice
19.5i-l(){)]
^ D..rks.
NelghboiWo
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RESOLUTION NO: '
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
APPROVING AND AUTHORIZING THE AGENCY'S EXECUTIVE
DIRECTOR TO EXECUTE AMENDMENT NO.4 TO THE AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY AND THE
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE
(NHSIE) - ($65,000 HOME CHDO GRANT FOR PURCHASE AND
REDEVELOPMENT OF THE PROPERTY AT 1219 - 1227 RIALTO
AVENUE).
WHEREAS, the Agency and Neighborhood Housing Services of the Inland Empire,
("Participant") have previously entered into an Agreement for the purpose of authorizing the
Agency to convey the land located at 571 Magnolia Street to the Participant for development
of a single-family home, and subsequently amended said Agreement on July 24, 2000, to
convey the property located at 1149 Rialto Avenue, San Bernardino (the "Amendment No.
I"), on October 2,2000, transferring the properties located at 1556 Mountain View and 1662
Sierra Way (the "Amendment No.2"), and thereafter transferring the property located at
1650 Sierra Way, ("Amendment No.3") on February 19, 2002, to the Participant, all for
rehabilitation, or construction and resale to income qualified homebuyers; and
WHEREAS, the Agency sold the property at 1219, 1223 and 1227 Rialto Avenue, San
Bernardino (the "Property") to Schechtman Construction, (the "ARR Participant") pursuant
to the terms of the Acquisition, Rehabilitation and Resale Agreement (ARR) between the
Agency and ARR Participant; and
WHEREAS, Schechtman Construction has agreed to assign and sell the Property to the
Participant for redevelopment and for use consistent with the Department of Housing &
Urban Development Program (HUD) Single Family Disposition Program. The Participant
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desires to acquire the Property from ARR Participant, subject to the terms and conditions as
set forth in Amendment No.4.
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION, AS THE
GOVERNING BODY OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
FOLLOWS:
Section 1. The Executive Director of the Redevelopment Agency ("Director") is
hereby authorized and directed to execute on behalf of said Agency Amendment No.4, and
any other documents related in order to effectuate the implementation of Amendment No.4,
to the September 7, 1999 Agreement ("Agreement") between the Agency and Neighborhood
Housing Services of the Inland Empire, Inc. (NHSIE) and as subsequently amended on July
24, 2000 and October 2, 2000, February 19, 2002, wherein NHSIE will buy the property
located at 1219, 1223 and 1227 Rialto (the "Property") from ARR Participant (at the same
purchase price sold by the Agency to ARR Participant) for development of a single family
home ("New Home"), and upon completion sell the Property and the new home to an income
qualified homebuyer, and as more fully described in the Amendment No.4, a copy of which is
on file with the City Clerk, and incorporated herein by reference as though fully set forth at
length. To facilitate this effort, the Agency will further provide a HOME/CHDO grant up to
$65,000 to NHSIE for the acquisition of the Property. NHSIE will provide all necessary
funds for the redevelopment of the property and the New Home.
Section 2. The Director is hereby authorized to make minor corrections, additions,
and clarifications to the Amendment No.4 and the Agreement, provided said changes are not
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substantive in nature and do not increase the monetary impact to the Agency pursuant to the
Amendment No.4 and Agreement.
Section 3. Pursuant to Section 15332, Class 32, the Project is categorically exempt from
the California Quality Act (CEQA) and the National Environmental Protection Act (NEPA)
requirements.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
APPROVING AND AUTHORIZING THE AGENCY'S EXECUTIVE
DIRECTOR TO EXECUTE AMENDMENT NO.4 TO THE AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY AND THE
NEIGHBORHOOD HOUSING SERVICES OF THE INLAND EMPIRE
(NHSIE) - ($65,000 HOME CHDO GRANT FOR PURCHASE AND
REDEVELOPMENT OF THE PROPERTY AT 1219 - 1227 RIALTO
AVENUE).
