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HomeMy WebLinkAboutR7- Economic Development ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/JOINT POWERS FINANCING/COUNCIL ACTION From: Timothy C. Steinhaus Subject: MULTIFAMILY HOUSING Agency Administrator REVENUE BONDS - MOBILEHOME PARKS Date: November 14, 1995 -------------------------__----------------------------------------------------- Synopsis of Previous Commission/JPA/Council/Committee Action(s): None. ------------------------------------------------------------------------------- Recommended Motion(s): OPEN PUBLIC HEARING CLOSED PUBLIC HEARING (Mayor and Common Council) MOTION A: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, REGARDING THE USE OF HOME FUNDS IN CONNECTION WITH THE MODERATE OR SUBSTANTIAL REHABILITATION OF PACIFIC PALMS MOBILE HOME PARK. MOTION B: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, REGARDING THE USE OF HOME FUNDS IN CONNECTION WITH THE MODERATE OR SUBSTANTIAL REHABILITATION OF SEQUOIA PLAZA MOBILE HOME COMMUNITY. Recommended Motions Continued orCiage 2 Admin Services Timothy C. Steinhaus Agency Administrator ------------------------------------------------------------------------------- Contact Person(s): Barbara Lindseth/Tim Steinhaus Phone: 5081 Project Area(s) : None Ward(s) : 2, 3 & 7 Supporting Data Attached: Staff Report; Resolutions Funding Requirements: Amount: $1,280,000 Source: HOME Funds Budget Authority: FY 1995-96 Budget ------------------------------------------------------------------------------- Commission/Council Notes: Sec lit' y�Gr�yG COMMISSION MEETING AGENDA vil/N J Meeting Date: 11/20/1995 ,v Agenda Item Number: 11/20/1995 CDC Item V - Resolution Numbers R7A Res 95-394 R7B Res 95-395 R7C Res 95-396 R7D Res 95-397 R7E Res 95-398 R7F Res 95-399 R7G Res 95-400 R7H Res J-33 R7I Res J-34 R7J Res J-35 R7R Res J-36 R7L Res J-37 R7N Res J-38 Recommended Motion(s) Continued: i (Mayor and Common Council) MOTION C: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, REGARDING THE USE OF HOME FUNDS IN CONNECTION WITH THE MODERATE OR SUBSTANTIAL REHABILITATION OF RANCHO MERIDIAN MOBILEHOME PARK. MOTION D: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, REGARDING THE USE OF HOME FUNDS IN CONNECTION WITH THE MODERATE OR SUBSTANTIAL REHABILITATION OF THE GLEN AIRE MOBILE ESTATES. MOTION E: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, REGARDING THE USE OF HOME FUNDS IN CONNECTION WITH THE MODERATE OR SUBSTANTIAL REHABILITATION OF ROYAL COACH MOBILE MANOR. MOTION F: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, REGARDING THE USE OF HOME FUNDS IN CONNECTION WITH THE MODERATE OR SUBSTANTIAL REHABILITATION OF NINTH STREET MOBILEHOME PARK. MOTION G: RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE ISSUANCE OF CERTAIN MULTIFAMILY HOUSING REVENUE BONDS AND THE BORROWING BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OF THE PROCEEDS THEREFROM PURSUANT TO CERTAIN LOAN AGREEMENTS AND APPROVAL OF THE ISSUANCE OF SAID BONDS UNDER SECTION 147 (f) OF THE INTERNAL REVENUE CODE. (Joint Powers Financing Authority) MOTION H: RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $3,500,000 MULTIFAMILY HOUSING REVENUE BONDS (PACIFIC PALMS MOBILE HOME PARK PROJECT) SERIES 1995A, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. MOTION I: RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $875,000 MULTIFAMILY HOUSING REVENUE BONDS (ROYAL COACH MOBILE MANOR PROJECT) SERIES 1995A, APPROVING THE FORM OF THE LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. TWO (Recommended Motion(s) Continued on Page 3) ------------------------------------------------------------------------------- TCS:bl:2120A COMMISSION MEETING AGENDA Meeting Date: 11/20/1995 Agenda Item Number: Recommended Motion(s) Continued: (Joint Powers Financing Authority) MOTION J: RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $4,500,000 MULTIFAMILY HOUSING REVENUE BONDS (RANCHO MERIDIAN MOBILEHOME PARK PROJECT) SERIES 1995A, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. MOTION K: RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $6,500,000 MULTIFAMILY HOUSING REVENUE BONDS (SEQUOIA PLAZA MOBILEHOME COMMUNITY PROJECT) SERIES 1995A, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. MOTION L: RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE ISSUANCE OF NOT TO EXCEED $3,500,000 MULTIFAMILY HOUSING REVENUE BONDS (GLEN AIRE MOBILE ESTATES PROJECT) SERIES 1995A, APPROVING THE FORM OF LEGAL DOCUMENTS RELATED THERETO AND AUTHORIZING AND DIRECTING PREPARATION, EXECUTION AND DELIVERY OF THE FINAL FORMS THEREOF. MOTION M: RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY AUTHORIZING THE CREATION OF THE POSITION OF ADMINISTRATOR WITHIN THE AUTHORITY AND DESIGNATION OF SAME. (Community Development Commission) MOTION N: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AUTHORIZING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE BORROWING OF FUNDS FROM THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY IN CONNECTION WITH THE ISSUANCE OF CERTAIN MULTIFAMILY HOUSING REVENUE BONDS. MOTION 0: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, AUTHORIZING, ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, THE MODIFICATION OF PAYMENT OF FEES TO THE LONDON GROUP IN CONNECTION WITH THE MOBILE HOME PARK CONVERSION PROGRAM. ------------------------------------------------------------------------------- TCS:bl:2120A COMMISSION MEETING AGENDA Meeting Date: 11/20/1995 Agenda Item Number: ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO STAFF REPORT ------------------------------------------------------------------------------- Multifamily Housing Revenue Bonds - Mobilehome Parks Background Pursuant to the Mobilehome Conversion Program, Agency staff and consultants have completed or substantially completed due diligence on the following mobilehome parks ("Parks") : Glen Aire, Pacific Palms, Ninth Street, Rancho Meridian, Seqouia Plaza and Royal Coach. The financing structure contemplates that the Agency will acquire ownership of the Parks from the present private owners through the issuance of multifamily revenue bonds. Such a bond issue will provide the funds needed for payment of the purchase price for such Parks and to pay certain costs of issuance. Additional costs of acquisition will be funded by the provision of HOME funds from the City to the Agency to the extent necessary. The bonds are being issued under certain provisions of the Internal Revenue Code to enable the Agency to transfer said Parks to a nonprofit corporation for operation and maintenance. The following represents the bonds to be issued and the estimated amount of HOME funds to be used: Pacific Palms Mobile Home Park - Issue of $3,500,000 2727 East Pacific Street - 142 spaces Estimated HOME funds - $350,000 Glen Aire Mobile Estates - Issue of $3,500,000 222 South Rancho Avenue - 131 spaces Estimated HOME funds - $260,000 Rancho Meridian Mobilehome Park - Issue of $4,500,000 2686 West Mill Street - 143 spaces Estimated HOME funds - Negotiating Sequoia Plaza Mobilehome Community - Issue of $6,500,000 2505 West Foothill Blvd. - 242 spaces Estimated HOME funds - $370,000 Royal Coach Mobile Manor - Issue of $875,000 2280 West Rialto Avenue - 45 spaces Estimated HOME funds - $150,000 Ninth Street Mobilehome Park - Issue of $1,000,000 780 East Ninth Street - 108 spaces Estimated HOME funds - $150,000 ------------------------------------------------------------------------------- TCS:b1:2120A COMMISSION MEETING AGENDA Meeting Date: 11/20/1995 Agenda Item Number: Economic Development Agency Multifamily Housing Revenue Bonds Staff Report Page - 2 - -------------------------------------------------------------------------------- A fee agreement with the London Group was previously approved by the Commission as to the amount and the method of payment. The restructuring of the fee agreement with the London Group is required so that the conversion fees are not paid from the bond proceeds or as a lump sum amount upon acquisition, but rather so that said fees are paid from excess cash flow from the acquired mobilehome parks and from the low- and moderate-income housing fund, as necessary, for a ten (10) year period, with interest not to exceed 7%. Currently the Chairman of the Joint Powers Financing Authority is the only authorized signatory of the Joint Powers Financing Authority. In order to assist the Chairman with the day-to-day activities of the Joint Powers Financing Authority, it has been determined that the appointment of the EDA Administrator as Administrator of the Joint Powers Financing Authority will alleviate some of the burdens of the Chairman in the execution of documents. A public hearing must also be held pursuant to the federal tax laws prior to undertaking a financing by a public body of tax-exempt obligations for a 501 (c)(3) non-profit corporation. Qualified 501 (c)(3) bonds will be issued by the Agency to fund the original acquisition, and such bonds will remain in place upon and after acquisition of a particular mobilehome park by the subsidiary non-profit corporation. Based n the foregoing, staff recommends adoption of the form motions. Timothy C. tei aus, Agency Administrator ------------------------------------------------------------------------------- TCS:bl:2120A COMMISSION MEETING AGENDA Meeting Date: 11/20/1995 Agenda Item Number: _ 0 NINTH STREET MOBILEHOME PARK Agreement for Purchase and Sale