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HomeMy WebLinkAboutRedevelopment Agency - Neighborhood Enhancement Project - Co REQUEs r FOR CITY COUNCIL ACTION RH 88.63 Date October 3, 1988 Submitted to: Honorabl_- Mayor and City CounO; Members Submitted by: Paul E. Cook, City Administrator Prepared by: Douglas N. La Belle, Deputy City Administrator/Economic Development Subject: FUNDING FOR ADDITIONAL UNIFORM OFFICER A O CpUNCiL CIRCLE Consistent with Council Policy? j j Yes [ j N,sw Policy or Excepti n E '` CITY GLS Statement of Issue, Recommendation,Analysis, Fundin0.3ource,Alternative Actions,Attachments: STATEMENT OF ISSUE: The Huntington Beach Police Department is continuing Its efforts in addressing the problem of drug sales and crime at Commodore Circle. However, the Police Department has recently expressed a desire to expand the enfcrcement activities In this area., The Economic Development Department has funds available in the Community Development Block Grant (CDBG) Commodore Circle account to fund additional Police personnel for this area. RECOMMENDATION: Approve the transfer of $10,000 from CDBG Account - Commodore Circle 894850 to Police Overtime Account 332130 to be expended exclusively for additional Police personnel at Commodore Circle. ANALYSIS: In a concerted effort to improve the conditions of the Commodore Circle area, the Economic Development Department and Police Department have identified the need for r additional Police personnel to be assigned specifically to the Commodore Circle area. The additional personnel will consist of two uniformed officers in a black and white stationed at Commodore Circle between the hours of 9:00 p.m. until 3:00 a.m., seven days a week. This Police presence should discourage drug sales and other criminal �. activity taking place during these hours. FUNDING SOURCE: Federal Community Development Block Grant funds previously allocated to Commodore ,Circle. t ALTERNATIVE ACTION: Do not approve the transfer of these funds and continue the current )eve; of Police staffing for this area. PEC/DLBJEN:sar 3674r l �JnJ@ CITY OF HUNTINGTON BEACH ca s8-9s it., COUNCIL - ADMINiSTRATOR COMMUNICATION HUHriacraN ak�i To Honorable Mayor and From Paul E. Cook City Council Members CIty Administrator Subject COMMODORE CIRCLE STATUS Date September 22, 1988 REPORT-OCTOBER 3, 1988 COMMODORE CIRCLE STUDY SESSION The attached report is intended to provide an update on staff's action to Implement the City CouncIl's direction at Its meeting of August 13, 1988. Additionally, at that time, It was your further action to schedule a study session on this matter in 30 days which has now been scheduled for October 3, 1988. PEC/EN:sar Attachments xc: Douglas N. La Belle, Deputy City Administrator/Economic Development 3673r/1 r ,l . f f: / . ,__.........�. �_.... ....... . .yv ..�.�........���.�..��...���...�....�w..Mr.�.b:..T.7s'vJ:r:•R'T:.liyCV,y1-Yt..-�'�'~-r,;A;r�' L I S'f UDY SESSION October 3, 1999 COMMODORE CIRCLE PROJECT UPDATE 1. Progress of Construction Project: The physical improvements such as new sidewalks, entry walls and 'andscaping, " additional street lighting, new alleys and resurfacing of the street are currently underway. The demolition work has been completed, and the concrete work is anticipated to begin within the next two weeks. Following the completion of these public right-of-way Improvements, the on-site landscaping will proceed. The on-site landscaping will Include new grass, perimeter fencing, sprinkler system and new shrubbery and trees. The anticipaV-d completion date for all construction work is February 1, 1989. I 2. Condemnation and Resolution of Necessity for Creation Lot "A": A continuing "eye-sore" and health/safety hazard on Commodore Circle has been the Lot"A" or recreation lot at the terminus of the cul-de-sac. This lot was originally designated as a recreation lot and included a pool and two recreation buildings. Over a period of years the recreation lot has fallen into disrepair$ thr pool has been filled with soil, and the recreation building deteriorated and boarded up. Staff's recommendation Is to condemn the Lot "A" and acquire the property through eminent domain for public use. This can be accomplished at the October 24, 1988 City Council Meeting and immediate possess;on taken by the City. The appraisal value for the recreation Lot "A" is $26,000. If the Resolution of Necessity is approved by the City Council on October 24, 19880 � the City can proceed In developing this area as a public open space area. The development of this parcel would Include clearing the site of existing structures, and ; adding grass, trees, and a covered area with picnic tables. This area could then be used for recreational and educational programs offered by the City. The park area would be maintained by the City thus insuring continued maintenance of this parcel. r. 3. Property Manager: r . On August 13, 1988 the City Council approved the expenditure of $30,000 to hire an onsite property manager. City staff har contacted several property management firms during the past 30 days. None of the firms contacted expressed an interest in managing the units on Commodore Circle. Three choices for a property manager are identified below: - Current resident of Commodore Circle. - Hire through advertisement and City pays rent for manager plus a nominal management fee. - Continue to seek property management firm. Also, the City Council may choose not to hire a property manager and increase the zoning enforcement to address the problem of overcrowding. kA I 4. Social Outreach Programs: A number of social programs will be offered to residents of Commodore Circle based on many comments received at the August 15, 1988 City Council Meetin regarding a need for this type of service for Commodore Circle. These programs win Include the start-up of alcoholics anonymous and family anonymous in Spanish at Pacifica Hospital. Also, the LOGOS Youth Employment Program will contact 14-18 year old residents of Commodore Circle interested in participating in the youth program. Also planned for this street is a Neighborhood Watch Program to be discussed with the residents within the next 30 days. Finally, with the asAstance of residents, a Street Fair will be held which will bring together City programs, food, music, and other activities. 5. Police Enforcement: +: ,1 1'. The Police Department Is continuing Its efforts in eliminating drug sales and other criminal activities In this area. Upon City Council approval, additional funds will be transferred to the Police Overtime Account from the Coi,imunity Development Commodore Circle Account to provide for uniformed Police personnel to be stationed at Commodore Circle. 6. Zoning Enforcement; .� The City Planning Department and the County of Orange will Increase enforcement t'a of .ccupancy standards for Commodore Circle apartment units. This enforcement Ri will he continuous until the housing of numerous non-related individuals Is curtailed y� and the property owners are able to monitor the number of tenants occupying their apartment units. y 7. City Housing Authority/Redevelopment Project Area/Powers of Condemnation: M The City staff received direction from the City Council on August 15, 1988, to begin the formation of a Redevelopment Project Ai%:a for Commodore Circle and/or Investigate the potential of forming d City Housing Authority with the powers of '• condemnation for housing. Upon consultation with the Redevelopment Agency �•1 Special Council, the Mayor's Committee, and the City Attorney, the most practical and expeditious method in obtaining the powers of condemnation is through the , adoption of a resolution forming a City Housing Authority. This housing authority could operate concurrently with the Orange County Housing Authority (OCHA). The ` City could continue contracting with OCHA. for the administration of the Federal r: Section 8 program. By forming a• City Housing Authority the City may undertake housing projects which may include condemnation through eminent domain. �. ATTACHMENTS: I. 1. Housing Authority Memorandum regarding formation of City Housing 1% Authority/Powers of Housing Authority. 2. Memorandum Opinion regarding acquisition of housing site through eminent domain. 3. Letter from Orange County Housing Authority to Federal Department of H.U.D. 4. Draft proposal seeking property manager for Commodore Circle. EN:sar 9-16-88 3675r .I • • I I 04 00 FIA wS'WC& R rle r- o r t Be h CA 2- 02 MEI� oRANDUM . T0: Steve Kohler FROM: Barbara Zeid RF: Formation of City Housing authority/Powers of Housing Authority AAWZ July 18, 1988 ss�ssasscs .'-�'as:a�a��AC�zssae:ss�����=c::a��:��r.��ssras_=�tss:atz=sas A City Housing Authority is a. public body exercising public and essential government functions and having powers necessary or convenient to carry out the promotion of sanitary, oaf* and affordable housing in its jurisdiction. The formation, activities and powers of local housing authorities are governed by the Housing Authorities Law (Health and Safety Code §34200 t aeQ. ; all statutory references heroin shall be to the Housing Authority . , Law) . w 'i FORMATION OE A CITY HOUSING AUTHORITY S, Formation of Authority Formatio:: of a City Housing Authority is relatively { simple. The City Council must adopt a resolution declaring r` that a need existo for an authority to function in the city (634240) . The resolution may be adopted upon the Council' s own motion. or upon the filing of a petition signod by twenty-five (25) residents of the city asserting the need for a housing authority to operate in the city (g34241) . The determination { of need roust be aubstintiated by appropriate findi:tga incorporated Into the resolution that: (2) unsanitary or • ATTACHMENT 110. 1 i 4 _ . 04 00 • P" wg'jra& R rifwpa r t Bch CA P03 unsafe inhabited dwelling zccommcdations exist in the City, and/or (2) there is s shortage of safe or sanitary dwelling accommodations in the city available to persons of low income at rentals they can afford (§§34242, 34244) . In determining whethor dwelling accommodations are unsafe or unsanitary the City Council may consider: (1) the degree of overcrowding; (2) the percentage of land coverage; (3) the light, air, space and access available to the inhabitants of such dwelling accommodations; (4) the size and arrangement of the rooms; (5) tie sanitary facilities; and (6) the extent to which conditifLTA exist in such buildings which endanger life or property by fire or other causes. Arpoi.ntment of Commissio nsrs Upon adoption of a resolution declaring the need for a housing authority, the City Council, subject to certain requirements, appoints fiVe or seven housing authority cotmissioners who serve staggered terma of one, two, three or four years (§634270,. 34272) . The councilmembers may, and often do, elect to appoint themsolves as the commissioners of the housing authority (§34290) , Area Housing_Authori_,,_y The Housing Authorities Law contains alternative provisions authorizing a city to form an area housing authority pursuant to an agreement with any other city or county whose governing body has also declared by resolution a need for an authority to function in its jurisdiction (S$34240.1, 34246, 34246,5, 34247). 07/18/88 . 0643n/2460/001 I ,1 04 s Op PM * gjrca• R Nawpo r t lee h CA PO4 i i Cooperative Agreement and BY-laws Upon adoption by o city council of a resolution creating a housing authority, the council may, but in not required, to contract with the Department of Housing and Community Development or any other authority for the provision of necessary staff eservic:es (534250) . It is suggauted that A City Housing Authority itself could enter Into a cooperative agreement with the city to provide necessary staffing. Thi,a •ir. expressly provided by statute with respect to legal services ` required by the Authority in that an authority may call upon they chief law officer of t:ze city or may employ its own counsel and legal ,staff (634279) . Once formed, a City Housing Authority may also make, amend, and repeal by-laws and regulations to carry into effect the powers and purposes of the Authority (134321) . Althot,tgh not specifically authorized by statute, the Authority may elect to include provisions restr3ctinq or prioritizing the geographical boundaries in which it will operate. POWERS OF A CITY HOUSING AUTHORITY General Powers A City Housing Authority is authorized to operate within I the city in which it is formad and within five miles of the i city's territorial boundaries, exclusive of area within the Jurisdiction of another city (unless approved pursuant to agreement) and unincorporated areas -,,-here a county authority has already been authorized to transact business (§34208). As 07/18/88 0643n/2460/001 -3- i s • .V...... .. I 16. 86 04 00 .112*A P; ewpo r t Bch CA P05 suggested above, an authority may elect to limit the exercise of its powers to certain priority areas. A City Housing Authority may exercise many powers within its area of operation subject to specific requirements relating to income reetrictions and financing mechanisms outlined in the Housing Authorities Law. in general, an Authority may: (1) prepare, carry out, acquire (including by eminent domain (134325)), lca+ae, sell, own, operate and manage housing projects; (2) develop, rehabilit;te, or finance housing projects; (3) participate in or provide for the financing construction, reconstruction, improvement, alteration, or repair of all or part of any housing project (1134312, 34312.3) . in addition, a City Housing Authority is authorized to make and, execute contracts and other instruments necessary or convenient to the exercise of its powers, including contracting for services in connection with a housing project ( 1534311, 34314) . "housing :nclud s . Pursuant to §34212, a ho inq c : "Any work or undertaking. . . to which a state public � body [including a city) extends assistance by supplying all or part of the labor, by guaranteeing the payment of liens, by providing Financing through the issuances of its debt obligations, or otherwise, for anyone or *a combination of the following purposes: (a) [slum clearance) . . . ;b) provide decent, safe, and sanitary urban or rural dwellings, apartments or other living accommodations for persons of low income [including assistance to multifamily rental housing projects where less than 50% of the units are occupied by low-income persona) . Such work or undertaking may include buildings, land, equipment, facilities and other raal or personal property for necessary, convenient or desirable Appurtenances, streets, 07/19/88 0643n/2460/001 -4- "'R Zvi..'A. .... •"aJ... .... t. 4... .. �.. .... ... .i.. r.. • .. .. _T...L.+.�.w .«. . t s.td,.A...�i,tyJ'.•�.rr..n.y..�,. ...�....M.�...w ' 1 1 6. 63 04 00 P?4 w ! 'Vcs- R NawP o r t H 0 h CA FOp Pr W- sowers, water service, parks, site preparation,_ gardening, administrative, community, health, recreational, educational, welfare or other purposes. " Assistance to Low income Persons i i A city Housing Authority may assist low income households by: (1) providing Massed housing to persons of low income; (2) providing financing for the construction or rehabilitation of dwelling accommodations for persons of low incomes (3) providing counseling, referral and advisory services to paroons and families of low or moderate income in connection with the purchase, rental, occupancy, maintenance or repair of housing, and (4) providing the security which the Authority deems necessary for the protection of a housing project and its inhabitants ( 534312) . In addition, an authority may convey surplus lands it acquires from another public agency to a non-profit or private developer for the development of single-family homes where the development will provide home ownership for persons and families of low or moderate income ( 934312.3) . Financing Powers The financing powers of a City Housing Authority include the power to: (1) iauue bonds for cry of its corporate purposes, including tax or tax-exempt revenue bonde for the purpose of financing the construction or development of multi- family y rental ental housing and for the provision of capital improvements in connection with such housing; (2) make or undertake commitments to make construction loans and mortgage loans to finance the development of multifamily rental housing, 07/18/88 0643n/2460/001 -5- 1 d. ee 04 00 PM YPOYCA. R rlswrort Bch C.A. P07 and (3) purchase or undertake commitments to purchase construction loans and mortgage loan• originated in accordance with a financing agreement with the authority to finance the development of multifamily rental housing (§§34312.3, 34350) . An authority is also empowered to implement a home-financing program including the authority to Acquire, contract, and enter into advance commitments to acquire horns mortgages, and to make loans to lending institutions for the making of home mortgage's ( 134312.4) . Pow6ro Relating to Insurance In addition to housing authority powers concerning acquisition and disposition of property, a City Housing Authority may insure or provide for the insurance of any real or pirsonal property or operations of the authority against risk or hazards, lend upon the security of a mortgage or deed of trust, in connection with the sale of real. property to persons of low income, and procure insurance or guarantees from the federal government or the California Housing Finance Agency or from any persons licensed to i6iiure mortgages in this state of the payment of all or part of any debts, whether or not incurred by the authority, secured by mortgages or deeds of trust on any property included in any of, Its housing projects (§34315) . i 07/18/88 0343n/2460/001 -fi- CV4 Li,me CITY OF HUNTINGTON BIUCH INTER-DEPARTMENT COMMUNICATION "uwrrrcro++.w �fr, x4 741 ' Douglas N. LaBelle, Director From Gail Hutton Arm 01* To Community Development City Attorney Acquisitran of Housing Site Date August 29, 1988 Sub3ect through Eminent Domain MBM©RANDUM OPINION Statement of Facts: On August 15, 1988, the City Council requested the Housing and Redevelopment Staff to begin the formation of a redevelopment project, area for Commodore .Circle. Commodore Circle is a cul-de-sac street located just north of Main . ' Street between Delaware Street and Huntington Street. During the past three years, the street has attained a high visibility as a result of strict zoning enforcement of housing conditions (1985), drug dealing and police sweeps (1988) , and gathering of day workers in the. morning hours (1989) . During the past few months, the residents of two condominium associations abutting Commodore Circle have expressed continuing concerns regarding problems in the area. A question has been raised as to whether the City under its Charter powers can condenn housing for public good? Analysis: Although the "charter" provisions do not provide for taking of property pursuant to eminent domain, the government code does authorize a city to acquire property by eminent domain. i The codes do not authorize condemnation for public "good," but' r for public "use or purposes." The taking of property must he for a proper public use. Code of Civil Procedure 5 1240.010. The public use concept Ras Been greatly liberalized in decisions upholding the elimination of slums and bliyhted areas by publicly financed "redevelopment" or "urban renewal" programs. The public purpose in the governmental condemnation of the land is obvious. But the property is eventually sold or leased to • private pereons so there is, strictly speaking, no taking for public purpose. Nevertheless, such programs have been upheld where the public need exists (health, safety and a_eneral welfare menace by slum) and cannot be satisfied by private enterprise or governmental action under the police power. Thus, the restricted concept of "public use" gives way to a new concept of "public purpose" a:sd the power of eminent domain is properly exercised even though the use after the I AT'.rACHmm No. 2 -1� �w.+++itp.•a _tt J:.:i.!•LA"iF'+a.i. :..a . r ..._ .. .. .. ... .. .._ . ...n....... ..n...wr _. ...eu_p.+.►.«r......r l...-... -.�-.+......+R11 1 4 1 taking is a private use. Winkelman v. City of Tiburon (1973) 108 Cal.Rptr. 415. Government Code S 37350.5 provides: "A city may acquire by emitient domain any property nacessar.- to carry out any of its powers or functions." The eminent domain law states that property "includestreal and personal property and any interest therein." Code of Civil Procedure S 1235.170. An authorized condemnor may acquire property of any ,type necessary for public use except where power is limited by the particular statutory grant. Another entity that may acquire housing through eminent domain is a Housing Authority. Health and Safetx Cade S 34325 provides: "An authority may acquir�y e;ninent domainany real property which it deems necessary f-:r its purposes under this chapter." "Housing Authority" means a housing authority created pursuant. to the housing authority's law. Health and Safety Code S 34103. "Authority" means a public corporation created pursuant to the housing authority's law. Health and SafetX code S 34203. The City's housing authority is created and its powers are exercised by City Council resolution. Health and Safety Code S 34240. "Housing project" treats any work or undertaking to be financed in whole or in part by the Federal government or a state public body or to which the Federal government or a state public body extends assistance by supplying all or Fart of the labor, by guaranteeing the payment of liens, by providing financing through the issuance of debt obligations or otherwise or any one of the combination of the following purposes: A. To demolish, clear or remove buildings from any slum area.. Such work or undertaking may embrace the adaption of the area to public purposes, including parks or other recreational or community purposes. H. To provide decent, safe, and sanitary urban or rural dwellings, apartments or other living accommodations of people of low income and persons and households eligible for housing assistance pursuant to S 34312.3. Such work or undertaking make include h.tildings, land, equipment, facilities, and other real or personal property or other necessary, convenient or desirable appurtenances, streets, sewers, water service, Farksl site preparation, t gardening, administrative, community, health, recreational, educational, welfare or other purposes. "Housing projects" also include the planning of building improvements and the acquisition of property. Health and Safety Code S 34212. f w2_ 1 ! 1 .- good and the protection and indemnification of private citizens whose property is taken to advan.:e that good. That protection is constitutionally ordained by the Fifth Amendment to • t?e United States Constitution which is made applicable to the states by nature of the 14th Amendment and by Article one, Section 19 of the California Conetitution. There may be a question regarding whether or not a particular -housing site was being taken for a public use. Public use within the meaning of the California Constitution is a use which concerns the whole community or promotes general interest in relation to any legitimate object of { government. But the meaning of the term depends largely on the circumstances under which it is applied. The following uses and purposes have been recognized as public uses or purposes are applied to the exercise of the power of eminent domain: Airport.. Community redevelopment, Electric power lines, Highway, Parking facility; Railroad; School; Sewage disposal] Sturm drainage systems and water supply system. if the city is acquiring housing pursuant to eminent domain for one of these purposes, the City should be able to acquire that housing provided . it complies with all laws that apply to the procedures for that public use and purpose. Conclusion: The City may obtain housing through eminent domain providing the taking of the housing is for a public use and providing that the following factors exist: The public interest and necessity require the project; The project is planned or located in the manner that will be most compatible with the greatest public good and the least: private in jury: snd• The property sought to be acquired is necessary for the project. P Gail Hutton City Attorney ill sg I' i _4•- r ..r+..+-r.w+r..wn...n••w n rv-.•".. ... a. _. .... _ . .. .. .. . .... .. _. •. ..... .... fie_1.Mwr..w.i: ..J. ...4.