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HomeMy WebLinkAboutReso 2001-271 RESOLUTION NO. 2001-271 (AGENCY RESOLUTION NO. 1744) RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA [A] APPROVING LOAN AGREEMENTS AND RELATED RESTRICTIVE COVENANTS; THE AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY, CITY OF CHULA VISTA, AND MAIN PLAZA, L.P. (FORMED BY AVALON COMMUNITIES) AND AUTHORIZING THE CHAIRMAN OF THE REDEVELOPMENT AGENCY/MAYOR TO EXECUTE SAID AGREEMENTS; AND lB] APPROPRIATING $1,510,000 FROM THE UNAPPROPRIATED BALANCE IN THE LOW AND MODERATE-INCOME HOUSING FUND AND $300,000 FROM THE CITY'S HOME FUNDS FOR FINANCIAL ASSISTANCE TO MAiN PLAZA, L.P. FOR THE DEVELOPMENT AND OPERATION OF MAIN PLAZA WHEREAS, the City of Chula Vista is an entitlement/participating jurisdiction for the U.S. Departmem of Housing and Urban Development (HUD) fimding 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, Califomia 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 community'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/or rehabilitation of housing which will be made available at an affordable housing cost to such persons; and WHEREAS, pursuant to 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 2001-271 - Page 2 WHEREAS, Avalon Commtmities 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 households at 50 percent of the Area Median Income (AMI), 41 units affordable to low 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, out of the total of one-hundred six (106) units in the Project, six (6) three- bedroom units are being assisted with HOME funds (the "HOME-assisted units"); and WHEREAS, in order to carry out and implement the Redevelopment Plan for the Agency's redevelopment projects, the City's Consolidated Plan and the affordable housing requirements and goals thereof, the Agency and City propose to enter into an Agency Loan Agreement and Related Restricted Covenants (the "Agency Loan Agreement") and an Agency and City Loan Agreement and Related Restricted Covenants (the "Agency/City Loan Agreement") with the Developer, together with an "Affordable Housing Agreement" which would be recorded as an encumbrance to the Project, pursuant to which the Agency and City would make loans to the Developer (the "Agency Loan" and "Agency/City Loan", respectively), and the Developer would agree to develop and operate the Project in accordance with the requirements of the Agency and Agency/City Loan Agreements, restrict occupancy of 51 of the apartment units in the Project to very low and lower-income households, and 55 of the apartment _ units to moderate income households, and rent those units at an affordable housing cost; and WHEREAS, the Agency and Agency/City Loan Agreements will leverage the investment of the Agency and City by requiring the Developer to obtain additional financing for the construction and operation of the Project through a combination of a loan obtained from the proceeds of multifamily mortgage revenue bond financing and an equity contribution by a limited partner investor in consideration for the "4% Tax Credits" to be generated by the Project; and WHEREAS, in carrying out its affordable housing activities, the Agency may subordinate its affordability covenants or restrictions to the lien, encumbrance, or regulatory agreement of a lender or from a bond issuance providing financing of rental units if certain requirements, as specified in Health and Safety Code Section 33334.14(a), are met; and WHEREAS, the Project is located within the Agency's Southwest Redevelopment Project Area and development and operation of the Project pursuant to the Agency and Agency/City Loan Agreements would benefit the Agency's redevelopment project areas by providing affordable housing for persons who currently live and work within those redevelopment project areas; 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 development and operation of rental housing units through Agency assistance; and Resolution 2001-271 Page 3 WHEREAS, the Agency and Agency/City Loan Agreements further the goals of the Agency and City to facilitate the creation of affordable housing which will serve the residents of the neighborhood and the City as set forth in the Implementation Plan and the Consolidated Plan; and WHEREAS, the Legislature declares in Health and Safety Code Section 37000, et seq., that new forms of cooperation with the private sector, such as leased housing, disposition of real property acquired through redevelopment, development approvals, and other forms of housing assistance may involve close participation with the private sector in meeting housing needs, without amounting to development, construction or acquisition of low rent housing projects as contemplated under Article XXXIV of the State Constitution; and WHEREAS, Health and Safety Code Section 37001 provides that a low rent housing project under Article XXXIV of the State Constitution does not include a development which is privately owned housing, receiving no ad valorem property tax exemption, other than exemptions granted pursuant to subdivision (f) or (g) of Section 214 of the Revenue and Taxation Code, and less than 49 percent of the units within the Project will be occupied by persons of low and very low-income; and WHEREAS, the Project will not receive any ad valorem property tax exemption, other than exemptions granted pursuant to subdivision (f) or (g) of Section 