In accordance with The London Group Mobilehome Park Conversion Feasibility Study dated November 30, 1993 Ninth Street Mobilehome Park was designated as a Category I park. Category I parks are those which were identified as being appropriate for resident ownership and/or control via a condominium or non-profit form of ownership. This park is most suitable to a non-profit acquisition and operating structure. Pursuant to prior Commission authorization and utilizing the standard form agreement prepared by Agency Counsel, an Agreement for Purchase and Sale (Agreement) was prepared for execution for the purpose of Agency acquisition of this property. Accordingly the due diligence process was commenced and is completed. Due Diligence A comprehensive physical plant, legal and financial due diligence was conducted on this property. Inspections and document reviews were performed by industry professionals who specialize in their fields. These professionals include an MAI and State of California Certified General Real Estate Appraiser, Certified Public Accountants currently engaged by the Agency, City of San Bernardino Fire Department, State of California Registered Environmental Assessor and Scientists, State of California Certified Asbestos Consultant, City of San Bernardino General Building Inspector, Agency Counsel, State of California Registered Civil Engineers, State of California licensed General Engineering Contractor, and a State of California licensed Land Surveyor. Attached as Appendix I is a list detailing the documents and information requested of the seller for review. This list represents an ideal for seller provided documentation, although it is rare that all items listed can be obtained particularly on a property over ten years old. No construction plans or engineering or environmental inspections or reports were available. The property owner provided most of the other basic documents requested, and the due diligence was completed based upon the documents as provided as well as site inspections, review of official governmental records and reconstruction of documents as necessary. With respect to financial information enough data was made available to satisfactorily verify cash flow and expenses on this property as well as develop forward projections. These inspections and reviews were coordinated and the results jointly analyzed by The London Group and the respective service providers to determine whether any conditions exist which would warrant further investigation or cause the property to be not acceptable for acquisition by the Agency. Due Dilizence: • ALTA Survey • Appraisal • Audit Review • Auditors Income and Expense Projections • Environmental Assessment: Phase I and Asbestos/Lead Survey • Fire Safety Inspection • Legal Review • Physical Plant Engineering • Reserve Analysis • Structural Pest Inspection • Title 25 Inspection Findings and Recommendations The results of reports and other information received through the due diligence inspections and reviews indicate that other than nominal compliance issues and repairs there are no significant problems which should preclude acquisition of the property by the Agency. The physical plant engineering inspection recommends that several repairs and/or reviews be done. Some are not listed as deferred maintenance but rather as items which if done would bring those areas identified into ideal conditions immediately or at a minimum should be funded through a reserve account for future replacement. Exceptions to this include items identified as being in non-compliance with HCD Title 25 specifications or other regulatory agencies and deferred maintenance work. These include installation of front corner markers at several homesites at $200, replacing missing meter covers, removal of unused wire and bringing cables above ground at several sites for $400, miscellaneous repairs to the laundry/office building facilities at $1,500 videoscope of sewer line at $500 and cleaning and flushing of storm drain at $1,000. These are all items which should be done now. In addition to those items recommended by the engineering inspection report the reserve analysis report recommends several repairs be done during the first year of operation. These include replacing swamp cooler at $1,200, replacing picnic benches at $700, replacing water heater at $1,400, upgrade of laundry room at $1,800, and painting office/laundry room building exterior at $1,025. The projected operating budget should cover any maintenance items needed and the reserve analysis report will detail appropriate reserve requirements for any significant repairs or replacements required in future years based upon current condition and estimated remaining useful life. The environmental assessment and asbestos survey indicates the limited presence of asbestos containing materials in the following locations in the office/laundry room building: 110 square feet of vinyl floor tile and mastic and 50 square feet of roof mastic. It is very typical of buildings which were constructed prior to 1980. One option is that these materials be removed in accordance with California-OSHA regulations and South Coast Air Quality Management Rule 1403. The estimated cost of abatement and replacement is approximately $930. Elective costs for monitoring and project management would be approximately $1,200. An alternative to this expenditure would be to leave the asbestos containing materials in place and conduct ongoing environmental monitoring of such materials through a formal Operations and Maintenance program. This is an acceptable alternative because, according to the environmental assessment, all of the materials are presently nonfriable with a low to moderate potential for disturbance. Development of an Operations and Maintenance program is estimated to cost $2,000. The annual operating cost to implement an acceptable environmental monitoring program for any retained asbestos could be approximately $1,000. Based upon a comparison of these two options removal is the most logical course of action as it is more cost effective. As a condition of the Agreement the seller is required to provide a recently completed structural pest control inspection report on the property common area structures and facilities prior to closing and is responsible for any noted corrections/treatments of any active infestations. Repairs, rehabilitation and code compliance items will be either completed prior to close of escrow and/or an amount equal to the costs identified shall be withheld from seller at close of escrow. Additionally, initial capital reserve requirements as identified in the reserve analysis report shall be funded at close of escrow. Authorization to Proceed The London Group therefore requests that Commission authorize proceeding with consummation of the transaction in accordance with Section 5 Paragraph 5.3 of the Agreement and Section 6, entitled "Conditions of Closing of Buyer", including, but not limited to, Paragraph 6.10 thereof, entitled "Financing". Said paragraph provides that the escrow closing is further conditioned upon having obtained satisfactory financing by the Agency for the actual acquisition of the property. This request for authorization to proceed is made subject to any remaining items of compliance and negotiation of those identified repair issues which shall be resolved to the satisfaction of Agency Staff, Agency Counsel and The London Group prior to closing. -7 0 0 PROPERTYPROFILES Property Name: Ninth Street Property Address: 780 East Ninth Street San Bernardino, CA 92410 Property Phone No: (909) 889-1314 Manager: Jennifer&Mattew Welch Park Owner: Jerry& Cheryl Winstead Park Owner Address: 654 Purdue Drive Claremont, CA 91711 Park Management Company: Bessire & Casenhiser Park Management Company Address: 725 Brea Canyon Road Walnut, CA 91789 Park Management Company Phone No: (909) 594-0501 Number Homesites: 108 Year Built: 1972 Number of Acres: 7.3 Vacant Homesites: 13 Assessor's Parcel Number: 0147-191-10 & 03 Brief description of the property: This older park is neat and clean, with minimal common area landscaping. It is located in a residential neighborhood with several other mobilehome parks. All basic services, except department stores, are within a five mile radius. There are a number of transportation related service or light manufacturing related businesses in the area. Amenities: There is a laundry room and as grass play area. Brief description of the homes: Homes are older, most with metal siding and roofs. The newer doublewides have wood- like siding and composition shingle roofs. There are no consist architectural or fencing standards. All sites have concrete driveways and most have carports. Landscaping is amateur but attractive and reflects and reflects the average pride of ownership shown in the homes. 