HomeMy WebLinkAbout0117.094• $ ~
January 13, 1994
HONORABLE CITY COUllCIL
Palo Alto, California
753 ALMA STREET -PRE-DE\1EWPI!ENT CONTRACT
FOR S INq"..cE ROOM OCCUPANCX HOUSING
Members of the Council:
BE PORT IN BR TEF
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This report forwards to Council 1) a cent,ract with Palo Alto
Housing Corporation for pre-development expenses relat~d to a
proposal to construct BRO (single: room occupanC"y) type housing at
753 Alma Street, and 2) a Budget Amendment Ordinance (BAOl
authorizing up to $400,OOD in Housing Reserve funds to be used
for PARe's pre-develo~~nt expenses and the cost of an
enyironmental impact report on the development proposal.
On November 22, 1993, Council approved a development project at:
1050 Arastradero Road. An part of the 1050 Arastradero Road
agreement. the City acquired a one-year option to purchase the
va,cant property at 753 Alma Street. The opt-ion to purchase was
chosen i~ order to allow time to determine if the 753 Alma Street
site were appropriate for housing and to develop preliminary
design and financing proposals. The option to purchase was
executed on J~~uarI 6. 1994~ The City has until January 6~ 1995
to close escrow on 753 ~ma Street lor until June 3D, 1995, if
the provision for a maximum six month extension is utilized)~
PARe AS DEVEi .tJPER
Attached to this report is a proposed agreement between the City
and PAHC~ Staff is recommending that PAHC he granted the
contract for pre-development activities, and the future right to
develop the property if the project is approved~ based on the
follOWing considerations:
• Time is of the essence: To utilize an RFP process to select
a project developer WOuld add a minimum three additional
months to the feasibility phase schedule.
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• PA.~C first approached the City ~bout ~he development cf a
downtown SRO housing project in ~4y 199:. At t~at time
discussion was focused on the use of downtown parking lots.
After review by Council in the fall of 1992, PAHe was
directed to analyze other alternative sites, includin.g the
vacant parcel at 753 Alma Street.
• In fiscal year ~992~93, the City provided PARe with SlS.~CQ
in Community Development Block Grant (CDBG) funds for
downtown BRO pre-development activities. This process
required fAHe to respond to a City request for proposals for
expenditure of CDBG funds. Proposals were reviewed by the
Cltizens Advisorz Committee and approved by the City
Council.
• Neither City procedures nor HOD regulations require separate
REPs in this instance. HtJD's previous concerns with the
close relationship between PARe and the City related to the
City'S use of PAHC 2'2 a CQn§\11t:i5.~ on a variety of housing
issues, without utilizing an open proposal process that
encouraged other housing groups to participate. PAHe
advised the City on the use of housing funds while applying
for those funds for their own housing activities. These
conditionB have been addressed and corrected. as the City no
longer r~s a conSUlting relationship with PAHC.
• PARe has ~~d one meeting with the project neighbors ar.d is
in a position to work with the neighbors to develop a
proposal that addresses the housing needs as well as the
desire to retain the automotive services.
Buron
The attached pre-development budget covers the costs of
developing a project proposal for submittal to the City and
review by the Planning Commission, Architectural Review Board and
City Council. rt is expected that a Plar~ed Community (PC)
rezoning will be requested and that a focused Environmental
Impact Report will be required. Staff estimates that the EIR
will cast about $~OO,OO~, about $75,000 for the consultants and
about $25;000 for City staff administration and ~eview.
PAne has requested a loan of $300.000 fer their pre-development
expenses. These include architecture. engineeri~g, financing
studies, City application fees (based on full cost recovery),
adminiatration and $90,000 for the cost of a project manager.
Due to the short time frame and the current PJL~C project work
load, Etaff strongly SUPPOLtS the PAHe proposal to ueilize a
project manager. A project manager will expedite feasibility and
pre-development activities, so that a decision can be made on the
site acquisition within the maximum 18 months of the ope ion
period.
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The fllource of the $400,000 in pre-development funds is the City's
Housing Reserve fund. The p::,e-development budget outlined is.
typical of expenses i~curred by any project requiring this level
of public review. Due to the degree of public concern about the
proposal and the need for both an EIR and a PC zone change, it is
not realistic to expect a developer to front the pre-develQpment
expenses in anticipation of recouping them later when the project
is built. It is emphasi2ed that this budget will only get the
project through the preliminary d~sign phase. Additional pre
development expenses will be incurred prior to construction, if
the project is approv-ed.
If the project does not go forward after the preliminary design
phase. the $400,000 in pre-development COSt6 and the $~S,OOO
option payment, plus any payments for the six month extension,
will not be recovered. If the project is approv~d and
constructed, it is po~sible that some of the pre-development loan
funds will be recovered by the City through the final development
financing.
PROJECT FUNDING
Staff estimates that the final cost of the prcject, if
constructed, will be between $6,000,000 and $10,000,000,
depending on the ~umber of units and parking requirements. If an
SRO housing proposal receives approval. potential sources of
funds for site acquisition and construction include City housing
reserve funds k tax credits, CDBG, HOME and other possible state
and federal funds. The final amount of public subsidy need~d to
make the project viable depende primarily on the level of
affordability~ unit sizes and amenities, density~ parking, costs
of environmental mitigation and availability and COBt of
financing. The total amount of subsidy t.hat ~ill be needed from
City sources cannot be predicted at this ti~e.
The City bas approximately $2,000,000 currently available in the
commercial housing reserve fund + This does not include the $1.45
million which was budgeted for the Lytton IV project. Assuming
that the final City contribution to Lytton IV ~ill be limited to
the $SOO~OOO currently under contract, then $950,000 of the $1.45
million will become available for other housing activities.
Other funds that could be available from the City are CDBG and
HOME. The City's CDBG program annually provides approximately
$350,000 to $.50,000 for housing developrnent+ The City ~ill be
eligible to again apply to the State for FY 94 HOME funds in May
1994.
In the r.ear future, staff foreseee only two major projects that
might co~te for City housing reserve or CDBG funds -purchase
of the Arastradero Park Apartments and housing for the
developmentally disabled. Other projects are urJknown at this
time l but might include the purchasa of an existing project for
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conversion to lev-income houslng. preliminarl estimates of local
f~~~ required for purchase of th~ Arastradero Park apaTtment6 is
$500.000 to $B50,000. This figure will fluctuate based on
financing and repair costs. About $150,000 may be needed in
fiscal 94-95 for pre-acquisition coats and the rest in fiscal 95-
96. The proposal for housing for the developmentally disabled
continues to move forward, but there is no specific time fra.me
and no estimates of costs are available.
Since the action before the Council is a contract fo~ pre
developmer.t activities. it is not considered & project ur.der
CEQA. However. the project will require an environmental
assessment. wh~ch will be done during the pre-development phase.
Staff expects that an EIR will be required that will focus on the
issues of air. noise, light and glare, housing, parking and
traffic. Included in the recormr.endatio:J.s is authoriz:ation for
City staff to proceed with securing an environmental consultant.
