Housing Successor Agency
MEETING DATE: 10/28/2015
TITLE:
Title
Timeline Extension for 69-Unit Mixed Use Development
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FROM:
Leisa Lukes, Economic Development Manager
RECOMMENDATION:
Recommendation
Staff recommends that the City Council direct the City Manager to prepare and execute an amendment to the Property Transfer Agreement and Escrow Instructions approving a 5-month extension whereby Close of Escrow is to occur on or before May 2, 2016, with Project construction to be complete by May 25, 2017, and stipulating that no further amendments will be granted.
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BACKGROUND:
The City of Cathedral City as the Successor Housing Agency to the Former Redevelopment Agency of the City of Cathedral City ("City") approved a Property Transfer Agreement ("Agreement") with Thermal Land, LLC, in August 2013 to disperse of an approximate 2-acre site located at the southeast corner of East Palm Canyon Drive and West Buddy Rogers Avenue. This is property that was acquired by the former Cathedral City Redevelopment Agency to meet affordable housing needs and is to be developed for housing purposes. A percentage of the units are to be available to, and occupied by, moderate income households at affordable rent. The Agreement includes these requirements and additionally requires that the Project include approximately 5,000 square feet of commercial space. This mixed use development is contemplated to be a desirable addition to the City's downtown core. The terms of the Agreement and associated Amendments are to conclude on February 28, 2016, with completion of Project construction.
In November 2014, the City approved an assignment of the Agreement and associated Amendments to Saxony Living, LP ("Developer"). In February 2015, the Developer requested an amendment to the Agreement to accommodate unanticipated pre-design work needed to complete the architecture and engineering drawings necessary for project submittal to the City to entitle the desired development, and to address the site complexities anticipated during the design and construction phases of the Project. The City approved an amendment (Amendment No. 3) to extend the Project construction completion date to December 29, 2016; however, per the Amendment, "[n]o further extensions may be granted except upon approval of the City Council of the City, as it may determine in its sole and unrestricted determination."
On October 19, the Developer submitted a letter to the City requesting a 150-day extension with Close of Escrow to occur by May 2, 2016 and with construction to be complete by May 25, 2017. (see Attachment 1).
DISCUSSION:
As a condition of the Extension of Time granted by Amendment No. 3, the Developer was required to fulfill all conditions set forth on Exhibit "C" to the Amendment (Conditions Required to be Fulfilled by March 12, 2015) as shown on Attachment 2. The Developer submitted the entitlement application package to the City's Community Development Department on March 12, 2015, and thereby meeting this requirement. The City completed its initial review of the application and provided a review letter to the Project architect on April 10, within the 30-day initial review period per Amendment No. 3, Exhibit "B", Project Schedule (see Attachment 3).
City staff, the project architect, and the Developer met several times after April (when the Project resubmittal was to occur per the schedule) and toured the site to discuss proposed revisions to the Project design in order to address site conditions. On October 12, the Developer submitted the Phase 1 Environmental Report and the Project re-submittal. Given the status of the Project review, it is not possible for the Developer to achieve the current Project Schedule shown in Attachment 3.
On October 19, the Developer submitted a letter requesting a 150-day extension and stating that the required Cultural Study would be submitted in early November. Also required are a Traffic Study, a Noise Study, and a Southern California Edison electrical design application/fee. These are to be submitted as soon as possible, but no later than early November if the Developer is to meet the extended Project schedule being requested (see Attachment 4).
In accordance with Amendment No. 3, "[n]o further extensions may be granted except upon approval of the City Council of the City, as it may determine in its sole and unrestricted determination." The Developer's request for a 150-day (5-month) extension is presented for your consideration. At your direction, the City Manager will prepare and execute Amendment No. 4 approving the time extension and stipulating that no further amendments to the Property Transfer Agreement and Escrow instructions will be granted.
FISCAL IMPACT:
None with this action.
ATTACHMENTS:
1. Letter to City Manager dated October 19, 2015
2. Amendment No. 3, Exhibit "C" - Conditions to be Fulfilled by March 12, 2015
3. Amendment No. 3, Exhibit "B" - Project Schedule
4. Proposed Project Schedule