«+.J7 a.r1t:...a I ' ' ORANGE COUNTY HOUSING AUT,.ORITY '� •• 2043 North Scoadway • Santa Ana.Ca'dornia 92706 • (7141 036.3033 September 2, 190a RECEIVEj) ' 1 SEP p 6 Ig�� Dr. Ben:amin Bobo, Area ManagerIDEpARTMEF(T. OF COMMuIy( U.S. Department of Housing and �VELOP, �NT Urban Development Los Angeles Area Office, Region IX 1615 Kest Olympic Boulevard Los Angeles, California 90015-3801 Dear Dr. Bobo: The purpose of this letter is to seek your concurrence in the following course of action: Orange county Housing Authority (Or=) plans to continua to contract with the City of Huntington Beach to administer the Section 8 Existing Certificate and Voucher programs in that city in the event that the city should decide to form its own housing authority. Recently, Huntington Beach, one of our participating cities, has informed OCHA that the City Council is considering the formation of a city housing authority. The city, however, wishos to continue in its current relntionsbip with OCHA, i.e., OCHA would continue to administer the Section 8 rental assistance program on behail.f of -Huntington Beach. OCHA currently administers the: Section 8 Existing rental assistance program in the unincorporated area of Orange County and in all of the cities of the County, except Santa Ana, Anaheim, Garden Grove and Brea, four cities which have . their own Housing Authorities and have barred OCHA from operating within their jurisdictional. boundaries. OCHA's present Section 8 Exieting rental assistance program consists of 5,245 certificates for which the Annual Contributions Contract expires on October 7, 1990, and 490 vouchers. CCHA's waiting list includes applicants residing in all of the jurisdictions we serve; Certificate and Voucher holders may select housing in any of our participating Jurisdictions. This policy permits Certificate and Voucher holders to seek housing over a very broad geographic area. I have reviewed the relevant Code of Federal Regulations and California Health & Safety Code, Housing Authority Law, and consulted with legal counsel regarding the legal ability to continue our administrative arrangement with the city in the event that a city housing authority if Zormed. The regulations and law appear designed to encourage such cooperative ventures. i i . ATTACHMENT NO. 3 i i Dr. nenjamin Bobo September 2, 1988 Page Two The following excerpts from the above-montioned codes appear relevant to our situation: Any two or more authorities may join or co-operate with one another in the exercise either jointly or ' otherwise, of any or all of their powers for the purpose of financing, including, but not limited to, the issuance of bonds, notes, or other obligations and giving security therefor, or planning, undertaking, owning, constructing, or operating, or ontering into any contract with respect to any housing project or projects located within the area of operation of any one or more of such authorities. For any such purpose, one authority may provide by resolution that another authority with which it has joined or is cc-operating in the exercise of powers is authorized to act on its behalf with respect to any or all of the Lowers, as its agent or otherwise, in its name, the name of such other authority, or in the nar.,es of the authorities which have joined or ' are co-operating. California Health G Safety Code Section 35324. (c) PHAn are encouraged to promote greater choice of housing opportunities by: (1) Seeking participation of owners in any area in which the PHA has determined that is is not legally barred from entering into Contracts, (2) Advising Famil.im^ of their opportunity to lease housing in i all .ar ?.. areas, (3) Cooperating with other PHAs by issti% Certificates to Families already receiving the I.enefit of Section 8 housing assistance paymet.tc who wish to move from the operating area of she PRA to another, and (4) Developing ?a i•i' strative arrangements with other PHAs; in c.e�lar to permit Certificate Holders to seek housing in the broadest possible area. In any geographic t area established for the purpose of allocating funds, HUD will give preference in funding to PHAs which provide Families the broadest geographical choice of units. 24CFH 882.103(c). 1 � f t , 1 Dr. Benjamin gobs September 2, 1988 Page Three In order that I may respond to the City of Huntington Beach in a timely mariner, I would appreciate a written response from your office concurring with the coarse of action presented in this letter, by September 23, 1983. If you foresee a problem responding by that date, or if you have cpiastions, please call me at (714) 836-3002. I Thank you in advance for your assistance. Sincerely, I Sandra J. McClymonds Executive Director WK-.bjg cc: Hs. Beverly Kendrick, Chief, Assisted Housing Management Branch HUD Lou Angeles Area Office, Region IX Mr. Kenneth Brackenhoff, Supervisor Housing Management Specialist, Assisted Housing Management Branch, HUD Los Angeles Area Office, Region IX Mr. Willia A. Baker, Director, Orange County Ca mnity Services Agency Ms. Sandra hard, Executive Assistant, Orange County 2nd supervisorial District Mr. Douglas laBalle, Deputy City Administrator/Community Development City of Huntington Beach Hr. Benjamin do Mayo, Orange County Deputy County Counsel MANAGEMENT OF COMMODORE CIRCLE APARTMENTS THIS AGREEMENT WILL PROVIDE FOR THE MANAGEMENT OF 20 APARTMENT UNITS LOCATED AT COMMODORE CIRCLE IN HUNTINGTON BEACH. THE AGREEMENT WILL BE EFFECTIVE ON A MONTH TO MONT:i BASIS AND CAN BE TERMINATED BY EITHER PARTY WITH A 30 DAY NOTICE. The following services will be provided and reported to the city ind property owner on a quarterly basis; 1. Provide a list of all occupants residing in each unit and their relationship to each other on a quarterly basis. 2. Provide a list of vehicles with license plate numbers for each occupied unit and identify the owner of the vehicle. 3. provide a list of needed repairs for each apartment unit . 4 . Enforce all provisions of the rental agreement, especially notification of guests, and maintain up to date agreements. 5. For units which are overcrowded, serve a thirty day notice to occupants not listed on the rental agreement form. b. Act as a contact person for Commodore Circle property owners , adjacent condominium property owners, and City staff . 7. Provide minimal cleanup activities or notify the person reponsible for removal of trash and debris . The activities listed above will be provided for a fixed cost of $140.00 per month for each building serviced. An invoice Hill be provided on the first of each month for work provided during the previous month and must be payed by the 15th of the month in which it was received. PROPOSAL SUBMITTED BY PROPOSAL ACCEPTED BY ATTACHMENT No. 4 --1 0, REQUES f FOR CITY COUNCIL. ACTION RH 88-50 Date August 15, 1988 Submitted to: Honorable Mayor and City CouncilMembers Paul E. Cook, City Administrator Submitted by: -- f Prepared by: Douglas N. La [belle, Deputy City Administrator/Community Developm I subject: COMMODORE CIRCLE PR03ECT ANALYSIS AND ALTERN iTY GoUNGIL 'llll 1 Consistent with Council Policy? Dq Yes ( ] New Policy ur Exception xX� Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: STATEMENT OF ISSUE: Commodore Circle has received much attention at recent City Council Meetings regarding crime, loitering, and generally poor housing conditions. The Housing and Redevelopment Division has prepared a compr.-hensive analysis of the existing Enhancement Project for the area and an alternative senior housing project. This Information Is attached for your review. RECOMMENDATION: Upon review and consideration of the two alternative projects for Commodore Circle: 1) Authorize staff to continue the Neighborhood Enhancement Project. or 2) Cancel the contracts associated with the Neighborhood Enhancement Project, and authorize staff to proceed with a senior mousing project. or 3) Instruct staff to explore oth!T alternative housing possibilities. ANALYSIS: Coupled with the tttached analys(•s, staff will be prepared to discuss other alternatives. FUNDING SOURCE: 1) Enhancement Project - previously budgeted Community Development Block Grant Funds = $450,000. 2 Senior h o� housing project - Tax increment set-aside funds = $6,478,000. Unobligated General Fund Account = $1,582,000. i f ALTERNATIVE ACTION: None. PIQ G/at •..• +.� . �.. �............rl .Y• .. .. . .. .•• .. . ... ... .... '.1 r..I r .'0..♦KTlaa.y�ww�..w.. �.l w. o'•r+n.Y-H+ 'TV RH 88-50 August 15, 1488 Page Two ATTACHMENTS: 1. Commodore Circle Analysis 2. Neighborhood Enhancement prior authorization information. 3. Commodore circle cost estimate for senior housing conversion project. 4. R.J. Szolomayer do Co. - Development Cost Brea kdown/Pro form a 5. Stradling, Yocca, Carlson h Rauth memorandum regard!ng acquisition through eminent domain. 6. Discussion paper - Regarding formation of Huntington Beach City Housing Authority. PEC/DLB/EN:sar 3468r 'I i i •.,n,t:.,uaYnxcv+rx;ar.:.�^�:4w+«v.K�+u txncK;t 1 f f A � ATTACHMENT I rV �Ii f rf i •r,e COMMODORE CIRCLE ANALYSIS S�'{ rin �•4 pi;; -;r i 1 M 1I1. 1 t COMMODORE CIRCLE ANALYSIS Background: Commodore Circle Is a cul-de-sac street located just north of Main Street between Delaware Street and Huntington Street. During the past three years the street has obtained a high visibility as a result of strict zoning enforcement (1985) of housing conditions, drug dealing and police sweeps (1998), and gathering of day workers In the morning hours (1988). during the past two months the residents of two condominium associations abutting Commodore Circle have expressed continuing concerns regarding problems In the area. As a result of this citizen Input, the Housing and Redevelopment division was requested to prepare an analysis of current and future Improvements planned for the street (including funds previously disbursed), and the potential for a senior housing (new construction) project for the street. in presenting this Information the staff has Identified two alternative plans for the City Council's consideration. Each plan will be presented as a separate and distinct project requiring a number of action steps In order to accomplish the desired result. The two plans will hereby be Identified as Project "A" which will refer to the existing Commodore Circle enhancement plan, and Project 1113" which Is a comprehensive plan for project acquisition, relocation, and development of a senior housing project. ENHANCEMEN'r PROJECT Protect Analysis: 1 — Project "A" Commodore Circle Enhancement - This Is the project currently being Implemented by the Housing and Redevelopment division. This project Is scheduled to be Implemented In three phases with additional Issues to be addressed as needed. PHASE I - rehabIlitation of existing units Is neerly complete with four active loans currently under construction. To date the property owners have borrowed a total of $561,021 to rehabilitate 17 of the 20 buildings. All owners have signed license and maintenance agreement forms guaranteeing to maintain any and all Improvements constructed un their property. PHASE 11 - Off-site public Improvements to include new walkways, landscaping, entry walls, and asphalt paving. This Contract has been executed by the City and Excell Paving Company on July 6, 1988 In the amount of $210,000. The contractor Is prepared to begin the Improvements upon receipt of "Notice to Proceed" order from the city. PHASE In - This phase Includes landscaping Improvements on private property. This final phase will greatly enhance the area with grass, trees and perimeter fencing. The owners have agreed to perform these Improvements with financial assistance from the City. The Improvements will begin Immediately following Phase If. 1 Total Funds Expended $561,021. Total Additional Funds Allocated For Improvements 450,000. i Social Issuej: Many of the problems associated with Commodore Circle are. not related to the physical appearance of the area. The social problems must also be addressed If this area Is to become compatible with the neighborhood. The primary social problems identified In this P. ea are as follows: 1. Drug Sales i 2. Loitering j 3. Overcrowding I ....__....... ._.._ .._ �.�.___ .....,...,� "otential solutions for these can be addressed as iollows: I. Drug Sales - continue a zero tolerance approach to drug sairs and drug use on this street. In the month of 3uly, 19 felony arrests were made which are expected to result In jail time for the offenders. 2. LoIterIng - nearly every morning a group of hispanic men gather on the corner of , Commodore Circle and Delaware Street In search of labor jobs. They are commonly referred to as "day workers". The best approach In analyzing tills situation would he for the City Council to assign the task of searching for alternatives to this practice to the City's Human Resources Board. 3. Overcrowding - (a) the City can appropriate housing set-aside funds to hire an on-site manager to Insure rental agreements are strictly enforced and that J overcrowding does not occur; (b) the City's zoninf, enforcement office could also assist the property owners by issuing citations for overcrowding and not meeting occupancy standards. This assistance would allow the owner to work with the tenants In the enforcement of the rental agreement; (c) City staff can work with the Orange County Housing Authority In Implementing a Section 8 program for the entire street which will guarantee that the occupancy standards are met. This would require I" owner participation and a general willingness to accept the fair market rent structure as defined by the Housing Authority. ! The total anticipated cost for the above Project "A" Is as iollows: FUNDING SOURCE (CDBG) Rehabilitation funds previously expended $ 5610021. t (Rental Funds necessary to complete the rehabilitation 120,000. Rehab) (CDBG) Public improvement project as contracted with 2109000. , Excell Paving I (CDBG) Landscaping improvements on-site 100,000. (Redev. On-site manager, Annual Cost 33.00 } Set-A-Side) 't TOTAL COST lt024,021.* *All items currently budgeted with the exception of on-site manager. I • I 1 SENIOR HOUSING PROJECT Project "B" Senior Housing Project: A potential project for Commodore Circle which will establish a comppatible use for the neighborhood Is a senior housing project. A senior housing project Is desirable based on the areas close proximity to shopping, transportation and health car,: facilities. A proposal for a new construction senior housing project has been received from R.J. Szolomayer and Company and Is attached for the City Council's 1 review. In order to facilitate the Implementation of a senior housing project for i Commodore Circle, several actions must be taken by the City Council as outlined In the ; following project analysis. 1. In order for the City/Agency to proceed with acquisition of the apartment buildings by condemnation, either a Housing Authority or Community Development i Commission (exercises the powers of both the Redevelopment Agency and the i Housing Authority) must be formed. A third option is to amend the operating : agreement between the Orange County Housing Authority (OCHA) and the City to allow OCHA to assemble the properties through Eminent Domain. However, this , limits the direct Involvement of the City In the Implementation of the new housing project. (See attachment: Stradling, Yocca, Carlson do Rauth; Acquisition Through . Em nent Domain for Senior Housing Project at Commodore Circle). 2. Once the City has formed a Housing Authority, Community Development Commission, or amends It's agreement with OCHA, the acquisition process may begin ' (see attachment: Discussion Paper - Implications to formation of Huntington Beach City Housing Authority). The appraised :slue of the four-plex units on Commodore Circle are currently $250,000. after rehabilitation. This cost dues not assume additional costs such as escrow fees, appraisals and closing costs, The total acquisition cost c` 20 four-plex units and one recreation lot Is estimated at $7,026,000 (see attachment - Commodore Circle Cost Estimate for Senior Housing r;: Conversion Project). 3. After the Housing Authority or Community Development Commission has completed Z ' the acquisition phase, the agency must relocate all tenants residing In the project. There Is an estimated 120 families residing in 80 units on Commodore Circle. At an f estimated relocation cost of $4,000. per household, a total of $480,000. will be ► ;;. expended. t . 4. The total cost for acquisition and relocation and refund of HUD funds (see attachment - Cost Estimate for Conversion Project) Is estimated at $8,060,000. The redevelopment Agency currently has $6,478,000. In housing set-aside funds which can be used for this project. The unfunded balance of $1,592,000. will need to be appropriated from the General Fund unobligated balance or other appropriate funding sources. 5. Once the site fund is acquired and all units vacated the housing authority can ' Implement the new housing construction project. The most acceptable proposal for development will dictate the sale of the land or lease agreement. If the land Is sold, ` the authority will recapture a portion of the funds expended In the Initial phase of the ; project. If a long term lease agreement Is negotiated, the authority will recapture much of the funds expended In the Initial phase over the life of the lease agreement. It is Important to note that the CIty will benefit from this project by reducing the current high level of City services provided to this area. Currently, police, planning (zoning), and housing and redevelopment have spent a significant and disproportionate amount of time In the Commodore Circle neighborhood. , I . I J I 6. The Housing authority may now enter Into the development phase of a senior mousing project. (see attachment - Huntington Garden Apartments). A naw senior !sousing project complete with on-site bus service, extensive landscaping, and access from both Delaware Street and Huntington Street is very desirable for this area. The proposed project will bring greater revenues to the nearby shopping areas, and be visually appealing to residents, visitors and neighbors. The time-frame for Implementation of this project Is difficult to determine. The acquisition phase will require an initial offer by the Housing Authority, If a purchase price cannot be reached on a willing seller/willing buyer basis, the court will ultimately determine the value under eminent domain. The acquisition phase could be completed within six months. The relocation of existing tenants will require approximately four months. The development agreement and entitlement process may be Implemented within four months. Our best estimate for the project to break ground Is between twelve to eighteen months. SUMMARY The two proposals presented for the Council's consideration are two distinct projects which differ greatly In Impact and costs. The ongoing neighborhood enhancement project will essentially Improve the existing conditions while the senior housing project will eliminate the problems of the area but at a much higher financial :ost. to T i • t I COMMODORE CIRCLE SUMMARY SHEET " Actions Necessary to Implement Identified Projects PROJECT "B" PROJECT "A" NEW CONSTRUCTION ENHANCEMENT PROJECT SENIOR HOUSING PROJEC', 1. Instruct staff to Issue notice to I. Cancel contract in the amount proceed to Excell Paving Co. for of $210,000 with Excell Paving public Improvements. Co. for public improvements. 2. Continue the rehabiliation loan 2. Cancel all active Rehabilitation program with four active loan loans, and Instruct staff to participants. modify loan amounts to reflect funds expended. 3. Designate the Fluman Resources 3. Authorize staff to prepare document- Board to find alternatives to tation to proceed with formation day worker assembly. of Nousing Authority or Community Development Commission. 4. Continue zero tolerance policy 4. Authorize staff to Initiate toward drug offenders. appraisal and purchase offers to property owners of Commodore Circle. S. AuthorIze staff to use Redevelop- 3. Authorize staff to Initiate reso- ment set-aside funds to hire an on- lutions of necessity and condemn- site manager to enforce occupancy nation for owners not willing standards and general rental to sell on willing seller/ agreement provisions. willing buyer basis. 1 6. Authorize staff to begin relocation of tenants to suitable replacemcat housing. 7. Authorize staff to proceed with Requests for Proposals for a senior housing project. }. 8. Approve development agreement. r• c' t t, 1�; t I i 1 ATTACHMENT 2 NEIGHBORHOOD ENHANCEMENT PRIOR AUTHORIZATION INFORMATION n 5 1r.wM.a�.�y w�-r...�. .� +.Y n.. a1Y1�•.1:. './i�'. � • . .....�..��.• ♦ r a .• .r. •. ........... ._......�....�.........� .....w..r•a..w a•.w+rr.w.�..-..�.�.�a-+.� f .� r I .2 ' J4 ll�' CI'li'y 009 HUNlTINGTON BEACH CA $8-63 ila COUNCIL - ADMINISTRATOR COMMUNICATION Ntx1TING10N�I�CII To Honorable Mayor and From Paul E. Cao • City Council &9embers City Administrator Subject STATUS REPORT - Date June 14, 1988 COMMODORE CIRCLE IMPROVEMENT PROJECT As requested at the June 6, 1988 City Council meeting, Included t,erein Is an update of the Commodore Circle Enhancement Project. The Housing and Redevelopment Div!,-ion has Identified the Commodore Circle neighborhood as an enhancement project, and the City Council has appropriated $430,000 of CDBG funds for Improvements. On June 6, 1988, the City Council approved a contract In the amount of $210,000 for completion of public right--of-way Improvements. These Improvements will Include: 1 - New sidewalks adjacent to the curb. - Entry walls of masonry material at Delaware Street. Tree and landscaping at entry walls. Resurfacing of street and reconstruction of alleys. - t andscaping and new walkway at Huntington Street. These jmprovements are to begin by the first week of July 1988. To date, the City has loaned $430,000 In Rental Rehabilitation loans for Interior improvements to meet housing codes, anc: exterior Improvements Including re-stucco and trim painting. The property owners are waiting for the completion of the public Improvements prior to Installing landscape Improvements on private property. The City Council was provided with an analysis of a potential Redevelopment Project Area for Commodore Circle In !985, at that time It was recommended by staff to develop an enhancement area and provide financial assistance through CDBG funds. This recommendation was based on the lack of developer Interest In regards to high land value, the low amount of tax Increment generated from residential development, and the loss of affordable housing In Huntington Beach. The City Council concurred with this recommendation and approved $430,000 of CDE•G funds for Improvements to the area (Commodore circle account). This project Includes three phases of development. The first phase Includes owner participation In renovation of the apartment buildings. This phase has been completed with the exception of one owner 0 buildings), total funds expended $450,000 (housing rehabilitation account). Phase two of the project includes improvements to the: public right-of-ways as listed above, total contract amount $210,000. phase three will Legln In September and will include financial assistance to owners to cgnstruct landscape improvements on private property. Although other problems exist I:, the Commodore Circle area, such as drug sales and I-ilterIng, the Housing and Redevelopment staff recommends continuance of the Enhancement Project through its conclusion. Once ale improvements are In place, the owners and tenants will hopefully experience a "pride of ownership'- which will encourage ongoing maintenance of the area. PEC/EN:sar 31SIr �., � . ...�...:!'t'_-�!;... ... ., Y. . ,. •i.•, .«. _ �..,, .nr•• .•r:nr h.+t•r•tv;rnnnntrrbr.rv±r•+u•ryrN•re.tu•r.n:rrr•n�ry:•rr•rvrr•r•nnnr e;u.nc,r•nr.ra�cam ncrar r nr r r I J • Page 5 - Council/Agar. , Minutes - 6/6/88 n jr-I.ly,. Col nci U 610 AMRQ - APPROVED - AMEEMENL- APPROVED - NEST-mM L OP -_PAWNa CTTATION MUGENfAl SYSTEM - Approved the Police Department's request to award the contract for the full-service Parking Citation Management • System to Nest-Computil Corp. and approved and authorized execution of the agreement. i (City QuAcll) ENVIROKNENTAL BOARD BE..IGMI4K= &M[PIEQ HIJU REGB�� JTEEL - Accepted resignation of Torn Steele from the Environmental Board, with regret, and instructed the City Clerk to post a vacancy notice purBuant to the Maddy Act. [ci v Council) PIQ AWARD - APPROVED - COhMODORE CIRCLE BEHABILITATIOM - EXCEL pAVi�llG�,-, CQ411 - Accepted the low bid of Excel Paving in the amount of s210,713.60 for the Commodore Circle Rehabilitation Project. hold bid bonds on -the lowest three bidders until execution of contract and filmg of beads, re- �ected all other bids and directed the City Clerk to notify the unsuccessful. idders and return their bid bonds and authorize the Finance Director to -eh- cumber $6,000 for anticipated project "ii;#identals." The bids were as follows.- Excel Paving Company $217,878.60 (corrected 67 210,713.60) Nobest 2140285.34 (corrected to 214,467.34) Clayton Engineering 217,200.80 (corrected to 218,200.90) Wakehtm Joker 221 ,221 .00 Griffith Company 222,534.12 Excalibur Contracting 229,348.29 (correcteJ to $226,178.29) Inland Contractors 234,863.50 General Procurement 238,986.60 Damon Construction 248,512.50 Modern Asphalt, Inc. 249,739.07 Sully-Miller 253,658.48 Warnatt Const. 270,991 .55 Bruce Paving 277,514.70 -- - Approved grant appli- c olon submitted jointly by the Huntington Beach Union High School District and the Huntington Beach Police Department to the Office of Criminal Justir- Pic,. ning in the amount of $83.200 to be used in various drug prevention and suppression programs in Huntington Beach city schools. (CS.tX Council) BRAIN GE EASEMENT AGREEMENI - APPJWEEQ - NOLA DEVE.LOPHENT OQRP - PCH EEWFN 12TH A 131H 5T2[F.T1t The Deputy City Clerk presented a communicatic7 from the Acting Director of Public Works regarding a proposed drainage easement agreement batwoen the City and Nola Development CorporAtion. A motion was made by Finley, seconded by Green, to approve and authori;:e execration of the Grant of Easement Agreement (Drainage) between the City and Nola Development Corporation in connection with the construction of Tract No. 1223E and following rocordatioa instruct the City Clerk to file one copy and return second copy to subdivider. The motion carried by the following roll call vote: i Page 4 - Council/Agency Minutes - 317/88 (Radela,inwmnt Aggncy) OR ,AE AMISITION & :UPR01/ L OF COii-- I CT 0 OR PARCEL LOCATED AT 5TH STREET BETMEEN HAI-NUT .A OLIVE AYERUE r AUNUES ,- TEW BUICK 800Y S" .MAjK«PIER REQUELOMENT ERNECI AREA - Authorized the acquisition of the Terry Buick Shop property (AP #024-147-34) i j in the amount of $315,000; accepted grant deed from Robert C. Terry and , approved and authorized execution of the Agreement For Acquisition of Real Property Between the Agency and Robert C. Terry which includes the points included in the RCA dated March 7, 1988. ' ERedavetetmwln4-AAc•�,,sE„F-CT'ON OE APPRAISER m PREM APMrSAL FOR .VALUA_ Tldi LEASE-111LU INTERESTS no OF JUE 2J, R -,,RDBERI ANSON STE LE„AS - Approved and authorized execution of an agreement for appraisal services between the Redevelopment Agency and Robert Anson Steel Association for appraisal services to facilitate the design, construction and completion of tAe parking structure north of the pier, not to exceed a cost of $5,000. (Ra a RIO .A SERV„ICES •• 301iN 1 - MAIN PIER REDEVELOPMENT PR03ECT AREA - Approved and authorized execution o Amendment No. 1 to Agreement For Acquisi- t on Consulting Service Between the Agency and John Cutler & Asso .1p tion for i property acquisition services in the Main Pier Project Area. 1OPR1Ax1QN FQ SV[LRIE11_T - APPROI►ED - MU ICIPAL QVMEES' ASSOCIATION The Deputy City Clerk presented a communication from the Deputy City Adminl - strator/Administrative Services regarding an appropriation for settlement with the Wil inai Employees' Association. A motion was made by Kelly, seconded by Bannister, to approve appropriation of $214,500 from the Unappropriated fund balance. as shown on the Financial Impact Statement dated January 28, 1988 to effectuate the settlement agreen.dnt in the case of the Huntington Beach Municipal Employees Association vs. Charles Thompson, at al . The motion carried by the following roll call vote: AYES: Green, Finley, Erskine, Mays, Winchell. Bannister NOES: Kelly 'ABSENT: Nona (Ci t_v Council) 922ME Ci'j l , RFC@;.