BURBANK REDEVELOPMENT AGENCY
Tuesday, January 31, 2006
AGENDA
CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE
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6:30 P.M.
INVOCATION:
The Courts have concluded that sectarian prayer as part of City Council meetings is not permitted
under the Constitution.
FLAG SALUTE:
ROLL CALL:
JOINT PUBLIC HEARING WITH THE CITY COUNCIL:
1. Consideration of A PROPOSAL TO LEASE RESIDENTIAL PROPERTIES OWNED BY THE BURBANK REDEVELOPMENT AGENCY LOCATED AT 313 AND 427 WEST VALENCIA AVENUE TO THE Burbank Housing Corporation for THE PURPOSE OF PROVIDING AFFORDABLE RENTAL HOUSING OPPORTUNITIES:
The purpose of this report is to provide information to the Redevelopment Agency (Agency) Board on a proposal to lease residential properties owned by the Agency located at 313 and 427 West Valencia Avenue (Valencia Properties) to the Burbank Housing Corporation (BHC) for the purpose of providing affordable rental housing opportunities. BHC proposes to rehabilitate the Valencia Properties with Agency financial assistance and use the properties to provide affordable rental housing opportunities for very low and low-income households.
In May 1999, the Agency purchased a single-family home located at 427 West Valencia Avenue using $221,899 of Housing Set-Aside Funds. In June 1999, the Agency purchased a four-unit apartment building located at 313 West Valencia Avenue using $344,155 of Housing Set-Aside Funds. Since acquiring the Valencia Properties in 1999, the Agency has maintained their use as affordable housing.
Staff is proposing to enter into Disposition and Development Agreements (DDAs) and long-term lease agreements with BHC to rehabilitate the properties for use as affordable rental housing for very low and low-income households for a period of 55 years.
BHC hired a professional licensed contractor and certified building inspector to assess the properties� condition and to determine a scope of rehabilitation appropriate for the long-term use of the residential units. In addition, BHC reviewed environmental site assessments of the properties previously attained by the Agency. Based upon these inspections and reports, the proposed rehabilitation work for both properties is estimated to cost approximately $220,000. BHC is proposing to perform the rehabilitation with financial assistance from the Agency.
To perform the rehabilitation, it will be necessary to relocate the current residents of the Valencia Properties. Agency staff has contracted with Overland, Pacific & Cutler, Inc. (OPC), an experienced acquisition and relocation firm, to prepare the Valencia Properties Relocation Plan (Relocation Plan) and provide professional relocation assistance to households that are displaced from the Valencia Properties. The total actual amount of relocation assistance that may be necessary to relocate the four households has not yet been determined, but is estimated to be $120,000.
The properties will be reserved for very low-income and low-income households and rented to tenants at the statutorily-established affordable rents. However, at this time, it is difficult to identify the ultimate mix of very low and low-income households that will reside in the properties. To ensure that no tenant will be required to pay more than the defined affordable rent for their unit, staff proposes to establish a rent subsidy reserve that BHC may use to stabilize rental income to ensure that operating expenses are attained. The rent subsidy reserve will be established as part of the DDAs for each property in the form of a grant available to BHC. The maximum amount of rent subsidy that may be necessary during the first five years of operation is approximately $75,000 or $15,000 annually. Therefore, staff is proposing that the Agency establish a rent subsidy reserve account of $75,000 for the first five years of operation of the Valencia Properties. If sufficient revenues are generated during the initial five years of operation, BHC will use excess revenues to build up a long- term reserve account that will replace the Agency rent subsidy reserve after the fifth year of operation.
The proposed DDAs between the Agency and BHC will allow for lease of the Agency-owned properties to BHC for a period of 55 years at a lease rate of one dollar per year per property until such time as the Agency loan is fully repaid and 100 percent of the residual receipts generated by the properties thereafter. Lease of the properties in lieu of sale will enable the Agency to retain ownership of the properties for possible future reuse. If necessary, the Agency will be responsible for relocating the existing tenants at the properties at an estimated cost of $120,000. The Agency will provide a loan to BHC in the amount of $220,000 to rehabilitate the properties. The terms of this loan are proposed to be three percent simple annual interest and BHC agrees to repay the loan over the 55-year term from residual receipts generated by the properties. Repayment of the Agency loan is contingent upon the project generating sufficient cash flow to fulfill the obligation within the 55-year term. The Agency will also establish a rent subsidy reserve in the amount of $75,000 for the first five years of the properties� operation that BHC may use to subsidize tenant rents.
There are currently sufficient funds in the Low & Moderate Income Housing Unappropriated Fund Balance for this project. Staff recommends approving the Valencia Properties Relocation Plan, the DDAs for 313 West Valencia Avenue and 427 West Valencia Avenue and adopting the related resolutions.
