HomeMy WebLinkAboutReso 2015-087 RESOLUTION N0. 2015-087
RESOLU7IOI�' OF THE CITI' COUNCIL OF THE CITY OF
CHUL.A VISTA [1] APPROVIT�'G DEFERRAL OF THE
APPLICABLE PARKLAI�TD ACQUISITION AND
DEVELOPMENT FEE. TRAFFIC SIGI�'AL. SALT CREEIC
SEWER BASIlv. AriD SEA'ER CAPACITY FEES. AND
WAiVER OF THE RESIDEI�'TIAL COI�'STRUCTION TAX I?�T
THE TOTAL ESTIr4ATED AMOUI�i7' OF �911.429; AIvD [2]
AUTHORIZII�'G THE CITY A9ANAGER TO E�ECUTE FEE
DEFERRAL AGREEMENTS AND RELATED SECURITY
II�'STRUMEI�'TS Bl' AND BETWEEN THE CITY OF CHLiLA
VIST.A. AND A TO-BE-FORMED LIA4ITED PARTNERSHIP
FOR MILLENIA MULTIFAMILY AFFORDABLE
APARTMEI�'TS
W'HEREAS, to facilitate and materially assist the housing industr}� in pro��idine adequate
and affordable shelter for all economic sesments of the communit�� and to pro��ide a balance of
housing opportunities for ven�-lo��-income. lo�aer-income; and senior households, the City of
Chula Vista ("Cit�%`) has adopted Chula Vista Municipal Code (`CVMC") Section 19.90 -
Affordable Housine Incentives consistent ���ith Sections 6�91� and 6�917 of the Califomia
Govemment Code: and
WHEREAS, Chelsea lnvestment Corporation, utilizino a to-be-formed limited
partnership of �;�hich Chelsea In��estment Corporation ti�ill be a partner. the "Developer',
proposes to construct an 87 unit multifamilv rental de��elopment. w�ith 9 units affordable to ��en�-
IoN�-income households at �0 percent (�0%) of the Area Median Income (AI�4I) and 77 units
affordable to low-income households at 60 percent (60%) of the Area Median Income (AI�41),
within the Otav Ranch Millenia Master Planned Communit�� (`Multifamih� Project`); and
WHEREAS, Developer is applying for an allocation of Multifamil}� Housine Revenue
Bonds from the Califomia Debt Limit Allocation Committee (CDLAC); and
WHEREAS; Developer is apph�ing for four percent (4%) ta� credits from the Taz Credit
Allocation Committee (TCAC); and
V1'HEREAS. in accordance with CVA4C §19.90.0�0. to close the fina�cine eap,
Developer has requested the deferral of applicable Parkland Acquisition and Development
(PAD); Traffic Signal, Salt Creek Se��er Basin and Se���er Capacit�� fees and waiver of the
Residential Construction Tax (collectiveh� known as "Development Chazges") in the total
estimated amount of �911,429 to reduce the de��elopment costs for the construction of the
A4ultifamily Project for its financial feasibilitv and as allowed b�� the Cit}�'s i�4unicipal Code to
stimulate development of affordable housine and upon economic hardship; and
Resolution No. 201�-087
Page No. 2
WHEREAS, the Cirn`s evaluation of the development budget, operating pro forma, and
source and uses for the Project determined that additional financing is appropriate and necessar��
in order to make the Multifami]}� Project feasible: and
WHEREAS, CVMC §17.10.070 provides that the City Counci] may waive all or anv
portion of the park lands dedication or fee requirements upon finding that said waiver will
stimulate the construction of housing for low- and moderate-income families; and
WHEREAS, in accordance with CVMC §3.45.0]0 (C), the City Council may waive or
defer all or portion of the Traffic Signal, Salt Creek Sewer Basin and Sewer Capacity fees based
upon economic hardship or other injustice resulting to the applicant which outweighs, when
balanced against, Yhe need of the City revenue and the need for a uniform method of recovering
same from those against wbom it is imposed; and
WHEREAS; in accordance with CVMC §3.32.0�0, the City Council may waive all or a
portion of the Residential Construction Tax for any dwelling-unit types constructed N�hich would
sen�e as housing for lo«�- and moderate-income families; and
WHEREAS. the applicable Parkland Acquisition and Development (PAD), Traffic
Signal, Salt Creek Se���er Basin and SeH�er Capacity fees and Residential Construction Tax
(RCT); are due and payable upon application to the City for a building permit for the
construction of any such dwelline units of the Multifamily Project; and
WHEREAS, the Ciry wishes to defer for a fifreen year period, with an option to extend
for an additional fifteen }�ear period for any remaining unpaid balance, the applicable Parkland
Acquisition and Development fee (PAD) (estimated at $545,132), Traffic Signal fees (estimated
at $18,421), Salt Creek Sewer Basin (estimated at $86,782) and Sewer Capacity fees (estimated
at $237,119) and waive the Residential Construction Tax (estimated at $23,975) to assist in
reducing the development costs for the construction of the residential units of the Multifamily
