HomeMy WebLinkAboutOversight Board - 2015-04 RESOLUTION NO. 2015-04
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 xI 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 further amended by an Amendment to Purchase and Sale
Agreement and Joint Escrow Instructions dated January 31, 2012, and further amended by that
Escrow Amendment/Supplement dated April 25, 2012, and further amended by that Second
Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated June 25, 2012,
and further amended by that Third Amendment to Purchase and Sale Agreement and Joint
Escrow Instructions dated as of January 25, 2013, and further amended by that Fourth
Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of January
21, 2014 (collectively, the "Prior 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"). The rights of `Buyer" under the Prior
Purchase Agreement were assigned to Miramar GP, LP, a California limited partnership
("Miramar"), a private third party developer; 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
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
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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
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,
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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
Pursuant to H&S Code Section 34191.5(b) of the Dissolution Act, once the California
Department of Finance ("DOF") issues a Finding of Completion to the Successor Agency, the
Successor Agency shall prepare a Long Range Property Management Plan ("LRPMP") that
addresses the disposition and use of certain real properties of the former Agency. The LRPMP
shall be submitted to the Oversight Board and the DOF for approval no later than 6 months
following the issuance of the Finding of Completion to the Successor Agency; and
On May 13, 2014, the Successor Agency received its Finding of Completion; and
On November 5, 2014, the Oversight Board reviewed and approved the LRPMP and
Prior Purchase Agreement which was then sent to DOF on November 7, 2014. On March 3,
2015, the Successor Agency received correspondence from DOF regarding modifications to the
LRPMP. On or about the same date in March 2015, DOF requested modifications to the Prior
Purchase Agreement; and
The Successor Agency prepared a proposed Amended LRPMP to address the
modifications requested by DOF and likewise prepared a new proposed Purchase and Sale
Agreement and Joint Escrow Instructions by and among the Successor Agency, Miramar, and the
City of Huntington Beach which would supersede and terminate in its entirety the Prior Purchase
Agreement ("Purchase Agreement"); and
At this same meeting of the Oversight Board, the Oversight Board will consider for
approval the Successor Agency's Amended LRPMP whereby the Successor Agency proposes,
among other things, to sell the Agency Property to Miramar pursuant to the proposed Purchase
Agreement. The Amended LRPMP will thereafter be submitted to the DOF for review
concurrently with the proposed Purchase Agreement; 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
The anticipated sale proceeds from the sale of the Agency Property to Miramar pursuant
to the proposed Purchase Agreement in the amount of$3,100,000 will be remitted after the close
of escrow to the Orange County Auditor-Controller's Office for distribution to the taxing entities
in accordance with H&S Code Section 34191.5(c)(2)(B) of the Dissolution Act; 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:
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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 Miramar in accordance with the
terms and conditions set forth in the Purchase Agreement, for the purpose of developing the
Proj ect.
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.
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, certificates of acceptance, 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.
8. If any provision of this Resolution or the application of any such provision to any
person or circumstance is held invalid, such invalidity shall not affect other provisions or
applications of this Resolution that can be given effect without the invalid provision or
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application, and to this end the provisions of this Resolution are severable. The Oversight Board
declares that its Board would have adopted this Resolution irrespective.of the invalidity of any
particular portion of this Resolution.
9. This Resolution shall take effect upon the date of its adoption.
PASSED AND ADOPTED by the Oversight Board of the Successor Agency to the
Redevelopment Agency of the City of Huntington Beach at a meeting thereof held on the 5th day
of March, 2015.
hairpe n
REVIEWED AND APPROVED: INITIATED AND APPROVED:
XtUive Director Deputy Executive Director
APPROVED AS TO FORM:
Board Counsel
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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 March 05,2015 and that it was so adopted
by the following vote:
AYES: Board Members: Delgado, L. Dunn, Fritzal, Hardy, Katapodis
NOES: Board Members: None
ABSENT: Board Members: A. Dunn, Bone
ABSTAIN: Board Members: None
7
Secre ry of the Huntington h Oversight
Bo of the Successor Agen of the Former
Cit of Huntington Beach Redevelopment
Agency, Huntington Beach, California