0 PACIFIC PALMS MOBILEHOME PARK Agreement for Purchase and Sale In accordance with The London Group Mobilehome Park Conversion Feasibility Study dated November 30, 1993 Pacific Palms Mobilehome Park was designated as a Category I park. Category I parks are those which were identified as being appropriate for resident ownership and/or control via a condominium or non-profit form of ownership. This park is most suitable to a non-profit acquisition and operating structure. On September 7, 1995, pursuant to prior Commission authorization and utilizing the standard form agreement prepared by Agency Counsel, an Agreement for Purchase and Sale (Agreement) was executed for the purpose of Agency acquisition of this property. After execution of the Agreement, escrow was opened with Commonwealth Title Insurance Company, Escrow Number 14308, and the due diligence process was commenced and is completed. Due Diligence A comprehensive physical plant, legal and financial due diligence was conducted on this property. Inspections and document reviews were performed by industry professionals who specialize in their fields. These professionals include an MAI and State of California Certified General Real Estate Appraiser, Certified Public Accountants currently engaged by the Agency, City of San Bernardino Fire Department, State of California Registered Environmental Assessor and Scientists, State of California Certified Asbestos Consultant, City of San Bernardino General Building Inspector, Agency Counsel, State of California Registered Civil Engineers, State of California licensed General Engineering Contractor, and a State of California licensed Land Surveyor. Attached as Appendix I is a list detailing the documents and information requested of the seller for review. This list represents an ideal for seller provided documentation, although it is rare that all items listed can be obtained particularly on a property over ten years old. No construction plans or engineering or environmental inspections or reports were available. The property owner provided most of the other basic documents requested, and the due diligence was completed based upon the documents as provided as well as site inspections, review of official governmental records and reconstruction of documents as necessary. With respect to financial information enough data was made available to satisfactorily verify cash flow and expenses on this property as well as develop forward projections. These inspections and reviews were coordinated and the results jointly analyzed by The London Group and the respective service providers to determine whether any conditions exist which would warrant further investigation or cause the property to be not acceptable for acquisition by the Agency. Due Diligence: • ALTA Survey • Appraisal • Audit Review • Auditors Income and Expense Projections • Environmental Assessment: Phase I and Asbestos/Lead Survey • Fire Safety Inspection • Legal Review • Physical Plant Engineering • Reserve Analysis • Structural Pest Inspection • Title 25 Inspection Findings and Recommendations The results of reports and other information received through the due diligence inspections and reviews indicate that other than nominal compliance issues and repairs there are no significant problems which should preclude acquisition of the property by the Agency. The physical plant engineering inspection recommends that several repairs and/or reviews be done. Some are not listed as deferred maintenance but rather as items which if done would bring those areas identified into ideal conditions immediately or at a minimum should be funded through a reserve account for future replacement. Exceptions to this include items identified as being in non-compliance with HCD Title 25 specifications or other regulatory agencies and deferred maintenance work. These include installation of corner markers at all homesites at $2,500, various electrical and street repairs at $15,000, repair and cleaning of storm drain system at $2,500, miscellaneous repairs to the main recreation facilities at $11,000, miscellaneous repairs to the second recreation facilities area at $7,000, repair of fencing at $4,860, seal and patch of high severity cracks and potholes at $5,000 and repairs to the RV storage area pavement at $10,000. These are all items which should be done now. In addition to those items recommended by the engineering inspection report the reserve analysis report recommends several repairs be done during the first year of operation. These include an additional sum of$5,850 be spent on street repairs, replacement of the pool heater and filter at $2,000, remodel of small clubhouse at $4,950, repainting clubhouse stucco and wood work at $3,100. The projected operating budget should cover any maintenance items needed and the reserve analysis report will detail appropriate reserve requirements for any significant repairs or replacements required in future years based upon current condition and estimated remaining useful life. The environmental assessment and asbestos survey indicates the limited presence of asbestos containing materials in the following common area locations: vinyl floor tile, roof mastic and two transite pipes in the main clubhouse. It is very typical of buildings which were constructed prior to 1980. One option is that these materials be removed in accordance with California-OSHA regulations and South Coast Air Quality Management Rule 1403. The estimated cost of abatement and replacement is approximately $6,950 plus an additional fifteen to thirty five percent for any elective costs of monitoring and project management. An alternative to this expenditure would be to leave the asbestos containing materials in place and conduct ongoing environmental monitoring of such materials through a formal Operations and Maintenance program. This is an acceptable alternative because, according to the environmental assessment, all of the materials are presently nonfriable with a low to moderate potential for disturbance. Development of an Operations and Maintenance program is estimated to cost $2,000. The annual operating cost to implement an acceptable environmental monitoring program for any retained asbestos could be approximately $1,000. Based upon a comparison of these two options removal is more cost effective over time. The environmental assessment included a lead survey which indicates the presence of lead containing paint in areas of the clubhouse. These findings are not uncommon for facilities of this age, lead containing paint was not banned until 1978. The Department of Housing and Urban Development recommends that such paint be removed from areas which are accessible to children. The estimated cost of this removal and replacement is estimated to be $ $15,000. The remaining lead containing paint, that which is not accessible to children, should be managed under an Operations and Maintenance program. The estimated cost of developing such a program is $3,000 with an annual operating cost of$1,000. As a condition of the Agreement the seller is required to provide a recently completed structural pest control inspection report on the property common area structures and facilities prior to closing and is responsible for any noted corrections/treatments of any active infestations. Repairs, rehabilitation and code compliance items will be either completed prior to close of escrow and/or an amount equal to the costs identified shall be withheld from seller at close of escrow. Additionally, initial capital reserve requirements as identified in the reserve analysis report shall be funded at close of escrow. Authorization to Proceed The London Group therefore requests that the Commission authorize proceeding with consummation of the transaction in accordance with Section 5 Paragraph 5.3 of the Agreement and Section 6, entitled "Conditions of Closing of Buyer", including, but not limited to, Paragraph 6.10 thereof, entitled "Financing". Said paragraph provides that the escrow closing is further conditioned upon having obtained satisfactory financing by the Agency for the actual acquisition of the property. This request for authorization to proceed is made subject to any remaining items of compliance and negotiation of those identified repair issues which shall be resolved to the satisfaction of Agency Staff, Agency Counsel and The London Group prior to closing. PROPERTY PROFILE Property Name: Pacific Palms Trailer Park Property Address: 2727 East Pacific Street Highland, CA 92346 Property Phone No: (909) 862-9120 Manager: DeAnna and Chris Ditto Park Owner: Mr. & Mrs. K.C. Hu Park Owner Address: 2175 Lindsey Court Tustin, CA 92680 Park Management Company: Owner managed Park Management Company Address: N/A Park Management Company Phone No: N/A Number Homesites: 142 Year Built: 1969 Number of Acres: 15.4 Vacant Homesites: 0 Assessor's Parcel Number: 0286-163-42 Brief description of the property: The site is rectangular in shape with some variation in street patterns. There is a low pole carriage lamp at alternate homesites. The immediately adjacent land uses include single family and multi-family residential and a flood control channel. All basic services are within a five mile radius. Amenities: There is a 3,590 square foot clubhouse which contains a kitchen, billiard area, management office, meeting hall, men's and women's restrooms, a laundry room and a storage room. Adjacent to the main clubhouse there is a pool and jacuzzi. There is a second 850 square foot building with a main room, a sauna, men's and women's restrooms and a utility room. There is a second swimming pool adjacent to this building. There is a nineteen space RV storage lot. 0 GLEN AIRE MOBILE HOME PARK Agreement for Purchase and Sale In accordance with The London Group Mobilehome Park Conversion Feasibility Study dated November 30, 1993 Glen Aire Mobile Home Park was designated as a Category I park. Category I parks are those which were identified as being appropriate for resident ownership and/or control via a condominium or