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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. CRA Minutes -1- 11 /19/96 252 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. CRA Minutes -2- 11/19/96 253 (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. CRA Minutes -3- 11/19/96 254 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 CRA Minutes -4- 11/19/96 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. CRA Minutes -5- 11/19/96 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. CRA Minutes -6- 11/19/96 257 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: CRA Minutes -7- 11/19/96