PURPOSE:

The purpose of this report is to request the Council to consider an extension of the holding period to initiate housing activities at 704-722 South San Fernando Boulevard (Lance Site).

BACKGROUND:

On October 11, 1995, the Agency purchased a 39,875 square foot (0.92 acres) site located at 704-722 South San Fernando Boulevard from John Lance.  The total cost for acquisition, relocation and demolition was $1,388,000 utilizing 20% Housing Set Aside funds.

Under the California Redevelopment Law (CRL), Health and Safety Code Section 33334.16 requires the Agency to initiate housing activities on sites purchased with 20% Housing Set Aside funds within five years of the date the property was purchased.  The same section also permits the legislative body, by resolution, to extend the holding period to initiate housing activities for an additional period of up to five years.  If housing activities are not initiated within the first five year period, or for the period during which the holding period was extended (up to an additional five years), the land must be sold to reimburse the 20% Housing Set-Aside fund.

The first five year period expired on October 11, 2000, five years from the date the Lance site was purchased.  On September 26, 2000, the Council approved an extension of the holding period to initiate housing activities for an additional three years in order to provide additional time for a developer to be selected and an agreement to be executed for the purchase and development of the site. This period ends on October 11, 2003.  After the review and consideration of various proposals, on August 6, 2002, staff was authorized to initiate negotiations with the Olson Company to draft a Disposition and Development Agreement (DDA) to develop 33 for-sale townhome residential units. Additional time is needed to complete the DDA and entitlement process for the purchase and development of this site.  Therefore, staff proposes that the Council extend the holding period for residential purposes for an additional two years which would end on October 11, 2005.  

FISCAL IMPACT

Since this is a request to extend the holding period to initiate housing activities for the Lance site, there is no fiscal impact.

RECOMMENDATION

It is recommended that the Council adopt a resolution extending the holding period to initiate housing activities at 704-722 South San Fernando Boulevard (Lance Site) for an additional two years.

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