HomeMy WebLinkAboutCoultrup Development Company & Birtcher Real Estate - 1993-07-06"W
ATTACHMENT NO. 4
SCHEDULE OF PERFORMANCE
I. GENERAL PROVISIONS
1. Preparation of"Partnershi
Agreement. Property Owners
shall complete preparation
and execute Block 104
Developer Partnership
Agreement in a form acceptable
to Agency Executive Director.
2. Execution of Aareement
Sy the Agency. The Agency
shall approve and execute
this Agreement, and shall
deliver one (1) copy
thereof to the Developer.
Prior to scheduling of
hearing by the Agency of the
Agreement.
Not later than forty-five
(45) days after the date
of execution and submission
of three (3) copies of.
this Agreement by the
Developer and the Property
Owners have executed their
individual covenants,
conditions and restrictions
and guaranties.
3. Evidence of Financin_a Not later than ninety (90)
and Insurance Certificates. days prior to close of
Each of the Developers shall escrow for Block 105 and
submit evidence of ninety (90) days prior to
financing and Insurance building permits for Block
Certificates. 104.
4. Sirtcher/Coultrun Entitv
The Block 105 Developer
shall become a partnership
between Coultrup Companies
and a new Birtcher entity.
Not later than ten (10)
months from Coastal
Commission approval of the
Downtwon Specific Plan, but
in no event later than July
15, 1994. r
II. ENTITLEMENT AM MAP APPLICATION CONSTRUCTION DOCUMENTS AND
BUILDING PERMITS WITH RESPECT TO THE SITE
S. Developer and Acenc
ADDlication for Discretionar
Permits for Proiect. Each of
the Developers and Agency shall
apply for the conditional use
permit, tentative tract map,
Within ninety (90) days
after Agency approval of
this Agreement.
(� 05/13/93 ATTACHMENT NO. 4
.� 6449u/2460/009'' Page 1 of 3
and coastal development permit
required for the construction
of the Developer Improvements.
6. Submittal of Construction
Drawings. Each of the
Developers shall submit to
the City complete
construction drawings for all
of the Developer Improvements.
7. Review of Complete
Drawings. The City and
its Building Official shall
review.the construction
drawings submitted
by the Developers.
8. Final Review of Complete
Drawings. The City and
its Building Official shall
review the construction
drawings (revisions) sub-
mitted by each of the
Developers.
9. Obtainina of Building Permits.
Each of the Developers shall
obtain all building and
other permits needed to
commence construction of
their respective Developer
. Improvements.
Not later than eight (8)
months from Coastal
Commission approval of the
Downtown Specific Plan, but
in no event later than
July 15, 1994.
Within forty-five (45) days
after submittal by each of
Developers.
s a .
Within twenty (20) days
after resubmittal by each of
the Developers.
Not later than forty-five
(45) days after approval of
construction plans.
10. Recording Property Owners Not later than ten (10)
CC&Rs. Agency shall record days from issuance of
CC&Rs on each parcel of building permits.
Block 204.
III. AC UISITION OF SiRRABERE-WOOD•GOODKkN PARCELS OR OTHER
PARCELS AS REQUIRED.
11. agency shall obtain Not later than eighteen (18)
possession of Sarrabere-Woad- months from date of
Goodman Parcels. execution of this Agreement.
I:'. ESCROW .
12. Opening -of Escrows. Agency Within twenty (20) days
Ind the Block 105 Developer after approval of
open escrows for the construction plans.
conveyance of the Agency
Parcels and the Sarrabere-
Wood-Goodman Parcels.
05r 13; 93 ATTACHMENT NO. 4 .
6 i49ul2460j009 Page 2 of 3
.13.
Close of Escrow. Escrow
Within ten (10) days
closes.
after the satisfaction
(or waiver by the
appropriate party) of all
of the Conditions
Precedent to Conveyance.
- V.
CONSTRUCTION PRASE
24.
Commencement of Construction.
Not later than thirty
Each of the Developers shall
(30) days after
commence construction of the
issuance of building
Developer Improvements.
permits.
15.
Comoletion'o£ Construction.
Not later than eighteen
Each of the Developers
(18) months after
shall complete construction
the close of Escrow or the
of all of the Developer
transfer of possession
Improvements.
under an order of ` ' -
prejudgment possession but
in no event later than
forty-eight (48 ) months
from the date of execution
of this Agreement.
05/23/93 ATTACHMENT NO. 4
6449u/2460/009 Page.3 of 3
i
Main Pier II Partnership
18281 Gothard, Suite 202 Huntington Bach, CA 92647
P.O. Box 1270, Sunset Beach CA 90742
(714) 3754733 Fax: (714) 3754735
July 17, 1995
Members of the City Council
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92647
Re: Your approval of Main Pier 11
Honorable Mayor and Members of the City Council:
We respectfully request that you rind MP11 fiinxnclRily fcasibic tonight and
d[rect staff to prepare a affordable housing plan.
1) uncial Feasibility:
a. Best project in IS years.
b. No other option has been found or exists that is better.
c. $400,000 Agency obligation for affordable housing can be funded in
many ways. We recommend use of funds from the MPII project
as follows:
I. $300,000 from soils retnediation from MPII. $990,000 is the
total available from the State Clean Up Fund.
2. $200,000 from Agency obligation to pay project fees on MPII.
City may waive or defer these fees. Agency, if
needed, may repay fee from MPII tax increment.
$500,000 Total Is $46,000 more than needed.
3. S201,000 Agency is required to set wide 200/9 ofMP11 tax
increment for affordable housing. This represents
20% of the present value (S 1.005.000) not the entire
tax increment.
$7011000 Partial fuMs available from project if needed.
d. MPII creates $130.000 a year in increased tax increment.
c. MP11 resources provide amble reserves in the unlikely event site
Improvements or affordable housing costs arc higher.
'95 07i17 13:11 %T 7143754735 VITR
Q6 03
2} Otber 66 fr d 1 ni s:
a. With Home Funds and if needed tax increment from MP11 the Agency
can provide the affordable units undcr the same plan as identified for MPII.
The sites have been identified and the plans to acquire are identified. It can
be done DZY.
3) Approvals & ContrIcts-.
a. All approvals including the recent approval by the California Coastal
Commission are in place. All City approvals were approved in July 1993.
b. All Contracts have been in place since July 1993. The contracts are
between the Privatt Property Owners, the Redevelopment Agency,
Coultrup Companies and Birtcher.
4) R d 'c :
a. Coultrup/Birtcher are prepared to fund MP11. Our market review proves
that the average Condo sales prig will be $239,000. Third BlocMest has
funded it's equity/risk capital and underwritten it's condos at 5230,000.
5) 11yIP1i ja nol approved;
a. City losses the right to condemn the Property Owners.
b. Set backs, open space, public arrenities and building continuity is lost.
c. Private Property Owners are sprat emotionally and physically. After 15
years a deal is finally in place. it may take another IS years to get
any kind of movement on behalf of the parties.
d. 15 years of work, investment and planning would be lost.
f. Blight and unsafe conditions would remain indefinitely.
c. You still have Papa Joe's on black lay and that is an expensive problem.
g. Tax increment will be lost (5130,000 per yr.)
h. It may be another 15 years until the next chance comes along. By then
the City would have lost millions of dollars.
L The downtown plan remains incomplete. All the time and money that was
invested to bring the downtown back falls well short. Synergism is
not accomplished and the PCIVPicr entrance to the City remains a
black eye.
Approval ofMIP1I Is the obvious choice. We hope that you will support the
many years of planning and extensive investment of time and money by Coultruip, the
Property Owners and the Agency to bring the people of Huntington Beach this
opportunity.
On behalf of the Main Pier 1I Partnership;
Ton . CCU true
ent,
195-125
`"./
,Main Pier If/ Coultrup
Remaining Agency Costs to Complete the Project
1. Cracchiolo Acquisition $99,000*
2. Loan Interest Subsidy
4900000*
3. Downtime/Relocation
630,000*
4. Permit Fee Tnereases (City can waive or defer)
200,000*
S. Site Remediation
300,000**
6. Off Site Improvements
$85,000
7. Affordable Housing ($300,000 to $400,000)
400.000 s .
Total Agency Costs
S2,704,000
A&ency Revel
Developer Land Payment $ 1,800,000
Developer Advance Reimbursement 200,000
State Clean Up Fund Reimbursement 5�
Total Agency Revenues $2,250,000
Total Agency Revenues/(Cost) ($454,000)
Affordable Housing Funding Sources
a) Reimbursement from State Cleanup Fund Tor Main Picr II
(Agency has been approved by the state for up to $990,000)
b) City may waive or defer Ageny's obligation for project fees
c) Tax Increment from Main Pier l l (present value based on S 13 0,000
per year for 23 years)
d) Agency's potential profit share from Main'Pier 11
t) Home Funds ( $500,000 available now, $500,000 this year and an
additional $500,000 next year. These Federal Funds are
allocated to the City specifically for affordable housing)
Total Available
S 300,000
S 200,000
$ l,005,000
$ 158,000
§—MQ0,W0
S 3,163r000
Note: *L1ne items 1-4 are capped costs listed at their maximums and may in fact cost less.
** Line item 5 is part of a total S990,000 that is availabic to be reimbursed from the
State Clean up Furd. 195.112
ATTACHMENT NO.6
ATTACHMENT f 6
1o.
handling in its use, transportation, generation,
storage, handling, treatment or disposal, or is
"hazardous" or harmful to the environment.
`"f Excerpt from
209 of DDA
collection,
defined as
(b) The term "Hazardous Materials
Contamination" shall mean the contamination (whether presently
existing or hereafter occurring) of the improvements,
facilities, soil, groundwater, air or other elements on, in or
of the Site by Hazardous Materials, or the contamination of the
buildings, facilities, soil, groundwater, air or other elements
on, in or of any other property as a result of Hazardous
Materials at any time (whether before or after the date of this
Agreement) emanating from the Site.
(c) The term "Governmental Requirements" shall
mean all laws, ordinances, statutes, codes, rules, regulations,
orders and decrees of the United States, the state, the county,
the city, or any other political subdivision in which the Site
is located, and of any other political subdivision, agency or
ins-trumentality exercising jurisdiction over the Agency, the
Developer or the Site.
2. Environmental Site Evaluation
As soon as possible following the execution of
this Agreement, each of the Developers and Agency shall cause
the investigation of the environmental condition of their
respective portions of the Site, at their respective cost and
expense. Such investigation shall include such activities as
the environmental consultant or expert retained to perform such
im estigation (the "Environmental Consultant") deems necessary
or appropriate to determine the environmental condition of the
Site, but in any case, including preparation of at least a
Phase 1 report for the Site. If either of the Developers
determine that testing beyond Phase I is necessary, such
testing shall be the requesting Developer's expense. All
parties shall deliver to each other a copy of all reports and
test results.
The Bloch, 104 Developer and Agency shall each
bear any remedial cost associated with hazardous material
contamination of or caused by as certified and proof provided
by an engineers report acceptable to both parties of,their
respective parcels (the "Cleanup Costs"), which shall not
exceed Two Hundred Thousand Dollars ($20C,000) for the Agency
and One Hundred and Twenty -Five Thousand ($125,000) as
follows: Sixty Thousand Dollars ($60,000) for the Block 104
Developer; and Sixty -Five Thousand Dollars ($65,000) from
Coultrup Companies (the "Maximum Cleanup Costs"). Each
propeuty owner on Block 104 shall be required to contribute up
to ;fen Thousand Dollars ($10,000) per parcel. This
contribution is made first to cover contamination clean up on
05/13; 93
6 449u1=a60T009 -2 4-
Section
their individual property and second to cover contamination
clean up on another property owner's property who is a party to
this Agreement. Each property owner shall contribute an equal
amount up to Ten Thousand Dollars (510,000) per parcel except
for Frank Alfonso who will only contribute towards his own
parcel. For the Agency, the Maximum Cleanup Cost shall be
comprised of an initial One Hundred Thousand Dollar ($100,000)
amount (the "Nonrecoverable Amount") and a One Hundred Thousand
Dollar ($100,000) amount (the "Recoverable Amount"). rf the
Agency expends funds of the Recoverable Amount, said funds
shall be reimbursed from gross profits of the Block 105 portion
of the Project prior to calculations of net profits pursuant to
Section 201 herein. The Agency shall pay any necessary Cleanup
Costs for the 5arrabere-Wood-Goodman Parcels as a separate
obligation from the Maximum Cleanup Costs up to an amount equal
to One Hundred Thousand Dollars ($100,000). In the event that
the cleanup costs on Sarrabere-Wood-Goodman Parcels exceed the
One Hundred Thousand Dollar ($100,000) cap and are not offset
an the condemnation evaluation of fair market value or the
negotiated purchase price, said additional amount shall count
toward the naency's Nonrecoverable, Recoverable and Maximum
Cleanup Costs.
3. Riaht of Termination for Contamination
Each of the Developers and the Agency shall each
have the right to terminate this Agreement if the Cleanup Costs
for their respective parcels are expected to exceed the Maximum
Cleanup Cost of Two Hundred Thousand Dollars ($200,000) for
Agency or One Hundred and Twenty -Five Thousand Dollars
($I25,000)'for the Flock 104 Developer. The determination of
the Cleanup Cost shall be made by a specialist in the area of
contamination evaluations and documented by a written report
subject zo review by the expert retained by the non -terminating
party. In the event of a dispute, a third expert shall be
retained jointly to review the analysis and make a final
determination as to probable cost which determination shall be
binding in all parties for purposes of this paragraph. Each of
the Developers shall have the option to elect to pay Agency
Cleanup Costs in excess of Two Hundred Thousand Dollars
($200,000). Agency shall have the right to pay Developers
Clean Up Costs in excess of Ond Hundred and Twenty Five
Thousand ($125,000). Termination of the Agreement pursuant to
this provision (if after the conveyance of title) shall require
the reconveyance of all of the Bloc}: 105 property to the Agency
and a repayment of the Purchase Price to the Developer. In the
event of termination under this Section, the Block 105
Developer shall retain the Advance Assistance but in no event
shall any of the parties owe any other a claim for
reimbursement or loss arising out of or relating to this
Agreement.
05f13j93
6449u/2460!009 -25-
ATTACHMENT NO. 7
Attachment: 7
MAIN -PIER Project Wea -Cash Flow Projections
0-1wing C-NOW Corrmpanles Development)
1W4M5 I 19SS96 1 1996197 1 1997198 1s998199
EST. BEGINNING CASH BALANCE $1,035,000 to (344,634) (31,876,3911) ($1,738,759)
INCOME
Tax Increment (100%): Non-Couttmp
2,142,083
2,192,556
2.245.3%
2.345.643
2,44$,899
Tax Increment (100%): Coutlrup Co. Development
0
0
65.618
131236
Interest
56.925
0
(2,455)
(103.202)
(95,632)
T.O.T. (Walarfront)
500,0D0
525,000
551.250
578.813
607.753
Abdatmuti Loan
338,700
340.505
340.505
340.505
340.WS
RLM Ground Lease
253,64
253.534
253,834
253,834
253,834
Lease Payments (438 Main)
14.400
19.200
0
0
0
Land Safe (rows Sq.)
27,000
54.000
54,0W
54,0DO
54.000
Land Sale (Third Block West)
0
4.620.000
0
0
0
Land Sala Pacific Park Villas
O
416.000
0
0
0
TOTAL INCOME
$3,332.942
$3.421,095
$3.442.5W
53,W5,211
$3,738.595
EXPENSES
NON-DISCRgMONARX
Usting Bond Debit
1,179,145
1.175.905
1,175,665
1,180.ms
1.179.585
Huntington National Bank Note
130.000
1L0,000
95,000
90,000
90.000
Pass Thru Payments
30.761
31.376
32.004
32,644
33.297
Property Tax Collection Charge
27,771
221.3213
25.893
29.471
30.060
Third Block west
0
4,1'."O,DDO
0
0
0
TEW Stle Remodiatlon
0
2:.0,000
0
0
0
Town Square Parldng -18 spaces
0
0
270,0D0
0
0
Durwood Buyouts
9W.000
900,000
900,000
9W.000
900,000
Abdelmuti Rent Subsidy/Misc.
364.000
190.000
100.000
75.000
75,000
Abdolmutl Tenant Improvement Loan m
750,000
0
0
0
0
Facade Grant-2eidan
0
146,000
O
0
0
Phase 11(roxics & Relocation)
250,000
0
0
0
0
In-riau Parking Fees
0
120.0DO
60,000
60.000
K000
Potential Ubgstion Costs
0
307.000
1.600,000
0
O
Trainer Facade Grant
98,000
0
0
0
0
Sub Total
3,689,677
7,368.603
4,261,562
2,Wa.100
2.367.942
CR ONA
City Debt
89.816
450.000
450.000
450.000
450,000
Operating
125,750
132.038
138,639
145.571
152,850
Operating Admin Portion (30'%)
191,203
195,W7
200,878
206,904
213.111
Legal Services
83.000
200.000
100.000
100,DDO
100,0m
Legal Services Admin (30%)
11.370
23,370
23.370
23.370
23.370
Business Development (30%)
70.521
96.687
99,845
103.926
107.682
Sub -Total
571.6W
1.037,122
1.012.732
1.029.472
1.047.013
TOTAL EXPENSES $4,261,337 S8,435,729 $5,274.294 13,397.571 $3,414.955
NET INCOME (928,395) (44,634) (1,831,764) 137,639 323.641
Bankruptcy Claims 106,605
EST. ENDING Cash BALANCE SO ' S44,634) - (S1,876,398) ($1,738,759) $1,415,118)
The Following Main -Pier Project Area obligations are proposed to be paid by the Huintington Center Project
Area in order to reduce the Main -Pier Expenses in view of the projected Shortfalls.
untington Center payment of Main 4'ier Obligations-*
1W4V5 I 1995M 1996197 1 1997198 1 1MTS
Ltain-Pier Housing Set -Aside Obligations $428.417 $438,511 $449,079 5482,252 3515.627
ktain.Pier City Debt Repayment Obligations 360.184 _ 0 0 0 0
Total $788.601 $438.511 $449,079 5482,252 $515.627
MEiGED.XLS M-P 5/31195 12:29 PM
ATTACHMENT NO. 8
Attachment 8
HUNTINGTON CENTER Project Area - Cash Flow Projections
1"4)95 (
1995M I
1996197 I
1997198 I
1997198 {
EST. BEGINNING CASH BALANCE
17.036,000
$4,859.729
$3,742,223
$2,561,917
$1.135.104
INCOME
Tax Increment (80%)
955,424
978.706
1.007.472
1,028,534
1.057,174
Interest
386,980
267.285
205.822
140,905
62.431
TOTAL INCOME
1.342.404
1.245.991
1.213.294
1.169.439
1.119.605
EXPENSES
Non0scret+ona r y
Eadsting Bond Debt
1,040,673
1.040.073
1.043.313
1.040,230
1,041.163
School Pass -Through
3,500
4,895
5.045
5,045
5.045
Property Tax Collection Charge
15,000
15.000
15.300
15.606
15.918
Barge Development
155.000
Housing Set Aside. Main PlerPortlon
426,417
436,511
442,079
482.252
515,627
Education Revenue Augmentation Fund
$139.142
s0
s0
s0
s0
Sub -Total
1.626,732
1.498.479
1.512.737
1.698.133
1,577,753
DISCRETIONARY
City Debt
475.000
475.000
475,000
475.000
475.000
My Debt Ualn-PlarPortlon
380,184
0
0
0
0
Operating
39.495
41.470
43.543
45.720
48.006
Operating Admin Portion (30%)
182,098
191.203
200,763
210.801
221,341
Legal Sorvkea
5.060
5.060
5.060
5.060
5,060
Legal Services Admin Potion (30%)
11.370
23.370
23.370
23.370
23.370
Business Development (40%)
S4.028
128.916
133.126
138.168
143.576
Sub -Total 1,167,235
865,019
880.863
898.120
916,353
TOTAL EXPENSES s2,7aa,ss7 $2,363.423 $2,393,600 $2,596.253 $2,494.106
NET INCOME {51,451,6fi3) (57,117,607} ($1,180,305) (St,426,814) ($1,374,502)
Bankruptcy Claims 724.708
EST. ENDING Cash BALANCE $4,859,729 :.. $3,742.223 $2.561.917'" $1.135.104 ($239.398)
MERGED.XLS H-C 5131 /95 12:22 PM
ATTACHMENT NO. 9
Attachment 9
HOUSING SET -ASIDE - Cash Flow Projections
Qndudng Couldup Companies DevelopmenU
1994S5 I 1995196 I 1996197 1 1997M 1 1998199
EST, BEGINNING CASH BALANCE 31.194.000 ($1,055,195) ($911,92T) (S1,052,339) {51,065,165)
INCOME
Tax Increment (20%)
871.076
891.415
914.291
929,424
052.576
Five Points Senior Villas $250k
9.500
38,000
38,000
38.000
38.000
Interest
64,020
(58.035)
(50-156)
(57.879)
(58,584)
In Lieu Fee Affordable Housing ("111)
0
0
50,000
0
0
TOTAL INCOME $944,596 $871,380 $952,135 $909.645 $931.992
Expenses
Nog-0iscretionary
Five Points Senior VI'as Loan/Grants
OVE II Buyouts
725 Utica Loan Agreement
Third Block West
Berge Development
Pacific Park Villas
ERAF
Brisas del Mar
Couttrup Companies Development
DISCRETIONARY
Operating
Operating Admin Portion (10%)
Legal Services
Legal Services Admin Potion (10%)
Transfer to Emerald Cove
Mobile Home Review Committee
100.000
100.000
100,000
100.000
0
150.000
0
450.000
0
0
0
0
0
0
825,000
0
0
6W.000
0
300,000
450.000
0
0
0
139,142
0
0
0
0
243.717
0
0
0
0
1,334,500
0
0
0
0
Sub Total 2.717,359
550,000
925,000
750.000
0
54.671
42,3e8
44.486
46.711
49.046
55.540
57.743
60,049
62,6W
65.368
20.000
20.000
20,000
20.000
20.000
3.411
8.011
6.011
8.011
8,011
60.000
35.000
35.000
35.000
35.000
15.000
Subs -'total 213,822
178.122
167.547
172,372
177.425
TOTAL EXPENSES $2.930,921 $728,122 $1.092,547 $922,312 $177,426
NET INCOME (S1,966,365) $143,258 (3140.412) ($12.826) $764.566
Bankruptcy Claims $232.200
EST. ENDING Cash BALANCE ''1101.055.186) (11911.927) ($1,052,339) (51,066.166) ($310.599)
MERGED.XLS Hsg 5/31/95 12:26 PM
ATTACHMENT NO. 10
ATTACHMENT NO.3
Attachment 43
Main -Pier Phase II/Coultrup
Remaining Agency Costs to Complete the Project
1. Cracchiolo Acquisition $992000*
2. Loan Interest Subsidy 490,000*
3. Downtime/Relocation 630,000*
4. Permit Fee Increases
Sub Total
5. Site Remediation
6. Off -site Improvements
7. Affordable Housing
(Range: $800,000 - $1,334,500)
Sub Total
Total Agency Costs
Agency Revenues
Developer Land Payment
Developer Advance Reimbursement
State Cleanup Fund Reimbursement
Total Agency Revenues -
Total Agency (Cost)/Revenues
200,000*
300,000
585,000
1,334.500
$1,800,000
200,000
250,000
$1,419,000
$2,219,500
S396389500
$2,250,000
(S1,388,500)
Note: "Line items 14 are capped costs listed at their maximums. Line item 5 is expected to be
fully recovered from the State Cleanup Fund. Present Value of Tax Increment $1,005,000.
ATTACHMENT NO.4
U-c.W-0-0 11=.>U
I#J..77f
I 'ACRMENT #4
State cf GlFforNa
Memorandum
TO : Mr. Keith Bohr
FROM : Wendy Westerman, Claims Reviewer
UST CLEANUP FUND PROGRAM
STATE WATER RESOURCES CONTROL BOARD
2014 T Street - Mail Code G8
SUOJECT : Status of Letter of Commitment for Claim 1253
Date: May 26. 1995
Per our conversation today, the Letter of Committmerd (LOC) for the Huntington Beach
RodevelopmeM Agericy, 520 Pacific Coast Hghway is on hold pending Governor Witson's
signing of the 1995/1996 Budget. When the budget is signed we will procecss your claim in order
of priority on the "HOLD" fiat.
If you have any questions or require further information, plcm do not hesitate to call me at (9I6)
227-0749.
