RESOLUTION NO. HSA -2024-01
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PLACENTIA, CALIFORNIA, MAKING FINDINGS
PURSUANT TO HEALTH AND SAFETY CODE SECTION
33433 FOR REAL PROPERTY LOCATED AT 314 BAKER
STREET AND 323 BAKER STREET AND AUTHORIZING
THE SALE OF THE PROPERTIES IN CONNECTION
THEREIN
A. Recitals.
(i) On December 29, 2011, the California Supreme Court rendered its decision in California Redevelopment Association v. Matosantos, upholding ABx1 26 ("Dissolution Act");
(ii) As a result of the California Supreme Court's decision, all redevelopment agencies in the State of California, including the Redevelopment Agency for the City of Placentia ("former RDA") dissolved as of February 1, 2012; (iii) On January 17, 2012, the Placentia City Council adopted Resolution No. R- 2012-03 accepting the City of Placentia's role as Successor Agency to the former Placentia Redevelopment Agency ("Successor Agency");
(iv) As of and after February 1, 2012 all assets, properties, and contracts of the former RDA were transferred, by operation of law, to the Successor Agency; (v) Pursuant to the Dissolution Act, on or about January 17, 2012, the Placentia City Council approved Resolution No. R-2012-04 to elect to retain all housing assets and assume the affordable housing functions of the former Agency as of February 1, 2012 as Housing Successor Agency to the former RDA ("Housing Successor Agency"); (vi) The Successor Agency is shown as the record owner of real property located at 314 Baker Street in Placentia, California, designated as APN 339-391-14 and 323 Baker Street in Placentia, California, designated as APN 339-392-19 respectively (the "Properties) however the correct legal owner of the properties is the City of Placentia; and
(vii) In compliance with Health and Safety Code 33433, the 33433 Summary Report has been made available for public inspection and is attached herein as Exhibit "A" and the Housing Successor published a notice of public hearing for tonight's action; and
(viii) The City has selected Mercy Housing California ("Buyer"), to purchase the Properties pursuant to the terms of which are set forth in that certain draft instrument entitled "Disposition and Development Agreement" in a form submitted herein (the "Agreement"); and
Resolution HSA -2024-01 ATTACHMENT 1
(ix) The resolution approving the sale of the Properties must be adopted by a majority of the legislative body, and include the following findings: (1) a finding that the sale will assist in the elimination of blight, or provide housing for low- or moderate- income persons; (2) is consistent with the former RDA's implementation plan; and (3) the purchase price is not less than the fair market value of the Properties at its highest and best use under the implementation plan, or the purchase price is not less than the fair reuse value of the Properties given the covenants and conditions associated with the transaction; and
(x) If the City Council acting as the Housing Successor Agency approves the sale of the Properties, the net sales proceeds will be deposited into the LMIHAF to expand and preserve the supply of low and moderate -income housing in the City; in compliance with legislative requirements pertaining to the expenditure of Low and Moderate -Income Housing Asset funds; and
(xi) All other legal prerequisites to the adoption of this Resolution have occurred.
B. Resolution.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLACENTIA DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
(1.) The City Council finds that (1) the sale of the Properties will assist in the elimination of blight, or provide housing for low- or moderate- income persons in that the properties are either vacant, underdeveloped, or in a state of disrepair, and the sale to private parties will facilitate their redevelopment, revitalization, or reuse, and the sale proceeds will provide funding to expand and preserve housing for low- or moderate - income persons; (2) the sale of the Properties is consistent with the former RDA's implementation plan and the City's General Plan; and (3) the purchase price is not less than the fair market value of the Properties at its highest and best use under existing zoning and development standards.
(2.) The City Council approves the attached Health & Safety Code 33433 Summary Report.
(3.) The City Council authorizes and directs the City Administrator to sign all necessary documents and staff to take all actions necessary under the Dissolution Act for approval and completion of the sale of the aforementioned Properties to Mercy Housing California.