PROJECT SCH'rnULR
PARe has prepared D project development schedule, based on Lhe
aB~~tion that a PC zone change and focused ErR will be needed~
It ie a very tight fifteen month sChedule that assumes no
significant delays either during project design or during the
public hearing phase. A complete development proposal package,
including the draft EIR, ~ould be submitted to che City by
Nove~r 1, 1394.
Staff believes that the Housing Corporation should be given the
a'.lthcrity to proceed with plans and studies to determine if the
753 Alma Street site can be suitably developed as housin~. Staff
supports PARe as the appropriate entity to develop the project.
if it is approved~ and believes that contracting with PARe
directly is in conformance with City and HUD requirements. The
initial pre-development costs are consistent with development
costs for a proposal o~ this type. While the~e are other
qualified nonprofit and for-profit developers, the uncertainty
and risk of the project would require City funding of comparable
upfront expenses. ~lternatively, the developer would propose
greater density, higher rents and/or higher subsidies to re=over
Lhe initial expenses. Also, due to PAHe's efforts during the
past two years supporting downtown SRO housing~ PARe has a uniq~e
local knowledge, which should enable them to ~~ve ahead more
quickly than another developer lacking that background. The
attached contl.-act includes a binding commitment from the City
that PARe will be the project developer should their proposal
obtain eventual Council approval.
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Should t-he Council decide not. to commit to the expendit.ure of th.e
pre-development expenses, staff recornm~nds that the City forego
the option. This will result in the Development Agre~ment for
the 10S0 Arastradero project revertjng to the t ..... o year
developme:lt prt)vi~ions and the payment of doubl;; the normally
required housing mitigation. The $65,000 option payment would
not be recovered.
AGREEMENT FORM
The agreement bet~een the City and PAHe has been negotiated and
dTafted quickly in order to permit PARe t.o co~~ence its
activitiee as soon as possible. in view of the short option
period. However. the Cit.y Attorney has det.e::-mined that it w0'-11d
be in the beet ir.terest of the City to review the Agreement and
other legal iseues of the project with legal counsel specializing
in houaing issues. If such revie ..... indicates the need for changes
to agreernent~ after execution of the agreement, staff will return
to Council at a late: date for approval of necessary amendments.
If minor changes are deemed necessary after Council approval but
prior to execution of the agreement, staff recomm~nds that the
City Attorney be authorized to make such changes prior to
execution.
RECOMMm:c"DAIIQN
Staff recommends that the City Council authorize the City Manager
to:
~) Execute an agreement for ser~ices with the Palo ~to
Housing Corporation in substantially the form attached,
and authorize the City Attorney to make such changes as
may be necessary or advisable to meet appliable leaal
requirements; -
2) Adopt the attached Budget Amendment Ordinance
authorizing the use of up to $4QO,000 in Housing
Reaerve funds for pre-develop~nt expenses; and
3) Authorize City staff to prepare a Request For Propo9als
for environmental consultirlg services.
R£" e.?~ctfU; ~;;;Lp
J E~ GILLILAND
, ager Planrling Projects
C\~h.W.v.u k, FLEMIN~-""-" r-
City Manager
KENNETII R. SCHREIBER
Director of Planning and
Community Environment
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Attacl"..mente: L Draft Agreement Between City and Palo Alto
Housing Corporatic~
Budget Amendment Ordinance 2.
3. uanuary 10, 1994 Letter from PAne, Including
Pre-d.evelopment Budget and Schedule
cc ~ith attachm@nts~
Ke~nar.-Love ..... ell Ventures, 700 Emerson Street, Palo Alto, CA 94301
Marlen~ Prendergast. Director, Palo Alto Housing Corporation,
540 Cowper Street. Suite G. Palo Alto, CA 94301
cc without attaChmeMts:
Planning Commission
Architectural Review Board
Marilyn Bryant, League of W~~en Voters of Palo Alto, 457 Kingsley
Avenue, Palo Alto, CA 94301
Ellen Christensen, 4217 Los Palos Avenue, P~lo Alto, CA 94306
Andy Doty. 4072 Scripps Avenue, Stanford, CA 94305
Ellen Fletcher, 777 San Antonio Road, Palo Alto, CA 94306
Joseph Martignetti, Jr., Palo Alto Housing Corporation,
540 Cowper Street, Suite G, Palo Alt~, CA 94301
Bob Moss, 4010 Orme Street, Palo Alto, CA 94306
Janet OWene, Palo Alto Housing Corporation~ S4C Cowper Street,
Suite G, Palo Alto, CA 94301
Denr.y Petrosian, 443 Ventura. Palo Alto, CA 94306
Kenneth Rodriques & Associates, Inc., SC West San Fernando, #650,
San Jose, CA 95113
Willis and Roee Thoits, 744 High Street, Palo ~to, CA
Dee and Cozette Hileman, 799 Alma Street, Palo Alto, CA
Joe Yarkin. 152 Homer Street, Palo Alto, CA 94301
94J01
94301
Barry Swenson, 701 North First Street, San Jose, CA 95112
Thomas C McMUllan, Chestnut Hill Land Co, P.O. Box 478, Menlo
Park, CA 94026
Ole Christensen, Ole's Car Shop, eOl Alma, Palo Alto. CA 94301
Marlene Smidt, 666 High Street, Palo Alto, CA 94301
Geoff Bertelsen, 960 Waverley, Palo Alto. CA 94301
Earl Schmidt. 201 Homer, Palo ~to, CA 94)01
Earl Ellison, 705 ~ma Street, Palo Alto, CA 94301
SUsan Herald, Stanford University, P.O. Box N, Bldg. 170,
Stanford, CA 94305
Ron Rainey* Hallgrimsoo, McNichols, McC~~ , Inderbitzen,
40 S. M~rKet St, Suite 7JO. San Jose, CA 95113
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AGlggwSNt BB".NKDi TBlI eIn 0,. PALO aLTO AIm
'I'D PALO <O BOOSIIfG CORPODTIOII Ul:LATIlfG TO
TIIB POTIDITlA%. DI!VZLOPIGIIIT OF PWPlDlT!' AT 725
AIm 753 AUQ linEIn' POI< SDIOLB ROOK OCCUPANCY
BOOSIIfG
THIS AGRBEMENT is made and entered into on the ___ day
of , 1994, by and between [he CITY OF PALO ALTO, a
~~icipal corporation ot the State of California '·City·) and the
PALO ALTO HOUSING CORPORATION, a California nonprofit corporation,
540 COwper Street, Suite G, Palo ~to, CA 94301 (·PARe·).
• t T • ISS I t H :
WBERBAS~ City has acquired an option to acquire certain
real property commonly kc~ as 725 and 153 Alma Street, in the
City of Palo Alto, California (the ·Property'); and
WHEREAS, City has determined that there is a severe
shortage of bousing for low income individuals in the City of Palo
Alto; dlld
~~ to further City;s affordable housing goals; and
consistent with City'. Comprehensive HouSing Affordability
Strategy, City desires to determine whether the Property would be
a. rea.scmabl.e and feasible site for a single 1'oom occupancy (I!SRO·)
hotel; and
WHEREAS, PAHC is experienced in developing affordable
housing and bas demonstrated its interest in developing SRO housing
in the City of Palo ~to. and
WHEREAS, City desires to desigbate PARe as City'S agent
for the purpose of determining the feasibility of an SRO project on
the ?roperty and to designate PABC as the developer if, after dl.:.e
consideration of the matter. City decides to approve an SRO use of
the Property.
