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HDC - Minutes 07-27-04NOT OFFICIAL UNTIL APPROVED BY THE ROSEMEAD ROUSING DEVELOPMENT CORPORATION MINUTES OF THE REGULAR MEETING ROSEMEAD HOUSING DEVELOPMENT CORPORATION JULY 27, 2004 The Regular Meeting of the Rosemead Housing Development Corporation was called to order by President Clark at 7:00 p.m. in the Conference Room of City Hall, 8838 E. Valley Boulevard, Rosemead, California. The Pledge to the Flag was led and Invocation were waived as having been completed during the meeting just adjourned. ROLL CALL OF OFFICERS: Present: Directors Alarc6n, Taylor, Vasquez, Vice - President Imperial and President Clark Absent: None. APPROVAL OF MINUTES: NONE 1. APPROVAL OF PARTNERSHIP WITH THE CITY OF ROSEMEAD FOR USE OF HOME FUNDS Bill Crowe, City Manager, presented the staff report. Director Taylor requested that the following section be verbatim and be included as part of the Minutes of the City Council meeting of July 27, 2004 regarding: PUBLIC HEARING — APPROVAL OF PARTNERSHIP WITH THE ROSEMEAD HOUSING DEVELOPMENT CORPORATION FOR USE OF HOME FUNDS VERBATIM DIALOGUE BEGINS: DIRECTOR TAYLOR: I need to ask the Board members if they have been down there, ' upon the property to look at it? VICE - PRESIDENT IMPERIAL: I have... TAYLOR: Mr. Imperial, I went down today and drove back through the property and looked at it and I was shocked, literally shocked. I am ashamed that people have to live in that quality of property due to the lack of maintenance and the broken up driveway. I can't call it a street because there is only one lane of traffic. When I drove down, there were cars parked on both sides of it. The carports are deteriorated. The vacant lot next door is a storage lot. I don't know how many vehicles are out there. There are probably 10 or 12 cars parked in there. But, I agree something needs to be done and I think indirectly or directly, we're being led into something that... this is now a precedent. I don't know if it is an absentee landlord, a slumlord for it to get that bad, but it's going to cost a $1/2 million. These guys are getting rewarded for RHDCMIN:7 -27 -04 Page K I misconduct for this kind of...that's why I asked if you've seen the property. How come this hasn't been on rehab before? There's no other place in the City that would ever get away with . what's down there. IMPERIAL: I think if I may, Bill. I brought this up two years ago and then last year for signs and what have you. It is something that we have been trying to get done. ' We had to do it properly and I don't think the vehicle was there to do it. TAYLOR: Why couldn't Rehab go down there and write the property up? We've done it with other apartments. IMPERIAL: This again, is out of the area and therefore that's the reason... it took a slow process to get it done. TAYLOR:. We can go every where, in the City and write up property. I'm just thinking, I'm being abused by whoever owns it. I don't know how many properties... who owns all those properties? BILL CROWE, CITY MANAGER: We have at least six or seven separate ownerships there. There is one that ... the 'six four plexes there at 3009 and 3027 are probably the ones that come closest to meeting the slum definition. There are, as we indicated, as least two or three property owners that have indicated a willingness to work with us to clean up. Obviously, we're going to continue on a code enforcement tack. TAYLOR: When you say continue, when were they ever inspected or given any notices? CROWE: I don't know that it said that they've ever gone through rehab. I'd have to ask Jim Guerra. TAYLOR: I'm ashamed that people would be abused and have to live in conditions like that. That isn't right: IMPERIAL: It's been going on a long time, Gary. In fact I've asked for signs on there because people are going down there and dumping garbage in there... put signs on the gates or what have you need to make sure... Again I can understand how we got to this point because it's just been a ... we've got so many things out there in the community. Now that we're getting fixed up in that area as far as the problems were concerned and having the special meeting, we're now in a position where we should be looking over the fence at those things. TAYLOR: We've had a policy where homeownership is required for the assistance programs with the... rightfully so, they're living in the community we're investing in. The homeowner has equity in it and every reason to participate. And, I don't know who these owners are. I don't know if they're renting them out. It's a shame if it's an absentee landlord and we're going to put $1/2 million into his property. We had a property on here tonight on DeAdalena Street. A homeowner has done things that are code violations and we're not paying for those. RHDCMn.:7 -27 -04 page a2 PRESIDENT CLARK: It's a loan though, isn't it? IMPERIAL: This is a law and it's not..., TAYLOR: No, it's forgivable in ten years. IMPERIAL: Doesn't it go against the owner of the property. LISA BAKER, GRANTS COORDINATOR: In terms of the code enforcement and rehabcases, every one of those single - family homeowners is approached for our residential rehab program and if they are income eligible they can participate. In this sense this program would also mirror that so the properties that are in code enforcement would have access to funds that they're not able to make the corrections. These properties have been, are going through code enforcement at this point and have been given notices.... I .. TAYLOR: Excuse me. That's the first I've heard of it. They are going through the process now? They have been cited. BAKER: Yes. TAYLOR: I'd like copies