HomeMy WebLinkAboutReso 2017-188RESOLUTION NO. 2017-188
(HA RESOLUTIONNO. 2017-004)
RESOLUTION OF 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 SAFETY CODE
SECTION 34176, (1) APPROVING A LOAN OF UP TO
$3,300,000 FOR LAND ACQUISITION AND PRE -
DEVELOPMENT EXPENSES TO WAKELAND HOUSING
AND DEVELOPMENT CORPORATION OR AN AFFILIATED
DEVELOPMENT ENTITY FOR A NEW DEVELOPMENT TO
BE LOCATED AT 750 AND 754-760 ANITA STREET AND
RELATED COVENANTS TO OFFER RENT- AND INCOME -
RESTRICTED APARTMENTS FOR LOWER-INCOME
HOUSEHOLDS; AND (2) AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO NEGOTIATE AND
EXECUTE ALL DOCUMENTS RELATED TO THE LOAN
AND THE ACQUISITION AND DEVELOPMENT OF THE
SITES IN A FORM APPROVED BY THE CITY ATTORNEY'S
OFFICE
WHEREAS, to facilitate and materially assist the housing industry in providing adequate
and affordable shelter for all economic segments of the community and to provide a balance of
housing opportunities for very low income, low income and senior households, the City of Chula
Vista ("City") has adopted Chula Vista Municipal Code ("CVMC") Chapter 19.90 (Affordable
Housing Incentives), consistent with Sections 65915 and 65917 of the California Government
Code; and
WHEREAS, Wakeland Housing and Development Corporation, utilizing a to -be -formed
limited partnership of which Wakeland Housing and Development Corporation will be a partner,
the "Developer," proposes to construct a 47 unit family multi -family rental development, with
units affordable to extremely low, very low and low income households to be located at 750-752
and 754-760 Anita Street in the southwestern area of Chula Vista (the "Project"); and
WHEREAS, Developer is applying for nine percent (9%) tax credits from the Tax Credit
Allocation Committee (TCAC); and
WHEREAS, in accordance with CVMC section 19.90.050, the Developer has requested
assistance to reduce the development costs for the construction of the Project for its financial
feasibility; and
WHEREAS, the City's evaluation of the development budget, operating pro forma, and
source and uses for the Project determined that additional financing is appropriate and necessary
in order to make the Project feasible; and
Resolution No. 2017-188
HA Resolution No. 2017-004
Page No. 2
WHEREAS, California Health and Safety Code sections 33334.2, 33334.6, and 34176.1
authorize and direct the Housing Authority (in its capacity as the Successor Housing Entity with
the meaning of Health and Safety Code section 34176; "Housing Authority") to expend Low and
Moderate Income Housing Asset Funds 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 Health and Safety Code section 34176(d) the Housing Authority
has established a Low and Moderate Income Housing Asset Fund (the "Housing Fund"); and
WHEREAS, pursuant to Health and Safety Code sections 33334.2(e) and 34176.1, in
carrying out its affordable housing activities, the Housing Authority 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, the Housing Authority wishes to provide Developer with a pre -development
and land acquisition loan in an amount not to exceed three million three hundred thousand
dollars ($3,300,000) from its Housing Fund to assist with the financing gap for the construction
of the Project with the loan to be secured against the Sites; and
WHEREAS, the Project furthers the goals of the City and the Housing Authority as it will
facilitate the creation of new affordable rental housing which will serve the needs and desires of
various age, income, and ethnic groups of the neighborhood and the City; and
WHEREAS, in order to carry out and implement California Health and Safety Code
sections 33334.2, 33334.6, and 34176.1 and the City's Housing Element of the General Plan and
the affordable housing requirements and goals thereof, the City and Housing Authority propose
to enter into a Housing Authority Loan Agreement and Related Restricted Covenants (the
"Housing Authority Loan Agreement") and City and Housing Authority Declarations of
Covenants, Conditions and Restrictions (the "Declarations"), respectively, with the Developer, to
be recorded as encumbrances to the Project, pursuant to which the Housing Authority would
make the loan to the Developer, and the Developer would agree to develop and operate the
Project in accordance with the requirements of the Housing Authority Loan Agreement and the
associated City and Housing Authority Declarations, restricting occupancy of approximately 47
of the apartment units in the Project to extremely -low, very -low and low-income households and
rent those units at an affordable housing cost, plus 1 unrestricted apartment unit which will be
the managers' unit; and
WHEREAS, the Housing Authority Loan Agreement will leverage the investment of the
Housing Authority 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 an
equity contribution by a limited partner investor in consideration for the "9% Tax Credits" to be
generated by the Project and other financing programs; and
Resolution No. 2017-188
HA Resolution No. 2017-004
Page 3
WHEREAS, in accordance with the requirements of CEQA, the Environmental Review
Coordinator has determined that the proposed project qualifies for a Class 32 infill development
categorical exemption (15332) for new residential units on residential property consistent with
the Residential Apartment (R-3) zoning designation, therefore no further environmental review
or documentation is required.
