96-1119_CRA_Minutes_Regular Meeting251
NOVEMBER 19, 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 8:33 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.
PUBLIC HEARINGS
None.
CONSENT CALENDAR
It was moved by Director Jones, seconded by Director Nash, 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
1. APPROVAL QF COMMUNITY REDEVELOPMENT AGENCY MINUTES -
REGULAR MEETING OF OCTOBER 15. 1996
The Minutes of the Regular Meeting of October 15, 1996, were approved as submitted.
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2. RECEIVE AND FILE WARRANTS OF NOVEMBER 6. 1996 (300,30)
The List of Demands dated November 6, 1996, in the total amount of $8,631.64 was received
and filed.
RECEIVE AND FILE FINANCE OFFICER'S REPORT OF INVESTMENTS AS
F OCTOBER 31 1996 (350,30)
The Finance Officer's Report of Investments as of October 31, 1996, in the total amount of
$785,157.54 was received and filed.
BOARD ACTIONS
OUTCOME OF COMMUNITY ENHANCEMENT HOUSING PROGRAM
REQUEST FOR QUALIFICATIONS PROCESS (CIVIC CENTER BARRIO
HOUSING CORPORATION(600.40/585.10)
Written mm i n :
(1) Report dated November 19, 1996, from Jennifer Murray, DPA, Assistant City
Manager, recommending that the Executive Director be authorized to negotiate a
contract with Civic Center Barrio Housing Corporation to provide oversight and
property management services for the City's Community Enhancement Housing
Program.
(2) Letter dated November 19, 1996, from Fred Jenner, Senior Vice President of the
South Orange County Association of Realtors, expressing concerns regarding the
amount of bonded indebtedness for the program and suggesting that the rental market
would better address the overcrowding issue. The letter contained a list of FHA sales
for 1996 through September 15 and a letter from HUD regarding financial incentives
for housing counseling for first-time buyers on some FHA loans.
(3) Letter dated November 17, 1996, from James B. Hasty, owner of property in
Capistrano Villas III, expressing concerns that the proposed rental program would
undercut property owners who rent their units at market rates.
Jennifer Murray, DPA, Assistant City Manager, made an oral presentation.
Public Comments:
(1) Fred Jenner, Senior Vice President of the South Orange County Association of
Realtors, 25552 La Paz Road, Laguna Hills, distributed copies of his letter noted
above. He expressed serious concerns regarding the amount of bonded indebtedness
to finance the proposed program because the number of units needed to make the
program financially viable may not be possible.
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(2) Carlos Negrete, 27422 Calle Arroyo, expressed concern that no feasibility study or
costs projections were done for the proposed program. He noted that the proposal
submitted by the Mary Erickson Foundation had not been considered by the Agency.
He stated that he was informed by Robert Kiley of Community West Development
that the specifications for the Requests for Qualifications were modified after that
organization had submitted their proposal. He felt that the RFQ process was
preferential to the Civic Center Barrio Housing Corporation and that additional bids
should be solicited. He urged that the Agency ascertain the overall program costs
before making a decision.
Chairman Swerdlin advised that the Mary Erickson Foundation had been included as a part
of the proposal submitted by Affordable Housing Clearinghouse. Mr. Scarborough indicated
he would meet with Mr. Negrete to clarify any concerns.
(3) Joann de Guevara, 26482 Calle San Francisco (Capistrano Villas II), urged the
Agency to proceed with the proposed program to resolve the overcrowding problem,
which is detrimental to the affected neighborhoods and the City overall.
(4) Benedict Reyes, 32004 Paseo Carolina (Capistrano Villas), felt that the proposed
program was a good attempt in trying to resolve the problems in the neighborhood
and that concerns regarding lower market values were not valid. He suggested that
some of the units be converted into assisted living units for senior citizens. He felt
that this option would have no adverse affect on market values and would reduce
some of the overcrowding problem. He suggested that as an incentive, it should be
required that a resident from the immediate community be hired to assist these
seniors.
(5) Gillian Cannon, 26467 Calle San Luis (Capistrano Villas II), spoke in strong support
of the proposed program. She felt that the concerns regarding declining market rates
were not valid. She explained that many families cannot afford to qualify for the units
because of the current rates, which forces multiple families to live in one unit. With
regard to the suggestion for assisted living units for seniors, she stated there are strict
State requirements and that only one fourth of their units are located on the ground
floor, with the resulting units requiring access by stairs.
Director Jones stated that the City had received a letter this date from Carlos Negrete
requesting that he not participate in this issue. He stated he has been involved in this issue
for about ten months and would continue to participate. He felt he had no conflict of interest
in this matter since his residence/business was located approximately 1,000 feet from the
nearest corner of one of the neighborhoods and approximately 1 '/z miles from the farthest
point of the neighborhood.
Director Nash stated that the Agency's main focus was to address the issue of overcrowding
by controlling the number of people in the units. She stated that this program had been in
effect in other communities for over sixteen years and was not considered a risky venture.
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She preferred that a rental program not be used for these neighborhoods because home
ownership was needed to improve and maintain property values. She noted that the City has
been in the process of developing the proposed program for over a year and that it was not
submitted hastily. She stated that staff followed up on every lead and proposal submitted, and
that the program proposed was the most widely used by cities to control overcrowding. She
stated that staff and the Agency were aware of the costs involved. She felt that the program
proposed was a step in the right direction in improving living conditions in these
neighborhoods by controlling the number of people that can live in the units. She felt that
only by adopting the proposed program based on federal guidelines can the issue of
overcrowding be addressed since the State has no regulations for cities to use to control
overcrowding. She advised that this program has been upheld in the courts and found to be
successful. She noted that another goal of the proposed program is to educate first-time
homeowners with regard to maintenance, finances, homeowners associations, managing their
homes. She felt it was critical for the Agency to adopt this program immediately to help the
homeowners in these neighborhoods who have been trying to maintain their properties on
their own without financial or political backing and who have indicated their support for this
program. She emphasized the need to bring in management experienced in this type of
program.