of that. BAKER: They've been cited and at least three of the owners indicated that they don't have sufficient funds to make the repairs and they want to do it, that is why they're interested in participating. The street part is difficult to address because it's a private street so the City doesn't have a lot of ability to do the improvements absent a multi- family program, and you'll _ see the draft talking points allowed for a multi - family incentives. I think there are three owners of the street, everybody else has an easement. So, if they were to come together to take the money, then we could actually make the street improvements there. It is a loan, it would be secured by a second trust deed, which would actually then give us a little more control over the properties than we currently have. And, in addition, instead, while it is a loan and it is deferred because obviously some of these owners don't have the funds to make the improvements on their home. It nevertheless would contain some very significant management and maintenance covenant requiring them not to allow criminal activity on their property, to do maintenance and if they don't do the maintenance that is required, to allow us access to the property to make repairs if they will not make them, and to lien their property. So, we do -not have to go through rehab again in order to be able to make the repairs — and they would have to have sound management practices in order to prevent some of the items... so it's not like a "no strings attached" loan. It would require of them some thoroughly hefty commitment which we would have secured by the deed of trust loan on the property. WAGNER: I think, Gary, it's a carrot and stick approach. I've worked here for 21 years and I know... and I think about 20 years ago we've looked at this — at rental rehab assistance. At that time the Council made a decision not to move ahead with it. We thought, in really looking at RHDCMn4:7 -27 -04 Page k3 this target area... and to be honest I haven't been down there in quite a while either because for whatever reason, we don't get many complaints other than Mr. Imperial getting some. We don't get many complaints from that section because I would think that the type of people that live there, maybe they don't speak English, maybe they're afraid to call City Hall. But, I think this is an unique opportunity of the Council and the Corporation to maybe use this as a pilot program. Otherwise... TAYLOR: Well, it's still, everyone of us... and I have to say whether it's 80 or 90 percent of the residents in the community are responsible for maintaining their property. But, let me clarify . one thing. You did not clarify that it's a ten -year forgiveable loan. At the end they don't have to pay it back. Is that correct? BAKER: As it's currently structured, it's structured similar to the way we do our other commercial loans, which is that it is deferred if they meet all management and maintenance covenants and they maintain all the portable units, and they allow an annual inspection of their property by us, and they certify their income eligibility every year for ten years, it would be forgiven. TAYLOR: The loan can be forgiven in ten years. Then we're talking up to, God only knows whether it is $300,000 or $500,000. IMPERIAL: Don't we go to the owner of the property:..who owns it. BAKER: We would negotiate. This would allow the RHDC to negotiate a loan that is a current unit minimum and maximum on it. For example, if there were ten units and the owner was going to put in half the money himself, then maybe he'll need five units that would be the ones that we would loan money against. And, then it would be the same would minimum and maximum, based on the need in the building. COUNCILMAN JOE VASQUEZ: Is this is project street behind the drive - through dairy? IMPERIAL: Yes. VASQUEZ: I've always seen it from a distance. I've stopped there, but like you said, no one comes out complaining, they stay quiet and away. WAGNER: ,It's quite an eye opening. I just think it's a neat opportunity... VASQUEZ: I've eaten across the street from ... the little burrito place... TAYLOR: It's unique opportunity, but it's a first time ... then the next person comes and, I won't tolerate saying No to the next person because that's a double standard and that's why we had this. The first one we get in, there's the potential... it's bad down there. And, I don't know how many houses are involved on both sides of the street and back at the end of the cul de sac. We RHDCIAN:7 -27 -04 Page x4 don't even know that, we don't know the owners. We didn't have a policy in the past and once we do it, we can't go back and say No, we did it once and that person got special treatment. IMPERIAL: Is it possible to get more information on this? TAYLOR: It's two days before it expires, and that's the other bone I have to pick. Why did we wait until this time? Two days. CLARK: What happens if we don't use it? IMPERIAL: All I can say is they're badly in need. I've seen better looking projects down in East L.A. than these. I think it's about time we do something with it. TAYLOR: It's not our responsibility and it's not the taxpayers responsibility to help somebody that has... and it says "rental units ". That's what is happening. We can only do so much and then when we start doing it, the other residents /owners have a right to come here and say you did it for them, why can't you do it for me? And then we're over a barrel that way. CROWE: I guess if you're asking us.