HomeMy WebLinkAboutOversight Board - 2013-04 RESOLUTION NO. 2013-04
A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING A
PURCHASE AND SALE AGREEMENT AND DIRECTING THE TRANSFER OF
OWNERSHIP OF REAL PROPERTY IN ACCORDANCE WITH HEALTH AND SAFETY
CODE SECTION 34181(a) [APN NOs. 142-081-06, 142-081-09, 142-081-10, 142-081-11, 142-
081-12, and 142-081-28]
WHEREAS, the former Redevelopment Agency of the City of Huntington Beach
("Agency") was a redevelopment agency in the City of Huntington Beach ("City"), duly created
pursuant to the California Community Redevelopment Law (Part 1 (commencing with Section
33000) of Division 24 of the California Health and Safety Code) ("CRL"); and
The Agency was responsible for the administration of redevelopment activities within the
City; and
Section 33220 of the CRL provides that certain public bodies may aid and cooperate in
the planning, undertaking, construction or operation of redevelopment projects; and
The City and the Agency entered into a number of Cooperation Agreements to continue
the effort to redevelop, revitalize and/or eliminate blight in the City to achieve the purposes and
goals of the CRL, to repay debt to the City and to provide for affordable housing, as appropriate
and as authorized by redevelopment law in effect at the time of approval of said agreements; and
Pursuant to such authority set forth in the CRL and other applicable law, on March 7,
2011, by Resolution No. 2011-17, the City approved and accepted the transfer of certain real
property located in the City of Huntington Beach, California, APN Nos. 142-081-06, 142-081-
09, 142-081-10, 142-081-11, 142-081-12, and 142-081-28 (collectively, the "Agency Property");
and
Pursuant to Resolution No. 2011-17, the City executed certificates of acceptance
(collectively, the "Certificates of Acceptance") for the Agency Deeds designed to transfer
ownership of the Agency Property from the Agency to the City (collectively the "Agency
Deeds"); and
On or about March 10, 2011, the Agency Deeds, along with the Certificates of
Acceptance, were recorded in the official records of the County of Orange; and
Neither the Cooperation Agreements nor the purported transfer of the Agency Property
(or any of the related documents and actions) were challenged within the applicable statute of
limitations; and
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AB xl 26 ("AB 26") was signed by the Governor of California on June 28, 2011, making
certain changes to the CRL and adding Part 1.8 and Part 1.85 to Division 24 of the California
Health and Safety Code; and
AB 26 states, in part, that "[t]he Legislature hereby finds that a transfer of assets by a
redevelopment agency [after January 1, 2011] is deemed not to be in the furtherance of the
[CRL] and is thereby unauthorized;" and
AB 26 further states, in part, that "[c]ommencing [February 1, 2012], ... arrangements
between the city ... that created the redevelopment agency and the redevelopment agency are
invalid...;" and
AB 26 further states, in part, that "[a]ll ... properties [and] buildings ... of the former
redevelopment agency are transferred on [February 1, 2012], to the control of the successor
agency;" and
Subsequent to the date of transfer of the Agency Property to the City, the City and
Campbell Lodging, Inc. entered into that certain Purchase Agreement and Joint Escrow
Instructions dated January 27, 2012, as amended by that Amendment to Purchase Agreement and
Joint Escrow Instructions dated January 31, 2012 and that Second Amendment to Purchase
Agreement and Joint Escrow Instructions dated June 25, 2012 (collectively, the "Purchase
Agreement") relating to the sale of the Agency Property and the development thereon of a high-
quality, first-class, four story, 120-140 room Hyatt Place Hotel or other brand hotel ("Project")
pursuant to the terms and conditions contained in the Purchase Agreement. Campbell Lodging,
Inc. assigned it's rights as "Buyer" under the Purchase Agreement to Campbell Lodging
International, LLC but retained the obligation to be the developer of the hotel; and
The disposition of the Agency Property pursuant to the Purchase Agreement is aimed at
maximizing value in that the purchase price for the Agency Property pursuant to the Purchase
Agreement is within the fair market value range of the Agency Property as determined by an
appraisal of the Agency Property dated January 9, 2012 prepared by Nagasaki & Associates; and
On or about April 20, 2012, the California State Controller issued correspondence stating,
in part, that "[i]f your city ... received any assets from a redevelopment agency after January 1,
2011, your city ... hereby is ordered to ... reverse the transfer and return the applicable assets to
