HomeMy WebLinkAboutItem 4.07 Arroyo Vista DDA~~~,~ OF DUB~~
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STAFFREPORT CITY CLERK
DUBLIN CITY COUNCIL File #^~ 0^~- 6^~
DATE: March 15, 2011
TO: Honorable Mayor and City Councilmembers
FROM: Joni Pattillo, City Manager
SUBJEC • Resolution Approving Assignment of Disposition and Development Agreement for
the Arroyo Vista Redevelopment Project and Settlement Agreement from Citation
to KB Home
Prepared By: John Bakker, City Attorney
EXECUTIVE SUMMARY:
The City Council will be asked to authorize the City Manager to approve the assignment of SCS
Development Company's interests in the Arroyo Vista redevelopment project to KB Home.
FINANCIAL IMPACT:
None.
RECOMMENDATION:
Staff recommends that the City Council adopt the resolution Approving Assignment and
Assumption of Disposition and Development Agreement and Settlement Agreement for the
Arroyo Vista Market-Rate-For-Sale Housing Project.
~ Subm' te By
City Attorney
DESCRIPTION:
Revie d y:
Assistant City anager
Arroyo Vista is a public housing development on approximately 22.9 acres of land located at
6700 Dougherty Road in the City of Dublin and owned by the Housing Authority of the, City of
Dublin. On July 25, 2007, the City of Dublin, the Dublin Housing Authority (DHA), the Alameda
County Housing Authority (HACA), Eden Housing and SCS Development Company (doing
business as Citation) entered into a Disposition and Development Agreement (DDA) for the
purpose of creating a new mixed income development on the site. In October of that same year
the parties were sued by four Arroyo Vista tenants, represented by the Public Interest Law
Project and Bay Area Legal Aid, to set aside the DDA.
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On May 22, 2009, the Department of Hou'sing and Urban Development (HUD) approved the
Dublin Housing Authority's Disposition Application and the plaintiffs' counsel proposed
negotiations to settle the lawsuit: Negotiations were conducted over several months and
approved by all parties to the DDA and ultimately HUD. On December 17, 2009, the settlement
was approved by the court and the case was dismissed.
In January, 2010, the DDA was amended by the City of Dublin and the other parties to the
Agreement to comply with HUD approval conditions, including affordability provisions and
restrictions on the use of the land sale proceeds.
On March 1, 2011, HACA, pursuant to the DDA, transferred the Arroyo Vista Property to Eden
Housing, Inc. and Citation. The portion of the property (approximately half) purchased by
Citation is intended to be developed with 198 for-sale homes, 14 of which would be sold at
below-market prices to moderate-income households. Eden intends to develop the other half of
the property with 180 units of affordable housing (50 for seniors and 130 for families).
Citation and Eden have submitted a request to transfer responsibility for completion of Citation's
portion of the project to KB Home. Citation indicates that it is no longer positioned in the market
to construct new homes and, following a thorough investigation of possible replacements,
identified KB Home as the most appropriate. KB Home was chosen due to its strong
relationship with Eden Housing. KB Home was founded in 1957 and has delivered over
500,000 homes since then. It was the first homebuilder to be listed on the New York Stock
Exchange and was named to Fortune magazine's 2010 list of the "World's Most Admired
Companies" and ranked #1 for "Innovation" among homebuilders. Locally, KB Home is based in
Pleasanton and is the largest Bay Area homebuilder by volume. KB Home currently has two
other projects underway in Dublin totaling 84 units.
Section 19.8 of the Arroyo Vista Disposition and Development Agreement (DDA) entered into
by HACA, DHA, the City of Dublin, Eden and Citation provides for transfers such as the one
proposed with the consent of DHA and the City of Dublin. Attached to the proposed resolution
(Attachment 1) is an Assignment and Assumption of Disposition and Development Agreement,
and Settlement Agreement (Exhibit A to the Resolution). In the Assignment, Citation assigns all
of its rights, title and interest in the DDA and the Settlement Agreement to KB Home. KB Home
accepts the assignment, and agrees and undertakes to be bound by, observe and perform all of
the obligations, covenants, and agreements of Citation pursuant to the DDA and the Settlement
Agreement. The Assignment must be signed by Citation and KB Home; and consented to by
Eden, HACA and the City of Dublin. HACA approved the agreement on March 8.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
Not Applicable.
ATTACHMENTS: 1. Proposed Resolution Approving Assignment and
Assumption of Disposition and Development Agreement and
Settlement Agreement for the Arroyo Vista Market-Rate-For-
Sale Housing Project (Agreement included as Exhibit A).