�,tx�j�ON PROJECT _ PL.IUi5 b SPECIEI e- 7IONSS,( LL EM BIDS - APPRQYM . The Deputy City Clerk presented a communication from the Actin Director of Public Works regarding the Commodore Circle Rehabilitation Pro�act. A motion was made by Kelly, seconded by Mays, to approve the plans and speci- fications for the rehabilitation project for public improvements on Commodore Circle and authorize the Department of Public Works to solicit bids for con- t struction. The motion carved by the following roll call vote: AYES: Kelly, Green, Finley, Erskine. Mays, Ninchall NOES: Bannister -.•� ABSENT: None I . I . i s I 7 . V 1 Page 6 -- buncil Minutes - 4/20/87 i i 4. Support continued negotiations with signal Landmark on annexation/devel- opment agreement to implement final plans. i AYES: Winchell, Mays, Finley, Kelly, Erskine, Green, Bannister NOES: None 4 ABMW: None f A motion was made by Erskine, seconded by Mays, to approve staff recroarenda- f I tion No. 3, as outlined in the RCA dated April 16, 1987, and amended by Chun- _ i cil, ac follows: s 3.. The local land use planning process for the Bolsa China be expedited, r ..j.►►q generally the land use designation on the mesa and specifically the com- pletion of studies an technical and financial feasibility of navigable or non•-navigable ocean entrance, wetland restoration, Huntington Harbour connection and resolution of issues identified for confirmation review by the bastal baonission. The motion carried by the following roll call vote.- AYES: Mays, Kelly, Erskine, Bannister NOES: Winchell, Finley, Green ABSWr: None Mr. Barnard clarified that staff recommendation No. 1 included the amendment prohibiting the Special District from imposing a transfer tax and the and- ment providing that the Special District have s'-=t term borrowing powers. RECESS - FIECONVENE The :Mayor called a recess Of Council at. 9:20 p.m. The meeting was reconvened at 9:40 p.m. ARE CIRQS NEIGMORMM IIZf ANOMn PFiL1T= - AtrIUM= HJkJC 51'iPfllDVHMS STAFF AUMPI'L® To AM}1 M BE d HUM,-, I nUM RAPE lI 'The City Clerk presented a communication from the Depx:ty City Administrator/ Fadevelopaaent regarding the 0mviodare circle Neighborhood lhhancement Project. Doug LaBelle, Deputy City Administrator/Redevelolpent informed Council that the agreements w.7sld be submitted to Qxuncil for approval at a later date- Mr. LaBelle and Pat Spencer, program Ma.Ziager/Redevelofaent, presented staff reports and answered Council gxstions. A motion was made by Erskine, sek-ocxierd by Greeno to authorize the Public WarXS DepartmWt to make the necessary errange=nts to have the identified substand- ard and deteriorated public ivW.ovements within the public right-of-lAY repaired and or replaced; and to authorize staff to arrange beL-W-market interest rats (60 loans amortized over fifteen (15) years, available tO Owners Wbo Enter into agreements gua anteering Im►ainterruance tend committing tO the accommodation of 1--incom tenants. The motion carried by the fallow�3 roll call-vote: 6- I 'I ,Z %.,JMMODORE CIR. REHAB LOh..S i BLDG # TYPE LOAN % RATE AMOUNT 1 BMRI 10 13,000.00 2 RENTAL REHAB 10 20,000.00 2 RENTAL RrUAB 6% ONE TIME 20, 000.00 3 RENTAL REHAB 10 20,000.00 . 3 RENTAL REHAB 6% ONE TIME .:0,000.00 4 BNRI 10 31,021.00 5 BMRI 10 32,000.00 6 BMRI 12 20,000.00 7 RENTAL REHAB 10 10,000.00 7 RENTAL REHAB 6% ONE TIME 10,000.00 8 BMRI 12 20,000.00 9 BMRI 12 20,000.00 10 RENTAL REHAB 6 20,000.00 'a 10 RENTAL REHAB 6% ONE TIME 20,000.00 11 RENTAL REHAB 10 20,000.00 11 RENTAL REHAB 6% ONE TIME 20,000.00 12 RENTAL REHAB 10 20,000.00 12 RENTAL REHAB 6% ONE TIME 20,000.00 13 RENTAL REIIAB 10 : 20,000.00 13 RENTAL REHAB 6% ONE TIME 20,000.00 14 RENTAL REHAB 10 20,000.00 . i 14 RENTAL REHAB 6% ONE TIME 20,000. 00 15 BMRI 6 32,000.00 1.6 BMRI 10 13, 000.00 17 RENTAL REHAB 6 20,000.00 17 RENTAL REHAB 6% ONE TIME 20,000.00 10 RENTAL REHAB 10 2110,000.00 ` 18 RENTAL REHAB 6% ONE TIME 20,000.00 TOTAL AMOUNT OF LOANS 561,021.00 a. • �t. 7.r ^va^c.•v r. ar.'L•a,,^.�t. ,j"T:' i I I t ATTACHMENT COMMODORE CIRCLE COST ESTIMATE FOR SENIOR HOUSING CONVERSION PROJECT ''tLr 1 f.� I t . t• .f, I I 1 t COMMODORE CIRCLE COST ESTIMATE FOR SENIOR HOUSING CONVERSION PR03ECT 4 The following Is a cost estimate associated with the proposed conversion of Commodore Circle to senior housing prepared by the Housing And Redevelopment division. These { costs must be incurred by the CIty/Agency prior to a new housing development on this ! site. These costs are based on Information available as of July 25, 1938, and will likely change by the time actual implementation takes place. ? Acquisition_: The acquisition costs will include the purchase of 20 four-plex units and one recreation lot. The value of the four-plex units was determined by using an average of the two most recently completed appraisals for the refinancing of the units. The recreation lot value was determined from an appraisal completed November 109 1987. 4 0 20 four-plex buildings a: $350,000, per building = $7,000,000. 0 1 recreation lot S26.000. Total acquisition cost $7,026,000. ? Relocation: State law dictates that every household residing within an Agency/City 1 acquisition and displacement project Is entitled to relocation benefits regardless of legal residency status. In the cases where overcrowding of apartment units exist, each separate and distinguishable household Is entitled to relocation assistance. The cost of relocation assistance to tenants varies greatly depending an the type of replacement housing chosen by the tenants. For this report a cost of $4,000 per household `_tl was used assuming a rent differential payments for 48 months. The number of households per unit was determined to be 1.5 based on Information requrrted from the property t owners regarding section 8 housing assistance and from on-site fieiu Inspections. o number of households residing In project = 120 o cost of relocation at $4,000. per household (120 at $49000) _ $480,000. Return of Federal HUD funds: During the past two years, the Housing and Redevelopment division has Issued loans to Commodore Circle property owners to rehabilitate their apartment units. The following is a summary of funds used to Improve the existing housing conditions on Commodore Circle. These funds would be required to be paid to the f U.S. Treasury based on HUD regulations that prohibit the funds to be used for the benefit i of moderate Income households while displacing low Income households. , 0 18 loans Issued Total Agency/City costs associated with acquisition, relocation, and return of HUD funds _ $8,0600000. EN/sp 3380r I' i �I i I I 11I1y}. �.f p ATTACHMENT 4 l , i c, R.J. SZOLOMAYER & COMPANY i � DEVELOPMENT COST BREAKDOWN/PROFORMA n HUNTINGTON GARDEN APARTMENTS DEVELOPMENT COSTS r LAND: 0 i i DIRECT COSTS: Construction (256,000 s.f. ® $42.00 s.f.) $ 10,752,000 ; 1 Offsites 50,000 Demolition 250,000 Contingency (5%) 537,000 Total $ 11,589 000 INDIRECT COSTS City Fees 0 Architectural/Structural/Civil 280,000 ;tti Taxes 198,000 Construction Insurance 30,000 ;! Legal/Closing 75,000 Marketing 200,000 :; Finance (3 pts.) 490,000 is Interest Reserve - Construction 980.000 Interest Reserve - Lease up 2,095,000 G & A (3%) 480,000 Security During Construction 20,000 Total $ 4,848,000 TOTAL DEVELOPMENT COST: $16,437,000 i }. i r i i i � a r , � t i t 1 , f ) i I ' HUNTINGTON GARDEN APARTMENTS h PRO FORMA ' �i ANNUAL RENTAL INCOME ; 2,587,000 LESS VACANCY (101) 258,000 EFFRCTIVB GROSS INCOME = 2,329,000 LESS OPERATING EXPENSES (35%) (815,000) NET OPERATING INCOME ; 1,514,000 LESS DEBT SERVICE (8}) (1,377,000) � PROJECTED CASH BEFORE TAXES ; 137,000 MARKET VALUE -- CAP. RATE (9%) ; 16.822,000 LESS PROJECT COST ;(16,437.000) 1 PROJECTED EQUITY ; 385,000 i i i % i CALCULATIONS 1 SITE AREA (4.62 ACRES) 201.247 s.f. BUILDING PAD AREA 69,800 s.f. GROSS BUILDING AREA 279,200 s.f. RATIO OF SITE COVERAGE 35 $ PARKING AREA 46,980 s.f. RATIO OF PARKING AREA 23 % 1 PARKING SPACES 290 RATIO OF SPACES/UNIT .75 NUMBER OF BUILDINGS 2 IIUM13ER OF FLOORS 4 NUMBER OF UNITS 384 UNITS PER ACRE 83 i f I i i i 11� i. i 1 I it I I I ATTACHMENTS 4, STRADLING, YOCCA, CARLSON do RAUTH ►`' MEMORANDUM REGARDING ACQUISITION THROUGH EMINENT DOMAIN i. i- STRALDLING, YOCCA, CA21LSON & A.UT i aTwA ►w•.(,,, w 'AOr{SSIOnw�CpppQp411OH ti.Gg t.► O.,,* LwNtar C.SAC*.. C,CRA4 CC►wLSOr. .Au..c o NAT A r70MNCY5 AT' LAW1►ILLIAh a, LCI A,GwOLJr/p.LA• w H(W W7p7 A•C.! w �Aur,.r.' RALp./.-AM./A% CNAwD G.6 i dd0 CANT Nt. �t aw C AK DO !Li aplY_I SLnTC IC00 1'2" tCwitiwDOt h' 0C0wA1. 1 tF a•a►v.aAwT,.a, wt4A C.etn•.( "h-J.huwrn► th O.rtLn,AN POST CrrIC6 OUw 7g •tM•+'IriIIOMAhr••p• 4t14-6 w`at.tiat40y NA r NCOpt a(ACyr C101-CN1,IA fl,T!!AC•e{ql CA�Ia w,MaiwtN Ctl(aT(a?A..a.... '[LLnHp►IE Tip C"AIarOAntA J.r-L/ATw.CA O.70,»RUDD-" lAh NAhGiC0 0H14c C.Opt✓Awe JCtL m 0.ITM w0itwr,,,rAs[ VLIr r,hrCOr r[LtCQ0,tw .�.�.. h.0.TA OANh c,Nphpwi4� Ir'tr EAO••]]).fr�Al a♦ •LIT[.000 L. LA.rwt•. O•r]]t acl tiCHTock-ARI arwatT awLti C.a7yAr.r CC a,CO+.y O°uOLAd I.w10nA4 aTt1...t4 t fwtthAlr ''A"•04hGiCO,CA aAunlaO• At.AMar TiAGI[p Mi'wT,L TARO.C►ig1 rtLt aNOht(A.al TIa•7A]I AOliwr 14 MNALtN *t 9111 A M'LlON TILL: t ITR* 000twT r••e,, O tp(trO)DIt•T3r1 ArC%0,&a" OCGL•"OkAx.7[NNtlON LIaA h,glTS"TA TScaTtNOhta,A• Comftat .rCwy 0.a/RIN\Sw0 RANDA L MCO►rM(LL *vat*?C.ruff*", wANOAIL J.awtw NAh ALLTA LOVINE rwrAMT OOL49 w.tj VCMTIM y,Nq N h.C1+AtL VAYON MR4 4r nAL'JOpO CINCY A.wVOuC• "A"N A,CLLla O(Mra(it.NA•11a♦.IQ4 (LI(AatTN[.6attN (a C yALTl4Ah �•'L t TO: Huntington Beach P.edevetopment Agenc Attention: Paul Cook y Gail Hutton bouglas La Belle Art De La Loxa Stephen Kohler Eric Nicoll Patrick Spencer PROM: Celeste Stahl Brady, Esq. RE: Acquisition Through Eminent Domain for Project at Commodore Circle Senior Housing ' DATE: AugUst 12, 1988 At tt meeting with Eric Nicoll on JulY 13, 1988 a SphnceUP.nt telephone cOnversatiolis among Steve r SPeriCQr, Tom Clark and Barbara Zeid, several issuesew�rPatd in about the authority of the Redevelopment Hunting Lon beach to withAgency or the City of Commodore circle if proceed domain Is necessary housing Project at Properties. YOU have requested a to assemble the authority by which the City and/or the of the properties Project and use eminent 9domaSna�apa�semb2�ith P necessary to complete the the project. By memorandum dated July 18, 1988, from Barbara Zeid to Steve Kohler regarding the formation of a Housing Authority, the statutory procedure to establish a housing authority was outlined. Two sections within the Housing Authorities Law (Health and Safety Code Section 34240, &, Seg. ) address the J power of a housing authority to exercise eminent domain. Section 34315(d) states an authority may acquire any real property by eminent domain. And, in Section 34325, the legislature states an authority may acquire by eminent domain any real. property which it deems necessary for its purposes under this chapter. Real property belonging to the city, the county, the state, or any of its political subdivisions shall not be acquired without its consent. A public entity may only exercise the power of eminent domain as specifically authorized by statute. The redevelopment agency acting outside the project area boundaries and the City of huntington Beach do not have the power of eminent domain for the proposed housing project without first forming a housing authority or jointly cooperating with an existing housing authority. Therefore, it is recommended the Agency or the city accomplish one of the following: (1) form a housing authority and declare the council or Agency the housing commission, or (2) form a community development commission which exercises the powers of both the redevelopment agency and the housing authurity, or (3; amend the existing cooperation agreement between the Orange County Housing ' uthority and the City and/or the Redevelopment Agency to authorize the implementation of the senior housing project and use the I authority of the Orange County Housing Authority to assemble the properties through eminent domain. With the first alternative, the City may establish a housing authority which would operate as a separate state public body with the powers granted through the Housing Authorities Law. The procedures outlined in the memorandum from Barbara Zeid dated July 18, 1988 should be followed if a housing authority will be formed. This method creates another entity wittlii, the City with broad powers to carry out housing projects for target income groups at an affordable housing cost. Alternatively, in Health and Safety Code Section 34100, at sea, , the Legislature creates and establishes a public body corporate and politic known as the Community t Development Commission. The commission is created and established in order that a local entity may have the option of 'i operating and governing its redevelopment agency, or its redevelopment agency and its housing authority, under a singe operating entity and board. The commission was also created and established for the purpose' P P e of exercising any other powers 08-12-88 0758n/2460/01 -2- a 1 regarding community development (redevelopment) which the legislative body of a community may desire to delegate to the commission subject to such conditions as may be imposed by the f legislative body. Section 34112. A commission is established by ordinance of the legislative body declaring there is a need I for a commission to function in the community. The ordinance is subject to referendum as prescribed by law for a county or J city ordinance. Section 34115. The ordinance declaring the ! need for a commission to function may state that the commission functions only with respect to a redevelopment agency, or that I the commission functions with respect to a redevelopment agency and a housing authority. A certified copy of the: adopted i ordinance is filed with the office of the Secretary of State and the Department of Housing and Community Development of the 1 State. Section 34116. Once the ordinance is adopted, the commission has all rights, powers, duties, and I immunities vested by the Legislature in a commission1egIf the city council has declared itself to be the commission with the powers of the housing authority, it must appoint commissioners who are tenants of the housinauthoritydiftthe ' housing authority has tenants. if the housing authority does not have tenants; the legislative body must by ordinance provide for the appointment to the commission of two tenants of the housing authority within one year authority first does have tenants. Section 34h12Oausing Once the ordinance establishing the commission is effective, the commission has all of the j r function, and jurisdiction of a redevelopment agency oandya housing authority. Section 34141. Therefore, the commission If it is declared to be both a redevelopment agency and a housing authority, would have the Powerof assemble properties and complete a p housing eminent domain to the Commodore Circle area or in any area withintheecitynboundaries. AR discussed in Barbara Zeid's memo of July 18, 1488, the powers and duties of a housing authority encompass areas that a redevelopment agency is not authorized to carry out. For 3aample, a housing authority may ar development, rehabilitation, or financticipate in the including purchasing, Selling, g Of housing projects Projects i managing housingleasining, owning, operating or t has assisted, subject only to the requirements of the housing Authorities Law. 34312, 34312.3, See Sections Q.. The legislature intended that housing authorities are the local entities with ! for providing housing for very low :neomer r and households within their jurisdictions. In addition to the Power of prope eminent domain, housing authorities may also 113ase or Purchase,real leaser or own, hold, and improve real property; Property; Y. sell, lease, 08-12--88 0758n/2460/Ol exchange, transfer, assign, pledge, or dispose of real property; insure real property and lend upon the security of a mortgage or deed of trust for the financing or construction or rehabilitation of housing and rehabilitation programs for persons of low income. The declaration of the community development commission to operate both as a redevelopment agency and as a housing authority would broaden the powers of the city and agency and accomplish the purposes of both redevelopment and ; housing as implemented by one public body. Procedurally, the City should adopt a resolution declaring the need for a housing authority and thereafter consider and act on an ordinance declaring the redevelopment agency a community uevelopment commission that operates both as a redevelopment agency and as a housing authority. This ordinance, after it becomes effective, would enable the community development commission to carry out the necessary housing projects within the city, including the Commodore Circle project. The third alternative for carrying out a housing project, like that proposed for Commodore Circle, would be to amend the existing cooperation agreement between the City of Huntington Beach and the orange County Housing Authority to specify the implementation of a specific new project or projects. Under Health & Safety Code Section 34324, any two or more public entities may join or cooperate with one another in the exercise, either ,jointly or otherwise, of any or all of their powers for the purpose of financing, planning, undertaking, owning, constructing, rehabilitating or operating, any housing project. For such purpose, one authority may provide by resolution that t-he other authority with which it has joined or is cooperating iu the exercise of powers is authorized to act on its behalf with respect to any or all. of the housing authorities ' powers as its agent, or otherwise or in the names of the authorities which have joined or are cooperating . Therefure, the Orange County Housing Authority would have the power to acquire by eminent domain the real property which the City and the OCHA deem necessary for the purposes set forth in the cooperation agreement. Redevelopment agency funds including 20% set-aside funds, could be committed and expended by the Orange County Housing Authority to implement housing programs for low to moderate income persons at an affor0able housing cost as required by the Community Redevelopment Law. j i 08-12-88 0758n/2460/01 -4- i I 5 Under the Community Redevelopment Lbw, housing projects, whether inside or outside the project area, are always of benefit to the project area. Because the power of eminent domain is vested in the housing authority, the housing project proposed could be implemented by the Orange County Housing Authority, rather than the City forming a separate housing authority, or the agency declaring the need for a community development commission. It is important to note, however, that because the Orange County Housing Authority is a pi,blic entity separate from the City or the Agency, the F.xograms or projects that Huntington Beach wishes to implement ; :should be carefully and fully outlined in the cooperation agreement. The joint exercise of powers by the Orange County Housing Authority and the City leaves implementation to a public entity separate from the City or the Agency and therefore, a certain level of control is not available to the Agency or the City. If ine City of Agency acted as a housing authority or a commission, the county would not be directly involved in carrying out the housing projects . Also supporting the cooperative venture between she Orange County Housing Authority and the City or the Agency is the Housing Cooperation Law in Health & Safety Code Section R 34513, Dfi Wq. Section 34516 provides that a state public body (wt+ich includes the city, county, city and county, commission, or other subdivision or public body of the state including any housing authority) may do any of the following: any and all things necessary or convenient to aid and cooperate in the planning, undertaking , construction, or operation of housing projects; purchase oz legally invest in the bonds of a housing authority; and enter into leases or installment payment contracts for the purpose of aiding and cooperating with a housing authority in financing the acquisition, planning, and construction of housing projects. In summary, ample authority exists for a housing authority to exercise eminent domain to complete a housing project. Because the Huntington Beach Redevelopment Agency may not exercise its power of eminent domain outside its project arear ' boundaries and because the City of Huntington Beach has not yet formed a housing authority, the power to carry out the 1 proposed Commodore Circle project presently does not exist within the City's or the Agency's authority. It is suggested that either a housing authority be formed which operates separately as its own state public body or, that a community development commission is formed, or that a cooperation agreement be entered into with the Orange County Housing Authority to enable the City and the Redevelopr.iant Agency to curry out housing projects which would provide housing to persons of low to moderate income at an affurdable housing i 08-12-88 0758n/2460/01 -5- cost. Such programs would fall within the proper prerequisites for expenditure of the low to moderate housing fund (2n% funds) required to be expended by the redevelopment agency. As legal comment separate from the issue of eminent domain, it is noted that the project proposed for Commodore circle would displace the existing occupants of the apartment buildings, the majority of whom are very low to low--income tenants. This fact raises issues involving replacement housing requirements and relocation to decent, safe and sanitary housing through relocation assistance and benefits. Relocation and replacement housing strategies should be analyzed developed concurrent with any new housing project proposed for the Commodore Circle area. { 4' l� 1 1 t li t 08-12-88 0758n/2460/01 -6- f . : ]3 t ATTACHMENT 6 DISCUSSION PAPER REGARDING FORMATION OF HUNTINGTON BEACH CTIY HOUSING AUTHORITY ! ` `' �f h) �e t. I i r D I S C U S S I O N P A P E R IMPLICATIONS TO FORMATION Or HUNTINGTON BEACH CITY HOUSING AUTHORITY 5 AUGUST 1988 ------------------------------------- ------------------------------ Local governments are empowered by state law to form housing authorities. The formation of these public b-,dies is governed by the Housing Authorities Law Health and Safety Code S34200 et seq. ) . The statatory req:siremen4s for the formation of a housing authority are outlined in the attachrsd overview report and will not be discussed herein except as they may present particular implications to Huntington Beach. BACKGROUND: -- ___--- The City currently contracts with the Orange County Housing Authority for the administration of the Sei:t]on 0 Leased Housing Program as funded throught the federal Department of Housing and Urban Development. This contract, appru•:ed in 1975, has a term 1 of 20 years. The, city is the largest user of the Section 8 Program throught the County Authority with over 500 units under lease in the city (Elsewhere in the county. the cities of Santa Ana, Anahiem, Garden Grove and Brea have their own housing authorities) . In adddition, the city participates with the county in the rental rehabilitation program (20 ssnits3) and the Project Self-Sufficientcy (58 units) . Lastly, the city staff haH discussed participation in the County Authority's new program for financial assistance in the creation of additional , privately � owned affordable housing. The Orange County Housing Authority, therefore, provides all t:he services necessary to the city's participation in housing 1.rograms (without expense to the city) except the use cf eminent domain within the city boundaries. IMPLICATIONS: ------------- 1. CONTINUATION OF THE SECTION 8 PROGRAM i The Section 8 Leaued Housing Program enjoys federal authority for only two more years, in the fall of 1989, the Orange Count} Housing Authority will be barred from extending existing or entering new leases on behalf of its clients and will begin to i dismantle the Section 8 Program. Only specific action of the cnrgreGs will continue the program. With its expiration, the administrative fees provided through HUD, and which support the County Authority's staff, will also come to an end. Therefore, a city housing authority should not assume responsibility for the administration of the Section 0 Program at this time. County Counsel has researched the question of whether the city may continue to contract with 1.he County Authurity for this service after formation of a City Authority. This office has j determined to its own satisfation that this may occur, and that i HOD would hold no objection to this arrangement. It has been suggested that a City and the County Authorities might: beat cooperate in this regard hrough a joint exercise of t powers agreement to replace the existing contract which may he terminated b;► either party on 30 days notice. The current contract does stipulate, however, that upon termination, the 1 County Authority's leases for assisted housing units shall lapse and administration of the program shall revert to the local jurisdiction exercising its right to terminate. This language ` will need to be ever-riden in. any new agreement. I 2. ORGANIZATION OF TEE BOARD O • COMISSTONERS { One of the statutory requirements of housing authorities is that tenants of the authority must sit on its board of commissioners. As pointed out: in the attached memo, while the City Council nay serve as the Board of Commissioners of a Huntington Beach Housing Authority, it would be necessary for its membership to b.