ATTACHMENT NO. 5
ATTA�ENT 15
REQUEST FOR REDENTLOPMENT AGENCY ACTION
ED 93-II
Date ,July 6,,,_Z993
Satmitted to: Honorable Chairman and Redevelopment Agency Members
Sul:mitted by: Michael T. Uberuaga, Executive D'
Prepared by: Barbara A. Kaiser, Director of Redevelopment
Subject: Af n-Pier Phase H (CouUrup) Affordable Housing Ptah
7%/93 - d4�.u• ,e, 1& '71-/r/93
Consistent with Council Policy? I X I Yes I I New Policy or Exception
DENIED
13Y COUNCIL
7- /9 - fS
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments:
;. V1"1012
The Main -Pier Phase II (Coultrup) project, if approved, triggers the requirements of Health & Safety
Ccde Section 33413(b)(2). This section requires that 15% of the units constructed (12 out of 80 units),
must be provided to low and moderate income households. Of this 15%, 40% of the units must be
very low income units (5 of the 12 units). Staff recommends an Affordable Housing Plan that complies
witli this requirement in several steps.
1) Approve the proposed Affordable Housing Plan for the Main Pier Phase II (Coultrup) Project, as
proposed, and appropriate $732,000, using redevelopment housing funds (set aside) for
implementation, if the project proceeds.
2) Approve the proposed Affordable Housing Plan as meeting Condition No. 9-g (Affordable Housing
Program) of the Conditional Use Permit No. 92-17 for the Main -Pier Phase II project.
AI,TALYSiS:
Staff has completed the negotiations for a proposed Disposition and Development Agreement for the
development of 80 condominiums and 47,500 square feet of commercial/office space at Main Street
and Pacific Coast Highway (Main -Pier Phase II). The construction of housing within a redevelopment
project area triggers Section 33413 (b) (2) of California Community Redevelopment Law ("Production
Requirement"). The Production Requirement states that 15% of all housing built in a redevelopment
project area must be affordable to households of low and moderate income. In addition, 4070 of the
If ! must be affordable to households of very low income. Production housing units may be built
offshe of the project that triggers them but they must be built in the redevelopment project area. At
this time, staff has no other sites available or proposals for development of affordable housing within
the Main -Pier Redevelopment Project Area that are financially feasible.
In the past, projects such as Pier Colony, Bayshore and Villas del Mar have not complied with this
requirement. This has resulted in a current net deficit of-133 affordable unit . Under the terms of the
proposed Disposition and Development Agreement for the Main Pier Phase II Project, the Agency has
assumed the responsibility for meeting the Production requirements of this project.
Staff has analyzed the potential costs for providing very low and moderate income units on site.
Coultrup Companies anticipates the following sales prices %ith Agency subsidies as indicated for a one
bedroom, two person household.
3SaI 'ce Sales Prices1max.1
$220,000 $ 159,000
$220,000 38,500
Total Subsidy Required: 7 Moderate x
5 Very Low x
affordable Unit Subsidy Amt.lUnit (8% 1st TD)
Moderate Income $ 61,000
Very Low Income 181,500
$ 61,000 = $ 427,000
181,500 = _ _ :07.500
Total: $ 1,334,500
As the above analysis demonstrates it is prohibitively exrnsive to subsidize units on -site for sale
horsing for very -low incorhe. Therefore, staff is recommending that a subsidy be provided to future
buyers for 12 moderate income units on site and that 5 very-Iow income rental units be developed
offsite at some time in the future. The subsidies to the 12 future buyers would be in the form of second
trust deeds, with equity sharing upon sale. The final sales prices will be established upon completion of
the project, and the subsidy amount will be adjusted accordingly.
To implement this recommendation staff requests that $732,000 be appropriated to assist the 12
Mgderate income units onsite. The additional 5 very low income rental units to be developed offsite
would be funded from future years Housing Set -Aside. The Redevelopment Agency's Housing capital
outlay budget for FY 93/94 contains funds to meet this obligation. This proposed Affordable Housing
Plan only becomes effective if the proposed DDA is approved, signed and implemented.
aNDING SOURCE:
Redevelopment Agency Low and Moderate Income Housing Fund
ALTERNATfVE AMQN:
None
,6JTACI��NTS:
1) Resolution No. a `-1
2) Affordable Housing Plan for Main Pier Phase II (Coultrup).
3) Affordable Housing Calculations
4) Draft CUP
A4TU/BAK:ls
351
t , Attachment 12
Coultrup Companies V
18281 Cot hard Strict, suite 202, 1lunluig(on Woch CA 92648
(714) 37-"733. Fax: 3754135
May 9,1995
Keith Bohr
Development oftconomic Development
City of Huntington Beach
2000 Main Suvd
Huntington Beach CA 92648
RE: Nearing date for removal ofthc Agcmy financial feasibility condition in the ))J)A.
Dear Keith:
We are most plcaxd with the CmlifoWta Coastal Commission's (CCC) favorable response to
the MPR project. Fuvlxx it is anticipated that the pending; appeal will be denied by the (':CC at the
June hearing which is scheduled bemven the 12th and 16th.
In the DDA it provides that the Agency shall determine within thirty (30) days ufapproval of
the DTSP by the CCC that tL a Agency has sufficient funds available to casnplc(c all of its obligations
forMPII. We arc encouraged that as all parties had alwa)s planned, your findings show a surplus of
funds forMPH.
Sequentially we believe that the removal of the financial feasibility condition should occur at
the first City Council meeting after tine CCC denies the pmtding appeal.
71=cibrc we request that aldmgh the subjed 30 days is rasp on June 10, 1995 we request that
the 30 day period be extended to forty (40) days to allow the city Council to remove the fsnanaal
feasalfflity condition on Monday. Junc 19.1995. .
Thank yes for your assistance in this matter.
On behalf of the Main Pier 11 partomh1p;
yam•
Michael Voss Birtcher Real Estate, Ltd.,
Kay Let, Esq. Voss, Cook & The
Nchael Leifer Pa k ierL Tyler, Weiner....
Mike Meruaga City Administrator
Kah Bohr Departrtne:nt of Economic Development "4-%5
Attachment110
Council/Agency Meeting Held:
Deferred/Continued to:
Cl Approved ❑ Conditionally Approved C! Derled
City Clerk's Signature
Council Meeting Date: Apri13, '1995
Department 10 Number. unknown
REQUEST FOR COUNCILIREDEVELOPMENT AGENCY ACTION
SUBMITTED TO: HONORABLE MAYORiCHAIRMAN AND CITY COUNCIL
MEMBERS/REDEVELOPMENT AGENCY MEMBERS
SUBMITTED BY: MICHAEL T. UBERUAGA, City Administrator/Executive Direct�f Cat
PREPARED BY: RAY SILVER, Assistant City Administrator AV
SUBJECT: , Affordable Housing Strategy (Low and Very Lov Tncome)
Statement of Issue, Funding Source, Recommended Action, Altemative Action, Anafysis. Environmental Status.
Statement of Issue:
A strategy is needed to guide the expenditure of monies for the development of affordable
housing. Attached is the proposed first annual Affordable Housing Strategy. Staff envisions
this document as the implementation tool for all affordable housing in the City, one tha!VAII;—;
present both staff and affordable housing developers with criteria for evaluating poten%l
projects and presenting those projects to the Council. `�-
e
� 7•�
FundinSource: w ;�f7/+f
q �z
� y
No kno= budgetary impact from the adoption of the strategy, though the document � l
guide the expenditure of the following affordable housing funds: Redevelopment Hofrsrng�
Set Aside; Community Development Block Grant (CDBG), and HOME Investment
Partnership funds
Recommended Action:
Approve the First Annual Affordable Housing Strategy. Direct staff to return on an annual
basis (at a minimum) with a strategy for Council approval.
Altemative Action(sl:
1. Direct staff to make specific changes'to the strategy.
2. Do not approve the strategy as it is currently drafted.
y
REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION
MEETING DATE Apnl 3, 1995- _ - - - DEPARTMENT ID NUMBER- unknown
Analysis
With the exception of the city's housing element, CHAS (Comprehensive Housing
Affordability Strategy) and redevelopment housing plans, there has been no single policy
document that defines city council preferences for affordable housing (for households with
incomes from 0 to 80% of median income) policies and programs As proposed, the annual
housing strategy is intended to provide direction for staff, and ultimately the City Council, in
evaluating proposals for funding assistance The strategy will also serve as
an annual report, which is reviewed and debated in a public forum
• a policy document that compares adopted housing goaLumth state requirements and
redevelopment obligations of the city
an evaluation tool for comparison of both proposed and approved affordable housing
projects
The strategy covers the following housing programs, policies and activities
• Housing Needs
• Housing Survey
• Housing Element Goals and Affordable Housing Strategies
• Housing Programs
— CDBG rehabilitation loan program
— HOME program
— Redevelopment housing set aside funds
• Rankings of Approved and Proposed Projects
• Affordable Housing Obligations (due to redevelopment activities)
Staff is prepared to discuss the strategy in more detail and respond to any questions and
concerns from Council
Environmental Status
Exempt
HSGSTRG DOC -2- 03/22/95 2 16 PM
REQUEST FOR COUNCIUREDEVELOPMENT AGENCY ACTION -
MEETING DATE: April 3,1995 DEPARTMENT ID NUMBER: unknown
Attachments):
9. First Annual Affordable Housing Strategy
2. Economic Development Committee Minutes—February24 & March Z 0,1995
MTU:RS:DB:GB:db:gb'
HSGSTRG.DOC -3- 03122/95 2:31 PM
cC
V
In Attendance: Dave Sullivan, Dave Garofalo, Victor Leipzig, Ray Silver, Stephen Kohler,
Mike Adams, Greg Brown, Dart Bruening
Ij Affordable Housing SlrafeMr - Mike Adams distributed a draft Affordable
Housing Strategy document for review by Committee Members, and he, Dan Brucning,
and Greg Brown gave -a two=hour presentation on its-content:-The'followirig items are
noteworthy points of distinction:
Housing Survey - Early results of the city's single-family residential survey conducted,
show the area north of Heil, west of Springdale, and east of Bolsa Chica as the focused
area of future reviialiration.
The benefits of concentrating rehabilitation funds in one area, as opposed to piecemeal
rehabilitations throughout the city, were explained. Positive statistics were expressed of
the Oakview Enhancement Project related to the overall reduced numbers in Police and
fire calls, as well as the secondary social benefits to the community.
Housing Element -- Within the city's adopted Housing Element, goals and policies are
identified for numerous programs and a variety of tasks. While many of these programs
have already been implemented, the Housing Strategy will attempt to place those
programs into perspective, and offers 13 affordable housing activities for future
consideration and implementation.
Housing Programs - Council member Garofalo asked staff if the city had an incentive
program for commercial owners. He was specifically addressing the successful
storefront improvement program completed in Westminster. Ray Silver responded that
two years ago, a similar proposal was presented to our City Council, however, it was not
favorably supported.
Mobile Home Park Programs - The city has exhausted its financial resources for
inspections that require bringing Parks into compliance with current codes. Therefore,
the inspection process was given back to the state_ Ray Silver stated that the decision
remains -- how much money do you put into a mobile home before improvements
exceed its value? Mike Adams identified Cabrillo Park to be the city's biggest offender of
codes because it is owned by the state and exempt of regulations. The city is looking at
ways to make mobile homes more affordable, and Council member Sullivan asked if
since the Human Resources Board (HRB) chair agrees staff can make additional
recommendations to the HRB, can this procedure be followed for the Citizens Advisory
Board, and can staff place more emphasis with CAB for funds to implement housing?
Home Program - Greg Brown described this federally funded program and identified
targeted areas to be Main -Pier and Oakview project areas. The program funds are
available for housing rehabilitation, acquisition of housing or vacant land, new
construction, rent.sl assistance and first time home buyer assistance programs.
Staff recommends the HOME funds be used for (I) Facilitating the acquisition of multi-
family housing projects for rehab, (2) Develop paiincrships with CHDO's and other
nonprofit housing developers, and to (3) Provide gap financing for nonprofit housing
partners with secured partial financing commitments from conventional lenders.
Redevelopment Set Aside finds - The City's/Redevelopment Agency's existing
shortfall of housing unit credits was briefly discussed. Council member Garofalo asked
for clarification of credits earned within and onside the project areas. He also asked if
staff previously researched the benefits of amending the existing Main -Pier Project Area
boundary to include the Pacific Trailer Park.
Affordable Housing Project Rating Sheet - A point system was created in the form of
a rating sheet to evaluate the requests for financial assistance for affordable housing
projects. Council Members would like to see the following items included on the rating
sheet. (I) Higher points available for development inside project areas, (2) IncIude a
"unique feature" category to distinguish projects, (3) A project quality category to
include For Profit/Non Profit developers, and (4) A staff recommendation line available
for comments.
Council member Garofalo asked staff to include the following language under Project
Cost Analysis "Cost Per Unit; Subsidy Per Unit; and Payback to the Agency/City."
Using the proposed point system, Mike Adams noted I potential projects outlined on
page 22 of the document.
The Final version of the Affordable Housing Strategy will be recommended to the City
Council for formal adoption after committee deliberations are complete.
'2) Proposed Nome Project - The Orange County Community Housing Corporation is
purchasing the properties at 17361 and 17371 KoIedo Lane (5 units each), to
rehabilitate and make them affordable to very -low income households for no less that
59 years. The city's cost for the rehabilitation is $5I8,000; $250,000 secured from
other sources, and $268,000 as the city's obligation. The city currently has HOME funds
available until April 19, 1995, from Year 1994. This project is proposed to be
allocated from these available funds.
The loan will be structured as a deferred loan, and rents will be paid to OCCHC, fully
secured by real estate. The city will receive 10 very -low income housing credits for the
Housing Element. An Affordable Housing Agreement and Recorded Covenant will
assure us that the units remain affordable, and will require annual monitoring.
0
Mayor Leipzig mentioned his focus to be statutory obligations as 1 st to redevelopment,
2nd to housing quality in Oakview, not affordability If rents have to be increased, so be
it Dan Bruerung mentioned the secondary benefit assurance with the CCR's in place If
the city rehabs these properties, the nonprofit owner will have a voice on the
Homeowner Association Board to enforce CCR's to include ongoing maintenance,
landscape, fencing, etc , on surrounding units
Council member Garofalo is resistant to investing this kind of money without one-half
of the rent going back to the city It was determined that thisitem will be brought back
to the EDC for further discussion
The next Economic Development Committee meeting is scheduled for Friday,
March 10, 1995, at 10 00 AM, Fourth Floor Center Conference Room La Salle
Partners have been invited back to give an update presentation on the Mall
xc- Mayor and City Council
Department Heads
(s\,nutcs\u)
3
In Attendance: Dave Sullivan, Dave Garofalo, Victor Leipzig; Ray Silver, Jim Lamb,
Melanie Fallon, Greg Brown, Dan Bruening
1) Affazdehle Housing Strategy - Dan Brucning distributed the 2nd draft version of
the Affordable Housing Strategy. Melanie Fallon and Dan will -coordinate comments to
rewrite portions of the document's introduction. Staff will incorporate recommended
changes to develop a more concise description of the document and housing programs.
Daring discussion, of the HOME Investment Partnership Program, Council Member
Garofalo stated his concern to revitalizing the Oakview Area with affordable housing.
He believes Oakvitw is a Redevelopment Project Area issue.
The proposed rating sheet point system will b_ used to evaluate approval or denial of
initial requests for financial assistance of afferdablc housing projects. If approval is
recommended, staff designed an additional document "Project Description and
Application, to obtain detailed information from a prospective developer applicant.
In addition, a new category will be added at the end of the rating sheet to include "City
Cost Per Unit." The point system below is to be reflective on the new rating sheet:
Loan of Iess than $25,000/unit =
10 points
Grant of less than $25,000/unit =
7 points
Loan of less than $50,000/unit =
5 points
Grant of less than $50,000/unit =
2 points
Also, it was noted that a "Screening Process" section for comments be incorporated into
the rating sheet.
Z) Proposed HOME Project - Creg Brown gave a brief overview of the proposed 10-
unit project at 17361 & 17371 KoIcdo Lane. In terms of the proposed deferred loan,
Council Member Garofalo will not support the project without a reduction of the
principal borrowed on at Ieast an annual basis as payback to the city. An estimated
amount of $7,500 was calculated and suggested. Staff speculated that while a payback
of some -Find may occur, the city will only be able to realize this by putting more money
upfront into the project.
Mayor Leipzig believes this project accomplishes two things: (1) An improvement in the
community's housing quality, and (2) It keeps the units affordable. It is his believe that
affordable housing should be secondary to improving housing quality, and therefore, he
suggested Orange County Community Housing Corporation (OCCHC), the non-profit
property owner, seek higher rents. Staff responded that rental fees are determined by
HOME regulations. Greg will research with Alan Baldwin of OCCHC the feasibility of
agreeing upon a minimal annual payback to the city. Further, Council Committee
Members were reminded by staff of the significance of Council approving the
"commitment" of funds before the deadline of April 13.
3) Surplus School Sites - Melanie Fallon distributed a draft version of the language
proposed by Community Development staff to be established as Surplus School Sites
Reuse Policies into the city's General Plan In the past, staff has experienced problems
with looking at only 9 vacant sites of the total 19 existing vacant sites Therefore, the
new proposed policy creates a school site master plan that addresses the long-term needs
of the school districts and the city residents
Melanie advised Council Committee Members that the General Plan Advisory Committee
will meet on April 5 to review and support staffs position on this issue Concurrently,
city staff is distnibutmg the proposed policies for review by the school district
superintendents and the district school board members Subsequent meetings with all
parties will be scheduled over the next few weeks Historically, the school districts have
experienced difficulty taking individual sites through the city's process for development
Through these upcoming meetings, staff wants to improve communications with the
school districts It was noted that Wayne Wedin, consultant representing the Ocean
View District, has reviewed the proposed policies, and is extremely pleased at staffs
effort
Mayor Leipzig and Councilman Sullivan support keeping open space to the greatest
extent possible, and advised staff to keep the applicable language strict
The next Economic Development Committee meeting is scheduled for Friday,
March 24, 1995, at 10 00 AM, Fourth Floor Center Conference Room
xc Mayor and City Council
Department Heads
(&\aunutcs\1s)
2
Rk,
9
FEE
W,
O
W
A
O�
• L
._� TABLE OF CONTENTS '
PAGE
INTRODUCTION............... ........................................................................ :............ .......................................... 1
AFFORDABLE HOUSING INCOME GUIDELINES..................................................................... 2
HOUSINGNEEDS .»»»..,.».........»...» ................»....... ... »...».... ...».»»............ »............................ 3
HOUSING SURVEY STA ITSTICS................................................................................................ 4
HOUSINGSURVEY...................................................................................................................... 5
HOUSING ELEMENT GOALS & POLICIES................................................................................ 6
AFFORDABLE HOUSING STRATEGIES ................................ »............... ......................... .......... . 7
HOUSINGPROGRAMS..................................................................................................................................... 9
LOANS ISSUED IN FY 1994/95 TO DATE ................. ........... ».... »..»............................................
10
CDBG REHABII.ITAIION PROGRAM ............ ».................. »......................................................
Ii
MOBILE HOME PARKS IN HUNIINGTON BEACH .............. ..... ».... ....... .................................
12
MOBII.E HOME PARK PROGRAMS » .... ».................................................................. .............
13
HUNTINGTON BEACH HOME PROGRAM ............................. »..... ............................................
14
HOME INVESTMENT PARTNERSHIP PROGRAM....................................................................
15
HUNiiNGTON BEACH REDEVELOPMENT SET ASIDE..........................................................
16
REDEVELOPMENT SET ASIDE FUNDS ........................................... »........................................
17
AFFORDABLE HOUSING PROJECTS COMPLEI'ED.................................................................
18
AFFORDABLE HOUSING IMPLEMENTATION, .
VYITH RANKINGS OF APPROVED & PROPOSED PROJECTS
AFFORDABLE HOUSING PROJECT RATING SHEET'-1995........................................ :........... 20
PROPOSED PROJECTS RATING ...................................................... ............................... ........... 22
AFFORDABLE HOUSING OBLIGATIONS
REPLACEMENT HOUSING REQUIREMENT............................................................................ 24
PRODUCTION HOUSING REQUIREMENT................................................................................ 25
�1TRODUCTION
Huntington Beach is a diverse community with households of varied socioeconomic, racial and
cultural backgrounds. Providing adequate and affordable housing opportunities for its diverse
resident population is both a concern and an obligation of the City. This Housing Strategy is
intended to provide direction in responding to the housing needs of all economic segments of the
community.
Affordable Housing efforts occur -in two Departments: the Economic Development and the
Community Development Departments.. The Community Development Department has the
responsibility of preparing the City's housing policies and implementation programs through the
state -mandated Housing Element. They also review all proposed housing developments and
recommends specific conditions to developers to provide affordable housing units in the City.
The Department is also preparing an affordable housing ordinance which will outline the specific
requirements for housing developments. The Economic Development Department is responsible
for the acquisition, construction, and rehabilitation of housing within the City, using set aside
Community Development Block Grant (CDBG) and HOME funding.
The Affordable Housing Strategy should be considered an annual report -which is reviewed and
provides the Council v&ith direction for funding affordable housing projects at budget time. This
report compares adopted housing goals rith the state requirements and redevelopment
obligations of the City. The report will provide staff and council with a tool which will enable
project comparison and lead to effective and objective decisions.
The City has a number of documents which direct affordable housing decisions. The Housing
EIement, Comprehensive Housing Affordability Strategy (CHAS) and Redevelopment
Compliance Report.
The City's adopted Housing Element has been certified as in compliance with State Housing
Element Law.
This report summarizes the City's affordable housing efforts by funding source and offers
recommendations and strategies for projects in I995.
1n�C
AFFORDABLE HOUSING INCOME GUIDELINES
Shows the Increase in the Median Income in Orange County for the Last 5 Years
TYPICAL FAMILY SIZE 4
YEAR
VERY LOW
INCOME
50%
LOW
INCOME
SO%
LOWER
INCOME*
MEDIAN
INCOME**
MODERATE
INCOME
120% Median I
1990
1 24.550
1 39.280
1 35.700
= 49.100
1 58.920
1991
26,100
41,760
38 000
52,200
56,400
1992
26,350
42,160
38,600
52,700
63,240
1993
28,250
45,200
39,700
56,500
67,800
1994
29,400
47,040
39,900
58,800
70,560 '
1995
29,550
47,280
40 200
59.100
70.920 '
1 CALIFORNIA MEDIAN FAMILY INCOME IS $46 600 FOR 1995
* National Median Income
** Orange County Median Income
*** Source U S Dept Of Housing & Urban Development
2
]ROUSING NEEDS
In order for the City's Housing Element to become certified by the State, the City must identify
quantitative objectives based on a regional allocation formula.
State Iaw requires jurisdictions to provide for their share of regional housing needs. The Southern
California Association of Governments (SCAG) has determined the 1989-1994 needs for the City
of Huntington Beach, and has estimated the number of households which the City will be
expected to accommodate during this period. These needs were forecast by the 1988 Regional
Housing Needs Assessment (ftMA), which considered on a regional and local level: market
demand for housing, employment opportunities, availability of suitable sites for public facilities,
commuting patterns, We and tenure of housing needs, and housing needs of farm workers. _
According to the 1988 Regional Housing Needs Assessment (RIiNA) forecast, housing to
accommodate 6,228 households would need to be added to the City's June 30, 1989 total
households by July 1994 to fulfill the City's share of regional housing needs. Based on the
distribution of regional income, this total was further divided among four income groups to
identify the types of households to be provided for as follows:
Vcry Low (0-50%) 984 (15.8%)
Low (50-801%) 1,264 (20.3%)
Moderate (80-1200/,) 1,370 (22.0%)
Upper (Over 120%) 2.610 (4I.9%)
Total Households 6,228 (1000/9)
County Malian Income* $59.100
*Note: The chart on the previous page shows how the Orange County modian income has increased over
the past five years.
In addition to the requirements of the Housing Element, the City has accumulated obligations for
affordable housing on numerous Redevelopment Proiccas. These obligations have been identified
in the Redevelopment Housing Compliance Report.
HOUSING SURVEY STATISTICS
AS OF JANUARY 26, 1995
18,644
Good*
5,905
Fair*
589
Poor*
0 +\ �;\ \� �'� 2?hu = � _
�2 }b O \ } #hh? 2`h' h \�? ? 'C
*10 to 14 Points
*15 to 21 Points
*22 to 30 Points
Good
Fair
Poor
MEDIAN SALES PRICE I SALES VOLUME
ZIP CODE
Jan 95
% Change from `94
Jan `95
% Change from `94
92646
$220 000
2 3%
42
-22 2%
92647
$178 000
-1 7%
19
-32 1%
92648
$264 000
-6 4%
34
-5 6%
92649
$234 000
0 0%
35
-27 1%
Source Orange County Register
El
IN
MUSING SURVEY
A third method of determining the City's housing needs can be through a housing quality survey.
In 1993, City staff began a drive by survey of single family neighborhoods to attempt to identify
the condition of the City's stock. This survey rates the condition of housing as good, fair, or poor
based on a number of exterior conditions. The results of this survey have been mapped and
clearly identify neighborhoods in need of enhancement.
