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HomeMy WebLinkAboutAGENDA REPORT 2004 0505 CC REG ITEM 09DMOORPARK CITY COUNCIL AGENDA REPORT ITEM q • -b. f� To: Honorable City Council From: Hugh Riley, Assistant City Manager Date: April 21, 2004 (CC Meeting of May 5, 04) Subject: CONSIDER APPROVAL OF PAYMENT -IN- LIEU -OF -TAXES (PILOT) AGREEMENT FOR VINTAGE CREST SENIOR APARTMENTS, L. P., (GPA 2002 -01, ZC 2002 -01, RPD 2002 -02) BACKGROUND Section 214(g) of the California Revenue and Taxation Code provides for a partial exemption of property tax fees for eligible organizations with qualifying rental properties that serve lower income households. The exemption that may be obtained is based on the percentage of units in the project that are restricted to lower income households. The Development Agreement for Vintage Crest Senior Apartments provides that all one hundred ninety (190) units will be affordable to low and very low income households for the life of the project. DISCUSSION Section 6.16 of the Development Agreement requires the Developer to enter into an agreement with the City to pay the City each year the amount of money the City would have received if the project was not exempt from the payment of property taxes. The Development Agreement further specifies that, if the project is sold or transferred to another entity, an increase in the fee will be due that is based on the new value of the property. The initial year's fee will be twenty thousand dollars ($20,000), with provision for an increase in this amount if the first year payment is due after December 31, 2004. A two per cent (2 %) increase in the fee due, in general, will occur each year; there is no provision for a decrease in the amount due from the prior year. The Payment -in- lieu -of -Taxes (PILOT) Agreement provides 000053 Honorable City Council Date 04/21/04 Page 2 for reimbursement to the City for potential loss of property tax revenue due to a welfare exemption the developer may receive as a non - profit corporation whose project will serve low income tenants. Section 5.22 of the Deed of Trust on this property anticipates its subordination to the PILOT Agreement. STAFF RECOMMENDATION Approve the Agreement Between the City of Moorpark and Vintage Crest Senior Apartments, L.P., for Payment in Lieu of Taxes (PILOT) and authorize the City Manager to execute said Agreement, subject to final language approval by the City Manager and City Attorney, and direct the City Clerk to record the document. Attachment: Agreement Between the City of Moorpark and Vintage Crest Senior Apartments, L.P., for Payment in Lieu of Taxes 000054 OFFICIAL BUSINESS Document entitled to free recording per Government Code Sections 6103 and 27383 Recording requested by: The CITY OF MOORPARK 799 Moorpark Avenue Moorpark, CA 93021 Attention: City Clerk Final Version 4 -09 -04 Space above this line for recorders use AGREEMENT BETWEEN CITY OF MOORPARK ZLI VINTAGE CREST SENIOR APARTMENTS, L.P. FOR PAYMENT IN LIEU OF TAXES Page 1 of 8 000055 AGREEMENT BETWEEN THE CITY OF MOORPARK AND VINTAGE CREST SENIOR APARTMENTS, L.P. FOR PAYMENT IN LIEU OF TAXES THIS AGREEMENT FOR PAYMENT IN LIEU OF TAXES (the "Agreement') is entered into this _ day of , 2004, by and between the City of Moorpark ( "City "), a municipal corporation organized and existing under the laws of the State of California and Vintage Crest Senior Apartments, L.P., a California Limited Partnership ( "Vintage Crest "), who agree as follows: Recitals A. Vintage Crest is in the process of developing a 6.8 Acre Parcel multifamily rental housing project on certain real property located south of the intersection of Park Lane and Park Crest Lane (the "P rope rty "), which is located within the City of Moorpark. Vintage Crest proposes to construct a 190 -unit, multi- family rental housing project on the Property. B. The Moorpark City Council by Resolution No. 2002 -1989 approved Residential Planned Development Permit No. 2002 -02 (RPD 2002 -02) on the property on July 10, 2002 (the "Project "). C. Vintage Crest has obtained an allocation of federal tax credits in order to assist in the financing of the Project. The Managing General Partner of Vintage Crest is a nonprofit California Corporation dedicated to providing affordable housing. D. Inclusion of a non - profit organization in the partnership may qualify the Project to receive the welfare exemption under Section 214(g) of the California Revenue and Tax Code. Vintage Crest desires to ensure, to the extent legally permissible, that the City will not suffer any loss of its share of property tax revenues and that the payments to be made under this Agreement are intended to reimburse the City for its delivery of services to the Project, including, but not limited to public safety and general administrative costs. Agreements NOW, THEREFORE, in consideration of the mutual conditions, promises and covenants hereinafter contained, the parties agree as follows: Page 2 of 8 000056 Section 1. Parties a. The City is a municipal corporation. The office of the City is located at 799 Moorpark Avenue, Moorpark, California, 93021. b. Vintage Crest is a California Limited Partnership. The office of Vintage Crest is located at 2440 Professional Drive, Roseville, California 95661. Wherever the term "Vintage Crest" or "Vintage Crest Senior Apartments, L.P." is used herein, such term shall include any permitted nominee, assignee or successor in interest as herein provided. Section 2. Acquisition and Development of the Property a. The Property is described in