96-0917_CRA_Minutes_Regular Meeting227
SEPTEMBER 17, 1996
REGULAR MEETING OF THE SAN JUAN CAPISTRANO
COMMUNITY REDEVELOPMENT AGENCY
BOARD OF DIRECTORS
The Regular Meeting of the Board of Directors of the City of San Juan Capistrano Redevelopment
Agency was called to order by Chairman Swerdlin at 7:40 p.m. in the City Council Chamber.
ROLL CALL: PRESENT: David M. Swerdlin, Chairman
Carolyn Nash, Vice Chairman
Collene Campbell, Director
Wyatt Hart, Director
Gil Jones, Director
ABSENT: None
STAFF PRESENT: George Scarborough, Executive Director, Thomas Tomlinson, Deputy Director;
Richard K Denhalter, Agency Counsel/City Attorney; Cynthia L. Pendleton, Finance Officer; Cheryl
Johnson, Agency Secretary; William Huber, Engineering and Building Director; Joe Arranaga, Public
Lands and Facilities Director, Al King, Jr., Community Services Director; Lt. Paul Sullivan, Chief of
Police Services; Nancy Bernardi, Recording Secretary.
It was moved by Director Jones, seconded by Director Hart, that the staff recommendations be
accepted for the following items listed on the Consent Calendar. The motion carried by the following
vote:
AYES: Directors Campbell, Hart, Jones, Nash, and Chairman Swerdlin
NOES: None
ABSENT: None
} APPROVAL OF COMMUNITY REDEVELOPMENT AGENCY MINUTES -
REGULAR MEETING OF AUGUST 20,.1996
The Minutes of the Regular Meeting of August 20, 1996, were approved as submitted.
Director Nash abstained due to her absence at the August 20 meeting.
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The List of Demands dated August 28, 1996, in the total amount of $327,878.17 was
received and filed.
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The Finance Officer's Report of investments as of August 31, 1996, in the total amount of
$645,971.79 was received and filed.
Written Communication:
Report dated September 3, 1996, from Jennifer Murray, DPA, Assistant to the City Manager,
recommending that the proposed program be approved in concept to address overcrowding
conditions and other problems at the Capistrano Villas and Casa de Capistrano
neighborhoods. The program proposed to: 1) permit the Community Redevelopment
Agency to acquire vacant homes in targeted neighborhoods from the Federal Housing
Administration (FHA), 2) lease the units to qualified low-income tenants for short periods of
time, and 3) resell the units to these tenants. It was anticipated that the transition to private
ownership would be approximately 12 months; at the time of purchase, the Agency would
retain a silent second mortgage on each property, which would prevent the unit from being
resold at a price which would contribute to lower market values. The Report also
recommended that Council authorize staff to solicit the services of a qualified, non-profit
housing corporation to provide management oversight of the program. This item was
continued from the meeting of September 3, 1996, to allow staff to address the issues raised
at that meeting to provide additional information with regard to the rental program and
potential for recouping money through the second trust deed.
Jennifer Murray, DPA, Assistant to the City Manager, made an oral presentation. She
anticipated that staff could return with recommendations for hiring a non-profit housing
manager at the meeting of November 17, 1996.
Public Comments:
(1) Phyllis Orgeich, 26522 Calle San Francisco, spoke in support of the proposed
program. She felt the program would resolve existing problems such as vandalism,
over -crowding and empty HUD units and urged that the Request for Proposal process
be approved to avoid further delays.
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(2) Mario Pena, 32224 Paseo Carolina, representing the Casa de Capistrano Board of
Directors, spoke in opposition to the proposed program. He felt the program would
be "giving away" the units. He expressed concern that the Agency would be unable
to enforce certain program regulations, stating that the City was currently unable to
enforce its property maintenance standards ordinance. He indicated that should this
program be approved, the Casa de Capistrano Board did not want to be a part of it.
(3) Bill Hill of Mission Realtors, 31501 Camino Capistrano, felt the program was ill-
conceived because HUD property was already being sold to homeowners rather than
landlords. He submitted information obtained from a title company showing that
HUD recently sold six units in Casa de Capistrano, not to landlords, but to
homeowners who were qualified by HUD for only $100 down, and that 21 out of 22
sales in the Capistrano Villas were to homeowners, with only one unit sold to a
landlord. He questioned why the property targeted for purchase was only HUD
property and not other vacant properties owned by other types of institutions. He
questioned the intent regarding occupancy levels. He expressed concern that the
program would decrease property values that have finally leveled off in the area.
