Loading...
HomeMy WebLinkAboutAuthorize and Direct City Manager/Executive Director to Exec r City of Huntington Beach File #: 20-1432 MEETING DATE: 2/18/2020 REQUEST FOR CITY COUNCIUHOUSING AUTHORITY ACTION SUBMITTED TO: Honorable Mayor/Chair, and City Council/Board Members SUBMITTED BY: Oliver Chi, City Manager/Executive Director PREPARED BY: Ursula Luna-Reynosa, Director of Community Development Subiect: Authorize and direct the City Manager/Executive Director to execute a Purchase and Sale Agreement, in a form approved by the City Attorney, for acquisition of real property located at 17631 Cameron Lane by and between the City of Huntington Beach and Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitsuru Yamada, Trustee of the Mitsuru Yamada Living Trust; Authorize and direct the City Manager to execute an Option Agreement, in a form approved by the City Attorney, to acquire real property located 17642 Beach Blvd. by and between the City of Huntington Beach and Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitsuru Yamada, Trustee of the Mitsuru Yamada Living Trust; and approve allocation of funds necessary to complete the transaction to acquire the property located at 17631 Cameron Lane Statement of Issue: The City Council/ Housing Authority is asked to authorize the acquisition of real property commonly referred to as 17631 Cameron Lane (the "Property") utilizing restricted funds for the purpose of affordable housing and authorize an option to acquire the adjacent property located at 17642 Beach Blvd. (the "Option Property") for future acquisition for the same purpose. Financial Impact: The total acquisition costs for the Property are estimated to be $3,159,550 consisting of the following: $3,077,010 (purchase price), $61,540 (broker commission); $8,000 (due diligence studies) and $13,000 (closing costs) (collectively, the "Acquisition Costs"). The Acquisition Costs are proposed to be funded through the City's restricted Low-Moderate Income Housing Asset Fund (Fund 352) (the "LMIHAF"). The LMIHAF represents the former Redevelopment Agency's (the "Successor Agency's) Housing Set-Aside funds, which are restricted for developing affordable housing within the City. Based on current State Health & Safety Code Section 34176.1(d), and the estimated -$4.5 million in LMIHAF dollars that the City is projected to have on hand at the end of FY 2019/20, the City will find itself in an "Excess Surplus" situation, whereby the State will take back all Excess Surplus funds City of Huntington Beach Page 1 of 4 Printed on 2/13/2020 - / powere8176�LegistarT"" File #: 20-1432 MEETING DATE: 2/18/2020 (estimated at —$3 million), unless the City encumbers those dollars by June 30, 2020. Therefore, in order to avoid having the State take back our local affordable housing dollars, it is recommended that the City Council authorize the purchase.of the Property, which will enable the Housing Authority to avoid an Excess Surplus situation, while also allowing the City substantial influence in dictating the terms of any future development on the identified site. Furthermore, a future purchase and sale agreement for the Option Property won't be executed without sufficient funds identified through a budget amendment which will come to the City Council/ Housing Authority for approval. Recommended Action: CITY COUNCIL AND HOUSING AUTHORITY RECOMMENDATION: A) Authorize and direct the City Manager/ Executive Director to execute a Purchase and Sale Agreement and any additional necessary documents to consummate the transaction, in a form approved by the City Attorney, by and between the City of Huntington Beach/ Housing Authority and Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitsuru Yamada, Trustee of the Mitsuru Yamada Living Trust to acquire the Property; and, B) Authorize and direct the City Manager/ Executive Director to execute an Option Agreement, in a form approved by the City Attorney, by and between the City of Huntington Beach/ Housing Authority and Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitsuru Yamada, Trustee of the Mitsuru Yamada Living Trust to acquire the Option Property; and, C) Appropriate funds of$3,250,000 from Fund 352 for acquisition of the Property. Alternative Action(s): Do not authorize the City