Minutes 2002-03-20 SP
MINUTES
SPECIAL MEETING OF THE CITY COUNCIUREDEVELOPMENT AGENCY
TUESDAY, MARCH 20, 2002
COUNCIL CHAMBERS, 215 E. BRANCH STREET
ARROYO GRANDE, CALIFORNIA
1. CALL TO ORDER
Mayor/Chair Lady called the Regular City Council meeting to order at 8:10p.m.
2. ROLL CALL
City Council: Council Members Dickens, Ferrara, Lubin, Mayor Pro Tem Runels
and Mayor Lady were present.
RDA: Board Members Dickens, Ferrara, Lubin, Vice-Chair Runels, and
Chair Lady were present.
City Staff Present: City Manager/RDA Executive Director Adams; City Attorney/RDA
General Counsel Carmel; Director of Administrative Services/RDA
Secretary Wetmore; Director of Financial Services/RDA Finance
Officer Snodgrass; and Associate Planner Heffernon.
3. PUBLIC COMMENT
None.
4. PUBLIC HEARING
a. CONSIDERATION OF APPROVAL OF DISPOSITION AND DEVELOPMENT
AGREEMENT.
City Manager/RDA Executive Director Adams gave a brief introduction of the item and
stated that staff recommended the Council conduct the required public hearing, and
approve the Disposition and Development/Affordable Housing Agreement by and
between the Arroyo Grande Redevelopment Agency and Courtland-Arroyo Grande,
L.P., for a 108-unit senior affordable housing project located at the northwest corner of
Courtland Street and E. Grand Avenue, and appropriate $10,000 from the Affordable
Housing "In Lieu" Fee for professional services directly related to the proposed project.
City Manager Adams introduced Mark Huebsch, Redevelopment Agency Legal
Counsel, and Consultant Tim Mulrenan from Rosenow Spevacek Group, Inc.
Consultant Mulrenan gave a presentation of the proposed project; reviewed income and
rent targets for potential tenants; explained that the developer projected that all units
would be considered affordable housing; reported that total Agency assistance would be
$800,000; explained that financial assistance from the Agency would be secured by a
Trust Deed recorded against the property; reviewed total project cost of $14.4 million;
reviewed terms of Agency assistance; reviewed financial assistance with Low Income
CITY COUNCIUREDEVELOPMENT AGENCY MINUTES
MARCH 20, 2002
PAGE 2
Housing Tax Credits; reviewed sources of funds in the first phase; reviewed the
competitive process for tax credit allocations; explained that increased local assistance
would aid in the competition for funds; explained that the tax credit process was
expensive; and reviewed changes from the first draft of the Disposition and
Development Agreement.
Consultant Mulrenan and Special Counsel Huebsch responded to questions from
Council/Board Members relating to the total cost of the project and regarding the tax
credit allocation process and due diligence task required for the project.
Mayor/Chair Lady opened the Public Hearing and stated all members of the public were
invited to come forward to speak on the matter.
Hal Rosen, Affordable Homes, spoke in support of affordable housing; however, he
expressed concerns with regard to the financing mechanisms related to the project.
Hearing no further public comments, Mayor/Chair Lady closed the Public Hearing.
Council/Board Members Ferrara and Dickens made comments supporting the
Disposition and Development Agreement. Council/Board Member Lubin stated he
favored the project; however, he expressed concerns about the potential tax
implications and potential liability to the Agency and the City as a result of the proposed
transaction. He requested a legal opinion from a tax attorney or certified public
accountant addressing this issue as part of the City's due diligence investigation.
Council/Board Member Runels stated he had no problem with the proposed project;
however, he had concerns with the proposed financing. He felt the City would not have
the finances to cover the project over a 20-year period.
Following further discussion, Board Member Ferrara moved to adopt a Resolution
approving the proposed Disposition and Development Agreement with Courtland-Arroyo
Grande, L.P. and appropriate $10,000 from the Affordable Housing "In Lieu" Fee Fund
for professional services directly related to the proposed affordable senior housing
project, subject to, and conditioned upon the inclusion of elevators to service all second
story units within the project. The Resolution reads as follows:
Resolution of the Arroyo Grande Redevelopment Agency approving a
Disposition and Development/Affordable Housing Agreement Between the
Agency and Courtland - Arroyo Grande, L.P.
He further moved that the due diligence effort be expanded to ensure that no tax
implications are involved for the City and that the disposition on this be conditioned as a
requirement for closing.
CITY COUNCIUREDEVELOPMENT AGENCY MINUTES
MARCH 20, 2002
PAGE 3
RDA Special Counsel Mark Huebsch asked for clarification the tax implications referred
to income tax and not property tax. He explained that an affordable housing project is
almost assuredly going to qualify for a property tax exemption.
Council/Board Members Ferrara and Lubin clarified that was correct.
City Attorney Carmel asked for further modification of the language in the motion to
change the words "tax implications" to "tax liabilities". The maker of the motion agreed
to the modification.
Board Member Lubin seconded the motion as amended, and on the following roll-call
vote, to wit:
AYES: Ferrara, Lubin, Dickens, Lady
NOES: Runels
ABSENT: None
There being 4 A YES and 1 NO, the motion is hereby declared to be passed.
Council Member Ferrara moved to adopt a Resolution approving the proposed
Disposition and Development Agreement with Courtland-Arroyo Grande, L.P. and
appropriate $10,000 from the Affordable Housing "In Lieu" Fee Fund for professional
services directly related to the proposed affordable senior housing project, subject to,
and conditioned upon the inclusion of elevators to service all second story units within
the project. The Resolution was read as follows:
Resolution of the City Council of the City of Arroyo Grande Consenting
Arroyo Grande Redevelopment Agency approving a Disposition and
DevelopmenUAffordable Housing Agreement Between the Agency and
Courtland - Arroyo Grande, L.P.
He further moved that the area of due diligence be expanded to ensure that tax liability
is adequately addressed prior to the close of escrow under the Agreement.
Council Member Lubin seconded the motion, and on the following roll-call vote, to wit:
AYES: Ferrara, Lubin, Dickens, Lady
NOES: Runels
ABSENT: None
There being 4 AYES and 1 NO, the motion is hereby declared to be passed.
CITY COUNCIUREDEVELOPMENT AGENCY MINUTES
MARCH 20, 2002
PAGE 4
5. CITY COUNCIL CLOSED SESSION
The City Council convened in Closed Session at 9:15 p.m. to consider the following
matter:
CONFERENCE WITH LEGAL COUNSEL. EXISTING LITIGATION pursuant to
Government Code Section 54956.9 (a):
Name of Case: Citizen's Committee for the ConseNation of Local Aqriculture v.
Citv of Arrovo Grande. et aI., San Luis Obispo County Superior Court Case No.
CV 020085.
6. RECONVENE TO OPEN SESSION
Council Member Ferrara announced that there was no reportable action from the closed
session.
7. ADJOURNMENT
Council Member Ferrara adjourned the meeting at 10:33 p.m. to the Regular City
Council Meeting of Tuesday, March 26, 2002 at 7:00 p.m., in the City Council Chambers
located at 215 E. Branch Street, Arroyo Grande, California.
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ATTEST:
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ore, Director of Administrative Servicesl
Deputy City Clerk/Agency Secretary.
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