Economic Development, Placemaking and Branding/Marketing Committee TO: ECONOMIC DEVELOPMENT, PLACEMAKING DATE: APRIL 21, 2022 AND BRANDING/MARKETING COMMITTEE FROM: COMMUNITY & ECONOMIC DEVELOPMENT WARD: 2 DEPARTMENT SUBJECT: CONSIDERATION OF A DEVELOPMENT PROPOSAL FROM GRAPEVINE DEVELOPMENT, LLC FOR 2.12 ACRES OF SUCCESSOR AGENCY AND HOUSING AUTHORITY-OWNED VACANT LAND, LOCATED AT 2731-2871 UNIVERSITY AVENUE AND 2882 MISSION INN AVENUE ISSUE:
Review and consideration of a development proposal from Grapevine Development, LLC for 1.9 acres of Successor Agency-owned vacant land, located at 2731-2871 University Avenue (Assessor’s Parcel Numbers 211-131-021, -022, -023, -024, -026, -031, and -032) and 0.22 acres of Housing Authority-owned vacant land located at 2882 Mission Inn Avenue (Assessor’s Parcel Number 211-131-001) for the proposed development of a 64-unit, 15% affordable mixed-use retail project.
RECOMMENDATIONS:
That the Economic Development, Placemaking and Branding/Marketing Committee:
Review and consider a development proposal from Grapevine Development, LLC for 1.9 acres of Successor Agency-owned vacant land, located at 2731-2871 University Avenue and 0.22 acres of Housing Authority-owned vacant land located at 2882 Mission Inn Avenue for the proposed development of a 64-unit, 15% affordable mixed-use retail project; and Direct staff to negotiate a Purchase, Sale, and Development Agreement for the Successor Agency property with Grapevine Development, LLC for the proposed development project to be presented to the Successor Agency Board and Countywide Oversight Board for final consideration and approval.
Direct staff to negotiate a Disposition and Development Agreement for the Housing Authority Property for the proposed development project to be presented to the Housing Authority Board for final consideration and approval.
BACKGROUND:
In 2006, the former Redevelopment Agency acquired the property located at 2731-2871 University Avenue (Successor Agency Property). The Successor Agency Property consists of seven contiguous parcels of vacant land, identified as Assessor’s Parcel Numbers 211-131-021, -022, -023, -024, -026, -031, and -032.
In 2008, the former Redevelopment Agency, on behalf of the Housing Authority, acquired the property located at 2882 Mission Inn Avenue, identified as Assessor’s Parcel Number 211-131-001 (Housing Authority Property). The Housing Authority Property contained a single-family dwelling that was destroyed in a fire and was subsequently demolished.
The Successor Agency Property is approximately 1.9 acres of vacant land zoned Commercial Retail (CR), and the General Plan land use designation is Mixed Use – Neighborhood (MU-N). The Housing Authority Parcel is approximately 0.22 acres of vacant land zoned R-1-7000 and the General Plan designation is Medium Density Residential (MDR).
On July 18, 2019, the Countywide Oversight Board approved Resolution No. 2019-037 for a Purchase and Development Agreement with Grapevine Economic Development Fund, Inc., for the disposition of the Successor Agency Property and the construction of a mixed-use retail and multi-family affordable housing project. However, on December 2, 2019, escrow was canceled with Grapevine Economic Development Fund, Inc. due to its failure to submit the security deposit required for acquisition of the Successor Agency Property and Housing Authority Property.
On October 9, 2019, Assembly Bill 1486 (“AB 1486”) was signed into law by Governor Newsom. AB 1486 has revised the procedural requirements for the disposition of local agency surplus property and has expanded the definition of “local agency” to include land owned by a Successor Agency to a former redevelopment agency and the Housing Authority.
DISCUSSION:
Anticipating a cancellation of escrow with Grapevine Economic Development Fund, Inc., on May 28, 2021, as required by AB 1486, staff sent a written notice of availability to the required public agencies and to all affordable housing developers who registered with State’s Housing and Community Development Department (HCD). On July 27, 2020, the deadline for interested developers to respond, staff received one development proposal from Logan Capital Advisors to construct an 80-unit, 50% affordable project. After the 90-day due diligence period, and careful consideration, Logan Capital Advisors withdrew their development proposal. After consent from HCD, on June 22, 2021, the Successor Agency Board & Housing Authority Board approved the issuance of an RFP seeking a mixed-use retail and multi-family project to include 15% of the residential units restricted to “low Income” affordable housing levels for the Housing Authority-owned land. On July 8, 2021, staff issued a Request for Proposals (RFP) with the deadline of October 6, 2021 and received 5 (five) development proposals.