Manager/ Executive Director to acquire the Property or the Option Property. Analysis: On February 3, 2020, the City Council adopted Resolutions No. 2020-06 and 2020-07 approving General Plan Amendment ("GPA") No. 19-003 (the "Housing Element Amendment"), Zoning Text Amendment ("ZTA") No. 19-006 (Beach and Edinger Corridors Specific Plan Amendment, the "BECSP") and approved the 2019 Housing Element Progress Report. The Housing Element Amendment has identified how the City will address its proportionate share of regional housing needs for all economic segments of the community ("RHNA") for the current cycle, in accordance with Government Code Section 65588. Currently, the City has exceeded all of the RHNA targets with the exception of 413 low and very-low income units. The Housing Element Amendment also contains an affordable housing overlay ("Overlay") within the BECSP that identifies six (6) properties that can accommodate the RHNA shortage. The Overlay allows for by-right development (i.e. no discretionary permits) for projects that provide a minimum of 30% very-low and low income units. City of Huntington Beach Page 2 of 4 Printed on 2/13/2020 powereVr2j LegistarW File #: 20-1432 MEETING DATE: 2/18/2020 Two adjacent parcels, the Property and the Option Property (located on the eastside of Beach Blvd, between Slater Ave and Warner Ave) (collectively, the "Properties"), were identified as one of the six sites identified as part of the Overlay. The Properties are owned by Shigeru Yamada, Trustee of the Shigeru Yamada Living Trust, and Mitsuru Yamada, Trustee of the Mitsuru Yamada Living Trust (collectively, the "Owners"). The Owners listed the Properties for sale with an asking price of$3.4 million each. Staff submitted a conditional Letter of Intent to Purchase (Attachment 1) with the following salient terms: • Purchase Price: Three million seventy seven thousand ten dollars ($3,077,010) for 34,189 square feet of vacant land; • Security Deposit: Fifty thousand dollars ($50,000) non-refundable after the 45-day due diligence (contingency) period expires. If escrow is cancelled prior to expiration of contingency period, then the security deposit shall be returned, in full. to the City; • Close of escrow: 10-days after the expiration of due diligence period; • Broker Commission: The City and Sellers will split the 4% commission fee, each paying 2% ($61,540.20); • Closing Costs: The City and Sellers have agreed to split closing costs, (estimated City portion is $13,000); • Option to Purchase: Sellers will grant the City an option to purchase the Option Property (34,325 square feet) for $3,089,250. The option to purchase the Option Property shall expire on July 31, 2021. A separate option agreement will be prepared by the City Attorney's Office with similar salient terms. If the City Council/Housing Authority authorizes and directs the acquisition of the Properties, staff will coordinate the review of all title matters with the City Attorney's Office and initiate site assessments. Upon the close of escrow, the City will prepare a Request for Proposal to solicit qualified affordable housing developers to submit proposals to design and construct the developments. By acquiring the site, the City can dictate terms, conditions, including aesthetics and density beyond the requirements set forth in the Overlay. Environmental Status: The acquisition of the properties is exempt in accordance with Section 15061(b)(3) of the California Environmental Quality Act ("CEQA") Guidelines as the purchase will not cause a significant effect on the environment. A future project contemplating the residential development of affordable housing may be exempt in accordance with Section 15194 subject to requirements listed in Sections 15192 and 15194 of the CEQA Guidelines. Such environmental analysis will be conducted once an application is submitted and a project description is defined. Strategic Plan Goal: Non-Applicable - Administrative Item Attachment(s): City of Huntington Beach Page 3 of 4 Printed on 2/,13/2020 powerE874 LegistarT""' File #: 20-1432 MEETING DATE: 2/18/2020 1. Letter of Intent dated January 16, 2020 City of Huntington Beach Page 4 of 4 Printed on 2/13/2020 powerea74 LegistarT" I i I City of Huntington Beach 2000 MAIN