The survey was conducted using a drive -by technique (windshield), the survey assesses the
exterior condition of single family homes. To date, staff has surveyed approximately 60% of the
single family stock. Items rated on survey include roof; driveway, paint or stucco, landscaping
and fencing. Point values were assigned depending on the condition of the property. Upon
completion of the single family residential survey, statTwill begin a survey of multi -family housing.
There are many additional ways to determine the housing needs of a community. These include
vacancy rental rates and rent costs, residential resale activity, jobs/housing balance studies and
employment rates. The City Council should corsider all these sources of information in
determining the annual affordable housing obligations.
k
HOUSING ELEMENT GOALS & POLICEES
The City's Housing Element adopted in 1999 prioritizes five local housing concerns. The five
areas of concern are:
111. Accessibility
• Provide housing opportunities for various types of households
• Provide housing for persons with special needs
2. Adequate Provision
• Provide incentives and assistance for a variety of housing types for different income
households
3. Adequate Sites
• Designate additional residential areas
4. Preserving Housing and Neighborhoods
Encourage maintenance and repair of deteriorated housing
S. Preserving Affordability
• Place assured affordability covenants on affordable housing units
Note: These goals and policies have directed how the City implemented the housing program
over the past six years. The adopted Housing EIement identifies numerous programs
and a variety of tasks. Many of these programs have been implemented. The housing
strategy will attempt to place those programs in perspective and prioritize future
affordable housing activities for implementation.
0+
AFFORDABLE HOUSING STRATEGIES
- 'Through the implementation of the City's adopted Housing Element, a number of activities have occurred. 'Ile
City appointed an Affordable Housing Committee to review policies and make recommendations on new
ordinances. An Affordable Housing Ordinance was directed and approved by the Planning Commission and has
ban reviewed by the City Council, but has yet to be adopted.
The City of Huntington Beach needs to comply with the rcgLL-itions of State Redevelopment Law. A number of
residential units were removed to accommodate new redevelopment projects, those units need to be replaced. In
addition the Redevelopment Agency assumed the affordable housing obligation of the new redevelopment projects.
The Affordable Housing Strategy should balance the redevelopment housing obligations nith housing needs
identified in the housing survey in an attempt to achieve the goals of the Housing Element.
Remmmendations ( Not in order of priority)
1. Adopt ordinance which encourages and accommodates the production of affordable housing units.
2. Approve affordable housing development agreements with major development companies.
3. Prepare affordable housing monitoring programs, including covenants.
h. Conclude City's housing condition survey for multifamily units.
5. Modify zoning regulations to allow for more affordable housing opportunities.
6. Coordinate and contract with private and public organizations to conduct the ministerial functions of the
City's Housing Program.
7. Develop specific projects and programs for special needs residents.
S. Prioritize affordable housing projects which target tnrniiies of low and very low income.
9. Establish new source of affordable housing funds through the loan program income, projects profits, in -lieu
development fees and program loan interest payments.
10. Fxclude financial assistance for new development projects with inclusionary affordable housing requirements.
11. Prioritize the preservation of at -risk existing affordable units to assume long term affordability.
I2. Renegotiate the application of affordable housing covenants on projects previously subsidized.
13. Developers within the project areas are to provide affordable housing on site.
trat
1. Adopt City's affordable housing ordinance.
`rl
LOWAND VaERYLOW
HOUSING MOGRAMS
Currently, there are three main funding sources for affordable housing is Huntington Beach:
1. Redeveio meet Set Aside - 20'/0 of tax in:rement from redevelopment project area is
required to be used for affordable housing. This funding source is the Ieast restrictive of
the three sources. Income range is from 120% of median income and below.
2. Cotfirnunill Development Block Grant CDBG - a yearly allocation funded by the
federal goversunent. These funds are more restrictive than redevelopment set aside.
CDBG requires that 70% of all funds expended must benefit persons of 80% median
income or less.
3. HOME Funds - is another federally funded program These funds can only be used for
affordable housing. This funding has the most restrictions. Program regulations require
that 90% of all HOME funds be used to assist households below 60% of median income.
The remaining 10% can be used to assist households with incomes of up to 80°!o of median
income.
0
COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM
HOUSING RELATED PROJECTS AND PROGRAMS
SM47 e1
04
A3
+'E
(Proposed)
REHAB LOANS
$300 000
Single Family
$117,862
$225 949
$209 829
$18 000
$96 310
Mobile Home
$146 240
$113 009
$202 349
$234 460
$78 041
Multi family
$70 612
$218 8831
$165 636
$25 000
$0
REHAB GRANTS
Single Family
$0
$0
$2 000
$0
$0
Mobile Home
$0
$0
$2 000
$2 000
$0
Multi Family
$0
$0
$0
$0
$0
HOUSING SERVICES
Orange County
Fair Housing
$34 779
$37 000
$36 500
$35 000
$35 000
$35 000
HOUSING COOPERATIVE
AGREEMENTS
Habitat for Humanity
$163 000
Orange Housing Development
Corporation
$35 000
SPECIAL HOUSING
PROJECTS
Down Payment Assistance
$157 098
TOTAL a ` \
}♦ 60 i 03
\ �94F789
$7-5.412
i��1+\•� \ .�p
\ it
10
COMMUNITY DEVELOPMENT BLOCK GRANT
HOUSING PROGRAMS `
Community Development Block- Grant (CDBG) has been in existence since 1974. The CDBG program has been the
rmjor Federal Urban Development assistance program. T 3 program has received numerous awards of excellence
from the Department of HUD.
Fe
zulatigm
1. Allhousing crust be for lowimodcrate income persons.
2. 71% of all CDBG funding mast be for persons of 80% cr below of median income. .
3. Improvements permitted arc to complete health, safety, structural and energy saving repairs and for enhancement
items to improve neighborhoods.
Recommendations (Not in order of priority)
The following are, different typ= of rehabilitation packages:
1. Deferred Loans, onetime interest loan of 5% for those property owners that are below 50% of median income;
repayable when property is sold or title transfer.
2. Amortized 3 % loan for a maximum of I5 years for those abose income is greater than 50% but less than 801/o of
median income_
3. Amortized 6% loan for a maximum of 15 years for those Abose income is greater than 80% but less than 100%
of median income. -
4. Amortized 8% loan for a ma-imum of 15 years for those Rose income is greater than 100% but less than 120%
of median income.
S. 'Ibe persons whose income is greater than 80% of median would only be eligible for loans to repair health and
safety deficiencies.
6. Amortized 6% loan for a n=*rnum of 15 years in conjunction A ith a deferred loan of equal amount to improve
multi -family units with a requirement of a covenant for kcVing them affordable for 10 years.
7. Place covenants on existing housing for long-term affordability through acquisition and rehab.
trat 'es (Not in order of priority)
1. Target rehab efforts in zip code area 92647 (north central portion of the city).
2. Target mobile home residents with minor repair grants for bandy7nan services.
3. Offer special services in areas adjacent to other assisted and affordable housing projects.
4. Provide grants for handicap modifications up to S2,000 per household to make necessary handicapped -oriented
changes.
11
MOBILE HOME PARKS IN HUNTINGTON BEACH
PARK
ADDRESS
SPACES
OCCUPIED
1 /1 /94
1
Beachview Mobile Home Park
17261 Gothard
82
82
2
Brookfield Manor
9850 Garfield
139
139
3
Cabrillo
21752 PCH
45
45
4
Del Mar Mobile Home Estates
19251 Brookhurst
142
141
5
Driftwood
21462 PCH
157
140
6
Huntington By the Sea
21851 Newland
306
286
7
Huntington Harbour Mobile Estates
16400 Saybrook
130
128
8
Huntington Mobile Estates
7652 Garfield
105
105
9
Huntington Shorecliffs
20701 Beach
304
304
10
Los Amigos Mobile Park
18601 Newland
145
145
11
Manners Point
19350 Ward
98
97
12
Ocean View Estates
7051 Ellis
44
44
13
Pacific Trailer Park
80 Huntington
260
259
14
Rancho Del Rey
16222 Monterey
379
379
15
Rancho Huntington
19361 Brookhurst
193
193
16
Sea Aira Mobile Estates
6301 Warner
230
229
17
Sea Breeze Mobile Estates
5200 Heil
65
63
18
Skandia Mobile Country
16444 Bolsa Chica
167
167
19
Villa Huntington
7850 Slater
125
125
TOTAL SPACES
3 116
3 071
12
MOBILE HOME PARK PROGRAMS
The City of Huntington Beach has over 3,000 mobile homes providing the community with a
substantial amount of affordable housing. State law mandates that each of these homes and parks
be inspected and brought into compliance with current codes. These regulations provide the City
with an opportunity to assist the home owner and park owner with necessary repairs in exchange
for affordable housing covcnants.
Recommendation2 (Not in order of priority)
1. Offer below interest market rate loans for park owners to repair the deficiencies that are found
during the park inspection
2. Offer grants to residences of parks up to a maximum S 1,200 grant to do the required repairs
as found during park inspection.
3. Offer the same rehab loan program that is offered to owners of single family homes (SFD).
Note: The City has given the inspection process back to the state.
13
Huntington Beach HOME Program
2...,.i
i�j�'�F }yi }�2 \" ik `kki
} i P OJEC i i Y�k7Z�tk ki 2 i
,Q }t+{z� }� 2 Yi �
i 2YY �t i kµ
_ i i `Q
kid\ k j/ {]may k �2N\ k
Jff# � k k..... iir Y }Yi "^ 2
� 2 ik k�Y�fiirY���"; Ai k Y Y`
A k v YY �.`C 2" .\2. i.} }\.., kiw
2 w ~Y �c
t �" k} i`22t�
2 \ Y'k kl�i 2 Y Ywi Yk
22}} i Y k
� k 2 �2 YY .ki# �..
i z "r Z`\A`2x} kkii} k'� }22i }2i i
>}2; kk i I A `'rt k
tt}'2kw \ ,i "#f Y}kY'£
Y�.r't2 # kYi lt'id 9S }A x2 i 2
_ kt 2
�fniAf YY.. 2 }2 M1�tK'ki YSi
Y �^^ `k iiY .. k
iy; iiiY `� iiitr`� f ��
'ffY�-.} Y.. Y 1.
2 {` Y(( j� Y kl#`
AYtrikYi� iZi :2 2 �Y 2
k; k;.Y i`�k ttt Y2}2..
kXk2Y.i }.r i �Y NYC ikt� %Y,f
$ 881,000 00
$ 584,000 00
$ 543,000 00
$ 583,000 00
Project Costs
17372 Keelson Lane
$ 225,000 00
7812 Barton Drive
$ 320,000 00
17382 Keelson Lane
$ 247,900 00
$ 97,100 00
17361-71 Koledo Lane`
$ 428,500 00
$ 89,500 00
Total Fri eifs i ` i
$ 792.�90i3 00
If0 -$ 525,1WO
89,500 00
w
10% Administration
$ 88,100 00
$ 58,400 00
$ 54,300 00
$ 58,300 00
Total Administration
$ 88,100.00
58,40QX0
54,800 00
x $ = 58,300.00
FUND BALANCE i i
$ i
$ 399,200 00
,s 524s7'00-
* Not Approved by Council as of 3/21195
Note A minimum of 15% of funds in a given year must be awarded to special housing nonprofits known as
Community Housing Devleopment Organizations ("CHDOS7
14
HOME INVESTMENT PARTNERSHIP PROGRAM
The National Affordable Housing Act of 1990 ("NAHA") established the HOME Program as a
means of expanding and preserving affordable housing for low and very low income households.
Eligible categories of programs include: housing rehabilitation, acquisition, new construction,
rental assistance and first-time home buyer assistance programs. Huntington Beach receives a
formula allocation, the amount of*hich is determined much like the CiVs CDBG entitlement
1. A minimum of 15 % ofHOME funds must be am rded to special housing nonprofits known as
Community Housing Development Organizations CCIDOs").
2. In order for a nonprofit to be recognized as a CI DO, it must conform to an extremely rigid
set of guidelines governing bylaws and articles of incorporation, and flake -up of the
governing board (a third of who must be low income). The CHDO must have a history of
serving the community. .
3. The City has established a quality working relationship with two housing nonprofits in Orange
County that qualify as CHDO's: Orange County Community Housing Corporation
(OCCHC), based in Santa Ana, and Shelter for the Homeless, which is based in Westminster.
Beginning with the expenditure of Fiscal Year 1993 HOME funds, a 25% matching fund
requirement goes into effect. The match must come from non-federal sources. Redevelopment
housing funds that have been committed to certain other affordable housing projects will be used
for the match requirement.
ecommendati n (Not in order of priority)
Staff recommends that HOME funds be used in the following manner.
1. Facilitate the acquisition of multi -family housing projects in need of rehabilitation.
2. Develop partnerships with CHDO`s and other nonprofit housing developers. Secure partial
financing commitments from conventional lenders. -
I. Provide gap financing for nonprofit housing partners with secured partial financing
commitments from conventional lenders.
trate 'es (Not in order of priority)
1. Target the Oakview and Main Pier Redevelopment Project Areas.
2. Offer deferred payment loans for 30 years with repayment of the principal equal to CPI.
15
HUNTINGTON BEACH
REDEVELOPMENT SET A —SIDE
.00
INCOME
Tax Increment
$
871 076 00
$ 891 ,415 00
$
914 291 00
Interest Income
Five Points Senior Villas
$
9 500 00
$ 38 000 00
$
38 000 00
Loan Interest Income
In Lieu Fee Affordable Housing
$
50 000 00
Fees Collected
Return of Mora Kai Pledge
$ 385 563 00
$
385 563 00
Expenses
Operating Expenses
$
123 677 00
$ 129 861 00
$
136 354 00
Administrative Costs
$
60 699 00
$ 63 734 00
$
66 921 00
Legal Services
$
2010000
$ 30 100 00
$
30 100 00
Administrative Costs
$
3 790 00
$ 7 790 00
$
7 790 00
Projects
Mora Kai (Pledge)
$
385 563 00
$ 385 563 00
$
385 563 00
Five Points
$
100 000 00
$ 100 000 00
$
100 000 00
725 Utica
$
450 000 00
Pacific Paris Villas
$
300 000 00
$ 450 000 00
Bnsas Del Mar
$
243 717 00
ERAF
$
13914200
MCC
$
30 000 00
$ 30 000 00
$
30 000 00
Emerald Cove
$
80 000 00
$ 80 000 00
$
80 000 00
Third Block West
$ 825 000 00
TOTAL PROJECT EXPENSES
$ �'I `2 *4221�1�
�...♦ 7E#a,�,#�E2
�`��� ��;�95,s��.1
FUND BALANCE � ♦
`
g�� ,W fills
;00 alk 2
W
� � 7599
16
REDEWT—OPMENT SET ASIDE FUNDS
Redevelopment law requires redevelopment agencies to reserve twenty percent of the tax increment collected annually for the
,irposc of affordable housing. For some years redevelopment agencies have been acquired to provide fiRcca percent of the
• omits in a completed project area as "affordable".
Recently, Iegislation aas approved and incorporated into the Health and Safety Code that requires redevelopment agencies to
provide a plan through which these housing obligations can be achinTd. This plan is to be updated c' cry five years in
romjunction with the jurisdiction's housing element.
Jtcgnlations
1. 30% of all new housing or rehabilitation housing units developed by the redevelopnxmt agency must be available at
affordable housing costs to low and moderate income households, 50% of which must be available at affordable housing
cost to very low income households.
2. 151104 ofall new or rehabilitation housing units developed within a project area by entities or persons other than the
Agency, must be available at affordable cost to low and mod=tc income households, 40% of which must be available at
affordable housing cost to very low income households.
3. Units rchabditatedr developed or constructed in compliance with the Housing Requirements must remain affordable to
each respective income level for the longest feasible time.
4. The agcmcy is to adopt a housing compliance plan for each proixt area to ensure compliance with the implementation
plan requirement every S years- '
s The housing compliance plan is to be submitted to the state of California Department of Housing and Community
Dv elopment.
LRtcomrrendatiM (Not in order of priority)
1. Comply with state law by providing all nemsary replacement housing units within the requimed four years of the units'
removal and assuring 15% production units requirements every ten years.
2. Rehabilitate and covenant existing units city wide to maintain affordability and to receive the most affordable units for
the r.�onies expended.
3. Focus efforts and expenditure of funds on the provision of housing for low and very low income households on a city
.,vide basis or within project areas when economically feasible.
S tratc cs (Not in order of priority)
1. Pro-- ide replacement and production housing inside project area.
2. Rehab units outside project area only if cost of provision of units is at least 1/3 of comparable units provided inside
project area.
3. Pro% ide production units outside project area only if cost is 1/2 or Iess of comparable units within project area.
4. Match housing t}pcIincome to job generation.
17
AFFORDABLE HOUSING PROJECTS COMPLETED
NOPROJECT-NANOV
Am
Koledo Lane Prqject:
16 Wh f=�H Buildings
80
Amberleaf
19 Multifamily Buildings
76
Mulffamfly
CityWide
121
Sin g!eEn�dRehab
2!y Wide
559'
Mobile Home Rehab
gi RWide
107
Huntington Was 5 Points
Senior housing
48
Emerald Cove
Senior Housing
164
m
Sea View
Multifamily
25
17372 Keelson
Multifarddy
4
Breakers
Mulfifmay-
68
Utica Ave
MulffarnHy
36
313 1 Ith
MultifarnHy
9
Brisas Del Mar
MulKaznHy
44
7812 Barton
MultifarrMy
4
17382 Keelson
mulgmuy
4
m
Affordable Housing Implementation, with
Rankings of Approved and Proposed Projects
{
UT
19
-9:xx i R6je s UvistOr1
�orda�I�H�in�Pro��fRa�ngS`
1995
InW:9 requests for financial assistance for affordable housing projects will be evaluated on the following point
system:
e
Proieet Loc2tion--
Priority arras will be established wwually by the Oty Coto cil.
thepo W system In this section may cbmige accordingly
Redevelopment project area
IRM enhancement area
Arta demand on city services /
Low, medium, or high JaI�Z:�Q r(��G•~�i�� .
City housing surety area rated "Poor"
Pro iect Profile (Acquisition of Existing Projects)
BIdg. conforms to all applicable building codes
Zoned for residential use
Zoning compatible with surrounding uses
Adequate open space
Meets required puldng
Rousehold Income Served
Number of units & % of project reserved
for low or very low income persons
I00% of units for very low - 10 pts.
50% of units for low Q 5 pts.
20
20
10
5
5 '
5
5
5
5
5
10
Rating Sheet, Cont.
Number of units and % of project resmrd for
special needs groups (e g. seniors)
I00% of units for special needs 10 pts.
50% of units for special needs 5 pts.
Number of units and % of project serval for
large families (3+ bedrooms)
SO% of units (3+bedrooms) e 5 pts.
e�tlo er Pmfiie
Nonprofit housing developer
For -profit developer
Lone -Term Affordability Controls
Length of Affordability*
30+
20-30 years
15-20 years
5-15 years
City Cost for Emieci
Loan of Less than 525,000 per unit
Grant of Less than $25,000 per unit
Loan of Less than $50.000 per unit
�Cunt of than S50,000 per unit
G
TOTAL POSSIBLE POim:
10
5
10
5
10
7
5
a
10
7
5
2
140
* Dependent upon the source of funds, the full 25 points wdll be awarded for projects with thirty or more years
of affordability
Note: •Additional consideration will be given to projects based on average unit size, cost, overall density of the
project, as well as the cost of rehabilitation and other related aTenses
t4 minimum nf50 points is required for anyproject to merit further consideration
21
R
I
PROPOSED PROJECTS RATING
PROJECTS BCO,
�,n
V--'��, ST
.,CDBG�
T--JjOME��
q
5, ASIDE �%,�;,-
MCOUNCILIAGENCY�K
R 2 ... M1,
::... :,:
K lLLACT I ONE N,
R.A
-,�,,-*=MMENTS:"�!--
—0
---- -- - ---
x�
R
RATING" -
1W
1
17361 Koledo
$ 335,000
$ 335,000
Verbal Comm Itmert OCCHC
h Escrow
93FUNDS
115
2
17371 Koledo
$ 300,000
$ 300,000
Verbal Cmvnbrmt
123,500 93 FUNDS
170,500 94 FUNDS
115
3
Mora Kal
$ 400,000
$ 400.000
Loan Agreement
Bond ClosaVMar. 3%1g%
70
4
Yorktown -Lake
$ 1,000,000
S 1,000,000
Purchase Agrmnerd
Proposed S&-Jw Pro)ed
100
5
611 6th Street:
$ 575.000
$ 300,000
$ 275.000
$
?
County HOME Furls
Wlhdrew
40
6
Habitat for Humanity
$ 163.000
$ 163.000
To Pay for City Owned Land
NegodWon
80
7
Orange Hag, Dev. Corp.
$ 30.000
$ 30.000
No Projed
CAB
No Rating
8
Hurt Harbor Owners
S 15.000
s 15,000
DhicUm fmm cam a to proceed
FM Step of Process
No Rating
TOTALS
$8,020,500-
4793,000.�-
-42,090,0W
',-$5;137,600,,1,
--v
Affordable Housing Obligations
23
Replacement Housing Requirement
Replacement
Removed
Requirement
Alain P4er
Demonstration Block
18
14
Main Promenade
33
33
Main -Pier II
18
18
Pierside/Piercolony
27
24
Third Block West
19
19
Town Square
5
3
Waterfront
104
92
Sayshore
1
1
Huntington Center
Huntington Center Area
1
1
Cakvlew
Zizakus
6
5
Talbert -Beach
Seaview - formerly "Collins/Zweiber
3
2
Yorktown -Lake
0
0
Outside Project Areas
Ocean View Estates/Mushroom
Farm
1
1
Total
236
213
Units Produced for
Replacement Housing
263
Surplus
50
24
Production Housing Requirement
Affordable Units
Affordable Units
Affordable Units
PROJECT
UNITS
Required
Provided
Deficit
15% of Produced
Main -Pier
Huntington Pier Colony/1990
130
20
0
20
Town Square11989
89
14
0
14
Huntington Bay Shore/1988
159
24
0
24
Villas Del Marti 988
64
10
0
10
Huntington Breakers/1986 (Bond)
tco--ne.gr. tW9l
342
52
68
16
Subtotals
784
120
68
52
oakvlew
Ash Street Projects/1985-89
20
3
0
3
Cypress Avenue
3
1
0
1
Elm Street Projects/1985
30
5
0
5
Koiedo Lane/1984
16
3
0
3
Subtotals
69
12
0
12
Talbert -Beach
Windward Cove1986
96
15
0
15
Capewoods/1985
55
9
0
9
Emerald Covell 986 (Agency) - so
unw we courted 10,ards replacement tequ.emane
164
50
74
24
Pacific Park VAlas/1994 (Project In
poyrcak 38 units completed)
88
14
25
11
Subtotal
403
88
99
-11
Yorldown-Lake
Huntington Classtcs/1990-94
81
13
0
13
Subtotal
81
13
0
13
TOTAL
1337
233
167
66
25
V
ATTACHMENT NO. 11
CN FILE WITH CITY CLERK
ATTACHMENT NO. 12
V
CouncillAgency Meeting Held:
Deferred/Continued to:
O Approved ❑ Conditionally Approved ❑ Denied City Clerk's Signature
Council Meeting Date: June 5, 1995 Department ID Number. 95-19
CITY OF HUNTINGTON BEACH
REQUEST FOR REDEVELOPMENT AGENCY ACTION
SUBMITTED TO: Honorable Chairman and Redevelopment Agency Members
SUBMITTED BY: Michael T. Uberuaga, Executive Director
PREPARED BY: Ray Silver, Assistant City Administrator/Acting Director of Economic Development
SUBJECT: .._Determination of Agency Financial Ability to Perform Obligations
Under Coultrup Companies et at. Disposition and Development
Agreement (Main Pier Redevelopment Project Area)
Statement of Issue, Funding Source. Recommended Action. Alternative Action. Analysis. Environmental Status, Attactunentls)
Statement: of Issue: On July 6, 1993, the Redevelopment Agency and Coultrup
Companies et. al., entered into a Disposition and Development Agreement (DDA). Section
210 of the DDA states: The Agency shall determine, in its sole and absolute discretion,
within 30 days of the approval of the Downtown Specific Plan by the Coastal Commission,
that the Agency has sufficient funds available to complete all its obligations under this
agreement.' The 30-day deadline ends June 10, 1995.
Funding Source: N/A
Recommended Action: Motion to:
Make a determination that the Agency does not have sufficient funds available to complete
all of its obligations under the Disposition and Development Agreement. Direct staff to
return with the follow-up action required to terminate the Disposition and Development
Agreement.
