HomeMy WebLinkAboutReso 2015-086 RESOLUTIOI� NO. 201�-086
(HOUSl.�vG .4 U7HORI77'RESOL�T/OA'A'O. 101 i-009)
RESOLUTIOI�' OF THE CITY COUT'CIL OF THE CITY OF
CHULA \'1STA AI�'D THE HOUSII�'G AUTHORITI'. II�' ITS
CAPACITY AS THE SUCCESSOR HOUSII�'G ENTITY VJITHII�
THE I�4EANII�'G OF HEALTH AND SAFETY CODE SECTIO?�'
34176, [1] APPROVI?�'G TOTAL FINANCIAL ASSISTAI�'CE OF
$2,068;000; AND [2] AUTHORIZI\'G THE CITl' I��LAI�'AGER
TO EaECUTE RELATED LOAN DOCUn4ENTS BY A?�TD
BETVI%EEI�' THE CITI' OF CHULA VISTA AND .A TO-BE-
FORMED LIA2ITED PART2vERSHIP FOR MILLENIA
MULTIF.AA4[LY AFFORDABLE APARTA4ENTS
WHEREAS; to facilitate and materially assist the housing industry in providing adequate
and affordable shelter for all economic se�ments of the communiri� and to provide a balance of
housine opportunities for ven�-low income, IoH�er-income. and senior households, the Citv of
Chula Vista (`City") has adopted Chula Vista Municipal Code (`CVMC") Section 19.90 -
Affordable Housine Incentives. consistent with Sections 6�91� and 6�917 of the Califomia
Go��emment Code: and
WHEREAS; Chelsea Investment Corporation, utilizing a to-be-formed limited
partnership of which Chelsea Im�estment Corporation ��ill be a partner, the "De��eloper',
proposes to construct an 87 unit multifamily rental development, �vith 9 units affordable to ven�
low income households af 50 percent (50%) of the Area Median Income (AI�4I) and 77 units
affordable to lo���-income households at 60 percent (60%) of the P:rea Median Income (AMI).
���ithin the Ota�� Ranch Millenia Master Planned Community ("Multifamily Projecr`); and
l�'HEREAS; Developer is applying for an allocation of Multifamilv Housing Revenue
Bonds from the Califomia Debt Limit Allocation Committee (CDLAC); and
��'HEREAS, De��eloper is apph�ine for four percent (4%) tai credits from the Tas Credit
Allocation Committee (TCAC); and
�l'HEREAS. in accordance ��ith CVMC §19.90.0�0, the De��eloper has requested
assistance to reduce the de��elopment costs for the construction of the D4ultifamil}� Project for its
financial Feasibilit��: and
\�'HEREAS. the City's e��aluation of the development budset. operating pro forma. and
source and uses for the n9ultifamil�� Project determined that additional financing is appropriate
and necessar}� in order to make the A4ultifamil}� Project feasible; and
�VHEREAS. Califomia Health and Safet�� Code §3333�.2 and 3333=3.6 authorize and
direct the Housing Au[hority (in its capacity as the Successor Housing Entity ���ithin the meanine
of Health and Safety Code section 34176; "Housing Authorin- `) to espend funds pursuant to
Health and Safety Code section 34176(d) for the purposes of increasing, improving and
presen�ing [he community's supph� of loti�- and moderate-income housine a��ailable at affordable
housine cost to persons and families of low- and moderate-income, lower-income, and verv-low-
income: and
i
Resolution No. 201�-086
H.A Resolwion A'o. ?01�-009
Page No. 2
WHEREAS; pursuant to Health and Safety Code section 34176(d) the Housing Authorit}�
has established a Low- and Moderate-Income Housing Asset Fund (the "Housing Asset Fund");
and
WHEREAS, pursuant to Health and SaTety Code Section 33334.2(e), in carrying out its
affordable housing acti��ities, the Housing Authority is authorized to provide subsidies to or for
the benefit of very-low-income and ]ower-income households, or persons and families of low- or
moderate-income, to the e�;tent those households cannot obtain housing at affordable costs on the
open market, and to pro��ide financial assistance for the construction and rehabilitation of
housing which will be made available at an affordable housing cost to such persons; and
WHEREAS, the Housing Authority wishes to provide Developer with a development
loan in the amount of eight hundred ninety-five thousand three hundred forty dollars ($89�,340)
from its Housin� Asset Fund to assist with the financing gap for the construction of the
Multifamily Project; and
WHEREAS, the Multifamily Project furthers the goals of the Housing Authoriri� and the
Ciry, as it will facilitate the creation of new affordable rental housing which will serve the �eeds
and desires of various age, income and ethnic groups of the neighborhood and the City; and