Director Jones encouraged the residents in the affected neighborhoods to oversee the
program to ensure its success. He emphasized that the intent of the program was to instill
pride of ownership to turn these neighborhoods around and that the City needed to make a
long-term commitment to people who purchased these units.
Director Hart stated that these issues have been well discussed and thought out and concurred
with the concept of the proposed program. He had concerns with the methods on how to
attain those goals, such as the government being involved in the private sector. However, he
noted that the federal government is already involved with these units through FHA and
HUD, and he preferred that the City be the government which oversees this program full time.
Director Campbell felt there was no conflict of interest in this matter for Director Jones. She
stated she had initially been "on the fence" when the concept for this program was first
introduced. After discussing this issue with many people, she felt that the proposed program
was the only way to resolve the problem of overcrowding since the State was unwilling to
address the issue. She emphasized that no taxpayer's monies were involved with this
program, as only set-aside funds will be used, which are to be used exclusively for affordable
housing. She felt that this program may also save money in the area of public safety.
Chairman Swerdlin expressed appreciation to Directors Jones and Nash for their efforts on
the Ad Hoc Committee and the good intentions of the proposed program. However, he felt
that the private sector could do a better job than local government and had urged staff to
explore that avenue. He stated he was reluctant to support the proposed program since most
of the City's litigation consists of tenant/landlord conflicts, and this program may incur even
more similar litigation. He stated he had many concerns with entering into negotiations for
management oversight of this program but indicated he would support the staff
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recommendation at this time to get the process going. He suggested that alternatives to the
proposed program could include controlling parking by requiring residents to park in their
garages, reducing the amount of available street parking, using set-aside funds to educate the
Homeowners Associations Boards of Directors to use the resources that are currently
available to them, and hiring private patrols for the area. He requested that during the
contract negotiations with Civic Center Barrio, staff should ensure that the neighborhoods'
boards of directors receive monthly reports from the management group, similar to that
required on foreclosures in the private sector. He also requested that quarterly reports be
provided to the eity eouncitBd o'on the Consent Calendarrr'WC�E�r3
(Corrected by Board on 12117196)
Mr. Denhalter stated that part of the proposed program is qualifying applicants, and the City
has the right and power to require applicants to be legally employed in order to meet the
requirements of the program.
Authorization to . Negotiate Contract for Oversight and PropeMManagement
Services
It was moved by Director Nash, seconded by Director Jones, and unanimously carried that
the Executive Director be authorized to negotiate a contract with the firm of Civic Center
Barrio to provide oversight and property management services for the City's Community
Enhancement Housing Program.
2. AGUE MENT FOR BOND COUNSEL SERVICES FOR LQW AN
MODERATE -INCOME HOUSING PROGRAM (STRADL�C, YOCCA
CARLSON & RAUTH) (600.40)
Written Communication:
Report dated November 19, 1996, from the Finance Officer, recommending that the formal
bid process be waived and that the firm of Stradling, Yocca, Carlson & Rauth be retained as
bond counsel for debt issuance relating to low- and moderate -income housing programs at
a cost of between $20,000 and $28,000 based on the amount of debt issued.
Ms. Pendleton noted that the interest rate was 6% as of November 8, 1996, which is about
2% lower than conventional financing for this type of program. She stated that the Agency
will save at least 2% using tax-exempt bond financing. She estimated that the total amount
of bond issuance would be between $750,000 and $3 million based on the units available to
be acquired by the Agency needs for all of its housing programs, including the Community
Enhancement Housing Program and the HOPE plan. However, she felt it was very unlikely
that the Agency would issue a $3 million bond.
Mr. Scarborough explained that $1 million would represent the 15-16 units acquired for the
Community Enhancement Housing Program, with the remaining housing programs to be
funded through the use of set-aside funds. A legal analysis and the actual amount of the bond
will be returned to the Board of Directors for final action.
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Air val_ ofAAgreement for Bond ,Counsel Services:
It was moved by Director Hart, seconded by Director Jones, and unanimously carried that the
firm of Stradling, Yocca, Carlson & Rauth be approved to serve as bond counsel for debt
issuance relating to low- and moderate-income housing programs. The Executive Director
was authorized to execute the appropriate agreements after review and approval by the
Agency Counsel.
CLOSED SESSION 610.85)
The Board recessed to the Council meeting at 9:38 p.m. and reconvened in Closed Session at 10:10
p.m. for:
1. Conference with Real Property Negotiator per Government Code Section 54956.8 for
property known as A.P.N. 649-361-02, with Vestar, G.M.E. Development, Extended Stay
America, and possible others as the negotiating parties, to consider price and terms of
payment;
2. 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;
3. 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;
4. Conference with Real Property Negotiator per Government Code Section 54956.8 for
property located at 26701 Verdugo Street, with Burrage as the negotiating party, to consider
price and terms of payment; 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 10:58 p.m.
BOARD ACTIONS FOLLOWING CLOSED SESSION
Mr. Denhalter advised there was no action to report on any of the items.
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ADJOURNMENT
There being no further business before the Board, the meeting was adjourned at 10:58 p.m. to the
next regular meeting date of Tuesday, December 3, 1996, at 7:00 p.m. in the City Council Chamber.
Respectfully submitted,
�WM'O." ��L ✓�
ATTEST:
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