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HomeMy Public PortalAboutA2011-06-29LRA-SP°4 LVry LYNWOOD REDEVELOPMENT AGENCY 11330 BULLIS ROAD LYNWOOD, CALIFORNIA 90262 -3845 (310) 603 -0220 �� /FOR Aide Castro, Chair Jim Morton, Vice Chair Alfredo Flores, Member Ramon Rodriguez, Member Maria T. Santillan, Member This Agenda contains a brief general description of each item to be considered. Copies of the Staff reports or other written documentation relating to each item of business referred to on the Agenda are on file in the Office of the City Clerk and are available for public inspection. Materials related to an item on this Agenda submitted to the Agency Board after distribution of the Agenda packet are available for public inspection at the Agency Secretary's office at the above address during normal business hours. Any person who has a question concerning any of the agenda items may call the City Manager at (310) 603- 0220. ext. 200. AGENDA LYNWOOD REDEVELOPMENT AGENCY JUNE 29, 2011 SPECIAL MEETING 6:00 P.M. LYNWOOD CITY HALL 11330 BULLIS ROAD AIDE CASTRO CHAIR JIM MORTON VICE CHAIR RAMON RODRIGUEZ MEMBER ROGER L. HALEY EXECUTIVE DIRECTOR RECEWED JUN 282011 CITY OF LYNWOOD CITY CLERKS OFFICE ALFREDOFLORES MEMBER MARIA T. SANTILLAN MEMBER FRED GALANTE AGENCY COUNSEL OPENING CEREMONIES A. Call Meeting to Order B. Roll Call (FLORES- RODRIGUEZ- SANTILLAN- MORTON- CASTRO) C. Certification of Agenda Posting by Secretary PUBLIC ORAL COMMUNICATIONS (Regarding Agenda Items Only) PUBLIC ORAL COMMUNICATIONS CONSENT CALENDAR All matters listed under the Consent Calendar will be acted upon by one motion affirming the action recommended on the agenda. There will be no separate discussion on these items prior to voting unless members of the Agency or staff request specific items are removed from the consent calendar for separate action. CONSIDERATION OF A PROPOSED JOINT VENTURE HOUSING PURCHASE, REHABILITATION AND SALE PROGRAM Comments: Rex Natan (hereinafter "Developer"), desires to invest funds in the City of Lynwood to Purchase, rehabilitate, and sell single family residential homes with the intent to assist low -and moderate - income families. The Developer has provided a list of 23 foreclosed homes that he is interested in rehabilitating and putting back on the market. The Developer's investment for acquisition is approximately $2.8 million dollars. The Developer would like the homes to be purchased below market rate to leverage the cost of rehabilitation prior to resale. It is felt that one way to achieve this goal is to have the Agency acquire the property and use the Developer as the sole source of funding for acquisitions Recommendation Staff recommends that after consideration the Agency adopts the resolution titled, "A RESOLUTION OF THE CITY OF LYNWOOD REDEVELOPMENT AGENCY APPROVING THE PURCHASE AND SALE AGREEMENT (PSA) BETWEEN THE LYNWOOD REDEVELOPMENT AGENCY (AGENCY) AND REX NATAN (DEVELOPER) FOR THE PURCHSE DEVELOPMENT AND SALE OF FORECLOSED RESIDENTIAL PROPERTY." CLOSED SESSION NONE ADJOURNMENT THE NEXT REGULAR MEETING WILL BE HELD ON JULY 5, 2011 AT 5:00 P.M. AT THE COUNCIL CHAMBERS OF CITY HALL, 11330 BULLIS ROAD, LYNWOOD, CALIFORNIA. AGENDA STAFF REPORT DATE: June 29, 2011 TO: Honorable Chair and Members of the Agenc Board APPROVED BY: Roger L. Haley, Executive Direc o PREPARED BY: Sarah Magana Withers, Director of Rede�velqp ment Bruno Naulls, Redevelopment Associat�)) ���� SUBJECT: Consideration of a Proposed Joint Venture Housing Purchase, Rehabilitation and Sale Program Recommendation: Staff recommends that after consideration the Agency adopts the resolution titled, "A RESOLUTION OF THE CITY OF LYNWOOD REDEVELOPMENT AGENCY APPROVING THE HOUSING REHABILITATION AGREEMENT (HRA) BETWEEN THE LYNWOOD REDEVELOPMENT AGENCY (AGENCY) AND REX NATAN (DEVELOPER) FOR THE ACQUISITION, DEVELOPMENT AND SALE OF FORECLOSED RESIDENTIAL PROPERTIES." Background: 1. Rex Natan (hereinafter "Developer"), Desires to invest funds in the City of Lynwood to purchase, rehabilitate, and sell single family residential homes with the intent to assist families prepare for homeownership. 2. The Developer has provided a list of 23 foreclosed homes that he is interested in rehabilitating and putting back on the market. The Developer's investment for acquisition is approximately $2.8 million dollars. 3. The Developer would like the homes to be purchased at realistic pricing that recognizes the economic recession being experienced, which has produced a glut of foreclosed homes. With such savings, the Developer has represented that it can achieve the goal of renovating these home�. to make them ready for occupancy, with the Developer acting as the sole source of funding for all aspects of acquisition, renovation and sale. AGENDp ITEM 4. The foreclosed homes are bank-owned and are vacant, which over time is a contributing factor to blight in our community due to neglect and vandalism. 