Exhibit A, attached hereto and incorporated herein by this reference. b. Vintage Crest has acquired the Property and intends to develop the Project on the Property. Vintage Crest agrees that it will be responsible, at its sole cost and expense, for applying for and obtaining all necessary environmental and land use approvals and making any submissions required by the City for the development of the Project. Section 3. Vintage Crest Senior Apartments, L.P. Annual Payments a. In the event Vintage Crest applies for and receives a Welfare Exemption pursuant to Section 214(g) of the California Revenue and Taxation Code for any fiscal year, for part or all of the Property, Vintage Crest agrees that, so long as it elects to maintain such exemption, it will make payments to the City as follows: Twenty Thousand Dollars ($20,000) for any portion of any calendar year commencing on January 1, 2004 in which the project is occupied with one or more residential units. The annual payment shall increase by two percent (2 %) each year above the prior year amount. In no event shall there be a decrease in the amount paid in any year compared to the prior year. b. Payments shall be made on March 10 of each year beginning March 10, 2004. If March 10 falls on a Saturday, Sunday, or City Holiday then payment shall be due on the City's next business day. A late payment penalty equal to 10% of the payment due shall be added to payments received three (3) days or more after the due date as stated herein or when a deficient check has been given for payment. Payments received more then ten (10) days after the due date shall, in addition to the 10% penalty, accrue interest at a rate of 12% from the due date through and including the date the payment is received by the City. Page 3 of 8 000057 C. (i) In the event of a sale, transfer, assignment of any type or any portion of the Project or Property by Vintage Crest to any other entity, the fee amount referenced above shall be increased based on the new value of the property as if it had been reassessed by the Ventura County Assessor and not exempt from the payment of new property taxes. The calculation shall provide the City .08% (equivalent to $800 per $1 million of assessed value) of the assessed value or such higher percentage of the total new property taxes if the City portion has been increased by action of the State of California or by a statewide initiative or referendum. (For example, if the sale results in a value of $30,000,000 then the annual fee to the city would be $30,000,000 X .0008 = $24,000 or if the City portion of the property taxes has been increased to 9% by the State of California on a statewide initiative or referendum then the amount would be $27,000). In the event the payment to the City would be less than it would per the Section 3.a. above, inclusive of the 2% adjustment, then Section 3.a. shall continue until such time as this section c. would yield a higher annual fee. (ii) In the event the parties cannot agree on the value of the property then the parties shall agree upon a retired judge to arbitrate the value and the parties shall share equally in the cost of such arbitration proceedings. In the event the parties cannot agree on an arbitrator, then each party will select a nominee and those two nominees will select a third qualified arbitrator to conduct the arbitration proceedings. (iii) The provisions of paragraph (i) of this Section 3.c shall not apply to the Transfer by Vintage Crest of approximately 2.6 acres of the Property to the Ventura County Watershed Protection District as required by City of Moorpark City Council Resolution No. 2002 -1989 approving Residential Planned Development Permit No. 2002 -02. Section 41 Obligation on Sale or Disposition of Property In connection with a transfer of the Property by sale or other disposition, Vintage Crest shall request a novation of this Agreement pursuant to Civil Code Section 1531. The novation will substitute the transferee of the Property into the place of Vintage Crest with respect to Vintage Crest's obligations under this Agreement. The transferee will assume all responsibility for performance hereunder, and the liability of Vintage Crest for such performance shall cease. The City agrees that its consent to such novation shall not be unreasonably withheld. Page 4 of 8 000058 Section 5. Indemnification Vintage Crest hereby agrees to indemnify City and hold City harmless from all demands, claims, actions and damages asserted by Vintage Crest or third parties which seek to invalidate this Agreement and /or the obligations created hereunder. Section 6. Default Failure by either party to perform its obligations hereunder shall constitute a default under this Agreement, and the other party may institute legal action to cure, correct or remedy such default, to recover damages for such default or to obtain any other remedy whether at law or in equity, consistent with the purpose of this Agreement. Section 7. Waiver of Protest Rights Vintage Crest hereby expressly waives any and all right of protest under Government Code Section 66021 or any other statute in connection with the payment of the PILOT fee hereunder. Section 8. Miscellaneous Provisions a. Any obligation to pay the PILOT fee, as set forth herein, shall terminate in any year in which the property ceases to be exempt from real property taxes pursuant to Section 214(g). In the event this occurs and the property taxes received by the city for the property are less than the fee required by this agreement then Vintage Crest shall pay the