NOW, 'T'HEREFORE, in co:c.sideratiOll of the mutual covenants
and agreements specified hereiD, and subject t.o its terms and
provisions I the parties to this Agreement hereby agree as follows:
S SCI! ON :!. -AG&EEMElf!' COORDINATION
1.1~. The City Manager shall be representative
of City for all purposes under this Agreement4 City'S Director of
Planning and Community Environment is designat~d as the Project
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Manager and he or his designee shall supervise the progress and
execution of this Agreement.
1.2~. The ~~ecutive Director of PARe shall be
representative of PARe for all purposes under this Agreeme~~~ The
Rxecutive Oiz.'ector of PAHC is also designated as the project
Director for PARe and shall supervise the progress and execution of
this Agreement.
SRcrION dl -pURPOSE OF AGRRRMRNT
"l'h~ purpose of this Agreement is to set forth the
respective duties and responsibilities of City and PARe with
respect to determining the feasibility of developing the Property
for SRO housing. The 'Project' of this Agreement will be defined
as the scope of work as set forth in Section 3. The parties agree
that if, after due consideration of the matter, City determdnes
that an SRO hotel should be developed on the Property~ PAHC will be
the developer of that hotel. However. the Proj ect that is the
subject. of chis Agreement includes only pre-development activities.
SICTION 3 -S COp! OF WORj(
PABC shall undertake certain pre-development activities
90 that City's City Council will be able t.o make a detenninatioD as
to whether the Property should be developed for SRO housing. The
specific duties of PARC under this Agreement are set forth in
Exhibit ~A~. attached hereto and inco~rated herein by reference.
SIC'fION 4 • TRBM OF AGRiBMiN'l'
The term of this Agreement shall connence on the date of
its execution by City and shall expire on January 6. 1955;
provided, that, by Dl'..ltual consent of the parties, the term may be
extended fOT. an additional period not to exceed five montl".s.
During the term ot the Agreement. PARC shall perform in accordance
with tbe ti..tre achedule set forth in Exhibit -A·. it being
understood by the parties that t.his schedule and the term of this
Agreement coincide with the option period witbin which City must
decide whether to exercise the option and purchase the Property.
The parties agree that time is of the essence of this Agreement.
SECTION 5 • PAYMIm'I'; PROMISE TO RB PAY
5.1 PaYUMmt. In consideration for the full performance
hy PARC of this Agreement, City shall pay to PABC an amount not to
exceed Three Hundred Thousand Dollars ($300,000.00). The actual
amount of compensation. including payments for subcontractor work~
but excluding the Developer OVerhead Fee. shall be computed in
accordance with the budget set forth in Exhibit ·S·. atta.ched
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hereto and incorporated herein by reference, on a time and
materials basis, up to the max~~ $300~OOO.OO. Payments to PAHC
for the Developer overhead Pee ehall be made in periodi~ lump sume
upon c:ompletion of the Tasks specified in the Time Schedule set
forth in Exhibi t • A· .
5.2 Payment SChedule~ Payment shall be made by City
only for services reodered and within thirty (30) days of
submission in triplicate of monthly progress payment requests.
5.3 Prorrdse to &epay~ Because the parties have agreed
that PAne will be tne developer of the Property in the event City
determines that the property should be developed for SRO housing,
the parties agree that the compensation to be paid in accovdance
with Paragraph 5.1 shall be considered a loan ~rom City to PAHC.
PAHC agrees to execute and deliver a Promissory Note in favor of
City (the -Note-) in substantially the form atta.ched hereto as
Exhibit -C', and incorporated herein by reference. in the amount of
$300,000.00. The Note ahall be executed prior to any disbursement
of funds under this Agreement. The Note shall bear no iotereBt~
a.cd no periodic payment.s ahall be due during the term of chis
Agreement. Should City determine tbat tbe property should be
deve1qped tor SRO housiog r City will convey the property to PARe
UDder such tenns and conditions as will be determined by tbe
parties. At the time of Buch conveyance" th,e parties shall enter
into a .new agreement for development of the Property. and the Note
shall be incorpora.ted into a new loan, together with any other
funds provided by City for development of the Property. The new
loan shall be secured by a deed of trust on the Property in favor
of City, to the extent all~ by any other funding Bource PAHC may
utilize to acquire or develop the Property.
If ~ upon expiration of the term of this Agreement,
including any extec.sioD thereof. or upon the earlier t.ermination of
this Agreement~ the City determines that the Property should not be
developed for SRa housing~ or PARe deter.mines not to develop the
Property, then no repayment shall be required of any funds provided
under this Agreement and the Note.
5.4 Payment uppn SuspePBio~ or !hqpdgnment pf Pro;ect.
If the Project under this Agreement is suspended for more than
three (3) months or abandoned in whole or in part, PAHC sha11 be
paid for B~.rvices performed prior to receipt of writ,ten notice from
City of such suspension or abandonment. together with additional
reimbursable expenses tben due. If this Agreement is suspended or
t.exmioated for fault of PARC, City shall be Obligat.ed to compensate
PABC only for that portion of PAHC~s services which are of benefit
to City, as such determdnation may be made by the City Manager in
the reasonable exercise of her discretion.
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sHCIrON 6 -TBRMlRATIQN OR SUSEiNSION OF AGaR~
This a.gree:me:at may be terminated, with or wit.hout ca'.lse.
by either party upon fifteen US) days' prior written notice co the
other party. Notice shall be given on behalf of the City by the
Project Ma..~9'er ~ Opon termination of this Agreeln,,,,nt or Buspension
of work on the Project by either City cr PAHC, as provided herein.
all duties of City and PAHe under this Agreement st..all terminate;
provided, chat rAHC1s obligations under Section S. to make its
records available. shall 8urvive the termination of this Agreem~nt.
SECTION 7 -ADDITIONAL SQURCES OF FUNDS
The parties anticipate that if the Property is developed
for SRO housing. outside sources of funding, such as HUD funds,
will be sought. Therefore, PARe agrees to carry out its duties
under this Agreement in a manner that will not conflict with. or
otherwise prevent the obtaining of such future funding. In this
regard, PARe sball~ to tbe extent feasible; comply with applicable
federal regulations, including, but not limited to, conflict of
interest, enviromnental~ recordkaepiog and accounting, and
affir.mative action requirements.
