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Report to City Council and Redevelopment Agency Board regarding Colton Palms Settlement Agreement Page 3 of 4 million with Colton Non-Profit. The balance of the money will be forwarded to the Agency with the following distribution: $50,000 initial deposit with the property manager (total amount $76,500), $75,000 to be held for potential capital improvements to Colton Palms, $120,000 to be held for operating subsidy and $1.2 million to repay the low-moderate income housing fund for legal expenses. The balance of approximately $3.8 million will be deposited into the low- moderate income housing fund. Interest earned from the $5.5 million will be used to reimburse Inland County Legal Services for charges it incurred as part of the mediation and then will be used to pay delinquent utilities on the property. ENVIRONMENTAL IMPACT Approval of the Settlement Agreement may lead to the removal of the housing units from the low-moderate income housing stock. Should the units be destroyed, CEQA review will occur as part of that process. CONFLICT OF INTEREST — Gift Disclosure Requirements Colton Non-Profit Housing, Inc. President: Maurice R. Peters Contact: Maurice R. Peters CONSISTENCY WITH IMPLEMENTATION PLAN The Replacement Housing Plan is consistent with Section 4.5 of the 2005-2009 Implementation Plan which addresses the senior housing project. RELATED ITEMS A Replacement Housing Plan for the Colton Palms project is also included as part of this agenda. Section 33413.5 of the California Community Redevelopment Law (Health and Safety Code, Section 33000 et seq.) requires the Agency to adopt by resolution a replacement housing plan not less than 30 days prior to the execution of an agreement for acquisition of real property, or the execution of an agreement for the disposition and development of property, or the execution of an owner participation agreement, which agreement would lead to the destruction or removal of dwelling units from the low -and moderate-income housing market. Should the City and Agency approve this item, it is recommended that the Executive Director be authorized to execute the Agreement upon receipt of executed Release of Claims from each person who is a resident and/or a lessee of Colton Palms, but in no event earlier than 30 days of the Agency's adoption of the Replacement Housing Plan. R:�Administration�lVleetings�2005 MEETINGS�December 20, 2005\Colton Palms Settlement Agreement Staff Report.doc