5. The Developer has agreed to the terms and conditions set forth by the Agency in the proposed HRA and the project will be subject to all applicable provisions of the Lynwood Municipal Code. Discussion $ Analysis: The Agency shall initially submit offers for each property and use Developer's funds as down payment to put the properties in escrow. Upon closing escrow, Agency would immediately transfer and record each property into the Developer's name to avoid additional transfer and recording requirements and Developer shall be required to pay the balance owed for the purchase of each property. Developer believes that acquiring the properties separately would involve a significantly more protracted process, more costly process and thus the cost and valuation would be difficult to justify added investment to refurbish the homes and make them ready for occupancy. The estimated $2.5 million cost to acquire the homes in an as-is condition, through a large-scale, quick negotiated acquisition process, and in light of the existing economic recession is believed by the Developer to yield savings, which will enable the Developer to rehabilitate the homes and sell at market rate. No financial assistance is requested of the Agency. The Developer intends to fully fund the cost of purchase and rehabilitation of the homes. In furtherance of the objectives of the California Community Redevelopment Law, Agency desires to undertake a program for the redevelopment of certain areas within the City, and in connection therewith is undertaking and carrying out activities for housing redevelopment potentially in and outside Lynwood Redevelopment Project Area "A" ("Project Area") pursuant to and in furtherance of the Redevelopment Plan for the Project Area. Developer desires to rehabilitate the Sites all in accordance with applicable City regulations and standards ("ProjecY'). Agency and Developer desire to enter into the HRA to accomplish the sale of Agency acquired parcels to Developer and rehabilitation of the units pursuant to the HRA. The fulfillment generally of the terms of the HRA is believed to be in the vital and best interests of the City of Lynwood and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local housing laws and requirements. The development of these sites will contribute the elimination of blight, and 2 generate property tax revenue, which is consistent with the intent of the Redevelopment Plan of the City of Lynwood. Fiscal Impact: The sale of the rehabilitated properties will have a positive impact on the General Fund by generating property tax revenue from homes currently held in foreclosure by banks. Coordinated With: City Manager's Office Finance and Administration City Attorney's Office Attachments: Resolution 3 RESOLUTION NO. A RESOLUTION OF THE CITY OF LYNWOOD REDEVELOPMENT AGENCY APPROVING THE HOUSING REHABILITATION AGREEMENT (HRA) BETWEEN THE LYNWOOD REDEVELOPMENT AGENCY (AGENCY) AND REX NATAN (DEVELOPER) FOR THE PURCHSE, DEVELOPMENT AND SALE OF FORECLOSED RESIDENTIAL PROPERTY WHEREAS, the Lynwood Redevelopment Agency ("Agency") is a public body, corporate and politic, organized and existing under California Community Redevelopment Law (Health 8� Safety Code § 33000, et seq.) ("CRL"); and WHEREAS, in accordance with the CRL, the City Council of the City of Lynwood adopted the Redevelopment Plan for the Redevelopment Project Area "A" in the City of Lynwood on July 10, 1973, as established by Ordinance No. 945 of the City Council, and as amended from time to time; and WHEREAS, Rex Natan (hereinafter "Developer"), Desires to invest funds into the City of Lynwood to purchase, rehabilitate, and sale single family residential homes with the intent to assist low and moderate income families; and WHEREAS, the Developer has provided a list of 23 foreclosed homes that he is interested in rehabilitating and putting back on the market. The Developer's investment for acquisition is approximately $2.8 million dollars; and WHEREAS, the Developer would like the homes to be purchased below market rate to leverage the cost of rehabilitation prior to resale. It is felt that one way to achieve this goal is to have the Agency acquire the property and use the Developer as the sole source of funding for acquisitions; and WHEREAS, the foreclosed homes are bank owned and are vacant, which over time is a contributing factor to blight in our community due to neglect and vandalism; and WHEREAS, the Developer has agreed to the terms and conditions set forth by the Agency and the project will be subject to all applicable provisions of the Lynwood Municipal Code; and WHEREAS, In furtherance of the objectives of the California Community Redevelopment Law, Agency desires to undertake a program for the redevelopment of certain areas within the City, and in connection therewith is undertaking and carrying out activities for housing redevelopment potentially in and outside Lynwood Redevelopment Project Area "A" ("Project Area") pursuant to and in furtherance of the Redevelopment Plan for the Project Area. NOW, THEREFORE, THE LYNWOOD REDEVELOPMENT AGENCY DOES HEREBY FIND, DETERMINE, ORDER AND RESOLVE AS FOLLOWS: SECTION 1. The Agency Board of Directors hereby approves the Housing Rehabilitation Agreement and the instruments referenced therein. SECTION 2. The Project is consistent with the Agency's adopted Implementation Plan for Redevelopment Project Area "A". SECTION 3. The Project will assist in the elimination of blight, and generate property tax revenue. SECTION 4. The Agency further authorizes the acquisition of foreclosed residential homes for rehabilitation by Agency with funds provided exclusively by Developer or his authorized investors. SECTION 5. The Agency sole obligation is to facilitate the purchase of said foreclosed homes and shall transfer title to Developer upon close of escrow on each property as they become available. SECTION 7. The Agency Chair and or Executive Director are authorized and directed to take such actions and execute such documents as may be necessary to implement and effect this Resolution and the Housing Rehabilitation Agreement on behalf of the Agency. SECTION 8. The resolution shall be effective upon adoption. PASSED, APPROVED and ADOPTED this 29 day of June, 2011. Aide Castro Chair 2 ATTEST: Maria Quinonez Roger L. Haley Secretary Executive Director APPROVED AS TO FORM: APPROVED AS TO CONTENT: Fred Galante Sarah Magana Withers Agency Counsel Director of Redevelopment 3