Recommendation:
Adoption of proposed City Council resolution entitled:
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK AUTHORIZING THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK TO SELL OR LEASE SMALL HOUSING PROJECTS.
Adoption of proposed Redevelopment Agency resolutions entitled:
1. A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND BURBANK HOUSING CORPORATION FOR 313 WEST VALENCIA AVENUE.
2. A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE AGENCY AND BURBANK HOUSING CORPORATION FOR 427 WEST VALENCIA AVENUE.
Adoption of proposed City Council resolution entitled:
A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING A RELOCATION PLAN FOR THE RELOCATION OF RESIDENTS DISPLACED AS A RESULT OF THE REHABILITATION AND LEASING OF 313 AND 427 WEST VALENCIA AVENUE.
Adoption of proposed Redevelopment Agency resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AMENDING THE FISCAL YEAR 2005-2006 BUDGET BY APPROPRIATING $415,000 FOR THE PURPOSE OF FUNDING THE VALENCIA PROPERTIES LEASE PROJECT.
JOINT MEETING WITH THE CITY COUNCIL AND THE PARKING AUTHORITY:
2. THE COLLECTION PROJECT � APPROVAL OF FINAL MAP AND RELATED AGREEMENTS:
The purpose of this report is to request the Council, Redevelopment Agency Board (Board) and Parking Authority consider Final Map No. 62742 and various documents related to the Collection Project.
On November 23, 2004, the Council and Board approved an Amended and Restated Owner Participation Agreement (OPA) with Champion Development, Inc.; a Second Implementation Agreement to the OPA with Burbank Entertainment Village, LLC-AMC; and, other documents relating to the proposed development of the Phase II site of the Burbank Entertainment Village Project by Burbank Collection, LTD., a California limited partnership formed by Champion Development, Inc.
Under the Champion OPA, the Developer is required to purchase the Phase II site from Burbank Entertainment Village, LLC (AMC) contingent upon the simultaneous closing of approved bonds to help finance the Phase II parking structure. The Developer is then required to construct a mixed-use project which includes 118 residential units, approximately 40,000 square feet of commercial uses and a six-level parking structure on the Phase II site. The parking structure will consist of parking spaces required for the residential condominium and commercial components of the project and 278 public parking spaces.
In preparation for the close of escrow and start of construction, various legal and construction-related documents are required for the implementation of the project and subsequent sale of the public parking component to the City. These agreements are summarized as follows:
Reciprocal Easement and Shared Maintenance Agreement. This is an agreement between the City and Burbank Collection, Ltd. which describes the responsibilities of both parties regarding the joint use, operation, management and maintenance of the Phase II parking structure upon its completion.
Subdivision Improvement Agreement. Final Map No. 62742 authorizes the subdivision of the Collection at Downtown Burbank Project, previously approved as Planned Development No. 2003-2, into condominium units. The map subdivides the project into five modules, including; a residential component; commercial component; public and private parking components; and, common area. The map shall have a maximum of 118 residential condominium units. Pursuant to the Burbank Municipal Code (BMC) Section 27-323, (approval of Tentative Map for Condominiums by the Director of Community Development) the Vesting Tentative Tract Map was approved on April 21, 2005. In order for Final Tract Map No. 62742 to be approved (prior to start of construction for the Phase II project), the Council must find that all conditions of the tentative map have been substantially met. Since all of the conditions, except for public improvements, have been substantially met, a Subdivision Improvement Agreement is required. Burbank Collection, Ltd. (as the new property owner) must enter into a Subdivision Improvement Agreement with the City and deliver a bond in an amount as determined by the Public Works Director to guarantee the completion of all off-site improvements placed on this development (BMC 27-604). The bond amount is estimated at $517,634.
Right of Entry Agreement (Six Spaces in the Orange Grove Structure). In order to help facilitate the timely construction of the Phase II parking structure, Burbank Collection, Ltd. is proposing to utilize six parking spaces in the lower level of the Orange Grove parking structure until the Phase II parking structure is completed. These spaces would be fenced off, secured and used for the storage of tools and other smaller items that would otherwise need to be carried to the site from off-site parking areas. This agreement between the Parking Authority and Burbank Collection, Ltd. will terminate upon the completion of the Phase II parking structure.
Encroachment Agreement (First Street Construction Staging). During the construction of Phase II improvements, the developer proposes to utilize three travel lanes on First Street as a construction staging area (approximately 70-72 feet wide) including the location of the construction trailer. The developer will also utilize the sidewalk area (along First Street) located adjacent to the site. This has been identified as the only available area for staging adjacent to the construction site since there are existing improvements surrounding the remaining portions of the project. Since this work will involve the temporary closure of portions of First Street and adjacent sidewalk area, the developer is required to enter into an Encroachment Agreement with the City for this purpose.