— again... we're proposing it from the standpoint of being a pilot. Is this the last shot at this? I would see if this works. Those other people that want to step up to the plate and say we want to fix these housing units up, we would support that as long as the funds were available. I believe there are 44 units there total. We've got a six -plex, we've got six four - plexes, which is 24. That's the worst one. That's not the one that we're talking about working with. TAYLOR: How does that work then? BAKER: He has not approached us. We would probably approach him. If I can clarify for a moment. This is a commitment agreement, so it's not the final program, which would have to come back to you for approval. This allows us to commit these funds and then we have three additional years to expend those, so we would more fully develop the program and bring the program back to you. At this point we are just asking the... the City is asking the RHDC if they are interested in committing to putting this program together, that's what is before the Corporation tonight. CLARK: Do we have to have in there that monies are forgiven? Could we have some kind of other program where we require they repay them then we loan them to someone else. r BAKER: We could do a deferred loan that's not forgiven. You could do a residual receipt loan. You could do a regular loan. But, most of these owners don't have sufficient wherewithal to make regular payments on loans. CLARK: But, if this person owns a four -plex and with the price of housing escalating all the time, they have equity. RHDCMRN':7 -27 -04 Page 45 BAKER: You could also make a deferred loan that would be due on sale of transfer, you could also do that. CLARK: So, we have room. If we approve this tonight merely to keep the funds from going back to the federal government because they will expend it in some other city — the way we don't like. If we approve this tonight, do we have room to wiggle around with... BAKER: Those are draft program points and we would further develop the program to bring back for approval... CLARK: So we could change it to where it's not a forgivable loan, because I have a problem with that. Someone is just lazy and doesn't do anything and then they get a loan... TAYLOR: Especially if they're absentee slumlords CLARK: Exactly. TAYLOR: Let me say something. It says "type of assistance" and then there's the sentence, "the maximum amount of the assistance without a multi - property incentive would be $30,000 per unit ". For example: six -home unit would be $180,000. Mr. Crowe made the comment that v there are 44 units down there. Now do the math on that — we don't have enough money to do this one project even. CROWE: Completely rehabilitate that whole area? TAYLOR: Whatever... CROWE: Realistically, this is like a traditional, back in the 60's urban renewal project. You'd level the place and start over. We've sat there and said how do we approach this? TAYLOR: I know exactly what you're saying. CROWE: It's like... well let's just start scraping it layer by layer and do the best we can. TAYLOR: It goes on a little further. The maximum amount for assistance with a multi - property incentive would be $50,000 or $300,000 for six homes. So however it ends up, the choice being, if we have six at $180,000, $360,000 would be 12 — you could get another five, that would be 17 and take up the total, $500,000 you could do 17 out of them out of the 44. BAKER: With the current allotment. TAYLOR: Okay, then go to the $50,000 that we had ... that even scares me more. Would you want more money with the current allotment, or do we go to $1 million? CROWE: If it works, we would probably come back to you for more to.:. RHDCMIN:7 -27 -04 Page #6 TAYLOR: It's so easy to give away other people's money. It's the easiest thing in the world CLARK: But if some other city is going to get it, if we don't get it. These are federal.funds, not local money. I hear where you're coming from, but if someone else is going to get it and use it in their city... WAGNER: These are federal funds dedicated to... correct Lisa? TAYLOR: Every city gets caught into it — "federal government, give us more money ". IMPERIAL: I had it in the Army and a lot of other areas. But, if you don't spend it, you lose it. TAYLOR:, But, indirectly, the federal government gets taxes from all of us whether it's a dollar apiece or two dollars apiece. CLARK: So then why shouldn't it be used in Rosemead and not Montebello. TAYLOR: We've been giving our money away. It's referred to here because they're building new housing projects. CLARK: And, I don't want to give anymore away as long as it's coming. TAYLOR: But, 1 don't want to give it to a slumlord either. CLARK: I agree. I don't want to give it, that's why I want to change it to a ... TAYLOR: But anyway, we can't do much in two days. I'm frustrated about that. We can't even go find the owners in two days to find out who is really at fault. CLARK: But, we don't have to do all that in two days. We just have to say we're interested in the program. IMPERIAL: And, redo the program. CLARK: How do we form a motion that would satisfy that? BAKER: The motion would be that you are willing to enter into a commitment agreement and that you want to rework some of the draft points and bring it back for approval. CROWE: It's the staff recommendation to approve the concept of the partnership and the draft and bring back whatever program guidelines and specifics. VASQUEZ: Move the recommendation: IMPERIAL: Second. RHDCMIN:7 -27 -04 Page a7 COUNCILMAN ALARCON: I do have a question. Mr. Taylor was reading about the multi - property. The way I interpret that is that doesn't mean if it is six units, for instance, you get 6 times $50,000. It means the total property which stands alone, even though it is six units. It's a total of the $50,000. BAKER: It's similar to what we do in our commercial rehab program, which is one owner comes in and wants to do something, he can only get $30,000 per unit. TAYLOR: Excuse me, that's his question, per unit. What is a unit? BAKER: A place where an individual family resides. TAYLOR: That's six then. BAKER: The owner could come to us and he could say, for example: "I have some of my own money I want to put in, but I don't have enough to do all of it, and I would like to do three units worth, and I will put the rest of the money in ". Then he would do that and it would be $30,000 or that would be $90,000 in that case. Now one of the big problems out in Langford Place especially, is that they have a private street and there is no way to pay for needed street improvements. The other properties have an easement and most of them, I think, do not have any other public access except through this private street. It's one of the few streets in the City that is that way. What we are offering, we know, obviously, to do things to the parking in the street to improve what Mr. Taylor so rightfully called that single lane of traffic, part of which is caused by all the cars that park along it — is to be able then to lend them money to make improvements so that the people that live in the neighborhood can use the neighborhood. The renters in the neighborhood, which are Rosemead residents, are trying to improve access to their homes. The owner would actually have to take on the additional debt to do that, they would get a multi - property incentive to be able to afford that. They would be able to make the life,. safety, code enforcement corrections that are required and there would still be special money to also improve the access which.... ALARCON: One more question. This is a little bit off. Isn't there a body or repair shop that borders that street? TAYLOR AND BAKER: On the east side. ALARCON: Coincidentally, I was in that area a few months ago for a different reason. As I was sitting there in my car while my wife was taking care of some business, people were parking... some of the repair people's cars were apparently there and they were moving them around because they had to move cars out of the shop. Is there anyway they can be forced to keep them from the street for their repairs? BAKER: I understand they are looking at using that vacant lot. RHDCMIN:7 -27 -04 Page n8 BRAD JOHNSON, PLANNING DIRECTOR: They've entered into a lease agreement with the owner of that vacant lot to pave it, landscape it, to have more vehicle storage area. They've filed - a conditional use permit with the City to expand. They will probably be going before the Planning Commission before the next month or two and we're requiring extensive landscaping improvement.. We're requiring that they close the access onto that private street and take the access off of Garvey. BAKER:. So, they won't be adding to the traffic and also they won't be able to park their cars along that lane and keep that access... right now they park on both sides and it's very narrow and there's no turn around at the end so you practically have to back your car up to get out. VASQUEZ: That's why I never drove in. I thought it was a private driveway or something. TAYLOR: I swear.to God, with the grace of God, they would have hit me today down there. I turned into that dirt lot to back out and some guy came roaring... by the time I pulled in to back out, he roared up that alleyway and I swear I don't know how I missed getting hit because he had already passed the car and it only takes 5 to 10 feet to back into. But, he was speeding, he wasn't just rolling down the alley. So that's a problem with just one lane in and out. It's broken up so bad, full of water and puddle holes. Something has to be done with this street, again, if we're to put in $300,000 or $' /a million without -doing something with that street. It's ridiculous. CLARK: But, we can't do it unless they volunteer. BAKER: It's a private street so we would have to work with them to do it. As Don has said, it is a carrot and stick approach. We're saying that Code Enforcement needs to address these conditions, and here is a property incentive to do that and by the way, we're going to have conditions attached to that, then you can take our money. IMPERIAL: Am I correct in saying that for them to donate that street, it has to be improved to City specifications? CROWE: There's no way we could make it a City street. BAKER: It's very substandard. CROWE: We could maybe give them the $500,000 and tell them to repair their own street BAKER: We could ask the body shop guy to block his access so there would be no incentive or ability for them to use the street once he blocks it off. They'll landscape both sides of the wall so that it improves the aspect for the residential properties. CLARK: Any other comments? We have a Motion and a Second to approve the staff recommendation. All in favor say Aye. Any opposition? RHDCMIN:7 -27-04 Page #9 Vote resulted: Aye: Alarcon, Vasquez, Clark, Imperial No: Taylor Absent: None Abstain: None TAYLOR: No. The reason being is that we don't have enough information and I don't want to bail out a slumlord, or who owns the property. CLARK: We're going to find all that out. TAYLOR: I'd appreciate that. VERBATIMDIALOGUE ENDS. 2. MATTERS FROM OFFICIALS Vice-president Imperial stated that the sidewalk in back of City Hall (by the parking lot) has risen to where it is a potential hazard. 