non-profit form of ownership. This park is most suitable to a non-profit acquisition and operating structure. On September 7, 1995, pursuant to prior Commission authorization and utilizing the standard form agreement prepared by Agency Counsel, an Agreement for Purchase and Sale (Agreement) was prepared for executed for the purpose of Agency acquisition of this property. After execution of the Agreement, escrow was opened with Commonwealth Title Insurance Company, Escrow Number 14307, and the due diligence process was commenced and is completed. Due Diligence A comprehensive physical plant, legal and financial due diligence was conducted on this property. Inspections and document reviews were performed by industry professionals who specialize in their fields. These professionals include an MAI and State of California Certified General Real Estate Appraiser, Certified Public Accountants currently engaged by the Agency, City of San Bernardino Fire Department, State of California Registered Environmental Assessor and Scientists, State of California Certified Asbestos Consultant, City of San Bernardino General Building Inspector, Agency Counsel, State of California Registered Civil Engineers, State of California licensed General Engineering Contractor, and a State of California licensed Land Surveyor. Attached as Appendix I is a list detailing the documents and information requested of the seller for review. This list represents an ideal for seller provided documentation, although it is rare that all items listed can be obtained particularly on a property over ten years old. We received copies of construction plans from the seller. No other engineering or environmental inspections or reports were available. The property owner provided most of the other basic documents requested, and the due diligence was completed based upon the documents as provided as well as site inspections, review of official governmental records and reconstruction of documents as necessary. With respect to financial information enough data was made available to satisfactorily verify cash flow and expenses on this property as well as develop forward projections. These inspections and reviews were coordinated and the results jointly analyzed by The London Group and the respective service providers to determine whether any conditions exist which would warrant further investigation or cause the property to be not acceptable for acquisition by the Agency. Due Diligence: • ALTA Survey • Appraisal • Audit Review • Auditors Income and Expense Projections • Environmental Assessment: Phase I and Asbestos/Lead Survey • Fire Safety Inspection • Legal Review • Physical Plant Engineering • Reserve Analysis • Structural Pest Inspection • Title 25 Inspection Findings and Recommendations The results of reports and other information received through the due diligence inspections and reviews indicate that other than nominal compliance issues and repairs there are no significant problems which should preclude acquisition of the property by the Agency. The physical plant engineering inspection recommends that several repairs and/or reviews be done. Some are not listed as deferred maintenance but rather as items which if done would bring those areas identified into ideal conditions immediately or at a minimum should be funded through a reserve account for future replacement. Exceptions to this include items identified as being in non-compliance with HCD Title 25 specifications or other regulatory agencies and deferred maintenance work. These include installation of corner markers at all mobile home spaces at $2,000, replace existing high pole lights and add new circuit breakers at $36,000, replace main sewer lines at specified spaces at $20,700, add a new electrical service panel, transformer, distribution panel and electrical feeder to existing transformers at $45,000, clean storm drain system at $1,000, miscellaneous clubhouse repairs at $10,000, miscellaneous laundry building repairs at $1,000, emergency gate wire repairs at $200 and sealing of all high severity cracks/potholes at $7,000. These are all items which should be done now. In addition to those items recommended by the engineering inspection report the reserve analysis report recommends an additional sum of$5,400 be spent on pavement repairs during the first year of operation. The projected operating budget should cover any maintenance items needed and the reserve analysis report will detail appropriate reserve requirements for any significant repairs or replacements required in future years based upon current condition and estimated remaining useful life. The environmental assessment and asbestos survey indicates the limited presence of asbestos containing materials in the following common area locations: vinyl floor tile, linoleum mastic joint compound and spray applied acoustical ceiling material in the clubhouse. It is very typical of buildings which were constructed prior to 1980. One option is that these materials be removed in accordance with California-OSHA regulations and South Coast Air Quality Management Rule 1403. The estimated cost of abatement and replacement is approximately $66,035 plus elective cost of monitoring and project management estimated to be fifteen to thirty-five percent of removal cost. An alternative to this expenditure would be to leave the asbestos containing materials in place and conduct ongoing environmental monitoring of such materials through a formal Operations and Maintenance program. This is an acceptable alternative because, according to the environmental assessment, all of the materials have a low to moderate potential for disturbance. Development of an Operations and Maintenance program is estimated to cost $2,000. The annual operating cost to implement such a program is approximately $1,000. As a condition of the Agreement the seller is required to provide a recently completed structural pest control inspection report on the property common area structures and facilities prior to closing and is responsible for any noted corrections/treatments for active infestations. Repairs, rehabilitation and code compliance items will be either completed prior to close of escrow and/or an amount equal to the costs identified shall be withheld from seller at close of escrow. Additionally, initial capital reserve requirements as identified in the reserve analysis report shall be funded at close of escrow. Authorization to Proceed The London Group therefore requests that the Commission authorize proceeding with consummation of the transaction in accordance with Section 5 Paragraph 5.3 of the Agreement and with Section 6, entitled "Conditions of Closing of Buyer", including, but not limited to, Paragraph 6.10 thereof, entitled "Financing". Said paragraph provides that the escrow closing is further conditioned upon having obtained satisfactory financing by the Agency for the actual acquisition of the property. This request for authorization to proceed is made subject to any remaining items of compliance and negotiation of those identified repair issues which shall be resolved to the satisfaction of Agency Staff, Agency Counsel and The London Group prior to closing. PROPERTYPROFILES Property Name: Glen Aire Property Address: 222 South Rancho Avenue San Bernardino, CA 92410 Property Phone No: (909) 888 2666 Manager: Peter and Cindy Gonzales Park Owner: Mr. &Mrs. K.C. Hu Park Owner Address: 2175 Lindsey Court Tustin, CA 92680 Park Management Company: Owner managed Park Management Company Address: N/A Park Management Company Phone No: (714) 669-1333 Number Homesites: 131 Year Built: Phase I 1969-1970; Phase 11 1970-1971 Number of Acres: 14.6 Vacant Homesites: 2 Assessor's Parcel Number: 0142-361-26 Brief description of the property: Glen Aire is an older property which appear properly maintained. It is located in a residential neighborhood with other mobilehome parks nearby. All basic services are within a five mile radius of the property. Area businesses include small retailers, services and light industrial. Amenities: The hall and kitchen. There is an adjacent pool and jacuzzi. There is also a building containing a laundry clubhouse is approximately 3,000 square feet and contains an arts and crafts room, a billiards room, large meeting room and beauty salon. There is a carwash area and fifteen space RV storage lot. There is a dog run and horseshoe pit. 7 SEQUOIA PLAZA MOBILE HOME COMMUNITY Agreement for Purchase and Sale In accordance with The London Group Mobilehome Park Conversion Feasibility Study dated November 30, 1993 Sequoia Plaza Mobilehome Community was designated as a Category I park. Category I parks are those which were identified as being appropriate for resident ownership and/or control via a condominium or non-profit form of ownership. This park is most suitable to a non-profit acquisition and operating structure. Pursuant to prior Commission authorization and utilizing the standard form agreement prepared by Agency Counsel, an Agreement for Purchase and Sale (Agreement) was prepared for execution for the purpose of Agency acquisition of this property. Accordingly the due diligence process was commenced and is completed. Due Diligence I A comprehensive physical plant, legal and financial due diligence was conducted on this property. Inspections and document reviews were performed by industry professionals who specialize in their fields. These professionals include an MAI