Alternative Action(s):
1. a) Waive Condition (xi) of Section 210 of the DDA which requires the Agency to
determine the financial feasibility of the project.
b) Direct staff to identify possible non Agency funding sources to comply with the
Affordable Housing requirement in Section 202 (14.) of the DDA by using HOME
funds allocated to the city for fiscal year 1994/95 and fiscal year 1995/96 to
provide the 12 affordable units.
REQUEST FOR REDEVELOPMENT AGENCY �610N
MEETING DATE: June 5,1995 DEPARTMENT ID NUMBER: 95-19
Analysis:
Background:
On July 6, 1993, the Redevelopment Agency entered into a Disposition and Development
Agreement (DDA -Attachment 1) with the Coultrup Companies, Birtcher Real Estate Limited
and the Main -Pier Property Owners. The DDA outlines the terms for the development of the
Main -Pier Phase II/Coultrup project, consisting of 80 condominium units and 40,000 square
feet of retaif/restaurant/office space. The project site is located in the two blocks bordered
by Main and Sixth streets, Pacific Coast Highway, and Walnut Avenue.
On July 6, 1993, the City Council also approved the project's building entitlements on appeal
from the Planning Commission (Attachment 2). The entitlements were subsequently
appealed to the California Coastal Commission for review and reconsideration. On April 12,
1995, the Coastal Commission considered the appeal and found substantial issues existed.
The Coastal Commission then continued action on the item, tentatively scheduled to be
considered at its meeting of June 13-16, 1995. The issues to be reviewed are strictly land
use issues, and are not affected by the Agency's financial determination.
Section 210 of the DDA states: The Agency shall determine, in its sole and absolute
discretion, within thirty (30) days of the approval of the Downtown Specific Plan by the
Coastal Commission, that the Agency has sufficient funds available to complete all its
obligations under this Agreement."
The Downtown Specific Plan/Master Parking Plan was first considered by the Coastal
Commission on March 15, 1995, and the Plan was approved with minor modifications. The
City Council formally accepted those modifications on April 17, 1995, and final approvals by
the Coastal Commission on the Downtown Specific Plan were received on May 10, 1995.
Therefore, the Agency is required to make its financial determination by June 10, 1995.
Jon T. Coultrup, Coultrup Companies, in a letter dated May 9, 1995, (Attachment No. 12),
requested the Agency to remove the condition of the financial feasibility in the Disposition
and Development Agreement. He also requested that the June 10, 1995 date to make the
financial feasibility determination, be extended to June 19, 1995.
Financial Issues*
W.
Staff presented its initial cash flow analysis of the Agency's remaining DDA financial
obligations to the economic Development Committee on _February 3, 1995. That analysis
portrayed a potential positive cash flow of approximately $181,000 . Further analysis
resulted in the revision of both costs and revenues.
RAA95-19.DOC -2- 05/31195 3:59 Phi
REQUEST FOR REDEVELOPMENT AGENCY ICCTION
MEETING DATE: June 5,1995
DEPARTMENT ID NUMBER: 95-19
The offsite improvement cost initially considered at an estimated $100,000 was based on
estimates prepared prior to the approval of the final project design. The revised estimate
came in significantly higher at $585,000. Construction of a new Terry Buick Parking lot
alone came in at $120,000 including decorative paving. The majority of the increase is due
to the demolition and reconstruction of streets adjacent to the project (Main, 5th, Walnut and
PCH). These revisions to the offsites and the cleanup reimbursement turned the projected
$181,000 surplus into in an Agency cash flow deficit of $54,000.
In 1994, the Agency purchased the SarrabereMood/Goodman property at $1,085,000 which
was paid out of the Main -Pier Redevelopment Project Area. The Report 33433 estimated
the cost at $630,000.
—The cash flow analysis for Main -Pier Project Area (Attachment No. 6), projects a zero
balance for the end of fiscal year 1994/95. The cash flow analysis for the Low -Income
Housing Fund, including a projected affordable housing cost of $1,334,500, would result in a
negative balance of $1,055,185 at the end of fiscal year 1994/95. As shown in Attachment
No. 7, the Main -Pier Area has no cash surplus; in fact, the Huntington Center Project Area
(Attachment No. 8) is contributing $360,184 for repayment of City debt in 1994/95 for the
Main -Pier Redevelopment Project Area, and $428,407 for payment of the Main -Pier Housing
set aside obligation for fiscal year 1994/95. It is projected to continue paying this obligation
in the years to come.
Site Remediation
Staff has been notified that the Agency's applicaticn had been approved by the State's UST
(Underground Storage Tank) Fund Program for reimbursement of monies expended by the
Agency offsite remediation for the Main -Pier Phase II site. The fund allows reimbursements
up to $990,000. and currently, staff has requested approximately $250,000. The letter of
commitment is on hold pending the Governor's signing of the 1995/96 budget. Our Claim
Reviewer estimated we would receive the first reimbursement in August if all goes according
to schedule (Attachment No. 4).
Section 209 of the DDA (Attachment No. 6) provides for the Agency to pay up to $200,000
for site remediation. In the fiscal year 1994/95 budget, $250.000 is appropriated for site
remediation.
Affordable Housing
Section 202 of the DDA obligated the Agency to fulfill the project's affordable housing
requirement of 12 units. This cost was not included in the preliminary cash flow analysis in
February, 1995. Attachment No. 3 represents the analysis, including the affordable housing
requirement. Historically, the Agency has incurred this obligation and attempted to expend
its 20% Set Aside Funds to provide the required units as the funds become available. As
RAA9549.DOC -3- 05/31195 3:59 PM
REQUEST FOR REDEVELOPMENT AGENCY ACTION
MEETING DATE: June 5,1995 DEPARTMENT ID NUMBER: 95-19
shown on Attachment 9, there are no uncommitted Housing Set Aside Funds; in fact, the
Huntington Center Redevelopment Project Area is contributing $428,407 each year to pay
the amount due each year by the Main -Pier Redevelopment Project Area.
Section [202114. of the DDA states: 7%gency shall provide replacement housing units as
required by law and shall assure that a minimum of 12 units of affordable housing are
provided consistent with Community Redevelopment Law. Agency shall have the right to
designate twelve units as affordable to low and moderate use pursuant to the guidelines of
the City's requirement. Such designation shall not effect the market price of the unit to the
Developer as the Agency's low to moderate housing funds shall be utilized to make the unit
affordable to the designated eligible family or individual.'
Condition of Approval (for C.U.P. No. 92-17) No. 9.g. reads as follows:
Prior to issuance of building permits for the construction of the residential portion,
Developer shall provide the City with an Affordable Housing program to be approved by the
Director of Community Development and in accordance with provisions of the City's adopted
Housing Element and Redevelopment Law. The affordable housing program shall provide
for the development of not less that 12 residential units which will be available at affordable
housing costs to persons and households of low and moderate income, with not less than
five of those units available at affordable housing costeto Very low income'households as
defined by the Department of Housing and Urban Development (H.U.D.). The affordable
housing program shall identify housing proposals, locations and implementation strategies
for the development of new residential units designed for families of low and moderate
income. The developer shall provide affordable housing within the residential portion of the
site or provide affordable housing offsite. if all or a portion of the affordable housing is to be
provided offsite, one or more of the following must occur prior to the issuance of building
permits of the construction of residential phase of Main -Pier Phase II.
1. Control of an offsite location acceptable to the City.
2. City approval of a development plan for an offsite location.
3. Prior to issuance of building permits, the applicant shall identify a location for the
replacement of units lost through demolition. Said plan shall comply with Section
33413.5 of California Community Development Law. All units must be replaced within
four years of approval of this Conditional Use Permit.'
On July 19, 1993, the Agency reviewed a Main -Pier Phase IIICoultrup Affordable Housing
Plan (Attachment No. 5). The recommended Plan required the Agency to provide a subsidy
to future buyers for seven moderate -income units onsite, and that five very -low-income
rental units be developed offsite in the future. The estimated costs were as follows:
RAA95-19ACC -4- 05/31/95 3:59 PM
REQUEST FOR REDEVELOPMENT AGENCY A'I�iION
MEETING DATE: June 5, 1995
DEPARTMENT ID NUMBER: 95-19
Subsidy AmtJUnit
Sales Price _Sales Prices (max.)
Affordable Unit
8% 1st TD
$ 220,000
$159,000
Moderate Income
$ 61,000
220,000
38,500
Very Low Income
181,500
Total Subsidy Required:
7 Moderate x $
61,000 -
$ 427.000
(If all twelve (12) are
5 Very Low x
181,500 =
907,500
provided on -site)
Total:
$ 1,334.500
This plan was denied by the Redevelopment Agency at their July 19,1993 meeting.
Staff is not recommending the use of H.O.M.E. funds to provide the 12 affordable housing
units required for this project. Presently, these funds are anticipated to be used to further.
meet the Production Housing deficit of 66 units required under Redevelopment Law
(Attachment No. 13) that occurred since the establishment of Redevelopment. Of the 66
units, 52 are in the Main -Pier Redevelopment Project Area.
Economy:
The recession of the early 1990's led to a substantial down turn in the California real estate
market which is still lingering. Reassessment of property values has led to a decline in the
amount of tax increment generated in the City's Main -Pier Redevelopment Project Area.
Agency's revenues have experienced further decline due to the Orange County bankruptcy
on December 6, 1994. This resulted in a 20% decline in the Agency's fund balance in each
of the project areas, and the low-income housing fund.
Environmental Status: N/A
Attachment(s):
2.
.... . i . 3.
DDA Staff Report Dated July 6, 1993
Entitlement Staff Report Dated July 6, 1993
Main -Pier Phase II/Coultrup DDA Cash Flow Analysis
RAA95-19.DOC - - 05131/95 4:05 PM
REQUEST FOR DEVELOPMENT AGENCY'X6TION
MEETING DATE: June 5,1995
DEPARTMENT ID NUMBER: 95-19
4. UST Cleanup Fund Program Memo Dated May 26. 1995
5. Housing Plan Staff Report Dated July 5,1993
6. Section 209 of DDA Site Remediation
7. Agency Cash Flow Analysis Main -Pier Project Area
8. Agency Cash Flow Analysis Huntington Center
9. Agency Cash Flow Analysis Main -Pier Low Income Housing
10. Affordable Housing Strategy RCA
11. Disposition and Development Agreement (on file in City Clerk's office)
12. Letter from .ion T. Coultrup, dated May 9, 1995
RAA95-19.DOC -6- 05/31/95 4:03 PM
ATTACHMENT NO. 1
ATTACHMENT #Z
REQUESTER CITY COUNCIL A( jIONI
REDEVELOPMENT AGENCY ACTION
APPROVED BY CITY COUNCI
19v.
cnY
ED 93 21
Date JOY 4993
Submitted to: honorable hlayorlChairman & City Council/Redevelopment Agency
Submitted by: Michael T. Uberuagn, City Administrator/Executive Director
Prepared by: Barbara. A. Kaiser, Redevelopment Director"
Subject: Disposition and Development Agreement between CouItrup Companies
& Birtcher Real Estate Limited and the Redevelopment Agency of the
City of Huntington Beach/Main-Pier Redevelopment Project Area
Consistent with Council Policy? M Yes [ ] New Policy or Exception
Statement of Issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachments
STATEMENT OF ISSUE:
Since July 15, 1991, the Redevelopment Agency staff has been in negotiations with the
Coultrup Companies for development of a condominium project and 40,000 sf
commercial/retaiUrestaurant project located at Main Street, Pacific Coast Highway,
Walnut Avenue, and Sixth Street. A Disposition and Development Agreement (DDA)
has been executed by Coultrup Companies, Birtcher Real Estate Limited and the Main -
Pier Property Owners to implement this proposed project.
BECS?N�1fE�VDED C• OUNCILLGENCY1IOl�:
1) Conduct a joint public hearing on the Disposition and Development Agreement;
2) Adopt City Council Resolution No. 6429, and Redevelopment Agency No. 240;
3) Approve the reallocation of $350,000 to be used for payment to Coultrup
Companies in compliance with the terms of the DDA. ($200,000 upon DDA
approval, $150,000 if Downtown Master Parking Plan denied);.
4) Direct the City Attorney to prepare a waiver and Release of Claims to be executed
by Coultrup Companies prior to release of the $200,000, but not later than 30 days
after approval of the DDA.
D001 �
%
W
AIX I :
The Redevelopment Agency has been attempting to develop a feasible plan for the
redevelopment of these two blocks for the last 8+ years. Extensive negotiations with
two different developers and the remaining property owners ended without success.
The Agency's last attempt began with the issuance of a Request for Proposals in the fall
of 1990. The RFP included an Owner Participation requirement, therefore, only
submittals including the participation of one or more existing property owners would be
eligible for consideration.
In July of 1991, the Agency entered into a 120-day Exclusive Negotiation Agreement
(ENA) with Coultrup Development Company and six of the Phase 11 property owners
for the purpose of negotiating a Disposition and Development Agreement (DDA).
Although the formal ENA expired in November of 1991, the Agency directed staff to
continue good faith negotiations, as long as progress towards culminating an agreement
was being made. The Coultmp Companies, Birtcher Real Estate Limited, the Property
Owners, and staff have agreed to all the terms in the attached DDA. The Coultrup
Companies and the property owners have entered into a General Partnership Agreement
for the development of Block 104 (Attachment No. 11 to the DDA).
The DDA calls for the proposed project consisting of approximately 40,000 sf of
visitor -serving commercial space, including a mix of retail, restaurant, and offices. All
of this visitor -serving commercial space will be located on Block 104 (bordered by
Main & Sth streets, Pacific Coast Highway, and Walnut Avenue). Approximately
20,000 sf will be housed in a new two-story structure with 100 linear feet of storefront
along Main Street. The remaining, approximate 20,000 sf will be located on Pacific
Coast Highway in a three-story structure, with 90 linear feet of frontage.
The residential element of the project is located in Block 105 (bordered by 5th & 6th
streets, Pacific Coast Highway, and Walnut Avenue), directly northwest and adjacent
to the visitor -serving commercial. The 80 condominiums will consist of various floor
plans to include 34 one bedrooms, and 46 two bedrooms, ranging in size from 838 sf -
1,290 sf. The average projected sales price is $248,000, with most units having ocean
views. The residential component not only enhances the economics of the project, the
influx of new residents downtown will provide much needed patronage to the shops and
restaurants in the off-peak season.
De_v_eloperLrrtnership_Obligations
1) Property Acquisition: Purchase Agency parcels for a total of $1,800,000 on
Block 105. Exchange one parcel on Block 105 for one parcel on Block 104, with
the Agency to pay an additional $99,000 to compensate the property owner.
kwd
2) Project Description: Develop a mixed -use project with approximately 40,000
sf in two commercial/office complexes along Main Street & PCH, an 80-unit
condominium project on Block 105, and related parking, as entitlements
specify.
3) Financing: Coultrup/Birtcher to provide financing for development,
acquisition, and construction of Block 105. The property owners are
responsible for providing financing for development and construction of Block
104.
4) Public Improvements: Developer to construct and pay for all offshe and onsite
improvements for Block 105, with the exception of curb, gutter, and sidewalk
adjacent to the Worthy parcel.
5) Hazardous Materials: Developer will bear the cost of its own investigation
and cleanup of parcels it owns. Developer may terminate if cleanup costs
exceed $125,000.
6) Property Owner Business Expenses: Partnership is responsible for allocating
$380,000 provided by the Agency to individual property owners for the purpose
of covering any and all relocation, down time, and potential goodwill costs.
7) Equity Sharing: Developer will share 50% of residential sales revenues
received above agreed upon threshold with the Agency (10% equity return, $3.2
million profit on sales).
8) Demolition: The partnership shall have demolished the existing commercial
structures on Block 104 at their cost (except the Lane parcel) prior to transfer
of the Agency and third -party parcels, and prior to the start of construction of
the condominiums on Block 105.
9) Partnership: Partnership documents between the property owners and
Coultrup Companies have been executed. Such documents define the
relationship and responsibilities between the property owners and Coultrup
Companies.
10) Guaranty: If the project is terminated because of the inability to finance
Block 104 andlor Block 105, Coultrup Companies will return to the Agency
$200,000 initially provided at the time of DDA approval. This provision is
backed by an unsecured Coultrup Companies guaranty.
3
Redevelopment Agency Obliention5:
1) Property Disposition: Agency to sell its parcel, (including Wimpi's parcel) if
acquired, to the developer for $1,800,000.
2) Public Improvements: The Agency is to construct, or cause construction of,
all offsite public improvements for BIock 104, as well as those curb, gutter, and
sidewalk improvements adjacent to the Worthy parcel in Block 105 (estimated at
$100,000).
3) Hazardous Materials: The Agency is required to bear the cost of investigation
and cleanup of any hazardous materials located on property currently owned
before sale of the site, and up to $100,000 on parcels to be acquired. After
disposition, the Agency is responsible to the extent of $200,000 for any
supplemental cleanup worked required on its property, with the right to
terminate if costs exceed $200,(M.
4) Development Fees: The Agency is responsible for paying to the city any
increase in development fees for a period of 10 months, after California Coastal
Commission approval of the Downtown Specific Plan/Downtown Master
Parking Plan (estimated at $200,000).
5) Business Expenses: The Agency is obligated to pay the partnership $380,000
to cover any and all relocation, down time, and potential. goodwill costs, plus
actual cost of relocating non -property owner commercial tenants (including
Wimpi's, if acquired), and all residential tenants (estimated at $250,000).
6) Parking: Downtown Master Parking Plan to be approved by the City Council
and Coastal Commission. Agreement will terminate if Plan is not approved.
7) Eminent Domain: The Agency agrees to consider use of its eminent domain
authority to purchase the Wimpi's site at its own expense, if necessary.
Further, the Agency agrees to consider use of eminent domain for any
partnership property owners' property that drops out of the deal, at the expense
of the partnership.
8) Affordable housing: Agency to assume responsibility for complying with the
affordable housing requirements under Redevelopment Law. The Agency
adopted the Replacement Housing Plan on July 20, 1992. The Affordable
Housing Plan is scheduled for City Council action on July 6, 1993.
9) Reimbursement: Agency to provide developer with $200,000 upon execution
of the DDA. Agency to provide Coultrup Companies an additional $150,000, if
agreement terminated due to failure to obtain Downtown Master Parking Plan
approval.
I,1
10) Financing: Agency to provide a maximum interest subsidy to the property
owners not to exceed $490,000 to be negotiated directly with the lender,
providing permanent financing for Block 104 only.
11) New Construction/Rehabilitation: Building shall be of new construction, with
exception that Agency shall consider requests for individual reconstruction for
the buildings owned by Mulligan, Draper, and Alfonso. The Agency, at its
discretion, will determine if the buildings are to be reconstructed, rather than
built new.
Public Benefits of the Proposed Project:
1) The DDA furthers the objectives of the Community Redevelopment Law, and
implements the Redevelopment Plan for the Main -Pier Redevelopment Project
Area.
2) The DDA provides for removal of blight and upgrade of two city blocks with
new development which will provide new property tax and sales tax revenues
and new employment opportunities.
3) The proposed project is the most cost-effective proposal submitted to the
Agency since redevelopment of the area was first proposed in 1984.
4) The project has tentative commitments for construction financing to complete
both the commercial and residential portions of the project.
5) The development team of Birtcher and Coultrup are experienced in the
development of mixed -use projects of the scope and magnitude as contemplated
in the agreement.
6) The DDA provides maximum opportunity for owner participation, and
minimizes the extent of property acquisition required to implement the project.
7) Development of the site completes the entryway to the downtown retail
corridor, and complements the city's investment in a new pier structure,
Pierside Pavilion, Pier Colony, Main Promenade parking structure, second
block rehabilitation, and other redevelopment projects.
8) The project provides for the comprehensive development of the site under one
master developer and one construction company.
5
Redevelopment Analysis: (Main -Pier Redevelopment Plan)
The general objective of the Main -Pier Project Area is to improve, upgrade, and
revitalize those areas which have become blighted because of deterioration, disuse,
economic, physical, and social maladjustments. The Coultrup/Birtcher project, as
proposed, meets the following objectives as defined in the Redevelopment Plan.
1) Eliminates blighting influences, including deteriorating buildings, incompatible
and uneconomic land uses, inadequate public improvements, obsolete structures,
and other physical, economic, and social deficiencies; improves the overall
appearance of streets, parking areas and other facilities, public and private, and
assures that all buildings are safe for persons to occupy.
2) Encourages existing owners, businesses and tenants within the Project Area to
participate in redevelopment activities.
3) Provides adequate parcels and required public improvements so as to encourage
new construction by private enterprise, thereby providing the city of Huntington
Beach with an improved economic base.
4) Provides adequate public improvements, public facilities, open spaces, and
utilities which cannot be remedied by private or governmental action without
redevelopment.
5) Provides construction and employment opportunities in the development of these
facilities, and provides employment opportunities in the operation of the
proposed commercial facilities.
6) Provides for relocation assistance and benefits to Project Area residents and
commercial tenants which may be displaced.
Removal of Blight/Improvement of Tax Base:
The two blocks located along Main Street and Pacific Coast Highway remain the two
most dilapidated blocks within the downtown area. The properties include vacant lots,
closed storefronts, seismically unsafe buildings, under-utilized properties, and
inadequate public improvements. The project, as proposed by Coultrup/Birtcher,
would provide for removal of these blighting influences and construction of new
residential, office, and commercial uses consistent with the Redevelopment Plan for the
area. The project would also complement the recently completed Pierside Pavilion and
Pier Colony complex located directly adjacent to the southeast.
Construction of new building swill provide an increased property and sales tax base for
the city, and lead to an increase in City and Agency revenue. In addition, new
6
employment opportunities will be created in both construction of the facilities and long-
term employment benefits in the commercial establishments.
Economic Analysis:
A Section 33433 Report has been completed and submitted by the Agency's economic
advisors, Keyser Marston Associates, Inc., in conjunction with completion of the
Disposition and Development Agreement (see attachment).
Currently, Agency investment in land acquisition, relocation, and hazardous materials
Remediation, stands at approximately $4,518,000. Additional land acquisition is
estimated at $729,000. Costs for relocation, hazardous materials remediation, public
improvements, and city fees total approximately $1,230,000, In addition, Block 105
predevelopment cost advance to Coultrup Companies is $200,000. The Agency's total
investment will, therefore, be approximately $6,677,000. In addition, the Agency has
contingent liability for an interest subsidy of $490,000 to the lender for the commercial
properties, or $150,000 to Coultrup Companies if the Downtown Master Parking Plan
is not approved.
The Agency's contribution will be reduced by the developer's payment of $1,800,000
for the land, and tax increment revenues of approximately $1.7 million. In addition,
the $200,000 payment to Coultrup Companies paid upon execution of the DDA will be
repaid to the Agency. Therefore, the Agency's net investment is approximately $3.6
million. This may be further reduced by any Agency participation in the sales proceeds
of the condominium units. The Agency's participation does not include any affordable
housing set aside funds that may be allocated to meet this requirement of the project.
The project will not proceed if a parking facility is required to be built. In that case,
the developer will be entitled to $350,000 in reimbursement only.
If the project were to proceed as planned, the following costs would be realized:
Project Costs:
Spent to Date
Land, Relocation, Toxics $ 4,518,000
Additional Land Costs 30.000
$ 5,148,000
1Y
Additional Costs $ 2,019,000
Developer Land Payment-1,800,000
Developer Reimbursement 200,000
$ 19,000
The Redevelopment Agency maintains the right to terminate the DDA if, within 30
days after the approval of the Downtown Master Parking PIan, the Agency at its
discretion, determines it does not have sufficient funds to complete its obligations under
the DDA.
7
The target market for the residential units of the project remains at approximately
$248,000, which does well in sales throughout the city. Units with prices at $300,000
and above have been slow in selling along the Huntington Beach coastline.
As a comparison to this Coultrup/Birtcher proposal, the previous proposal in
negotiations with Griffin/Related Properties was identified as "Plan B-3." After
analyzing the cost of the "Plan B- 3," it was determined that the cost of owner
participation for this approach would not be feasible. The analysis performed by an
independent economic consulting firm (Keyser Marston) indicated that over the Iife of
the project, the cost benefit of this approach to the Agency, net of all returns, was an
approximate loss of $16 million.
Financing Commitment:
The owner participants are currently negotiating with Liberty National Bank to provide
Small Business Administration (SBA) loans for construction financing for the
commercial storefronts along Main Street. Owners of property along Pacific Coast
Highway will most likely be financed directly by the lender since they do not meet the
minimum owner occupancy standards of SBA. According to bank representatives, they
are optimistic that financing arrangements will be completed.
Coultrup has brought in Birtcher Real Estate Limited as general partners to replace the
KN Group. Birtcher is interested in Huntington Beach for a number of reasons. Their
corporate objectives include expansion into the residential area of development. They
see a potential in Huntington Beach for developing a number of mixed -use projects in
prime locations along the coastline. Birtcher has substantial experience in working with
redevelopment agencies throughout California, and they have an excellent reputation in
terms of project quality and completion.