SECTIQN e -B 'CORDS AND UPORAS
PARe shall maintain on a current basis complete records,
including books of original entry, source documents supporting
accounting transactions, service records. a general leeger,
cancelled checks, time sheets. and related documents and records to
assure proper aaccouneing of funds and performance of the terms of
this Agreement. PARe shall furnish any and all information and
reports which may be required by City and any other entity that may
provide fUI:ids for development of t.he Property. PARe shall further
permit access to its ~ks, records and accounts by the
representatives and employees of Cit.y and any other entity that tr.ay
provide funds for developintlnt of the Property J d:.1.:-ing regular
business hours, for tbe purpose of investigation or audit to
ascertain compliance witb all applicable laws: re~~lationB, rules
and orders and for the pUrpoSe of evaluating and monitoring PAHC1s
cCIIJi)liance with the provisions of this Agreement. All such records
shall be retained by PARe and made available to City and any other
entity that may provide funds tor development of the Property~ upon
request for review or audit for a period of at least three (3)
years following the termdnatioa of this Agreement.
S 8CTIQN 9 -0WNSBSHI P OF DOCQMRNTS
S.l Ownership of Original [)Qcurnenta. Because the
parties anticipate that PARC would be the developer of the property
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if the property is developed for SRO housing and~ consequently.
because th~ payments made to PARe under this Agree~nt are in the
form of a :oan to PAHC. the parties agree that~ subject to the
provisions of Paragraph 9.2~ the original drawings, map8~ plans.
designs, records of survey, work data, specifications, financial
documents. and any other documents prepared by PAHC or i t9
subcontractors in the perfonnance of this Agree.rnent shall be
considered the property of PAHC.
9.2 transfer ~Q City. Upon early termination of this
Agreement, or in the event that either party decides not to develop
the Property for SRC housing. or in any other circumBtance in which
PABC is not required to repay the loan described in Paragraph 5.3.
the originals of all documents described in Paragraph 9.1 shall
become the property of City, and PARe shall transfer them to City,
upon request, without additional compensation. City ehall have t.he
right to utilize any completed or uncompleted drawings, e6tima~es,
specifications, and any other d~cument9 prepared hereunder by PAHC
or its subcontractors.
SECTION 1Q -INTBRRST OF PARC
In accepting this Agreement, PMC covenants tbat it
presently has no interest, and shall not acquire any inte:!."est.
direct or indirect. financial or otherwise, which wou1.d conflict in
any manner or degree with the perfo~ce of the services
hereunder. PARC further covenants that, in the performance of this
Agreement, no subcontractor or person having such an interest shall
be employed. PABC certifies that no one who has or will have any
financial interest under this Agreement is an officer or employee
of City.
SBCTION 11 -MSIGNMBNT PRQHXaXmn; r;tmCQNTBACTQRS
11.1 Assignment Prohibited. This Ag~·eement is for the
personal services of PARe and shall not be assigned without the
express prior written consent of City, to be evidenced by
resolution of the City Council. Any attempt to do 80 otherwise
shall be void ,and, at the sale discretion of City, a default of the
terms of this Agreement and the Note~
11.2 Subcpntrectprlil. PARe shall be responsible for
employing all outside subcontractors necessary to aid PAHe in the
performance of the services described in Exhibit ·A·: prcr .... ided,
however~ that all such subcontractors shall receive prior appro'.ral
of City in writing and shall remain acceptable to City during the
term of this Agreement.
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SHCTION 12 -INDEMNITY
PARe agrees to protect, indemnify. defend a~'ld hold
har.rolees City, its Council members, officers. agents and employees,
And. Charles J .. K<eenan, III and Mark T. Gates, from any and all
demands, clai~. or liability of any natur~, including death or
injury to any person, property damage or any other 1058, caused by
or arising out of PAHC's. its ctticers·. agence'. subcontractors'
or employeee' negligent acts, ez'rors or omissions. or wilful
misconduct. or conduct for which the .law may impose strict
liability on PARe in the perfor.mance of or failure to perform its
obligations under this Agreement.
sHCTrQN 13 -INSURANCE
1.3.1 IMurance cOVerage. PASCo at its 8012 cost and
expense, shall obtain and maintain, in full force and effect
throughout the entire term of this Agreement, the insurance
coverage described in Exhibit. liD", attached hereto and incorporated
herein by reference. ins~ring not only PAHe and its subcontractors,
if any. hut also, with the exception of. workers~ compensation,
employ~r's liability and professional liability i~urance, naming
as additional insureds City, its Council memcere. officers, agents
and employees~ Charles J. Keenan. III and Mark T. Gates, and each
of them, concerning this Agreement and the Project.
All insurance coverage required. hereunder shall be
provided through carriers wi~h a Best rating of A:X or higher that
are admitted to do business in the State of california. Any and
all wjbcontractors of PARe under this Agreemeot shall obtain and
maintain, in full force and effect. thro"J.ghout the term of this
Agreement, identical insurance coverage, with City named as
additional insured under such policies as required above; provided,
that PARC shall not be required to obtain professiOO3l liability
insurance •. but shall require ite professional subcontractor6 to
obtain such coverage~ a_s described in Exhibit -0-.
13.2 Ey~dence of Iggyr'pce. Certific~tes of such
insurance, preferably on the fo".. provided by City, shall be filed
with Cit.y concurrently with the execution of this Agreement. The
certiticates shall be subject to the approval of the City's Risk
Manager and shall contain an endorsement stat.ing that the insurance
is primary coverage and will net be cancelled or altered by the
insurer except after tiling with th~ City Clerk thirty (30) days~
prior writt~l notice of such cancellation or alteration, and that
the City of Palo ~to is named as an additional insured except in
policies o~ workers' compensation. employers' liability~ and
professional liability insurance. Current certificates of such
i~~rance shall be kept OD file at all times duricg the term of
this Agreement with the City Clerk.
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W011l ... «DD&S4
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1).) No Limit of L]ability~ The procuring of Eluch
required policy or policies of insurance shall not be construed to
limit PARCo e liability hereunder nor to fulfill the indemnification
provision and requirements of tbis Agreement under Section '12
hereof. Notwithstanding said policy or policies of insurance, FAHC
ehall be obligated for the full and total amount cf any damage,
injury.. or loss caused by the services performed under this
Agreement. in accordance with Section 12, including after the
Agreement haa terminat~d or expired.
SSC'I'IQN 14 -YORgRS' CQMPENSATION
PAHC, by e~ecuting this Agreement, certifies that it is
aware of the provieions of the Labor Code of the Stat.e of
california which req-oli!:"e every emplo:{er to be insured against
liability for workers' compensation or to undertake self~ineurance
in accordance with the p~ovieionB of that Code. and certifies that
it will comply with such provisions before commenCing the
performance of the work under this Agreement.