and State of California Certified General Real Estate Appraiser, Certified Public Accountants currently engaged by the Agency, City of San Bernardino Fire Department, State of California Registered Environmental Assessor and Scientists, State of California Certified Asbestos Consultant, City of San Bernardino General Building Inspector, Agency Counsel, State of California Registered Civil Engineers, State of California licensed General Engineering Contractor, and a State of California licensed Land Surveyor. Attached as Appendix I is a list detailing the documents and information requested of the seller for review. This list represents an ideal for seller provided documentation, although it is rare that all items listed can be obtained particularly on a property over ten years old. We received copies of construction plans from the seller. No other engineering or environmental inspections or reports were available. The property owner provided most of the other basic documents requested, and the due diligence was completed based upon the documents as provided as well as site inspections, review of official governmental records and reconstruction of documents as necessary. With respect to financial information, enough data was made available to satisfactorily verify cash flow and expenses on this property as well as develop forward projections. These inspections and reviews were coordinated and the results jointly analyzed by The London Group and the respective service providers to determine whether any conditions exist which would warrant further investigation or cause the property to be not acceptable for acquisition by the Agency. Due Dilizence: • ALTA Survey • Appraisal • Audit Review • Auditors Income and Expense Projections • Environmental Assessment: Phase I and Asbestos/Lead Survey • Fire Safety Inspection • Legal Review • Physical Plant Engineering • Reserve Analysis • Structural Pest Control Inspection Report • Title 25 Inspection Findings and Recommendations The results of reports and other information received through the due diligence inspections and reviews indicate that other than nominal compliance issues and repairs there are no significant problems which should preclude acquisition of the property by the Agency. The physical plant engineering inspection recommends that several repairs and /or reviews be done. Some of the repairs are not listed as deferred maintenance but rather as items which if done would bring those areas identified into ideal conditions immediately or at a minimum should be funded through a reserve account as future capital improvement expenditures. Exceptions to this include items identified as being in non-compliance with HCD Title 25 specifications or other regulatory agencies and deferred maintenance work. These include repairs at electrical pedestals estimated to cost $1,000, tightening ground clamps at $1,405, installation of electrical conduit at $1,800, cathodic testing of the gas system at $700 and street pavement crack repairs and slurry coat/stripe estimated to cost $18,000. These are all items which should be done now. In addition to those items recommended by the engineering inspection the reserve analysis report recommends several repairs be done during the first year of operation. These include repainting the wrought iron fencing at$2,250, repainting clubhouse exterior wood surfaces at $1,000 and resurfacing of the shuffleboard courts at $750. The projected operating budget should cover any maintenance items needed and the reserve analysis report details appropriate reserve requirements for any significant repairs or replacements required in future years based upon current condition and estimated remaining useful life. The environmental assessment and asbestos survey indicates the limited presence of asbestos containing materials in the following common area locations: vinyl floor tile and black mastic and acoustical ceiling material all located in the clubhouse. It is very typical of buildings which were constructed prior to 1980. One option is that these materials be I 0 removed in accordance with California-OSHA regulations and South Coast Air Quality Management Rule 1403. The estimated cost of abatement and replacement is approximately $108,169. Elective costs for monitoring and project management would be an additional fifteen to thirty-five percent of the removal cost. An alternative to this expenditure would be to leave the asbestos containing materials in place and conduct ongoing environmental monitoring of such materials through a formal Operations and Maintenance program. This is an acceptable alternative because, according to the environmental assessment, all of the materials are presently in good condition with a low to moderate potential for disturbance. The estimated cost to develop an Operations and Maintenance program is $2,000. The annual operating cost to implement an acceptable environmental monitoring program for any retained asbestos could be approximately $1,000. The environmental assessment included a lead survey which indicates the presence of lead containing paint in areas of the clubhouse. These findings are not uncommon for facilities of this age, lead containing paint was not banned until 1978. The Department of Housing and Urban Development recommends that such paint be removed from areas which are accessible to children. The estimated cost of this removal and replacement is estimated to be $25,000. The remaining lead containing paint, that which is not accessible to children, should be managed under an Operations and Maintenance program. The estimated cost of developing such a program is $3,000 with an annual operating cost of $1,000. During the environmental assessment a rusted drum was discovered with stained soil in it. The cost of testing and disposal of the soil, in accordance with all applicable regulations, will be approximately $840. As a condition of the Agreement the seller is required to provide a recently completed structural pest control inspection report on the property common area structures and facilities prior to closing and is responsible for any noted corrections/treatments of active infestations. Repairs, rehabilitation and code compliance items will be either completed prior to close of escrow and/or an amount equal to the costs identified shall be withheld from seller at close of escrow. Additionally, initial capital reserve requirements as identified in the reserve analysis report shall be funded at close of escrow. Authorization to Proceed The London Group therefore requests that the Commission authorize proceeding with consummation of the transaction in accordance with Section 5 Paragraph 5.3 of the Agreement and Section 6, entitled "Conditions of Closing of Buyer", including, but not limited to, Paragraph 6.10 thereof, entitled "Financing". Said paragraph provides that the escrow closing is further conditioned upon having obtained satisfactory financing by the Agency for the actual acquisition of the property. This request for authorization to proceed is made subject to any remaining items of compliance and negotiation of those identified repair issues which shall be resolved to the satisfaction of Agency Staff, Agency Counsel and The London Group prior to closing. PROPERTY PROFILE Property Name: Sequoia Plaza Mobilehome Park Property Address: 2505 West Foothill Boulevard San Bernardino, CA 92410 Property Phone No: (909) 889-7916 Manager: Karen Owens Park Owner: Walter Kinsman Park Owner Address: 14 Rockingham Drive Newport Beach, CA 92660 Park Management Company: J& H Asset Park Management Company Address: 22875 Savi Ranch Parkway Park Management Company Phone No: Yorba Linda, CA 92687 Number Homesites: 242 Year Built: 1970 Number of Acres: 29.69 Vacant Homesites: 13 Assessor's Parcel Number: 0142-071-38 Brief description of the property: AaftL This is a clean property in good condition. There is a small duck pond adjacent to the recreation facilities. There are carriage lamps at alternate homesites providing decorative common area lighting. The property design, decorative lighting/mailboxes and homesite landscaping provide a residential feeling to the property. The immediately adjacent land uses include Meridian Terrace Mobilehome Park, a small motel, vacant land and commercial property. The entrance to the property is off of Foothill Boulevard also known as Historical Route 66. Most basic services are within a one mile radius. Amenities: There is a 9,900 square foot clubhouse which contains a meeting hall, kitchen, billiard room, small library, management office, card room, men's and women's restrooms, and a storage room. There are two laundry room buildings. There is a heated pool, a jacuzzi, two saunas, covered/lighted shuffleboard courts, a barbecue area and a fifteen space RV storage lot. ROYAL COACH MOBILE MANOR Agreement for Purchase and Sale In accordance with The London Group Mobilehome Park Conversion Feasibility Study dated November 30, 1993 Royal Coach Mobile Manor was designated as a Category I park. Category I parks are those which were identified as being appropriate for resident ownership and/or control via a condominium or non-profit form of ownership. This park is most suitable to a non-profit acquisition and operating structure. Pursuant to prior Commission authorization and utilizing the standard form agreement prepared by Agency Counsel, an Agreement for Purchase and Sale (Agreement)was