HomeMy WebLinkAboutItem No. 31 Agreement Escrow Purchase Real Property 215 W Graham Ave.City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
www.lake - elsinore.org
City Council Agenda Report
File Number: ID# 19 -645
Agenda Date: 6/23/2020 Version: 1 Status: Approval Final
In Control: City Council / Successor Aqency File Type: Council Business
Item
Agenda Number: 31)
Agreement and Escrow Instructions for Purchase and Sale of Real Property 215 W. Graham
Avenue. Lake Elsinore (APN 374 - 172 - 009 -3. - 012 -5. & - 021 -31
1. Approve the purchase of real property located at 215 W. Graham Avenue (APN 374 - 172 - 009 -3, -
012 -5, & - 021 -3) for $2,250,000, ratify the City Manager's execution of the Agreement and Escrow
Instructions for Purchase and Sale of Real Property on file with the City Clerk and further authorize
the City Manager or designee to execute such other ancillary documents as may be necessary to
complete the purchase, in such final form as approved by the City Attorney;
2. Allocate funds from the Low and Moderate Income Housing Asset Fund (Fund 617) to purchase the
property and authorize the City Manager to execute and record a regulatory agreement restricting
the property to affordable housing purposes; and
3. Allocate funds from the City's Housing Fund 106 to make necessary repairs and to pay taxes due
pursuant to LEMC Chapter 3.32 in a cumulative estimated amount of $215,500.
City of Lake Elsinore Page 1 Printed on 611812020
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"4-f' DREAM EXTREME
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Barbara Leibold, City Attorney
Date: June 23, 2020
Subject: Agreement and Escrow Instructions for Purchase and Sale of Real Property
215 W. Graham Avenue, Lake Elsinore (APN 374 - 172 - 009 -3, - 012 -5, & - 021 -3)
Recommendations
Approve the purchase of real property located at 215 W. Graham Avenue (APN 374 -172-
009-3, - 012 -5, & - 021 -3) for $2,250,000, ratify the City Manager's execution of the
Agreement and Escrow Instructions for Purchase and Sale of Real Property on file with the
City Clerk and further authorize the City Manager or designee to execute such other
ancillary documents as may be necessary to complete the purchase, in such final form as
approved by the City Attorney;
2. Allocate funds from the Low and Moderate Income Housing Asset Fund (Fund 617) to
purchase the property and authorize the City Manager to execute and record a regulatory
agreement restricting the property to affordable housing purposes; and
3. Allocate funds from the City's Housing Fund 106 to make necessary repairs and to pay
taxes due pursuant to LEMC Chapter 3.32 in a cumulative estimated amount of $215,500.
Background
As part of the dissolution of redevelopment, the City of Lake Elsinore elected to act as the
successor to the housing assets and functions of the former Redevelopment Agency in
accordance with Health & Safety Code Section 34176.1(a)(3)(A) ( "Housing Successor ").
The Housing Successor's Low and Moderate Income Housing Fund ( LMIHAF), established by
law in connection with the dissolution of the former Redevelopment Agency, contains monies
which can only be utilized to increase, improve, and preserve the community's supply of
affordable housing; including housing for persons of extremely low income (i.e. those with
incomes not exceeding 30 percent of area median). LMIHAF funds cannot be used for general
municipal services or projects.
The LMIHAF currently has sufficient funds to purchase properties to satisfy the unmet need to
serve the community's most needy population. City negotiators conferred with the City Council
in closed session initially on March 10, 2020 and in subsequent closed session meetings to
discuss the potential acquisition of the property located at 215 W. Graham Avenue. Following
the City Council's direction to the negotiating team, the City reached an agreement with the
owner to purchase the property for $2,250,000. The item was presented to the City Council on
June 9, 2020 and continued to June 23, 2020.
Purchase Agreement for Property at 215 W. Graham Avenue
June 23, 2020
Page 2
Discussion
The property located at 215 West Graham Avenue was originally operated as a 19 -room motel.
The property is comprised of three (3) parcels consisting of approximately .82 acres. The
property was listed for sale and presents an opportunity for the City, in its capacity of Housing
Successor, to acquire property that can be improved to meet the City's mandate to provide
housing for extremely low- income households. This housing will also help the City to satisfy its
regional fair share housing needs imposed by state law. Accordingly, staff recommends that the
City, in its capacity as Housing Successor, purchase the property and record a regulatory
agreement restricting the long -term use of the property for housing affordable to extremely low
income households in accordance with Health & Safety Code Section 34176.1(a)(3)(A).
The existing improvements on the property provide the City with the unique opportunity to
partner with our non - profit team, Social Work Action Group (SWAG), law enforcement and the
City's Homeless Task Force to use the property on an interim basis to immediately help address
the City's homeless and transitional housing needs coupled with appropriate full -time social
service support. More specifically, the property could be used for Crisis Stabilization Housing of
up to 90 days as part of the City's House LE program funded by California's Homeless
Emergency Aid Program (HEAP). The property would be fully managed by SWAG, with
oversight by the Homeless Task Force, and it would not be operated as a homeless shelter and
would not be an open invitation to any homeless person, especially those from outside the area.