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 Safety Code section 34176, that it finds the Project is consistent with the provisions
of Chula Vista Municipal Code Chapter 19.90, wherein Developer will construct housing units to
be restricted for occupancy by very -low and low-income households as set forth in CVMC
section 19.90.040; and
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista and by
Housing Authority, in its capacity as the Successor Housing Entity within the meaning of Health
and Safety Code section 34176, that the financial assistance requested by Developer, in
accordance with CVMC section 19.90.050, is necessary to provide for affordable rents and to
lower development costs. The Project cannot be built without such assistance; and
BE IT FURTHER RESOLVED by Housing Authority, in its capacity as the Successor
Housing Entity within the meaning of Health and Safety Code section 34176, that it does hereby
approve a loan from its Housing Fund to Developer for pre -development and land acquisition
costs for a new development to offer approximately 47 rent -and income -restricted residential
units for extremely -low, very -low and low-income households to be located at 750-752 and 754-
760 Anita Street in the southwestern area of Chula Vista in an amount up to (or not to exceed)
three million three hundred thousand dollars (53,300,000) and to be secured against the Sites and
repaid from cash surplus in annual installments; and
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista and
Housing Authority, in its capacity as the Successor Housing Entity with the meaning of Health
and Safety Code section 34176, that it directs staff to prepare all necessary documents and any
actions, as required by Chula Vista Municipal Code Chapter 19.90 and California Health and
Safety Code sections 33334.2, 33334.6, and 34176.1 to commit the Housing Funds, and
authorizing the City Manager, or his designee to negotiate and execute a Housing Authority Pre -
development and Land Acquisition Loan Agreement and all associated loan documents, and
regulatory agreements and other actions necessary for the financing, acquisition and
development of the Sites and Project, consistent with the City's standard documents as reviewed
and approved in form by the City Attorney's office, and, at minimum, subject to the following
terms and conditions:
1. Certification of the appropriate CEQA documentation prior to any Housing Authority
Loan disbursements for any portion of the Project.
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HA Resolution No. 2017-004
Page No. 4
2. Developer shall secure all other financing necessary for the acquisition and
development of the Project within two years of acquisition of the Sites. If Developer
is unable to receive commitment of financing within such period, the Housing
Authority Loan shall become due and payable in full or Sites shall be transferred to
the Housing Authority.
3. The loan repayment will be secured by Deeds of Trust and Promissory Notes for the
properties in favor of the Housing Authority and recorded against the Project
property. The Housing Authority's loan will be junior to the Permanent Financing
and the deferred developer fees on the Project.
4. The term of the Agency loan shall be fifty-five (55) years.
5. The outstanding balances shall all accrue simple interest at 3 percent (3%) per annum.
6. Payment of principal and interest on the Housing Authority loan shall be made out of
a fund equal to fifty percent (50%) of the "residual receipts," defined as the income
which remains after the payment of the debt service on the permanent loan, deferred
developer fee and reasonable operating expenses.
7. Developer will be required to operate the Project consistent with the Regulatory
Agreement required by the Project's tax credit financing, the City's Affordable
Housing Program, and the Housing Authority's financing, the covenants imposed by
these Agreements, and any other project requirements that may be imposed by other
financing to be secured by Developer, to include at a minimum:
a. Tenancy preference for a minimum of 10 percent of the available units for those
persons who are former members of the armed forces of the United States of
America.
b. A minimum of 10 percent of the available units for occupancy by and affordable
to extremely low income households (less than 30 percent of the AMI).
c. To the extent restrictions of the financing and housing programs that are
applicable to the Property limit the rent and/or occupancy of the Property, the
most restrictive of these restrictions shall apply.
8. The Housing Authority assistance is based upon the assumptions presented within the
sources and uses of funds, development budget, development pro forma and other
information filed with the Affordable Housing Review Application for the project as
submitted and reviewed by the City's Development Services Housing Division. The
assistance is a maximum level of participation. It is expected that any substantive
revisions in such financing assumptions which would lead to an increase in other
resources available, would therefore reduce the level of Housing Authority assistance.
Resolution No. 2017-188
HA Resolution No. 2017-004
Page 5
Presented by,.;, Approved as to form by
Kelly G. ro ghton, FASLA Gen R. Go ns
Director of Development Services Cit y
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 10th day of October 2017 by the following vote:
AYES: Councilmembers: Aguilar, Diaz, McCann, Padilla, and Salas
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
Mary S s, Mayor
ATTEST:
Kerry K. BCikelow, Wk, City Clerk
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
I, Kerry K. Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2017-188 was duly passed, approved, and adopted by the City Council at a
regular meeting of the Chula Vista City Council held on the 10th day of October 2017.
Executed this 10th day of October 2017.
ICA? 0A
Kerry K. i elow, MW, City Clerk