The 5 (five) proposals are broken down as follows:
Developer
Proposed Development
Project Details
Responsive to RFP
Grapevine Development
Mixed-Use
Units:64
Retail: 4500 SF
Live/Work Units: 10
Yes
Casitas/ Design with Skill
Mixed-Use
Units:26
Retail: 13,511SF
Live/Work Units: 7
Yes
Volunteers of America & Community Preservation:
Mixed-Use
Units:48
Retail: 750 SF
Yes
RC Hobbs
Residential
19 Townhomes
No Commercial
No
Coto Realty
Multi-Family
Units:68
No Commercial
No
To evaluate all proposals received, an evaluation committee (consisting of Successor Agency, Public Utilities, Public Works, Economic Development, Housing Authority, Planning, and an Eastside Community member) was convened. The RFP evaluation committee carefully reviewed and considered each proposal received and collectively determined that the Grapevine Development, LLC proposal was most responsive, offering a greater variety of uses for the community while creating the largest number of needed new housing units. Furthermore, the RFP evaluation committee also determined that they have sufficient development experience and the financial capacity to undertake the acquisition and development of the Successor Agency and Housing Authority properties as proposed.
Moreover, an appraisal by an independent third-party appraiser shall be obtained to establish the purchase price of the subject properties.
By way of background, Grapevine Development, LLC, is a family-owned real estate development firm headquartered in Sherman Oaks, California, founded in 1996. Grapevine’s founder and managing partner, James Acevedo, has experience as a master developer of mixed-use developments dating back to 1991. These developments have included major retailers, such as The Home Depot, Walgreens, and Chevron, among others. Grapevine Development’s signature development, The Gateway mixed-use transit-oriented development, in El Monte, California it’s under construction and includes several major name retail brands including the Marriott International, Panera Bread, and CVS, among others.
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority 3 – Economic Opportunity and Goal 3.3 – Cultivate a business climate that welcomes innovation, entrepreneurship, and investment.
This item aligns with each of the five Cross-Cutting Threads as follows:
Community Trust – The process of selecting the Grapevine Development, LLC, proposal was accomplished through issuance of a Request for Proposal. The Grapevine Development, LLC, response was reviewed by staff from the Successor Agency, Planning, Public Utilities and Economic Development divisions.
Equity – Moving forward with the Grapevine proposal will ensure that the subject properties are developed and their value is maximized to generate revenue for the City to fund public services necessary to promote growth and provide equitable economic benefits throughout the immediate area.
Fiscal Responsibility – The subject properties, as previously noted, are currently vacant and underutilized and Grapevine’s proposal will revitalize the site and create new revenue for the City.
Innovation – Developing a 15% affordable mixed-use project with live/work units demonstrates that Riverside is inventive and timely in meeting the housing needs for residents and entrepreneurs.
Sustainability & Resiliency – Developing a 15% affordable mixed-use project demonstrates that Riverside is committed to meeting the housing needs of the present without compromising the needs of the future.
FISCAL IMPACT:
The fiscal impact is unknown at this time. The subject properties will require the value to be determined by an independent third-party appraiser. All sale proceeds from the Successor Agency Property, less related title, escrow, and miscellaneous closing costs, will be remitted to the Riverside County Auditor Controller’s Office (ACO), upon receipt of funds. The ACO will distribute the sale proceeds to the various taxing entities and report the sale to the State Department of Finance. The City’s portion of the sales proceeds is estimated to be approximately 14% of the sales price.
All sales proceeds from the Housing Authority parcel, less related title, escrow, and miscellaneous closing costs, will be remitted to the Housing Authority.
Prepared by: Chris Christopoulos, Acting Community & Economic Development Director Certified as to
availability of funds: Edward Enriquez, Chief Financial Officer / City Treasurer Approved by: Rafael Guzman, Assistant City Manager
Approved as to form: Phaedra A. Norton, City Attorney Attachment: Presentation
2131-2871 University Ave / 2882 Mission Inn Ave Development Proposal • Page 3