Rather, the property would offer essential short -term housing to individuals experiencing
homelessness that are individually screened, selected, and placed in a unit. Supportive
services, including case management, will be provided on -site as part of the comprehensive
House LE Initiative. Those housed here would then be placed into treatment or permanent
housing and self- sufficiency. This would be only an interim use for the property as the City
works toward converting the property into a well- designed, functional affordable housing project
for the long -term.
Since 2017, under the guidance of the Homeless Task Force, the City has engaged in a
progressively proactive, team approach to address homelessness that focuses on going out on
our streets to better understand our homeless population and securing the resources and
partnerships needed to effectively tackle homelessness. This includes taking a Zero Tolerance
approach to criminal activities while encouraging Responsible Compassion, i.e. a hand up, not a
hand out. The goal of the City's Homeless Outreach Team, which was formed in 2019, is to
enforce illegal activity by holding individuals accountable for committing crimes, while striving to
help those in need when they are ready to receive help. Overall, the City's efforts have led to
significant success as documented by the City's 2020 annual Point -In -Time count, which
declined by more than 24 percent, while Riverside County's increased by 31.6 percent. City
representatives, law enforcement, devoted volunteers, behavioral health professionals, and
others working together on the Homeless Task Force have clearly made a difference.
Services required to staff the interim use of the property will be funded with HEAP funds that are
earmarked exclusively for this purpose. The City was awarded a $1.5 million grant to assist
those who are chronically homeless (homeless for more than a year) by providing critical
funding for enforcement, education, outreach, and housing. This includes a HEAP deputy and
behavioral health and other supportive services. With these grant funds the City, in partnership
with SWAG and others, can provide housing coupled with essential services to persons battling
homelessness in our community and to do so responsibly. The allocation of HEAP Grant funds
to address the City's homeless is a significant contribution to the community and saves general
Purchase Agreement for Property at 215 W. Graham Avenue
June 23, 2020
Page 3
fund revenues and public safety resources that would otherwise be drained to help address
these issues.
In addition, this month the City was graciously provided its own Lake Elsinore Coordinated
Cares Team by the Riverside University Health System's Behavioral Health Department. This
new team includes four staff members to further assist the City in combatting its top challenges
in getting individuals off the streets and into treatment or housing, i.e. mental illness and
substance abuse. This new team is something never tried before for a City and is expected to
help the City further expand its success in getting people off the streets. The new Cares Team
will assist in street outreach with SWAG and can be on -site at this property to provide critical
support to those housed in terms of substance abuse counseling, mental health services, job
training, and housing support.
It is also noteworthy that due to the United States Supreme Court's decision not to consider
Martin v. City of Boise in December 2019, cities cannot enforce its camping restrictions or other
related ordinances to remove homeless individuals from public spaces, such as sidewalks,
parks and other city properties, unless there are beds available in the community. While the City
has secured some rooms on a short -term leased basis that have allowed us to pursue
enforcement, that lease is expiring and commencing in July, there will be zero beds available in
Lake Elsinore. Consequently, the proposed interim use of the property as transitional housing
will allow the City to continue to proactively enforce trespassing, loitering and other less than
desirable crimes in our community while also providing a safe place for those without a bed that
is well- managed, staffed and supervised. Without it, the City will not be able to stop individuals
from sleeping in public spaces.
In total, this property could provide up to 32 beds for the City's efforts to house homeless
individuals throughout Lake Elsinore, Wildomar, and the surrounding county areas. By creating
these much - needed beds, the City and law enforcement will be able to keep enforcing our local
ordinances to prohibit the homeless from sleeping in public spaces such as our City parks,
beaches, and historic downtown. This will also further our ability to truly give these individuals a
hand up, rather than a hand out, without spending any City general fund dollars.
Based on the City's initial inspection, there are only minimal repairs required to satisfy code
requirements including ADA compliance. The estimated cost for these essential repairs will be
approximately $55,000, plus a 10 percent contingency. To bring the property current, an
outstanding delinquency of City transient occupancy tax must be paid in the amount of
$155,000. The City's in lieu affordable housing fee Fund 106 has sufficient funds available to
cover these costs. Like the LMIHAF, Fund 106 is restricted for affordable housing purposes
only and cannot be expended for general municipal services or projects.
Fiscal Impact
The funding for acquisition in the amount of $2,250,000, plus closing costs, will come from the
LMIHAF (Fund 617). The costs of repair and tax delinquencies to bring the property into
compliance will be funded with monies from Fund 106.
Exhibits
A — Vicinity Map
B — Opinion - Editorial
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Aerial Map