Project in order to facilitate the development of housing for low- and moderate-income
households: and
WHEREAS, the City's Housing Advisory Commission did, on the 20th day of
November; 2014, hold a public meeting to consider said request for financial assistance; and
WHEREAS; the Housing Advisor�� Commission, upon hearing and considerina all
testimony, if any, of all persons desiring to be heard, and considering all factors relating to the
request for financial assistance, recoinmended to tl�c City tliat financial assistance be approved
on the condition that all other necessary fnancing be secured for the Multifamily Project, and
WHEREAS, the Housing Advisory Commission found that the City's financial
participation in the development of the Multifamily Project will be a sound i�vestment based
upon Developers ability to effectivelp serve the City's housing needs and priorities as expressed
in the Housina Element and Consolidated Plan and the cost effectiveness of the City's financial
assistance based upon the leveraging of such sources and is necessary in order to facilitate the
construction of the Multifamily Project; and
Resolution I�ro. 201�-087
Paee No. 3
VJHEREAS. on .4pri1 21; 201� the City Council of the Citv of Chula Vista held a noticed
public hearing on the proposed deferral of the associated Traffic Signal, Salt Creek Se���er Basin
and Sewer Capacity development fees applicable to the Multifamih Project; and
WHEREAS. the Citv Council of the Cit� of Chula Vista re��ieti�ed and considered the
deferral of the associated de��elopment fees applicable to the I�4ultifamil�� Project. staff
recommendations and reports both oral and ��-ritten, and the testimom of all those ���ishing to be
heard: and
R'HEREAS. in accordance ���ith the requirements of CEQA, the Environmental Revie��
Coordinator has determined that the proposed project H�as adequateh� co��ered in pre��ioush
adopted Final Second Tier Environmentai Impact Repon. EIR 07-01, and no further action b�
the Cirv Council is necessan�.
I�'OVd, THEREFORE; BE IT RESOLVED b�� the City Council of the City of Chula V'ista
that the Multifamih Project is consistent with the provisions of Chula Vista Municipal Code
(CVMC) Section 19.90, wherein Developer ���ill construct housine units to be restricted for
occupanc}� b}� ven�-loti� and low�-income households or senior citizens as set forth in CVMC
§19.90.040.
BE IT FliRTHER RESOLVED bv the Cin� Council of the Cin• of Chula Vista. that the
deferral of applicable Parkland Acquisition and Development (PAD). Traffic Signal, Salt Creek
Sewer Basin and Se�rer Capacit�� fees and waiver of the Residential Construction Ta� in the total
estimated amount of $911;429 as requested bv Developer; in accordance with CVA4C
§19.90.0�0; is necessar}� to provide for affordable rents and to achie�e lower development costs.
The Multifamilti- Project cannot be built ���ithout such assistance.
BE IT FURTHER RESOLVED that the Citv Council finds, based upon the recitals in this
Resolution and e}�idence presented at the public hearing b}� staff and the public. that there is a
peculiar economic hazdship to applicant that oun+�eiehs, when balanced aeainst. the need for City
revenue and the need for uniform method of reco��erine same from those a2ainst whom it is
imposed, and that the project furthers the Citv`s and Housine Authorin�'s goal for pro��iding and
developing affordable housing.
BE IT FURTHER RESOLVED b}� the Cit�� Council of the City of Chula Vista, in
accordance N�ith CVMC §3.4�.010 (C), that the pa}�ment of the Traffic Sienal, Salt Creek Se��er
Basin and Sewer Capacit}� fees w�ould present an economic hardship to the Multifamil�� Project,
ai��en the limited re��enue that can be Qenerated from affordable rents and the Multifamih�
Project's development costs; and that the pro��ision and benefits of affordable housine to the
communirv outN�eia_hs. �vhen balanced aeainst. the need of the Cit�� revenue and the need for a
uniform method of recovering same from those against �i�hom it is imposed.
BE IT FliRTHER RESOL\'ED bv the Citv Council of the Cit�� of Chula Vista. that it has
determined that the ���aiver of the Residential Construction Tax in accordance with CVMC
§32.�OA�O is consistent ti�ith the Cit�� of Chula Vista Housine Element of the General Plan. «ill
assist H�ith reducing the development costs for the construction of the lo«� income units of the
Multifamilv Project, and that the public necessitv, convenience. general �aelfaze and eood
planning practice support the «�aiver of this Tax.
