TITLE
Recommendation to amend the Purchase and Sale Agreement, dated March 10, 2022, with Armory Arts Collective, LP (Buyer/Developer), for the disposition of City of Long Beach-owned exempt surplus property located at 854 East 7th Street, commonly known as the former Long Beach Armory (Subject Property) to add an Option to Lease the Subject Property in lieu of a fee purchase. (District 1)
DISCUSSION
On December 7, 2021, the City Council authorized a Purchase and Sale Agreement, dated March 10, 2022 (Purchase and Sale Agreement), with Armory Arts Collective, LP (Buyer/Developer) for the development and adaptive reuse of City of Long Beach (City)-owned exempt surplus property located at 854 East 7th Street, commonly known as the former Long Beach Armory (Subject Property) for the development of a 64-unit affordable housing project (Proposed Project). The Purchase and Sale Agreement established a purchase price of $5.15 million to be paid to the City through a fifty-five (55) year Residual Receipts Loan, which is a loan that is repaid with surplus cash from Proposed Project rents after all obligations from construction and financing have been disbursed. After execution of the Purchase and Sale Agreement, the Buyer/Developer applied to the California Debt Limit Allocation Committee (CDLAC) and the California Tax Credit Allocation Committee (TCAC) (Collectively: CDLAC/TCAC) for an award of multifamily housing bonds and Tax Credits. Unfortunately, the Proposed Project was not competitive enough to secure an award from CDLAC/TCAC last year.
To increase the competitiveness of the Proposed Project’s CDLAC/TCAC application this year, the Buyer/Developer has requested to have the option to convert the purchase structure into a long-term ground lease (Lease Option), wherein the City would agree to enter into a long-term lease of the Subject Property with the Buyer/Developer for a specified period, and the City would retain fee ownership of the Subject Property. Theref...
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