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HomeMy WebLinkAboutReso 2001-204 RESOLUTION NO. 2001-204 (Agency Resolution No. 1735) RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA CONDITIONALLY APPROVING ADDITIONAL FiNANCIAL ASSISTANCE, SUBJECT TO FUTURE APPROPRIATION, iN THE FORM OF A LOAN FROM THE HOME FUNDS AND LOW AND MODERATE iNCOME HOUSING FUND IN AN AMOUNT NOT-TO-EXCEED $300,000 AND $450,000, RESPECTIVELY, TO AVALON COMMUNITIES, LLC FOR THE DEVELOPMENT OF A MIXED-USE PROJECT, INCLUDING 106 AFFORDABLE HOUSiNG UNITS WHEREAS, the City of Chula Vista is an entitlement/participating jurisdiction for the U.S. Department of Housing and Urban Development (HUD) ~mding programs and is awarded on an annual basis a formula grant from the HOME Investment Partnership Program (HOME); and WHEREAS, HOME funds are designed exclusively to create affordable housing opportunities for low-income households through the construction, purchase, and/or rehabilitation of affordable housing for rent or homeownership or provide direct rental assistance to low-income people; and WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize and direct the Redevelopment Agency of the City of Chula Vista (the "Agency") to expend a certain percentage of all taxes which are allocated to the Agency pursuant to Section 33670 for the purposes of increasing, improving and preserving the commtmity's supply of low and moderate income housing available at affordable housing cost to persons and families of low and moderate income, lower income, and very low income; and WHEREAS, pursuant to applicable law, the Agency has established a Low and Moderate Income Housing Fund (the "Housing Fund"); and WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out its affordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of very low income and lower income households, or persons and families of low or moderate income, to the extent those households cannot obtain housing at affordable costs on the open market, and to provide financial assistance for the construction and rehabilitation of housing which will be made available at an affordable housing cost to such persons; and WHEREAS, pursuant to Health and Safety Code Section 33413(b), the Agency is required to ensure that at least 15 percent of all new and substantially rehabilitated dwelling units developed within a project area under the jurisdiction of the Agency by private or public entities or persons other than the Agency shall be available at affordable housing cost to persons and families of low or moderate income; and Resolution 2001-204 -- Page 2 WHEREAS, Avalon Communities, LLC ("Developer") proposes to construct a mixed- use project of 15,000 square feet of commercial retail and a 106 unit multifamily rental development, with 10 units affordable to very low income households at 50 percent of the Area Median Income (AMI), 41 units affordable to low income households at 60 percent of the Area Median Income (AMI) and 55 units affordable to moderate-income households at or below 120 percent of AMI to be located on the northeast comer of Main Street and Broadway within the Southwest Redevelopment Project Area ("Project"); and WHEREAS, Developer has received an allocation of Multifamily Housing Revenue Bonds from the California Debt Limit Allocation Committee (CDLAC); and WHEREAS, Developer is applying for four percent (4%) tax credits from the Tax Credit Allocation Committee (TCAC); and WHEREAS, additional financing is necessary in order to make the residential use of the Project feasible; and WHEREAS, the provision of affordable housing units like the Project is consistent with and called for by the City's General Plan Housing Element, Consolidated Plan, and Califomia - Health and Safety Code; and WHEREAS, the City/Agency wishes to provide Developer with a development loan of seven hundred fifty thousand dollars ($750,000) to assist with the financing gap for the construction of the residential units of the Projeet; and WHEREAS, the City/Agency's provision of funds to the residential use of the Project will directly improve the City's supply of very low and moderate-income housing; and WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and Safety Code Section 33490, which sets forth the objective of providing housing to satisfy the needs and desires of various age, income and ethnic groups of the community, and which specifically provides for the construction of new affordable rental housing units through Agency assistance; and WHEREAS, the residential use of the Project furthers the goals of the Agency set forth in the Implementation Plan as it will facilitate the creation of affordable housing which will serve the residents of the neighborhood and the City; and WHEREAS, the City's Housing Advisory