(4.) The Mayor shall sign this resolution, and the Clerk shall attest and certify to the passage and adoption thereof.
(5.) The City Council declares that, should any provision, section, paragraph, sentence or word of this resolution be rendered or declared invalid by any final court action in a court of competent jurisdiction, or by reason of any preemptive or inconsistent legislation, the remaining provisions, sections, paragraphs, sentences and words of this resolution shall remain in full force and effect.
Resolution HSA -2024-01 ATTACHMENT 1
PASSED AND ADOPTED this 5th day of March 2024.
Jeremy Yamaguchi, Mayor
ATTEST:
Robert S. McKinnell, City Clerk
STATE OF CALIFORNIA
CITY OF PLACENTIA
I, Robert S. McKinnell, Secretary of the Housing Successor Agency to the Redevelopment Agency of the City of Placentia do hereby certify that the foregoing Resolution No. HSA -2024-01 was adopted at a regular meeting of the City Council acting as the Housing Successor Agency to the Redevelopment Agency of the City of Placentia held on the 5th day of March 2024 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Councilmembers:
Councilmembers:
Councilmembers:
Councilmembers:
Robert S. McKinnell, Housing Successor Agency Clerk
APPROVED AS TO FORM:
Christian L. Bettenhausen, City Attorney
Exhibit "A" - 33433 Summary Report
Resolution HSA -2024-01 ATTACHMENT 1
EXHIBIT "A"
SUMMARY REPORT PURSUANT TO
SECTION 33433 OF
CALIFORNIA COMMUNITY REDEVELOPMENT LAW
IN CONNECTION WITH THE SALE OF PROPERTY
BY AND BETWEEN THE CITY OF PLACENTIA
AND MERCY HOUSING CALIFORNIA
This summary report ("Summary Report") for the proposed sale and disposition of property purchased with property tax increment funds has been prepared by the City of Placentia ("City") and the City acting as the Housing Successor Agency to the former Placentia Redevelopment Agency ("Housing Successor Agency") pursuant to Health and Safety Code Section 33433. This Summary Report sets forth certain details of the proposed sale and disposition of property between the City and Mercy Housing California (the "Buyer") yet to be approved by the City Council.
The City proposes to sell, at fair market value, the approximately 12,737 square foot of vacant properties owned by the former Placentia Redevelopment Agency's ("Redevelopment Agency") to Mercy Housing California, as a portion of a larger site consisting of these parcels and additional City owned property and right of way. The properties which are the subject of this report are located at the following address (with Assessor Parcel Number in parenthesis): 314 Baker Street, Placentia, CA 92870 (339-391-14) and 323 Baker Street, Placentia, CA 92870 (339-392-19) ("Properties").
I. BACKGROUND
Section 33433 of the Community Redevelopment Law of the State of California (California Health and Safety Code, Sections 33000 et. seq.) provides that if a redevelopment agency wishes to sell or lease property to which it holds title and if that property was acquired in whole or in part, directly or indirectly, with tax increment funds, the redevelopment agency must obtain approval of the proposed sale or lease by resolution of the legislative body after a legally noticed public hearing.
A copy of the proposed sale or lease agreement(s) and a summary report that describes and contains specific financing elements of the proposed transaction(s) shall be available for public inspection prior to the public hearing.
Pursuant to Section 33433, the Summary Report must include the following information:
• The cost of the agreement to the redevelopment agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the redevelopment agency, plus the expected interest on any loans or bonds to finance the agreement;
• The estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the redevelopment plan;
• The estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale or lease. The purchase price or present value of the lease payments which the lessor will be required to make during the term of the lease.
• If the sale price or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use consistent with the redevelopment plan, then the redevelopment agency shall provide as part of the summary an explanation of the reasons for the difference.
• An explanation of why the sale or lease of the property will assist in the elimination of blight, with reference to all supporting facts and materials relied upon in making this explanation.