- expanded to accomodate the placement of two tenant commissioners. i These tettants would need to participate in any meeting during which Housing Authority business watt to he discussed. 3. PENDING LEGISLATION RE: HOUSING SET-A-SIDE FUNDS AB 4566 (Polenco) is pending in the state legislature. while it carries a numb.*r of changes to the way redevelopment agencies handle the twenty percent hruning set-a--side funds, one requirement is of special concern. Specifically, it: passed and signed into .law, the bill would require that any housing set-a- side funds in excess of $500,000, held by a redevelopment agency for more than five years, be ttirnpd over to the public. housing � authority doing business in the jurisdiction. The Huntington Beach Redevelopment Agency already has surpassed the threshold amount of housing set-a-side funds stipulated in the bill , and in fact, received $4 million dollars for housing purposes from the recent Public Financing Authority b--nd issue. If for any reason, the agency was unable to expend these:, and the continuing contributions to the housing fund, within the five year period, these funds would bo forfieted to the Orange County HoutAng ►' Authority. If this legislation is 9• pa+►sed, there may be additionsl inducement for the formation of a city housing authority to maintain control of these: .funds. c 1 i `1 I 4. CREATIO.I OF A COM6IUNITY DEVELOPMENT COr1MISSION I If a city housing authority is to be formed, it may als^ be ► worthwhile to consider the creation of ii more comprehensi•re ity Development c_e�m►n? r.i son (CDC) . organization: a Commun State law provides that a housing authority, redevelopment This is agency, and planning function may be combined in a CuC. essentially a "super agency" to deal with the three functions and the City Council may serve as the commission of all three bodies. This would require some reorganization within the city structure and it woaid still be necessary to appoint the tenant commissioners and for these to participate on an equal basis with all other commissioners when housing authority business was transacted. Any advantage this organization may offer for the implementation of these fuctions should be considered. 5. POLITICAL (� If a city housing authority should be formed, it should he I communi.tcated to the County of Orange that it is solely to Farther the housing purposes within the city and not due to the failure of the County's Authority to perform on the admi.nintration of its programs. The Hoard of Supervisors serves i as the Commission of the County Authority, and has a policy of non-involvement in publically owned housing. Therefore, the purpose of a city authority should not conflict with the objectives of the county's efforts. Further, the creation of a city authority while still maintaining a contractual relationship with the county authority will f represent an arrangement different from the relationship between the county and any other local jurisdiction within the County ! that maintains its own housing authority. This new relationship will need to be made explicit in the new agrement with the County Board or Supervisors. '1 i I �I I i iI 1 x\ J. CITY OF HUNTINGTON BEACH 1� CA- $8-85 COUNCIL ADMINISTRATOR COMMUNICATION" Y� HWIItiGigVtFkll ^ I«� ... �" i '� .•J r To Honorable Mayor and From Paul E. Cook City Council Members City Administ ator Subject BACK-UP INFORMATION Date August 12, 1988 REGARDING COMMODORE CIRCLE FOR AUGUST 1 S, 1988 CITY COUNCIL STUDY SESSION I I l Attached for your review and information Is an analysis of current and potential projects for Commodore Circle. This Information will be the topic of discussion at the August IS Study Session and will appear as an Action Item (E-1) on the City Council Agenda for that evening. PEC/EN:sar Attachment 34G7r ` l r l� i i M� REQUEST FOR CITY COUNCIL ACTION ` RH 87-09 i Date April 20, 1987 .GN,'\ ' O i Submitted to: Honorable Mayor and City Council Members Submitted by: Charles W. Thompson, City Administratorl i Prepared by: il Douglas N. LaBelle, Deputy City Administrator 1 Subject: COMMODORE CIRCLE NEIGHBORHOOD ENHANCEME T A/CO3 T Consistan?with Council Policy? Yes ( ] New Policy or Exception Statement of Issue, Reeomm&ndatlon,Analysis, Fund!, g Source,Alternative Actions,Attachments: it STATEMENT OF ISSUE: iOn May 19, 1986, the CIty Council authorized staff to negotiate an Owner Participation Agreement with the Commodore Circle property owners The purpose of such an agreement was to develop a neighborhood enhancement program similar to that which was previously formed in the Oakview Redevelopment Project Area. The Oakview area project, known as the Koledo Lane Demonstration Project, has gained i national recognition and is being nominated for a National Public/Private Award by HUD, for being an excellent example of a public/private funded housing project. RECOMMENDATION: 1. Authorize the Public Works Department to make the necessary arrangements to have the Identified substandard and deteriorated public improvements within the public right-of-way repaired and or replaced; and 2. Authorize staff to arrange below-market Interest rate (6X) loans amortized over fifteen (15) years, available to owners who enter into agreements guaranteeing maintenance and committing`to the accommodation of low-income tenants. '/1r 1/) 17♦ �. 'N t' ..) (�.f.�•.laAlr�^,-.t'7 1,� 17 �._-�cti\•�•'.{-'� t�t'-t�t (a.-�' ANALYSIS: c\•.�. Lc� - t lb The intent for Commodore Circle was to improve a neighborhood consisting of twenty (20) four-plex buildings, constructed approximately twenty-five years ago, that had been allowed to deteriorate by utilizing city-administered Community Development Block Grant (CDBG) funds. The proposal was a plan to expend these CDBG monies to upgrade public improvements and improve certain proposed common area + improvements. The purpose was also to make available below-market interest rate loans available for building rehabilitation and garage reconstruct'on to individual property owners. I i� t l � Pic 5/QS lil ` it i I The abovementioned improvements, both public and private, were hinged upon formation of a Property Owners Association and an Owner Participation Agreement between that Association and the city. These documents would serve to guarantee an absolute commitment by the Owners Association to maintain+, the investment made by the city and commit individual owners to provide housing for the low-moderate income families residing within their buildings. It is the city's position that ALL owners are to participate for a meaningful and long-standing rehabilitation plan. After eight (8) months and numerous draft documents which were prepared and discussed, the owners have been unable to reach a consensus as to the formation of an Owners Association. Based on this inability, an alternative plan has been proposed. Basically, this alternative suggests that the city expend previously budgeted CDBG funds earmarked for Commodore Circle rehabilitation by replacing broken and deteriorated public improvements(curbs & gutters, sidewalks, street trees, street lights, pavement) and make available below-market interest rate loans to Individual owners to complete their rehabilitation efforts. In turn, the owners will agree to tinter into individual agreements guaranteeing maintenance and provide housing for low-moderate income families similar to the city's Rental Rehabilitation Loan Program Guidelines. During the staffs negotiations with the property owners, rehabilitation of buildin s has progressed, utilizing a combination of funding sources (both private and public. To date, various owners have taken advantage of city-wide, owner-investor CDBG rehabilitation loans at market interest rates. A total of $254,000 of these funds have been loaned, and an additional $122#500 of CDBG Rental Rehabilitation funds have been expended. Together with the abovementioned bay-administered CDBG funds, approximately $260,000 of private loans have been utilized, bringing a total of approximately $637,000 expended to date in an effort to revitalize Commodore Circle. Unfortunately, because of the extent to which the buildings were allowed to :. deteriorate by previous owners, additional dollars are needed in order to improve the streets' appearance. it is based on this need for additional capital that staff is in support of the owners' alternative plan to enhance Commodore Circle. PUBLIC improvements to be replaced or repaired to include: 1. Removal and replacement of curbs, gutters, sidewalks, and parkway trees. ' 2. Re7mrfacing and/or replacement of street and alley pavement sections. PRIVATE improvement loans to accomplish: � • i i 1. Complete rehabilitation of building exteriors. 2. Complete carport reconstruction. 3. Landscaping, fencing, and trash enclosures. 4 .-mow.+-...�.rn....�.....-.....•... .1..., ..,•., • ..... . ...... ....... i ....,_...,....... ._.. .�..__ _-...ram......�..«... •. wMKhA Nr^ F.S f i It Is estimated that the total cost of replacing deteriorated public improvements will not exceed $2500000, and that additional rehabilitation loans to owners would not exceed $250,000. ' Currently, owners of thirteen (13) buildings are participants in the city's market interest rate (12%) housing rehabilitation loan program. In order to bring the buildings j to acceptable community standards, the above mentioned additional loans of $250,000 at below market interest rate (6%) Is being recommended to be combined with existing market rate loans amortized over a fifteen (15) year period. Total amount of these combined loans will not exceed$32,000 per building. FUNDING 50URCE: 1 CDBG funds previously budgeted for Commodore Circle. ALTERNATIVE ACTIONS: 1. Reject the owners' request for below-market interest rate loans, but make the necessary Improvements to the public right-of-way. 2. Do not Improve the public right-of-way and redesignate the CD13G funds to another project. 1 ATTACHMENTS: I. Individual property owner agreement form. CWT/Aflp 3043h I I I COMMODORE CIRCLE NEIGHBORHOOD ENHANCEMENT PROGRAM OWNER COOPERATION AGREEMENT THIS AGREEMENT is entered into on khe day of , 1987 by and between the CITY OF HUNTINGTON BEACH ( "CITY") and ( "PARTICIPANT" ) . The CITY and the PARTICIPANT hereby agree as follows: I. SECTION 1. PURPOSE OF AGREEMENT 1.1 The purpose of this Agreement is to effectuate and implement the Commodore Circle Neighborhood Enhancement Program (the "Program") and to provide for the participation in the Program by the PARTICIPANT through the rehabilitation of improvements on that certain real property owned by PARTICIPANT and located at (hereinafter the "Site") . SECTION 2. APPROVALS 2. 1 PARTICIPANT has submitted, and the City has approved plans for rehabilitation work (hereinafter the "Improvements") for the Site. The approved plans are set forth } on Attachment "A" to this Agreement and are hereby incorporated by reference. 2.2 PARTICIPANT has submitted a bid for the Improvements For approval by the CITY. The approved bid is attached and incorporated to the Agreement as Attachment "B" . SECTION 3. CONSTRUCTION OF IMPROVEMENTS 3.1 PARTICIPANT agrees to complete construction of the Improvements set forth on Attachment "A" to this Agreement pursuant to the bid set forth on Attachment "B" on the Site within six months of execution of this Agreement by PARTICIPANT. 3.1.1 The Improvements shall be constructed in accordance with the approved plans as set forth on Attachment "A" to this Agreement, except as changes may be mutually agreed upon in writing between PARTICIPANT and the CITY. 3.2 Before commencement of construction, PARTICIPANT shall secure any and all permits which may be required by the City of Huntington Beach or any other governmental agency affected by such construction. -1- t I 3.3 Prior to the commencement of construction, the CITY and PARTICIPANT shall mutually agree in writing upon a satisfactory construction schedule. 3.4 Promptly after completion of all required construction, PARTICIPANT shall furnish CITY with an Invoice for Final Payment. Approval of Invoice for Final Payment shall constitute conclusive determination of satisfactory completion with the terms hereof with respect to the Site. SECTION 4. FUNDING OF CONSTRUCTION 4.1 Loan by CITY. In consideration of PARTICIPANT'S construction of the Improvements, the CITY agrees to loan to PARTICIPANT the amount of as follows: 4 .1.1 Structure loan as to fully amortize total loan amount over a fifteen (15) year term at a below market interest rate. Also, include provisions to consolidate any existing above market interest rate rental rehabilitation loans into the new loan amount. (Note: Rental Rehabilitation loans involving Section 8 paticipation will remain, but senior to the new and consolidated loan amount) . In no case should the total amortized loan amount exceed $32,000 per parcel. 4 .1 .2 Prior to the disbursement of the CITY loan, into escrow, PARTICIPANT shall execute and record against the Site a Deed of Trust for the loans in 4 . 1 .1 above. 4.1 .3 The CITY shall disburse loan funds from escrow periodically as the work on the Improvements progresses, upon approval by the CITY staff of Progress Payment Invoices submitted to the CITY. I 4.1.4 Ten percent ( 10%) of the loan proceeds shall be retained subject to completion of the Improvements. This amount shall be disbursed upon CITY approval of Invoice for final Payment as provided in Section 3. 4 0£ this Agreement. 4.1.5 Disbursement of the loan proceeds is ! expressly conditioned upon the continued satisfactory progress of the work on the Improvements. i -2- • 4 SECTION 5. HOLD HARMLESVINSURANCE 5. 1 During the period of construction and until such time as the CITY has approved an Invoice for Final Payment, PARTICIPANT agrees to, and shall, identify and hold the CITY harm.less from and against any and all liability, loss, dariage, costs, or expense (including attorneys ' fees and court costs) arising from or as a result of the death of any person which shall be directly or indirectly caused by any acts done thereon or any acts or omissions of the PARTICIPANT or its agents, servants, employees, and contractors. 5. 2 PARTICIPANT shall secure and maintain during the term of this Agreement and until all loans and notes are paid in full, comprehensive general liability insurance, including premises operations, broad form property damage, and full value fire insurance coverage for the Site. SECTION 6, DEFAULT 6.1 Failure or delay by eithec party to perform any term or provision of this Agreement constitutes a default under this Agreement. The aggrieved party shall give written notice of the default to the party in default, upecifying the default complained of by the aggrieved party. Failure or delay in giving notice shall not constitute a waiver of any default, nor shall it change the time of default. The party who has f defaulted must immediately commence to cure, correct, or remedy such default, anO shall complete such cure, correction or remedy with reasonable diligence and during any period of curing shall not be in default. Such cure shall commence within five ( 5) days of the date of the written notice of default. 6.2 In addition to the remedies specified in Section 6.10 in the event of litigation arising out of any breach of 01is Agreement, the prevailing party shall be entitled to recover reasonable costs and attorneys' fees. SECTION 7. NON-DISCRIMINATION; EXECUTION OF MEMORANDUM ON AGREEMENT AND PROPERTY OWNER CERTIFICATION 7. 1 PARTICIPANT shell execute against the Situ a Memorandum of Agreement and Property Owner Certification in the ti forms attached hereto as Attachment. and respectively prior to I the disbursement of the first installment of the CITY loan, as provided in Section 4 .1.3. f i I i -3- •v 7.2 There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall PARTICIPANT itself or any person claiming under or through PARTICIPANT establish or permit any such practice or practices of discrimination or segregation with refVrence to the I selection, location, number, use or occupancy of tenants, lesses, subtenants, sublessees, or vendees of the Site or any portion thereof. E SECTION 8. ENTIRE AGREEMENTr WAIVERS, AND AMENDMENTS I. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with S respect to all or any part of the subject matter hereof. All waivers and amendments of the provisions of this Agreement must be in writing and executed by both parties to this Agreement. WHEREFORE, the parties affix their signatures hereto on the date first hereinabove mentioned. ' CITY OF HUNTINcroN BEACH, CALIFORNIA BY: PARTICIPANT BY: BY: I i, 0067R i i I , i I . _q_ REHABILITATION LOAN PARTICIPANTS: SCOPE OF IMPROVEMENTS ITEM # I: Interior/Exterior Rehabilitation: Complete rehabilitation of structures Including but not limited to: re-roofing, stucco color coating, and complete interior rehabilitation. ITEM # 2: Landscaping: Yard renovation including but not limited to: re-landscaping, Irrigation system, patio enclosures, concrete walkways, yard lights, and low masonry perimeter walls. ITEM # 3: Trash enclosures: Trash enclosure of masonry construction and of sufficient size to accommodate rolling trash bins, with swinging gates, and properly accessibility to tenants. ITEM # 4: Carport Rehabilitation and Conversion to enclosed garage: Complete rehabilitation of existing carports to include but not limited to: re-roofing, stucco repair, and painting. Conversion to enclosed garages to include but not limited to: addition of partition walls, garage doors and hardware, framing and stucco necessary to properly enclose garage. EN/mhg 1025r II 1 I t COMMODORE CIRCLE NEIGHBORHOOD ENHANCEMENT PROGRAM { PARTICIPANT COOPERATION AGREEMENT DATE: PARTICIPANT: PROPERTY TO BE REHABILITATED: As owner of the above property, I hereby certify that I will adhere to the following conditions: (a) As a condition of participation in the program, I shall maintain rental rates at fair market rents as established by the Orange County Housing Authority. (b) I will not refuse to rent to tenants of low and moderate income except for good cause, such as tenants who previously failed to pay their rents, maintain their dwelling units or were otherwise in violation of the terms and conditions of the tenancy. %c) I will comply with existing Housing Regulations including Housing Quality Standards. I understand that failure to maintain these units in a decent, safe, and sanitary condition will constitute default of this Agreement. a f a(d) I shall exercise affirmative fair housing marketing o 11 and any units when they become vacant (using the Egual Housing Opportunity Logo in any newspaper advertisement or written communication to community groups, organizations, agencies, or other community contacts) . (e) I agree not to convert rehabilitated units to condominiums or ineligible cooperatives. i (f) I agree to adhere to the foregoing conditions for a period of five (5) }years or duration of note whichever is the larger. Should I default I must repay the entire balance. PARTICIPANTS) t 0068R I ,I I i i i -7- 4 ,-� � j4"lam• REQUES. FoR CITY COUNCIL_ ACTT N1 RH 86-38 i Date Submitted to: Honorable Mayor and City Council Members i Submitted by: Charles W. Thompson, City Administrator Prepared by: Douglas N. LaBelle, Deputy City Administrator/Redevelopmen Gp1.TNGiL' Subject: FORMATION OF COMMODORE CIRCLE NEIGHBO 0 ANCEM�N Jqf=-' PR03ECT V.Y. /v Cl'r 7 Consistent with Council Policy? [>C Yes I l New Policy or Enna � U{ S j� ,per'• Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions,Attachments: STATEMENT OF ISSUE: It Is recognized that the Commodore Circle apartments have been allowed to deteriorate over time. After numerous complaints from neighboring property owners and others, a complete Investigation was conducted which Identif led numerous basic housing and health code violations. Orders were then given to owners to remedy these violations or face criminal prosecution. To date, the majority of buildings are In final phases of obtaining compliance; however, it is also recognized that minimum code ' compliance remedies are not adequate to completely alter a neighborhood which has been allowed to deteriorate. + For some time, staff has made repeated attempts to formulate an owners association P. similar to the successful association formed within the Koledo Lane Demonstration Project. The Intent in forming such an association would be for the owners to agree collectively to maintain whatever Investment the city would make. Within the last four months, thirteen (13) buildings have changed ownership and the new owners are now , agreeable to the formation of an owners association and have s+:bmitted this intent In ` writing. t ' I i RECOMMENDATION: Authorize staff to have plans and specifications prepared for certain public and private ! Improvements for a Commodore Circle Neighborhood Enhancement Project. Authorize staff to negotiate an Owner Participation Agreement with the Commodore Circle property owners. ANALYSIS: I Plans and specifications would include the following physical improvements: 1. Complete renovation of all yards and replace with common landscape and Irrigation systems to be maintained by the owners association; 2. Rehabilitation and/or reconstruction of all garages; / I P10 6185 1 I 1 3. Construction of concrete block trash enclosures within the common area; 4. Rt.,._ .at and replacement of curbs, gutters, and sidewalks; 5. Resurfacing and/or replacement of street and alley pavement; 6. Rehabilitation of the existing re:reational lot to an acceptable standard to be maintained by the owners association; and 7. Evaluate the closure of the alleys where they intersect with Huntington Street and other improvements, as appropriate. It Is estimated that the total cost for accomplishing the abovementioned Items will not exceed $525,000. Of the projected $525100% approximately $185,000 would be In the form of a grant to be used for common area improvements, trash enclosures, recreational lot purchase plan, specifications and engineering. Tb remaining $340,000 would be In the form of a loan to the individual owners, Gaither amortized over a fifteen (15) year period @ 6%, or deferred at the market rate, for garage reconstruction and other building Improvements. FUNDING SOURCE: A combination of CDDG funds which was previously budgeted for Commodore Circle ane Local Option. ALTERNATIVE ACTIONS: Reject owners' request for funds. ATTACHMENTS: t. Letters of Intent to form association by property owners. 2. Commodore Circle status report of May 5, 1986. I i CWT/DLB%CpS:lp 2430h I� E� I I 1 ,1 f . f ^ DRAFT ATT'ACI MENT 1 AGREEMENT WE, the undersigned owners of property located on Commodore Circle, have agreed I to the formation of an Owners Association for the purpose of guaranteeing perpetual maintenance of certain elements of our indilridual holdings. C More specifically, It is our intent to have mutually acceptable docufnenm prepared, binding each of the properties to a continuous maintenance program; that we, the undersigned, agree to encumber each of the properties including provisions for "Right of 1 Access" to maintain. Ibis offer to the formation of an Owners Association is contingent on the monies (previously budgeted for Neighborhood Preservation (CDBG) being made available to the Association by the city. These monies will be used to upgrade and complete necessary foffsite Improvements (landscaping, sidewalks, paving, trash enclosures, recreational 1 facilities). It is also understood that the Association will complete the necessary onsite building rehabilitation Improvements through a combined privateipublic funding program. Our primary objective Is to install a "pride of ownership" back to Commodore Circle and with the requested funds, together with the Association's obligation to maintain, will preserve this public Investment. OWNERS: r;►iS% /.J ADDRESS: r l� Al L// -�N�tJ •`!&7a. /3 r G 1 . i AGR EE-M ENT WE'. the undersigned owners of property located an Commodore Circle, have agreed Ito tl-.e formation of,in Owners association for the purpose of guaranteeing perpetual maintenance of certain elements of our individual holdings. More Tecifictilly, it is our intent to have mutually ticceptable documents prepared, binding eijoh of the properties to n continuous maintenance program; that we, the undersigned, agree to encumber each of the properties including provisions for "Right of Access" to innintnin. I This if fer to the formation of an owners Association is coningent on the monies Previously budgeted for Neighborhood Preservation (CDBG) being made available to the a•.;ociation by the city. These monies will be used to upgrade and complete necessary } :)ffsite improvements (landscaping, sidewalks, paving, trash Enclosures, recrentional I filitie�l. it is also understood that the association .rill complete the necessary onsite building 1 rehatiilitution improvements through a combined privnte/public funding program. I , Our primary objective is to install a "pride of ownership' back to Commodore Circle and with the requested funds, together with the association's obligation to maintain, will i preserve this publi nvestment. 