3. ORAL COMMUNICATIONS FROM THE AUDIENCE ON HOUSING DEVELOPMENT MATTERS - None 4. ADJOURNMENT There being no further action at this time, the meeting was adjourned at 8:00 p.m. Respectfully submitted: APPROVED: Corporation Secretary PRESIDENT RHDCMIN:7 -27 -04 Page 410 NOT OFFICIAL UNTIL APPROVED BY THE ROSEMEAD ROUSING DEVELOPMENT CORPORATION MINUTES OF THE REGULAR MEETING ROSEMEAD HOUSING DEVELOPMENT CORPORATION JULY 27, 2004 The Regular Meeting of the Rosemead Housing Development Corporation was called to order by President Clark at 7:00 p.m. in the Conference Room of City Hall, 8838 E. Valley Boulevard, Rosemead, California. The Pledge to the Flag was led and Invocation were waived as having been completed during the meeting just adjourned. ROLL CALL OF OFFICERS: Present: Directors Alarcon, Taylor, Vasquez, Vice - President Imperial and President Clark Absent: None APPROVAL OF MINUTES: NONE APPROVAL OF PARTNERSHIP WITH THE CITY OF ROSEMEAD FOR USE OF HOME FUNDS Bill Crowe, City Manager, presented the staff report. Director Taylor requested that the following section be verbatim and be included as part of the Minutes of the City Council meeting of July 27, 2004 regarding: PUBLIC HEARING — APPROVAL OF PARTNERSHIP WITH THE ROSEMEAD HOUSING DEVELOPMENT CORPORATION FOR USE OF HOME FUNDS VERBATIM DIALOGUE BEGINS: DIRECTOR TAYLOR: I need to ask the Board members if they have been down there, upon the property to look at it? VICE - PRESIDENT IMPERIAL: I have... TAYLOR: Mr. Imperial, I went down today and drove back through the property and looked at it and I was shocked, literally shocked. I am ashamed that people have to live in that quality of property due to the lack of maintenance and the broken up driveway. I can't call it a street because there is only one lane of traffic. When I drove down, there were cars parked on both sides of it. The carports are deteriorated. The vacant lot next door is a storage lot. I don't know how many vehicles are out there. There are probably 10 or 12 cars parked in there. But, I agree something needs to be done and I think indirectly or directly, we're being led into something that ... this is now a precedent. I don't know if it is an absentee landlord, a slumlord for it to get that bad, but it's going to cost a $1/2 million. These guys are getting rewarded for RHDCMIN:7 -27 -04 Page 41 misconduct for this kind of... that's why I asked if you've seen the property. How come this hasn't been on rehab before? There's no other place in the City that would ever get away with what's down there. IMPERIAL: I think if may, Bill. I brought this up two years ago and then last year for signs and what have you. It is something that we have.been trying to get done. We had to do it properly and I don't think the vehicle was there to do it. TAYLOR: Why couldn't Rehab go down there and write the property up? We've done it with other apartments. IMPERIAL: This again, is out of the area and therefore that's the reason... it took a slow process to get it done. TAYLOR: We can go every where in the City and write up property. I'm just thinking, I'm bused by whoever owns it. I don't know how many properties... who owns all those properties ?�U,„ BILL CROWE, CITY MANAGER: We have at least six or seven separate ownerships there. There is one that ... the six four plexes there at 3009 and 3027 are probably the ones that come closest to meeting the slum definition. There are, as we indicated, as least two or three property owners that have indicated a willingness to work with us to clean up. Obviously, we're going to continue on a code enforcement tack. TAYLOR: When you say continue, when were they ever inspected or given any notices? CROWE: I don't know that it said that they've ever gone through rehab. I'd have to ask Jim Guerra. TAYLOR: I'm ashamed that people would be abused and have to live in conditions like that. That isn't right. IMPERIAL: It's been going on a long time, Gary. In fact I've asked for signs on there because people are going down there and dumping garbage in there... put signs on the gates or what have you need to make sure... Again I can understand how we got to this point because it's just been a... we've got so many things out there in the community. Now that we're getting fixed up in that area as far as the problems were concerned and having the special meeting, we're now in a position where we should be looking over the fence at those things. TAYLOR: We've had a policy where homeownership is required for the assistance programs with the... rightfully so, they're living in the community we're investing in. The homeowner has equity in it and every reason to participate. And, I don't know who these owners are. I don't know if they're renting them out. It's a shame if it's an absentee landlord and we're going to put $1/2 million into his property. We had a property on here tonight on DeAdalena Street. A homeowner has done things that are code violations and we're not paying for those. RHDCMIN:7 -27 -04 Page n2 PRESIDENT CLARK: It's a loan though, isn't it? IMPERIAL: This is a law and it's not... TAYLOR: No, it's forgivable in ten years. IMPERIAL: Doesn't it go against the owner of the property. LISA BAKER, GRANTS COORDINATOR: In terms of the code enforcement and rehab cases, every one of those single- family homeowners is approached for our residential rehab program and if they are income eligible they can participate. In this sense this program would also mirror that so the properties that are in code enforcement would have access to funds that they're not able to make the corrections. These properties have been, are going through code enforcement at this point and have been given notices... TAYLOR: Excuse me. That's the first I've heard of it. They are going through the process now? They have been cited. 