This Summary Report outlines the primary details of the proposed sale and disposition of the Properties between the Housing Successor Agency and prospective Buyer. This Summary Report is being prepared because tax increment funds from the former Redevelopment Agency were used to acquire the Properties. The Summary Report is based upon information regarding the proposed sale of the Properties and addresses the requirements pursuant to Health and Safety Code Section 33433.
II. REPORT ORGANIZATION
This report is based upon information in connection with the proposed sale and disposition of the Properties and is organized into the following seven sections:
• Summary of the Proposed Sale & Disposition — This section includes a description of and other relevant information pertaining to the proposed sale of the Properties between the Housing Successor Agency and prospective Buyer;
• Cost of the Proposed Sale & Disposition to the Agency — This section summarizes the estimated costs of the proposed sale of the Properties to the Housing Successor Agency; • Estimated Value of the Interest to be Conveyed Determined at the Highest and Best Use Permitted Under the Redevelopment Plan — This section estimates the value of the property interest to be conveyed, determined at the highest and best use permitted under the redevelopment plan for the Project Area;
• Estimated Value of the Interest to be Conveyed Determined at the Use and with the Conditions, Covenants, and Development Costs Required by the Sale —This section estimates the value of the property interest to be conveyed determined at the use and with the conditions, covenants, and development costs required by the sale or lease; • Consideration Received and Comparison with the Established Value - This section includes an explanation if the sale price is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use consistent with the redevelopment plan.
• Elimination of Blight — This section describes the existing conditions on the Properties and includes an explanation of how the proposed sale will assist in the elimination of blight; This Summary Report sets forth certain details of the proposed sale and disposition of the Properties by the City as Housing Successor Agency to the prospective Buyer. A copy of the proposed Disposition and Development agreement (DDA"), which prospective Buyer will be required to execute, in substantially the attached form, to effectuate the sale of the Properties is attached to this Summary Report (see Attachment "A"). This Summary Report is made available for public inspection and copying on the date that the first notice of the joint public hearing is published, which is Thursday, February 22, 2024 and Thursday, February 29, 2024. The public
hearing relating to the proposed sale of the Properties is scheduled for March 5, 2024 at 7:00 p.m., in the City Council Chambers, at 401 East Chapman Avenue, Placentia, CA 92870.
III. SUMMARY OF PROPOSED SALE AND DISPOSITION OF PROPERTIES As previously described, the City intends to sell, at fair market value, the Properties to a prospective Buyer in its "As -Is" condition for a purchase price of $1,018,960. The Properties was originally acquired by the former Redevelopment Agency to expand and preserve the supply of affordable housing and alleviate blighting conditions in the City in furtherance of the Redevelopment Plan and 2010-2014 Five -Year Implementation Plan ("Implementation Plan") goals and objectives.
IV. COST OF THE PROPOSED SALE AND DISPOSITION TO THE AGENCY The Housing Successor Agency's cost under the proposed sale of the Properties is comprised of the costs associated with the original acquisition and the sale of the Properties, including but not limited to the payment of real estate commissions, escrow services, title policy and documentary transfer taxes (if any) and other miscellaneous costs associated with conveyance of the Properties, which will be determined at the time of the closing of the proposed sales transaction.
The specific costs to the former Redevelopment Agency as it pertains to acquisition costs for the Properties is reflected in the following table:
No. Address APN Acquisition Cost
1. 314 Baker Street 339-391-14 $498,960
2. 323 Baker Street 339-392-19 $520,000
V. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED DETERMINED AT THE
HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN As described throughout this Summary Report, the Housing Successor Agency is proposing to sell the Properties to a prospective Buyer. The Properties will be sold in its current "as is" condition and no express or implied representations have been made to the prospective Buyer by the Housing Successor Agency regarding suitability for desired use, zoning and land use, subsurface compaction and/or the existence or non-existence of toxic waste, hazardous materials, and/or undesirable substances in or on the Properties.