0 `ER ADDRESS: i 7721 Camn:dore Circle, H.B_t. Ca I is R roc,President+ I . DRAFT i IAGREEMENT WE, the undersigned owners of property located on Commodore Circle, have agreed to the formation of an Owners Association for the purpose of wunranteeing perpetual maintenance of certain elements of our Individual holdings. More specifically, it is our intent to have mutually acceptable documents prepared, binding each of the properties to a continuous maintenance program; that we, the undersigned, agree to encumber each of the properties including provisions for "Right of Access" to maintain. ' This offer to the formation of an Owners Association is coningent on the monies I previously budgeted for Neighborhood Preservation (CDBG)being made available to the Association by the city. These monies will be used to upgrade and complete necessary offsite Improvements (landscaping, sidewalks, paving, trash enclosures, recreational facilities). It Is also understood that the Association will complete the necessary onsite building rehabilitation Improvements through a combined private/public ublic furdin g p ' p g program. Our primary objective is to install a "pride of ownership" back to Commodore Circle and with the requested funds, together with the Association's obligation to maintain, will preserve this public investment. OWN ADDRESS: � 7z�e�ce, 7 C! �i� U-Z mkt•z �..�.L-� I / a'Z i i t 4 i r OWNERS: ADDRESS: i 2096H I f i f; DRAFT AGREEMENT WE, the undersigned owners of property located on Commodore Circle, have agreed to the formation of an Owners Association for the purpose of guaranteeing perpetual maintenance of certain elements of our Individual holdings. More specifically, it is our intent to have mutually acceptable documents prepared, binding each of the properties to a continuous maintenance program; that we, the i undersigned, agree to encumber each of the properties Including provisions for "Right of Access" to maintain. This offer to the formation of an Owners Association Is coningent can the monies previously budgeted for Neighborhood Preservation (CDBG)being made available to the Association by the city. These monies will be used to upgrade and complete necessary offslte improvements (landscaping, sidewalks, paving, trash enclosures, recreational facilities). It is also understood that the Association will complete the necessary onsite building rehabilitation improvements through a combined private/public funding program. Our primary objective is to install a "pride of ownership" back to Commodore Circle and -alth the requested funds, together with the Association's obligation to maintain, will preserve this public investment. OWNERS: ADDRESS: of I /r i { i 4 DRAFT AGREEMENT WE, the undersigned owners of property located on Commodore Circle, have agreed to the formation of an Owners Association for the pyrpose of guaranteeing perpetual i maintenance of certain elements of our Individual holdings. I = More specifically, It Is our Intent to have mutually acceptable documents prepared, binding each of the properties to a continuous maintenance program; that we, the n/undersigned, agree to enrmnaer each of the properties Including provisions for "Right of Access" to maintain. This offer to the formation of an Owners Association Is coningent on the monies previously budgeted for Neighborhood Preservation (CDBG) being made available to the Association by the city. These monies will be used to upgrade and complete necessary offsite Improvements (landscaping, sidewalks, paving, trash enclosures, recreational facilities). It Is also understood that the Association will complete the necessary onsite building rehabilitation improvements through a combined private/public funding program. Our primary objective is to Install a "pride of ownership" back to Commodore Circle And with the requested funds, together with the Association's obligation to maintain, will preserve this public investment. OWNERS: ADDRESS: F11ST-t 1' F 1S.b. 77Q2. .I622_.h_Iti62.�. Ucm'-Y)dnrU c i role :luntington Beach, CA I ,f '�, r• DRAFT AanEEMENT WE, the undersigned owners of property located on Commodore Circle, have agreed to the formation of an Owners Association for the purpose of guaranteeing perpetual maintenance of certain elements of our individual holdings. More specifically, It is our Intent to have mutually acceptable documents prepared, i binding each of the properties to a continuous maintenance program; that we, the i i undersigned,agree to encumber each of the properties Including provisions for "Right of Access"-to maintain. ._..ThIs.offier to the formation of an Owners Association Is coningent on the monies previously budgeter! for Neighborhood Preservation (CDBC3) being made available to the Association b the city, Thew monies will be used to y r upgrade and complete necessary J offaite Improvements Qandscaping, sidewalks, paving, trash enclosures, recreational facilities). It is also understood that the Association will complete the necessary onsite building rehabilitation Improvements through a combined private/public funding program. Our primary objective Is to install a "pride of ownership"back to Commodore Circle and with the requested funds, tcgether with the Association's obligation to maintain, will preserve this pubic: Investment. OWNERS: ADDRESS: w_ `773 iMh�o�,z� �s� ,� `17�� ea,_•e�•�.•�.� . .:, v�4 ..�5 he �' .�cc- ,,"`•`' `� IV in A.A _Q 1 13 Eu hmcrn, :ry:ne, CA 92714 714.7s6.4��, ` ATTACHMENT 2 HeINTER•DEPAMRAENT COMMUNICATION KACH Charles W. Thompson, P ,,enter, Program ,%igr. To City Administrator From Ho� in�, do Redevelopmen' Subject STATUS OF COMMODORE CIRCLE Date May 3, 19-, 6 I have attached a memorandum from Susan Tully, City Cade Enforcement Officer, date: April 30, 1996, regarding the compliance status of buildings being repaired on G->mmodoi Circle. To date, property owners have expended considerable dollars trying to comply with building/housing code standards. Our department has currently processed six (6) rehabilItation loans to those owners requesting assistance, amounting to $120,000. These loans are processed through CDE':. -funds which are made available on a citywide basis to investor-owned rental units at 11:4, and a maximum of $,3,000 per unit. The majority of owners have made substantial strides In :ectifyinc overcrowded conditions which have existed In the past. Unfortunately, although overcrowding may be •esolved and buildings made to conform to minimum housing and building code requiremints, the overall blighted appearance will not Improve without additional monetary support. Staff has continued to meet with the property owners in an attempt to formulate an owners association similar to the successful association formed by the Kolcdo Lane Demonostration project owners. i The primary objective In meeting with property owners Is to collectively Identify the needed Improvements (landscaping, common irrigation system, trash enclosures, carport reconstruction, street and alley resurfacing, replacement of public and private sidewalks, etc:.), and present an action plan to the City Council for authorization to enter into an agreement with the owners to utilize previously budgeted CDBG funds for enhancing the neighborhood. If you have any questions or concerns, please let me know. PS:Ip Attachment I xc: Douglas N. La Belle, Deputy City Administrator Susan Tully, Building E-1:partment 1 2389h 4 I 7 IN a �r+Zi�• �i .'�'a7. ���'r•'•,�•~3,7 �'��.`t `;�••' �j.: T.'�hs:'ia•..i•1•��•6;�i� F•'^:�-�+ ! � :�i:�y+,�:�i jt`�,•. �K.'c"L.•t �/ j• 71� .. - ..- ►..:.�:....:•'.N'vtt w�'.• ��. .�1 ` :�,; ri.:�j.�♦.. DEPARTMENT COMMhNICA'fION '�T"' - �' • INTER• .-� {•- .... fkJ;:: ,► r•'•-.u:- t ' ::gMMAICN •• ter._ '{ �' ^w:.'�' :.«: From •;�. ter:=- �_ ' - .TO Pat Spencer Susan Tully Data 4-30--86 , subject Commodore Circle _ . � .•- current status of Commodore Circle is as follows: The a „j' :- ••. :�-`. 12 properties are in cor-,ipliance of Uniform Housing Code on ' the interiors of the building. ' 1 property is in compliance with the exceptioni�f a balcony. .r which is currently being repairedce.. 7 properties are being prosecuted by .the City Attorney'$- i 'OffiIiii ;- However, while the prosecution process is mt-arted the propertes ' are being rehabilitated. in fact by the time the cases are at trial stage, it may very well be dismissed clue to compliance. All of the buildings on Commodore Circle are in need of •;''� exterior paint. All property owners have held off on exterior - paint due to the pandi_ng agreement with the C?ty• ' a.0 Two 'carports are still missing, both of which nre on properties being prosecuted. -. • • .. J. •' • tad `� ',� �td•q _-_. -. _ :• . .. •'•..r a,!.� AI»r•'Tt ii� •-J:�I+•.• -+• •. ._yi ,.'_ .0-. ..�--• •.- - -Z••.� _..��� :•: .wr.!r' .--.cam-:.'3�•-♦' ?•tom , :=•. ...-...• •s. '• �.. _ .•'ti_. _ `. - t•`: ..� a.\Q►..-. •�R�.•',•ti."1� • "• ss„•+y.+.1•jS�t 1�i.1T. ••-V.• A •��L. c..=i 1.►�►ir.r..� .. tia`:` p ... f .r_ . v c ar-f�• ate!a .� �J• > 7 ^•Mr�+ .yYj'_ _ry `� t.�J•i�"�i�,'�•��'`�?�-_`::«'�,1•a-mesas ..',�: ":��.,.;da::.--sr•. +`7� "' `-,-;i:-� _c ti � .. a•T ,'♦'ZA ", .•Zt. •wR f+�• :a..i i «/�" . J-t i• =• •'•�ui.�_ x�t.ie�.J.�y� �•/`�,r�•,• '� ~ .♦�' , ,xi. a� _ X\ 'j.. �+Mi`,�`•Iyf�,tJ�'.'.fy.�•t��� J T'• '� •'� R��4� ~/`•cyj�C=':w- ♦ • •�,....�•.c tl�:w 7 CCU +:y,J.rJ+•� '�1�•-i ti��.�:�vP• -.its 1 • ' �T • - _ jam. .L�►��iF�l.Ji :��wR-�v• 1� M •�f� IN T11 F , `!i; Superior Court o►Tttx STATE OF CALIFORNIA In and for the County of Orange CITY OF HUNTINGTON BEAM CITY CLERK PROOF OE PITHL1011121 NOTICE OF NO SIGNIFICANT FINDING 1lol l'awa `? �! i Stare of California County of Oranite 1°a' day i i �1"ORfiC1111*!t(if7CY � Rita J. Richter KAIX I • That I am and at all times herein mentioned was a citizen of 7 '�•� + �� Js�ts,tlsl the United States,over the age of twenty-one years,and that I Mot e:� am not a patty to,nor interested in the above entitled matter; 11 fi fs6t1 that I am the principal clerk of the printer of the HUNTINGTON BEACH IND. REVIEW aott i 'i we Md"M 1b so a newspaper of general circulation,published in the City of ��*to }trot b W ►aT HUNTINGTON BEACH '+ ; County of Orange and which newspamr is published for the diseminalion or local news and intelligence or a general chsrac• t of lir ter,end which newspaper at all times herein mentioned had , y, and still has e•bona tide subficriptiun list of paying subscribers, and which nitwepaper has twen established,printed and pub lished at regular intervals in the said County of Orange!or a ii �• period exceeding one year; that the notice, of which the iwi cis? j annexed in a ptinted copy,has been published in the regulat and entire issue of raid newspaper.and not in any supplement thereof,an the tollo•.ing dates,to wit: Jam ^ Mw ofP&� �• �.>L k tisi Meat» tirt wi; t . �� eifsrltss J U I Y 191 1984 net; I.ertily(or declare)under penalty of perjury that the forego- t i i irtr, i ing is true and correct. C►a1 C`rrac� Dated at.... ..... GARDEN GROVE.......... rrsaew�rsr� y�i��� • 6sfirel"ia as: Cal' is this... ,ly.P.4 �......19�..... �r ' jand V.erdt�� M ? .,'. .:....� ...� .Rita J. Richter..... s, Signature fibs ,I • •� �� rar�►r fiib+tr Me.asbswssas�rF. w w�!sit w,t fifie : =dstin fswfiiilsrwptMet...tr,. ; *saw, ftw u.�of franc 1Mo1i , _._.. . _ _.__ .. ... _.._ ... ,01A ! swtrsedJ �� inbttdadr fro;;,,Pw , 'paod aNa wa m 'i 'oe wAO4 tt ir+pAMMasben"" "=h A.rM t. tow the"an Swihan MON aM: 1 WbMW11 "bob W*b S stwr�+t *fid�wat t1s�rr 1W aa►at-:; IMs to tfrs:�ralYei Net rllsr Y r 7ri wR� ifi w claw WANtahi die"Pnow tw. 41a.e � M04.1 of Mlt�..r epy d i 17tla t at tts N[8A� tlraNaat�wr�trMwpenNldat lr:d�M, a w I�dawa�•hb e�+/+wl w Grnrr AiiiiMiswaauewfis rre,.*►Lis Fad dWlw t!NM robw Ueae*N M► tr'�o ;wn'9ir`w4bo %cart A%d �d wd�o,pwtfit ptisa tr +a Q•. dda retriali.� It IL t A aM fit W a+e lr IsM,ettr rat �j `rrRit�oi ft i ~- ewM weiwsswrasl:h�rhie Ist r 1 W 7adrerrr aerWttr i tr twtad llaiisa woo ae�dwWr M 9e�ra}et r for rwebas�wilr tr 1.r.pimia t7e�.ewsfi mat be P f�t R.tde� sd Y se CM Pat bB n d do bu fw MWANi" Iamd is un Felled }}sense,tbawt Atin7 1s. IVA'tow reptA sm on srsi161e Fa the d1ke d do Car d Nvtertna PAWL 711e7 be ad- dttsgd.b bMlN'+WY cbuww at HoWing OW Utw Vuk�o.�Rt'o within 6a4+sn1. to Aaestis,.'GYf.sws WAt _Or .,iad.�6uie sthee tlifia tttart stassd ie. at Pwf-WAp�s�p spk wo set be c w• IAVW by M lb n M"d sM•AKn►t!,IN9.w be coaide"d =by HL"I _ (�atke'V.7het�eafi.� • Cnr d H,,�tirtm Atrclt :000 xaia t;rreat N a.e..-a.Gtflateia smote. it �• CITY COUNCIL COMMUNICATION - TO City Councilmembers FROM Gloria L . cy ! i SUBJEcT I`i'EM H-4 , COMMODORE CIRCLE DATE August 22, 1983 R 1 I Scott Strohbenn, 964-71211 was in the Council office today and spoke to the Mayor by telephone concerning the above Agenda item. He will be coming before the Council at tof r. aht' s meeting to ask for a cont-inuance of this item (see attached letter dated May 3, 1982) . I i i I 4 1 ul i i Attachment i E s i i i i 1 I: s oL;,- P.O. BOX 190 DEPAMIENT OF DEVELOPMENT SERVICES CALIFORNIA92649 BUILDING DIVISION(714)5.13-5241 PLANNING DIVISION(714)32S•5271 i ! Play 3, 1982 i - I I`! Mr. Douglas Settles , 338 Violet Lantern E Orange, California 92669 i f Dear Doug: Scott was in my office on Friday April 30 discussing your appeal on Tentative Parcel Map 81-963. At that time I informed him that the City had incorporated the Commodore Circle area into the survey area for possible redevelopment in conjunction with the + Five Points com.-•Icrcial center. I �;. We discussed the star is Qi° your appeal and I advised that it be l withdrawn with the understanding that, should nothing materialize within the next G to 8 monttls on a meaninc7ful program towards i consolidation for redevelopment of the area pursuant to the pro- posal submitted concurrently with the General Plan amendment request, the Department of Development Services would at that point in time endorse access to your subject parcel. from Commodore • Circle. The action to withdraw would in no way jeopardize a future map on the total area having an access point from Delaware as well as Huntington Street subsequent to the vacations of the north/ I t south alley as well as Commodore Circle. This withdrawal would t also not affect a future filing of a parcel map requesting access {, from Commodore. ! Trust this information will suffice. Should you need additional =� • clarification, do not hesitate to contact Inc. Very truly yours, i ames W. ralin r rDirector i. JWP:df 41 r :t WORK SHEET AGENDA I CITY COUNCIL/REDEVELOPMENT AGENCY 4" p t r4- .- Room B-8, Civic Center tom — Monday, August 1 , 1983 CITY COUNCIL/AGENCY ROLL CALL - Pattinson, Thomas, Kelly, MacAllister, Finley, Bailey, Mandic 1. KOLEDO LANE DEMONSTRATION PROJECT (OAKVIEW REDEVELOPMENT PROJECT AREA, (CC & R's and related documents are available for review in the Cit .Council ( af ce and the ty—Uer sOffice.) f (a) Physical Improvement Plans (b) Property Owner's Association Status (c) Financing Private Placement Bonds (d) Schedule 2. COMMODORE CIRCLE NEIGHBORHOOD ENHANCEMENT AREA (CC & R's and related documents are available for review in the City Council Office and the City Clerk's Office. (a) Tentative Physical Improvement Plans (b) Property Owner's Meetin s (c) Enforcement Activities (d) Property_ Owner's Association Status 3. QUESTIONS FR014 REDEVELOPMENT AGENCY/CITY COUNCIL MEMBERS 4. CITY COUNCIL/REDEVELOPMENT AGENCY ADJOURN14ENT ALICIA M. WENTWORTH, CITY CLERK .r..• .5. -.,.«... .- ... ..... ... ,. .. -... .. rkita-'^;lµi. i ��;w`1:�.:'t-S�..aw....'r-�L'7H i • _ AG�J_i� Requ1AP Ppe°eh 1'7 Lit l` ,9,i C� Cj . f Q NARRATIVE DESCRIPTION OF KOLEDO LANE PROPERTY OWNERS' ASSOCIATION DOCUMENTS There follows a brief summary of the Declaration of Conditions, Covenants and Restrictions and Grant of Easements; Owner Participation Agreement; Disposition and Development Agreement; and Construction Agency Agreement for the Koledo Lane Property Owners. CONDITION_S,4 QVENANTS AND RESTRICTIONS The CdOs `for 'the itoledo lane Property Owners' Association is similar in 6M'and content to. CC&Rs for condominium homeowner associations.' The pri- n4 ry purpose oftthis dgcume6t. is to create this Association for the common . nwintenagc . and tn.n'aigement of ,these units including such things as maintenance agd,�epairs of com�pn landscape and parking areas, building maintenance, insurance, trash collection and property taxes on common facilities. . The CC�rits .is divided into 12 articles and the contents of the major of these articles are highlighted below. A•t i• le 11 UsR."Mstrict1ons and_Proaerty Rights T irtic{t. restrii:is use of the apartment units viithtjl. the project area�. to t�,Js' at of. myli-family' renta1 housing and forbids such things as hotel tenancy { or eondgminium. or time-share conversions. 4 Ar`tiele :III - Property Owners'_Association and VoRights This prticle establishes the creation of the property owners' association and stipulates that ownership of each building shall be represented in the association by one vote. Art:-:-e TV - Powers and Duties of Association This' a�ticle stipulates the powers of the Association 'to.levy assessments-to individual owners for non-compliance, and its responsibilities for the common benefit. i Article' V - Assessments { . �r .J'" •. ... .. .; .•:-. .'i is this establishes'.that there will be amonthly. assessment for each property, in an amount suf10 6t to cover the common expenses incprred .by the Association such as., andscape and parking maintenance, utilities, ipsurance, taxes on com- r moo y held property and, to tie extent desired by the Association, common building Maintenance. Article VII - Architectural Control i This article establishes an architectural review committee composed of members of the Association and requires that any major improvement or alteration of any structures or improvements receive the approval of this committee. KOLEE:)o fin. //h r rg�`oY6 4 f i w , Article IX - Obligation to Maintain, Repair and Rebuild This is the article which will accomplish one of the major objectives for the demonstration project in that it charges the responsibility of maintenance and repair of its facilities to the Association. It also discloses the op- tions of the Association should any private or common improvements be destroyed by fire, earthquake or other calamity. OWNER PARTICIPATION AGREEMENT As with property owners in any of the City's redevelopment project areas who intend 'to participate in the implementation of the adopted redevelopment plan, Owner Participation Agreements with each of the owners in the Koledo Lane demonstration project will be required. The Owner participation Agreement sinply'states that the purpose of the agreement is to implement the rede- velopment 'plan, references the adoption date of the ordinance 'for the Oak- view Redevelopment Project Area; identifies the site Oertinen t :to the a""''' meet and the';parties to the agreement, and stipulgree- ates the improvements which will occur. These improvements are: demolition of the 'existing carports, + construction of new 5-car garages, rehabilitation of the existing.4-plexes + and, at the'opiion of any owner, the 'constNction of a new 2-bedroom.apart- ment uiiit over the garage. .: The Owner Participation Agreement so provides ► irisuranie and indemnity requirements, requires each owner to. 5ecure the usual Ci j ty-permits ,forAhei construct'i'ori activity, maintains a public right of.taccess for repair and maintenance of public utilities, offers the owners the' oppor- tunity. to approve, plans and specifications for the improvements planned to both private and commonly held property, and provides for the circumstances under which the -agreement may be terminated. CONSTRUCTION AGENCY AGREEMENT This document is between the Redevelopment,Agency and each of the property owners and:its purpose is,to provide a vehicle thorugh which, the, property.owners can appoint the property owners `association as their collective agent. fcr th "pur- pose of constructing the planned improvements. Through this �mechanism..it is envisioned that the Association will contract with one. entity for' the reha- bilitation of the existing 4-plexes and the new construction under one contract, This will permit substantial cost savings through one master contract and should also expedite the construction and rehabilitation work. The,a ; nt goes tci W oplate the obligation of the property owners to pay theirpropriate on ! share of the costs incurred by the Association for the new construction and rehabilitation work and provides that the Association has the opportunity to review and approve plans. The agreement also cal Is, for subscription to 'the worker's compensation law and for non-discrimination for the tern of the contract. DISPOSTION AND DEVELOPMENT AGREEMENT I This agreement is between the Rndevelopment Agency and the Koledo Lane P roert Owners Association. The purpose of this agreement is to provide the mechanism -2- I 9 t I - 0 1 LAN&DI'MONSTRATIAN P110,I1V SCHEDULE1 Revised Julv 21, 1983 July 7-30 - Pronerty owners meetings to approve CC3Rs, OPAs and financing and commitment to participate August 1 - City Council study session August 18 - City Council approval of rehab financing program, CC&Rs, OPAs and other documents, and authorizes engineering'consultant for public improvements August 19 - Commence rehab work writeups Lender commitment for tax exempt rehab bond issue File for Conditional Exception with BZA September 6 - City Council approves engineering consultant and authorizes preparation of public improvement plans BZA approval of Conditional Exception September 30 - Complete rehab work writeups Commence processing of new construction loans Complete working drawings for building construction and file for plan check October 3 - City Council approves public improvement plans and authorizes bids October 21 - Plan check complete and building permits issued Tax exempt bond issue closed; proceeds available October 24 - Commence rehab work Complete building construction loan approvale. November 1 - Commence new building construction November 19 - Commence construction of public improvements December 24 - Complete rehab January 15 - Complete new building construction February 1 - Complete construction of public improvements U 7 through which the vacated street right-of-way may be improved as common landscape and parking areas and subsequently conveyed to the Association for maintenance. This document further identifies the Agency parcel (the old street right-of-way), the parties to the agreement, establishes that an escrow will be used to convey the parcel , terms and conditions of title insurance, tax assessments, and recordation of the appropriate deed. The Association also has the right to approve the site plan for the improvement of the old street right-of-way and -the construction drawings and related documents. The, document calls for the preparation of a schedule of per- . foriance, requires that necessary governmental approvals be achieved prior to the commencement of construction, and contains the anti-discrimination provisions necessary in all Odas. Lastly, the document provides for the terms and conditions under which it may be terminated and provides that the Redevelopment Agency has the right to re-enter and take possession .of the parcel, should there be default on the part of the Association at any sub- sequent time. i i c 4 s i -3- K0LgW LAa DI'MONSTRAT ION PROJI-CT SCHEDULE . Revised Jul 21, 1983 i July 7-30 - Property owners meetings to approve CC&Rs, OPAs and financing and commitment to participate August 1 - City Council study session August 18 - City Council approval of rehab financing program, CURS, OPAs and other documents, and authorizes engineering consultant for public improvements August 19 - Commence rehab work writeups Lender commitment for tax exempt rehab bond issue File for Conditional Exception with 9ZA September 6 - City Council approves engineering consultant and authorizes i preparation of public improvement plans ,I BZA approval of Conditional Exception ' September 30 - Complete rehab work writeups Commence processing of new construction loans Complete working drawings for building construction and file ;I for plan check October 3 - City Council approves public improvement plans and authorizes bids i October 21 - Plan check complete and building permits issued Tax exempt bond issue closed; proceeds available ii October 24 - Commence -ehab work Complete building construction loan approvals November 1 - Commence now building construction November 19 - Commence construction of public improvements December 24 - Complete rehab i January 15 - Complete new building construction February 1 - Complete construction of public improvements i -Pei 0 is r a NARRATIVE DESCRIPTION OF COMMODORE CIRCLE PROPERTY OWNERS' ASSOCIATION DOCUMENT i There follows a brief summary of the Declaration of Conditions, Covenants and Restrictions and Grant of Easements for the Commodore Circle Property Owners. CONDITIONS COVENANTS AND RESTRICTIONS i t The CC&Rs for the Commodore Circle Property Owners' Association is similar � in form and content to CC6Rs for condominium homeowner associations. The primary purpose of this document is to create this Association for the com- mon maintenance and management of these units including such things,,as maintenance and repairs of common landscape and parking areas, building t maintenance, insurance, trash collection and property taxes an common facilities.oCrticles are highlighteo below divided articles and the contents of ' the major f these a Article II - Use Restrictions and Property Rights ' ' This article restricts use of the apartment units within the project area to that of multi-family rental housing and forbids such things as hotel tenancy or condominium or time-share conversions. Article III - Property Owners' Association and Vot.iR_ ts This article establishes the creation of the property owners' association and stipulates that ownership of each building shad be represented in the Association by one vote. Article IV. - Powers and Duties of Association This article' stipulates the powers of the Associationtresponsibil for itieshe to individual owners for non-compliance, and i benefit. :u i Article V - Assessments This establishes that there will be a monthly assessment for each property in an amount sufficient to cover the common expenses incurred by the Association such as landscape and parkingQaeXtentndesiredlbyjthe Association,taxcoommon s on com- monly held property and, to h building maintenance. Article VII - Architectural Control This article establishes an architectural review conmittee composed of members of the Association and requires that any majorimarove tnt orarlteration of any structures or improvements receive the appr i i 1 1 ' Repair and Rebuild ,► Article _ pb_li�Cation to Maintain, ` ne of the major objectives for 4 ` This is the article which will accomplish o the demonstration project in that it charges the responsibility of maintenance and •:pair of its facilities to the private ion. it orcommonalso improvementssbehe op- destroyed tio-..,. of the Association should any p �i by fire, earthquake or other calamity. I i ..:y c , 4 f •. LIer16 roe ;r NARRATIVE DESCRIPTION OF COMMODORE CIRCLE PROPERTY OWNERS' ASSOCIATION DOCUMENT There follows a brief summary of the Declaration of Conditions, Covenants and Restrictions and Grant of Easerents for the Commodore Circle Property Owners. CONDITIONS, COVENANTS AND RESTRICTIONS The CC&Rs for the Commodore Circle Property Owners' Association is similar in form and 'content to CC&Rs for condominium homeowner associations. The primary purpose of this document is to create this Association for the com- mon°maintenance and management of these units including such things as maintenance and repairs of common landscape and parking areas, building maintenance, insurance, trash collection and property taxes on common facilities. The CC&Rs is divided into 12 articles and the contents of the major of these articles are highlighted below. Article 11 - Use Restrictions and Property Rights This article restricts use of the apartment units within the project area to that of multi-family rental housing and forbids such things as hotel tenancy or condominium or time-share conversions. Article III - Property Owners' Association and Voting Rights This article establishes the creation of the property owners" association and stipulates that ownership of each building shall be represented in the Association by one vote. Article IV - Powers and Duties of Association This article stipulates the powers of the Association to levy assessments to individual owners for non-compliance, and its responsibilities for the common benefit. Article V - Assessments This establishes that there will be a monthly assessment for each property in an amount sufficient to cover the common expenses incurred by the Association such as landscape and parking maintenance, utilities, insurance, taxes on com- monly held property and, to the extent desired by the Association, common building maintenance. .",rticle VII - Architectural Control This article establishes an architectural review committee composed of members of the Association and requires that any major improvement or alteration of any structures or improvements receive the approval of this committee. ti � fi v r�.Yt•�•♦. ...! +¢. ..N1? :..:J... _.