SECTION 1.5 -AGRBEMENT BINDING
!be terms, covenants, and conditions of this Agreement
shall apply to, and Shall bind, the heirs, suecessors~ executors,
administrators, assigns, and subcontractors of both partieB~
SICTION 16 -WAIVERS; NO IMPLIED WAIVER
The waiver by eithf!:r party of any breach or violation cf
any term, covenant. or cormi tieD of this Agreement r or of any
proviSions of any ordinanCe or law shall not be deemed to be a
waiver of any such term, covenant, condition, ordinance. or law or
of any subsequent breach or violation of the same or of any other
tent'., cOV"enant. condition, ordinance or lay. Tne subsequent
accepta.nce by either party of any fee or other mcJoey which may
beccme due hereUIlder shall not be deemed to be a 'IIo-aiver of any
preceding breach or violation by the other party of any term.
covenant, or condition of this Agre~eDt or of any applicable l~w
or ordinance ..
No payment, partial payment~ accepcance, or pa...-tial
acceptance by City shall operate as a waiver on the part of City of
any of its rights under this Agraement.
SBcrTON 17 -COSTS AND AITORNEYS' FEES
The prevailing party in any action brought to enforce the
terms of this Agreement or arising out of this Agreement may
re~over its reasonable costs and attorneys' fees expended in
connection with such an action from the other party ..
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SRGTIQN 18 -NOTICES
All notices hereunder shall be given in 'Writing and
mailed. postage prepaid,. by certified mall, addressed as follovs:
To CITY:
With a
copy to:
To PAHC:
Office of tile Cit~1 Clerk
250 Hamilton Avenue
Palo Alto. CA 94301
Director. Department of Planning and
Community Environment
City of Palo Alto
250 ~~lton Avenu~
Palo Alto. CA 94301
Attention of the Project Director
at the address of PAHC recited abov-e
SRCTIQN 19 -!T,T, COymiANTS ME CONDITIONS
Al.l provisions of this Agreement are expressly made
conditions.
SECTION 20 -INTBGRATIQN AND AMRNpMENT
This document, together with the Exhibits and the Note
referenced. herein,. represent t;be entire agreement between City and
PAHC and supersede all prior negotiations, representations, and.
agreements, either written or eral.
This dOCUD\ellt. may be amended onl.y by written instrument.
signed by both City and PARe.
IN WITNESS WHEREOF, t.he part.ies hereto have execut.ed this
Agreement the day and year first above written.
A'l"rBST r
Cit.y Clerk
Senior Aset. City Attorney
B
CITY OP PALO ALTO
~:~~-------------~ycr
PALO ALTO IlOOSDlG COUOllATIOB
l!y, ____________ _
ItS: ____________ __
•
Director of Finance
Manager, Real property
Director of Planning and
Community Bnvironment
Risk Manager
Attachments:
EXHIBIT • A· ;
EXHIBIT -8-;
BXIUBIT -C·:
EXHIBIT ·D-:
Scope of Work
Budget
Pranissory Note
Xnsurance Certificates
EXIIIBIT A
SCOl'l! OP IfOU
City has acquir~d an option to purchase the Property. It
desires to determine the feasibility of developing the Property for
SRO housing. PARe has stated its desire to develop SRO housing in
th~ City and is w~1lin9 to undertake certain tasks, described in
this Scope of work l that will enable both parties to deter.mine the
feasibility Of developing SRO housing on the Property. Thi9 Scope
of Work covers only pre-development activities. If the City
determines that SRO housing should be developed on the Propeart.y and
if PARe desires to be the developer of SRO housing on the Property,
then the parties ",ill enter into a further agreement for
d.evelo~t of the Property.
RereJired AjmjniBtra~ive Proeed~
1. Zoning Approval. The Property is currently zoned
CD-S(P). The parties anticipate that development of the Property
for SRO houaing would require a zone change to the PC 'Planned
CODDunity zone. If PARe and its subcontra:etors determine tr.at SRO
housing could feasibly be developed on the Properc.y ~ PABC shall
present a development proposal to City in t.he form of a PC
application and shall act as the proposed developer throughout the
administrative process. City shall consider such application in
tbe same manner as it considers any other application for proposed
development. If other types of discretionary appro--o/ills are ne~ed
to develop the Property, PARe shall also apply for those approvals
as if it were the proposed developer of the Property.
2. Environmental Assessment. The parties anticipate
that an Environmental Impact Report {-IHiP) will be required to
assess the potential environmental impactS of SRO housing on tbe
Property ~ The parties anticipate that the BIR will focus on air
quality. noise; light and glare, housing. parking and traffic
issues. As is the City'S practice in &11 cases in which an EIR is
required. City shall contract directly for a consultant to prepare
the EIR and shall administer the preparation of the SIR and the EIR
process.
Specific TaAkB to b@ Performed hy PAHC
~_ Plan the Project. PAHC shall subcontract with such
architectural~ engineering and financing spe~ialieta as it
determines are necessary to determine the feasibility and plan for
a Project with the following general characteristics:
10
9«1111 ... GQ:JOI.S.4
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An SRO hotel wi~h an estimated range of units
from 20 to 120.
b. Possibly a small amount of commercial space
alJng ~ma Street.
c. ~~tici~ted tenants would be singJe adulta and
some couples. The units would oot be designed
for children. The range of income w.:>uld be
within BUD's very low income limit with rents
at 30 percent of income.
d. Parking to meet the demand of the project and,
if possible. additional parking for the public
and/or nearby businesses.
2. Legal OpinioD. PARe shall obtain a legaJ opinion
from an attorney 9pecializing in housing law i as to ~hether or not
the Project would be considered a "'low income housing project'
~r Article 34 of the california Coustitution.
3. Financial Analysis. PARe shall subcontract with
fiDancing specialists as necessary to determine the financial
feasibility of the Projec~ and the public subsidies required fer
operation of the Project. PARe shall develop several financing
alternatives that involve a range of local and federal funding~
including' at least one alternative using tax credits. PARe shall
analyze the relationship of the financing alternatives and the
level of loca..l S\ll)sidy on rent. levels and population se:rved.
4. Prepare Plans. PARe shall develop plana necessary
to apply for the PC zone change and any other entitlement necessary
for approval of the prcje~t.
5. P'..ililic Outre:ach. PAHe ahall meet wit,h neighbors a.'1d
other interested parties, and &hall coordinate: a neighborhood
liaison and publiC' participation in the design and planning
proces..,.
6. Management Plan. PARe shall prepare a ma:lagement
plan for operation of the project.
7. Fundingc PAGe shall seek funding for the ~roject.
o. Project Manager. PAHC shall retain the services of
a project Manager who, under the general direction of the Project
Director~ will ~~ersee all of PARe's obligations under this Scope
of Work.
11
*112. 0I»0tS4
Q Progress Reports.
progress reports to City describing
effort,s under this Scope of Work.