prepared for execution for the purpose of Agency acquisition of this property. Accordingly the due diligence process was commenced and is completed. Due Diligence A comprehensive physical plant, legal and financial due diligence was conducted on this property. Inspections and document reviews were performed by industry professionals who specialize in their fields. These professionals include an MAI and State of California Certified General Real Estate Appraiser, Certified Public Accountants currently engaged by the Agency, City of San Bernardino Fire Department, State of California Registered Environmental Assessor and Scientists, State of California Certified Asbestos Consultant, City of San Bernardino General Building Inspector, Agency Counsel, State of California Registered Civil Engineers, State of California licensed General Engineering Contractor, and a State of California licensed Land Surveyor. Attached as Appendix I is a list detailing the documents and information requested of the seller for review. This list represents an ideal for seller provided documentation, although it is rare that all items listed can be obtained particularly on a property over ten years old. We received copies of limited construction plans from the seller. No other engineering or environmental inspections or reports were available. The property owner provided most of the other basic documents requested, and the due diligence was completed based upon the documents as provided as well as site inspections, review of official governmental records and reconstruction of documents as necessary. With respect to financial information enough data was made available to satisfactorily verify cash flow and expenses on this property as well as develop forward projections. These inspections and reviews were coordinated and the results jointly analyzed by The London Group and the respective service providers to determine whether any conditions exist which would warrant further investigation or cause the property to be not acceptable for acquisition by the Agency. Due Diligence: • ALTA Survey • Appraisal • Audit Review • Auditors Income and Expense Projections • Environmental Assessment: Phase I and Asbestos/Lead Survey • Fire Safety Inspection • Legal Review • Physical Plant Engineering • Reserve Analysis • Structural Pest Inspection • Title 25 Inspection Findings and Recommendations The results of reports and other information received through the due diligence inspections and reviews indicate that other than nominal compliance issues and repairs there are no significant problems which should preclude acquisition of the property by the Agency. The physical plant engineering inspection recommends that several repairs and/or reviews be done. Some are not listed as deferred maintenance but rather as items which if done would bring those areas identified into ideal conditions immediately or at a minimum should be funded through a reserve account for future replacement. Exceptions to this include items identified as being in non-compliance with HCD Title 25 specifications or other regulatory agencies. These include installation of shut-off valves to gas meters at two homesites for $500, installation of anti-siphon device and drain pipe modifications on mop sink at $100, replacement of wood vent pipe supports at two homesites and installation of gas tight caps at vacant spaces at $500. Deferred maintenance items include having an inspection done to determine whether a cathodic system is needed for gas lines at $300 (with an estimated system installation cost of $5,500), replacement of metering panel wood support posts at $3,150, clean/flush storm drain system at $1,000, seal and patch high-severity pavement cracks and pot-holes at $2,000 and miscellaneous repairs to the recreational facilities at $1,200. These are all items which should be done now. In addition to those items recommended by the engineering inspection report the reserve analysis report recommends several repairs be done during the first year of operation. These include an additional sum of$4,375 be spent on pavement repairs, replacement of site entrance globe light fixtures at $700 and pool filter and heater replacements at $2,450. The projected operating budget should cover any maintenance items needed and the reserve analysis report will detail appropriate reserve requirements for any significant repairs or replacements required in future years based upon current condition and estimated remaining useful life. The environmental assessment and lead survey indicates the presence of lead containing paint in areas of the clubhouse. These findings are not uncommon for facilities of this age, lead containing paint was not banned until 1978. The Department of Housing and Urban Development recommends that such paint be removed from areas which are accessible to children. The estimated cost of this removal and replacement is $18,000. The remaining lead containing paint, that which is not accessible to children, should be managed under an Operations and Maintenance program. The estimated cost of developing such a program is $3,000 with an annual operating cost of $1,000. As a condition of the Agreement the seller is required to provide a recently completed structural pest control inspection report on the property common area structures and facilities prior to closing and is responsible for any noted corrections/treatments for active infestations. The seller has provided such a report on the clubhouse which indicates no evidence of termites. The engineering inspection noted possible evidence of termites to the wooden dumpster enclosures. A follow-up report to include all other structures will be requested from the seller. Repairs, rehabilitation and code compliance items will be either completed prior to close of escrow and/or an amount equal to the costs identified shall be withheld from seller at close of escrow. Additionally, initial capital reserve requirements as identified in the reserve analysis report shall be funded at close of escrow. Authorization to Proceed The London Group therefore requests that the Commission authorize proceeding with consummation of the transaction in accordance with Section 5 Paragraph 5.3 of the Agreement and with Section 6, entitled "Conditions of Closing of Buyer", including, but not limited to, Paragraph 6.10 thereof, entitled "Financing". Said paragraph provides that the escrow closing is further conditioned upon having obtained satisfactory financing by the Agency for the actual acquisition of the property. This request for authorization to proceed is made subject to any remaining items of compliance and negotiation of those identified repair issues which shall be resolved to the satisfaction of Agency Staff, Agency Counsel and The London Group prior to closing. ,4 0 PROPERTYPROFILES Property Name: Royal Coach Mobile Manor Property Address: 2280 West Rialto Avenue San Bernardino, CA 92410 Property Phone No: (909) 885-7333 Manager: John&Mary Schaffer Park Owner: Robert& Viola Faulks Park Owner Address: 15986 Kewanee Road Apple Valley, CA 92307 Park Management Company: Owner managed Park Management Company Address: N/A Park Management Company Phone No: (619) 242-3773 Number Homesites: 45 Year Built: 1962 Number of Acres: 3.8 Vacant Homesites: 0 Assessor's Parcel Number: 0142-111-08 Brief description of the property: This is a small, older park. Land uses around the property include residential, one is a new housing tract, and Bonanza Mobilehome Park. All basic services are within a five mile radius of the property. Area businesses include manufacturin g, transportation services, industrial and retail. Amenities: There is a small clubhouse of approximately 600 square feet. There is a pool which appears to be closed seasonally and a shuffleboard court. Brief description of the homes: Most homes are older singlewides with metal siding and roofs. There are some doublewides with wood-like siding. There are no consistent architectural standards. Landscaping is minimal o non-existent. All homes have carports with asphalt driveways.. Homes reflect an average pride of ownership. RANCHO MERIDIAN MOBILEHOME PARK Agreement for Purchase and Sale In accordance with The London Group Mobilehome Park Conversion Feasibility Study dated November 30, 1993 Rancho Meridian Mobilehome Park was designated as a Category I park. Category I parks are those which were identified as being appropriate for resident ownership and/or control via a condominium or non-profit form of ownership. This park is most suitable to a non-profit acquisition and operating structure. Pursuant to prior Commission authorization and utilizing the standard form agreement prepared by Agency Counsel, an Agreement for Purchase and Sale (Agreement) was prepared for execution for the purpose of Agency acquisition of this property. Accordingly the due diligence process was commenced and completed. Due Diligence A comprehensive physical plant, legal and financial due diligence was conducted on this property. Inspections and document reviews were performed by industry professionals who specialize in their fields. These professionals include an MAI and State of California Certified General Real Estate Appraiser, Certified Public Accountants currently engaged by the Agency, City of San Bernardino Fire Department, State of California Registered Environmental Assessor and Scientists, State of California Certified Asbestos