(4) Janice Palermo, 31565 Los Rios Street, resident/owner, spoke in opposition to the
proposed program. She urged that the item be again continued to find better
solutions and to allocate the money in ways which would address the real issues in the
neighborhood. She expressed concern that the program would cause residents
currently "living on the edge" to give up, resulting in a decline in property values. She
cited her support of educating people coming into the community, but did not support
the City becoming involved with "government housing."
(5) Frederick Jenner, Government Affairs Manager for the South Orange County
Association of Realtors, 25552 La Paz, Laguna Hills, expressed concern about the
Community Redevelopment Agency managing the program as proposed and
suggested that this issue be further studied. He felt that the recent upturn in the real
estate market would resolve many of the issues without the program.
(6) Jessica Dean, 27032-C Paseo Burladero, representing the Mary Erickson Foundation,
noted that the Foundation recently received two grants totaling $14,000 to fund a
tenant education program at the properties owned by the Foundation in San
Clemente. She noted that their program in San Clemente included management of the
units but did not include selling units to the tenants. She emphasized the importance
of a tenant education program and offered to share the information from their
program in San Clemente with the management company selected for San Juan
Capistrano's program.
(7) Rosa Hernandez, realtor with Remax in the South County area, suggested that monies
for this program be used to increase the City's Housing Assistance Program to
encourage first-time homebuyer sales in San Juan Capistrano. She noted her company
had written two more offers this week under the City's Housing Assistance Program,
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which has no limit on the number of units eligible for assistance and has no
management oversight fees. She felt the problems of overcrowding and clean-up
were the problems that should be addressed. She stated that many existing
homeowners would choose to leave if the price of their unit dropped because of
government -involved housing. She advised that HUD would be unable to sell units
under the City's Housing Assistance Program because of the repairs that are required.
(8) Diane Ramirez, resident/owner at 32185 Paseo Carolina, spoke in opposition to the
proposed program. She stated that the City has been unable to provide assistance to
homeowners who have requested help with problems in the neighborhood. She noted
she was informed about the proposed program through a newspaper article and that
the publicity was very disappointing and upsetting to homeowners. She requested
that this matter be continued for further study and to ensure proper notification to all
homeowners affected.
(9) Patricia Feeney, 26414 Paseo Pamela, advised she purchased her unit in Casa de
Capistrano in 1975 and expressed concern regarding how living conditions have
declined in the neighborhood. She noted she is on the homeowners Board of
Directors, which has done everything it can, with the City's help, to halt the decline
in her neighborhood. She also expressed concern about the impact of the proposed
plan on property values in the area, controlling the number of people living in the
units, and whether notification of inspections would be given in advance which would
allow people to alter the condition of their units temporarily. She requested that the
homeowners Board of Directors be permitted to provide their input in this matter
before a decision is reached.
Director Nash noted that this type of program had not been developed for low-income
housing, but to improve conditions in these two neighborhoods by reducing overcrowding
and related problems, thus reducing the amount of money spent on law enforcement to
respond to problems in the area. She emphasized that the program was a response to
problems brought to the attention of the City and the primary reason was not to provide low-
income housing but to develop a process to improve the neighborhoods, restore economic
value to the area, and to turn the communities around by attracting people who would be
willing to spend the time and effort to make the communities prosperous. She emphasized
there was no intent to operate a housing project or have the Agency involved for a long
period of time. She felt that the proposed program would address the concerns expressed by
homeowners.
Ms. Murray emphasized that addressing the overcrowding problem in these neighborhoods
was the key to the proposed program. According to information provided to staff from the
City's housing consultant, documents from the Fair Housing Administration, and other
government documents, the City would be able to enforce occupancy limits with the use of
additional tools not available to the private sector but available only through programs similar
to that proposed. She noted this information had been verified by different sources. The
homeowner will acknowledge WAer understanding of the requirements when they sign their
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lease agreement. She advised that the non-profit property management company to be hired
would be on-site frequently to ensure compliance with the lease agreement and CC&R's. She
noted this company would be given as much control as possible in managing the tenants. The
company would also receive input from the homeowners association and provide the
Community Redevelopment Agency with regular updates. She emphasized the importance
of educating the new homeowners with regard to budgeting, compliance with regulations, and
pride of home ownership. She explained that once the unit is sold, a second mortgage would
be placed on the property to ensure that the property is not resold at less than the current
market value of other properties, and the grant deed would require the occupancy limits to
continue. She stated that should the number of people in a unit exceed the allowable limit,
such as through the birth of a baby, an exception could be requested.