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by
Community Development Commission of the City of San Bernardino at a
meeting thereof, held on
2002 by the following vote, to wit:
day of
COMMISSION MEMBERS: AYES
ESTRADA
LIEN
MCGINNIS
DERRY
SUAREZ
ANDERSON
MC CAMMACK
NAYS
ABSTAIN
ABSENT
Rachel Clark, City Clerk
The foregoing resolution is hereby approved this
,2002.
day of
Judith Valles, Chairperson
Community Development Commission
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AMENDMENT NO.4 TO THE NEIGHBORHOOD HOUSING SERVICES OF THE
INLAND EMPIRE (NHSIE) HOME PROGRAM ACQUlSITON CONSTRUCTION
AND RESALE AGREEMENT DATED SEPTEMBER 7,1999, AS AMENDED
THIS AMENDMENT NO. 4 (the "Amendment No.4") to the Agreement entitled
"HOME Program Acquisition, Construction and Resale Agreement", dated September 7, 1999
as amended by Amendment No. I, dated as of July 24, 2000 and Amendment No.2, dated
October 2, 2000 and Amended by Amendment No 4, dated, February 19, 2002, is made and
entered into as of this first day of April 2002, by and between the Redevelopment Agency ofthe
City of San Bernardino, a public body corporate and politic (the "Agency"), and Neighborhood
Housing Services of the Inland Empire, a California non-profit corporation, (the "Participant")
in view of the facts set forth in the following Recitals:
RECITALS
WHEREAS, the Agency and Participant have previously entered into the agreement for
the purpose of authorizing the Agency to convey the land located at 571 Magnolia Street to the
Participant for development of a single-family house (the "Agreement"), and subsequently
amended on July 24, 2000 and to convey the property located at 1149 RiaIto Avenue, San
Bernardino (the "Amendment No. I"); and transferring the properties located at 1556 Mountain
View and 1662 Sierra Way, ("Amendment No.2") and the transfer of the property located at
1650 Sierra Way ("Amendment No.3"), pursuant to Amendment No.3; and
WHEREAS, Schechtman Construction ("Partner") has purchased the property located at
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1219, 1223 and 1227 West Rialto Avenue ("the Property") from the Agency under the
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Acquisition, Rehabilitation and Resale (ARR) Program, Agreement ("ARR Agreement")
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between Agency and Partner; and
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WHEREAS, Partner has agreed to sell and transfer the Property to Agency and to
Participant for redevelopment of a new home and for use consistent with the Neighborhood
Initiative Program (NIP), and the Participant desires to acquire the Property, subject to the terms
and conditions as set forth in this Amendment No.4; and
WHEREAS, the Agency and Participant desire to further amend the Agreement
("Amendment No.4") to allow the Agency to provide a HOME/CHDO grant of up to $65,000
to Participant for the acquisition of the Property from the Partner, and enable the Participant to
commence development and disposition of the Property pursuant to this Amendment No.4.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS
HEREIN SET FORTH AND THE MUTUAL BENEFITS TO BE DERIVED THERE FROM,
THE PARTICIPANT AND AGENCY HERETO AGREE AS FOLLOWS:
Section 1.
The meaning of words and phrases as used in the Amendment No.4 shall
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be the same as set forth in the Agreement, except as the context of usage of a particular term or
phrase as set forth in the Recitals of the Amendment No.4. The text of the Agreement (and all
exhibits accompanying the Agreement) is hereby incorporated into this Amendment No.4 by
this reference.
Section 2. The Participant and the Agency mutually acknowledge and agree that as
of the date of approval of this Amendment No.4 by the governing board of the Agency, no
default exists under the Agreement, and Amendment No. I, No.2 and No.3, nor is either party
aware of any fact, with the giving of notice and the passage of time, would constitute a default
under the Agreement or the Amendment No. I, No.2, and No.3.
Section 3. The Agreement is hereby amended to add a new SECTION 34 thereto
which reads as follows:
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"Section 34 Amendment No.4 to the AlITeement
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a) Subject to the approval of Amendment No.4 to this Agreement by the governing
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board of the Agency and the transfer of the Property by the Partner to the Agency
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and subsequently to Participant, the Agency hereby agrees to assist the Participant in
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the purchase of the Property, and the Participant hereby agrees to purchase the
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Property from the Agency at a purchase price of not to exceed sixty-five thousand
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dollars ($65,000) (includes closing costs, escrow fees, title, interest to the Partner,
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etc.) (the "Purchase Price") as set forth in this Section 34 of the Agreement, as
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amended. A legal description of the Property is attached hereto as ("Legal
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Description of the Property") Exhibit "G".
