2005 AGN DEC 20 I22 - Laserfiche WebLink

Browse Search

REDEVELOPMENT AGENCY FOR THE CITY OF COLTON ITEM #22 Agency Board Meeting of December 20, 2005 TO: Honorable Chairperson and Boardmembers FROM: Candace E. Cassel, Economic Development Director SUBJECT: Consideration of Approval of Agency Resolution No. 849 Adopting a Replacement Housing Plan DATE: December 5, 2005 BACKGROUND Pursuant to a Disposition and Development Agreement (DDA), dated July 18, 1989, between the Redevelopment Agency, Cooperative Services, Inc. (CSI) as the agent, and Colton Nonprofit Senior Housing, Inc. (Colton Non -Profit) as the owner, the Colton Non -Profit entered into a contract with Turner Construction to build the 101 -unit Colton Palms Senior Housing which was completed on August 6, 1991. In 1997, the building began to exhibit problems with the exterior cladding or "skin." Given the Agency's relationship to the project and it's obligation at that time to fund any debt service, it agreed to be a party to litigation against the contractor and architect. In 1999, Colton Non -Profit and the Agency initiated litigation against Turner Construction and Valerio Architects. A claim against Valerio Architects was settled and final payment of $247,519.48 was received by the Agency in February 2002. In early 2003 the lawsuit with Turner Construction was settled with payment of $5,500,000 to Colton Non -Profit and the Agency. The Turner Settlement Funds were deposited into an interest bearing client trust account of the law firm of Best Best & Krieger LLP ("BB&K"). On April 5, 2004, the Agency and the City filed an action against Colton Non -Profit in the Superior Court of the State of California, County of San Bernardino (the "Court"), entitled Redevelopment Agency for the City of Colton v. Colton Non -Profit Senior Housing, Inc., Case No. SCV SS114148 (the "Agency's Action") to determine (1) ownership and control of Colton Palms, and (2) ownership of the Turner Settlement Funds and earned interest. On July 13, 2004, the Agency filed an amended complaint (the "Amended Complaint") asserting an additional claim for breach of contract and seeking specific performance of its purported right to purchase Colton Palms pursuant to an option provision in the Disposition and Development Agreement dated July 18, 1989. On May 19, 2004, Colton Non -Profit filed a separate action against the City and the Agency entitled Colton Non -Profit Senior Housing, Inc. v. City of Colton, et al., Case No. SCV SS115619 (the "Colton Non -Profit Action"). Over the past 1 % years, the parties have been engaged in mediation as an attempt to settle the dispute over the building, its future and the settlement funds. Although Relocation pursuant to California Redevelopment Law and construction of an alternative facility were offered, it was ultimately rejected by Colton Non -Profit in lieu of an alternative settlement. R:\Administration\Meetings\2005 MEETINGS\December 20, 2005\Replacement Housing Plan Staff Report Delmar rev 121505.doc