Mr. Scarborough advised that the Community Redevelopment Agency has the option to
acquire the units that have been foreclosed at a 30% discount from the private sector price.
The Agency would retain ownership of the unit for a period of 12 to 18 months to ensure that
the tenant was qualified as a homeowner. If the tenant met the criteria, the unit would then
be sold and the Agency would assume the second mortgage. When the unit was again sold
and the second mortgage paid ofd the Agency would then have the funds to purchase another
unit under the program, allowing the program to continue without the need for additional
funding.
Director Jones emphasized that the goal of the program was to instill pride of ownership
through educating people that had never owned a home previously and to establish individual
families in these units. He noted that a prospective homeowner in the program would be
required to be employed, provide proof that he/she can pay their bills, etc. He stated that the
intent of the proposed program was not to provide "government housing" and emphasized
he had always had the best interests of the people in these neighborhoods in mind. He felt
that property values would eventually increase when people move in who care and become
part of their community.
Director Hart felt that this matter should be continued so that the affected residents could be
properly informed, have a clearer understanding of the proposed program, ask questions, and
provide their input. He urged staff to work with the homeowners associations and set up
meetings to accomplish this.
Director Campbell noted she had many concerns and unanswered questions about the
proposed program; however, she felt the recommended action would only provide for staff
to continue working on the program. She expressed concern with the Agency purchasing
more real estate and not resolving the real problems. She questioned whether it was right for
a local government to try and control occupancy when the federal government would not.
She felt that the important issue of occupancy limits should be addressed at the federal and
State levels. She suggested that staff forward a request to the League of California Cities and
Congress urging them to introduce a bill that would address density issues.
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Chairman Swerdlin indicated he still had a lot of questions about the program and felt that the
matter should be continued to address outstanding issues and to receive input from residents.
He felt that there was not yet a clear picture of what was being dealt with and the "real"
problems were population density, lack of knowledge regarding home ownership, and lack _
of enforcement of CC&R's. He felt that the free market should be allowed to improve these
communities, noting that banks and other lenders require purchasers to meet certain
qualifications. He questioned whether non-profit agencies could really do the job better than
private enterprise. He suggested that portions of the proposed program could be
incorporated into the City's HOPE and HOME programs.
Director Jones felt that the majority of problems in the Capistrano Villas are caused by
absentee owners who purchase units for speculation. He emphasized his belief that the
solution to these problems was through the proposed program, which would encourage
owner occupation of the units and educate homeowners on proper maintenance and other
issues. He stated he would not be in support of the program if he felt it would be detrimental
to the residents or the community.
Director Nash concurred. She felt that the proposed program was a good one and needed
to be implemented as soon as possible. She stated that many of the Agency's and residents'
concerns and questions, as well as financing issues, would be answered by the non-profit
organization and financial consultant to be retained. She emphasized that approval of this
program would be m concept only to allow the Request for Qualification process to proceed
and to determine what the final program should be, during that time input will be received and
if it was determined that it would not work then something else would be done.
Director Campbell emphasized that her approval would be for a conceptual program only in
order to obtain answers to her questions, and further emphasized that it was very important
to obtain input from homeowners.
Mr. Scarborough stated that after input from residents and a thorough review of the concept
plan by the consultants, a final program would be prepared and presented for final approval
by the City Council.
Chairman Swerdlin expressed concerns that the concept plan, which he felt was flawed, would
be used as a guideline and ultimately become the final product. He noted that HUD often
takes back units which then sit vacant for months and become the source of criminal activity.
He felt more problems occur when the government is involved, despite good intentions.
Conceptual Approval of Low/Moderate Income Housing Program and Authorization
to Receive Bids:
It was moved by Director Nash, seconded by Director Jones, that the proposed program be
approved in concept to 1) permit the Community Redevelopment Agency to acquire vacant
homes in the Capistrano Villas and Casa de Capistrano neighborhoods from the Federal
Housing Administration, 2) lease the units to qualified low-income tenants for short periods
of time, and 3) resell the units to these tenants. Staff was authorized to solicit proposals from
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qualified, non-profit housing corporations, through the Request for Qualifications process,
to provide program management services. Staff was directed to meet with residents and
receive input about their concerns during the Request for Qualifications process. The motion
carried by the following vote:
AYES: Directors Jones, Nash and Campbell
NOES: Director Hart and Chairman Swerdlin
ABSENT: None
It was moved by Director Nash, seconded by Director Jones, and unanimously carried to find
that the following item was not available prior to publication of the Agency agenda and
consideration was necessary at this time.