Page 2 of 2
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RESOLUTION NO. - 11
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
************************************
APPROVING ASSIGNMENT AND ASSUMPTION OF DISPOSITION AGREEMENT AND
SETTLEMENT AGREEMENT FOR THE ARROYO VISTA MARKET-RATE-FOR-SALE
HOUSING PROJECT
WHEREAS, the City is a party to the Disposition and Development Agreement for the
Redevelopment of Arroyo Vista dated as of July 25, 2007, as amended by the First Amendment
to Disposition and Development Agreement entered into as of January 26, 2010 (collectively,
the "DDA") among the Housing Authority of Alameda County ("HACA"), the Dublin Housing
Authority ("DHA"), Eden Housing, Inc., a Califarnia nonprofit public benefit corporation ("Eden"),
and SCS Development Co. dba Citation Homes Central, a California corporation ("Citation")
(collectively, the "DDA Parties"); and
WHEREAS, the DDA Parties also entered into a settlement agreement dated as of
December 1, 2009 to resolve litigation prompted by execution of the DDA (the "Settlement
Agreement"); and
WHEREAS, effective March 1, 2011, HACA and DHA entered into a Master Agreement
to effect the consolidation of the activities of the two agencies and pursuant to which DHA
transferred all its rights and responsibility for owning and operating the low income public
housing program in the City of Dublin (the "City") to HACA;
. WHEREAS, pursuant to the terms of the DDA, the Authority sold approximately one-half
of the Project site (the "Citation Parcel") to Citation for the purpose of developing 198 for-sale
homes, 14 of which would be sold at below-market prices to moderate-income households (the
"Citation Project"); and
WHEREAS, pursuant to the terms of the DDA the Authority sold approximately one-half
of the Project site (the "Eden Parcel") to Eden for the purpose of developing 50 units of
affordable senior rental housing and 130 units of affordable family rental housing (the "Eden
Project"); and
WHEREAS, Citation and Eden have requested that the Citation Parcel be transferred to
KB Home, a Delaware corporation, and that KB Home develop the Citation Project; and
WHEREAS, Citation desires to assign the DDA and the Settlement Agreement, and all of
the rights and obligations under the DDA and Settlement Agreement, to KB Home; and
WHEREAS, KB Home desires to accept from Citation all of the rights and obligations of
Citation under the DDA and the Settlement Agreement, as such pertain to the Project.
NOW, THEREFORE; BE IT RESOLVED that the City Council of the City of Dublin does
hereby approve the Assignment and Assumption of Disposition and Development Agreement,
and Settlement Agreement (Arroyo Vista Market-Rate-For-Sale Housing) attached as Exhibit A
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and authorizes the City Manager or designee to make and approve any changes to same on
behalf of the City.
NOW, THEREFORE, BE IT FURTHER RESOLVED that the City Manager is authorized
to execute the Assignment and any and all documents required by any party to complete the
transaction between Citation and KB Home.
PASSED, APPROVED AND ADOPTED this 15th day of March, 2011 by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
ATTEST:
City Clerk
1608236.1
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ASSIGNMENT AND ASSUMPTION OF
DISPOSITION AND DEVELOPMENT AGREEMENT, AND SETTLEMENT AGREEMENT
(Arroyo Vista Market-Rate-For-Sale Housing)
This Assignment and Assumption of Disposition and Development Agreement, and
Settlement Agreement (the "Assignment") is entered into as of March l, 2011 (the "Effective Date"),
by and between SCS Development Co., a California corporation, dba Citation Homes Central
("Assignor") and KB Home, a corporation ("Assignee"), with reference to the following
facts:
RECITALS
A. Assignor, the Dublin Housing Authority, a public body, corporate and politic
("DHA"), the City of Dublin, a municipal corporation (the "City"), the Housing Authority of the
County of Alameda, a public body, corporate and politic ("HACA"), and Eden Housing, Inc., a
California nonprofit public benefit corporation ("Eden") (Assignor, DHA, the City, HACA and Eden
shall be referred to herein, collectively, as the "DDA Parties") entered into a Disposition and
Development Agreement dated as of July 25, 2007, as amended by the First Amendment to
Disposition and Development Agreement entered into as of January 26, 2010 (collectively, the
"DDA"), pursuant to which the Parties agreed to the conditions under which Assignor and Eden
would acquire that certain low-income housing project commonly known as Arroyo Vista, HUD No.
CA142000001 (the "Property") from DHA for the development of up to two hundred ten (210)
market-rate for-sale housing units (the "Project").
B. The DDA Parties also entered into a settlement agreement dated as of December 1,
2009 to resolve litigation prompted by execution of the DDA (the "Settlement Agreement").