The addition of the Bi tcher team substantially enhances the financial resources
availaW for project financing, and increases the likelihood of project completion.
Birtcher will work with Mitsui and Company (USA) on the development of this
project_ Birtcher's financial relationships include partners such as Aetna We Insurance
Company, Citicorp Real Estate, Inc., General Electric Investment Corporation, Mutual
Life Insurance Company of New York, Teachers Insurance and Annuity Association,
and cities throughout southern California.
Development Team:
Coultrup Companies was formed in 1984, and is a full -service real estate development
firm. In conjunction with the former Coultrup Construction Inc., the company has
completed projects in Huntington Beach, Long Beach, and Seal Beach. The company
specializes in the acquisition and development of apartment, condominium, and office
buildings.
8
k-.10'
Birtcher Real Estate Limited, is a joint venture between Birtcher and Mitsui and
Company (USA) Inc., for real estate development on the Pacific Coast. Birtcher is the
19th largest developer in the United States, based in Laguna Niguel, with 6.5 million
square feet under development. Mitsui and Company is an international trading
company based in New York with a 1990 total revenue of $27 billion. The joint
venture will emphasize single and multi -family developments, marking a return to
residential building for Birtcher which has been concentrating on commercial
development in recent years. _
Owner Participation:
The DDA, as proposed, includes the participation of eight property owners, covering
six separate properties. Only one property is contemplated for purchase at this time
(Wood/Sarrabere/Goodman). Owner participation is strongly encouraged in the
redevelopment plan for the Main -Pier Redevelopment Project Area. This high-level of
owner participation significantly reduces the cost of the project to the Agency. The
agreement also limits the Agency exposure to the participating owners for relocation,
business down time, and goodwill losses to approximately $380,000. Further each
property owner is responsible for the financing and construction of their portion of the
new buildings. Failure to secure financing by each of the property owners and Birtcher
is a reason for terminating the Partnership Agreement and Disposition and
Development Agreement. It is intended that the Wood/Sarrabere/Goodman property
will be acquired for integration into the condominium project. The site is currently
developed with Wimpi's food stand. Resolutions of Necessity were adopted by the
City Council on November 2, 1992, for this property.
Completion of Downtown Entryway:
Completion of the proposed Coultrup/Birtcher project would provide for revitalization
of the two remaining major blocks within the downtown area. The Agency and City
have made substantial investments in public facilities such as the new pier, surfing
museum, art center, Main Street public improvements, new water. and sewer lines, and
assistance to developers in construction of commercial and residential buildings,
including the Abdelmuti project at 101 Main Street. Approval of the Coultrup/Birtcher
DDA would significantly complete the master plan for downtown as contemplated
many years ago.
The project in its size and scope attempts to be consistent with the "village concept" for
the downtown. The Plan preserves the integrity of a Main Street retail and commercial
corridor, while providing residential buildings to support the commercial corridor. The
Master Plan for the downtown core is intended to be compatible with the adjacent
transitional areas and the surrounding residential neighborhoods. Outside of the
9
downtown core, the plan calls for commercial uses which are compatible with the
adjacent residential uses, and also enhances and reinforces the primarily residential
character of the area. The establishment of secure private residential uses adjacent to,
but adequately buffered from the public areas is one of the objectives of the plan.
In addition, the project preserves the historic Worthy building for future renovation, a
primary concern identified during environmental review of the project. Fifth Street is
maintained as a public street to preserve view corridors and access to other businesses
located further inland along Fifth Street.
Comprehensive Development:
The advantage of the Coultrup proposal is that one master developer and one master
contractor will be used to develop both blocks within the project. This concept
provides for greater cost efficiencies and greater assurance that the project will be
completed.
Related Issues:
rldne - Currently under review is the Downtown Master Parking PIan which.will
substantially affect the commercial parking requirements for the downtown area,
including the Coultrup/Birtcher project. It is anticipated that this Master Plan will be
considered by the Coastal Commission in early 1994.
Attached is a report (Exhibit A) from Ron Hagan, Director of Community Services,
related to the past operating performance of the Main Promenade Parking Structure.
The report indicates that construction of a second, parldng structure would be financially
infeasible due to current usage of the existing parking structure.
Commercial Feasibility on P .H - At the request of the City Council, Keyser Marston
Associates was requestecT to prepare a brief analysis of the feasibility of commercial
development as part of the residential project located, along PCH, between Fifth &
Sixth streets. Their report is attached (Exhibit B), and concludes that a mixed -use
project in this location is not feasible.
History of the Development Site:
Since late 1984, the Agency has been attempting to put together an Owner Participation
Ag reement/Di sposi don and Development Agreement with property owners and various
developers for the Main -Pier Phase II project. The proposed mixed -use project consists
of the two blocks bordered by Main & Sixth streets, Pacific Coast Highway, and
Walnut Avenue.
10
After concluding a Request for Proposals process for the Main -Pier Phase II project on
March 24, 1986, the Agency approved a Negotiation Agreement with the Main -Pacific
Property Owners.
The original proposal submitted by the property owners and the developer of record at
that time, A-M Equities, called for a mixed -use project consisting of 275 residential
units and 100,000 sf of commercial. On May 5, 1986, the Agency approved staffs
recommendation that the proposed Development Concept be revised to reduce the
project density (to approximately 240 units), and that plans and a pro forma be
submitted reflecting this change. The Agency also directed • staff to require the
developer to submit a duly executed Agreement between the property owners and A-M
Equities, setting forth the rights and obligations of each party by May 19, 1986, later
extended to June 2, 1986.
A-M Equities was not successful in putting together the above -described program, and
was succeeded by a new developer, Griffin/Related Properties. Griffin's original
proposal consisted of 220 residential units and 35,000 sf of new retail space. The final
proposal known as "Plan B-3," consisted of 103 residential units and commercial /retail
office space. An economic analysis of the "Plan B-3," demonstrated the infeasibility of
pursuing this plan because of the bottom -line, negative cost of approximately
$16,000,000.
On September 17, 1990, the Redevelopment Agency authorized staff to prepare and
issue a Request for Proposals for a two -block, mixed -use development for the Main -
Pier Phase II project. This direction was given after previous negotiations with prior
developers and the property owners were not successful. Development parameters
were included in the RFP.
Alternative actions considered by the Agency, but rejected, included issuing a RFP to
all property owners, as well as all interested parties or negotiating with property
owners, for the rehabilitation of their existing buildings.
On December 11, 1990, the city's Community Development Department determined
that the existing building at 101 Main Street was "unsafe to occupy" because of the
loosening and falling of bricks from the facade, and was therefore, vacated and closed.
At that time, the property owner revived old plans that called for the rehabilitation of
the existing two-story structure.
Allowing the property owner to proceed with rehabilitation would have ensured that the
City/Agency would not receive the street and plaza dedications and setbacks as already
provided across the street on the Pierside Pavilion project. Further the owner would
have been permitted to retain the then existing non -conforming second story apartment
uses.
11
V �4d'
Therefore, the Agency directed staff to negotiate an agreement with the property owner
that would enable the Agency to achieve its goals of the Amin -Pier Redevelopment
PIan, and yet be an economically viable plan for the participant to develop. The
Agency successfully concluded negotiations with Mike Abdelmuti for development of
his corner property on May 28, 1991.
Two proposals for the balance of the two -block site were submitted to the
Redevelopment Agency on December 26, 1990, for the Main -Pier Phase II project -
Main -Pier II Property Owners Association, in partnership with Coultrup Development
Company and Sheldon L Pollack Corporation. The Pollack proposal did not include
owner participation. The Coultrup proposal includes all property owners (Mulligan,
Johnson, Cracchiolo, Bagstad, Mase, Draper, Alfonso, and Geilim), except Lane and
Wood/Sa.rrabere/Good man.
According to the developer, Wood/Sarrabere/Goodman is not interested in participating
in a development of the block and they did not respond to the RFP. The Lane's, in a
separate letter to the Agency, indicated that they plan their own extensive
improvements to their property.
On July 15, 1991, the Agency approved an Exclusive Negotiation Agreement with the
Coultrup Development Company, in partnership with the Main -Pier Phase II Property
Owners Association, to terminate on November 15, 1991. Although the November 15
deadline for completion of a DDA was not met, the City Council directed staff to
continue negotiations, and provided direction related to these negotiations on several
occasions.
Reallocation of funds previously approved in the 1993-1994 fiscal year budget for
Main- Pier Phase Ti/Coultrup demolition, relocation and toxic remediation costs.
R TIVE AMON:
1) Continue the public hearing and consideration of the DDA.
TT HiTE :
1) Property Owner Site Map.
2) RedeveIopment Agency Resolution.
3) City Council Resolution.
4) Health & Safety Code Report 33433.
5) Disposition and Development Agreement.
6) Exhibit A.
7) Exhibit B.
MTU/BAK/KBB:ls
12
BLOCK 105
Worthy
Sixth
Street
Main -Pier Phase 11
Existing Property Owners
Walnut Avenue
Fifth
Street
Pacific Coast Highway
®Redevelopment
Agency
BLOCK 104
Coultrup Abdelmuti
Property Owners Development Company
Main
Street
Not to SwIs
Nov 11, 1992
1-- of A L-
yGf
SUMMARY REPORT PURSUANT T6/
c,.
SECTION 33433 �� •��`'
of the
CALIFORNIA COMMUNITY REDEVELOPMENT LAB
on a
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,
COULTRUP COMPANIES,
MAIN PIER PHASE II PARTNERSHIP,
AND BIRTCHER REAL ESTATE LIMITED -
This summary report has been prepared for the Huntington Beach
Redevelopment Agency ("Agency") pursuant to Section 33433 of the
California Health and Safety Code. This report sets forth certain
details of the proposed Disposition and Development Agreement
("Agreement") between the Agency, Coultrup Companies, Main Pier
Phase II Partnership (Property Owners) and Birtcher Real Estate
Limited (BREL). The Agreement requires the Property Owners to
develop the privately owned portion of Block 104, bounded by Main
Street, Walnut Avenue, 5th Street and Pacific Coast Highway with a
mix of commercial uses. The Agency dust purchase the privately
owned parcels on Block 105, bounded by 5th Street, Walnut Avenue,
6th Street and Pacific Coast Highway to allow for BREL to construct
80 to 90 condominium units. The proposed residential and
commercial development is located in the Main Pier Redevelopment
Area in the City of Huntington Beach. This -report describes and
specifies:
1. The cost of the proposed agreement to the Agency,
including relocation costs, site clearance costs, toxic
remediatibn costs, infrastructure costs and public
parking costs;
2. The estimated value of the interests conveyed, determined
at the highest uses permitted under the Redevelopment
Plan; and
1
3. The purchase price to be paid for the interests being
conveyed.
This report and the proposed Agreement are to be made available for
public inspection prior to the approval of the Agreement.
A. SALIENT POINTS OF THE AGREEMENT
1. groperty Owner Responsibiliti--s
Under the proposed Agreement, the Property owners have the
following Block 104 responsibilities. These responsibilities
will be fulfilled by a partnership comprised of the various
owners of the Block 104 properties and Coultrup Companies:
a. The Property Owners will demolish the existing commercial
structures on Block 104.
b. The Property Owners will design and develop Block 104
with 47, 500 square feet of commercial buildings comprised
of retail and office uses, respecting the separate
ownership of the parcels on Block 104. The commercial
development will be an integrated complex in conformance
with the Main -Pier Project Area Plan.
C. The Property Owners are responsible for all on -site
improvements on Block 104.
d. The Property Owners must contribute to the toxic clean-up
costs incurred on Block 104, to a maximum of $125,000.
2. PREL Responsibilities
Under the proposed Agreement, within three years of DDA
execution, BREL and Coultrup Companies must fulfill the
following Block 105 responsibilities:
a. BREL agrees to purchase the 71,452 square foot parcel
from the Agency for $1.8 million.
b. BREL is responsible for demolishing the existing
improvements located on the Block 105 properties
currently under private ownership.
C. BREL agrees to construct 80 to 90 condominium units and
a subterranean parking garage with sufficient spaces to
raeet the City code.
d. BREL is responsible for all on -site and off --site
Improvements on Block 105, except that portion adjacent
to the Worthy Property, to be paid by the Agency.
e. As a part of the land acquisition payment, BREL has
agreed to incorporate a participation formula which
allows the Agency to share in the project's net profits.
The participation formula will be based on the project
revenues generated in excess of the approved development
costs, a 10% annual return on equity investment and a
threshold profit of $3.2 million. Thereafter, the Agency
would share in 50% of the subsequent revenues generated
by the Block 105 project. The proposed participation
formula will be impacted by fluctuations in the allowable
development costs, the sales revenues and the time period
required to sell the units. Based on current development
cost and sales revenue estimates, the Agency will, Bo
receive any participation income. Only if the project is
significantly more successful than is currently
anticipated, will the Agency receive any participation
income.
3
f. At the time Block 105 is conveyed, BREL must repay the
Agency advance of $200,000 in predevelopment expenses.
If the agreement is terminated, Coultrup Companies shall
be responsible for the repayment.
3. Agency Responsibilities
After the completion of the Block 104 development, and upon
commencement of Block 105 development, the Agency is
responsible for and shall commit the following to the project:
a. Exchange Agency owned property, including 39.5 feet of
street, frontage plus $99,000 for the Cracchiolo property
that includes 50 feet of street frontage.
b. Purchase the third party parcel necessary to complete the
assemblage_of the Block 105 site. The acquisition costs
are estimated at $63a,000, based on an appraisal
conducted February 1992.
c. Finance the public improvements required for Block 104,
and the off --sites required around the perimeter of the
Worthy property, estimated at $100,000.
d. Compensate the Block 104 Property Owners and tenants for
$630,000 in relocation expenses.
e. Pay any increased City permits and fees costs imposed
between date of Agreement approval and ten months after
the approval of the Downtown Specific Plan by the
California Coastal Commission. This cost is estimated at
$200,000.
f. Advance $200,000 as reimbursement for Block 105
predevelopment expenses.
4
U.
g. Finance the investigation and clean-up of toxics on the
Agency -owned parcels on both Block 104 and Block 105, not
to exceed $200,000. As a separate obligation, the Agency
shall pay any necessary clean-up costs on the Sarrabere/
Wood/Goodman parcel, in an amount equal to'$100,000.
h. Provide housing units to meet the State mandated
inclusionary housing requirements.
COST OF AGREEMENT TO AGENCY
The estimated costs of the Agreement to the Agency are as
follows:
Land Acquisition, Relocation and Toxic
Remediation Costs Already Expended
$4,518,000
Land Acquisition (Block 104)
99,000
Land Acquisition (Block 105)
630,000
Block 104 and 105 Public Improvements
100,000
Relocation Costs
630,000
Increased City Permits & Fees
200,000
Block 105 predevelopment cost advance
200,000
Toxic Remediation Costs - Agency Parcels
200,000
Toxic Remediation Costs - Third Party Parcels
10Q,000
Total Costs to Agency
$606770000
In addition, the Agency has agreed to accept the
responsibility for two contingent liabilities:
a. In the event the Downtown Master Parking Plan is not
approved, the Agency will reimburse Coultrup Companies
for $150,000 in predevelopment expenses.
b. It is anticipated that the Block 104 development will not
proceed until the Fall of 1994. At that time, the
Property Owners may incur interest costs in excess of the
8% interest rate currently being estimated for the Block
104 commercial improvements. The Agency has agreed to
�W)
fund the net present value of the interest increase up to
a maximum of two percentage points. Assuming that the
maximum level of assistance is provided, the cost to the
Agency is $490,000.
The maximum costs to the Agency after inclusion of the
contingent liabilities and offsets for the public revenues,
are estimated at:
Total costs to Agency $6,677,000
Plus: interest Rate Write -down 490,000
Plus: Block 104 Predevelopment Cost Reimbursement 150,000
Total Costs Including Contingent Liabilities $7,3178000
(Less) BREL Land Payment for Block 105 (11800,000)
(Less) BREL reimbursement for Block 105
predevelopment advance (2001,000)
(Less) 50% Equity Share in Net Profit (0)
Net Costs to Agency $5,317,000
(Less) PV of Property Tax Increment Revenues (1,720,000)
Net Costs to Agency After Tax Increment $3,5971000
C. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN
The terms of the Agreement call for the Property Owners to
maintain ownership of Block 104, and for the Agency to convey
Block 105 to BREL. The determination of the estimated value of
the interests to be conveyed BREL was made by R.P. Laurain &
Associates in an appraisal dated September 9, 1991. The
appraisal identified the highest and best use permitted under
the Redevelopment Plan as a high density residential project.
The appraisal determined that the fair market value for that
use is $4.65 million.
6
D.
PURCHASE PRICE PAID AND REASONS FOR DIFFERENCE IN FAIR MARKET
VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPHENT PLAN
As detailed in the September 9, 1991 valuation analysis
performed by R.P. Laurain & Associates, Inc., the highest and
best use of the Block 105 site is a high density residential
development. The fair market value of the subject site is
estimated at $4.65 million, or $65 per square foot of land
area. However, the Agency has limited the scope of
development to 80 condominium units. This reduction in
density diminishes the supportable land value to $1.8 million.
The purchase price plus the participation in net profits
represent fair compensation for the subject site.
The 33433 report for the Coultrup project estimates land
acquisition, relocation and toxic remediation costs already
expended as $4,158,000. These costs are comprised of:
and Acctuisitio
Tharp
Energy
Conley
Shupe
Omohundro
Terry
city
city
Total Land Acq.
Demolition/Toxics
Relocation
Total Sunk Costs
$ 352,500
176,500
352,500
295,625
11300,000
103820000 (77% of costs - balance to
63,905 Abdelmuti)
21,448
$3,944,478
573,500
$4,517,978
7
The contingent liability to reimburse the Property Owners for
$150,000 in Block 104 costs is comprised of the following:
If the parking plan is not approved 150,000
$150,000
8
1..�'t to City to lose MPII
Cost are measured in money and much, much more:
Money: 1. Every year of delay $130,000 in annual tax increment is lost
2. Coultrup owes the Agency $200,000 but this is forgiven if the MPII is not
approved.
3. Agency and City has spent hundreds of thousands of dollars in attorney
fees, consultants, staff time and more just in the last five years Coultrup
has been involved, all this will be lost.
4. Future possible projects will cost much more. With Cracchiolo alone on
Block 105 it will be very expensive to purchase him if he will even
cooperate. History will repeat itself if another project is attempted but
this time you have feed -up property owners and a city with no money.
5. Agency/City has no money by it's admission. No funds and a limited staff
spells no future hope for MR.
6. It costs the Agency/City a great deal to cancel MPII vs. a reasonable
investment from N1PII resources to approve it
Private Property Owners on Block 104:
1. This loose mix of personalities are spent both emotionally, financially and
physically and will not be there again for the City. They have
given their all for 15 years and know that they now have a deal.
2. They do not trust the City and will have no incentive once M II is gone.
3. City losses the right to condem along with many other negotiated terms.
Public Benefits:
1. All set backs, public amenities, open. space, view corridors and a two block
master planned project are lost. Never will a piece meal bit by bit
approach of rehab every work, history has proven so.
2. The completion and bringing together of the downtown is lost. The plan the
tax payers, residents and local businesses bought into is lost. The
entrance to the City at PCH ar.d the Pier will continue to have one big
black eye.
3. When a pine or project is not completed it has little value. The reverse is
true when completed. The synergism is complete, the whole is greater
than the sum of its parts.
4. Blight and unsafe conditions remain. The public resists and they wonder why.
Approvals:
It took three years to get City approval with signed contracts and another 1 1/2
years to get California Coastal Commission (CCC} approval. The prior council approved MR
by a clear majority and the CCC overwhelmingly approved and embraced MPII.
Agenda for June 14, 1995
I. Funding sources for the Affordable Housing obligation of the Agency
II. City's best alternative for the site is ND'II
a. what is lost if not approved
b. It will forever cost the City more not to approve NlPII
III. Letter from 3rd Block West
IV. All parties ready to perform
i�.W' -711&t jq5-
Approve NOR
City's best and only choice:
1) A 15 year process with the Agency, City, private property owners (PPO's),
developers and consultants has proven that MPII is the highest and best
use.
2) MPII is financially feasible, requires no general funds, is approved by the City
Council, approved by the California Coastal Commission and all parties are
contractually signed.
3) From a pool of funds of almost $3,000,000 the Agency has many options for
funding it's affordable housing obligation. Several simple options are:
a. $300,000 from soils clean up reimbursement from MPH s� •,
b. $200,000 Agency project fee obligation can be waived by the —
City or deferred and paid back from tax increment.
$500,000 This total is $100,000 more than needed
If preferred
c. $201,000 Agency is required to put aside 20% (set aside funds)
for affordable housing. $1,005,000 present value of
tax increment x 20% = $201,000
$701,000 This total is $301,000 more than needed
4) Do to the uniqueness of the MPII site it has required subsidy by the Agency.
Most of the sunk cost were invested prior to Coultrup. It has always been
the Agency's clear understanding of the subsidies necessary to encourage
development of the MPII area. All costs to date are sunk and aU future cost
are offset by various revenues.
5) MPII is a financial asset to the City that %%i1 provide an increased tax increment.
6) Timing is everything. Currently the Private Property Owner's (PPO's),
Coultrup, Birteher and the Agency are all contractually signed and
committed to MPII. This fragile window may not come again for many
years if at all. The PPO's are willing, under this agreement, to build new,
expand the commercial square footage, provide set backs, provide open
space and take the risk with greater debt.
7) The Private Property Owners are held together by the signed contracts which
provide for, among other things, condemnation if needed. Condemnation
and many other benefits for all parties, that took years and hundreds of
thousands of dollars to achieve, will be lost and not recoverable. These
4l+Z1'ta
individuals will not cooperate with any alternative project. They are spent
emotionally, financially, physically and have invested enough time for ten
projects over the Iast 15 years, they can invest no more.
8) By any analysis it is clear that the contract and approved plan in place is far
more valuable than a future hope that something better will come along_
After all, the future hope has drug on now for 15 years, at Ieast 3
developers and many, many different plans. The Agency's own consultant,
Kathy Head, has stated that W11 is the highest and best use that has
been designed to date and doubts that there is a better alternative.
9) Delays have already cost the City several years of tax increment at $130,000 per
year. Every delay is another $130,000 lost annually. Also the sunk cost
invested by the Agency continues to de -value due to loss of interest on
investment and the time value of an opportunity lost.
t r
10) Failure to complete the downtown is a failure to encourage tourist and
residents to use the area. Other business suffer as well. Many business are
there today on the promise that the downtown would be completed.
11) CoultrupBirtcher have kept close tract ar:d analysis of the market and are
certain that average minimum sales prices for the condos will be $239,000.
They are financially secure and prepared to invest $4,500,000 in risklequity
capital and procure a $10,500,000 construction loan for the development.
12) If MPH is not approved the blight and unsafe conditions will remain. The main
window to the City will remain a black eye. Crachiolo will remain on Block
105 and will cost the Agency over $1,000,000 to buy out. With no
resources the Agency will be unable to move on any plan for the area. Any
other alternative will cost the Agency significantly more money. All the
other Agency efforts including WI, The New Maxwells, New Pier and
surrounding area, 3rd block west, the parking structure with commercial,
standard market improvements, AbdeLmuld building, post office and gym
directly behind, and 2nd block improvements will all be for not if MPH the
Center piece and final project is not completed.
13) Coultrup and the PPO's have done what the City has asked, spent hundreds of
hours and hundreds of thousands of dollars. It is the moral, legal, ethical
and financially correct decision to approve MPII.
14) It is clear that the best interest of the City is served with the approval of MPR.
0
_kJ Mike Roberts
P.O. Box 536, Iuntington Beach, CA 92648
714 960-2560
July 13, 1995
Tom Harmon
Council Member
City of Huntington Beach
2000 Main Street
Huntington Beach, Ca 92648
Re: Main Pier Phase Il and Third Block West
Dear Mr. Harmon:
Via Facsimile:
536-5233
536-4037
At the request of Jon Coultrup, I am writing this letter to apprise you of several facts about the Third
Block West project:
We have our equity money investment in place and have been earnestly at work preparing the final pm -
construction phase of this project since December of 1994.
The Project as presently planned has approximately 40,000 sf of retail and 68 residential condominium
units and is Iocated on the block bound by Olive, Main, orange and 5th Streets
Our lease rent for the commercial spaces per square foot per month will be between $2.25 NNN up to
$3.50 NNN at street level. Upstairs the rate will be SI.50 through S1.85. The projected sales prices for the
residential units vary from SI59,900 through to $349,900, with the average at $230,000 per unit.
The Third Block West condominiums vary in size between 1,113 sfto 1,675 sf. The average size will be
about 1,200 sf. This large average occurs because of the number of loft units on the third floor.