the successor agency of the relevant redevelopment agency;" and
Under AB 26, each successor agency shall have an oversight board with fiduciary
responsibilities to holders of enforceable obligations and the taxing entities that benefit from
distributions of property taxes and other revenues pursuant to California Health and Safety Code
Section 34188; and
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The oversight board has been established for Successor Agency to the Redevelopment
Agency of the City of Huntington Beach ("Successor Agency") (which oversight board shall
hereinafter be referred to as the "Oversight Board") and all seven (7) members have been
appointed to the Oversight Board pursuant to California Health and Safety Code Section 34179;
and
AB 1484 ("AB 1484") was signed by the Governor of California on June 27, 2012,
making changes to AB 26 and certain additional changes to the CRL; and
AB 1484, at Section 34179.5(c)(2) of Part 1.85 of the California Health and Safety Code,
categorizes certain assets as those "transferred after January 1, 2011 ... by the redevelopment
agency ... to the city ... that formed the redevelopment agency..." ("Section 34179.5(c)(2)
Assets"); and
AB 1484, at Section 34179.5(c)(1) of Part 1.85 of the California Health and Safety Code,
categorizes certain other assets as those "transferred from the former redevelopment agency to
the successor agency on or about February 1, 2012." ("Section 34179.5(c)(1) Assets"); and
Because (i) AB 26 states that a transfer of assets by a redevelopment agency after January
1, 2011 was "unauthorized", (ii) AB 26 states that commencing February 1, 2012, arrangements
between a redevelopment agency and the city that created it are "invalid" and (iii) the State
Controller has purported to order that ownership of certain assets be vested in successor
agencies, the Agency Property is therefore not categorized as Section 34179.5(c)(2) Assets; and
Because AB 26 states that all properties and buildings of the former redevelopment
agency are transferred on February 1, 2012 to the control of the successor agency, the Agency
Property was therefore categorized as Section 34179.5(c)(1)Assets; and
The City and Successor Agency do not acknowledge that the purported transfer of the
Agency Property by the Agency to the City in 2011 was not in furtherance of the CRL; and
The City and Successor Agency do not acknowledge the effectiveness of the
Legislature's purported deeming not to be in furtherance of the CRL of the purported transfer of
assets that was conducted in accordance with the CRL at the time when made and was not
challenged within the applicable statute of limitations; and
The City and Successor Agency do not acknowledge that commencing February 1, 2012,
arrangements between the redevelopment agency and the city that created it are invalid; and
The City and Successor Agency do not acknowledge the effectiveness of the California
State Controller's order to reverse the transfer of the Agency Property and return the applicable
assets to the Successor Agency; and
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The City and Successor Agency have limited financial resources and desire not to initiate
litigation at this time with regard to AB 26, AB 1484 and/or the purported order by the California
State Controller that ownership of the Agency Property be vested in the Successor Agency; and
Therefore, in order to avoid the costs of litigation and other costs, the City and Successor
Agency took action in a manner consistent with AB 26, AB 1484 and the California State
Controller's purported order, and in furtherance of the Successor Agency's duties under Section
34179.6(h)(1) and Section 34179.6(f), by processing documentation reflecting ownership of the
Agency Property by the Successor Agency pursuant to City Resolution No. 2012-71 and
Successor Agency Resolution No. 2012-07, without acknowledging the effectiveness of AB 26,
AB 1484 and/or such order and duties, expressly disclaiming the same. Quitclaim Deeds were
recorded on October 17, 2012 whereby the City quitclaimed to the Successor Agency the City's
right, title and interest in the Agency Property; and
Per Section 15301 of the State CEQA Guidelines, the transfer of the Agency Property is
exempt from environmental review under CEQA because the transfer will result in a
continuation of an existing facility involving no expansion of use and is therefore exempt from
environmental review, and any future development for the Agency Property will require separate
environmental review; and
All of the prerequisites with respect to the approval of this Resolution have been met.