STREET CALIFORNIA 92648 DEPARTMENT OF COMMUNITY DEVELOPMENT Bi�,�xs.F Business Development • Housing Rcal Estate 1 714.536.5582 www.hbbiz.com fax - 714.375,5087 i January 16, 2020 I George Felix Senior Associate CBRE, Inc., 3501 Jamboree Road Suite 100 Newport Beach, CA 92660 RE: LETTER OF INTENT TO PURCHASE 17631 CAMERON LANE, HUNTINGTON BEACH, CA 92647 &OPTION TO PURCHASE 17642 BEACH BLVD. t Dear Mr. Felix, The purpose of this Letter of Intent ("Letter") is to convey an offer from the City of Huntington I) Beach (City" and `Buyera') to purchase the real property located at 1"e, Cameron Lane,101 Huntington Beach, CA, owned by Mitsuru Yamada, Trustee of the Mitsuru Yamada Living Trust U/D/T dated September 17, 1998. 1. Property: Approximately 34,189 square feet of vacant land located at IT 0-05 1 Cameron Lane, Huntington Beach, CA 92647 (APN: 167-472-08) 2. Purchase Price: Three Million Seventy Seven Thousand Ten Dollars ($3,077,010.00), all cash purchase, at the dose of escrow($90/sf). i 3. Security Deposit: Buyer shall deposit Filly Thousand Dollars ($50,000.00) upon the i opening of escrow (the "Deposit). Deposit is non-refundable after i 45-day contingency period expires. If escrow is cancelled prior to expiration of contingency period then security deposit shall promptly be retumed to the Buyer, minus any costs incurred by escrow holder. 4. Opening of Escrow: Upon acceptance of offer by the Huntington Beach City Council, the Buyer shall draft a Purchase and Sale Agreement with Escrow Instructions("Agreement') incorporating the terms of this Letter. The following conditions must be met in order to open escrow: E www.huntingtonbeachca.gov f 875 I a. Fully executed Agreement signed by Seller and Buyer and transmitted to escrow holder. b. Buyer has placed the Deposit into escrow. 5. Title/Escrow: Title and Escrow shall be handled by Chris Maziar and Grace Kim of Commonwealth Land Title Company located at 4100 Newport Place Dr., Suite 120, Newport Beach, CA 92660. Seller will provide a Standard Owners Policy of Title Insurance ("CLTA") for the subject property. The Buyer shall have the option to obtain upgraded title policies at its cost and sole discretion. 6. Close of Escrow: Escrow shall close ten (10) days after the expiration of the contingency period. 7. Buyer's Contingencies: Buyer has forty five (45) days ("Initial Contingency Period") to diligently investigate the following items: preliminary title report and environmental assessment (Phase I & 11) to its satisfaction. If the Buyer is not satisfied with the Contingencies by 5:00 pm (Pacific Standard Time) on the 45th day, then the Buyer may waive the contingencies or terminate the escrow. a. Existing Reports & Documents: Within three (3) days after opening of escrow, Seller will deliver to Buyer the following: soils reports, existing leases, permits, disclosure of litigation and any violations affecting the property. 8. Brokerage: CBRE, Inc., is representing the Buyer and Seller in this transaction. Buyer and Seller each agree to pay the half of the brokerage commissions. 9. Option to Purchase: Seller shall grant the Buyer an option to purchase the adjacent real property("Adjacent Property"), approximately 34,325 square feet of vacant land located at 17642 Beach Blvd, Huntington Beach, CA (APN: 167-472-09). The purchase price for the Adjacent Property is Three Million Eighty Nine Thousand Two Hundred Fifty Dollars ($3,089,250.00), all cash purchase ($90/SF), with the same contingencies as the first property. The option to purchase shall expire on July 31, 2021. 9. Terms of Offer: The foregoing offer may be accepted by Buyer by executing and returning said counter offer to the City no later than 5:00 pm (PST) on Thursday, January 23, 2020. 