Despite the relatively high price, we feel our mix and pricing will be competitive with the general market
and specifically with the Main Pier Phase II project. We are careful with how we position ourselves because the
MITI project does have an excellent head-on ocean location and many excellent amenities we cannot provide due
to our relatively small `footprint" far our condominiums. The MPII price at approximately $240,000 per unit is
very nearly the same as ours, however, their units are a bit smaller, averaging about 1,100 sf.
We plan to be open and selling in Spring of 1997, barring any delays. We expect we will be one year
ahead of the MPII project, so we will avoid some competitive overlap. If both projects ran simultaneously, I
would like it because together we would be drawing more visitors and the added exposure will assure a quicker
sell -Out. The buyer would also have more choice.
I hope the foregoing is helpful in encouraging your support of the MPII project.
Sincerely,
Mike Roberts
L95-845
r 10I
KEYSER MARSTON ASSOCIATES INC.
300 SourH CnAmo Avsmus, Surra 1480
Los ANCLLu, CAt.rromm 90071
213/622-8095rAx 213/622-5204
MEMORANDUM
TO: Mr. Keith Bohr, Project Manager
Huntington Beach Redevelopment Agency
FROM: Keyser Marston Associates, Inc.
SUBJECT: Economic Analysis:
Phase li - Block 105 Condominiums
DATE: June 29, '1995
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In accordance with your request, Keyser Marston Associates, Inc. (KMA) has performed a
financial analysis of the Block 105 condominium project to be developed by Coultrup
Development Company (Coultrup). The purpose of the KMA analysis is to determine the
financial feasibility of the project as currently proposed, given current construction costs,
financing criteria and achievable market sales prices.
In conducting the analysis, KMA performed market surveys of new attached projects and
recent condominium resales for comparable projects in the vicinity of Block 105. Using a
pro forma analysis, KMA calculated the developer profd generated by the project given the
estimated development costs and the achievable market sales prices. In addition, KMA
calculated the sales prices which would have to be achieved in order for the developer to
receive an appropriate market return, and for the Agency to receive any participation
revenues.
Development Costs
The development costs utilized in the analysis are based on the costs submitted by
Coultrup and further verified by KMA in analyses conducted in 1992 and 1993. The major
cost components can be summarized as follows:
�W)
Page 2
1. Land acquisition costs total $1.8 million, based on the executed Disposition and
Development Agreement (DDA).
2. Based on the site costs utilized in previous analyses, a $329,000 allowance was
provided for off -site improvements. The site work costs have been estimated at
$5,000 per unit fora total of $400,000. Demolition and site clearance costs are
estimated at $196,000.
3. Building shell costs are estimated at appro)amately $71.50 per square foot of gross
building area.
4. Permits and fees costs are provided at $8,800 per unit
5. Interest during the 12 month construction period and 26 month absorption period
(assuming 3 unit sales per month) are calculated assuming a 9% interest rate and a
12% return on equity, assuming 60% of the costs are debt financed.
As can be seen in Table 1, the direct construction costs for this project are estimated at
$8.03 million. When the land costs; financing costs, and cost of sales are included, the
total development costs are 315,305,000, or $191,300 per unit.
Wrket Survey
New Proiects
K111A surveyed new condominium developments in the coastal Huntington' Beach to
determine the achievable sales prices and absorption levels. Residential New Home
Trends was used to identify five condominium projects in Huntington Beach that are
currentiyfor sale or recently sold out The five projects are outlined on Table 2, and can be
summarized as follows:
• Pierhouse condominiums are located at 1200 Pacific Coast Hwy. This 105 unit
project was built in 1989 and was operated as an apartment rental project until
1993. Sales began in June of 1993 and the project sold out in March of 1995.
The project averaged 4 to 8 sales per week until November of 1993, with an
overall average sales rate of 5 units per month. The asking price of these units
ranged from $139,900 to $197,900. However, it should be noted that the
property is subject to an 85 year ground lease, which requires the unit owners to
pay a monthly ground lease fee. This fee has a net present value cost of
$29,900 per unit. Thus, the effective safes prices for the units range from
$169,800 to $227,800 per unit
KEYS ER M ARSTON ASSOCIATES INC.
w
Page 3
Pacific Park Villas is a 22 unit complex which began sates in October of 1994.
Located at Talbert and Beach, this project consists solely of 2 bedroom units.
The asking price of these units range from $174,900 to $209,900. These
townhouse style units have sold at a rate of 1.8 units per month. The project has
sold 14 of the 22 units.
• Surfcrest is a 115 unit townhouse complex that opened in October of 1994. It is
located at Seaport and Palm Avenue. The project consists of two and three
bedroom units with asking prices ranging from $272.750 to $355,750. The
project has averaged 3 sales per month since opening in October of-1994. and
24 of the 115 units have been sold.
Villa Milano is a 33 unit complex located near Warner and Bolsa Chica. The
project consists of 2 bedroom units, with asking prices ranging from $179,000 to
$259,950. The project began sales in January of 1993 and 18 of the 33 units
have been sold, at a rate of .6 units per month.
+ Huntington Harbor Bay is a 36 unit complex located at Warner and Edgewater
Lane. The project consists entirely of 2 bedroom units, and the prices for these
single story flats range from $244,500 to $390,500. Located approximately 112
mile from the coast, this complex has views of Huntington Harbor and the ocean.
Since opening in June of 1991, the project has sold units at a rate of .6 units per
month and has sold 28 of the 36 units.
Of the projects surveyed, the one bedroom units range in size from 800 to 1,000 square
feel, and range in price from $198 to $228 per square foot. The two bedroom units
range in size from 1,250 to 2.160 square feet, and range in price from $125 to $181 per
square foot. On a per square foot basis, Huntington Harbor Bay and Pierhouse has the
most expensive units, with prices ranging from $159 to $228 per square foot
Of the new condominium projects surveyed. Pierhouse is considered the most
comparable to the subject property due to the size of the units, location, and views.
This project was absorbed an average rate of 5 units per month. Surfcrest and Pacific
Park are the newest projects to come on the market, and have experienced absorption
rates of approximately 3.0 and 1.8 units per month, respectively.
Condominium Resales
tM also obtained resale information for five projects in close vicinity to the subject site, as
shown on Table 3. Resale information was obtained from Pier Colony, Pierhouse,
Townsquare, Huntington Bay Shore and Villas Del Mar. In summary, the survey indicates
K E YSER M A RSTON ASSOCIATES INC.
Page 4
that one bedroom units have resold for $132,500 to $176,000, or $159 to $223 per square
foot The two bedroom units have sold for $166,000 to $224,000 or $158 to $183 per
square foot
Subject Site Pricing
Based on the two market surveys, and assuming sales do not commence for two years,
KMA projects the following prices for the project:
Price
Square- Fee
Price/SF
1 BD + Den
$168,000
838
$201
1 BD + Den
$175,000
959
$185
1 BD + Den + View
$185,000
959
$190
2 BD
$195,000
1,076
$181
2 BD_
$205,000
1,152
$178
2 BD + Den + View
$230,000
1,290
$178
KMA projects that the achievable market prices wilt range from $168,000 to $230,000
for the proposed project It is assumed that the proposed project will experience a
similar absorption rate to Pierside and Surfcrest, which both achieved strong sales
performance. For the purposes of this analysis, an absorption rate of 3.0 units per
month is utilized.
Sales Revenue and Profit Analysis
Based on the projected sales prices ranging from $168,000 to $230,000. the average unit
price 1s $191,250. The total sales revenue Is projected at $15.3 million, as shown in Table
4. As shown on Table 5, based on revenues of $15,300,000 and development costs of
$15,305,000, the costs exceed the sales revenue by $5,000. Therefore, no profit is
generated.
Change in Project Economics
The project economics and resulting conclusion regarding the projects financial feasibility
profit level have changed since Kl!VIA's original analysis in August 1992. The original
analysis projected that the developer would receive a profit of $3.2 million from the project
The changes in the projects economic characteristics are:
• The achievable sales prices have declined since INNs 1992 analyses due to
market factors. KMA projected an average sales price of $237,000 per unit in
August of 1992, versus the currently estimated average prig of $191.250 per unit
K EYsE R M A RSTON ASSOCIATES INC.
NJ
Page 5
KMA had previously assumed an absorption period of 15 months, assuming sales of
appro)amately 6 units per month. Based on the current absorption and sates rates
of units in comparable projects, KMA has projected a 26 month sales period, which
equates to average absorption of 3 units per month.
Given the prolonged sales period, the interest calculated during construction and
absorption has increased by appro)amately ±$950,000.
REQUIRED SALES LEVELS
KMA performed an additional analysis to determine the sales prices that would have to be
achieved to provide the developer with an adequate return given the inherent risk of the
project This was done by adding a 15% threshold profit to the estimated development
costs to arrive at the total project costs, which can be summarized as follows:
Development Costs $15,305,000
Developer Profit @ 15% of Costs 2 295 000
Total Project Cost $17,600,000
Cost Per Unit $ 220,000
As can be seen in the table above, the units would have to sell for an average price of
$220,000 for the project to achieve financial feasibility. If the achievable sales prices are
any lower, the project would a&bit a feasibility gap and the developer would not receive a
market rate profit
A participation formula is contained in the DDA which allows the Agency to share in the
projects net profits. The participation formula is based on the Agency sharing in 50% of
the net revenues after a 10% annual return on equity investment and a threshold profit of
$3.2 million. The project vmuld have to sell at an average sale price of approximatety
$231,000 per unit in order for the Agency to receive any participation income, which is
calculated as follows:
Development Costs $15,305,000
Threshold Developer Profit 3,200,000
Total Project Cost $18,507.000
Cost Per Unit $ 231,300
K EYSE R M A RSTON ASSOCIATES INC.
Page 6
CONCLUSIONS
The preceding IQM analysis indicates that at this time the proposed project is financially
Infeasible. This infeasibility is related primarily to the fact that the currently achievable
sales prices are inadequate to support the full cost to develop the project, even before any
consideration of developer -profit Based on the current projections, the development costs
are slightly higher than the sales revenues, and tits the developer is projected to receive
no profit. It Is the XW projection that the achievable sales prices would have to increase
by 15% before the developer would receive an adequate return from the project
It is clear from the preceding analysis that if the project Is developed during the near -term,
the Agency Is not projected to receive any participation income from the project In fact the
Agency would not begin to receive participation income until the sales prices increased by
21 % over the current projections.
Ss47s.HrB
14066.0001
K E YS ER MA RSTON ASSOCIATES INC-
A
N
TAB LE 1
ESTIMATED DEVELOPMENT COSTS
90 CONDOMINIUM UNITS
PHASE "LOCK 105
HUNTINGTON BEACH,CAlJFORNIA
L SAND COSTS
IL RNRECT COSTS •
ACQUISTION
OFF-SITESANFRASTRUCTURE ALLOWANCE
SITE WORN 80 UNITS
DEMOLITIONlSITE CLEARANCE ALLOWANCE
BUILDING SHELL 8Z596 SF
SUB PARKING 66,500 SF
TOTAL DIRECT COSTS
$329,000
$5,000 /UNIT 400,000
W.000
571.50 ASF 5,906,000
518.00 ASF 1.197.000
$8,028,000
IIL INDIRECT COSTS
ARCHITECTURE L ENGINEERING
4.0% DIRECT COSTS
PERMITS & FEES
80 UNITS $8,800 /UNIT
TAXES 3 INSURANCE
1.5% DIRECT COSTS
LEGAL & ACCOUNTING
1.5% DIRECT COSTS
DEVELOPMENT MANAGEMENT
3.0% DIRECT COSTS
CONTINGENCY
4.0% DIRECT COSTS
SECURITY DURING CONSTRUCTION
ALLOWANCE
MARKETINGISALES OFFICE
ALLOWANCE
MODEL DECORATION (NET OF RECAPTURE)
TOTAL INDIRECT COSTS
N. FINANCING COSTS
FINANCING FEES 25 POINTS
INT DURING COSST 3 ABSORPTION 10.2% INTEREST
TOTAL FINANCING COSTS
V. COST OF SALES
SZ127,000
sm.000
z497,000
SZ727.0o0
VL TOTAL DEVELOPMENT COSTS S1S,305,000
PREPARED BY: KEYSER MARSTON AS3=f%TES, M
FILENAME: RES_LAND=; &2S15: ELG
TABLE 2
NEW CONDOMINIUM SALES SURVEY
MAIN -PIER 11 BLOCK 105
HUNTINGTON BEACH, CALIFORNIA
PROJ
1 Plerhouse
1200 Pacific Coast Hwy
Huntington Beach
2 Pacific Park Villas
Talbert & Beach
Huntington Beach
3 Surtcrest
Seaport 3 Palm Ave
Huntington Beach
iCl L-1-1
DATE
TOTAL
UNIT
UNIT
BASE
PRICE/
SOLD ABSORP DENSITY
OPEN
NI S
t+ I
SIZE]
�t
SF
I-op&M (UN TI S1M0) U/A COp MENT2
5193
105
1B/1b
800
$139,900
$174.88
105 5.0 35 ' Pool, Spa, Clubhouse
113/11b
1,000
167.900
167.90
Single Story Flats, Sub garages
IS/lb
1,000
197.900
197.00
Converted from opts In'93. Subject
to 85 year ground lease, with NPV
•
of payments equal to $29.000.
10194
22
2Wb
1.460
$194.900
$133.49
14 1.8 WA Pool, Spa, Townhouse style
2Bt2b
1.400
174,900
124.93
Enclosed garages, Recently
28nb
1.700
209.900
123.47
opened
4 Villa Milano
Warner & S Solsa Chica
Huntington Beach
5 Huntington Harbor Bay
N Warner Ave 3
W Edgewater is
Huntington Beach
10194 115 2B12.5b
2,030
$272,T50
$134.35 24
3.0 WA Pool, Spa, Townhouse style
3912.5b
Z140
280.450
131.05
Enclosed garages, Recently
3B/2.5b
2,430
355,750
•146.40
opened
20+Dr2.5
2.160
322,760
150.12
1193 33 2B/2b
1,253
$179,000
$142.86 18
0.0 27 Pool, Spa, Clubhouse
2812b
1,375
199.000
144.73
Additional storage areas
213t2b
1,710
219.000
128.07
Single Story Flats, Sub garages
28/2b
1,723
239.950
139.20
2EWb
1.921
250,950
135.32
6/91 38 2812b
1,479
$255,600
$172.75 28
0.6 24 Ocean b Marina Views.
28nb
1,535
244,600
159.28
Pool, Sauna. Spa. Clubhouse
21312b
1.792
310,500
173.27
Single Story Flats, Sub garages
21312b
2,181
390.600
180.70
SOURCE: Residential Trends, April of 1995
PREPARED BY KEYSER MARSTON ASSOCATES, M
F LENWE: HS-CVMPS=: WZM: ELO
C
TABLE 3
RESALE CONDOMINIUM SURVEY
MAIN -PIER II BLOCK 105
HUNTINGTON BEACH, CALIFORNIA
DATE
YEAR
UNIT
SALE
UNIT
PRICE/
DEVELOPMENT
SITE ADDRESS
OE SALE
9UI
MI
EBM
S1Z fSf1
5M
1
Pier Colony
200 PCH
Huntington Beach
2/94
1989
18/1b
$132.500
832
$159.25
2
Pies Colony
200 PCH
Huntington Beach
5/94
1989
2=b
$225.000
1,250
$180.00
3
pier Colony
200 PCH
Huntington Beach
9/94
1991
18/1b
$135,000
$27
$163.24
4
Pierhouse
1200 PCH
Huntington Beach
11/94
1989
1 B11 b
$162,000
778
$208.23
5
Plerhouse
1200 PCH
Huntington Beach
12/94
1989
1B11b
$178,000
789
$223.07
8
Townsquare
415 Townsquare Ln
Huntington Beach
6194
1990
2B/2b
$194,500
1,147
$169.57
7
Townsquare
415 Townsquare Ln
Huntington Beach
8/94
1989
2B/1.5b
$187.500
1.024
$183.11
8
Townsquare
415 Townsquare Ln
Huntington Beach
7194
1989
1811.5b
$165,500
1,024
$161.62
9
Townsquare
415 Townsquars Ln
Huntington Beach
8194
1989
18/1.5b
$157.000
741
$211.80
10
Townsquare
415 Townsquare Ln
Huntington Beach
10194
1989
2812b
$185.000
1,019
$181.55
11
Townsquare
415 Townsquare Ln
Huntington Beach
3/95
1990
213/2b
$197.000
1,144
$177.20
12
ti"llas Cal Mar
606 Lake Street
Huntington Beach
7/94
1988
2B125b
$170.000
1,072
$158.58
13
Huntington Bay Shore
310 Lake Street
Huntington Beach
U94
1989
1 B/1 b
$154.000
745
$206.71
14
Huntington Bay Shore
430 Lake Street
Huntington Beach
5/94
1989
2B12b
$168,000
1,013
$163.87
15
Huntington Bay Shore
400 Lake Street
Huntington Beach
12194
1989
ii311.Sb
$163,000
1,021
$159.65
PREPARED BY KEYSER MARSTON ASSOCIATES. INC
FLERAME: H5tX*APS)U WZ9W: ELO
C
.TAB CE 4
SALES REVENUES PROJECTION
60 CONDOMINIUM UNITS
PHASE "LOCK 106
HUNTINGTON BEACH, CAUFORANIA
L MARKET SALES PRIG
1 BDA BA+1 DEN (1) a
22 UNITS
$168.000 KNIT
S3,696,0DO
1 Wil Bll+ 1 DEN + VIEW (1)
4 UNITS
$185.000 A)NIT
$740,000
16DM BA+1 DEN (1)
8 UNITS
$178,000 KNIT
$1.424.000
2 BD/2 BA (1)
19 UNITS
$195,000 A1NIT
$3.705,000
2 B= BA (1)
19 UNITS
5205.000 A1NIT
$3.W5,000
2 B= BA + DEN (1)
8 UNITS
t230.000 !UNIT
s1 mo wo
GROSS SALES PROCEEDS SI5.3W.000
(1) The absorption for the entire projed estimated at 3 unh per mor#L
PREPARED BY: KEYSER M RSTON ASSOC_LkTES. INQ
FL NWE: RES-,tANDJU: t;C VS; ELG
MILES
DEVELOPER PROFIT CALCULATION
90 CONDOMINIUM UNITS
PHASE "LOCK i 05
H UNTINGTON BEACH, CALIFORNIA
L PROF[[ GAP CALCUt- AMN
GROSS SALES PROCEEDS $15,300.000
(LESS) DEVELOPMENT COSTS INCLUDING LAND _(i5,305,000}
IDEVELMM FROM
i
.0.03% OF VALUE
-0.037.0 (5F COSTS
PREPARED BY. KMER MARSTON ASSOCIATES. M
F LENAAAE: RES ANO.Xi ; 0129M. ELO
V
AMENDMENTS TO THE SUMMARY REPORT
PREPARED PURSUANT TO
SECTION 33433
of the
CALIFORNIA COMMUNITY REDEVELOPMENT LAW
NP on a
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH,
COULTRUP COMPANIES,
MAIN PIER PHASE II PARTNERSHIP,
AND BIRTCHER REAL ESTATE LIMITED
R 7
On May 3, 1993, a summary report was filed by the Huntington Beach Redevelopment
Agency 'Agency') pursuant to Section 33433 of the California Health and Safety Code.
That report set forth certain details of the proposed Disposition and Development
Agreement ("Agreement") between the Agency, Coulirup Companies. Main Pier Phase 11
Partnership (Property Owners) and Birtcher Real Estate Limited (BREL). The Agreement
was executed by the Agency on July 6.1993.
The executed Agreement requires the Property Owners to develop the privately owned
portion of Block 1 D4, bounded by Main Street, Walnut Avenue, 5th Street and Pacific Coast
Highway with a mix of commercial uses. The Agency must purchase the privately owned
parcels on Block 105. bounded by 5th Street, Walnut Avenue. 6th Street and Pacific Coast
Highway to allow for BREL to construct 80 to 90 condominium units. The proposed
residential and commercial development is located in the Main Pier Redevelopment Area in
the City of Huntington Beach.
Since 1993, the Agency has been fulfilling the Agency responsibilities defined in the
Agreement. During the implementation process several of the Agency cost items have
been higher than were originally projected, while the projected public revenues have
declined from the original estimates. This amendment quantifies these changes, and
presents a comparison of the costs/revenues projected originally. versus the current
projections. For reference purposes, May 3, 1995 summary report is attached to this
amendment.
Agency Responsibilities
The Agency responsibilities defined in the Agreement commence after the completion of
the Block 104 development, and. upon commencement of Block 105 development. The
Agency responsibilities can be summarized as fo'lows:
Responsibilities Completed to Date
1. Before the execution of the Agreement, the Agency had assembled land on Blocks
104 and 105 at a cost of $3,944,478.
2. After the execution of the Agreement, the Agency acquired a third party parcel
required for the assemblage of the Block 105 site. The site was acquired at a cost
of $1,080,000.
3. Before the execution of the Agreement, the Agency funded demolition, toxic
remediation and relocation costs totaling $573,500.
4. After the execution of the Agreement, the Agency funded toxic remediation costs of
$41.000.
5. The Agency advanced $200,000 as a reimbursement for Block 105 predevelopment
expenses.
To date, the Agency has spent $5.024.478 to assemble the property necessary to develop
the proposed project The demolition, toxics remediation and relocation costs already
incurred equal $614,5W. Men the Agency advance for predevelopment expenses is
included, the Agency costs as of June 29.1995 total $5,838,978.
Outstanding Responsibilities
1.
2.
3.
4.
Exchange the Agency owned property, including 39.5 feet of street frontage, plus
$99.000 for the Cracchiolo property that includes 50 feet of street frontage.
Complete the investigation and clean-up cf toxics on the Agency -owned parcels on
both Block 104 and Block 105, at an estimated cost of $259,000.
Finance the public improvements required for Block 104, and the off -sites required
around the perimeter of the Worthy property, at an estimated cost of $585,000.
Compensate the Block 104 Property Owners and tenants for $630,000 in relocation
expenses.
5. Pay any increased city permits and fees costs imposed between date of Agreement
approval and ten months after the approval of the Downtown Specific Plan by the
Califomia Coastal Commission. The maxmum cost cost exposure is $200,000.
2
6. Fund the interest rate differential between 8% and the prevailing interest rate at the
commencement of the Block 104 development. The ma dmum interest rate
assistance is set at two percentage points. Assuming the maximum level of
assistance is provided, the cost to the Agency is $490,000.
7. Provide housing units to meet the state mandated inclusionary housing
requirements. Assuming seven lowfmoderate income and five very -low income units
are provided in an off -site location, the estimated costs are $400,000.
The projected cost to complete the Agency responsibilities defined in the Agreement is
$2,663,000. The resulting total implementation costs are $8.501.978. Thus, 67% of the
required implementation costs have already been incurred.
Agency Cost/Revenue Comparison
s �
The following table compares the original Agency cost estimate to the current estimates.
Current
Original
Estimate
Estimate
Difference
Land acquisition
$5,123,478
$4,673,478
$450,000
Demolitlon/toxdcstrelocation
1,503,500
1,503.500
--0--
Public improvements
585,000
100.000
485,000
Increased city permits & fees
200.000
200,000
—0—
PredeveIopment cost advance
200,000
200,000
—0—
Interest rate buy -down
490,000
490.000
--0--
Affordable housing obligation
400,000
--0—
400s000
Total Cost
$8,501,978
$7,166,978
$1.335,000
The Agency costs will be offset by the Block 105 land payment made by BREL, the
repayment of the Block 105 predevelopment advance and the property tax increment
revenues generated by the project over time. A comparison of the original projection of the
revenues and net Agency casts versus the current projections follows:
Land payment
Advance repayment
Property tax increment
Total Revenues
Net Agency Costs
Current
Original
Estimate
Estimate
Difference
$1,800,000
$1.800,000
$-0-
200,000
200.000
—0--
1,00_5,000
1,720.00
't�7 5,000)
$3,005,000
$3,720.000
($715,000)
$5.496,978 $3,446,978 $2.050,000
3
As can be seen in the tables above, the net Agency costs have increased by $2.050.000
since the original summary report was filed on May 3,. 1995. This is attributable to a
$1,335,000 increase In costs, and a $715,000 decrease in projected revenues. To date,
the Agency has incurred $450,000 (34%) of the $1.335,000 in additional costs, with
$885,OOO left to be expended (660/6).
Summary
The Agency has been fulfilling the responsibilities detailed in the Agreement since 1993.
To complete the responsibilities, the Agency must complete the land assemblage and toxic
remediation; construct public improvements; pruAde relocation assistance to Block 104
Property Owners and tenants; pay any increase in the city pern its and fees costs; and fulfill
the affordable housing obligation associated with the proposed residential development
These outstanding cost items have a projected cost of $Z663,000. Overall, the Agency
costs associated with the proposed project total $8,501,978. of which $5,838,978 (69%)
have already been funded.