Consultant, City of San Bernardino General Building Inspector, Agency Counsel, State of California Registered Civil Engineers, State of California licensed General Engineering Contractor, and a State of California licensed Land Surveyor. Attached as Appendix I is a list detailing the documents and information requested of the seller for review. This list represents an ideal for seller provided documentation, although it is rare that all items listed can be obtained particularly on a property over ten years old. Very limited plans were provided, and other than an environmental report dated 1990 no engineering inspections or reports were available. The property owner provided most of the other basic documents requested, and the due diligence was completed based upon the documents as provided as well as site inspections, review of official governmental records and reconstruction of documents as necessary. With respect to financial information, enough data was made available to satisfactorily verify cash flow and expenses on this property as well as develop forward projections. These inspections and reviews were coordinated and the results jointly analyzed by The London Group and the respective service providers to determine whether any conditions exist which would warrant further investigation or cause the property to be not acceptable for acquisition by the Agency. V Due Diligence: • ALTA Survey • Appraisal • Audit Review • Auditors Income and Expense Projections • Environmental Assessment: Phase I and Asbestos/Lead Survey • Fire Safety Inspection • Legal Review • Physical Plant Engineering • Reserve Analysis • Structural Pest Control Inspection • Title 25 Inspection Findings and Recommendations The results of reports and other information received through the due diligence inspections and reviews indicate that other than nominal compliance issues and repairs there are no significant problems which should preclude acquisition of the property by the Agency. The physical plant engineering inspection recommends that several repairs be done. Some of the repairs are not listed as deferred maintenance but rather as items which if done would bring those areas identified into ideal conditions immediately or at a minimum should be funded through a reserve account as future capital improvement expenditures. Exceptions to this include items identified as being in non-compliance with HCD Title 25 specifications or other regulatory agencies and deferred maintenance work. These include electrical pedestals repairs for an estimated $500, repair of minor cracking in the pool decking at $250, installation of missing space corner markers for $1,500, repair of tile roof and interior/exterior clubhouse damage caused by a roof leak at $21,540 and street repairs at $5,000. These are all items which should be done now. In addition to those items recommended by the engineering inspection report the reserve analysis report recommends several repairs be done during the first year of operation. These include replacement of clubhouse carpeting at $5,150 and repainting of exterior clubhouse stucco and wood at $2,000 and an additional sum of$6,900 on the streets to include slurry coat and restripe. The projected operating budget should cover any maintenance items needed and the reserve analysis report details appropriate reserve requirements for any significant repairs or replacements required in future years based upon current condition and estimated remaining useful life. The environmental assessment and asbestos survey indicates the limited presence of asbestos containing materials in the following common area locations: exterior stucco walls of the clubhouse and laundry room, dark brown floor tile in the laundry building storage room, brown vinyl floor tile in the clubhouse closet and dance floor, spray applied ceiling in the clubhouse, and in the clubhouse and laundry room building roof mastic. These findings are very typical of buildings which were constructed prior to 1980. One option is that these materials be removed in accordance with California-OSHA regulations and South Coast Air Quality Management Rule 1403. The estimated cost of abatement is $36,260 and replacement is approximately $34,250 for a total of $70,510. Elective costs for monitoring and project management would be an additional fifteen to thirty-five percent of the removal expense. An alternative to this expenditure would be to leave the asbestos containing materials in place and conduct ongoing environmental monitoring of such materials through a formal Operations and Maintenance program. This is an acceptable alternative because, according to the environmental assessment, all of the materials are presently nonfriable with a low to moderate potential for disturbance. The exception to this is the clubhouse spray applied acoustical ceiling material which is considered friable. The cost for removal and replacement of this ceiling material is $7,680 plus any elected costs for project management and monitoring. The estimated cost to develop an Operations & Maintenance program is $2,000. The annual operating cost to implement an acceptable environmental monitoring program for any retained asbestos could be approximately $1,000. As a condition of the Agreement the seller is required to provide a recently completed structural pest control inspection report on the common area structures and facilities prior to closing and is responsible for any noted corrections/treatments. Repairs, rehabilitation and code compliance items will be either completed prior to close of escrow and/or an amount equal to the costs identified shall be withheld from seller at close of escrow. Additionally, initial capital reserve requirements as identified in the reserve analysis report shall be funded at close of escrow. Authorization to Proceed The London Group therefore requests that the Commission authorize proceeding with consummation of the transaction in accordance with Section 5 Paragraph 5.3 of the Agreement and with Section 6, entitled "Conditions of Closing of Buyer", including, but not limited to, Paragraph 6.10 thereof, entitled "Financing". Said paragraph provides that the escrow closing is further conditioned upon having obtained satisfactory financing by the Agency for the actual acquisition of the property. This request for authorization to proceed is made subject to any remaining items of compliance and negotiation of those identified repair issues which shall be resolved to the satisfaction of Agency Staff, Agency Counsel and The London Group prior to closing. PROPERTYPROFILE Property Name: Rancho Meridian Mobilehome Park Property Address: 2686 West Mill Street San Bernardino, CA 92346 Property Phone No: (909) 825-4340 Manager: Artemiza and Friedmann Sommerfeld Park Owner: Meridian Park Investments, L.P. Park Owner Address: 6535 Wilshire Blvd., Suite 600 Los Angeles, CA 90048 Park Management Company: Western Mobilehome Park Management Park Management Company Address: 185 East Sierra Madre Boulevard Park Management Company Phone No: Sierra Madre, CA 91025 Number Homesites: 143 Year Built: 1978 Number of Acres: 18.6 Vacant Homesites: 12 Assessor's Parcel Number: 0142-141-01 Brief description of the ro er P P tY: This is clean property in good condition. There is some slope to the topography and street patterns are varied in layout. There is a low pole carriage lamp at alternate homesites which doubles as a mailbox post. The property design, decorative lighting/mailboxes and homesite landscaping provide a residential feeling to the property. The immediately adjacent land uses include single family and multi-family residential and vacant land. All basic services are within a five mile radius. Amenities: There is a 1,400 square foot clubhouse which contains a kitchen, billiard room, management office, card room, meeting hall, men's and women's restrooms, and a storage room. There is a 575 square foot laundry room. There is a pool, jacuzzi and eleven space RV storage lot. WNW DUE DILIGENCE DOCUMENTS AND INFORMATION TO BE PROVIDED BY SELLER 1. PHYSICAL a) As-built plans or other available park drawings for the site and utility systems. b) As-built plans or other available park drawings and specifications for all improvements. Indicate improvements location, use, size and construction materials. c) Schedule showing date of original construction for all improvements. d) List of any major capital improvements completed since original construction; include date of completion and cost. e) Copies of all available engineering and inspection reports including, but not limited, to the following: Flood Soils and seismic Health department reports Environmental reports Termite report HCD inspection report Electrical, sewer, water and gas (if there is a park owned gas distribution system, a copy of the latest leak survey and cathodic protection certification). Any other engineering and inspection reports in Seller's possession. f) Inventory of all personal property including equipment, tools, vehicles, etc. g) Copies of certificates of title of all Seller-owned mobilehomes to be transferred with the park. h) Summary of all Seller-owned mobilehomes to be transferred with the park stating all relevant information including space number, serial number, decal number, make/model & single/double-wide. i) Current written termite inspection report (performed within 30 days of execution of Purchase & Sale Agreement). 