WHEREAS; the City of Chula Vista ("City") is an entitlemenUparticiparing jurisdiction
for the U.S. Department of Housing and Urban Development (HUD) funding programs and is
awarded on an annual basis a formula grant from the 1-IOME Investment Partnership Program
(HOME); and
WHEREAS, pursuant to Council Resolution Number 2014-064, City Council approved
Ihe HUD Annual Action Plans which indudes funding for the production of affordable rental
housing For low income households using HOME Investment Partnership Program (HOME)
funds: and
WHEREAS, in May 2015, the City Council will approve the final 2015/2016 Annual
Action Plan for the HOME Investment Partnership Program that includes funding for the
production of affordable rental housing for low-income households; and
�VHEREAS, the Balanced Communities Policy of the City's Housing Element of the
General Plan ti�hich sets forth the objecti��e ot providing balanced and varied housine
opportunities throughout the City to satisfy needs and desires of various age, income, and ethnic
eroups of the communit}�, and which specifically provides for the construction of ne�� affordable
housing units through City assistance; and
WHEREAS, the Cit�� N-ishes to provide Developer with a development loan of eiaht
hundred thousand dollars ($800,000) from its Fiscal Year 2015/2016 HOME funds and three
hundred sevenry-two thousand six hundred siaty dollars ($372,660) from its Balanced
Communities In Lieu funds to assist with the financing 'gap for the construction of the
' Multifamil}� Project; and
Resolution No. 201�-086
H.9 Resolution A'o. ?01�-009
Paee No. 3
Vl%HEREAS; the Cin�'s development loan does not exceed the HOME ma�imum per-unit
subsid}� limits based on the Section 221(d)(3) limits established b�� HUD; and
WHEREAS. the Cin� has a��ailable funds recei��ed in satisfaction of the Cin�'s Balanced
Communities Affordable Housina Policv of the Housine Element of the General Plan: and
W'HEREAS, in order to cam� out and implement the Cit��'s Consolidated Plan and
Housino Element of the General Plan and the affordable housins requirements and goals thereof,
the Successor Agenc} and Ciri� propose to enter into a Housine Authority and City Loan
Agreement and Related Restricted Covenants (the "Housine Authorin�/Cit�= Loan Aereement `)
and a Cit�� HOME Loan Aereement and Related Restricted Co��enants (the "HOME Loan
Aareement"), respectivel}�.��+�ith the De��eloper, to be recorded as encumbrances to the
Multifamily Project. pursuant to ���hich the Successor Asenc}� and Cit�� would mal:e the loans to
the Developer; and the Developer ��ould agree to develop and operate the Multifamil}� Project in
accordance with the requirements of the Housi�e Authorit}�/Cit}� Loan Aereement and HOME
Agreement. restrictine occupancy of 87 of the apartment units in the Multifamilv Project to ��en�-
lo��� and lo�i�-income households and rent those units at an affordable housing cost, plus 1
unrestricted apartment unit ���hich ���ill be the manaeers' unit; and
WHEREAS. the Housine Authoritv/Cit� Loan. HOA4E Loan and Fee Deferral
Agreements ���ill leverase the investment of the Housing Authoritv and Citv by requiring the
De��eloper to obtain additional financin2 for the construction and operation of the Multifamilv
Project throueh a combination of a loan obtained from the proceeds of multi-family mortsaee
re��enue bond financing and an equit�� contribution b}� a limited partner investor in consideration
for the "4% Tax Credits' to be generated by the Multifamily Project; and
WHEREAS. the Citv's Housin� Ad��ison Commission did. on the 20th dav of
I�o��ember. 2014, hold a public meeting to consider said request for financial assistance; and�
WHEREAS. the Housing Ad��isory Commission, upon hearing and considering all
testimony, if any, of all persons desiring to be heazd, and considerin� all factors relating to ihe
request for financial assistance, recommended to the Housing Authorit�� and Cii}� that financial
assistance be approved on the condition that all other necessar}� financine be secured for the
Multifamih� Project and �
�i'HEREAS. the Housing Advisory Commission found that the Cin�'s and Housing
