TITLE
Recommendation to receive supporting documentation into the record, conclude the hearing and adopt resolution making certain findings; approving and authorizing the execution of the Disposition and Development Agreement between the Long Beach Housing Development Company and LINC Housing Corporation; finding that the consideration for the lease of certain real property in the Central Long Beach Project Area is not less than Fair Market Value in accordance with covenants and conditions governing such lease; and approving the lease of the property and the Disposition and Development Agreement and lease. (District 4)
DISCUSSION
The Long Beach Housing Development Company (LBHDC) purchased the Palace Hotel located at 2640 E. Anaheim Street (Site) from the City of Long Beach in August 2005 using tax increment housing set aside funds. (Site Map attached as Exhibit A) In May 2008, the LBHDC approved the selection of L1NC Housing Corporation and United Friends of the Children as the development team for the rehabilitation of the Palace Hotel. The LBHDC intends to enter into a Disposition and Development Agreement (DDA) to lease the land and convey the improvements to L1NC Housing Corporation for the development of affordable transitional housing for Transition Age Youth. Upon termination of the lease, the improvements will revert back to the LBHDC.
The proposed project includes the rehabilitation of the Palace Hotel from a 24-room hotel into a 14-unit affordable housing development, including one unit for an on-site manager, a community room, counseling offices, a management office, laundry facilities, a rooftop patio, and a 980 square foot commercial space that may be used to operate a business that can provide work experience and training for the residents. The project will provide service-enriched transitional housing for very low-income Transition Age Youth, or youth that are leaving the foster care program, and are at risk of becoming homeless. Services will be provided by United Friends of the Children, a non-profit social services provider, and will include life skills training, personal finance, job training, assistance accessing educational opportunities, counseling and any other service needed to ensure the residents' self sufficiency.
The Redevelopment Plan for the Central Long Beach Redevelopment Project Area, which was originally adopted in September 1993 and re-adopted in March 2001, sets goals to ensure a diversity of housing stock for the growing population; to expand, improve, and preserve the community's supply of housing available to lowand moderate-income persons; to remove blighting influences; and to assure high design standards for the entire Project Area.
Although the Redevelopment Agency (Agency) is not a party to the DDA, Section 33433 of the California Health and Safety Code requires that if a property is acquired in whole or part with tax increment funds, the local Redevelopment Agency must adopt a resolution approving the proposed sale or transfer of the property and make certain findings after a public hearing. Pursuant to the same Section of the California Health and Safety Code, the City Council is also required to hold a Public Hearing and adopt a resolution approving the proposed sale or transfer of the property.
Pursuant to California Redevelopment Law, the Agency has made available for public inspection and reproduction a Summary Report (Exhibit B) that contains the following:
· The estimated value of the interest to be conveyed determined at the highest and best use permitted under the Redevelopment Plan;
· The estimated value of the interest to be conveyed, determined at the use and with the conditions, covenants and development costs required by the Agreement;
· The purchase price;
· The cost of the Agreement to the Agency/LBHDC;
· An explanation of why the transfer of the Site will assist in the elimination of blight; and
· An explanation of why the sale of the Site is consistent with the Agency's AB 1290 Implementation Plan.
Summary of Disposition and Development Agreement
Proposed Agreement
· The proposed Disposition and Development Agreement is between the LBHDC and L1NC Housing Corporation.
· The LBHDC will ground lease the land at 2640 East Anaheim Street to the Developer over a 60 to 99-year term.
· The LBHDC will convey the 11,200 square foot improvements on the site to the Developer. Ownership of the improvements will revert to LBHDC upon expiration of the Ground lease.
· The Developer will rehabilitate the improvements and operate 13 income-restricted apartments for Transition Aged Youth, a manager's unit, a community room, ground floor commercial space and existing parking space on the Site.
The attached Summary Report provides a more detailed description of the proposed transaction, including the responsibilities of the LBHDC and the Developer. (Exhibit B)
ENVIRONMENTAL REVIEW
On February 19, 2009, the Planning Commission approved a Historic Landmark Designation for the Palace Hotel, and in accordance with the Guidelines of Implementation of the California Environmental Quality Act, a Categorical Exemption was issued for the proposed project (Categorical Exemption 08-073). (Exhibit C)
COMMUNITY OUTREACH
Presentation and discussion of the project took place at the East Anaheim Street Business Alliance and West Eastside Community Association meetings on January 27, 2009 and February 5, 2009, respectively. The project was also presented at various LBHDC meetings and to the Central Project Area Committee Executive Committee on November 6, 2008.
This letter was reviewed by Assistant City Attorney Heather Mahood on May 12, 2009 and Budget and Performance Management Bureau Manager, David Wodynski, on May 12, 2009.
TIMING CONSIDERATIONS
City Council action on June 2, 2009 will allow the Developer to submit an application for low-income housing tax credits to help fund the proposed project. The application is due to the California Tax Credit Allocation Committee (TCAC) on June 9, 2009.
One of the application's threshold requirements is that the developer has control of the site. The City Council's adoption of a resolution approving the ground lease will enable the LBHDC to execute a DDA with L1NC Housing. According to TCAC's guidelines, a fully executed DDA is sufficient proof of site control.
FISCAL IMPACT
There is no fiscal impact related to the proposed action, and there is no impact to the General Fund.
SUGGESTED ACTION
Approve recommendation.
BODY
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH APPROVING THE PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT AND LEASE BETWEEN THE LONG BEACH HOUSING DEVELOPMENT COMPANY AND L1NC HOUSING CORPORATION; FINDING THAT THE CONSIDERATION FOR THE LEASE OF CERTAIN REAL PROPERTY IN THE CENTRAL LONG BEACH REDEVELOPMENT PROJECT AREA IS NOT LESS THAN FAIR MARKET VALUE IN ACCORDANCE WITH COVENANTS AND CONDITIONS GOVERNING SUCH LEASE; AND APPROVING THE LEASE OF THE PROPERTY AND THE DISPOSITION AND DEVELOPMENT AGREEMENT AND LEASE
Respectfully Submitted,
DENNIS J. THY
DIRECTOR
DEPARTMENT OF COMMUNITY DEVELOPMENT
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APPROVED: |
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PATRICK H. WEST |
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CITY MANAGER |