PARC shall submit". rftonthly
the statuB to date of PAHC's
Time Schedule
Under the Option Agreement, City must decide whether to
purchase the property on or before January 6 1 1995. with possible
(expensive) monthly extensions up to an additional six months;
pravided l that escrow on purchase of the Property must close on or
before JWle 30: 1995. Consequently, all of the Administrative
Proc~sBes described in this S~ope ot Kork must ~e completed and a
tinal decisio~ made by City ~ithin a reasonable time prior to' that
date. Therefore, the parties have agreed on the following time
scbed~le for completion of PARe's required tasks:
Complete Assembly of
Project T~am
{hire subcontractorsj
Complete DeSign
Feasibility Studies
COmplete Architectu-~l
Schematic Design
SubIIli t Complete Developuent
Application to City
Completion of Public Hearings
on Development Application
!NaIll. CIlaOIS4
12
Completion Date
April 1, .1994
July 1, 1994
OCtober 1, 1994
November l~ 1994
per City process
•
Payment of
PARe Pee
$ o
$10,000
$10,000
$ 5,GOO
$ 5,000
Architecture
Sngin<>ering
Sn~ironmental Bngineering
Other Professional Services
(uegal, 5~~.in9. piD4neingl
City Fee" (FUU C" .. ~ lI .. c""",,ry)
p~C Proje~t ~er
p~c Pevel~r OVerhead lee
Contlngeney{Mise .. llaneous
1IXII:tIlI'I' 15
$ €5,O~Q
15,000
30,O~O
20,000
90,000
20,000
$300.000
.
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1D1<rBIT C
PP.CMX SSOllY 1I0T1i
(CITI" Il00SDlG RBSZItVII PlJlIllSI
$300,000.00 Date:
Palo Alto~ california
FOR VALUB RECBIVED~ the undersigned. TBB PALO ALTO
BOOS~ CORPORATIOR, a california nonprofit public benefit
corporation (the ·Borrower-), hereby promises to pay to the order
of the CI"l'r 0.. PALO ALTO, a charter city and a numicipal
corporation r 250 Hamilton Avenue. Palo ~to, California 94301 (the
-Bolder-)~ the principal sum of Three Hundred Tbouaand Dollars
('laO.DDC) pursuant to the terms and conditions set forth in this
?romissory Note {the -Note-} and the agreement rEferenced below.
The Holder shall be entitled to mak~ d~~ for payment hereunder
on1y in accordance with the p::,ovisions of this Note or said
agreement.
This Note is made in connection with an agreement
entitled -Agreement between the City of ?ala Alto and the Palo Alto
Reusing Corporation Re1ating to the Potential Development of
Propetty at: 725 and 753 Alma Street for Single Room Occupancy
Housing" (the -Agreement-). The Agreement provides that the
Borrower is t.he recipient of certain City of Palo lito HOUSing
Reserve funds of the Bolder, designated for certain pre-development
costs necessary to determin.e the feasibility of developing the rea.l
propert.y located at 725 and 753 Alma Stre~t. Palo Alto, California
(the -Property-) ~ for single room ocC'.lpancy {"SRO") housing (the
·Project-). Tne Holder owns an option to purchase the Propercy.
The Agreement provides that if, at the expiration of the Agreement,
both part,ies desire to develop the Property for SRO houBing~ and
the Helder exercises its option to purchase the Property, Holder
'Will convey the Property t.o Borrower under terms and condit.ioDS to
be determdned between ~be parties at that time.
l.) BorrOWer' s Ohliga~ion. This Note evidences t.he
obligation of the Borrower for the full repayment to the Holder, in
accordance ~ith this Note and the A9reement~ of the funds loaned
hereunder to the Borrower by t.he Holder. Such funds are to be used
solely by the Borrower for the Project.
2) Interest. The principal amount. of this Note shall
bear interest at the rate of zero percent (otl per annum.
" -,
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3) Secutity~ This Note is unsecured. However, in
accordance with Paragraph 5.3 of the Agreement. Borrower has agreed
that in th.e event it acquires ownership of the ?ropercy, it .lill
enter into a new agreement wi th Holder tor deyelcpment of the
Property and this Note shall be incorporated into a new loan,
~og-ether with any other funds provided hy HolO.;-r fOT development of
the Property .. and that such new loan will be secured by a deed of
trust on the Property in favor ~f the Holder, to the extent allowed
by any other funding source Borrower rr-.ay utilLc:e to acquire cr
develop the Property.
4.) Tern Qf Note and Repayment Schednle, The term of
this Note shall be from the date of its execution by the Holder
until the earlier of: (i) the date on which the Holder determines
that the Property !lhould not be developed for SRO housing. in
accordance with paragraph 5.3 of the Agreement, or (ii) the date on
which the Borrower determines t.l"'..at it will oot develop the
Pr~rty, in accordance with Paragraph 5.3 of the Agreement; Qr
(iii} the date of tbe Borrower~s full repayment to the Holder under
this Note.
5} Place and MlPper of Pavme.n.t.. The full amount. due
and payable under this Note ie payable at the office of Revenue
Collections of the Rolder, at the address: of the Holder set forth
above, or at such other place or places as the Bolder may designate
to the Borrower in writing from time to time, in legal tender for
the payment of public and private debts and which CD. the respective
date on which such payment is due and paid shall be immediately
available funds.
6' Prepaymepb-o The Borrower may prepay to the Holder
fran any aource, at any time prior to the date such obligation
becomes due hereunder, all or any part of the principal sum. of this
Note without the paymec~ of penalties or premiums.
7) Borrower', Waiver. The Borrower hereby vaives: la)
notice of default or delinquency; 'b) notice of acceleration; (c)
notice of nonpaymentj (d) notice of coses, expenses, losses and
late charges; (e) diligence in taking any action to collect any
sums owing under this Note; (f) presenbment for payment, demand,
protests and notices of dishonor and of protest; (g) the benefits
of all waivable exemptions; and (h) all defenaea of time of payment
or of any due date under this Note~ in whole or in part, whether
before or after ma..turity and with or without. nctir~e, except
extensions in writing. The pleading of any statute of liIr.it.ations
as a defense to any demand against the Borrower is also expressly
waived by the Borrowe r .
e} Attorneys' Fees. If any default ie made hereunder,
the Bor~ower promises to pay reasonable attorneys' fees and costs
15
MOl12 ... 0QJ0U4
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~ expenses incurred by the Holder in connection with any such
de!ault or any other action or other proceeding crought to enforce
any of the provisions of this Note. The Holder's right to such
fees shall not be limited to its representation by statt attorneys
ot the Holder's Office of the City Attorney. and such
representati.on shall be valued at the customary and reasonable
rates for private sector legal services.
9) Default Under Ncte and Acrelen:tipn. The Borrower
agrees that t,he unpaid balance of the prinCipal amount of this Note
shall, at the option of the Holder. become immediately due and
payable upon the failure of t.he Borrower to make any payment
hereunder a8 and when due or upon the failure of the Borrower to
perform or observe any other term or provision of this Note or the
Agreement 4 If the balance of this Note is not paid within thirty
(30) days of demand therefor~ the Borrower shall pay to the Holder
a late charge of one per~ent (1t~ per calendar month, or fractioD
thereof, or the highest rate permitted by law, whichever ia less,
on the amount past due and remainiDg uopai4. If this Note be
reduced. to judgment. such judgment shall bear the statutory
interest, rate on judgments.