1:1:\;4olt�iY:1a TAYLOR: I'd like copies of that. BAKER: They've been cited and at least three of the owners indicated that they don't have sufficient funds to make the repairs and they want to do it, that is why they're interested in participating. The street part is difficult to address because it's a private street so the City doesn't have a lot of ability to do the improvements absent a multi - family program, and you'll see the draft talking points allowed for a multi - family incentives. I think there are three owners of the street, everybody else has an easement. So, if they were to come together to take the money, then we could actually make the street improvements there. It is a loan, it would be secured by a second trust deed, which would actually then give us a little more control over the properties than we currently have. And, in addition, instead, while it is a loan and it is deferred because obviously some of these owners don't have the funds to make the improvements on their home. It nevertheless would contain some very significant management and maintenance covenant requiring them not to allow criminal activity on their property, to do maintenance and if they don't do the maintenance that is required, to allow us access to the property to make repairs if they will not make them, and to lien their property. So, we do not have to go through rehab again in order to be able to make the repairs — and they would have to have sound management practices in order to prevent some of the items... so it's not like a "no strings attached" loan. It would require of them some thoroughly hefty commitment which we would have secured by the deed of trust loan on the property. WAGNER: I think, Gary, it's a carrot and stick approach. I've worked here for 21 years and I know... and I think about 20 years ago we've looked at this — at rental rehab assistance. At that time the Council made a decision not to move ahead with it. We thought, in really looking at RHDCMIN:7 -27 -04 Page a3 this target area... and to be honest I haven't been down there in quite a while either because for whatever reason, we don't get many complaints other than Mr. Imperial getting some. We don't get many complaints from that section because I would think that the type of people that live there, maybe they don't speak English, maybe they're afraid to call City Hall. But, I think this is an unique opportunity of the Council and the Corporation to maybe use this as a pilot program. Otherwise... TAYLOR: Well, it's still, everyone ofus ... and I have to say whether it's 80 or 90 percent of the residents in the community are responsible for maintaining their property. But, let me clarify one thing.. You did not clarify that it's a ten -year forgiveable loan. At the end they don't have to pay it back. Is that correct? BAKER: As it's currently structured, it's structured similar to the way we do our other commercial loans, which is that it is deferred if they meet all management and maintenance covenants and they maintain all the portable units, and they allow an annual inspection of their property by us, and they certify their income eligibility every year for ten years, it would be forgiven. TAYLOR: The loan can be forgiven in ten years. Then we're talking up to, God only knows whether it is $300,000 or $500,000. IMPERIAL: Don't we go to the owner of the property... who owns it. BAKER: We would negotiate. This would allow the RHDC to negotiate a loan that is a current unit minimum and maximum on it. For example, if there were ten units and the owner was going to put in half the money himself, then maybe he'll need five units that would be the ones that we would loan money against. And, then it would be the same would minimum and maximum, based on the need in the building. COUNCILMAN JOE VASQUEZ: Is this is project street behind the drive - through dairy? IMPERIAL: Yes. VASQUEZ: I've always seen it from a distance. I've stopped there, but like you said, no one comes out complaining, they stay quiet and away. WAGNER: It's quite an eye opening. I just think it's a neat opportunity... VASQUEZ: I've eaten across the street from ... the little burrito place... TAYLOR: It's unique opportunity, but it's a first time... then the next person comes and, I won't tolerate saying No to the next person because that's a double standard and that's why we had this. The first one we get in, there's the potential... it's bad down there. And, I don't know how many houses are involved on both sides of the street and back at the end of the cul de sac. We RIIDCMIN:7 -27 -04 Page 04 don't even know that, we don't know the owners. We a policy in the past and once we do it, we can't go back and say No, we did it once and that person got special treatment. ROPERIAL: Is it possible to get more information on this? TAYLOR: It's two days before it expires, and that's the other bone I have to pick. Why did we wait until this time? Two days. CLARK: What happens if we don't use it? "ERIAL: All I can say is they're badly in need. I've seen better looking projects down in East L.A. than these. I think it's about time we do something with it. TAYLOR: It's not our responsibility and it's not the taxpayers responsibility to help somebody that has... and it says "rental units ". That's what is happening. We can only do so much and then when we start doing it, the other residents /owners have a right to come here and say you did it for them, why can't you do it for me? And then we're over a barrel that way. CROWE: I guess if you're asking us... again... we're proposing it from the standpoint of being a pilot. Is this the last shot at this? I would see if this works. Those other people that want to step up to the plate and say we want to fix these