C. Assignor desires to be released by the Assignee from all obligations in connection
with the DDA and the Settlement Agreement and related obligations and rights.
D. Assignor desires to assign to the Assignee, and the Assignee desires to accept from
Assignor, the assignment of the DDA and the Settlement Agreement and any related obligations
incurred by Assignor, as such pertain to the Project.
E. DHA has consolidated its activities with HACA and has transferred all of its rights,
interests and obligations to HACA, including those specified in the DDA and the Settlement
Agreement, pursuant to the Master Agreement, dated as.of March 1, 2011, by and among DHA,
HACA, the City and HUD. Under the terms of the Master Agreement, and the Settlement
Agreement, consent by HACA shall constitute also consent by DHA.
F. The consent to such assignment by the City, HACA and Eden are required and are
attached hereto as Exhibits A-C.
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NOW, THEREFORE, in consideration of the ~foregoing, of the mutual promises of the parties
hereto and for other good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties mutually agree as follows:
1. Assignment bv Assi~. Assignor hereby assigns and delegates to Assignee, and
Assignee hereby accepts from Assignor, all of Assignor's right, title and interest in and obligations
under the DDA and the Settlement Agreement.
2. Acceptance of Assi~nment. Assignee hereby accepts the above assignment and
hereby assumes, agrees, and undertakes to be bound by, observe and perform all of the obligations,
covenants, and agreements of Assignor pursuant to the DDA and the Settlement Agreement, to the
same extent as if the Assignee had originally been named as a party thereto in the place and stead of
the Assignor. Following the Effective Date of this Assignment, as defined below, any reference to
Assignor in the Agreement shall be deemed a reference to Assignee.
3. Release of Assi ng_or. Assignee releases Assignor from all obligations imposed under
the DDA and the Settlement Agreement. However, nothing herein contained shall be construed as a
release of Assignor from any obligations or liability which may have accrued prior to the Effective
Date, and which obligations or liability are not expressly assumed herein by the Assignee.
4. Representations and Warranties. Assignor represents and warrants to Assignee that
the execution and delivery of this Assignment has been duly authorized, that this Assignment is a
valid and legal agreement binding on the Assignor and that Assignor has not previously assigned,
pledged, hypothecated or otherwise transferred to a third party any of its rights under the DDA or the
Settlement Agreement. Assignee represents and warrants to Assignor that the execution and
delivery of this Assignment and the performance of its obligations hereunder have been duly
authorized and that this Assignment is a valid and legal agreement binding on the Assignee.
5. Governin Law. This Assignment shall be governed by the laws of the State of
California.
6. Effective Date. This Assignment shall be effective as of the Effective Date.
7. Counterparts. This Assignment may be executed in one (1) or more counterparts,
each of which shall be deemed an original, but all of which when taken together shall constitute one
(1) agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Assignor and Assignee have entered into this Assignment as
of the date first set forth above.
ASSIGNOR:
SCS DEVELOPMENT CO., a California
corporation, dba CITATION HOMES
CENTRAL
By:
Name:
Title:
ASSIGNEE:
KB HOME, a corporation
By: _
Name:
Title:
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EXHIBIT A
CONSENT BY THE CITY OF DUBLIN
The City of Dublin hereby consents to the assignment of the DDA and the Settlement
Agreement, as defined in the attached Assignment Agreement, from SCS Development Co., a
California corporation, dba Citation Homes Central, to KB Home, a corporation.
CITY OF DUBLIN, a municipal corporation:
APPROVED AS TO FORM:
By:
City Attorney
By: _
Name:
Title:
A-1
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EXHIBIT B
CONSENT BY THE HOUSING AUTHORITY OF THE COUNTY OF ALAMEDA
The Housing Authority of the County of Alameda hereby consents to the assignment of the DDA
and the Settlement Agreement, as defined in the attached Assignment Agreement, from SCS
Development Co., a California corporation, dba Citation Homes Central, to KB Home, a
corporation.
HOUSING AUTHORITY OF THE COUNTY OF
ALAMEDA, a public body, corporate and politic:
By:
Christine Gouig, Executive Director
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EXHIBIT C
CONSENT BY EDEN HOUSING, 1NC.
The Eden Housing, Inc. hereby consents to the assignment of the DDA and the Settlement
Agreement, as defined in the attached Assignment Agreement, from SCS Development Co., a
California corporation, dba Citation Homes Central, to KB Home, a corporation.
EDEN HOUSING, INC., a California nonprofit
public benefit corporation:
By:
Linda Mandolini, Executive Director
1608261.1
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