� .. .. .•...�..._ .. ....._...�... .. .. .. .. .. .. ,,.............. • ... .-.... •. .+wtir .-rw.+!t.r H•+r.«M1t Mi./r.i`IY.iR'�r� Article IX - Obligation to Maintain, Repair and Rebuild, This is the article which will accomplish one of the major objectives for the demonstration project in that it charges the responsibility of maintenance and repair of its facilities to the Assoc.lation. It also discloses the op- tions of Association should any private or common improvements be destroyed by fire, earthquake or other calamity. r: '.S•sx 1 1' F1.J la I 4 }•' S �i -z- :X:l'c+i�r..7+.,•--•,-+�s:mxa• t.;:,a::r:r:v.w•..��. _...... .___ .....�.... ._......:.. ............_. ..___..__ Recording requested by and when recorded return to: BARNEY A. ALLISON STRADLING, YOCCA, CARI,SON AND RAUTH 610 Newport Center Drive, Suite 800 P. 0. Box 7860 Newport Beach, California 92660 DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS AND GRANT OF EASEMENTS ( FOR COMMODORE CIRCLE PROPERTY OWNERS' ASSOCIATION 4 ' IP • I s TABLE OF CONTENTS ' f Page No. ARTICLE I Definitions 2 1 ARTICLE II Use Restrictions and Property Rights 3 a ARTICLE III Property Owners' Association and Voting Rights g ARTICLE IV Powers and Duties of Association g ARTICLE V Assessments 13 ARTICLE VI Effect of Non-Payment of Assesements Remedies of the Association 16 ARTICLE VII Architectural Control 17 ARTICLE VIII Mortgage Protection 17 ARTICLE IX Obligation to Maintain, Repair and Rebuild 22 ARTICLE X Damage, Destruction and Condemnation 23 ARTICLE XI Covenant Against Partiti,n 24 ARTICLE XII General Provisions 24 i, I�r:. DECLARATION OF CONDITIONS, COVENANTS AN'-) .. RESTRICTIONS AND GRANT OF EASEMENTS RECITALS: 1. (hereinafter referred to collectively as'-"Declarants") are the owners, respectively, of certain real property located in the City of Huntington Beach, County of Orange, State of California, more particularly described as: See legal description attached hereto as Exhibit A and incorporated herein by reference. Said real property is located in the Oakview Redevelopment Project Area (the "Project Area") described in the Redevelopment Plan approved and adopted by Ordinance No. 2582 adopted by the City Council of the City of Huntington Beach (the "City") . 2. The City is the owner of/ that certain public street, commonly known as Commodore Circle, more particularly described as: r"1 See legal description attached hereto as Exhibit B and incorporated herein by reference. In accordance with that certain Disposition and Development Agreement (the "DDA") by and among the City, the Redevelopment - Agency of the City of Huntington Beach (the "Agency") and Commodore Circle Property Owners' Association (the "Association") the City will vacate said public street in favor of the Agency, which will construct certain recreational and i landscape and surface parking facilities thereon and convey fee simple title to the improved public street to Commodore Circle Property Owners' Association. 3. Each of the properties referred to in paragraph I hereinabove is currently improved with a four-unit apartment building and adjacent parking facilities. Concurrently with the recordation of this Declaration, each of the Declarants will execute an Owner Participation Agreement (Ccmmodore Circle Project) with the Agency and the City generally calling for the rehabilitation of the existing structures and the development of certain improvements on the properties by each of the Declarants and the vacation and improvement of Commodore Circle with landscaping and parking facilities to be used in common by .the Declarants. i+ I 4. Declarants hereby establish by this Declaration a plan , for the improvement., development, rehabilitation and maintenance of the Project, for the benefit of all of the Project, the improvements thereon, the Declarants and the Project Area. i DECLARATION: Declarants, the fee owners of the real property described In Recital Paragraphs 1 and 2 above, hereby make the t� following declaration as to divisions, easements, rights, liens, charges, covenants, conditions, limitations, restrictions and uses to which such property and the improvements thereon (the "Project") may be put. Each and all of the restrictions, limitations, conditions, covenants, liens, reservations and charges herein contained &hall run with the land and shall be binding on Declarants as well as their uuccessors and assigns and all subsequent owners of all or any part of the Project, together with their grantees, successors, heirs, executors, administrators, devisees or assigns: ARTICLE I DEFINITIONS Section 1. "Project" shall mean all of the real �1 property herein described in Paragraphs 1 and 2 of the Recitals, including all structures and other improvements thereon. Section 2. "Lot" shall mean and refer to any of Lots through , inclusive, of the Project, together with all improvements located thereon. Section 3. "Common Area" shall mean and refer to that certain public straet commonly known as Commodore Circle, more particularly described in paragraph 2 of the 'Recitals herein. Section 4. "Owner" shall mean the Declarants hereunder, or any subsequent record owner, or ownere if more than one, or the buyer under a conditional sales contract or the lessee under a ground lease of a Lot in the Project. Section_ 5. "A:;sociation" shall mean the COMMODORE CIRCLE PROPERTY OWNERS ASSOCIATION, a California nonprofit mutual benefit partnership, its successors and assigns, in which all Owners shall have a membership interest as more particularly described in Article III hereof, provided that ` membership shall be limited to owners. Section 6, "Land" is the material of the earth, whatever may be the ingredients of which it is composed, i whether soil, rock or other substance, and includes free or 06-16-83 5273P/2273/00 _2„ I ' the Common Area without the approval of the Association. No owner shall permit anything to be done or kept in his Lot or in the Common Area which will result in the cancellation of insurance on any Common Area or which would be in violation of any law. (d) No sign of any kind shall be displayed to- the public view on or from any Lot or Common Area without the approval of the Association and appropriate City departments as required by the City Code, the Agency and the City, except one (1) "for sale" or "for lease" sign on any Lot. All signs otherwise permitted under this Section shall conform with all ordinances and other regulations of the Agency and the City. (e) No animals of any kind shall be raised, bred or kept in any Lot or in the Common Area, except that dogs, cats or other household pets may be kept on Lots subject to approval of the Association, provided that no animal shall be kept, bred or maintained for any commercial purpose and no animal shall be permitted outside of buildings on the Project unless on a leash. (f) No Owner shall permit or suffer anything to be done or kept upon said premiser which will increase the rate of insurance on any building, or on the contents thereof, or Impair the structural integrity thereof or which will obstruct or interfere with the rights of othe-r occupants, or annoy them by unreasonable noises or otherwise, nor shall any Owner commit or permit any nuisance on the premises or fail to keep the premises free of rubbish, clippings and trash or commit or suffer any illegal act to be committed thereon. Each Owner shall comply with all of the requirements of all governmental authorities with respect to the said premises. If by reason of the Occupancy or uses of said premises by any Owner the rate of insurance on the building shall be increased, such Owner shall become personally liable for the additional insurance premiums. (g) Nothing shall be done on any Lot or in, on or to any building or structure in the Common Area which would structurally change any such building or structure, except are otherwise provided herein. Nothing shall be altered or constructed in or removed from the Common Area, except upon the written consent of the majority of the Board of Directors of the Association. Nothing herein shall effect the rights of the Owner of a Lot to repair, alter or construct improvements on the internal buildings on said Lot unless such repair, alteration or improvement would impair or alter the structural integrity and/or exterior appearance of said buildings. (h) There shall be no structural alteration, construction or removal of any building, fence or other structure in the Project (other than repairs or rebuilding pursuant to Article IX hereof) without the approval of the Architectural Control Committee as set forth in Article NII 06-16-83 5273P/2273/00 -4- occupied space for an indefinite distance upwards as well as downwards, subject to limitations upon the use c' airspace imposed and rights in the use of airspace granted by law. Section 7. "Declarants" shall mean and refer to those record owners of the Lots referred to in paragraph 1 of the Recitals herein. Section 8. "Mortgage" shall mean and include a Deed of Trust, an Installment Land Contract with Power of Sale, a sale/leaseback for financing purposes, as well as a Mortgage in the conventional sense. Section 9. "Mortaa ee" shall mean a person or entity to whom a Mortgage is made and shall include the beneficiary of a Deed of Trust, the vendor under an Installment Land Contract with Power of Sale and the lessor under a sale/leaseback arrangement; "Mortgaaor" shall mean a person . or entity wlio mortgages his or its property to another, i.e. , the maker of a Mortgage, and shall include the trustor of a Deed of Trust, the vendee under an Installment Land Contract with Power of Sale and the lessee under a stale/leaseback arrangement. Section 20. "M " shall mean and refer to every person or entity who holds Membership in the Association. Section 11. "Parking Plan" shall mean and refer to the designation -of parking areas in the Project attached hereto as Exhibit C and incorporated herein by reference more particularly referred to in Article II, Section 1(i) hereof. Section 12. The definitions provided herein shall } be applicable to this Declaration and also to any supplemental Declaration (unless the context shall prohibit) , filed pursuant to the provisions of this Declaration. ARTICLE II USE RESTRICTIONS AND PROPERTY RIGHTS Section 1. Use Restrictions. The Lots and Common t Area shall be occupied and used as follows.- dwelling (a) Each Lot shall be used only for private apartment g purposesA and for no other purposes. (b) Subject to the provisions of these restrictions, use of the Common Area shall be in accordance with and subject to limitations as determined by the Association. (c) Nothing shall be done or kept in any Lot or in �-••� any Common Area which will increase the rate of insurance on 06-16-83 5273P/2273/00 _3- —+.. v... ... ... .., rig .. ... .. .. .. ........ .. ...-........._. ... ...w-.,.....,w.w-'S.' .-f:/:.�V aavr,.ra- hereof and the appropriate City departments as required by the City Code. No building, fence or other structure shall be constructed upon any portion of any Common Area other than such building and structure as shall be constructed by the Association pursuant to Article IX or Article X. In no event shall basketball hoops or clotheslines be permitted on the Project. (i) No Owner of a Lot shall permit the parking, storing or keeping of any vehicle except wholly within the parking areas designated therefor in accordance with the Parking Plan for the Commodore Circle Project attached hereto as Exhibit C and incorporated herein by reference (the "Parking Plan") . No Owner shall permit the parking, storing or keeping of any vehicle owned or operated by a tenant of a unit on a Lot within any area designated for "guest parking only" on the Parking Plan. No Owner shall permit the parking, storing or keeping of any large commercial type vehicle (dump truck, cement mixer truck, oil or gas truck, etc, ) , or any recreational vehicle (camper unit, motorhome, trailer, boat trailer, mobile home or other similar vehicle) , boats over twenty (20) feet in length or any vehicle other than a private passenger vehicle upon any portion of the Project, including parking spaces. No Owner of a Lot shall permit major repairs or major restorations of any motor vehicle, boat, trailer, aircraft or other vehicle to be conducted upon any portion the Project, including parking spaces, except for emergency repairs thereto and then only to the extent necessary to enable movement thereof to a proper repair facility. No inoperable vehicle shall be stored or kept in the Project:. The Association shall have the right to remove, at the Owner' s expense, any vehicle parked, stored or kept in violation of the provisions of this Declaration. I f (j) All Owners shall be Members of the Association and shall comply with the terms and conditions as set forth in the Articles of Incorporation and Bylaws and any rule or regulation of the Association. No Owner shall transfer any membership or interest in the Association, except upon the transfer of the Lot to which it is appurtenant. M The rights of Declarants in these Restrictions may be assigned by Declarants to any successor to all or any part. Of Declarants' interest in the Project by an express assignment incorporated in a recorded deed transferring such interest to such successor. (1) No Owner shall be permitted to lease his Lot for transient or hotel purposes. Any lease agreement covering a Lot or an apartment within a Lot shall ' of the lease shall be subject in all respects etohthetpr terms of the Declaration of Restrictions, the Articles of provisions Incorporation and the Bylaws and that any fail ure b to comply with the terms of such documents shall bey athe defaultee under the lesase. All leases shall be {ir. writing. Other than 06-16-83 5273P/2273/00 �g- the foregoing, there are no restrictions on the right of an Owner to lease his Lot or the apartment units thereon. (m) The Association shall have the right of entry, at reasonable hours and upon no less than 48 hours advance notice, onto any Lot to affect repairs or maintenance which the Owner has failed to perform or which are necessary in connection with repairs to the Common Area or an adjoining Lot. Entry onto any Lot for other than emergency repairs may be made only after notice and hearing, as provided in Article X11, to determine the necessity and right of such entry and the responsibility for the cost of any repairs or maintenance. If determined after such notice and hearing, the cost of any such repairs or maintenance shall become a charge for which such Owner and Lot shall be responsible; provided, however, that if such repairs or maintenance provide a special benefit to any other Lot they shall be charged to such Lot to the extent of such special benefit; and provided further, that if such repairs or maintenance are for the benefit of the Common Area then, to the extent of such benefit, they shall be charged to the Association and not to the Owner of such Lot. ' (n) Utilities ( 1) Owners' Rights and Duties: The rights and duties of the Owners within the Project with respect to sanitary sewer, water, electricity, gas and telephone lines and facilities, and heating and airconditioning facilities shall be as established as of the date of the recordation of this Declaration, as such rights and duties may be amended. (2) Easements for Utilities and Maintenance: Easements over and under the Project for the installation, repair and maintenance of electric, telephone, water, gas and sanitary sewer lines end facilities, heating and air conditioning facilities, walkways and landscaping as shown on the record or title to the Project as of the date of the recordation hereof, and as may be. hereafter required or needed to service the Project, are hereby reserved by Declarants and their successors and assigns, including the Association, together with the right to grant and transfer the same. (3) Association's Duties: The Association shall maintain all utility installations located in the Common Area except for those installations maintained by utility companies, public or private. The Association shall pay all charges for utilities supplied to the Project except those metered or charged separately to the bats. (o) Installation of solar heating systems on any Lot or in the Com.non Area will. be permitted, subject to applicable zoning regulations, the Uniform Building Code and associated :��•, ordinances, and reasonable architectural review by the Architectural Control Committee pursuant to Article VII . 06-16-83 5273P/2273/00 -6- i I (p) No more than two (2) persons per bedroom shall be 900) permitted to occupy the buildings on each lot. (q) No alcoholic beverages or controlled substances shall be permitted in the Common Area. (r) No Owner shall install or permit to be installed i on the exterior of said Owner' s Lot any antenna or television or radio receiving device. This prohibition shall not prohibit I the installation of cable television wires or receiving devices which serve the entire Project. n (s) No Owner shall further subdivide his Lot nor offer the Lot for sale as a "time share" project nor convert said Lot to condominium or stock cooperative ownership without the approval of the Board of Directors of the Association and compliance with applicable City ordinances. Section 2. Owners' Easements of Enjoyment. Every Owner shall have a right and easement of enjoyment in and to the Common Area which shall be appurtenant to and shall pass with the title to every Lot, subject to the following provisions: (a) The right of the Association through its Board of Directors to reasonably limit the number of guests of tenants ! r-� permitted to occupy the Project or any portion thereof. (b) The right of the Board of Directors of the Association to establish uniform rules and regulations pertaining to the use of the Common Area and the recreational facilities thereof which in all cases shalt be consistent with and in furtherance of the Redevelopment Plan for the Project Area. (c) The right of the Association, in accordance with its Articles, Bylaws and this Declaration, to borrow money with the assent of two-thirds (2/3) of Members for the purpose of improving and rehabilitating the Common Area, and, in aid thereof, to mortgage said property, provided that the rights of I such Mortgagee shall be subordinate to the rights of the Owners hereunder. (d) The right of the Association to suspend the voting rights of an Owner fo•: any period during which any assessment against his Lot remains unpaid and delinquent; and for a period not to exceed thirty (30) days for any single infraction of the published rules and regulations of the Association, provided that any suspension of such voting rights shall be made only by the Assocation, after notice and hearing j given and had as provided in Article XII . f 06-16-83 5273P/2273/00 -7- � J Section 3. Easements for Vehicular Traffic. In addition to the general easements for use of tl,e Common Area granted herein, there shall be and Declarants hereby covenants for themselves and all future owners within the Project that each Owner shall have a nonexclusive easement appurtenant for vehicular traffic over all private streets, if any, within the Project. Section 4. Delegation of Use. Any Owner may delegate, in accordance with the Bylaws, his right of enjoyment to the Common Area and facilities to those who reside on the Project. Section S. There is hereby reserved to the Association, or their duly authorized agents and representatives, such easements as are necessary to perform the duties and obligations of the Association as are set forth in this Declaration, or in the Bylaws or the Articles. Section 6. Each of the easements provided for in this Declaration shall be deemed to be established upon the recordation of this Declaration, and shall thenceforth be deemed to be covenants running with the land for the use and benefit of the Lots and Owners thereof, superior to all other encumbrances applied against or in favor of any portion of the properties that are the subject of this Declaration. In furtherance of the easeir-..nts provided for in this Declaration, ' the individual grant deeds to Lots nay, but shall not be required to, set forth said easements. Section 7. Notwithstanding anything herein expressed or implied to the contrary, this Declaration shall be subject to all easements heretofore or hereafter granted by Declarants for the installation and maintenance of utilities and drainage facilities that are necessary for the development or rehabilitation of the Project. ; I i ARTICLE III PROPERTY OWNERS` ASSOCIATION AW VOTING RIGHTS Section 1. Membership. Every person or entity who is a record Owner of a fee or undivided fee interest in any Lot that is subject to assessment by the Association shall be a Member of the Association. The foregoing is not intended to include persons or entities who hold an interest merely as security for the performance of an obligation. Section 2. Voting Rights. The Association shall have one (1) class of voting membership consisting of all Owners who shall be entitled to one (1) vote for each Lot owned. When more than one person holds an interest in any Lot, f•"� all such persons shall be Members. The vote for such Lot shall 06-16-83 5273Pj2273j00 -8.. T be exercised as they among themselves determine, but in no event shall more than one (1) vote be cast with respect to any Lot. Section 3. Transfer. The Association membership held by any Owner of a Lot shall not be transferred, pledged or alienated in any way, except upon the sale or encumbrance of such Lot, and then only to the purchaser of the Lot or to a Mortgagee or purchaser of such Lot upon foreclosure. Any attempt to make a prohibited transfer is void and will not be reflected upon the books and records of the Association. ARTICLE IV POWERS AND DUTIES OF ASSOCIATION Section 1. The Association is hereby designated as the management body of the Project. The Members of the Association shall be the Owners in the Project. The initial Board of Directors of the Association shall be as set forth in the Articles of Incorporation forming the Association. Thereafter the Directors shall be elected as provided in the Bylaws. Section 2. The Association shall have the right and power to do all things necessary for the management and ( operation of the Project. The Association, through its Board, shall further have power to enter into contracts on behalf of the Association for goods and services. Section 3. The Association, through its Board, and for the benefit of the Lots and the Owners in the Project, shall acquire and pay for out of the assessments hereinafter provided for., the following: (a) Water. sewer, electrical and gas and other necessary utility services for the Common Area and (if not separately metered or charged) for the Lots. `. (b) A policy or policies of blanket hazard insurance, including fire insurance with extended coverage endorsement, for the full insurance replacement value of the Common Area, without deduction for depreciation or coinsurance, insuring the Association for the benefit of the Owner, and their Mortgagees, as their interests may appear. (c) A policy or policies insuring the Association, the Board, the Officers and the Declarants and agents and employees of each of the foregoing against any liability incident to their duties on behalf of the Association and, if obtainable, a cross liability endorsement insuring each insured against liability to each other insured. 