HomeMy WebLinkAbout0010_1_Purchase of Properties - SRReport to City Council
To:Honorable Mayor and Members of the City Council
From:Barbara Leibold, City Attorney
Date:January 24, 2017
Subject:Purchase and Sale Agreement for the Purchase of Real Property for
Affordable Housing Purposes
Recommendation
Adopt A RESOLUTION OF THE CITY OF LAKE ELSINORE, ACTING AS SUCCESSOR TO
THE HOUSING ASSETS AND FUNCTIONS OF THE FORMER REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE UNDER HEALTH & SAFETY CODE
SECTION 34176(a)(1), APPROVING A PURCHASE AND SALE AGREEMENT FOR THE
PURCHASE OF REAL PROPERTY FOR AFFORDABLE HOUSING PURPOSES FROM
THE SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE
Background
The Successor Agency to the Redevelopment Agency of the City of Lake Elsinore
("Successor Agency") is a public body corporate and politic, organized and operating
under Parts 1.8 and 1.85 of Division 24 of the California Health and Safety Code
(“HSC”), and the successor to the former Redevelopment Agency of the City of Lake
Elsinore ("former Agency") that was previously a community redevelopment agency
organized and existing pursuant to the Community Redevelopment Law, Health and
Safety Code Section 33000, et seq..
As of February 1, 2012 the former Agency was dissolved pursuant to Assembly Bill xl 26
("AB xl 26"),as amended further by Assembly Bill 1484 ("AB 1484") (together with AB xl
26, as amended to date, the "Dissolution Law")and,as a separate public entity,
corporate and politic, the Successor Agency administers the enforceable obligations of
the former Agency and otherwise unwinds the former Agency's affairs, all subject to the
review and approval of a seven-member oversight board ("Oversight Board").
As of February 1, 2012, the City of Lake Elsinore (“City”) elected to act as the successor
to the housing assets and functions of the former Agency in accordance with Health &
Safety Code Section 34176.1(a)(3)(A)(“Housing Successor”). The City is required to
comply with applicable law in its role as Housing Successor.
Purchase of Properties for Affordable Housing Purposes
January 24, 2017
Page 2
Discussion
As part of the dissolution of the former Redevelopment Agency, Health & Safety Code
Section 34177(e) requires the Oversight Board to direct the Successor Agency to dispose of
the real property held by the Successor Agency. By Resolution No. 2016-007, approved on
June 28, 2016, the Successor Agency approved the sale of Properties (as hereinafter
defined) to the City for affordable housing purposes and a form of Purchase and Sale
Agreement for the sale.By Resolution No. 2016-004, approved on July 7, 2016, the
Oversight Board approved the sale of the Properties to the City for affordable housing
purposes and the form of Purchase and Sale Agreement. On August 16, 2016, the California
Department of Finance also approved the proposed sale and form of Purchase and Sale
Agreement. Those properties proposed to be sold to the City for affordable housing
purposes are as follows (collectively, the “Properties”):
Four Parcels located at Pottery and Spring - Assessor’s Parcel Numbers 374-062-
005; 374-062-006; 374-062-015; and [374-062-020].
Twelve Parcels located on Spring between Heald and Sumner - Assessor’s Parcel
Numbers 374-162-039; 374-162-041; 374-162-043; 374-162-045; 374-162-047; 374-
162-049; 374-162-051; 374-162-053; 374-162-055; 374-162-057; 374-162-059; and
374-162-061.
Staff has identified the Properties as appropriate sites for the future development of
affordable housing. Additionally, the Housing Successor’s Low and Moderate Income
Housing Fund (LMIHAF), established by law in connection with the dissolution of the former
Agency, contains monies which can only be utilized to develop affordable housing. The
LMIHAF currently has sufficient funds to purchase the Properties. Accordingly, staff
recommends that the City, in its capacity as Housing Successor, purchase the Properties for
fair market value with monies from the LMIHAF. The Properties shall be utilized by the
Housing Successor in accordance with the Community Redevelopment Law (Part
1(commencing with Section 33000)), as amended by Health & Safety Code Section 34176.1,
and, in particular, for the development of affordable housing in accordance with Health &
Safety Code Section 34176.1(a)(3)(A).
Attached is the proposed form of Purchase and Sale Agreement previously approved by the
Successor Agency, Oversight Board and Department of Finance. The Purchase and Sale
Agreement requires the purchase and sale of the Properties at a total purchase price of
$720,000, which is equal to fair market value of the Properties, as determined by a third
party, licensed appraiser. Based upon such appraisals, the four parcels at Pottery and
Spring appraised at $370,000 and the twelve parcels located on Spring between Heald and
Sumner appraised at $350,000.
In addition to approving the form of Purchase and Sale Agreement for the purchase of the
Properties, the attached Resolution authorizes the City Manager to accept a grant deed for
the Properties and to take any action and execute any documents as may be necessary to
implement the purchase of the Properties by the City.
Purchase of Properties for Affordable Housing Purposes
January 24, 2017
Page 3
Fiscal Impact
The City will utilize approximately $720,000 from the LMIHAF to purchase the Properties for
affordable housing purposes. Funds in the LMIHAF can only be used for affordable housing
purposes in accordance with applicable law.
Exhibits
Exhibit A - Resolution No
Exhibit B – Purchase and Sale Agreement
Exhibit C - Property Maps