10. City Council Approval: This Letter offer and subsequent Agreement is contingent upon approval by the Huntington Beach City Council. This Letter of Intent is not intended as,and does not constitute, a binding agreement by any party nor an agreement by any party to enter into a binding agreement, but is merely intended to specify some of the proposed terms and conditions of the transaction contemplated herein. Neither party may claim any legal rights against the other by reason www.huntingtonbeachca.gov 876 i i i of signing this letter of intent or by taking any action in reliance thereon. Each party hereto fully understands that no } party shall have any legal obligations to the other,or with respect to the proposed transaction, unless and until all the terms and conditions of the proposed transaction have been negotiated and agreed to by all parties and set forth in a Purchase and Sale Agreement with Escrow Instructions executed and delivered by all parties. The only legal obligations that any party shall have shall be those contained in such fully executed Purchase and Sale Agreement with Escrow Instructions.The above is intended to be an expression of the general business terms and conditions upon which we are willing to proceed. Other essential terms will be the subject of further discussions. Feel free to reach out to Kellee Fritzal at (714) 374-1519 or Carlos Marquez at (714) 536-5544 if you have questions. Sincerely, I Ursula Luna-Reynosa Community and Economic Development Director AGREED AND ACCEPTED BUYER: SELLER City of Huntington Beach, a municipal Mitsuru Yamada, Trustee of the Mitsuru corporation Yamada Living Trust U/D/T dated } September 17, 1998 By: b¢s y LA Lunt A R t2F V N6S ey: * ie oZ� Title: WLrc C 0(L Cr Title: � � 'e'' • ins ' L;6MMUN1r1 Dv=-'Q .L0?MjtNr 4rdt .� tam► �s,'I �afor ; Act/ G �` I I 4 I i i www.huntingconbeachca.gov. i 877 i ro ( 3 U) m o Z Z m c� � O co � H � `� 0 oCn 4-0 4-0 LU CY x � pJp Q o >=— Q v v O Lu U Q 0 d rr JMm C r V a - --. 1 cz 1 1•i i _. •1 a __ L � U (� Cn U a� m L- � o cn Cn 0) d Cfl N ti ti T O Co n 1 _ NT W co co Ca O IM LL O QJQ QU) Q L n '�f ^^,, 1�../L V W J � Q TO (n L y, >1 rl O 0 CDr' O LC) \)\ '9^^ � ^ D ^ LO 1I� � � N O O . . 00 Lr) LD O cy . U) a_U O U) 0 �� 0 ( L L CD- U CU U O a O C a- r 0 a) w (3) .O O � : o (3) V O U .� CT C6 a� � 4� a_ U C) Q 0 LO � 619- U) 0) U) 1 c U, . . O O a) I Z3 U O O O X N E E uj c O � � co a) ^ 1 � N O I` U U a� M CO 0 -0 :3 o a� U- : -0 a O � U X � — ca W LL °� 4- a Q4--, u) � ccn �—' a� }—>' — c na —i < LL E ui N � 2 (n :3 O 0 O O a ca O i Q LO Q O N O Q O � a_ O C) U L) Q N M�M O 06 o >1 DCIO cz � 0 � � 4-0 cu +� � QO � 4-A � C) � Q m Q O O O O � — ON a--+ 4-0 N 0 CL 0 0 UO G� 0L CNo0 z 00 LL a-=+ Esparza, Patty From: Fikes, Cathy Sent: Tuesday, February 18, 2020 10:09 AM To: Agenda Alerts Subject: FW: Items 25 and 25, 2/18/20 Council Agenda From:Galen Pickett<Galen.Pickett@csulb.edu> Sent:Tuesday, February 18, 2020 9:15 AM To:CITY COUNCIL<city.council@surfcity-hb.org> Subject: Items 25 and 25,2/18/20 Council Agenda Dear honorable members of the city council: I write to you today in support of items 24 and 25 on today's city council agenda, both of which deserve your serious consideration. It is extremely challenging to finance affordable development and permanent supportive housing solely through market mechanisms, and membership in the OCHFT would give the city more tools in supporting that development and in specifying the properties of that development. Controlling the financing mechanism for an affordable project,the city would have even more control over the direction of the development than in the usual zoning process and in the issuing of a conditional use permit. Given the fact that the money in the fund originates with taxpayers, we would be in a position to reclaim dollars sent to Sacramento and put them to use here, in the city and for the benefit of our residents. Surely this is a responsible expression of our determination to locally control development and maintain the character of the city. Similarly, item 25 supports and protects the autonomy of the city. Several members of the council expressed trepidation at the "by right" character of possible development in the affordability overlay of the Beach-Edinger Corridor Specific Plan. In my opinion, it is doubtful that including 20%affordable units in any proposed project for the 6 overlay sites is feasible in this market, but if that is not the case,the proposed action transfers ownership (and an option on ownership) of two of the sites to the city itself, using funds that will have to be returned to Sacramento in June if not used. As the property owner,the city would have a large degree of control as to the character of any development on those sites. You as the