Based on current market and financial conditions, it is projected that the net present value
of the public revenues will total $3,005,000. As a result, the net Agency costs to implement
the proposed project are $5,496,978.
For reference purposes, the public cost associated with abandoning the project has also
been projected. To date, the Agency has spent $5,838,978 to implement the project 1f the
project was abandoned and no alternative development was attracted, there would be no
public revenues to offset the costs. Thus, the Agency costs associated with a `no
development' option would be approximately $342,000 higher than the net costs
associated with implementing the proposed development However, at such time as the
land holdings already assembled by the Agency vwre sold, public revenues would begin to
accrue to the Agency.
4
TABLEI
ESTIMATED DEVELOPMENT COSTS
40 CONDOMINIUM UNITS
PHASE II -BLOCK 103
HUNTINGTON BEACH, CALIFORNIA
L LAND COSTS
ACQUISTION
31.800,000
L DIRECT COSTS
OFF-SI ESANFRASTRUCTURE
ALLOWANCE
$329.000
SITE WORK
80 UNITS
$5,000 (UNIT
400.000
DEMO) ITIORISITE CLEARANCE
ALLOWANCE
196,000
BUILDING SHELL
8ZS96 SF
$71.50 1SF
5.906.000
SUB PARKING
66.5W SF
518.00 13F
1,197.000
TOTAL DIRECT COSTS
58.028,000
[IL INDIRECTCOSTS
ARCHITECTURE S ENGINEERING
4.0% DIRECT COSTS
sm.000
PERMITS & FEES
80 UNITS
$8.800 /UNIT
704.000
TAXES & INSURANCE
1.5% DIRECT COSTS
120.000
LEGAL E ACCOUNTING
1.5% DIRECT COSTS
120.000
DEVELOPMENT MANAGEMENT
3.0% DIRECT COSTS
241.000
CONTINGENCY
4.0% DIRECT COSTS
321,000
SECURITY DURING CONSTRUCTION
ALLOWANCE
50.000
MARKETINGISALES OFFICE
ALLOWANCE
100,000
MODEL DECORATION (NET OF RECAPTURE)
150,000
TOTAL INDIRECT COSTS SZ127.000
IV FINANCING COSTS
FINANCING FEES 2.5 POINTS 5230.000
INT DURING COSST a ABSORPTION 102% INTEREST 2,497,000
TOTAL FINANCING COSTS $Z727.000
V. COST OF SALES $6m.000
VL TOTAL DEVELOPMENT COSTS $15,305,000
a
PREPARED BY: KEYSER MARSTON ASSOCIATES. VC.
FILE NNu!E: RES LANDXL5; 6f29195; ELG
TABLE 2
NEW CONDOMINIUM SALES SURVEY
MAIN -PIER II BLOCK 105
HUNTINGTON BEACH, CALIFORNIA
TOTAL
DATE
TOTAL UNIT
UNIT
BASE
PRICE/
SOLD ABSORP
DENSITY
PROD
OPEN
UNITS MIZ
SIZE (SF)
PRICE
S§F
fQA Nt NI SNOT
U( IACI COMMENTS
1
Pierhouse
5/93
105 113/1b
800
$139,900
$174.88
105 5.0
35 Pool, Spa, Clubhouse
1200 Pacific Coast Hwy
1 B/lb
1,01.10
167.000
167.90
Single Story Flats, Sub garages
Huntington Beach
IBM
1.000
197,900
197.90
Converted from opts in'93. Subject
to 85 year ground lease, with NPV
of payments equal to $29,000.
2
Pacific Park Villas
10/94
22 2B/2b
1,460
$194.900
$133.49
14 1.8
NIA Pool, Spa, Townhouse style
Talbert & Beach
2BRb
1,400
174.000
124.93
Enclosed garages, Recently
Huntington Beach
2BRb
1,700
209,900
123,47
opened
3
Surferest
10194
115 213/2.5b
2,030
$272.750
$134.36
24 3.0
NIA Pool, Spa, Townhouse style
Seaport L Palm Ave
38R.5b
2,140
280.450
131.05
Enclosed garages, Recently
Huntington Beach
3BR.5b
2,430
355.750
146.40
opened
28+13/2.5
2.150
322.750
150.12
4
Villa Milano
1/93
33 2BRb
1,253
$170,000
$142.88
18 0.6
27 Pool, Spa, Clubhouse
Warner & 5 Boise Chica
2BRb
1,375
199.000
144.73
Additional storage areas
Huntington Beach
21312b
1,710
219,000
128.07
Single Story Flats, Sub garages
2812b
1.723
239.950
139.26
2812b
1,921
259.950
135.32
5
Huntington Harbor Bay
6191
36 2BRb
1,479
$255,500
$172.75
28 0.6
24 Ocean & Marina Views.
N Warner Ave &
2812b
1,535
244,S00
159.28
Pool, Sauna. Spa, Clubhouse
W Edgewater Ln
2131215
1,792
310,500
173.27
h
Single Story Flats, Sub garages
Huntington Beach
2BRb
2.161
390,500
180.70
„
SOURCE: Residential Trends, April of 1995
PREPARED BY KEYSER MARSTON ASSOCIATES, VC
FILENMAE: H&COMPSAS: WSMS; ELO
TABLE 3
RESALE CONDOMINIUM SURVEY
MAIN -PIER It BLOCK 105
HUN11NOTON BEACH, CALIFORNIA
DATE YEAR
DMEOPMENT
SITE ADDRESS
m
OF SALE
BUILT
1
Pier Colony
200 PCH
Huntington Beach
2194
1989
2
Pier Colony
200 PCH
Huntington Beach
5194
1989
3
Pier Colony
200 PCH
Huntington Beach
9194
1991
4
Pierhouse
1200 PCH
Huntington Beach
11194
1989
5
Plerhouse
1200 PCH
Huntington Beach
12/94
1989
6
Townsquare
415 Townsqu ate Ln
Huntington Beach
5194
1900
7
Townsquare
415 Townsquare Ln
Huntington Beach
6194
1969
8
Townsquare
415 Townsquare Ln
Huntington Beach
7194
1989
9
Townsquare
416 Townsquare Ln
Huntington Beach
8194
1989
10
Townsquare
415 Townsquare Ln
Huntington Beach
10194
1989
11
Townsquare
415 Townsquare Ln
Huntington Beach
3195
1990
12
Villas Del Mar
606 Lake Street
Huntington Beach
7194
1988
13
Huntington Bay Shore
310 Lake Street
Huntington Beach
5194
1989
14
Huntington Bay Shore
430 Lake Street
Huntington Beach
5/94
1989
15
Huntington Say Shore
400 Lake Street
Huntington Beach
12/94
1989
PREPARED BY KEYSER MARSTON ASSOCIATES, INC
FILENAME: FIB-COMPSnS;Br29195: ELO
UNIT
SALE
UNIT
PRICE/
MIX
PRICE
SIZE.($F)
1B11b
$132,500
$32
$159.25
2B/2b
$225,000
1.250
$180.00
1B11b
$135,000
827
$163.24
1 B/1 b
$162.000
778
$208.23
1B/1b
$178.000
789
$223.07
2B/2b
$194,500
1.147
$169.57
2811.5b
$187.500
1,024
$183.11
1911.5b
$185.500
1.024
$161.62
1811.5b
$157,000
741
$211.88
28/2b
$185,000
1,019
$181.55
29/2b
$197,000
1,144
$172.20
2=.5b
$170,000
1,072
$158.58
1 B11 b
S154.000
T45
$206.71
2B12b
$168.000
1,013
$163.a7
1811.5b
$163.000
1.021
$159.65
C
C
TABLE 4
SALES REVENUES PROJECTION
80 CONDOMINIUM UNITS
PHASE II4BLOCK10S
HUNTINGTON BEACH, CALIFORNIA
L MARKET SALES PRIC
1 130n BA+1 DEN (1)
22 UNITS
$168.000 (UNIT
$3,636.000
1 BDlt SA+1 DEN + VIEW (1)
4 UNITS
$185.000 KNIT
$740.000
1 BD/1 BA+1 DEN (1)
8 UNITS
$178,000 NNIT
$1.424,000
2 BD12 SA (1)
19 UNITS
$195.000 /UNIT
$3.705.000
2 BOC BA (1)
19 UNITS
$205,000 (UNIT
$3,t395,000
2 BDC2 BA + DEN (1)
8 UNITS
$230.ODO ANT
$1,840,000
GROSS SALES PROCEEDS 315,300,000
(1) The absorption for the entire project estimated at 3 units per monft
PREPARED BY. KEYSER MARSTON ASSOCIATES, INC.
F1LE1IAME: RCS LAN =-, V2m5: ELG
DEVELOPER PROFIT CALCULATION
30 CONDOMINIUM UNITS
PHASE "LOCK 105
HUNTINGTON BEACH. CALIFORNIA
L PROFIT GAP CALCULATION
GROSS SALES PROCEEDS
(LESS) DEVELOPMENT COSTS INCLUDING LAND
$15,300,000
_ (15,305,000}
-0.03% OFVALUE
-0.03x OF COSTs
PREPARED BY: KEYSER MARSTON ASSOWTES, x7C.
FURAME: RE5_LANDXLS; 6r2SgS. ELG
SUMMARY REPORT PURSUANT TO'
SECTION 33433 O •,c��C
of the
CALIFORNIA COMMUNITY REDEVELOPMENT LAi��
on a
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
REDEVELOPMENT AGENCY OF THE CITY OF RUNTINGTON BEACH,
COULTRUP COMPANIES,
MAIN PIER PHASE II PARTNERSHIP,
AND BIRTCHER REAL ESTATE LIMITED
This summary report has been prepared for the Huntington Beach
Redevelopment Agency ("Agency") pursuant to Section 33433 of the
California Health and safety Code. This report sets forth certain
details of the proposed Disposition and Development Agreement
("Agreement") between the Agency, Coultrup Companies, Main Pier
Phase II Partnership (Property Owners) and Birtcher Real Estate
Limited (BREL). The Agreement requires the Property'Owners to
develop the privately owned portion of Block 104, bounded by Main
Street, Walnut Avenue, 5th street and Pacific Coast Highway with a
mix of commercial uses. The Agency must purchase the privately
owned parcels on Block 105, bounded by 5th Street, Walnut Avenue,
6th Street and Pacific Coast Highway to allow for BREL to construct
80 to 90 condominium. units. The proposed residential and
commercial development is located in the Main Pier Redevelopment
Area in the City of Huntington Beach. This report describes and
specifies:
1. The, cost of the proposed agreement to the Agency,
including relocation costs, site clearance costs, toxic
remediation costs, infrastructure costs and public
parking costs;
2. The estimated value of the interests conveyed, determined
at the highest uses permitted under the Redevelopment
Plan; and
r
3. The purchase price to be paid for the interests being
conveyed.
This report and the proposed Agreement are; to be made available for
public inspection prior to the approval of the Agreement.
A. SALIENT POINTS OF THE AGREEMENT
1.pronerty Owner Responsibilities
Under the proposed Agreement, the Property Owners have the
following Block 104 responsibilities. These responsibilities
will be fulfilled by a partnership comprised of the various
owners of the Block 104 properties and Coultrup Companies:
a. The Property Owners will demolish the existing commercial
structures on Block 104.
b. The Property owners will design and develop Block 104
with 47,500 square feet of commercial buildings comprised
of retail and office uses, respecting the separate
ownership of the parcels on Block 104. The commercial
development will be an integrated complex in conformance
with the Main -Pier Project Area Plan.
c. The Property owners are responsible for all on -site
improvements on Block 104.
d. The Property Owners must contribute to the toxic clean-up
costs incurred on Block 104, to a maximum of $125,000.
2. BREL Responsibilities
Under the proposed Agreement, within three years of DDA
execution, BREL -and Coultrup Companies must fulfill the
following Block 105 responsibilities:
W �+
a. BREL agrees to purchase the 71,452 square foot parcel
from the Agency for $1.8 million.
b. BREL is' responsible for demolishing the existing
improvements located on the Block 105 properties
currently under private ownership.
C. BREL agrees to construct 80 to 90 condominium units and
a subterranean parking garage with sufficient spaces to
meet the City code.
d. BREL is responsible for all on -site and off -site
improvements on Block 105, except that portion adjacent
to the Worthy Property, to be paid by the Agency.,
e. As a part of the land acquisition payment, BREL has
agreed to incorporate a participation formula which
allows the Agency to share in the project's net profits.
The participation formula will be based on the project
revenues generated in excess of the approved development
costs, a lot annual return on equity investment and a
threshold profit of $3.2 million. Thereafter, the Agency
would share in 50% of the subsequent revenues generated
by the Block 105 project. The proposed participation
formula will be impacted by fluctuations in the allowable
development costs, the sales revenues and the time period
required to sell the units. Based on current development
cost and sales revenue estimates, the Agency will not
receive any participation income. only if the project is
significantly more successful than is currently
anticipated, will the Agency receive any participation
income.
3
f. At the time Block 105 is conveyed, BREL must repay the
Agency advance of $200,000 in predevelopment expenses.
If the agreement is terminated, Coultrup Companies shall
be -responsible for the repayment.
3. Agency-_ Responsibilities
After the completion of the Block 104 development, and upon
commencement of Block 105 development, the Agency is
responsible for and shall commit the following to the project:
a. Exchange Agency owned property, including 39.5 feet of
street, frontage plus $99,000 for the Cracchiolo property
that includes 50 feet of street frontage. A. y
b. Purchase the third party parcel necessary to complete the
assemblage of the Block 105 site. The acquisition costs
are estimated at $630,000, based on an appraisal
conducted February 1992.
c. Finance the public improvements required for Block 104,
and the off -sites required around the perimeter of the
Worthy property, estimated at $100,000.
d. Compensate the Block 104 Property Owners and tenants for
$630,000 in relocation expenses.
e. Pay any increased City permits and fees costs imposed
between date of Agreement approval and ten months after
the approval of the Downtown specific Plan by the
California Coastal Commission. This cost is estimated at
$200,000.
f. Advance $200,000 as reimbursement for Block 105
predevelopment expenses.'
4
�r
g. Finance the investigation -and clean-up of toxics on the
Agency -owned parcels on both Block 104 and Block 105, not
to exceed $200,000. As a separate obligation, the Agency
shall pay any necessary clean-up costs on the Sarrabere/
Wood/Goodman parcel, in an amount equal to'$100,000.
h. Provide housing units to meet the State mandated
inclusionary housing requirements.
B. COST OF AGREEMENT TO AGENCY
The estimated costs of the Agreement to the Agency are as
follows:
i I
Land Acquisition, Relocation and Toxic
Remediation Costs Already Expended
$40518,000
Land Acquisition (Block
104)
99,000
Land Acquisition (Block
105)
630,000
Block 104 and 105 Public
Improvements
100,000
Relocation Costs
6308000
Increased City Permits &
Fees
200,000
Block 105 predevelopment
cost advance
200,000
Toxic Remediation Costs
-- Agency Parcels
200,000
Toxic Remediation Costs
- Third Party Parcels
100,000
Total Costs to Agency
$6,6771000
In addition, the Agency has agreed to accept the
responsibility for two contingent liabilities:
a. In the event the Downtown Master Parking Plan is not
approved, the Agency will reimburse Coultrup Companies
for $150,000 in predevelopment expenses.
b. It is anticipated that the Block 104 development will not
proceed until the Fall of 1994. At that time, the
Property Owners may incur interest costs in excess of the
8% interest rate currently be;ng estimated for the Block
104 commercial improvements. The Agency has agreed to
5
fund the net present value of the interest increase up to
a maximum of two percentage points. Assuming that the
maximum level of assistance is provided, the cost to the
Agency is $490,000.
The maximum costs to the Agency after inclusion of the
contingent liabilities and offsets for the public revenues,
are estimated at:
Total Costs to Agency $6,677,000
Plus: Interest Rate Write -down 490,000
Plus: Block 104 Predevelopment Cost Reimbursement 150,000
Total Costs Including Contingent Liabilities $7,317,000
(Less) BREL Land Payment for Block 105 (111800,000)
(Less) BREL reimbursement for Block 105
predevelopment advance (200,000)
(Less) 50% Equity Share in Net Profit 0)
Net Costs to Agency $5,317,000
(Less) PV of Property Tax Increment Revenues (11720,000)
Net Costs to Agency After Tax Increment $3,5971000
C. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN
The terms of the 'Agreement call for the Property Owners to
naintain ownership of Block 104, and for the Agency to convey
Block 3.05 to BREL. The determination of the estimated value of
the interests to be conveyed BREL was made by R.P. Laurain &
Associates in an appraisal dated September 9, 1991. The
appraisal identified the highest and best use permitted under
the Redevelopment Plan as a high density residential project.
The appraisal determined that the fair market value for that
use is $4.65 million.
6
W L 1
D.
PURCHASE PRICE PAID AND REASONS FOR DIFFERENCE IN FAIR MARKET
VALUE FOR THE HIGHEST USE UNDER THE REDEVELOPMENT PLAN
As detailed in theSeptember 9, 1991 valuation analysis
performed by R.P. Laurain & Associates, Inc., the highest and
best use of the Block 105 site is a high density residential
development. The fair market value of the subject site is
estimated at $4.65 million, or $65 per square foot of land
area. However, the Agency has limited the scope of
development to 80 condominium units. This reduction in
density diminishes the supportable land value to $1.8 million.
The purchase price plus the participation in net profits
represent fair compensation for the subject site.
The 33433 report for the Coultrup project estimates land
acquisition, relocation and toxic renediation costs already
expended as $4,158,000. These costs are comprised of:
nd Acuuisitio
Tharp
Energy
Conley
Shupe
Omohundro
Terry
city
City
Total Land Acq.
Demolition/Toxics
Relocation
Total Sunk Costs
$ 352,500
176,500
352,500
295,625
1,300,000
1,382,000 (77% of costs - balance to
631,905 Abdelmuti)
21,448
$3,944,478
573,500
$4,517,978
7
The contingent liability to reimburse the Property Owners for
"$150,000 in Block 104 costs is comprised of the following:
If the parking plan is not approved 150,000
$1500000
8
I
*, 'CITY OF HUNTINGTON BEACH
2000 MAIN STREET CALIFORNIA 92648
OFFICE OF THE CITY CLERK
C04NIE BROCKWAY
CITY CLERK
TO: Mr. Jon Coultrup
FROM: Connie Brockway, City Clerk
SUBJECT: Provision of Documents Related to June 5, 1995 City Council Action Re:
Coultrup Companies et al - Disposition and Development Agreement
DATE: July 20, 1995
Deputy City Attorney Arthur Delal-oza has provided the City Clerk's Office with the
attached documents and has requested my office to provide them to you.
Please Gall Mr. DeLaLoza, Deputy City Attorney, if you have any questions. The City
Attorney's phone number is (714) 536-5620.
74
g:195cbmem195-100
(Telephone. 71 L-536.5227)
. � i�3wiloi
c
Gail Hutton
C+ry Ammey
July 18, 1995
OFFICE of
CITY ATTORNEY
P.O. Box 190
2000 Main SL-ect
Huntington Beach, California 92648
VIA FAX - (714) 375-4735, Coultrup Companies
(714) 720-1508, Raymond Lee, Esq.
andfor by CERTIFIED MAIL
Coultrup Companies
P.O. Box 1270
Sunset Beach, CA 90742
Telephone
(714) 536-5555
Fax (714) 374-1590
Bircher Real Estate Limited
27611 La Paz Road
Laguna Niguel, CA 92656
Main Pier Phase 11 Partnership
r
c/o Coultrup Companies, General Partner
ira
Cb
P.O. Box 1270
.
Sunset Beach, CA 90754
- m T
ZU
Raymond Lee, Esq.
The Law Firm of Voss, Cook & Theil
840 Newport Center Drive, #700
Newport Beach, CA 92660
Michael Leifer, Esq.
Palmieri, Tyler, Wiener,
2603 Main Street
East Tower, Suite 1300
Irvine, CA 92714-6228
Wilhelm & Waldron
NOTICE OF HEARING ON INTENTION TO TERMINATE DISPOSITION AND
DEVELOPMENT AGREEMENT
Date: August 7, 1995
Time: 5:00 p.m., as posted in agenda
Place: Huntington Beach Council Chambers
2000 Main Street
Huntington Beach, CA 92648
TO ALL ABOVE -CAPTIONED INTERESTED PARTIES AND THEIR ATTORNEYS:
ddalerm
i
Coultrup DDA Termination Hearing
July 18, 1995
Page 2
PLEASE TAKE NOTICE that a hearing on the Agency's intention to terminate the
Disposition and Development Agreement approved by the Redevelopment Agency of the City
of Huntington Beach on July 6, 1993 ("DDA') is set for August 7, 1995 as set forth above.
The legal basis for the proposed termination is set forth in Section 210. Subsection 1, as
follows:
to the event any of the Agency's conditions precedent to the conveyance
are not satisfied or waived by the Agency within the time periods
provided herein ... Agency may, at its option terminate the agreement
and any escrow opened hereunder.
In the event of such termination, neither party shall have any farther
rights or obligations to the other under this agreement with respect to the
site ... (Emphasis added.)
The specific condition precedent which has not been satisfied or waived is Subsection (xi) of
the DDA, page 29, which reads as follows:
The Agency shall determine, in their sole and absolute discretion, within
thirty (30) days of the approval of the Downtown Specific Plan by the
Coastal Commission, that the Agency has sufficient funds available to
complete all of its obligations under this Agreement."
Attached hereto is a certified copy of the minutes cf the Agency meeting of
June 5, 1995 wherein the condition precedent, at Subsection (xi), expressly failed. Such
condition has therefore not been satisfied, nor has it been waived.
The issue before the Agency is whether to exercise its option to terminate the DDA since the
condition cited above has failed. The material and facts which form the basis for the proposed
intention to terminate are available for review at the Office of the City Clerk, 2000 Main Street,
Huntington Beach, California, 92648, in the'Coultrup DDA termination" file, s
You have a right to be heard on the sole issue of whether the Agency should exercise such
option, since failure of the condition (Subsection xi) constitutes an adequate legal basis for
termination of the agreement pursuant to the above cited Section 210, Subsection 1. of the
DDA.
Any written material which you would like the Agency to consider should be addressed to the
Agency Counsel/City Attorney at the above address.
Additionally, you will be afforded a reasonable opportunity to be heard at the hearing on
August 7, 1995, during the study session portion of the agenda.
ddalerm
V
July 18, 1995
Page 3
Any questions should be directed to Arthur DeLaLoza, whose direct line is (714) 536-5620.
Meanwhile, kindly acknowledge receipt of this notice by executing and returning, by fax, the
attached form.
Sincerely,
<411"GAIL HUTTON. City Attorney
cc: Redevelopment Agency Chairperson and Members of the Board of Directors
Michael Uberuaga, Executive Director, Redevelopment Agency
Ray Silver. Assistant City Administrator
Connie Brockway, City Clerk
z
ddW..erm
STATEMENT OF ACTION
OF THE
CITY COUNCILIREDEVELOPMENT AGENCY
Council Chamber, Civic Center
Huntington Beach, California
Monday, June 5, 1994
A videotape recording of this meeting
is on file in the City Clerk`s Office.
Mayor Pro Tern Sullivan called the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to order at 6:30 p.m.
PRESENT. Harman, Bauer, Sullivan, Dettloff, Garofalo (Green arrieved 5:15 p.m.)
ABSENT: Leipzig
(Redevelopment Agency) Determination Of Agency Financial Ability To Perform
Obligations Under Couitrup Companies et al - Disposition And Development
Acireement - Main Pier Redevelopment Proiect Area - Approved (600.30)
rrwwws*wwwwrlwwwl:w�rlel�►ww**Nwwww+w*wwa+www+rrwwarwwrwwwlwr+wwwwrrwwww+wwwl+wwwwwwwrNw!*wraw►slaw+waawwwN�ww
A motion was made by Bauer, seconded by Green, to make a determination that the
Redevelopment Agency does not have sufficient funds available to complete all of its obligations
under the Disposition and Development Agreement and direct staff to return with the 6ppropdate
follow-up action. The motion carried by the following roll call vote:
AYES:
Harman, Bauer, Sullivan, Qehloff, Green
NOES:
Garofalo
ABSENT:
Leipzig
! Nww!!lwww!lwwiwwlwMwwwlwwwlw!!iwlwwwwfllwlwlNwlN4NlwlilNNNlwwwA!!fllwfi!lw/NN1KilNii*MwiMNiM!!
•
,Page 2 - Statement of Action 05195 }
Mayor Pro Tempore Sullivan adjourned the regular meetings of the City Council and the
Redevelopment Agency of the City of Huntington Beach.