06-16-83 5273P/2273/60 -9- .•4:. .A ♦ , ... Ali . _ ......... ..�.. .,.. ....... ♦ . - .. .• .... - .. .. tv.. ...... _ ..� .....�..��.�._.. _......�..w.tir Y.'awY i (d) A comprehensive policy of public liabiUty insurance covering all of the Common Area. Such insurance policy shall contain a "severability of interest" clause or endorsement which shall preclude the insurer from denying the claim of an Owner because of the negligent acts of the Association or any other Owner. The scope of coverage must include all other coverage in the kinds and amounts commonly required by private institutional mortgage investors for projects similar in construction, location and use. Liability coverage shall be for at least $1,000,000 per occurence for personal injury and/or property damage. (e) WoLkers' Compensation Insurance to the extent necessary to comply with any applicable laws. (f) A fidelity bond or insurance against dishonest acts on the part of directors, managers, trustees, employees or volunteers responsible for handling funds collected and held for the benefit of the Owners. Such bond or insurance must name the Association as the named insured and shall be written in an amount sufficient to provide protection which is in no event less than one and one-half times the Association' s estimated annual operating expenses and reserves. (g) Such other policies of insurance as the Association may deem appropriate. The Board shall periodically review all policies of insurance to assure adequate coverage. The Association shall be deemed trustee of the interests of all Owners in any insurance proceeds paid to it under any such policies, and shall have full power to receive and to receipt for their interests in such proceeds and to deal therewith. (h) The services of a person or firm (the "Manager" ) to manage the Project to the extent deemed advisable by the Association, as well as such other personnel as the Association may determine to be necessary or proper for the operation of the Project whether such personnel are employed directly by the Association or are furnished by the Manager. ! (i) The Association shall maintain and repair the Common Area, including any improvements, landscaping and parking facilities thereon. The Association is also authorized to perform any and all repairs and maintenance activities on any Lots that are the primary responsibility of the Owner of said Lot as set forth in this Declaration and to levy a special assessment in the form of a lien against said Lot. The Association shall also maintain and repair any originally constructed fence, sewer, water and drainage facilities along ' the perimeter of the Project. Except as provided in this subsection, the Association shall have no primary responsibility for the maintainance or repair of any structure on a Lot. 06-16-83 5273P/2273/00 -10.. (j) If the Association has incurred any liability or paid any costs or expenses for a single Lot or Gwner, the cost thereof shall be specially assessed to the Owner of such Lot; provided, however, that nothing herein shall permit the Association to assess the Owners for any new improvements or additions to the Common Area except pursuant to Article .IV Section 9, or Article V or Article X hereof. (k) The Association shall pay any and all property taxes and special assessments, if any, levied against the Owner' s anti/or the Association' s interest in the Common Area. Section 4. The Association may delegate any of its duties, powers or functions, other than the power to levy fines, hold hearings or impose discipline, to any person, corporation or firm to act as Manager. Neither the Association nor the members of its Board shall be liable for any omission or improper exercise by the Manager of any such duty, power or function so delegated. Section S. As set forth in Section of Article of the Bylaws, the Board of Directors of the Associatic.:. shall be prohibited from taking certain actions, except with the vote or written assent of a majority of the voting power of the Association residing in [Members . ^"1 Section 6. The Board of Directors of the `- ' Association shall cause financial state;. entc for the Association to be regularly prepared and copies distributed to t ..? each Member of the Association are follows: (a) A pro forma operating statement (budget) for 'each fiscal year shall be distributed not less t! in 60 days before the beginning of the fiscal year. (b) A balance sheet--as of an accounting date whidh I is the lase day of the month the closest in time to six months from the date of this Declaration--and an operating statement for the period from the first closing to the said accounting date, shall be distributed within 60 days after the accounting date. This operating statement shall include a schedule of +, assessments received and receivable identified by the number of each Lot and the name of the person or entity assessed. (t) An annual report consisting of the following shall be distributed within 120 days after the close of the fiscal year: f i (1) A balance sheet as of the end of the fiscalyear. �.� (2) An operating (income) statement for the i fiscal year. 06-16-8a 5273r?/2273/00 -11-• a, S (3) A statement of changes in financial position for the fiscal year. (4) Any information required to be reported under Section 8322 of the California Corporations Code. (d) The fiscal year of the Association shall begin on the first day of January and end on the 31st day of December of every year, except that the first fiscal year shall begin on the dative of incorporation. The annual report referred to in this Article shall be prepared by an independent accountant for any fiscal year in which the gross income of the Association exceeds $ If the annual report rnferred to .in this Article is not prepared by an independent accountant, it shall be accompanied by the Certificate of the Treasurer of the Association that the statements were prepared without audit from the rooks and records :,f the Association. Section 7. The Association is authorized and empowered to grant such licenses, easements and rights-of-way for sewer lines, water lines, underground conduits, storm drains and other public utility purposes as may be necessary and appropriate for the orderly maintenance, preservation and enjoyment of the Conunon Area or for the preservation of the health, safety, convenience and welfare of the Owners, over those portions of the Common Area upon which no building or other structure has been erected. Such licenses, easements and ('7'1 rights-of-way may be granted at any time prior to twenty-one (21) years after the daa•ah of the Declarants and their issue who are in being as of the date hereof, and the right to grant such licenses, easements and rights-of-way is hereby expressly reserved. i Section B. Other than as provided in Article X relating to restoration of damaged improvements, the Association may construct new improvements or additions to the Common Area or demolish existing improvements, provided that in the case of any improvement, addition or demolition involving a total expenditure in excess of $2,000.00, the written consent or vote of a majority of the Owners in the Project as to the maximum total cost therefor shall first be obtained, and provided that no Lot shall be altered or damaged by any such demolition or construction without the consent of the Owner thereof. The Association shall levy a special ascessment on all Owners in the Project for the cost of such work. ARTICLE V ASSESSMENTS Section 1. Creation of the Lien and Personal Obligation of Assessment. The Declarants, and each Owner by acceptance of his deed, for Each Lot owned within the Project, �,.• 06-16-83 5273P/2273/00 -12- i S f t ,,..� hereby covenant and agree to pay to the Association: (1) regular annual assessments or charges, (2) special assessments for capital improvements and other purposes, and (3) other assessments against particular Lots, all as may be fixed, established and collected from time to time as herein provided. Such assessments, together with interest and costs for the collection thereof (not including attorneys' fees unless awarded by court) , shall be a charge on the land and shall be a continuing lien upon the property against which each such assessment is made. Each such assessment, together with interest and costs shall also be the personal obligation e£ the person wlo was the Owner of such property at the time when the assessment fell due. The lien for any unpaid assessments shall not be discharged by the sale of any Lot. Section 2. Purpose of Annual Assessments. The annual assessments levied by the Association shall be used exclusively to promote the health, safety and welfare of the residents of the Project and for the improvements and +' maintenance of the Common Area. Said annual assessments shall I include, and :he Association shall acquire and pay for out of the funds derived from said annual assessments, tha following: (a) The cost of furnishing water, gas, electricity, garbage and trash collection and other utilities to the extent furnished by the Association. -� (b) Maintenance and repair of storm drains, sanitary sewers, private streets, private parks, open spaces and utilities lying within the Common Area. (c) Insurance coverage: as provided in Article IV, Section 3 of. this Declaration. (d) Painting, maintenance, repair and replacement of all buildings, equipment and landscaping in the Project as described in Article IV, Section 3(1 ) as the Board of Directors ; of the Association shall determine is necessary and proper. (e) any other material, supplies, furniture, labor, services, maintenance, repairs, structural alterations, insurance, taxes or assessments which the Association ie required to secure or pay for pursuant to the ternis of these restrictions or by law or which in the opinion of the Association' s Board of Directors shall be necessary or proper for the operation of the Common Area or for the benefit of the Lot Owners, or for the enforcement of these restrictions. Section 3. Arrival Assessments Basis. The Owner of each Lot shall share in the common expenses of the Common Area and facilities on an equal basis. Until January 1 of the year immediately following the date of this Declaration, the maximum monthly assessment under this Article shall be that I 06-16-83 5273P/2273/00 -13- I amount shown on the initial Association budget on file with the Secretary of the Association. (a) From and after January 1 of the year immediately following the date of this Declaration, the maximum annual assessment may be increased effective January 1 of each year not more than twenty percent (20%) above the maximum regular assessment for the previous year without a vote of the membership. (b) Froin and after January 1 of the year immediately following the date of this Declaration, the maximum regular annual assessment for each Lot may be increased above twenty percent (20%) by the vote or written assent of a majority of the voting power of the Association residing in Members. Section 4. Special Assessments for Capital Improvements. In any fiscal year the Board of Directors may i not, without the vote or written assent of a majority of the voting power of the Association residing in Members other than the Declarant, levy special assessments to defray the costs of any action or undertaking on behalf of the Association which in the aggregate enceeds five percent (5%) of the budgeted gross expenses of the Association for that fiscal year. In any fiscal year the Board of Directors may, without vote or assent j of the Members of the Association, levy special assessments for any actions or undertakings which in the aggregate do not exceed five per cent (5%) of the budgeted gross expenses for that fiscal year. Section 5. Uniform Rate of Assessment. Except as otherwise provided in this Declaration, both annual and special assessments provided for in this Article shall be levied against each Owner according to the ratio of the number of Lots owned by the Owner assessed to the total number of Lots subject to assessment. All assessments shall be collected on a monthly or quarterly basis at the discretion of the Board of Directors. Section 6. Date of Commencement of Assessments and Fixing Thereuf. r (a) The assessments provided for herein shall commence as to all Lots in the Project on the .first day of the month following the date of completion of the improvements on the Common Area as determined in the sole discretion of the City Director of Public Works. i (b) The first annual assessment shall be adjust4 ) according to the number of months remaining in the ; Association' s fiscal year as set forth in the Bylaws. The Board of Directors shall fix the amount of the annual assessment against each Lot at least thirty (30) days in advance of each annual assessment period. Written notice of 06-16-83 5273P/2273/00 -14- i I I i I1 ' the annual assessment shall be sent to every Owner subject ^' thereto. The due dates shall be established by the Board of Directors. The Association shall, upon demand, and for the charge of fifteen dollars ($15) , furnish a certificate signed by an officer or agent of the Association, setting forth whether the assessments on a specified Lot have been paid. Section 7. Exem t Propert The following property subject to this Declaration shall be exempt from the assessments herein: (a) All property owned by or dedicated to and accepted by any pLblic agency; (b) The Common Area. ARTICLE VI EFFECT OF NON-PAYMENT OF ASSESSMENTS REMEDIES OF THE ASSOCIATION Section 1. Effect of Non-Payment of Assessments: Remedies of the Association. Any assessment not paid within thirty (30) days after the due date shall bear interest from the due date at the rate of fourteen percent (14%) per annum or such greater amount as permit,ted by law. The Association may bring an action at law against any Owner personally obligated to pay the same, or in equity for foreclosure of the lien - ' against his Lot. The Association can also foreclose the lien described hereinbelow by the nonjudicial provisions provided for by the laws of the State of California. No Owner may waive or otherwise escape liability for the assessments provided for herein by nonuse of the Common Area or by abandonment of" his Lot. Section 2. Notice of Lien. No action shall be brought to foreclose said assessment lien or to proceed under the power of sale herein provided less than thirty (30) days after the date a notice of claim of lien is deposited in the United States Mail, certified or registered, postage prepaid, to the Owner and a copy thereof is recorded by the Association in the office of the Orange County Recorder. Said notice of claim must recite a rood and sufficient legal description of any such Lot, the record owner or reputed Owner thereof, the amount claimed (which may at Association' s option :include interest on the unpaid assessment at the rate of fourteen percent (14%) , or such greater amount as permitted by 1;AW, plus costs of collection in connection with the debt secured by sa:.j lien but not including attorneys' fees unless awarded by a court), and the name and address of the claimant. Section 3. Foreclosure Sale. Any such sale provided for above is to be conducted by the B,,ard of 06-16-83 5273P/2273/00 -15- Directors, its attorney or other persons authorized by the � Board in accordance with the provisions of Sections 2924, 2924a, 2924b, 2924c, 2924f, 2924g and 2924h of the Civil Code of the State of California, applicable to the exercise of pcwers of sale in mortgages and deeds of trust, or in any other manner permitted by law. The Association, through duly authorized agents, shall have the power to bid on the Lot at any ,foreclosure sale and to acquire and hold, lease, mortgage and convey the same. Section 4. Curing of Default. Upon the timely curing of any default for which a notice of claim or lien is filed by the Association, the officers thereof are hereby authorised to file or record, as she case may be, an appropriate release of such notice, upon payment by the defaulting Owner of a fee, to be determined by the Association to cover the colts of preparing and fi:ing or recording such release. Section 5. Cumulative Remedies. The assessment lien and the rights to foreclosure and sale thereunder shall be in addition to and not in substitution for all other rights and remedies which the Association and its assigns may have hereunder and by law, including a suit to recover a money judgment for unpaid assessments, as above provided. ARTICLE VII ARCHITECTURAL CONTROL Section 1. Architectural Control. (a) The committee for the control of structural and landscaping architecture and design ( "Architectural Control Committee") within the Project shall consist of three members. (b) The Directors of the Association shall have the power to appoint all members to the Architectural Control Committee. (c) Members appointed to the Architectural Control Committee by the Directors shall be from the membership of the Association. (d) No building, fence, wall or other structure shall be commenced, erected or maintained upon the Project (except for the initial construction of improvements on the Project by Declarants and City) , nor shall any exterior addition to or change or alteration therein be made until the plans and specifications showing the nature, kind, shape, height, color, materials and location of the same shall have been submitted to and approved in writing as to harmony of external design and location in relation to surrounding structures and topography 06-16-83 5273P/2273/00 -16- i by the Architectural Control Committee. In the event said committee fails to approve or disapprove such design and location within thirty (30) days after said plans and specifications have been submitted to it, approval will not be required and this Article will be deemed to have been fully complied with. ARTICLE VIII MORTGAGE PROTECTION Notwithstanding any and all provisions elsewhere in this Declaration to the contrary, in order to induce lenders and investors to participate in the financing of the the Project, the following provisions are added hereto, and to the extent these added provisions conflict with any other provisions of this Declaration, the Articles of Incorporation . or the Bylaws of the Association, these added provisions shall control: (a) Each Mortgagee of a first Mortgage encumbering any Lot, upon request, will be entitled to written notification from the Association of any default by the Mortgagor of such Lot in the performance of such Mortgagor's obligations under this Declaration, the Articles or the Bylaws which is not cured within sixty (60) days. '-1 (b) Any "right of first refusal" shall not impair the rights of a first Mortgagee to foreclose or take title to a Lot pursuant to the remedies provided in the Mortgage, or accept a deed (or assignment) in lieu of foreclosure in the event of default by a Mortgagor, or sell or lease a Lot acquired by the Mortgagee. (c) Any first Mortgagee or third party foreclosure purchaser who comes into possession or who obtains title to a Lot pursuant to the remedies provided in the Mortgage or foreclosure of the Mortgage, or by deed or assignment in lieu of foreclosure, will not be liabla for such Lot' s unpaid dues or charges which accrue prior to such possession or acquisition of title 'to such Lot. The assessment liens provided for herein shall be subordinate to the lien or equivalent security interest of any first Mortgage on a Lot recorded prior to the date any such assessments become due. Such subordination shall apply only to assessments which accrue prior to a sale or transfer nf such property pursuant to a decree of foreclosure or trustee' s sale. Such sale or transfer shall not reli•..,re such property from liability for any assessments thereaf�er becoming due or from the lien of any such subsequent assessment. (d) Unless at least seventy-five percent (75%) of the first Mortgagees (based upon one vote for each first Mortgage owned), and the Owners of the individual Lots, as wall as the 06-16-83 5273P/2273/00 -17- City have given their prior written approval, the Association or the Owners shall not be entitled to: (1) by act or omission, seek to abandon or terminate the Project, except for abandonment oz termination provided by law in the case of substantial destruction by fire or other casualty or in the case of a taking by condemnation; (2) change the pro rats interest or obligations of any individual Lot for purposes of: (i) levying assessments or charges or allocating distributions of hazard insurance proceeds or condemnation awards, or (ii) determining the pro rata share of ownership of each Lot in appurtenant real estate and any improvements thereon which are owned by the Owners in the Project in undivided pro rata interests or by the I Association (which real estate and improvements are hereafter r-�-ferred to as the "common elements") ; (3) by act or omission, seek to abandon, partition, subdivide, encumber, sell or transfer the common elements. (The granting of easements for public utilities or for other public purposes consistent with the intended use of the common elements by the Project shall not be deemed a transfer within the meaning of this clause) ; (4) use hazard insurance proceeds for losses to any Project property (whether to Lots or to common elements) for other than the repair, replacement or j reconstruction of such property; (5) effectuate any decision of the Association to terminate professional management and assume self-management of the Project; (6) make any amendment to this Declaration, the Articles or the Bylaws governing the following subjects: (a) the percentage interest of the Owners j in the common elements; (b) the fundamental purpose for which the Project was created (such as a change from residential use to a different use) ; (c) voting; (d) assessments, assessment liens, and subordination thereof; (e) the reserve for repair and replacement of common elements; (f) property maintenance obligations; (g) casualty and liability insurance; (h) reconstruction in the event of damage or destruction; (i) rights to use the common elements; (j) annexation; and (k) any provision, which by its terms, is j specifically for the benefit of first Mortgagees, or Mortgagees specifically confers rights on first Mortgagees; 06-16-83 5273P/2273/00 -18- a r �..