NOW, THEREFORE, the Oversight Board of the Successor Agency to the
Redevelopment Agency of the City of Huntington Beach does hereby resolve as follows:
1. The Oversight Board hereby finds and determines that the foregoing recitals are
true and correct.
2. The Oversight Board hereby approves of the terms of the Purchase Agreement.
3. The Oversight Board hereby approves of and directs the sale and conveyance of
the Agency Property from the City or Successor Agency to Campbell Lodging International,
LLC in accordance with the terms and conditions set forth in the Purchase Agreement, for the
purpose of Campbell Lodging, Inc. developing the Project.
4. The Oversight Board hereby approves of the transfer to the Successor Agency of
the purchase price received from the sale of the Agency Property for distribution to the taxing
agencies in accordance with AB 26/AB 1484. Specifically, the Oversight Board hereby
approves of the transfer of all of the net proceeds received from the sale of the Agency Property
to the Orange County Auditor-Controller and the distribution of such proceeds to the taxing
entities pursuant to Health and Safety Code Sections 34177(e).
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5. The Oversight Board hereby acknowledges and agrees that the Purchase
Agreement constitutes the existence of an enforceable obligation pursuant to Part 1.8 and Part
1.85 of Division 24 of the Health and Safety Code for the purposes of, without limitation, the
disposition of assets previously owned by the Agency.
6. The Oversight Board hereby authorizes and directs the Executive Director of the
Successor Agency, or his or her designee, and the City Manager, or his or her designee, to take
all actions and sign any and all documents necessary to implement and effectuate the Purchase
Agreement and the actions approved by this Resolution (including, without limitation, approving
extensions of deadlines or dates set forth in the Purchase Agreement and its attachments) as
determined necessary by the City Manager or Executive Director, or his or her designee,
approving amendments to the Purchase Agreement and its attachments as determined necessary
by the City Manager or Executive Director, or his or her designee, to effectuate the Purchase
Agreement, executing documents on behalf of the Successor Agency and City (including,
without limitation, assignment and assumption agreements, grant deeds and quitclaim deeds),
and administering the Successor Agency's and City's obligations, responsibilities and duties to
be performed pursuant to this Resolution and the Purchase Agreement.
7. The Oversight Board does not intend, by adoption of this Resolution, to waive
any constitutional, legal and/or equitable rights of the Oversight Board, the Successor Agency or
the City under law and/or in equity by virtue of the adoption of this Resolution and actions
approved and taken pursuant to this Resolution and, therefore, reserves all such rights of the
Oversight Board, the Successor Agency and the City under law and/or in equity.
PASSED AND ADOPTED by the Oversight Board of the Successor Agency to the
Redevelppment Agency of the City of Huntington Beach at a regular meeting thereof held on the
,(Jay of , 2013
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Chairman
REVI ED ND APPROVED: ;IN7T&ED , PPROVED:
E u Director Deputy Executive Director
APPROVED AS TO FORM:
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S4Agency Counsel
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Ides. No. 2013-04
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
CITY OF HUNTINGTON BEACH )
I, JOAN FLYNN, Secretary of the Huntington Beach Oversight Board of the
Successor Agency of the Former City of Huntington Beach Redevelopment Agency, Huntington
Beach, California DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the
Huntington Beach Oversight Board of the Successor Agency of the Former City of Huntington
Beach Redevelopment Agency at a meeting held on January 8, 2013 and that it was so adopted
by the following vote:
AYES: Board Members: Boardman, Carchio, Bone, Fritzal
NOES: Board Members: None
ABSENT: Board Members: A. Dunn, L. Dunn, Delgado
ABSTAIN: Board Members: None
to
Secytary of the Huntingtyi Beach Oversight
Board of the Successor Agency of the Former
City of Huntington Beach Redevelopment
Agency Huntington Beach, California