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Home My WebLink AboutMINUTES - 10242006 - C.89 CONTRA COSTA COUNTY REDEVELOPMENT AGENCY Contra TO: BOARD OF COMMISSIONERS _ �,� Costa FROM: JAMES KENNEDY, DIRECTOR, CONTRA COSTA COUNTY REDEVELOPMENT AGENCY County DATE: October 24, 2006 C SUBJECT: AUTHORIZATION TO NEGOTIATE PURCHASE OF AFFORDABLE HOUSING UNIT, INSTITUTE LEGAL ACTION AND CEQA DETERMINATION SPECIFIC REQUES'I'(S)OR RECOMMENDATIONS)&BACKGROUND AND 3USTIFICATION I. RECOMMENDATIONS: A. AFFIRM Notice off Intent to Exercise Option filed on August 30, 2006, by the Director of the Contra Costa County Redevelopment Agency(the"Agency")to purchase the affordable housing unit located at 239 Ruby Avenue, Richmond, California (the "Property") from Judy McCormies (the "Owner"), pursuant to the Resale Requirements,Homebuyer Covenants and Option to Purchase Agreement dated as of August 24, 2001, between the Owner of the Property and the Agency (the "Agreement"); and B. AUTHORIZE the Director of the Agency(the"Director")or his designee to negotiate with the Owner of the Property for the purchase of the Property in an amount not to exceed Two Hundred Twenty-Five Thousand Dollars and No/100ths ($225,000.00); and C. AUTHORIZE the Director to institute all necessary legal action against(i)the Owner of the Property to compel the Owner to sell the Property to the Agency pursuant to the terms and conditions of the Agreement in the event the Owner will not voluntarily sell the Property to the Agency,and(ii)any lien holders seeking to preempt the purchase of the Property through foreclosure actions; and D. FIND that this project is exempt from the California Environmental Quality Act pursuant to CEQA Guidelines Section 15061(b)(3); and E. DIRECT the Director, or his designee, to file a Notice of Exemption for this project with the, County Clerk and to arrange for payment of the $25 andling fee to C unty Clerk for filing such Notice of Exemption. Continued on Attachment: X SIGNATURE: � ✓RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMME DATION OF BOARD C MITTEE /APPROVE OTHER r SIGNATURE (S). ACTION OF BO ON `L APPROVE AS RECOMM DED OTIIER I HEREBY CERTIFY THAT THIS IS A TRUE VOTE OF SUPr_RVISORS AND CORRECT COPY OF AN ACTION TAKEN UNANIMOUS(ABSENT AND ENTERED ON THE MINUTES OF THE ) BOARD OF SUPERVISORS ON THE DATE SHOWN. AYES: NOES: ABSENT: ABSTAIN: ATTESTED: JOHN CULLEN,CLERK OF THE 13 ARD OF SUPERVISORS AND COUNTY Orig.Div:. Redevelopment Agency ADMINISTRATOR Contact: Kara Douglas,Phone(925)335-7223 cc: County Administrator County Counsel Community Development By Deputy SUBJECT: AUTHORIZATION TO NEGOTIATE PURCHASE OF AFFORDABLE HOUSING UNIT, INSTITUTE LEGAL ACTION AND CEQA DETERMINATION DATE: October 24, 2006 PAGE '2 of 2 II. FINANCIAL IMPACT: None. No General Fund revenues are involved. Redevelopment Agency Housing Set-Aside funds (Fund 289301/Org 7885) will be used to purchase, hold, and resell the Property. It is anticipated that most, if not all, of these funds will be repaid by the proceeds from the sale of the Property to a new eligible purchaser. III. REASONS FOR RECOMMENDATION/BACKGROUND: From 2000 through 2002, the Community Housing Development Corporation of North Richmond sold 87 homes in the Parkway Estates development. Twenty-five of those homes, including the Property,received Agency assistance and were sold to low income,first-time homebuyers. In exchange for Agency assistance, homebuyers, including the Owner, signed the Agreement. The purpose of the Agreement is to provide the Agency with an opportunity to maintain the affordability of the units for another low-income household when a unit is sold or transferred. The Agreement provides that the Agency may exercise its option purchase the Property from the Owner in the event the Owner is in default under the terms of the Agreement. The Owner has defaulted on two loans secured by the Property and is therefore in default under the terms of the Agreement. On August 30, 2006, the Agency issued a notice of default and recorded a Notice of Intent to Exercise Option with the County Recorder's Office. The purchase price of the Property is set pursuant to provisions of the Agreement and is