� (7) by act or omission change, waive or abandon any scheme of regulations, or enforcement thereof, pertaining to the architectural design or the exterior appearance of Lots, the exterior maintenance of Lots, the maintenance of common property party walks or common fences and driveways, or the upkeep of lawns and plantings in the Project; (8) fail to maintain fire and extended coverage on the common elements on a current replacement cost basis in an amount not less than one hundred percent (100%) of the insurable value (based on current replacement cost) . (e) First Mortgagees shall have the right to examine the books and records of '�he Association during normal bus;ness hours. (f) Dues or charges shall include an adequate reserve fund for maintenance, repairs and replacement of those common elements that must be replaced on a periodic basis, and shall be payable in regular installments rather than by special assessments. (g) All taxes, assessments and charges which may become liens prior to the first mortgage under local law shall relate only to the individual Lots and not to the Project as a �- whole. (h) In the event of substantial damage to or destruction of any Lot or any part of the common elements or any portion thereof, the Mortgagee of any first Mortgage on the Lot shall be entitled to timely written notice of any such damage or destruction, and no provision in this Declaration, , the Articles or the Bylaws shall be interpreted to entitle the :. Owner of a Lot or any other party to priority over any rights of the first Mortgagee of the Lot pursuant to its Mortgage in l the case of a distribution to such Owner of insurance proceeds or condemnation awards for losses to or a taking of Lots or common elements. f, j (i) Any agreement for professional management of the Project may not exceed one j y year, renewable by agreement of the parties for successive one-year periods. Any such agreement must provide for termination by either party without cause and i. without payment of a termination fee on ninety (90) days' or less written notice. Any management agreement for the Project must provide for termination by the Association for cause upon thirty (30) days' written notice thereof. j (j ) The Association shall, upon the request of any first Mortgagee, (1) give written notice of all meetings of the Association and permit such Mortgagee to designate a 0 -6 16-$3 5273P/2273/00 -19- U representative to attend all such meetings, and (2) transmit to such Mortgagee an annual audited Financial statement of the Project within ninety (90) days following the end of any fiscal year of the Project. (k) If any Lot or portion thereof or the common elements or any portion thereof is made the subject matter of any condemnation or eminent domain proceeding or is otherwise sought to be acquired by a condemning authority, then the Mortgagee of any first Mortgage on a Lot will be entitled to timely written notice of any such proceeding or proposed acquisition, and no provision in this Declaration, the Articles or the Bylaws shall be interpreted to entitle the Owner of a Lot or any other party to priority over such Mortgagee with respect to the distribution to such Lot of the proceeds of any award or settlement. (1) Except as to the Association' s right to grant easements for utilities and similar or related purposes, no portion of the common elements may be alienated, released, transferred, hypothecated, or otherwise encumbered without the approval' of all holders of first Mortgage liens on Lots. ' (m) In the event any portion of any Lot encroaches t� upon any common elements, as a result of the construction, reconstruction, repair, shifting, settlement or movement of any portion of the Project, a valid easement for the ,encroach"ment y and for the maintenance of the same shall exist so long as the encroachment exists. (n) First Mortgagees of Lots may, jointly or singly, pay taxes or other charges which are in default and which may or have become a charge against any Common Area and may pay overdue premiums on hazard insurance policies, or recure new hazard insurance coverage on the lapse of a policy, for such Common Area, and first Mortgagees making such payments shall be owed immediate reimbursement therefor from the Association. Entitlement to such reimbursement shall be reflected in an agreement in favor of all first Mortgagees, duly executed by the Association and the City so long as City is fee title owner to the Common Area, with an original or certified copy of ouch agreement in the possession of Declarant. (o) As used in this Article VIII, "first Mortgagee" means any Mortgagee under a Mortagage which is a first lien of record made in good faith and for value, or a junior lien of record made in good faith and for value by the City, the Agency or an institutional lender in order to assist in the financing of the improvement and/or rehabilitation of the Project. Sectio;i 2. No breach of any of the foregoing covenants and restrictions shall cause any forfeiture of title ' or reversion or bestow any right of re-entry whatsoever, but 06-16-83 S273P/2273/00 -20- i i i i f1 violation of any one or more of these covenants or restrictions may be enjoined or abated by Declarants, their succes:crs and assigns, and by the Association, or by an Owner, by action of any court of competent jurisdiction, and damages may also be awarded against such violations; provided, however, that any such violation shall not defeat or render invalid the lien of any Mortgage made in good faith and for value as to said property cr any part thereof, but said covenants and restrictions shall be binding upon and effective against any Owner of said property, or portion thereof, whose title thereto is acquired by foreclosure, trustee' s sale or otherwise. ARTICLE IX OBLIGATION TO MAINTAIN, REPhIR AND REBUILD Section 1. Maintenance by Owner. Except as otherwise provided in this Declaration, and subject to Architectural Control Committee approval, each Owner shall, at his sole cost and expense, maintain and repair his Lot and the improvements thereon keeping the same in good condition and making all repairs as; they may be required. Section 2. Damage and Destruction Affecting Lots Owner' s Duty to Rebuild. If all or any portion of any Lot "4 and the improvements thereon is damaged or destroyed by fire or other casualty, it shall be the duty of the Owner of said Lot •' to rebuild, repair or reconstruct said Lot in a manner which will restore it substantially to its condition immediately prior to the casualty, except to the extent that such repair or reconstruction is assumed by the Association and financed by insurance proceeds or special assessments as provided herein. Section 3. Variance in Exterior Ap2earance and Design. Any Owner who has suffered damage may apply for approval to the Architectural Control Committee for reconstruction, rebuilding or repair in a manner which will provide for an exterior appearance and design of his Lot different from that which existed prior to the date of the casualty. Application for such approval shall be made in ! writing together with full and complete plans and specifications, working drawings and elevations showing the proposed reconstructions and the end result thereof. The Architectural Cont•.:ol Committee shall grant such approval only if the design proposed by the Owner would result in a finished ' Lot in harmony of exterior design with the rest of the Project. Failure of the Architectural Control Committee to act within thirty (30) days after receipt of such a request in writing coupled with the drawings and plot plans showing full and complete nature of the proposed change shall constitute approval thereof; provided, however, that in such case no such reconstruction, rebuilding or repair as described herein shall I 06-16-83 5273P/2273/00 -21- 1 be permitted without the prior written consent of all Owners of Lots at;.-ached to the particular building to which the subject Lot is attached. Section 4. Time Limitation. The Owner or Owners of any damaged Lot shall be obligated to proceed with all due diligence hereunder and commence reconstruction within three (3) months after the damage occurs and complete reconstruction within nine (9) months after damage occurs, unless prevented by causes beyond their reasonable control. ARTICLE X DAMAGE, DESTRUCTION AND CONDEhINATJON Section 1. Damage or Destruction. Damage to or destruction of all or any portion of the Common Area shall be handled in the following manner: (n) In the event of damage or destruction to the Common Area, if insurance proceeds are sufficient to effect total restoration, then the Association shall cause the Common Area to be repaired and reconstructed substantially as it previoualy existed. (b) If the insurance proceeds are within Five r.. Thousand Dollars ($5,000.00) or less of being sufficient to affect total restoration to the Common Area, then the Association shall cause the Common Area to be repaired and reconstructed substantially as it previously existed, and the difference between the insurance proceeds and the actual cost shall be levied as a special assessment equally against each of the Owners; provided, however, that if such cost, together with any other special assessments for the current fiscal year, exceeds five percent '5%) of the budgeted gross expenses of the Association for that fiscal year, the vote or written assent of a majority of the voting power of the Association residing in Members other than Declarant must be obtained before such cost may be levied as a special assessment. (c) If the insurance proceeds are insufficient by more than Five Thousand Dollars ($5,000.00) to effect total restoration to the Common Area, then by written consent or vote of a majority of the Owners, they shall determine whether (a) to rebuild and restore in substantially the same manner as the improvements existed prior to aamage and to raise the necessary funds over the insurance proceeds by levying equal assessments against all Lots, or (b) to rebuild and restore in a way which utilizes all available proceeds and an additional amount not in excess of Five Thousand Dollars ($5,C00.00) and which is assessable equally to all Lots but which is less expensive than replacing these improvements in substantially the same manner { as they existed prior to being damaged. 06-16-83 5273P/2273/00 -22- i (d) I£ reconstruction or restoration has not actually commenced within one (1) year from the date of any damage to which this Article is applicable, then the covenant against partition a.a provided in Article XI shall terminate and be of no further force and effect. Section 2. Condemnation. In the event of a taking by eminent domain, or a sale under threat thereof, of all or any part of the Common Area, the Association shall, subject to the right of all Mortgagees who have requested the right to join the Association in the proceedings to be represented separately, represent all Members in recovering all r awards. All awards shall be distributed, after deducting all fees and expenses related to the taking or sale, to the ! Association, the Owners and Mortgagees in accordance with this Article. Such distribution shall be according to the apportionment in any judgment of condemnation or by agreement j between the condemning authority and the Association and any affected Owner and Mortgagees, bared on fair market value of the respective interests. If the taking is other than by judgment- of condemnation or such agreement, or if such judgment �. fails to apportion the award, the Association' s Board of ! Directors shall distribute the award among the Association, the }' 0wners and Mortgagees based on the relative fair market values of their interests taken. Such relative fair market values shall be determined by written appraisal prepared by a member { of the American Institute of Real Estate Appraisers appointed by the Board, and the distribution of awards as determined by such appraisal shall be final and binding on the Association, all Owners and Mortgagees. ARTICLE XI COVENANT AGAINST PARTITIOP! By acceptance of his deed, each Owner shall be deemed ' I to covenant for himself and for his heirs, representatives, successors and assigns, that he will not institute legal proceedings to effect judicial partition of his interest in the Project unless the Project (a) has been in existence in excess of fifty (50) years, and (b) it is obsolete and uneconomical, and (c) the Owners of fifty percent (50%) of the hots and the . l City, join in such an action for partition. ARTICLE XII ' GENERAL PROVISIONS Section 1. Enforcement. In addition to all other remedies provided by law, the Declaration of Restrictions, the Articles of Incorporation and the Bylaws may be enforced by the ; Association, the City and/or any aggrieved Owner for the recovery of damages, or for injunctive relief, or both, as follows: 06-16-83 5273P/2273/00 -23- I I i (a) Breach of any of the covenants contained in the n Declaration or the provisions of the Bylaws and the continuation of any such breach may be enjoined, abated or remedied by appropriate legal proceedings by any Owner, by the Association or the successors in interest of the Association. (b) The result of every act or omission whereby any of the covenants contained in this Declaration or the provisions of the Bylaws are violated in whole or in part is hereby declared to be and constitutes a nuisance, and every remedy allowed by law or equity against a nuisance, either public or private, shall be applicable against every such result and may be exercised by any owner, by the Association or its successors in interest. (c) The remedies herein provided for breach of the covenants contained in this Declaration or the provisions of the Bylaws shall be deemed cumulative, and none of such remedies shall be deemed exclusive. (d) The failure of the Association to enforce any of the covenants contained in this Declaration or the provisions of the Bylaws shall not constitute a waiver of the right to enforce the same thereafter. I (e) P. breach of the covenants contained in this Declaration or the provisions of the Bylaws shall not affect or impair the lien or charge of any bona fide Mortgage or Deed of Trust made in good faith and for value on any Lot or the improvements thereon; provided, however, that any subsequent Owner of such property shall be bound by said covenants, whether such Cwner's title was acquired by foreclosure in a trustee' s sale or otherwise. (f) The Association shall have the right to suspend the voting rights of a Member for any period during which any assessment against his Lbt remains unpaid after notice and hearing given an4 had pursuant to subsection (h) of this section, and for a period not to exceed thirty (30) days after such notice and hearing given and had for any infraction of its published rules and regulations. (g) In addition to the above general rights of enforcement, the City shall have the right, through its agents and employees, to en-L-er upon any part of the Project for the purpose of enforcing the California Vehicle Code and the ordinances and other regulations of the City, and for maintenance and/or repair of any or all publicly owned utilities and is hereby granted an easement over the Project for that purpose. (h) No disciplinary action against any Member shall by taken until and unless prior notice is given to such Member, as provided herein, not lass than 15 days before such .j 06-16-83 52731)/2273/00 -24- t 1 disciplinary action, setting forth the proposed action and the reasons therefor, and unless an opportunity is provided for such Member to be heard, orally or in writing, not less than five days before the effective date of such disc. plinary action, by the Board of Directors, or by a person or body authorized by the Board of Directors to decide that such disciplinary action not take place. Section 2. Severability. Invalidation of any one of these covenants or restrictions by judgment or court order shall in no way affect any other provisiono, which shall remain in full force and effect. Section 3. Term. The covenants and restrictions of this Declaration shall run with and bind the Project, and shall inure to the benefit of and be enforceable by the Association, the Agency or the Owner of any property subject to this Declaration, their respective legal representatives, heirs, successors and assigns, for a term of fifty (50) years from the date this Declaration is recorded, after which time said covenants tid restrictions shall be automatically extended for successive periods of ten ( 10) years, unless an instrument, signed by a majority of the then Owners has been recorded, agreeing to change said covenants and restrictions in whole or in part. Section 4. Construction. The provisions of this Declaration shall be liberally construed to effectuate its purpose of --reating a unify-rm plan for the development of a residential apartment project and for the maintenance of said Project. The article and section headings have been inserted for convenience only and shall not be considered or referred to in resolving questions of interpretation or construction. Section 5. Amendments. This Declaration of Restrictions may be amended only by the vote or written assent of Members representing a majority o: the total voting power of the Association and the City in the event such amendment would adversely affect the rights of the City hereunder or would adversely affect the Project or the operation thereof. Section 6. Encroachments. None of the rights and obligations of the Owners created herein or by deed shall be altered in any way by encroachments due to settlement or shifting of structures or any other cause. There shall be valid easements for the maintenance of said encroachments so long as they shall exist; provided, however, that in no event shall a valid easement for encroachment be created in favor of an Owner or Owners if said encroachment occurs due to the willful conduct of said Owner or Owners. Section 7. Notices. Any notice permitted or required to be delivered as provided herein shall be in writing 06-16-83 5273P/2273/00 -25- 1 and may be delivered either personally or by first-class or registered mail. If delivery is made by registered mail, it shall be deemed to have been delivered seventy-two (72) hours after a copy of same has been deposited in the United States Mail, postage prepaid, addressed to any person at the address given by such person to the Association for the purpose of servis:c of such notice, or to the Lot of such person if no address has been given to the Association. I£ such notice is so sent by recgular mail, it shall be deemed to have been delivered when received. such address may be changed from time to time by notice in writing to the Association. Sectfan 88. Attorneys' Fees. If an Owner defaults in making a payment of assessments or in the performance or observance of any provision of this Declaration, and the Association has obtained the services of an attorney with respect to the defaults involved, t;:e Owner covenants and agrees to pay to the Association reasonable costs and attorneys' fees as may be awarded by a court. Section 9. Property Exemption. Except as other- wise provided herein, all public property within the Project shall be exempt from the provisions o£ this Declaration. IN WITNESS WHEREOF, the undersigned have hereunto set their hand and seal this day of i t f ' i ' I 1 1 1 i ' a6-iE-8s 5273P/2273/00 -26- i , 1 . ' 1 1 i i 1 SUBORDINATION AGREEMENT The undersigned, Beneficiary of that certain Deed of Trust recorded , 19_ in Book , Page of Official Records in the Office of the County Recorder of Orange County, State of California, hereby agrees that the lien and charge of said Deed of Trust is and shall be subordinate to the Declaration of Conditions, Consents and Restrictions and Grant of Easements of Commodore Circle Property Owners' Associaticn recorded concurrently he :with. Dated: 19� a corporation By: Its By: Its STATE OF CALIFORNIA ) so. COUNTY OF ORANGE On 19 , before me, the undersigned, a Notary Public in and for said State peruonally appeared _ _ known to me to be the President, and known to me to be the of the corporation that executed the within instrument, and kncwn to me to be the persons who executed the within instrument on beL.,If of the corporation therein named, and acknowl- dged to me that such corporation executed the within instrument pursuant to its bylaws or a resolution of its board of Directors. I WITNESS my hand and official seal. I Notary Public in and for said County and State [SEAL] 06-16-83 5273P/2273/00 -27- L1�r-.v �i.:.�c.✓ REQUEC FOR CITY COUNCIL ., I N $sue S-.Ibrnitted by Dan Villella, Acting Direct on_ Department Finance Date.Prepared March 5 , 19 U Backup Material Attached E) Yn No Subject DEFERRED PAYMENT RENTAL RESIDENCE IMPROVEMENT PROGRAM (RRI) _ COMMODORE CIRCLE City Administrator's Comments APPROVED BY CITY COUNCIL Approve as Recommended I9 CITY Im I w+rrrr.r^ rr rr�r�� .++ ■ rrr�r n.. r. e• Statement of Issue, Recommendation,Analysis, Funding Source,Alternative Actions: STATEMENT OF ISSUE: The Orange County Housing Authority has contacted the Housing and Community Develop- ment staff' to request the City's cooperation and participation in a demonstration program for the rehabilitation of rental units. Before continuing with this endeavor, The City Counci'l 's support is required. RECOMMENDATION: Acknowledge the Orange County Housing Authority's request for cooperation in exploring the feasibility of a demonstration program for the rehabilitation of rental units, (a) authorize the Housin and Community Development staff to pursue the feasibility of such a program and (b� authorize the Housing and Community Development staff to apply on behalf of the City to the State of California Department of Housing and Community Development for deferred payment rehabilitation loan funds for this program. , ANALYSIS: Attached is a brief narrative description of the proposed Rental Residence Improve- ment Program (RRI) outlining the basic parameters of the program. Basically, the RRI would provide a deferred loan secured by a deed of trust to owners of rental property. Because this rehabilitation loan would he deferred, no monthly installment payment would be due. As d result, the property owner could not use the amortization of a rehabilitation lnan as c;.-t%E to increase rents; however, the tenants would benefit from the rehabilitated property. To encourage long term ownership of rental units rehabilitated under this program, these deferred loans would carry a declining interest rate; that is, interest on the loan and the principal amount would be due upon the sale of the rehabilitated units and the amount of such interest would be reduced for each year the property is owned after the rehabilitation. For example, if the rehabilitated rental units were sold within the first year after rehabilitation, the interest rate would be perhaps 30 percent, and declining at a rate of approxiw tely 3 percent per year. Flo anal �"'' RRI Program March 5, 19&1 Page 2 In addition to the declining interest rate, the proposed program would also require the execution of an agreement between the property owner and the Orange County Housing Authority stipulating that the rehabilitated units be made available to low and moderate households at a specified rent level for the term of the loan. The Orange County Housing Authority is also willing to make available, to the extent possible, Section 8 existing rental assistance to households occupying units rehabilitated under this program. The HCD staff has contacted the owners of the four-plex units on Commodore Circle and requested their opinion of the concept of a deferred payment rehabilitation program. Response has been extremely favorable and it appears that most owners would participate enthusiastically. Also attached is a memo frnm Development Services staff outlining how this program would support the implementation of the Housing Element. The Orange County Housing Authority is soliciting funds from the County of Orange through its Block Grant Program to pay for the Housing Authority's share of the administration of this program. The City's share of administration would be integrated with the current Neighborhood Preservation Program under the City's consultant contract with Bill Bond and Associates. The Rental Residence Improvement Program would provide the opportunity to rehabili- tate units occupied by low and moderate income households on Commodore Circle, assure the continued availability of these units to such households, and perhaps make available additional units for the Section 8 existing rental assistance pro- gram. It is anticipated that this program could become operational within 60 to 90 days and, if successful , it could be applied to ether areas of the City. FUNDING SOURCE: U.S. Department of Housing and Urban Development, Housing and Community Development Block Grant Program. ALTERNATIVES: (A) The City may wish to allocate a share of its own Housing and Community Develop- ment Block Grant to this program. If the City's Application to the State is ` unsuccessful , or does nit provide sufficient funds, staff will return to the City Council with an alternative suggestion for funding. (B) The Council may choose not to participate in this program. Respectfully submitted, a `,11:4 ", Dan Villella Acting Director, Finance DV:SVR:jb attachments I Housing. Community Development. Reliabilitation, Program Planning. Design. Marketing. & Sttff Iraining RENTAL RESIDENCE IMPROVEMENT PROGRAM JRRIP2 This program Is being developed by the Orange County Housing Authority in cooperation with the city of Huntington Beach. Initially .the program will be operated within a selected target area in that city as a demonstration or "pilot" program. If successful, it is the Housing Authority's intention to expand the program to other areas ii, Orange County in need of expanding Rental Housing stock for low and moderate income families. A RRIEL PROGF�A�i DESCRIPTION This program is being called the Rental Residence Improvement Program (RRIP) by the Orange County Housing Authority. It is basically a financing mechanism which funds the rehabill ation of Rental Properties for low and moderate income famili.sa. A Deferred Payment 4 Loan is provided to the owner of a rental unit for the entire amount of eligible rehabilitation work. In return the owner enters into an I agreement with the operating Agency to keep the unit available to low and moderate renters for the term of the loan. The loan requires no monthly payment by the borrower, therefore the borrowers monthly debt setvice is not increased. No investment is needed on the owners part, an a result there are no costs to be passed on to the tenant or prospective tenant. The unit is brought Ij up to the current Section 8 standards and all code violations are corrected, without the need or 3ust'Afication to increase rents to cover those costs. The loan must be repaid upon SALE or TRANSFER OF TITLE BY ANY MEANS. The loan is secured by a DEED Ur TRUST and PROMISSORY NOTE which incorporates the terms and conditions of the agreement. To discourage participation in this program by speculators, the loan carries with it a very high interest rate (well above prime) which declines by H predetermined percentage over a predetermined time fraine. GA911- nlITLANn AVFNUE - ,RIVERSIDE. CALIFOPN1A 92S03 TELEPHONE (7141 3S4.2878 •. Ip AN EXAMPLE A property owner is givan a Deferred Payment Loan to make neccessary repairs on thti subject property. The loan amount is ,�7,500.00. The initial :interest rate is 30%. The rate decreases 6% every three years that the owner maintains ownership of the property. The chant below shows how this would work. IF 'TITLE TRANSFER INTEREST RATE AMOUNT TO BE OCCURS WITliTIN WOULD BE REPAID 1st 3 years 30% $91,750,00 4••---6 years 24% $91, 300.00 7---9 years 18% $8,850.OC i 'i 10-12 years 12% $8,400„00 13-15 years 6% $7,950.00 after 15 years $7,500.00 i i r It is the intent of this program to expand the Rental r, Housing stock for low and moderate income families in Orange County, by providing an incentive to owners of rental properties to upgrade their properties and rent to low and moderati, income families, With that in mind, if the operating Agency so desires this loan could be assumable by the buyer of.the subjeut property if the buyer is willing to enter into the same agveement as the original owner, at the original loan amount, with the original interest rate. This would keep the unit available to the low and moderate income person. This program can also be used in conjunction with the Section 8 � Rental nnnistance program, or the Section 8 Moderate Rehabilitation ► ► fir► nill. r 7 , 1 *41ni@ Cf-TY OF HUNTINGTON BEACH INTER-DEPARTMENT COMMUNICATION rn,rvrrvctw truri To Stephen V. Kohler, Senior From June Catalano, Deputy � Community Development Specialist Director, Planning Division Subje,Ot DEFERRED PAYMENT RENTAL Date March 5, 1981 REHABILITATION PROGRAM i The Department of Development Services has reviewed the Orange County Housing Authority's rental rehabilitation program and recommends that the City proceed as soon as possible with the proposed demonstration project. i . The program is consistent with the following actions identified in the City's Housing Element; ! 6.4.2.3 Continue to publicize and make available loci interest rehabilitation loans for owner-occupl.ed arl rental j housing, and 6.4.2.5 Monitor housing conditions, in neighborhoods con- sidered marginal. or at risk ft,r deteriorated con- ditions in order to identify the need to expand existing rehabilitation pro.-rams. u' C:HH:gc . l