AUjb=Wjgn to Forward B= -I= for Involvement by L&ague of California Citiea MW
Congressmao Packard:
It was moved by Director Campbell, seconded by Director Jones, and unanimously carried
that staff be directed to forward a request to the League of California Cities asking them to
work on convincing the State legislature to establish occupancy standards that are acceptable
for any city in the State. If no response is received from the League, the Agency will work
to sponsor legislation.
Direction to Staff:
Staff was directed to draft a Resolution for City Council approval to Congressman Ron
Packard requesting that he sponsor legislation establishing occupancy standards at the federal
level.
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Written Communication:
Report dated September 17, 1996, from the Finance Officer, recommending that the formal
bid process be waived and that the firm of Fieldman, Rolapp and Associates be retained as
the Agency's financial advisor, per Schedule "A," Schedule of Fees, for proposed debt
issuance relating to low- and moderate -income housing.
A212roval of Agreement for FiDNIdal Advisor Services:
It was moved by Director Nash, seconded by Director Jones, and unanimously carried that
the contract with Fieldman, Rolapp and Associates be approved per Schedule "A," Schedule
of Fees, for proposed debt issuance relating to low and moderate income housing. The
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Executive Director was authorized to execute the appropriate agreements after review and
approval by the Agency Board.
The Board recessed to the Council meeting at 9:03 p.m, and reconvened in Closed Session at 9:40
p.m. for:
Conference with Real Property Negotiator per Government Code Section 54956,8 for
property known as the Old Elementary School site located at the corner of El Camino Real
and Acjachema, Parcels A and B on Parcel Map 80-853, and related parcels, with the
Capistrano Unified School District as the negotiating party, to consider price and terms of
payment;
2. Conference with Real Property Negotiator per Government Code Section 54956.8 for
Assessor's Parcel Nos. 121-240-020 and 121-240-139, with Solag as the negotiating party,
to consider price and terms of payment;
Conference with Real Property Negotiator per Government Code Section 54956.8 for the
following addresses and negotiating parties in Little Hollywood to consider price and terms
of payment:
a. 26571 Ramos Street (Wattenburg) 2 adult tenants - Rehab complete
b. 26587 Ramos Street (Hawk) l adult tenant - Rehab complete
C. 26604 Mission Street (Yorba) 2 adult & 2 minor tenants - Rehab complete
d. 26590 Mission Street (Sanchez) 1 adult tenant - Rehab planned
e. 26580 Ramos Street (Garcia, R.) 2 adult & 2 minor tenants - Rehab planned
f. 26510 Mission Street (Rosales) 2 adult & 2 minor tenants - Re -build planned
g. 26513 Mission Street (Mendez 2 adult tenants - Re -build planned
h. 26581 Mission Street (Juarez) 2 adult tenants - Re -build planned
i. 26599 Mission Street (Martinez T.) 2 adult & 3 minor tenants - Re -build planned
j. 26595 Mission Street (Martinez J.) 2 adult tenants - Rehab planned
k_ 26519 Mission Street (Garcia J.) 2 adult & 2 minor tenants - Re -build planned
1_ 26603 Mission Street (no tenant) - Re -build underway
M. 26511 Mission Street (Alarcon) 2 adult tenants - Rehab planned
4. Conference with Legal Counsel, Existing Litigation, per Government Code Section 54956.9,
for the case known as McLaughlin, etc., et al v San Juan Capistrano Community
Redevelopment Agency, et at, and
5. Conference with Legal Counsel, Anticipated Litigation, per Government Code Section
54956.9(b), for significant exposure to litigation in two cases, and Government Code Section
54956.9(c), the initiation of litigation in two cases.
The Agency Secretary was excused therefrom, and the meeting reconvened at 10:15 p.m.
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Mr. Denhalter advised there was no action to report on any of the items.
ADJOURNMENT
There being no further business before the Board, the meeting was adjourned at 10:15 p.m. to the
next regular meeting date of Tuesday, October 1, 1996, at 7:00 p.m. in the City Council Chamber.
Respectfully submitted,
C]HERYL JOWSONLAGENCYSECRETARY
ATTEST:
DAVID M. SVVERDLIN, CHAIRMAN
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