The prospective Buyer of the Properties will be required to secure any and all land use and other entitlements, permits and approvals, which may be required by the City and any other governmental agency having jurisdiction over the Properties, including any environmental review required in connection with any development project application submitted by the prospective Buyer.
The estimated value of the interest to be conveyed for the Properties determined at the highest and best use permitted under the former Redevelopment Agency's Redevelopment Plan takes into consideration the uses and development potential permitted under the City of Placentia zoning code. Fee simple interest in the Properties will be transferred through its proposed sale and disposition.
The low range of value was determined based on the estimate of market value of the subject Properties as determined by an appraisal reported prepared by Colliers International Valuation & Advisory Services dated on June 19, 2023. The Housing Successor Agency Staff has reviewed the appraisal report which analyzed recent sales of comparable properties, in the immediate area,
and real estate valuation trends, which was used as a basis for determining the high-end of the range of fair market value of the subject Properties for this Summary Report.
The table below illustrates the estimated fair market value range for the Properties:
Fair Market Value Range
No. Address APN Low* High*
1. 314 Baker Street 339-391-14 $75.68 $82.77
2. 323 Baker Street 339-392-19 $75.68 $82.77
*Value range represents the estimate of market value of the subject Properties as determined by an appraisal report prepared by Colliers International Valuation & Advisory Services on June 19, 2023.
VI. ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED AT THE USE AND WITH THE
CONDITIONS, COVENANTS, AND DEVELOPMENT COSTS REQUIRED BY THE SALE Pursuant to the discussion in Section V above, The Properties will be sold in "as -is, where is" condition and therefore no conditions, covenants, and development costs are required by the sale. The prospective Buyer will be required to pay fair market value for the Properties which is $80/square feet for a total purchase price of $1,018,960 for the 12,737 total square footage for the Properties.
VII. CONSIDERATION RECEIVED AND COMPARISON WITH THE ESTIMATED VALUE OF
THE INTEREST TO BE CONVEYED
As mentioned in Section VI, the Properties will be sold for fair market value in "as -is, where is" condition and therefore no conditions, covenants, and/or development costs will be required by the sale. Therefore, the consideration to be received by the Housing Successor Agency is equal to the estimated value of the interest to be conveyed. Further, the highest and best use permitted under the City of Placentia zoning code is determined to be the same as and equal to the fair market value of the Properties.
VIII. ELIMINATION OF BLIGHT
The former Redevelopment Agency, established in 1982, sought to acquire the subject Properties for the purpose of eliminating remaining blight conditions, encouragement of private development activities, and increasing, improving, and preserving the City's supply of low and moderate - income housing through the continued implementation of the Redevelopment Plan and Implementation Plan. The goals, objectives, programs, and expenditures contained in the Implementation Plan to contribute to the elimination and alleviation of blighting conditions as follows:
• Re -planning, redesign and/or redeveloping areas suffering from economic dislocation and disuse;
• Re -planning, redesign and/or redeveloping areas which are stagnant or improperly utilized, and which could not be accomplished by private enterprise acting alone without public participation and assistance;
• Protecting and promoting sound development and redevelopment of blighted areas and general welfare of the citizens of the City by remedying such injurious conditions through the employment of appropriate means;
• Installation of new or replacement of existing public improvements, facilities, buildings, and utilities in areas which are currently inadequately served with regard to such improvements, facilities, buildings, and utilities;
• Promoting retention of existing businesses and encouraging new business opportunities; creating a physical environment within the Project Area that will support economic development through private investment activities; and
• Other means as determined appropriate.
The signs of blight that existed prior to the dissolution of the former Redevelopment Agency still exist today. The subject Properties are currently vacant and underutilized, which could contribute to depreciated and/or stagnant property values in the City. The proposed sale of the Properties, as described herein, will help eliminate blight within the Project Area as it will likely lead to the development of the Properties, increase of the current property tax base, and promote and stimulate economic activity and growth within the City.