214 of the Revenue and Taxation Code, and the Agreement restricts less than 49 pement of the units within the Project to persons of low and very low-income; and WHEREAS, Health and Safety Code Section 37001.5 provides that a public body does not develop, construct, or acquire a low rent housing project under Article XXXIV of the State Constitution when the public body provides assistance to a low rent housing project and monitors construction and/or rehabilitation of the project to the extent of carrying out routine governmental fanctions, performing conventional activities of a lender, and imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of assistance; and WHEREAS, the Loan Agreements provide for assistance by the Agency and City to the Project, and the Agency and City's monitoring of construction of the Project to the extent of carrying out routine governmental functions, performing conventional activities of a lender, and imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of assistance; and WHEREAS, the Agency and City have duly considered all terms and conditions of the proposed Agency and Agency/City Loan Agreements and Affordable Housing Agreement and believes that these Loan Agreements and Affordable Housing Agreement are in the best interests of the Agency and the City and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable State and local law requirements; NOW, THEREFORE, THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA DO RESOLVE AS FOLLOWS: Resolution 2001-271 - Page 4 Section 1. The Agency hereby finds that the use of funds from the Agency's Low and Moderate-Income Housing Fund pursuant to the Loan Agreements, for the development and operation of real property will be of benefit to the Agency's redevelopment project areas for the reasons set forth above. Section 2. The Agency hereby finds that an economically feasible alternative method of financing the Project on substantially comparable terms and conditions, without subordination, is not reasonably available and the Agency will receive written commitments reasonably designed to protect the Agency's investment in the event of default. Section 3. The Agency hereby determines that the Project is not a "low rent housing project" within the meaning of Article XXXIV of the State Constitution, and that the assistance to be provided pursuant to the Loan Agreements does not constitute development, construction or acquisition of a low rent housing project within the meaning of Article XXXIV of the State Constitution. This Resolution is hereby deemed to constitute a final approval of a proposal which may result in housing assistance benefiting persons of low income, within the meaning of Health and Safety Code Section 36005. Section 4. The Agency and City Council hereby IAI approve the Agency and Agency/City Loan Agreements and Affordable Housing Agreement in substantially the form presented to the Agency and City, subject to such revisions as may be made by the Agency Executive Director/City Manager or his designee, subject to the review and approval of the Agency/City _ Attorney. The Chairman of the Agency/Mayor is hereby authorized to execute the Loan Agreements and Affordable Housing Agreement on behalf of the Agency and City and [B] appropriates $1,510,000 from the unappropriated balance in the Low And Moderate-Income Housing Fund and $300,000 from the City's HOME funds for financial assistance to Main Plaza, L.P. for the development and operation of Main Plaza. A copy of the Loan Agreements and Affordable Housing Agreement when executed by the Agency and City shall be placed on file in the Office of the Secretary of the Agency and the City Clerk. Section 5. The Executive Director of the Agency/City Manager (or his designee) is hereby authorized, on behalf of the Agency/City, to make revisions to the Loan Agreements and Affordable Housing Agreement which do not materially or substantially increase the Agency's and City's obligations thereunder or materially or substantially change the uses or development permitted on the Site, to sign all documents, to make all approvals and take all actions necessary or appropriate to carry out and implement the Loan Agreements and Affordable Housing Agreement and to administer the Agency and City's obligations, responsibilities and duties to be performed under the Loan Agreements, Affordable Housing Agreement and related documents. Any such revisions or modifications to the Loan Agreements or the Affordable Housing Agreement are subject to the review and approval of the Agency/City Attorney. Presented by Approved as to form by Chris Salomone /IO/13~M. Kaheny / ~) - Community Development Director (~&gency Counsel and ClEf Attorney Resolution 2001-271 Page 5 PASSED, APPROVED, and ADOPTED by the City Council and the Redevelopment Agency of the City of Chula Vista, California, this 14th day of August, 2001, by the following vote: AYES: Agency/Councilmembers: Davis, Padilla, Rindone, Salas, and Horton NAYS: Agency/Councilmembers: None ABSENT: Agency/Councilmembers: None Shirley Hort~/~, Chair/Mayor ATTEST: Susan Bigelow, City Clerk c~ 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. 2001-271/Redevelopment Agency Resolution No. 1744 was duly passed, approved, and adopted by the City Council and Redevelopment Agency at a regular meeting held on the 14th day of August, 2001. Executed this 14th day of August, 2001. Susan Bigelow, City Clerk