city council would have far more local control than in the usual CUP process, as your input and support would be required at every stage of the planning and construction process. Allowing these funds to expire and return to Sacramento, or declining membership in the OCHFT is tantamount to telling the state and county respectively that they know better than we do how to use tax dollars to support the welfare of our city. With best wishes, SUPPLEMENTAL Galen T. Pickett COMMUNICATION Dept. of Physics and Astronomy CSU Long Beach Mee*v Date:_ 1250 Bellflower Blvd. \ Long Beach, CA 90840 - ,3aZJ Agenda NOM No.' http://www.csulb.edu/—gi3ickett i Estanislau, Robin From: Chi, Oliver Sent: Tuesday, February 18, 2020 2:05 PM To: Estanislau, Robin Subject: FW: Question on Housing Element Site#1 FYI! SUPPLEMENTAL COMMUNICATION orver Chi MeeMg Date: — c5-- a c o City Manager City of Huntington Beach A 0nde tWn Ho„ _ 4,43 2000 Main Street P.O. Box 190 Huntington Beach,CA 92648 Office: (714)536-5575 Cell: (310) 663-983 7 From: Luna-Reynosa, Ursula <ursula.luna-reynosa@surfcity-hb.org> Sent:Tuesday, February 18, 2020 10:07 AM To: Chi, Oliver<oliver.chi@surfcity-hb.org> Cc: Gates, Michael <Michael.Gates@surfcity-hb.org>; Hopkins,Travis<thopkins@surfcity-hb.org> Subject: FW: Question on Housing Element Site#1 FYI From: k s<iamalmira@hotmail.com> Sent: Sunday, February 16, 2020 6:15 PM To: Semeta, Lyn <Lyn.Semeta@surfcity-hb.org>; Hardy,Jill <Jill.Hardy@surfcity-hb.org>; Peterson, Erik <Erik.Peterson @surfcity-hb.org> Cc: Luna-Reynosa, Ursula <ursula.luna-reynosa@surfcity-hb.org> Subject: Fw: Question on Housing Element Site#1 I noticed a posting on the HB Comm Forum regarding an article that appeared in the LA Times about a "historic house" being located on the Cameron Lane property. A month ago, I was asked about this by Alan Ray. My response is attached and I copied Ursula on it at the time. I am doing so here again. I am directing this to the three of you since you have been or are council liasons to the HRB and are the mostly likely to have questions or to be in a position of having to answer any. As you can see, I have no thought that this small dilapidated structure would prove "preservable". The LA Times article adds to this discussion by bringing up the formation of what was previously known as Wintersburg. This identification spans a large area which has now been largely developed except for the few buildings Mary Urashima has been trying to save across from Rainbow. I have no idea where the Times got their information, but it is quite overly expansive. 1 While this particular Cameron property and its sister site facing Beach was at one time part of Wintersburg, it no longer has any historical context that would support preservation. It is far too remote from the Rainbow area property to be considered part of a historic district. As I've said before, I have no knowledge about RHNA and would not presume to comment on any aspect of that. Nor do I enter into HB Comm Forum discussions. Your vote on this item is, of course, up to you. I just wanted to be sure this latest issue was addressed to you to the best of my ability. As always, thank you all for the work you do! Kathie Schey From: k s<iamalmira@hotmail.com> Sent:Wednesday,January 15, 2020 11:44 AM To:Villasenor,Jennifer<VVil lase nor@surfcity-hb.org>; Ray,Alan <Alan.Ray@surfcity-hb.org>; Beckman, Hayden <hayden.beckman@surfcity-hb.org> Cc: Luna-Reynosa, Ursula <ursula.luna-reynosa@surfcity-hb.org>;James,Jane<iiames@surfcity-hb.org> Subject: Re: Question on Housing Element Site#1 Hi Alan, Thanks for such a thoughtful question. I would not presume to comment on RHNA because that knowledge is well outside my wheelhouse. Since I know you have a keen interest in city history, let me note that this site was listed as eligible for Cal Register status in both of the past historic surveys-the one you mention and the earlier one completed in 86. To my knowledge, that designation has not been applied for. Such status would not protect the property from demolition in any event. CR status sounds alot more important than it actually is. Since I have a copy of the entire historic survey on my desk, I double-checked the DPR for that location. It is said to have been built in 1947. The