10) Not.ice€!. Notices. cIema.1lds and coamunication
between the Bolder and the Borrower shall be sufficiently given if,
and shall not be given unl.el!s~ dispatched by certified mail~
postage prepaid, retur!!. receipt requested or sent by express
delivery service or over-night courier service, to the prinCipal
office of the Holder CUld the Bo~ower as follows. or at such other
address as the parties may designate in writing trom time to time:
Holder:
Borrower:
City ot Palo Alto
ATTN: City Clerk
250 Hamilton Avenue
Palo ~to. california 94301
Palo Alto Housing Corporation
ATTN: Executive Director
Such written noticea~ demands and communication shall be effective
on the date shown on the delivery receipt as the date delivered or
the date on which the del.ivery was refused.
11) Govgrn:ing Law. This Note shall be construed in
accordance with and be governed by the laws of the State of
california 4
9«)112_ oo:aa&S4
@ 0
12} Severability. If any provision of this Note shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.
13) ~. Time is of the essence of this Note.
14) No Waiver by the Hplder. No waiver of any breach,
default or failure of condition under the terms of the Note shall
be implied from any failure of the Holder to take, or any delay by
the Holder in taking. action with respect to such b~each. default
or failure or from any previous ·~iver of any similar or unrelated
brea~~~ default or failure; and a waiver of any term of the Note
must be made in Yl."iting and shall be limited to the-express writt~n
terms of such waiver.
15} Msiqrnpent. All
personal to the Borrower and are
absent prior written consent by
assignment therec! shall be void.
rights granted hereunder are
not assignable or transferable
the Holder, and the attempted
16) No partpership. The terms of this Note shall in no
way be construed to create C! partnership. joint vento.re or any
other joint re~aticnsb.ip or agency agreement bet.ween the Holder and
the Borrower. Rather, the relationship of the Holder and the
Borrower evidenced by this Note shall be deemed to t>e one of
creditor and debtor. respectively.
17, NOte Binding. The terms. covenants and conditions
of this Note shall apply to, and shall bind, the heirs, successors.
executors. administrators and assigns of both the Holder and the
Borrower.
lSi Amt:ndm.eptA. This Note may not be modified or
amended except by a:l instrument i.n writing which expresses such
intent.ion of the parties sought to be bound t.hereby I and such
writ.ing shall be firmly attached to this Note and made a parI:
hereof.
IN WI!NESS WHEREOF. this Note has been duly executed at
Palo Alto, California. Tbe effective date of this Note is ________________ , 1994.
Holder:
ern' 01' PALO ALTO
~,~~-----------Mayor
17
Borrower:
PALO ALTO ll00'SDIG COUOaATICIIJ
Joseph F. Martignett1, Jr.
Pres ident. Board of Direr:tors
I .
City Clerk
lU'PltaYBD AS TO POBX.
Senior Asst. City Attorney
City Manager
Director of P~ce
Director of Planning and
CCmmm 1 t y Environment
18
I
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EXHiBIT D
• INSURANCE li2J\lTREMEI'!ll-' long Form
RETURN THE COMPLETED CERTIFICATE TO THE CITY Of PALO ALTO. PURCHASING &. CON'TFIACT
ADMINISTRATKlN. 250 HAMILTON AVENUE, PALO ALTO 94301.
TYPE: Of C(lvtAA.G E AfOUIA EMeNT
'Ji1 GIf'n"'~ liability ~ 90C<1..Y IPtUlHI.Y li,OOC,OOO 'l.OIXl,OOO
INCLUDING, PAOI"EiUV O~MAC;;F. 11,000,000 11,000,000
.. I"'SlSONAL INJUIiIY
.. 8ROAD FOR."" PAOPfRn' DAMA~ E BeOIL Y ~UR'f , PROPEFiT'Y
.. I8UoNr.ET C~C'11JAt. OAMAG.f COMSlNl:O S1.MO.OOO ll,ooo,ooo
.comprahmsn.. Automobile Uabillty: lOOtt.y INJVRY CElIe'" 1".'lonl '1,000.000
TNC1..lJDING: l22!l.Y INJUI!Y I:I!i!! o.c.. .col Sl OOC QgQ
!!2etl!Il..QAMASC: ~-; 00(l 000
.. OVffleD aOOll Y INJURY. PAOFtATY
.. HJllfD OAMAG:f COMBINEO 'l,I)OO,OOC
• NCJH.OW!<tD
•• 0 Profft.lonlll UobI"oty:
••
.,
e.
c,
0,
E.
F.
0,
H,
u<CLUOlNC,
• alAOI'L$ AND OMl!SI~ All DAM.A.G ES $1.000,000
• .. .AU'RACTlCE" Of~!
<II NEGUGeN'T
n,." Crt". of .... 0 Ano. itt c:ffic:lrII. ,,~n(, IIt"d ~ ..... nemed 'I ~tJo,.,.J ;'"11OI.I'IIod, b.n .:l rn'of .. to work ~e~ und.r
~l. SWi co-~ .. to u. City of ,,"..-.0 AlID, .'<::., .. fqjI b. p.itr ... v 0::0\",.,,_. witho!.it on"l ~'" r Ci~" tlBtti.'lg i""u .. nc:.
ar4 ~ Do... ~ c..-n..:! by .".. City b~ ,:o:c ... ;rw.o'.J\C. D~~.
Whllrto m. w.;Jl ~ "...a'"11_ pni..",,_ •• " ..... Ii,;", clril!.iJ'l1l (I' DIM' II"nd ... "rlll,md •• uk.. III, PII'.:y includu d."~lIn of W';'fII"
c;oncfUrr:., pfpM. mW-. »>" JllhGf .-,..at. ,r • .nv Q!' .-.y ~.".'" in .:o.-.o-.ebon \tMI •• ,..;"!.h b.llIW' II,. .... rftC. of ttw QI'l)o.InG ..,,,,,n ....
ow.....s b~ 1N.-cI '"" D' .". Oty ., PM AIID_
Wh,~ the lII'fafll: imto.>fvn .. ~II"III_ co8apt. CII~ (. -P'IIwt..d '" II" .... -.mo1l"1' «III ....
The ~ i.rdu6H • 4S._~· III l,.t .... I .. P'II"o'11I-io,..
O..an:IibI .. o'll'flr :t5,OOO,..,.,.t bD ~.Jtd.".s., •• ut>j<o~ I" C/pJ""".
U ~~ .... ol!!rc"fd or cM"'1W d'""'''1iI \11. p..-io<l of COv .. ~ ., ".te<! ~ •• i,,_ in we'" • -rrnI .......... 10 .fflJd '"". Ctrtifo~._
thirty pOt., ..... writl«lllOtieir will b. "",,1..:1 LG 1'" 01.,. or "'-'0 .olJ11I; 1::''''.'«01 Ad""nrrttr.llon. ~.o. au 10250. 9";j~J
Tho ~Iy I.rwur~ pollC'f' iT>eiud ••• CO""IICI~~ lirobilit)" • .,.;111,,,,,..0,.,' IHII\<"Idi"lII i""~f'.-.c. :;-"'v.,~ le. Con'!It'CIO'-' .g ........ n1
10 inrli ....... "fv fM C:ty_
no. ea.,...r~."'tlrri~ vnti",Vl. p(lf>c,., it! IIll:>i.l:' 1., ejJ r •• ml ,,1 tl>, p"Jiei., lI.,i"".fOQ ,.,.,.i" .rodm .... ", iii! "f I"" p.tJ¥ili(J<"'~ .. rI!"':
,.,. ,"""cin.