ATTEST:
Is/ Connie Brockway _
City Clerk/Clerk
STATE OF CALIFORNIA }
County of Orange } ss:
City of Huntington Beach
/s/ Connie Brockway
City Clerk and ex-offcio Clerk of
the City Council of the City of
Huntington Beach, California
Is/ Dave Sullivan
Mayor Pro Tempore
1, Connie Brockway, the duly elected City Clerk of the City of Huntington Beach, California, do
hereby certify that the above and foregoing is a true and correct Statement of Action of the City
Council of said City at their regular meeting held on the 5th day of June,1995.
Witness my hand and seal of the said City of Huntington Beach this the 19th day of July,1995.
Is/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach, California
rxl&*r��� .,.
STATEMENT OF ACTION
OF THE
CITY COUNCIUREDEVELOPMENT AGENCY
Council Chamber, Civic Center
Huntington Beach, California
Monday, .tune 5, 1994
A videotape recording of this meeting
is on file in the City Clerk's Office.
Mayor Pro Tem Sullivan called the regular meetings of the City Council and the Redevelopment
Agency of the City of Huntington Beach to order at 6.30 p.m.
PRESENT. Harman, Bauer, Sullivan, Dettloff, Garofalo (Green arrieved 5:15 p.m.)
ABSENT: Leipzig
LRedevelopment_Agencyl_Determinati_on Of -Agency Financial Ability To Perform
Obligations Under Coultrup Companies et al - Disposition And Development
Agreement - Main Pier Redevelopment Proie_ct Area - Approved (600.30)
raararaararaarrrwaarrwraaawwraaawwwarwrawrwwwwawrwwrrwwraarraaawarrarrwwarwwwaaarwaaaawrrawwarrrwarraraarrawrr•
A motion was made by Bauer, seconded by Green, to make a determination that the
Redevelopment Agency does not have sufficient funds available to complete all of its obligations
under the Disposition and Development Agreement and direct staff to return with the appropriate
follow-up action. The motion carried by the following roll call vote:
AYES:
Harman, Bauer, Sullivan, Dettloff, Green
NOES:
Garofalo
ABSENT:
Leipzig
wwarrawwarrwawwawrwwwwaawrrrwarrrrrwwaraaw+arawarraawarraaw.rawaaawwwaaarwwrrwwrarawarawwwwawrarawwwwawwwrwawrw
Page 2 Statement of Action 6/5/95
Mayor Pro Tempore Sullivan adjourned the regular meetings of the City Council and the
Redevelopment Agency of the City of Huntington Beach
ATTEST
/s/ Connie Brockwa
City Clerk/Clerk
STATE OF CALIFORNIA )
County of Orange ) ss
City of Huntington Beach )
/s/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach California
/s/ Dave Sullivan
Mayor Pro Tempore
I Connie Brockway the duly elected City Clerk of the City of Huntington Beach California do
hereby certify that the above and foregoing is a true and correct Statement of Action of the City
Council of said City at their regular meeting held on the 5th day of June 1995
Witness my hand and seal of the said City of Huntington Beach this the 19th day of July 1995
/s/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach California
B y /, / &,- , �/"
Deputy City Clerk
a T3stmtac
195 07/19 14-20 %T 7143754735 WTR IZ 01
Coullr-up Coy tapirs
1821$ GothaN, suile 202 11untinglon !Beach (.A 92647
M. Buz 1270, Sunset lrcach, CA 90742
(714} 3'IS-4733, Vu (114) PIS-4115
TRANSMITTAL
Fax:.. r} '
CZA %, P,
. Attention: _ r � � ....._ .
Vhcre ~gill be __L page(s) to fallow: '
If You don't receive all the pages, please call us at 714 375-4733
Comments'. ._ 4q)NL . t-VI. Ock4AMU � '60
V�-l4-?� C=:30F2`: Evil
k".`
oultrup DDA Termination Hearing
sly '18.1995
ire 2
PLEASE TAKE NOTICE that a hearing on the Agency's Intention to terrninat3 the
)position and )Development Agreement approved by the Itedavelopment Agency of the City
rl Huntington Beach on July 6, 1993 ("DDAI Is set for August 7, 1095 as set forth above.
n a legal basis for tho proposed termination it set forth In Section 210, Subsection -t, as
to 3ws:
In the event any of the Agency's conditions precedent to the conveyance
are 12ot llIsfled 9r_wa1ved by the Agency within the time periods
provided herein... Agency may, e I, i j 9;LIg terminate the agreement
and any escrow opened hereunder.
In the event of such termination, neither party shell have any further
rights or obligations to the Char under iris sgreemgnt with respect to the
site ... (Emphasis added.)
ThL- : pecific condition precedent which has not been satisfied of waived Is Subsection (xi) of
the : DA. page 29, which reads as follows:
The Agency shall determine, in their sole and absoMe discratlon, Wthin
thirty (30) days of tho approval of the Downtown Specific plan by the
Coastal Commission, that the Agency has sufficient funds available to
cam. piote All of Its obligations under this Agreement.*
At it :ed hereto is a certified copy of the minutes of the Agency meeting of
.k iE 5.1995 wherein the condition precedent, at Subsection (xi), expressly failed. ;iuch
cc is ]on has therefore not been sstlsfled, nor has It been waived.
The 9ssue before the Agency Is whether to exercise Its option tajt9%MVDjjpjh8 DOA since
nd►)ion cite ove has failed. The m&-15*—,1-aTa—nd facts which form the basis for tho proposed
Intefit,on to terminate are available for review at the Office of tho City Clerk, 2000 Main Street,
Huntington Beach, California, 92648, In the `Caultrup DDA termination• file. , .
- -- X
Yt I aver a right to be heard on the sole issue of whether the Agency should exercise such
09 ' on, since fe'lure of the condition (Subsection xis constitutes an adequate legal ba is for
€e ilnafion of the agreement pursuant to the above cited Section 210, Subsection 1, of the
D k.
f t% written material which you would like the Agency to consider should be addressed to the
. it ncy CounsolfCity Attorney at the above address.
do itionalty, you will be effardod a reasonable opportunity to be heard at the hearing on
%ut ast 7, 1995, during the study sassion portion of the agenda.
Ur{
Main -Pier Phase II/Coultru
Project Description:
Block 104-
Mixed-use project with approximately 40,000 square feet in
two comrnercial/office complexes along Main Street and Pacific
Coast Highway
Block 105-
80 unit condominium project on Block 105
Related parking, as entitlements specify (residential parked to
code on -site)
Disposition and Development Agreement:
July 6, 1993 - City Council/Agency Approved Entitlements and
Disposition and Development Agreement between the
Redevelopment Agency, Coultrup Companies, Birtcher Real
Estate Limited, and Main Pier Phase 1I Partnership (property
owners)
Appeal of Coastal Development Permit to be considered by the
Coastal Commission at their June meeting (June 13-16) in
Carmel.
I
Sixth
Street
Main -Pier Phase II
Existing Property Owners
BLOCK 105 WainutAvenue
Worthy
c
t
tp t 4t
C`'m: a '1010
�s � yyxy?y kk
♦ < k �, ♦a
'y 9 > ♦ 4hf�♦ r
b�2frY y `� S
Fifth
Street
BLOCK 104
Lane
LMA
y
f� > ` an,, K
Iopmer
t
4GEnc
��Iik
'Al
MCI
S�y YL 45
y vQU
Y
91 }
iy � , Sy
♦ f �
k
Pacific Coast Highway
®Redevelopment
Agency
#F Coultrup m Abdelmuti
Property Owners Development Company
Main
Street
Not to scale
Nov 11, 1992
Disposition and Development Agreement
(Approved July 6,1993)
Section 210 of the DDA states:
"The Agency shall determine, in its
sole and absolute discretion, within 30 days
of the approval of the Downtown Specific Plan by
the Coastal Commission, that the Agency
has sufficient funds available to complete its
obligations under this Agreement."
Agency Financial ]Determination
• Review of Agency Costs to Construct
the Main --Pier Phase H/Coultrup Project
• Review of Redevelopment Agency's
E Financial Condition
C
c
The maximum costs to the Agency after inclusion of the
contingent liabilities and offsets for the public revenues,
are estimated at:
Total costs to Agency
Plus: interest rate writedown
Plus: Block 104 Pre -develop cost reimb.
Total costs incl/contingent liabilities
(Less) BREL land pmt Block 105
(Less) BREL reimburs. - Block 105
pre -development advance
(Less) 50% equity share in net profit
Net costs to Agency
$ 6,677,000
490,000
150,000
$ 7,317,000
(Ipopo)
(200,000)
(0)
$ 5,317,000
(Less) PV of property T.I. revenue (1,720,000)
Net costs to Agency after T.I. $ 33597,000
C
r
Coultrup Project
Cost:Revisions That Have Occurred Since
Approval of the DDA
affsite Improvements $ 1.00,000 - $ 5859000
Acquisition of
Wimpis Site
Affordable Housing
Obligation (12 Units) est.
Total:
Difference:
$ 630,000 $1,0855000
0
$ 730,000
$ 334,500
$ 3,004,500
2,274,500
C
Conditions of Approval for CUP 92-17:
"Prior to issuance of building permits for construction
of residential portion; Developer shall provide
the city with axe Affordable Housing Program....."
Section [202114. of the DDA states:
"Agency shall provide replacement housing units
as required by law and shall assure that a minimum
i
of 12 units of affordable are provided consistent
with Community Redevelopment Law."
Ma..i-Pier Phase II/Coultrup
Remaining Agency Costs to Complete the Project
1 Craccluolo Acquisition $99,000*
2 Loan Interest Subsidy 490,000*
3 Downtime/Relocation 63011000*
4 Permit Fee Increases 200.000*
Subtotal
5 Site Remediation 3002000**
6. Off -site Improvements 585,000
$ 1,419,000
7, Affordable Housing 1,334,500
(Range: $800,000 - $1,334,500) 11
Subtotal $23,219,500
Total Agency Costs $39638.500
Agency Revenues
Developer Land Payment $1,800,000
Developer Advance Reimbursement 20031000
State Cleanup Fund Reimbursement 250,000
Total Agency Revenues $2,250,000
Total Agency (Cost)/Revenues ($1,388,500)
Note *Line items 1-4 are capped costs listed at their maximums Line item 5 is expected to be fully
recovered from the State Cleanup Fund * *Section 209 of the DDA states that the Agency may terminate the
Agreement of the Cleanup Costs exceed $200 000 Present Value of Tax Increment m today's dollars is
$1,005,000 This represents the tax increment that will be received from the development of the Coultrup
Project from 1997-1998 to the end of the Mann -Pier Project Area Plan in the year of 2018
MAIN -PIER Project Area - Cash 'low Projections
(Including Coultrup Companies Development)
1994195
1995/96
1996/97
1997/98
1998/99
EST BEGINNING CASH BALANCE
$1 035 000
($54 000)
($101 604)
($1 936 501)
($1 802 168)
INCOME
Tax Increment (100 A) Non-Coultrup
2 142 083
2 192 556
2 245 396
2 345 643
2 446 899
Tax Increment (100%) Coultrup Co Development
0
0
65 618
131 236
Interest
56 925
(2 970)
(5 588)
(106 508)
(99 119)
T O T (Waterfront)
500 000
525 000
551 250
578 813
607 753
Abdelmub Loan
338 700
340 505
340 505
340 505
340 50S
RLM Ground Lease
253 834
253 834
253 834
253 834
253 834
Lease Payments (438 Main)
14 400
19 200
0
0
0
Land Sale (Town Sq)
27 000
54 000
54 000
54 000
54 000
Land Sale (Third Block West)
O
4 620 000
0
0
0
Land Sale Pacific Park Villas _
_ 0
416 000
0
TOTAL INCOME
$3 332 942
$8 418 125
$3 439 397
_ _ _0
�$3 531 905 ~ y
_ _0
$3 735 108
EXPENSES
NON -DISCRETIONARY
Existing Bond Debt
1 179 145
1 175 905
1 175 665
1 180 985
1 179 585
Huntington National Bank Note
130 000
100 000
95 000 __
___ 90 000_ ___
90 000 _
Pass Thru Payments
30 761
31 376
32 004
32 644
33 297
Property Tax Collection Charge
27 771
28 326
28 893
29 471
30 060
Third Block West
0
4 120 000
0
0
0
TBW Site Remediation
0
250 000
0
0
0
Town Square Parking 18 spaces
0
0
270 000
0
0
Dnftwood Buyouts
900 000
900 000
900 000
900 000
900 000
Abdeimuti Raft SubsK"tsc
384 000
190 000
100 000
75 000
75 000
Abdeimuti Tenant Improvement Loan (2)
750 000
0
0
0
0
Facade Grant Zeidan
0
146 000
0
0
0
Phase 11(Toxics 6 Relocation)
250 000
0
0
0
0
In4ieu Parting Fees
0
120 000
60 000
60 000
60 000
Potential Litigation Costs
0
307 000
1 600 000
0
0
Trainer Facade Grant
38 000
0
0
--
_ 0
0
Sub -Total
3 689 677
7 368 608
4 261 562
2368100
2 367 942
DISCRETIONARY
City Debt
89 816
450 000
450 000
450 000
450 000
Operating
126 760
132 038
138 639
145 571
152 850
Operating Admin Portion (30%)
191,203
195 027
200 878
206 904
213111
Legal Services
83 000
200 000
100 000
100 000
100 000
Legal Services Admin (30%)
11 370
23 370
23 370
23 370
23 370
Business Development (30%)
70 521
96 687
99 845
103 626
107 682
Sub -Total
571 660
1097122
1 012 732
1 029 472
1 047 013
TOTAL EXPENSES
$4 261 337
$8 465 729
$5 274 294
$3 397 671
$3 414 955
Net Cost Coultrup Co s Development
64 000
NET INCOME
(982,395)
(47604)
(1 834897)
134334
320153
Bankruptcy Claims
106 605
EST ENDING Cash BALANCE
($54,000)
($101604)
($1,936 $01)
01,802,168) ($1,482,014)
The Following Mam-Pier Project Area obligations are proposed to be paid by the Hulntington Center Project
Area in order to reduce the Main -Pier Expenses in view of the projected Shortfalls
Huntinaton Center oavment of Main -Pier Obriaations
1994W I 1995M 1996l97 1997M 19911%
Main -Pier Housing Set -Aside Obligations $428 417 $438 511 $449 079 $482 252 $515 627
Main -Pier City Debt Repayment Obligations 3601840 - — 0- 0 - --- 0
Total $788 601 $438 511 $449 079 $482 252 $515 627
MERGED XLS M P 6/2/95 2 43 PM
The following Main -Pier Project Area obligations are proposed to be
paid by the Huntington Center Project Area In order to reduce the
Main -Pier expenses in view of the projected shortfalls
Huntington Center Payment of Main -Pier Obligations•
1994195 1 199S196 1 1990' 1997/58 T 1598/99
Main -Pier Housing Set Aside Obligations $428,417 $438,511 $449,079 $482,252 $515,627
Mam-Pier City Debt Repayment Obligations 360,184 0 0 0 0
Total $788,601 $438,511 $449,079 $482,252 $515,627
HUNTINGTON CENTER Project Area - Cash Flow Projections
EST BEGINNING CASH BALANCE
INCOME
Tax increment (80%)
interest
994/95 1 1995M 1 1996197 1997/98 1 1997/98
$7 036 000 $4 859 729 $3 742,223 $2 661 917 $1 135104
955 424 978 706 1 007 472
386 980 267.285 205 822
1 028 534 1 057 174
140 905 62 431
TOTAL INCOME 1 342 404 1,245 991 1 213 294 1 169 439 11191505
EXPENSES
Non -Discretionary
Exrstug Bond Debt
School Pass -Through
Property Tax Collection Charge
Berge Development
HouslnpSet Valle. Maln Pier Pordon
Education Reverwe Augmeretatwre Fund
DISCRETIONARY
City Debt
city Debt Maln-pler Portion
Operating
Operating Admen Portion (30%)
Legal Sernces
Legal SwAoes Admire Portion (30%)
Busene= Oeve{opment (40%)
1 040 673
1 040 073
1 043,313
1040.230
1 041 163
3 500
4 895
5 045
5 045
5 045
15 000
15 000
1513W
15 606
15 918
155 000
428 417
438 511
449 079
482,252
515 627
$139142
$0
40
$0
$0
Sub -Total 1 626 732
1 498 479
1.512,737
1698133
1 577 753
475 000
475 000
475 000
475 000
475 000
360184
0
0
0
0
39 495
41 470
43 543
45 720
48 006
182,098
191,203
200 763
210 801
221 341
5 060
5 060
5 060
5 060
5 060
11,370
23,370
23.370
23.370
23,370
94 028
128.916
133126
138168
143,576
Sub -Total 1 167,235
865 019
880 863
W8120
916,353
TOTAL EXPENSES SZT93 96T i2,363 498 $2 393 600 $2,696 253 $2 494106
NET INCOME (t1.451,663) ($1 117 SOT) ($1 180 305) ($1.426 814) ($1,374 602)
Bankruptcy Claims 724 708
EST ENDING Cash BALANCE UAMIT29 53,742,29.3 S2,%IA17 1r1,135,404 (W9,398)
HOUSING SET -ASIDE - Cash Flow Projections
(lndudng Cou&up Companies Development)
EST BEGINNING CASH BALANCE
INCOME
Tax Increment (20%)
Five Ponts Senior Villas $250k
Interest
In Lieu Fee Affordable Housing (TNR)
TOTAL INCOME
Expenses
Non-0iscretiona
1994195 I 1995M 1 1996/97 1 1997M 1 1998/99
$1 164,000 (S1,05s 185) ($911,927) ($1 052,339) ($1065165)
871 076
891 415
914291
929 424
952,576
9 500
38 000
38 000
38 000
38 000
64 020
(58 035)
(50156)
(57 879)
(58 584)
0
0
50 000
0
0
$944,696
$971,380
$952135
$909 545
$931,992
Five Points Senior Villas Loan/Grants
100 000
100 000
100 000
100 000
0
OVE If Buyouts
150 000
0
725 Utica Loan Agreement
450 000
0
0
0
0
Thud Block West
0
0
825 000
0
0
BergeDerrelofxrient
650000
0
Pacific Park Was
300 000
450 000
0
0
0
ERAF
139142
0
0
0
0
Bnsas del Mar
243 717
0
0
0
0
Coultrw Cort>panies Developmend
1,334,5W
0
0
0
0
Sub -Total
Z717,359
550 000
925 000
750 000
0
DISCRETIONARY
Operating
54 671
42,368
44 486
46 711
49 046
Operating Admen Portion (10%)
55,540
57 743
60 049
62,650
651368
Legal Services
20 000
20 000
20 000
20 000
20 000
Legal Services Admen Portion (10%)
3 411
8 011
8 011
8 011
8 011
Transfer to Emerald Cc"
80 000
35 000
35 000
35 000
35 000
Mobile Home Review Committee
15 000
Sub -Total
213 622
178122
167 547
172 372
177 426
TOTAL EXPENSES "30,981 $M 122 $1092,647 $922,372 $177.426
NET INCOME (S1,986.sss) $143,2s8 ($140,412) ($12,826) $764,666
Bankruptcy Claims S232,800
EST ENDING Cash BALANCE (s1.10561185) ("11,927) (S1052,339) 1S11,0661g6) ($310699)
Other Economic Factors Affecting the
Main -Pier Cash Flow
1) Economic Recession Resulting in
Decreasing' Tax Increment
2) Orange County Bankruptcy Resulting in
20% Reductl*on in Fund Balance
3) State Taking Tax Increment for Other
State Purposes
0
The Agency needs to make a financial determination as
outlined in Section 210 (xi) of the DDA which states:
"In the event any of the Agency's conditions
precedent to the conveyance are not satisfied
or waived by Agency within the time periods
provided herein and, with respect to any claimed
default by either or both of the developers hereunder
and the applicable developer has not cured said
default within thirty days after written notice
from Agency,
Agency may, at its option, terminate this Agreement
and'any escrow opened hereunder."
Summary:
Agency Project Costs Went Up
Agency Revenues Went Down
Recommended Action - Motion To:
Make a determination that the Agency does
not have sufficient funds available to complete
all of its obligations under the DDA, Direct
staff to return with appropriate follow-up action.
�1 CITY OF HUNTINGTON BEACH
INTER -DEPARTMENT COMMUNICATION
N�►+'�G14� IiCH
TO: RAY SILVER, Assistant City Administrator
FROM: DAN T. VILLELLA, Director of Finance
RECEIVED
J U L 1 ; 1995
C1714r PUNI A , [OH BEAC4
N21111C -10-1 OFFXE
SUBJECT: MAIN PIER PROJECT AREA FINANCIAL CONDITION
DATE: JULY 14, 1995
In compliance with your request, we have reviewed information pertaining
to the financial condition of the Main Pier Project Area. Information
surveyed included: The Request for Redevelopment Agency Action dated
June 5, 1995, Determination of Agency Financial Ability to Perform
Obligations Under Coltrup Companies et. al., Disposition and
Development Agreement (Main Pier Redevelopment Project Area; the
Property Tax Increment Revenue Projections, as prepared by Vernazza
Wolfe Associates, Inc.; the Economic Analysis: Phase II - Block 105
Condominiums as prepared by Keyser Marston Associates, Inc.; the
Redevelopment Agency Financial Statements as of, and for the fifteen
months ended September 30, 1994 as audited by KPMG Peat Marwick
LLP; and miscellaneous other internally prepared and provided
documents and schedules.
The September 30, 1994, financial statements provide the most useful
information regarding the financial status of the Redevelopment Agency
since they are actual amounts that have been audited by an independent
certified public accountant corporaticn. Most of the other sources of
information are estimates and projections. These financial statements
show that as of September 30, 1994, the Agency needs to provide an
additional $117,511,000 to repay its entire debt. To fully amortize this
debt over twenty-four years (to the year 2018), would require annual
payments of approximately $10 million. The Main Pier Project Area's
portion of this amount to be provided is approximately $88 million which
would require an annual payment in excess of $7 million to pay this debt
in twenty-four years.
The Agency's primary source of revenue is tax increment. Vernazza
Wolfe Associates, Inc., (VWA), reviewed historical assessed valuations
for all of the project areas and projected future tax increment revenues
through fiscal year 2003104. Their projections for the Agency range from
MAIN PIER �wOJECT AREA FINANCIAL CONc6fbNS
e
$4,355,380 for 1994/95 to $5,351,395 for the fiscal year 2003/04.
Projections for the Main Pier Protect Area were $2,142,085 and
$2,599,455 for the same years respectively.
In-house cash flow projections shows that the Agency intends to disburse
approximately $10 million more than is estimated to be received during
the five year period ending September 30, 1999. Main Pier is projected to
disburse approximately $3,750,000 more than it is anticipated to receive.
Material attached to the June 5, 1995, Request for Redevelopment
Agency Action and subsequent schedules prepared by staff indicate that
various material amounts of monies could be designated and used for the
subject project. This would appear plausible since there are expected
expenditures labeled as Discretionary and anticipated cash sources being
dedicated to this project.
It is difficult to evaluate the information prepared as projections or
estimates. Such numbers often rapidly change within a relatively short
time even if prepared by the same individuals. Review of the
methodology, assumptions and known circumstances do not dictate that
any material changes would be warranted. With the assumptions that
these projections are materially accurate, the Agency would be able to
proceed with this project. This is accomplished by the Agency's annual
practice of increasing its total debt. The difference between being able to
pay and being able to afford becomes the issue.
The majority of the Agency's (and Main Piers) debts have no fixed
repayment schedules. Because of minimal payments, the balance of this
debt has steadily increased over the years. The Agency has not
developed a repayment plan and it would be impracticable to support
such a plan with an analysis of future payment sources. Hence, the City
is now compelled to estimate which and how much of its advances to the
Agency should be determined as uncollectible.
Because the Agency and/or Main Pier Project Area will not be able to
repay all of its present debts, it would not be prudent to increase debt,
unless it was certain that the debt would cause generation of significantly
more revenue than expenses, thereby allowing the Agency to pay more of
its total debt then presently anticipated. The Keyser Marston Associates,
Inc.'s, economic analysis and the California Committee's Redevelopment
Law,.§33433 report indicate that the present project would not meet this
criteria. The land presently owned by the Main Pier Project Area is of
greater economic value than net value cf completing the project.
0013324.01 -2- 07/14195 12:45 Ph1
MAIN PIER F'' JECT AREA FINANCIAL CONP ONS
The Agency, in conjunction with the City, should review its outstanding
obligations and determine which debts it will attempt to honor, and the
projected timing of the repayments. After this effort, the Agency will be in
a much better position to analyze the affordability of potential projects.
424e 71 ��ee!Z�c
DAN T. VILL LLA
Director of Finance
DTV:skd
cc: Robert.!. Franz
Art DeLaLoza
0013324.01 -3- 07114/95 12:24 PM