Resolurion No. 20]�-087
Page No. 4
BE IT FURTHER RESOLVED that the Cit�� Council of the City of Chula Vista. has
determined that the deferral of the Parkland Acquisition and Development fee in accordance��ith
CVMC §17.10.070 is consistent N�ith the City of Chula Vista Housing Element of the General
Plan.will assist with reducina the development costs for the construction of the low income units
of the Multifamily Project, and that the public necessity, convenience, general welfare and good
planning practice support the deferral of this fee.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista, that it
directs staff to prepaze all necessary documents and any actions, as may be.required for the
waiver and deferral of the Development Charges and authorizing the City Manager, or his
designee to execute a Fee Deferral Agreement ("AgreemenP'), Promissory Notes, Deeds of
Trusts and all associated loan documents. and regulatory agreements; consistent with the City's
standard documents as re��ie��ed and approved by the City Attomey`s office, necessary for the
financin� of the proposed Multifamily Project, securing repayment of said deferrals, and; at
minimum, subject to the following terms and co�ditions:
1. Developer shall secure all other financing necessary for the acquisition and development
of the Multifamily Project.
2. The repayment of fee deferrals ��ill be secured by Deeds of Trust and Promissory Notes
for the propert�� in favor of the City of Chula Vista and recorded against the Multifamil�-
Project propert}�. The Fee Deferral deeds of trust will be subordinate to the bond
financing and the deferred developer fees on each Multifamily Project.
3. The term of the Fee Deferral shall be fifieen (15) years. An extension of an additional 15
year deferral period may be granted by the City Manager or his designee, if necessary, for
any remaining balance at the end of the first 15 year term. The term extension shall be
granted upon a similar 15 vear term extension of the affordability covenants.
4. The outstanding balance shall accrue simple interest at 3 percent per annum. Interest on
the deferred fees shall begin to accrue as of the date of the A�reement.
5. Payment of principal and interest on the City's Fee Deferrals shall be made out of a fund
equal to fifty percent (50%) of the "Residual Receipts', defined as the income which
remains afrer the payment of the debt service on the permanent loan, payment on
subordinate junior bonds, payment of the deferred developer fee, and reasonable
operating expenses. Payments made by Developer from residual receipts will be
allocated first to repayment of the deferred fees, until paid in full. Upon the extension of
the initial Fee Deferral term, payment of the deferred fees shall be amortized over the 1�
year extended term with pa}�ments made on an annual basis.
6. Developer will be required to operate tl�e Multifamily Project consistent with the
Regulatory Agreement required by the Multifamily Project's bond and tax credit
financing, the Cit}�s Affordable Housing Program, and the Housing Authority's
financing, the covenants imposed by these Agreements, and any other project
requirements.
Resolution No. 201�-087
Paee No. >
7. The Cit�� assistance is based upon the assumptions presented H�ithin the sources and uses
of funds, de��elopment budget. development proforma and other information filed H�ith
the Affordable Housing Re��iew Application for the A4ultifamilv Project as submitted and
re��iewed b.� the Citv`s De��elopment Sen ices Housing Division. The Cit}• assistance is a
maximum leve] of participation. It is e�pected that an}� substanti��e re��isions in such
financine assumptions ���hich would lead to an increase in other resources available.
�ti�ould therefore reduce the le��el of Cin� assistance.
Presented b�� .Approved as to form b}�
�
Kell�� G. Broughton. FASLA Glen R. oogiris
Director of Development Services � _� ttornev
Resolution No. 201�-087
Page No. 6
PASSED, APPROVED; and ADOPTED by the City Council of the City of Chula Vista;
Califomia, this 21 st day of April 20]5 by the following vote:
AYES: Councilmembers: Aguilaz, Bensoussan and McCann
NAYS: Councilmembers: None
ABSENT: Councilmembers: Salas
ABSTATN: Councilmembers: Miesen
Mary las, Mayor
ATTEST:
�� � ��
Donna R. Norris, CMC; City Clerk
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Donna R. Norris, Cih- Clerk of Chula Vista, Califomia, do hereby certify that the foreeoing
Resolution No. 20l�-087 was duly passed, approved, and adopted by the City Council at a
regular meetin� of the Chula Vista City Council held on the 21 st day orApril 2015.
Executed this 21 st da}� of April 201�.
� �-
Donna R. Norris �C, Cit}� Clerk