DAn:, __ ~ __
As per agreement" PAHC shall. require its
obtain professional liability insurance. professional subcontractors to
. ',",
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ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDINC THE BUDGET FOR THE FISCAL YEAR 1993-94
TO PROVIDE ~ ADDITIONAL APPROPRIATION FOR
PRE-DEVELOPMENT EXPENSES FOR
SINGLE ROOM OCCUPANCY-TYPE HOUSING AT 753 ALMA STREET
~~EREAS, pursuant to the previsions ot section 12 of Article
XII of the Charter ot the city of Palo Alto~ the council on June
21, 1~~3 did adopt a budget for ~iscal year 1993-94; and
WHEREAS 6 providinq for single room occupancy (SRO) type
housing units promotes affordable housing for Palo Alto; and
WHEREAS, in November 1593, the Palo Alto city council acquired
a one-year option to purchase vacant property at 753 Alma Street;
and
WHEREAS, funds are available in the City' &. Housinq Reserve
Fund to pay for pre-d~velopment expenses in order for the Palo Alto
Rousinq Corporation to determine if the property can be suitably
developed as SRO housing;
NOW, THEREFORE:~ the Council of the City of Palo Alto does
ORD~N as follows;
SECTION...l. The SUlD of Four Hundred Thousand Dollars
($400,000) is hereby appropriated to Contract Services in the
coamercial Housinq In Lieu Fund, anCi the Unreserved Fund Balance of
the co~ereial Housing In Lieu Fund is correspondingly aecreased.
S;ctrQN 2.. This transaction will decrease the Unreserved Fund.
Balance frOE $1,974,830 to $1,574,830 as of December 31, 1993.
SECTION 3. As specified in Section 2.28 .. 080{a) of ~~e Palo
Alto Municipal Code, a two-thirds vote of the. City Council is
required to adopt this ordinance.
SECTION 4. The Council of the City of Palo Alto hereby finds
that the enactment of this ordinance is not a project under the
california Environmental Quality Act and, therefore, no environmen
tal iapact assessment is necessary ..
SECTION S ..
MuniCipal Code,.
adoption.
As provided in Section 2.04.375 of the Palo Alto
this ordinance shall become effective upon
INTRODUCED AND PASSED:
AYES:
--._------
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NOES:
Al!Sl'n"TIONS:
ABSENT:
ATTEST,
city Clerk
APPROVED AS TO FORM:
Sr. Asst. C1ty Attorney
APPROVED:
cIty Manaqer
Director of Finance
Director of Plann1nq and
community DevelopmQnt
APPROVED:
Mayor
I {'", "t~"Y
"
Palo Alto Housing Corporation
!anu.ary la, 1994
Kenneth Schreiber
Director of P~anning a.'1d Community Envlrunrnent
City of Palo Alto
250 Hamilton Avenue
Palo Alto. CA 94301
RE: Predevelopment Propo--....al for SRO Housing at 753 Alma Street
Dear Ken;
This lette:r transmits a pl"Opo.sed budget for predevelopment expenses for an SRO
housing de;,oelopmem at 753 Alma Street, and an estimated schedule for reaching
certain milestones during the option period the City currently has on the land. We
appreciate the confidence and support you and you r staff have provided in this
preliminary process.
TIle budget and time line represt'..nt cer~n assumptions which are inherent i!1 the
COIltext in whtch they are presented:
1. Although the reqoired process is nol known exactly al this point, there
appears to be nothing short of a ccmplele Planned Community zone, very likely
inclLKfing an EIR. that C41n provlde (he Council with suffLcient comfort in irs decision
whether to exercise its option to buy the land. We nope (0 cof'ltir.ue to explore v.ith
you a point shon of that, but ai this Lime we assume the "worst c.ase scenario· in terms
I)f time and costs so that.all issues can be adequately explored and dealt with (parlOng,
land use. envirotHr.enraJ) in ad ..... ance of the land purchase decision,
2. The relatively short time frame of the option period is a difficult one for any
developer, certainly for a s..'"tl3l1 rlonprofil agency nonnally dependenl on volunteer
efforts. Because of thi5 • .a. projec( manager, in addition to PAHC staff, is a necessary
component of the Pf'OC"S"
3. It is anlJCip~lled thai the project approval process will run concurrently with
the environmental ~iew and the search for fLnatlclng. Ho'W'ever. we hope the project
will be funded b~' " laA cTroil partner in addition to the City's contribution of land.
1be tn credit process is complica:ed as well, and an application ca'lnot be fmalized
umii mere l~ "!':Il' con~~ and projt'.Ct approval.
540 Cowper StreEt. S ... lto G. Palo Alto. California 94301. (415) 321·9709
P,o\HC staff and Board members have S~l1t ~me time di:>cussing aJ! approaches to this
situatiC1l. We are confident that tilis 'c>udget is necessary. Predevelopment money :s
always cr.JciaJ but is particularly so in this cmHe~! iCl which a very complicatoo .a.'1d
probably controversial project must work its way to a decision point on the site in 3.
very shan time. Prec.le ... elopment wad. on the pruject fl1U:;t be swift, complete.
properly done and may not have even the normal OCCllnellce of unanticipaled delays.
Please forward these materials to the Council with the s,<,.ff report for the Council
agenda of jai1uary 18, 1994. Thank. you.
We look forward to working 'o/Ilith YClU and the City Oll this. exciting SRO housing
project.
Sincerely,
~NG CORPORATION
Marlene H. Prendergast
E~ecutiye Director
Enclosures
cc: Joe Huber, ('ouncli Liaison
2 . ..
PAW ALTO HOUSING CORPORATION
OOWNTOWN SRO
753 AU\IA STREET
PRE-DEVEWPMENT EXPENSES
Preliminary Estimate
1·7·94
Architecture
Concept.ual design, rieighborhood meetings, City meetings
Engineering
Civil, Soils, AOOlistica,j, Traffic
Enviror.menW Engin:ering (Asbestos. EMF. Odo~s. etc.}
Otller Professlonal Serv\ces
Legal. SRO Operations & Managemen t. Fin.a.'lCLa 1
Project Manager
Complete supervision of pre-development phase, including
budget,schedule, consultants. ;m:hicecLS. and meetings.
Deveioper Overhead-PAHC
City Fees (Zone Change)
Contingency
Total
Notes:
65,000
30,000
15,000
30,000
90,000
30,000
20,000
20,000
300,000
I. Budget does not include costs of an EIR. should the City decide one is necessary.
2. Certain ronsultant work noted above may overlap work required for :m ElR.
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