housing units up, we would support that as long as the funds were available. I believe there are 44 units there total. We've got a six -plex, we've got six four- plexes, which is 24. That's the worst one. That's not the one that we're talking about working with. TAYLOR: How does that work then? BAKER: He has not approached us. We would probably approach him. If I can clarify for a moment. This is a commitment agreement, so it's not the final program, which would have to come back to you for approval. This allows us to commit these funds and then we have three additional years to expend those, so we would more fully develop the program and bring the program back to you. At this point we are just asking the... the City is asking the RHDC if they are interested in committing to putting this program together, that's what is before the Corporation tonight. CLARK: Do we have to have in there that monies are forgiven? Could we have some kind of other program where we require they repay them then we loan them to someone else. BAKER: We could do a deferred loan that's not forgiven. You could do a residual receipt loan. You could do a regular loan. But, most of these owners don't have sufficient wherewithal to make regular payments on loans. CLARK: But, if this person owns a four -plex and with the price of housing escalating all the time, they have equity. RHDCMIN:7.27 -04 Page n5 BAKER: You could also make a deferred loan that would be due on sale of transfer, you could also do that. CLARK: So, we have room. If we approve this tonight merely to keep the funds from going back to the federal government because they will expend it in some other city — the way we don't like. If we approve this tonight, do we have room to wiggle around with... BAKER: Those are draft program points and we would further develop the program to bring back for approval... CLARK: So we could change it to where it's not a forgivable loan, because I have a problem with that. Someone is just lazy and doesn't do anything and then they get a loan... TAYLOR: Especially if they're absentee slumlords. CLARK: Exactly. TAYLOR: Let me say something. It says "type of assistance" and then there's the sentence, "the maximum amount of the assistance without a multi - property incentive would be $30,000 per unit ". For example: six -home unit would be $180,000. Mr. Crowe made the comment that there are 44 units down there. Now do the math on that — we don't have enough money to do this one project even. CROWE: Completely rehabilitate that whole area? TAYLOR: Whatever... CROWE: Realistically, this is like a traditional, back in the 60's urban renewal project. You'd level the place and start over. We've sat there and said how do we approach this? TAYLOR: I know exactly what you're saying. CROWE: It's like ... well let's just start scraping it layer by layer and do the best we can. TAYLOR: It goes on a little further. The maximum amount for assistance with a multi - property incentive would be $50,000 or $300,000 for six homes. So however it ends up, the choice being, if we have six at $180,000, $360,000 would be 12 — you could get another five, that would be 17 and take up the total, $500,000 you could do 17 out of them out of the 44. BAKER: With the current allotment. TAYLOR: Okay, then go to the $50,000 that we had ... that even scares me more. Would you want more money with the current allotment, or do we go to $1 million? CROWE: If it works, we would probably come back to you for more to... RHDCMIN:7 -37 -04 Page n6 TAYLOR: It's so easy to give away other people's money. It's the easiest thing in the world. CLARK: But if some other city is going to get it, if we don't get it. These are federal funds, not local money. I hear where you're coming from, but if someone else is going to get it and use it in their city... WAGNER: These are federal funds dedicated to... correct Lisa? TAYLOR: Every city gets caught into it — "federal government, give us more money ". IMPERIAL: I had it in the Army and a lot of other areas. But, if you don't spend it, you lose it. TAYLOR: But, indirectly, the federal government gets taxes from all of us whether it's a dollar apiece or two dollars apiece. CLARK: So then why shouldn't it be used in Rosemead and not Montebello. TAYLOR: We've been giving our money away. It's referred to here because they're building new housing projects. CLARK: And, I don't want to give anymore away as long as it's coming. TAYLOR: But, I don't want to give it to a slumlord either. CLARK: I agree. I don't want to give it, that's why I want to change it to a ... TAYLOR: But anyway, we can't do much in two days. I'm frustrated about that. We can't even go find the owners in two days to find out who is really at fault. CLARK: But, we don't have to do all that in two days. We just have to say we're interested in the program. IMPERIAL: And, redo the program. CLARK: How do we form a motion that would satisfy that? BAKER: The motion would be that you are willing to enter into a commitment agreement and that you want to rework some of the draft points and bring it back for approval. CROWE: It's the staff recommendation to approve the concept of the partnership and the draft and bring back whatever program guidelines and specifics. VASQUEZ: Move the recommendation: IMPERIAL: Second. RHDCMW:7 -27 -04 Page #7 COUNCILMAN ALARCON: I do have a question. Mr. Taylor was reading about the multi - property. The way I interpret that is that doesn't mean if it is six units, for instance, you get 6 times $50,000. It means the total property which stands alone, even though it is six units. It's a total of the $50,000. BAKER: It's similar to what we do in our commercial