The URL can be used to link to this page

Home My WebLink About0502.000r-'".".. ..~.'.' .. ;: .' ! ' -,:, -" ! . ".' -•• , t;-', ,;, ", • I • \. I.~·~·:;'F· ! ..... ~t,: __ jt~"3$I_4\.t..J~::~~;J!J~~\y,c~~"-'; ;--:~~,:.:":,'~~~-_:~'_~--7'Y:!!-:';~'~~~~~:/';-"'\' ~~2'~''::'_~':~~~~~~~'N'it o 16 j ......... .. "" 1 '." - HONORABLE CITY COUNCIL Polo Alto, California JII) SBERlpU AVPYI -OP1'IOII fa REPORmpfll Members of the council: aeport: iD Brie, This report recommends that Council exercise the City's Option to Purchase the. property at 360 Sheric!an Avenue, known as the Sheridan Apartments if a recommendatio~ to purchase is received by the Palo Alto Housinq Corporation (PARe). BackgrOund In 1975. the City of Palo Alto aoquire~ property at 323, 331, and 365 Grant Avenue and 334 and 360 Sheridan Avenue, known then as the ·Power Parcels·~ on January 12. 1977, the city of Palo Alto enterec:S into an Agreement. of Sale (Aqreement) for t.he property with B:R.AMCO Development. The A9ree~ent required that the land be devel6ped with a complex t:o be use.d solely for low and JIIoderate income residential rental purposes for a ~riod of 40 years, wj th the first 20 years as housing for the elderly under Federal Assistance Program SectIon 8. Al!Iendment l of t.he Agreement with BRAMCO Development provides tbat after the 20th year, if there are no rental subsidy programs in existence or if the then owner bas made a good faith applIcation for rental SUbsidies and been denied by the appropriate agencies, the owner is free to use the site for any lawful residential purpose~ HOwever, the rents charged thereafter may not be higher than necessary t.o keep the project financially self-supportinq and to allow the owner .. reasonable rate of return .. The Agreement also includes an Option to Repurchase the property for t.he City. Specifically. before the owner sells the property to any qiven buyer who ia ready, willinq and able to acquire the property upon terms and conditions aqreed upon by the owner. the owner .ust otfer t.he property to the City on equivalent terms and conditions. The City has 30 d.ays from receipt of written notice by the owner to accept the offer. The City'S right to repurchase CMR:~02'O L I [ r , \ \ .- • ''1" .. ~" , '.' r-- - o o continues for the 40 year perIod or until actual repurchase property by the new buyer or the City, whichever occurs ~us the City .ay have only one repurchase opportunity. of the first. On June 2~, 1911, the city executed a Grant Deed to The Sheridan Associates (BRAMCO'. Bucce.sor in interest), e1so 8ubject to the above-described covenant. and conditions in the amended Agreement. The development, called the "Sheridan Apartments,· was COItpleted. in 1979 and consists of 57 one-bedroo:a. apartments, rented to low income elderly, 6 of which accommodate the physically handicappe~. One hundred percent of the apartments are subsic:Uz.ed under Sec. B. 8.1 •• Coptr&ct apd Optio. to I.pureb ••• on A~4St 17, 1990. The Sheridan ~.ociates provided the City with a copy of a sales contract they have entered into with a buyer for 360 SherIdan Avenue" and presented a written. offer to 8a11 the property to the City of Palo Alto on the SalDe terms and conditions .. The purchase price of the-sales contract Is $4,,160',(HlO, with a down payment of $l"OOO.OGO. The prospective buyer has paid a $20,OQQ deposit. Within 80 workinq days of the contract date, the buyer is to obtain a new loan of not less than $3,160,0'0'0 (loan fees and cost. of no~ more than 2.Stl at a fixed rate of 8.5' for a term of not les5 than 40 year ... City" Alterla\iy •• Cox lXerel,lA9 optiop Article 34 of the California Constitution requires a public a;eney to obtaIn voter approval before acquiring a low rent bousinq project. The City Attorney!s Office has advised that Article 34 will not apply if the City's riqht to purchase is assigned to PARCo rhe PAHe is faced with the decision of recommending that the city vaive the optj,on or recommendinq that the option rights be exerci.~d" in or~er that the City would then transfer its riqhts under tha sales contract to the PARCo PARe would then assume the position of the purchaser. The purcbase price, down payment and closing cost. (including buyer real .sute commissions) would become Obliiations of PAHC. PARe has expressed an interest in acquiring the property. !bey are currently inve~ti9.ting funding alternatives and analyzing this project with other proposed alternative housing project •• If PARe recommends exercising the op~lon" it ~ust be ~e within. the 30-day time period Which expires Sunday. September 16. As of this date l PARe i. not in a position to make a recommendation. Given tbe tact that the PARe .ust act by Sunday. September 16 and needs the additional tille to uke its recommendation l staff therefore recommends that council exercise the option to purchase if the PARe furnishes a written request by Fri~ay, September 14, CIIR:S02:0 2 '"-- • • o· .~-. I -_~< h-~~- . -.' . , ,-. " .. , . - o 19510, at 3:00 p~ .. ~ ,:ecomlendinq the option be exercised. A atatement .ust be included in the recommendation acltno'llecSqlng that the PARC will accept assignment of the option troD the City~ This will allow PAHC the opportunity to fully explcre all their alternatives. Exercl.Il19 the option to purchase this property ia cateqorically exempt {COD the requirements of the california Environmental Quality Act and no environmental impact assessment is required~ 'eeomp,l:n4 alila p Staff recommends tha~ Council: 1) Authorize the Mayor to accept the Palo Alto Housing corpora tion~& recommendation to exercise the option to purchase, if and only if, a written recommenda~ion is recelve~ by 3:00 p ••• Friday, September 14, 1990., and the recomme.ndation includes a statement that the PAHC will accept an assignment of the City's riqbt to purchase the property. 2) Authorize the Mayor to sign any correspondence on behalf of the City, notifyinq Sheridan Associates that the city will or will not exercise its option to purchase the 36-0 Sheridan Aven·u8 propert.y; and 3) Autbo-rize the Ma.yor to execute any and all documents neces$ary relat.e~ to assigning the City's riqht to purchase 360 Sheriaan Avenue to the Palo Alto Housin9 Corporation in t.he event the PARC recommends tba~ the City do so. Respectfully submitted, U '..4,;a(?( Wln<w-- WILLIAM F~LLKAN Manaqer, Real Property '--tb.~ EMILY HARRISON Director of Finance • ~~ JUNE FLEMING Assistant City Manaqer cc: Palo Alto HoUsill9 Corporation C!R:502:0 J 1 • --. f I f I, t· ";'" i t:. I '~ ~ ".; -<c.,. .> I I , I