2. GOVERNMENTAL APPROVALS a) Copies of all applicable permits and licenses including, but not limited, to the following: Business Registration Certificate City Permit to Operate/Certificate of Occupancy Pool Permit issued by the Department of Environmental Health Services Certificate of Registration/Permit issued by Department of Agriculture/Weights & Measures (if applicable) Zoning and Conditional Use Permit(s) 7 Housing and Community Development for the State of California Permit b) All franchise agreements, if applicable. c) Any available documents or correspondence relating to regulatory actions or proceedings including, without limitation,those relating to condemnation,tax assessment, zoning and subdivision, violations of local or state laws. 3. TITLE AND SURVEY a) Certified ALTA survey performed on the site showing all roads, encroachments, boundaries, permanent improvements, easements and matters of record. b) Last title policy issued including a legal description and a plot plan. c) Last preliminary title report issued with readable copies of all underlying documents. 4. AGREEMENTS a) Copy of all residency agreements and leases in existence together with a summary for all rentals including for each space: resident name, whether rental is month to month or subject to a written lease, lease commencement date, lease termination date, current base rental rate, anniversary date of scheduled rent increases and rent increase escalator. b) Copy of each resident's rental application. c) Copy of all rules and regulations in use. d) Copies of any other written agreement(s) or binding notices with residents. e) Copies of all written service contracts and a summary of all oral service contracts. f) Any agreements regarding utility services. g) Loan documents and other loan information, if applicable to the transaction. This includes loans on the property, inventory or any park owned homes being acquired. h) Copies of all contracts of sale for mobilehomes. 5. FINANCIAL a) Audited year end financial statements for the prior three calendar years and the current year-to-date including detail on all capital expenditures, income statements,balance sheet and statement of cash flow. Please note, for any non-recurring and extraordinary expenses or income indicate the amounts with an explanation and copies of corresponding receipts or invoices. b) Copies of corresponding general ledgers for the prior two years and the current year- to-date. c) Copies of the past two years sewer, water,trash, gas, electric, cable television and landscaping bills. d) Copies of certificates of insurance and billing statements for the past three years. e) Copies of all capital expenditures, maintenance and repair bills over$500 for the prior two years and the current year-to-date. f) Summary of the current employee payroll including all benefits provided: salary, - housing, utilities, insurance, vacation, sick leave, retirement plan, etc. and details. - Indicate for each employee regular hours worked and job classification. g) A copy of the past three months income receipts journal with corresponding deposit slips and bank statements. h) Copies of monthly bank statements for the prior three years and copies of bank reconciliations for all bank accounts; year end only for the prior three years and current month. I) Listing of all unpaid invoices at year end which were carried over to the next year for three years prior and at the end of the current month which were carried over to the next period for payment. j) Copies of the last two years' tax returns. k) Copies of the past two years' real estate and personal property tax bills, the current assessment and tax rate. Details on special assessments or other special charges levied on the property or currently under proposal. 1) Current rent roll, certified by seller, including resident name, space number, move-in date, current scheduled base rent and all other charges detailed including utilities and pass-throughs. A list of all security deposits, date collected and date refunded, if applicable. If actual rents differ from scheduled rents, indicate the actual rents collected and detail any credits being given. m) Indicate what advertising and marketing programs are in place and their associated costs. n) Delinquency or accounts receivable reports at year end for the past two years and for the current month. o) A summary of the rental history for the prior four years (amount and date of rent increases). 6. LEGAL a) Summary of any litigation including evictions in progress affecting the property or Seller's ability to sell. b) Copy of Seller's partnership agreement or any corporate resolution necessary to authorize execution of agreement for purchase and sale of the park. I due diligence list 9/26/95 City of San Bernardino © Pacific Palms MHP -------- 9 © Glen Aire MHP t--J Rancho Meridian MHP I- 215 0 Sequoia Plaza MHP � ( ° oa Royal Coach MHP - ; 0 Ninth Street MHP No I i' :>:..... 40th St — o --------- � I �° P ar Wale E: m .-...... .............. Marshall — — .................. Highland Ave — - ------ . ...� ! c 161 h St - '41 I-— L` t •I U — — Baseline — - — ��_-' 61h st _ — 30 5th St Foothill Blvd E""—"' —' i �\RV Rialto Ave a) I > Mill St 215� I _-._--j _ w Q I a) > I_ E Q � as p I c i— 10 > Hos italic � I I I % NORTH ------ San Bernardino city limit Map not to scale -`---- - "__"_ _ San Bernardino county area Revised:September,1994 NOV 14 '95 12:38PM P.6 0 NOTIC QF OI�T`�' PU LIB NOTICE OF JOINT OF PUBLIC HEARING HEARING O THE INTERNAL ACCORDANCE WITH SECTION 147(f) REVENUE CODE OF 1486, AS AMEND D SAN E XAYODINoD COMMON COUNCIL OF THE CITY CALIFORNIA AND THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY FOR THE ISSUANCE OF CERTAIN BONDS THE CITY OF SAN AND FOR THE COSTS WITHIN COSTS ASSOCIATED THEREWI'T'H Notice is hereby given that on November 20, 1995, at 11:00 a.m. , or as soon thereafter as the matter may be heard, the Mayor and Common Council of n bc�halftof the City of dSan�Bernardino,L Of Ban (the 'Common Council") , and san Bernardino Joint Powers California (the "City"),,Authority") , will conduct a hearing which Finanoing Authority (the Council Chambers, City shall be open to the public in the City Hall, 300 North "DStreet, San f Bernardino, California 92416, for the purpose as hereinafter The purpose of said public hearing to be held in 147(f) of the Internal Revenue Code of accordance with Section 19861 as amended (the "Code") 1 is to consider the Authority's alftounts not authorization for the purposes of acqu P it on of thee following! to exceed and f 1. r it M bilee Fs3tate� A. Description: Glen Aire Mobile Estates- mobilehome park comprised of 131 mobilehome spaces B. Maximum Estimated Tax exempt $3,500,000 Proceeds: C. owner: PVC-4, a California general partnership D. project Street Address= 222 South Rancho Avenue San Bernardino, California 2. �acif �_ �Ynx M bi1Q Ho P r A. Description: Pacific Palms Trailer Park 142 - mobilehome park comprised of mobilehome Spaces NOV 14 '95 12:38PM 0 P.7 B. Maximum Estimated Tax exempt $3,5001000 Proceeds: C. owner: pVC-Properties, a California corporation D. Project Street 2727 East Pacific Street, Address: Highland, California 3 . _ A, Description: Rancho Meridian MoC mprisaa Park of 143 mobilehome p mobilehome spaces g. Maximum Estimated Tax exempt $4,500,000 Proceeds: C. Owners Meridian Park investments, L.P, a California limited partnership D. project Street 2688 west Mill Street Address: San Bernardino, California 4a se ouQ a P1aZA M bilehom�Q bi 4 A. Description: Sequoia Plaza y mobilehome park comprised f 242 mobilehome spaces B. Maximum Estimated Proceeds: Tax exempt $6, 500,000 C. mgr: Sequoia Plaza Mobilehome Community, a California limited partnership D. Project street Address- 2505 West Foothill Blvd. San Bernardino, California g, Royal Cczacb Mnhlle Manor A. Description: Royal Coach Mobile Manor - mobilehome park comprised of 45 mvbilehome spaces B. Maximum Estimated Proceeds' Tax exempt $875,0 00 -2- NOV 14 '95 12:39PM 0 P_8 C. owner: Robert H. ag ulTrustee viola M. their successors, in trust under 1991, for the bne it of he F ulks 1991, Living Trust D. project Street 2280 West Rialto Avenue Address: San Bernardino, California 6. Nf�L'n S Get mobil el- Park A. Description: Ninth Street Mobilehone Park - mobilehome park comprised of 108 mobilehome spaces B. Diaximum Estimated Tax exempt $1,000,000 Proceeds: nera Jerome T. Winstead, Cheryl C. t Winstead, William Winstead and Anita winstead D. Project Street 780 East Ninth Street Address. San Bernardino, California The proceeds SProjects be repaid from rental revenue derived fr om the respective All persons interested in the subject matter and the public purposes and the public benefits and the execution and delivery of the Bonds may attend such hearing at the time and on set the date as ebm nner hereinafter, setffarth heir written comments thereto in th Any person present at the hearing shall have the opportunity to be heard on the question of os�a Authority's Any authorization to execute written@ comments t be summarized at person who wishes to p the hearing may do $o by delivering g office at to the eitttention of erk the City clerk at the City 'g o noted above, for receipt prior to the close of the hearing. This notice is being given, and the hearing being held, pursuant to the requirements of Section 147(f) of the Code. mod+ 8Ctaber S0, v aar , Y Authority SSpratauy