REPORT TO THE CITY COUNCIL March 5, 2015 FROM: BRUCE RUDD, City Manager BY: R. RENENA SMITH, Assistant City Manager SUBJECT ..Title Actions pertaining to Purchase Option and Right of Access Agreement between Cesar Chavez Foundation and the City of Fresno: 1. Adopt the addendum to Environmental Assessment No. C-14-044 2. Approve Agreement for Purchase Option and Right of Access between Cesar Chavez Foundation and the City of Fresno ..Body RECOMMENDATION Staff recommends that City Council adopt the addendum to Environmental Assessment No. C-14-044 and approve the Agreement for Purchase Option and Right of Access between Cesar Chavez Foundation and the City of Fresno for certain real property in the City of Fresno, California commonly known as the 5100 block of E. Kings Canyon Road, Fresno, CA 93727 ("Agreement"). Additionally, Staff recommends the City Council authorize the City Manager or his designee to complete negotiations and execute the contract subject to approval as to form by the City Attorney. EXECUTIVE SUMMARY The City desires to grant the Cesar Chavez Foundation (the "Developer") an exclusive one-year option to purchase vacant undeveloped property, commonly known as the 5100 block of E. Kings Canyon Road, Fresno, CA 93727, (the "Property") with a right to access to the Property during the option term. For the rights granted by the City, the Developer will pay the City $5,000 within thirty days of City Council approving the Agreement. The Developer will have the right to extend the option for up to ninety days. The Developer proposes to purchase the Property from the City for $904,000 in an "as is" condition and develop it privately to serve as a residential development for low-income residents consisting of 89 multi-family units and 46 units for senior households (the "Project"). BACKGROUND The City currently owns real property located at the 5100 block of E. Kings Canyon Road, Fresno, California. The Developer proposes to purchase the Property at fair market value for $904,000 in an "as is" condition and develop it privately to serve as a residential development for low income and senior residents. The Developer intends to finance the purchase of the Property and construction of the Project with financing, in part, from Low Income Housing Credit (LIHTC) equity investors, Greenhouse Gas Reduction Fund or other available public and private mortgage/debt financing (collectively "Tax Credit Financing"). The scope of the development and basic design is a 135 unit low-income housing development of which 89 units will be for multi-family residents and 46 units will be for senior households. The performance schedule is outlined in Exhibit C in the attached DDA. The Property acquisition closing shall be no later than October 30, 2016. The Developer is requesting site control to improve their competitiveness for the Tax Credit Financing. The Agreement provides site control for the Developer through October 2016. If the Developer exercises this option, the consideration paid will apply to the purchase price and Developer will construct the Project pursuant to the terms of the attached DDA. If the Developer does not timely exercise this option, the City will retain the consideration for grant of the option and the Developer's rights will automatically terminate without notice. ENVIRONMENTAL FINDINGS Staff has performed a preliminary assessment of this approval and has determined that the proposed modifications consist of minor technical changes and are consistent with Environmental Assessment No. C-14-044 which was prepared for Conditional Use Permit Application NO. C-14-044 1. No substantial changes are proposed in the project which will require major revisions of the previous Finding of Conformity due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. In this case, the only change is to modify the project description to acknowledge the purchase option and proposed Disposition and Development Agreement. 2. No substantial changes occur with respect to the circumstances under which the project was undertaken which will require major revisions of the previous Finding of Conformity due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects. In this case, the nature and intensity of the project will remain the same as that previously assessed. 3. There is no new information, which was not known and could not have been known at the time of the previous Finding of Conformity that the project will have significant effect not discussed in the Finding of Conformity. Furthermore, since a Finding of Conformity was previously adopted for this project, the considerations set forth in CEQA Guidelines � 15162(a)(3)(C) and (D), related to the adequacy and feasibility of previously adopted mitigation measures, are not applicable. LOCAL PREFERENCE Local preference was not considered because the Purchase Option does not include a bid or award of a construction services contract. FISCAL IMPACT For the rights granted by the City of Fresno, the Developer will pay $5,000 which will be applied to the purchase price and total proceeds will be deposited into Transportation Enterprise Fund as the owner of record. If the option is not exercised the $5,000 will be deposited into the General Fund. Attachments: Purchase Option Agreement (with Exhibit A to the Option attached) DDA (Exhibit B to the Option) Memorandum of Option (Exhibit C to the Option)