expected to be approximately$210,000. The condition of the Property could result in a somewhat higher or lower actual purchase price. The Agreement provides that the Property must be purchased within ninety days of the Agency's exercise of its option. The Agency expects to close escrow no later than November 28, 2006. The Property Owner refinanced the first mortgage and borrowed additional funds with subordinate loans. The Agreement allows refinancing under certain, limited conditions. The Agency was not contacted when the borrower refinanced the first mortgage, or when additional loans were obtained using the Property for security. The Agency would not have approved the total amount of debt now on the Property(approximately $300,000, not including the $5,370 loan from the Agency), which includes property taxes from fiscal year 2005-2006 that have not been paid. Two Notices of Default and Elections to Sell Under Deed of Trust have been filed against the Property. One notice of default was filed with the Recorder's office on July 31,2006 in the amount of$202,330.74 and the second notice of default was filed on August 29, 2006 in the amount of$9,658.73. In order to preserve the Property in the Agency affordable housing program,the Agency needs to proceed to purchase the Property in advance of the Property being sold at a foreclosure auction. The Property Owner has not been responsive to the Agency's correspondence and its notice of intent to exercise its purchase option. Therefore, it may be necessary to institute an action to compel the Owner to sell the Property to the Owner. Relevant law provides that the Agency's title to the Property shall relate back to the date the Agency was issued its purchase option (August 24, 2001), and the Agency should, in theory, be able to obtain title free of the defaulted mortgage liens. IV. CONSEQUENCES OF NEGATIVE ACTION: If the Agency does not purchase the Property from the Owner, it is likely that the Property will be sold at a foreclosure auction. The Agency will then have to enforce its rights under the Agreement to compel whomever purchased the Property at foreclosure to sell the Property to the Agency. This will be an expensive and time-consuming process that would likely involve litigation. Although the Agency could purchase the Property at a foreclosure sale,this is also a more expensive alternative to the purchase option. y CALIFORNIA ENVIRONMENTAL QUALITY ACT Notice of Exemption Contra Costa County Redevelopment Agency 253o Arnold Drive, Suite 190 Martinez, CA 94553=8611 ,Telephone: (925) 335-7230 Contact Person: Maureen Toms Project Description: Real Property Transaction at the Parkway Estates Development (Richmond). The activity consists of the acquisition and sale of the affordable housing unit located at 239 Ruby Avenue, North Richmond, California (the "Property") in the Parkway Estates Development. The transfer of the Property is pursuant to the Resale Requirements, Homebuyer Covenants, and Option to Purchase Agreement, dated as of August 24, 2001, between the owner of the Property and the Contra Costa County Redevelopment Agency, and is for the purpose of providing affordable housing to persons or families of low or moderate income. Project Location: 239 Ruby Avenue, in unincorporated Contra Costa County, North Richmond, CA 94801 This project is exempt from CEQA as a: Ministerial Project (Sec. 15268) Other Statutory Exemption, Section Declared Emergency(Sec. 15269(a)) X General Rule of Applicability.(Section 15061(b)(3) Emergency Project (Sec. 15269(b) or(c)) Categorical Exemption, for the following reason(s): This activity is not subject to the California Environmental Quality Act (CEQA) pursuant to Article 5, Section 15061(b)(3) of the CEQA Guidelines. It can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment. Date: By: Redevelopment Agency AFFIDAVIT OF FILING AND POSTING I declare that on I received and posted this notice as required by California Public Resources Code Section 21152(c). Said notice will remain posted for 30 days from the filing date. Signature: Title: Applicant: Kara Douglas Redevelopment Agency . 2530 Arnold Drive, Suite 190 Martinez, CA 94553 County Clerk Fee $25 Due