Commission did, on the 7th day of June, 2000, hold a public meeting to consider said request for financial assistance; and Resolution 2001-204 Page 3 WHEREAS, the Housing Advisory Commission, upon heating and considering all testimony, if any, of all persons desiring to be heard, and considering all factors relating to the request for financial assistance, has recommended to the Redevelopment Agency that the appropriation be approved because the Commission believes that the Agency's financial participation in the development of the Project will be a sound investment based upon Developer's ability to effectively serve the City's housing needs and priorities as expressed in the Housing Element and the Consolidated Plan and the cost effectiveness of the Agency's financial assistance based upon the leveraging of such resources; and WHEREAS, in accordance with the requirements of CEQA, the Environmental Review Coordinator has determined that the Project requires the preparation of an Initial Study, such study (IS 00-47) was prepared, and based on such study a Negative Declaration was adopted in connection with the Special Use Permit for the Project at a hearing held on June 13, 2000. NOW, THEREFORE, BE IT RESOLVED the City Council and the Redevelopment Agency of the City of Chula Vista do hereby conditionally approve a residual receipts loan subject to future appropriation in an amount not-to-exceed $300,000 from the City's HOME funds and $450,000 from the Agency's Low and Moderate Income Housing Set-Aside fund to Developer for the construction of the residential units of the Project subject to the City's/Agency's approvals of an affordable housing and loan agreement which shall include, at a minimum, the following terms and conditions: 1. Developer shall submit within a timely manner, applications for funding of the remaining approximately $3.8 million financing gap (the "Financing Gap") to the State Farmworker Housing Grant (FWHG) Program for the next funding cycle and other appropriate funding programs identified by the Developer or the City/Agency for the development of the residential units of the Project. Developer shall exercise its best efforts to obtain any or all of the Financing Gap proceeds and to identify potential additional sources for same. Any Financing Gap proceeds shall be immediately applied to repay the City/Agency loan of $750,000 on a first priority basis. 2. Funds shall be used only for those costs directly related to the residential units of the Project. 3. The loan repayment will be secured by Deeds of Trust and Promissory Notes for the property on behalf of both the City of Chula Vista and the Redevelopment Agency of the City of Chula Vista end recorded against the Project property. 4. Payment of any or all of the remaining principal and interest on the City/Agency loan shall be made, on an annual basis after issuance of the Certificate of Occupancy for the Project, out of a fund equal to fifty percent (50%) of the "Residual Receipts", rental income from the Project minus debt service on the bonds, payment of the deferred developer fee, and reasonable operating expenses. Resolution 2001-204 Page 4 5. The term of the loan shall be fifty-five (55) years. 6. The outstanding balance shall accrue with simple interest at 3 percent per annum. 7. Developer will be required to operate the Project consistent with the Regulatory Agreement required by the Project's bond and tax credit financing, the covenants imposed by the Agreement, and any other project requirements. 8. Developer shall enter into a loan agreement with the City/Agency consistent with the terms set forth above and with such other terms as shall be required or approved by the City/Agency Attorney. 9. This conditional approval remains subject to final approval by the City/Agency in its sole discretion. Presented by Approved as to form by Chris Salomone Director of Community Development City/Agency Attorney Resolution 2001-204 Page 5 PASSED, APPROVED and ADOPTED by the City Council and the Redevelopment Agency of the City of Chula Vista, Califomia this 19th day of June, 2001 by the following vote: AYES: Agency/Councilmembers: Davis, Padilla, Rindone, Salas, and Horton NOES: Agency/Councilmemb ers: None ABSENT: Agency/Councilmembers: None Shirley Hort0~, Chair/Mayor ATTEST: Susan Bigelow, City Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITY OF CHULA VISTA ) I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing City Council Resolution No. 2001-204/Redevelopment Agency Resolution No. 1735 were duly passed, approved, and adopted by the City CounciFRedevelopment Agency at a joint meeting of the Chula Vista City Council and Redevelopment Agency held on the 19th day of June, 2001. Executed this 19th day of June, 2001. Susan Bigelow, City Clerk