(1)AR 100708 Vacation of Streets

Browse Search

ITEM #1 CITY OF COLTON For the City Council Meeting and October 7, 2008 TO: Honorable Mayor and Councilmembers FROM: Candace E. Cassel, Economic Development Direct SUBJECT: Continuation of Public Hearing to Vacate any Intef TtDheCQity May Have in the Streets within the Rancho Mediterrania Mobile Home Estates to October 21, 2008: Request for Continuance to October 21, 2008 City Council Meeting BACKGROUND In 1993, the Redevelopment Agency acquired the Rancho Mediterrania Manufactured Home Estates (the "Park") as a negotiated settlement of a dispute with the former owners regarding the application of the City's mobilehome rent control ordinance. The Agency subsequently proceeded to convert the Park to condominium lots and resell the lots to the residents for the purposes of providing the residents homeownership opportunity, an opportunity to control their total housing cost and to aid the Agency in maintaining and preserving affordable housing. When the property is transferred from the Agency to the homeowner, their underlying space and 1/259 of the interest in the common area is also transferred to them, which includes the streets. In 1994, the City of Colton issued assessment district 1913 bonds and refinanced them in 2000 (collectively "RAD 00-01"). Proceeds from the sale of the bonds were used to pay a portion of the debt the Agency incurred to finance its acquisition of the Park. The revenue stream to pay the debt service on the bonds is generated by a lien that was placed on each of the lots and that obligation was transferred to the new lot owner upon their acquisition of the property and is due and payable with their property tax payments. In 1999, the Agency Board reaffirmed its decision to continue with the condominium conversion project, providing affordable housing options to the residents within the park, and continued to sell the lots with a 1/2591h undivided interest in the common areas as defined in the condominium map that was recorded in 1994. As part of its reaffirmation to continue with the conversion project in 1999, the Agency Board also agreed to reduce the burden on the lot owners by paying off the balance of the assessment district upon the transfer of the property 1) to the new buyers and 2) to those original lot purchasers who still occupied the property in 1999 in exchange for recordation of affordability covenants recorded against the property. The affordability covenants restrict the resale of the property to low and moderate income housing residents and assists the Agency in satisfying its low to moderate income housing production units, which are required under California Redevelopment Law. When the City issued the assessment district bonds ownership of the streets became unclear, although the City never formally accepted them as city streets. The Agency continued to sell its interest in the streets to the lot owners with each lot sale. Hence, there has been a great deal of confusion over the ownership of the streets. It has always been the intention of the City/Agency