survey states the significant period of Wintersburg activity extends from 1890 to 1940 (1 would have said through 1941) so this simple structure was built after that. It likely does reflect the post-war return of Japanese-Americans to Wintersburg. I would add that when I research structures in response to demo permits, I very often find inconsistencies between the info a DPR provides and other factual information. However, Mary Urashima contributed most of the information on that area to the survey. Mary has studied this area extensively, so I would consider this DPR to be reliable. The Cameron property appears to have deteriorated quite a bit in the few years since the DPR was prepared. Despite any "historical significance" that may attach to the place, I suspect that preserving that building would not be likely. 2 Best, Kathie Schey From:Villasenor,Jennifer<1Vil lase nor@surfcity-hb.org> Sent: Wednesday,January 15, 2020 10:22 AM To: Ray,Alan<Alan.Ray@surfcity-hb.org>; Beckman, Hayden <hayden.beckman@surfcity-hb.orR>; Schey, Kathie <iamalmira@hotmail.com> Cc: Luna-Reynosa, Ursula <ursula.luna-reynosa@surfcity-hb.org>;James,Jane<iiames@surfcity-hb.org> Subject: RE: Question on Housing Element Site#1 Hi Commissioner Ray, No, HCD has already accepted the site with this information. Let me know if you would like more information. Thank you. Jennifer From: Ray,Alan <Alan.Rav@surfcity-hb.org> Sent:Wednesday,January 15, 2020 9:03 AM To:Villasenor,Jennifer<JVil lase nor@surfcity-hb.org>; Beckman, Hayden <hayden.beckman@surfcity-hb.org>; Schey, .Kathie<iamalmira@hotmail.com> Subject: Question on Housing Element Site#1 Dear Jennifer, Kathie and Hayden, At last night's Planning Commission meeting, a question came up regarding the historical status of Site #1, 17631 Cameron Lane. I see that the property is listed in the 2014 Historic Context&Survey Report (p. 166). Does this listing have any impact on its availability as a RHNA site? https://www.huntingtonbeachca.gov/files/users/planning/Historic Context and Survey Report Final Draft.pdf Alan Ray Vice Chair, Planning Commission alan.ray(a)surfcity-hb.org 3 Estanislau, Robin From: Fikes, Cathy Sent: Tuesday, February 18, 2020 2:50 PM To: Agenda Alerts Subject: FW:Vote No on Agenda Item 23 &25 From:Taylor Haug<taylorhaug@gmail.com> Sent:Tuesday, February 18, 2020 2:38 PM To:CITY COUNCIL<city.council@surfcity-hb.org> Subject:Vote No on Agenda Item 23 &25 I urge you to repeat the vote on Agenda Item 23 and reject the item. The building does not fit the space, and it will cause even more traffic and safety issues at this intersection. HB doesn't need to get into the real estate business. This was proven in the last purchase of the Pipeline disaster, costing taxpayers over 100K. The fact that you already have a letter of intent to purchase these two items prior to changing the overlay of these parcels shows you have already decided before the public meeting. PLEASE PLEASE PLEASE reject this item. LISTEN TO THE PEOPLE YOU REPRESENT. Thank you. A homeowner and lifelong resident. Taylor Haug SUPPLEMENTAL. COMMUNICATION "Dee, AqWWG Illem NO Esparza, Patty From: Fikes, Cathy Sent: Tuesday, February 18, 2020 5:38 PM To: Agenda Alerts; Brenden, Patrick; Carr, Kim; Delgleize, Barbara; Fikes, Cathy; Hardy, Jill; Peterson, Erik; Posey, Mike; Semeta, Lyn Subject: Comment All Council Members COMMENTS & ADDITIONAL NOTES Dear City council members; I strongly urge each of you to vote FOR the purchase by the city of 17631 Cameron Lane, one of the sites in the affordability amendments to the Beach/Edinger Corridor Specific Plan with funds restricted to housing affordability projects. I live one block away from this address and I think this would be a wonderful place to have some affrordable housing built! I also urge you to vote yes for Item 24, so our city can join the Orange County Housing Finance Trust. I am a resident of HB for 25 years now and I vote every election, keeping track throughout the year on how each of you vote on issues concerning affordable housing and the homeless especially. Thanks for all you are doing to help those who are suffering in our city. Yours truly, Shevawn Opened: 02/17/2020 12:00 PM Closed- -4-4---- By: shevawn RAMSEY Email: mrswumbe@gmail.com Phone: 714-270-2055