Authorih�`s financial participation in the de��elopment of the Multifamil}� Project �•ill be a sound
investment based upon Developer's abilit�� to effecti��eh� serve the Cit��'s housins needs and
priorities as eapressed in the Housing Element and Consolidated Plan and the cost effecti��eness
of the Cirv`s financial assistance based upon the le��eragine of such sources and is necessary in
order to facilitate the construction of the Multifamilv Project; and
\�JHEREAS. in accordance ��ith the requirements of CEQA, the En��ironmental Revie�v
Coordinator has determined that the proposed project �aas adequateh� covered in previousl��
adopted Final Second Tier Environmental Impact Report. EIR 07-01. and no further action by
the Cit�� Council is necessarv: and
Resolution No. 201�-086
HA Resolution A'o. ZOI.i-009
Page No. 4
WHEREAS, the development of the Multifamily Project is subject to completing an
environmental revie�� under NEPA prior to construction.
NOW, THEREFORE; BE IT RESOLVED by the City Council of the City of Chula Vista
and the Housing Authority, in its capacity as the Successor Housing Entity within the meaning of
Health and Safet�- Code section 34176, that the Multifamily Project is consistent with the
provisions of Chula Vista Municipal Code (CVMC) Section 19.90, wherein Developer will
construct housing units to be restricted for occupancy by very-lo«� and low-income households
as set forth in CVMC §19.90.040.
BE IT FURTHER RESOLVED by the Housing Authority, in its capacity as the
Successor Housing Entiry within the meaning of Health and Safety Code section 34176, and City
Council of the City of Chula Vista that the financial assistance requested by Developer, in
accordance ���ith CVMC §]9.90.050, is necessary to provide for affordable rents and to achieve
lower development costs. The Multifamily Project cannot be built without such assistance.
BE IT FURTHER RESOLVED by the Housing Authority, in its capacity as the
Successor Housina Entity ti�ithin the meaning of Health and Safety Code section 34176, that it
does hereb}� approve a residual receipts loan in an amount not-to-exceed $89�;�40 from the
Housing Authoritys Low- and Moderate-Income Housing Asset fund to Developer for the
construction of 87 residential units of the Multifamily Project within the Otay Ranch Millenia
master planned community.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it
does hereby approve a residual receipts loan in an amount not-to-eaceed $372,660 from the In-
Lieu fees of the Cin-`s Balanced Communities Affordable Housing Policy to Developer for the
construction of 87 residential units of the Multifamily Project within the Otay Ranch Millenia
master planned community.
BE 1T FURTHER RESOLVED by the City Council of the City of Chula Vista that it
does hereby commit and approve a residual receipts loan in an amount not-to-exceed $800,000
of HOME Investment Partnership funds (HOME), $300,000 of its 2014/2015 HOME funds and
$500,000 of its 2015/2016 HOME funds to Developer for the construction of 87 residential units
of the Multifamil�� Project within the Otay Ranch Millenia master planned community.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista and the
Housing Authority, in its capacity as the Successor Housing Gntity within the meaning of Health
and Safety Code section 34176; that it directs staff to prepare all necessary documents and any
actions; as required b}� HUD or California Health and Safety Code Sections 33334.2 and 33334.6
to commit the HOME and Housing Authority funds, and authorizing the City Manager, or his
designee to eaecute a Housing Authority/Ciry Loan Agree�nent, HOME Loan Agreement, and all
associated loan documents and regulatory agreements, consistent with the City's standard
documents as re��iewed and approved by the Ciry Attorney's office, necessary for the financing
of the proposed Multifamily Project securing said loan, and, at minimum; subject to the
followina terms and conditions:
Resolution No. 201�-086
H.9 Resolurion A'o. 301�-009
Paee No. �
l. Cenification of the appropriate CEQA and NEPA documentation prior to an�� Cin- and
Successor Aeencv Loan disbursements for anv portion oFthe �4ultifamih� Project.
