HomeMy WebLinkAboutAgenda Statement 1986/07/15 Item 8 COUNCIL AGENDA STATEMENT
Item 8
Meeting Date 7/15/86
ITEM TITLE: Resolution / 760-3 Approving amended Housing Cooperation
Agreement with Eucalyptus Grove International
SUBMITTED BY: Community Development Directo
REVIEWED BY: City Manager 4/5ths Vote: Yes No X )
On August 27, 1985, the City entered into a Housing Cooperation Agreement with
Eucalyptus Grove International to govern the provision of rent and income
restricted units at Eucalyptus Grove Apartments at Flower Street and Bonita
Road in construction. a The density property exempt
certain amend The ents project tthe
under const
Housing Cooperation Agreement.
RECOMMENDATION: That the Council adopt the resolution approving an amended
the Housing Cooperation Agreement with Eucalyptus Grove International .
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The original Housing Cooperation Agreement was drafted by the land use
attorney for the property owner and agreed upon by all parties after
substantial revision. Subsequent to the execution of the agreement and the
issuance of mortgage revenue bonds for the project, the new attorney for the
limited partnership constituting the property owner (Eucalyptus Grove
International ) requested numerous changes to the Housing Cooperation
Agreement. Many of the changes requested were determined by staff to be
unacceptable, and the property owners' attorney was so advised and has
concurred. The remaining changes, which are conveyed in the attached amended
agreement, are felt to be appropriate by both staff and the property owner.
Many of the changes fall in the category of clean up or clarification of
language and intent and will not be discussed in this report. The three
significant amendments are discussed below:
1. DEFINITIONS, Section 3.1 and QUALIFICATIONS OF TENANTS, Section 3.2
The Housing Cooperation Agreement identifies the number of restricted
units by bedroom type on each lot of the project. This
identification, proposed by the original proponents' attorney,
intended to assure the provision of restricted units proportionally
to unrestricted units in the project.
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Page 2, Item 8
Meeting Date-7757E
The property owner now contends that such a specific identification
of units is too rigid and would require an unreasonable degree of
monitoring. Having to provide 13 restricted two-bedroom units in Lot
1 , for instance, would preclude the reasonable substitution of a
two-bedroom restricted unit in Lot 2 for a shortage created in Lot 1
by the loss of an eligible tenant. The property owner desires some
reasonable flexibility.
The property owner proposes to strike the identification of the Lot 1
and Lot 2 restricted units and unit counts and to substitute the
following reference: "Property owner shall be required to evenly
disburse the (identifies bedroom type and
income category) bedroom apartments throughout the dwelling units on
the real property to the greatest extent feasible. "
Staff concurs that the original intent was to achieve equitable
distribution of restricted units without specific and final
identification of restricted units. The proposed amendment provides
reasonable flexibility with assurance that restricted units will be
distributed proportionately.
(Affected sections: 3.1 .2 through 3.1 .15 and 3.2.1 through 3.2.6)
2. PROOF OF QUALIFICATION, Section 3.3
This section of the Housing Cooperation Agreement addresses the
obligations and entitlements of the property owner regarding proof of
tenant eligibility.
The property owner requests that the following language be added to
this section to clarify qualification of a unit as an eligible
tenant-occupied unit:
For purposes of this Section 3, a person or household whose
gross income qualifies at the commencement of occupancy of an
affordable apartment shall continue to be a qualifying tenant,
even though their income subsequently increases. In addition,
such affordable apartments shall be treated as occupied by a
qualifying tenant until such unit is reoccupied (other than for
a temporary period not exceeding 31 days), at which time the
character of the unit shall be redetermined.
Staff concurs with this language addition as an appropriate
clarification of the intent of the Housing Cooperation Agreement.
Such a definition has always been verbally provided by staff to the
property owner. That definition is also parallel to federal
regulations governing the tax exempt bonds financing the project.
(Affected section: 3.3)
Page 3, Item 8
Meeting Date 7/15/86
3. WAIVER, Section 3.5
This section provides for the removal of a particular unit
restriction by the City Manager at the request of the property owner
where sufficient evidence is presented that good faith effort has not
resulted in an eligible rental . Subsection 3.5.2, TERMINATION OF
WAIVER, indicates that the City Manager can terminate the waiver and
the property owner must vacate that unit of non-eligible tenants in
favor of eligible tenants.
The property owner asks that language be added as follows to provide
the option of leaving the existing non-eligible tenant in place at
recision of waiver and providing instead another unit with eligible
occupancy,thus achieving the total restricted unit count:
;provided, however, that in lieu of such termination and
eviction, property owner can lease another afordable apartment
to a qualified tenant to the extent necessary to satisfy the
requirements of Section 3.1 and 3.2.
Staff supports this provision, as it would assure the appropriate
restricted unit count while providing flexibility and the opportunity
to avoid unnecessary eviction.
In summary, all proposed changes in the amending agreement are recommended
because they provide clarity and more reasonable flexibility and ease of
monitoring while preserving the degree of benefit desired and intended.
FISCAL IMPACT: Not applicable.
WPC 2360H
a-,,2-15'1A4(1(1
by the City lcil of
Chula Vista, California
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Dated i011111119