difference to the City for any such years. b. The obligation to pay the PILOT fee hereunder to City shall be an obligation which runs with the property, and shall not be a personal obligation of any of the Owner(s), its affiliates, successors, or assigns. C. Promptly following the execution of this Agreement, City shall cause this Agreement to be recorded with the County Recorder's office of Ventura County, California. d. Time of the Essence. Time is of the essence for every provision of this Agreement. e. Notices. Notices or other communications given under this Agreement shall be in writing and shall be served personally or transmitted by first -class mail, postage prepaid. Notices shall be deemed received either at the time of actual receipt or, if mailed in accordance herewith, on the third business day after mailing, Page 5 of 8 000059 whichever occurs first. Notices shall be directed to the parties at the following addresses or at such other addresses as the parties may indicate by notice: City of Moorpark 799 Moorpark Avenue Moorpark, CA 93021 Attention: City Manager Vintage Crest Senior Apartments, L.P. C/O USA Vintage Crest, Inc. 2440 Professional Drive Roseville, CA 95661 Attention: Geoff Brown, president f. Headings. The titles and headings of the various sections of this Agreement are intended solely for reference and are not intended to explain, modify or place any interpretation upon any provision of this Agreement. g. Waiver. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the party making the waiver. h. Further Assurances. The parties shall execute, acknowledge, file or record such other instruments and statements and shall take such additional action as may be necessary to carry out the purpose and intent of this Agreement. i. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties, their respective heirs, legal representatives, successors and assigns, including the Limited Partnership which assumes ownership and management responsibility for the Project. j. Entire Agreement. This Agreement and Exhibit A, which is incorporated herein, together constitute the entire agreement between the parties and supersede all prior or contemporaneous agreements, representations, warranties and understandings of the parties concerning the subject matter contained herein, written or oral. No change, modification, addendum or amendment to any provision of this Agreement shall be valid unless executed in writing by each party hereto. k. No Third Party Beneficiaries. This Agreement, and the obligations created hereunder, exist for the exclusive benefit of the parties hereto, their respective heirs, legal representatives, successors and assigns. Page 6 of 8 000060 SECTION 9. Governing Law This Agreement shall be governed by and construed in accordance with the laws of the State of California. This Agreement is made, entered into, and executed in Moorpark, Ventura County, California and any action filed in any court or for arbitration for the interpretation, enforcement and /or otherwise of the terms, covenants and conditions referred to herein shall be filed in the applicable court in Ventura County, California. IN WITNESS WHEREOF, the City and Vintage Crest Senior Apartments, L.P. have caused this Agreement to be executed by their respective representatives thereunto duly authorized as of the dates set forth below their signatures. The effective date of this Agreement shall be the date it is signed by the City. DATED: , 2004 DATED: , 2004 CITY OF MOORPARK STEVEN KUENY, CITY MANAGER ATTEST: Deborah S. Traffenstedt, City Clerk Vintage Crest Senior Apartments, L.P. By: USA Vintage Crest, Inc. Its: Administrative General Partner GEOFF BROWN, PRESIDENT Page 7 of 8 000061 Exhibit A Property Description The land referred to herein is situated in the State of California, County of Ventura and is described as follows: A portion of Lot "L" Tract "L" of the Rancho Simi, as per Map recorded in Book 5, Page 5, of Maps and Parcel B of Parcel Map No. 5316, in the City of Moorpark, County of Ventura, State of California, as shown on Parcel Map recorded in Book 60, Page 87, of Parcel Maps, in the office of the County Recorder of said county, shown as Parcel 1 on the Lot Line Adjustment No. 2002 -05 recorded October 24, 2002, as Instrument No. 2002 - 0259095 -00, Official Records, in the office of the County Recorder of said county. EXCEPT a portion of Parcel 1 on the Lot Line Adjustment No. 2002 -05, in the City of Moorpark, County of Ventura, State of California, described and shown in document recorded October 24, 2002. as Document No. 2002 - 0259095 of Official Records, in the office of the County Recorder of said County, described as follows: Beginning at the Southeast corner of said Lot Line Adjustment; thence the following numbered courses: 1 st: North 66° 00' 24" West 547.50 feet along the Southerly line of said Lot Line Adjustment, to the Southwest comer of said Lot Line Adjustment; 2nd: North 0° 03' 00" West 213.96 feet along the Westerly line of said Lot Line Adjustment to the Northwesterly prolongation of the first course recited as "South 68° 07' 11" East 269.41 feet" of the parcel described in Exhibit "A" in the deed recorded September 4, 2001, as Document No. 2001 - 174965 of Official Records, in the office of the County Recorder of said County; 3rd: South 680 34' 26" East 537.30 feet along said Northwesterly prolongation to a point in the Easterly line of said Lot Line Adjustment; 4th: South 00° 03' beginning. 00" East 240.31 feet, along said Easterly line to the point of Page 8 of 8 000062