rehab program, which is one owner comes in and wants to do something, he can only get $30,000 per unit. TAYLOR: Excuse me, that's his question, per unit. What is a unit? BAKER: A place where an individual family resides. TAYLOR: That's six then. BAKER: The owner could come to us and he could say, for example: "I have some of my own money I want to put in, but I don't have enough to do all of it, and I would like to do three units worth, and I will put the rest of the money in ". Then he would do that and it would be $30,000 or that would be $90,000 in that case. Now one of the big problems out in Langford Place especially, is that they have a private street and there is no way to pay for needed street improvements. The other properties have an easement and most of them, I think, do not have any other public access except through this private street. It's one of the few streets in the City that is that way. What we are offering, we know, obviously, to do things to the parking in the street to improve what Mr. Taylor so rightfully called that single lane of traffic, part of which is caused by all the cars that park along it — is to be able then to lend them money to make improvements so that the people that live in the neighborhood can use the neighborhood. The renters in the neighborhood, which are Rosemead residents, are trying to improve access to their homes. The owner, would actually have to take on the additional debt to do that, they would get a multi - property incentive to be able to afford that. They would be able to make the life, safety, code enforcement corrections that are required and there would still be special money to also improve the access which.... ALARCON: One more question. This is a little bit off. Isn't there a body or repair shop that borders that street? TAYLOR AND BAKER: On the east side. ALARCON: Coincidentally, I was in that area a few months ago for a different reason. As I was sitting there in my car while my wife was taking care of some business, people were parking... some of the repair people's cars were apparently there and they were moving them around because they had to move cars out of the shop. Is there anyway they can be forced to keep them from the street for their repairs? BAKER: I understand they are looking at using that vacant lot. RHDCMIN:7 -27 -04 Page #8 BRAD JOHNSON, PLANNING DIRECTOR: They've entered into a lease agreement with the owner of that vacant lot to pave it, landscape it, to have more vehicle storage area. They've filed a conditional use permit with the City to expand. They will probably be going before the Planning Commission before the next month or two and we're requiring extensive landscaping improvement. We're requiring that they close the access onto that private street and take the access off of Garvey. BAKER: So, they won't be adding to the traffic and also they won't be able to park their cars along that lane and keep that access... right now they park on both sides and it's very narrow and there's no turn around at the end so you practically have to back your car up to get out. VASQUEZ: That's why I never drove in. I thought it was a private driveway or something. TAYLOR: I swear to God, with the grace of God, they would have hit me today down there. I turned into that dirt lot to back out and some guy came roaring... by the time I pulled in to back out, he roared up that alleyway and I swear I don't know how I missed getting hit because he had already passed the car and it only takes 5 to 10 feet to back into. But, he was speeding, he wasn't just rolling down the alley. So that's a problem with just one lane in and out. It's broken up so bad, full of water and puddle holes. Something has to be done with this street, again, if we're to put in $300,000 or $'/2 million without doing something with that street. It's ridiculous. CLARK: But, we can't do it unless they volunteer BAKER: It's a private street so we would have to work with them to do it. As Don has said, it is a carrot and stick approach. We're saying that Code Enforcement needs to address these conditions, and here is a property incentive to do that and by the way, we're going to have conditions attached.to that, then you can take our money. IMPERIAL: Am I correct in saying that for them to donate that street, it has to be improved to City specifications? CROWE: There's no way we could make it a City street. BAKER: It's very substandard. CROWE: We could maybe give them the $500,000 and tell them to repair their own street. BAKER: We could ask the body shop guy to block his access so there would be no incentive or ability for them to use the street once he blocks it off. They'll landscape both sides of the wall so that it improves the aspect for the residential properties. CLARK: Any other comments? We have a Motion and a Second to approve the staff recommendation. All in favor say Aye. Any opposition? RHDCMIN:7 -27 -04 Page #9 Vote resulted: Aye: Alarcon, Vasquez, Clark, Imperial No: Taylor Absent: None Abstain: None TAYLOR: No. The reason being is that we don't have enough information and I don't want to bail out a slumlord, or7-hq�owns the pypperty. CLARK: We're going to find all that out. TAYLOR: I'd appreciate that. VERBATIM DIALOGUE ENDS. 2. MATTERS FROM OFFICIALS Vice - President Imperial stated that the sidewalk in back of City Hall (by the parking lot) has risen to where it is a potential hazard. 3. ORAL COMMUNICATIONS FROM THE AUDIENCE ON HOUSING DEVELOPMENT MATTERS - None 4. ADJOURNMENT There being no further action at this time, the meeting was adjourned at 8:00 p.m. Respectfully submitted: Corporation Secretary APPROVED: PRESIDENT RHDCMIN:7 -27 -04 Page # 10