2. Developer shall secure all other financins necessary for the acquisition and development
of the Multifaznil}� Project. �
3. The loan repa��ments ���ill be secured bv Deeds of Trust and Promissor} Notes for the
propert}� in fa��or of the Cin� of Chula Vista and Housins Authority and recorded aeainst
the Multifamil�� Project propert��. The City's and Housing Authorit��'s loans will be
junior to the City`s De��elopment Fee Deferral deed of trust. the bond financine and the
deferred de��eloper fees for the Multifamilv Project �
4. The term of the City and Housin2 Authorit�� loans shall be fift�-five (») yeazs.
�. The outstanding balances shall all accrue simple interest at 3 percent (3%) per annum.
6. Pa��ment of principal and interest on the Citv and Housine Authorit�� loans shall be made
out of a fund equal to fift�� percent (�0%) of the "Residual Receipts ', defined as the
income which remains afrer the pavment of the debt sen ice on the pertnanent loan,
pa��ment on subordinate junior bonds. pa��ment of the deferred developer fee, and
reasonable operatine expenses.
7. Developer will be required to operate the A9ultifamilti� Project consistent ��ith the
Reeulator�- Agreement required by the Multifamily Project's bond and taa credit
financin�. the City's Affordable Housing Program. and the Cit��'s and Housing
Authorit}�'s financine, the covenants imposed by these Agreements, and an�� other project
requirements.
8. The Cit}� and Housing Authoritv assistance is based upon the assumptions presented
H�ithin the sources and uses of funds. de��elopment budget, de��elopment proforma and
other information filed �+ith the Affordable Housing Review Application for the project
as submitted and revie�ved bv the Cit��'s Development Services Housing Division. The
Citv and Housino Authorit�� assistance is a maximum le�el of participation. It is e�pected
that am� substanti��e revisions in such financing assumptions ti�hich ���ould lead to an
increase in other resources available. ���ould therefore reduce the level of Cit�� and
Housine Authoritv assistance.
9. The City Counci] and Housing Authorit� retain their sole and unfettered discretion to
approve. dem�, or to tal:e altemative actions; of; but not limited to. the follo���ing: the
commitment of�89�340 of Housina Asset funds. �800.000 from the Ciri�'s Fiscal Yeaz
201�/2016 HOME funds. and �372.660 of a��ailable Balanced Communities In Lieu
funds and final approval of multifamil�� mortgaee revenue bond financing for the
b4ultifamil.� Project.
I
Resolution No. 201�-086
H.9 Resolulion No. ?01.5-009
Page No. 6
Present `b�� Approved as to form by
> �
.��
Kelly G. roughton, FASLA len R. Goc�gins�
Director of De��elopment Services �trAtlamey
PASSED, APPROVED, and ADOPTED by the City Council and the Housing Authority;
in its capaciry as the Successor Housing Entity of the City of Chula Vista, California, this 21 st
day of April 2015 by the following vote:
AYES: Council/Authority members: Aguilar, Bensoussan and McCann
NAYS: Council/Authority members: None
ABSENT: Council/Authority members: Salas
ABSTAIN: Council/Authority members: Miesen
/
Mary S as, Ma}�or/Chairperson
ATTEST:
�!�- � ��
Donna R. Norris, CMC; City Clerk/Secretary
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Donna R. Norris, City Clerk of Chula Vista, California, do hereby certify that the foregoing
City Council Resolution No. 2015-086/Housing Authority Resolution No. 2015-009 was duly
passed, approved, and adopted by the City Council and Housing Authority at a regular meeting
held on the 21 st day of April 2015.
Eaecuted this 21 st day of April 2015.
�
Donna R. Norris, C C, City Clerh/Secretary