Leases for 57 East Palm and Lot O (Construction Storage and Staging). This involves two separate lease agreements between Burbank Collection, Ltd., the Parking Authority and Redevelopment Agency which allows the developer to utilize Agency-owned property located at 57 East Palm Avenue and Lot O, a City-owned parking lot located at 30 East Palm Avenue (along Interstate 5 at the end of Palm Avenue) for construction-related office, design and staging uses as well as limited parking for construction trade workers. The Agency-owned property located at 57 East Palm Avenue is 7,750 square feet and is currently improved with a 3,000 square foot storage building. It would be leased to the developer for $2,325 per month. The City-owned property (parking Lot O) is currently striped for 13 parking spaces and would be used by the developer for limited construction parking only. This property would be leased to the developer for $1,530 per month. Both lease rates are based on the cost of an encroachment permit at one cent per square foot of land area per day since these areas are being used by the developer based on the limited availability of construction staging and storage area located adjacent to the project site. These lease rates are within fair market value and the lease agreements would terminate upon the completion of construction.
Tie Back Agreement (Construction Shoring). The developer is requesting the right to construct tie-backs to shore the Phase II property during construction. Although shoring (i.e. excavation, soldier piles, lagging, walls, waterproofing, foundation drains, sumps and backfill) is planned to lie completely within the Phase II property, shoring ties to stabilize the work will be required to be drilled beneath adjacent properties. This work requires a joint agreement between Burbank Collection Limited, Ltd., the City and Parking Authority.
Preservation of Rights Agreement (AMC). Once Burbank Entertainment Village, LLC (AMC) sells the Phase II site to Burbank Collection, Ltd., the existing parking and signage rights AMC currently has in the Orange Grove parking structure under the 1991 Parking Easement Agreement automatically transfer to Burbank Collection, Ltd., who will also become responsible for the payment of the proportional share of maintenance costs formerly paid by AMC. Therefore, an agreement between Burbank Entertainment Village, LLC (AMC) and the Parking Authority is proposed which allows AMC to continue to retain existing parking and signage rights in the Orange Grove parking structure and to pay towards the annual maintenance costs within this structure.
Parking Maintenance Agreement (Champion). This is an agreement between Burbank Collection Ltd. and the Parking Authority regarding the developer�s responsibilities for parking maintenance costs for its proportional share of parking spaces under the 1991 Parking Easement Agreement for the Orange Grove parking structure during the construction of the Phase II project.
Orange Grove Parking Structure Easement. The developer proposes at-grade vehicular and pedestrian access to the Phase II parking structure through the existing Orange Grove parking structure and in the area located directly between the two parking structures which will also be improved. This requires an agreement between the Parking Authority and Burbank Collection, Ltd. which provides easements for pedestrian and vehicular access for this purpose.
Implementation of the Collection Project also involves items related to title, the assignment of the Phase II parking structure to the Parking Authority and early use of the Phase II parking structure by the public once the Phase II parking structure is completed.
These agreements are required to implement the provisions approved under the Champion OPA and do not represent a cost to the City or Agency. However, it is anticipated that the City and Agency will receive approximately $1,530 (Parking Lot O) and $2,325 (57 East Palm Avenue) in monthly rent revenues, respectively, from the lease of nearby properties to be used by the developer for construction storage and staging for approximately 27 months.
Recommendation:
Adoption of proposed Redevelopment Agency resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK APPROVING THE LEASE AGREEMENT BETWEEN THE AGENCY AND BURBANK COLLECTION LTD (57 EAST PALM AVENUE).
Adoption of proposed Parking Authority resolution entitled:
A RESOLUTION OF THE PARKING AUTHORITY OF THE CITY OF BURBANK APPROVING CERTAIN CONSTRUCTION RELATED AGREEMENTS WITH BURBANK COLLECTION, LTD., AND CERTAIN PARKING AGREEMENTS RELATED TO THE ORANGE GROVE PARKING STRUCTURE (133 EAST ORANGE GROVE AVENUE).
Adoption of proposed City of Burbank resolutions entitled:
(4/5 vote required)
1) A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING THE LEASE AGREEMENT BETWEEN THE CITY OF BURBANK AND BURBANK COLLECTION LTD (30 EAST PALM AVENUE).
2) A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING CERTAIN CONSTRUCTION RELATED AGREEMENTS WITH BURBANK COLLECTION, LTD., AND CERTAIN PARKING AGREEMENTS RELATED TO THE NEW PUBLIC PARKING STRUCTURE (COLLECTION PROJECT).
3) A RESOLUTION OF THE COUNCIL OF THE CITY OF BURBANK APPROVING FINAL MAP OF TRACT NO. 62742 AND THE SUBDIVISION IMPROVEMENT RELATED THERETO BETWEEN BURBANK COLLECTION LTD. AND THE CITY OF BURBANK.
RECESS to continue the City Council meeting.
ADJOURNMENT.