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b) The Agency and the Participant shall accomplish the transfer of the fee title interest
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of the Property from the Agency to the Participant (subject to corresponding action
by the Partner authorizing the transfer of the Property) as per the escrow instructions
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as prepared by an approved escrow company, and as approved by Agency and
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Participant substantially in the form as Exhibit "E" to the original Agreement dated
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September 7, 1999. The Agency and the Participant shall cause the escrow to close
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for the subject Property, by a date no later than June 14,2002.
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c) The Agency hereby allocates and grants the sum of up to Sixty Five Thousand
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Dollars ($65,000) of Agency Fiscal Year 2002-2003 HOME/CHDO Program funds,
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as the ("HOME/CHDO Grant") to the Participant for the Purchase Price of the
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Property and other good and valuable consideration as set forth in this Section 34 of
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this Agreement, as amended.
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which reads as follows:
"Section 36. Particioant Resoonsibilities
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The Participant is responsible for:
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a) All costs associated with the transfer and development of the Property, (i.e.
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including, but not limited to, finance costs, public improvements and capital charges,
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City impact and school district fees, and marketing fees, etc.), as identified in
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Section 4 herein related to the Property.
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Section 6.
Section 19 ofthe Agreement is hereby amended to add a new subsection
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19(e) to read as follows:
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Amendment No.4 may be terminated for the convenience of either party who is not then
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in default upon thirty (30) days notice to the other party at any time prior to the date on which
the Agency Grant Deed for the Property is recorded as provided herein and the escrow
instructions.
15 Section 7.
16 thereto as follows:
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Exhibit G -
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Section 8.
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The Agreement is hereby amended to add one (I) additional exhibit
Legal Description of the Amendment No.4 Property.
This Amendment No. 4 shall take effect following its approval by the
governing board of the Agency and when it has been fully executed by the authorized officers
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of the parties herein.
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1111
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e25 1111
.5.
Mar-21-02 05:05P
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IN wnmss WHEREOF, Ihe parties have ~uscd this AmCDdmcnt No~ 4 to me Agreemcnl to
2 be executed ill of the day ud year first wntten above.
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9 Approved Ii to Form:
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11 Agency Special Counsel
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AGENCY
RedevelOpment ^ICIICY of the
City of San Bernardino
Gary Van Osdel
Executive Director
PAllTIClPANT
Neighborhood Housing Scrviccs of Ibc:
Iulmd Empi:c. a CaJifomia Non-Profit
Co!JlOlllion .
"CD
X~ k. +bAr
Dawkins K. Hodges
Executive Director
"
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EXHIBIT G
Legal Description of the Amendment No.4 Property
The Property is described as the real property in the County of San Bernardino, State of
California:
Lots 12 and 13, Block I of Woods Subdivision No.2, in the City of San Bernardino,
County of San Bernardino, State of California, as per map recorded in Book 15, page(s) 95, of
Maps, in the office of the County Recorder of said County.
Commonly known as: 1219, 1223 and 1227 West Rialto Avenue, San Bernardino,
California.
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** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meeting Date (Date Adopted): -4-l-o.;:1 Item #
Vote: Ayes t.. 'I Nays-e--
Change to motion to amend original documents:
err! jOJd-tS
I
Absentff
I2.dCl Resolution #
Abstain .e-
Reso. # On Attachments: /
Contract term: --
Note on Resolution of Attachment stored separately;-==-
Direct City Clerk to (circle I): PUBLISH, POST, RECORD W/COUNTY
If(
Date Sent to Mayor:
-4 - ?;CJ.)-
Date of Mayor's Signature; -'i --'I --6~
Date ofClerklCDC Signature: -4 - -4 --o:;l
Date
tter Sent for Signature:
See Attached;
ttached:
See Attached;
60 Day Reminder Letter Sent on 30th day:
90 Day Reminder Letter Sent on 45th day:
Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433,10584,10585,12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Copies Distributed to:
City Attorney
Parks & Rec.
Code Compliance
Dev. Services
Water
Public Services
Police
Notes:
NulVVoid After: '-
By: -
Reso. Log Updated:
Seal Impressed:
/
y'
Date Returned; -
YesL No By
Yes NOL By
Yes No~ By
Yes No 1- By
Yes No_ By
EDA
/
MIS
Finance
Others:
BEFORE FILING. REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE
YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (Contract Term. etc.)
Ready to File: 11'\<'
Date; 4-8'-<:V-
Revised 01/12/01