HomeMy WebLinkAboutReso 2018-260RESOLUTION NO. 2018-260
(Housing Authority Resolution No. 2018-010)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AND THE CHULA VISTA HOUSING
AUTHORITY, IN ITS CAPACITY AS THE SUCCESSOR
HOUSING ENTITY WITHIN THE MEANING OF HEALTH
AND SAFETY CODE SECTION 34176, APPROVING THE
ASSUMPTION OF EXISTING CITY AND HOUSING
AUTHORITY LOANS TOTALING APPROXIMATELY
$2,643,695 IN PRINCIPAL AND ACCRUED INTEREST, AND
AUTHORIZING THE CITY MANAGER TO EXECUTE ALL
RELATED LOAN DOCUMENTS BY AND BETWEEN THE
CITY OF CHULA VISTA AND CORDOVA TROLLEY, LP
FOR CORDOVA VILLAGE AND TROLLEY TERRACE
MULTIFAMILY AFFORDABLE APARTMENTS
WHEREAS, South Bay Community Services, as the general partner of Cordova Village
LP, (the “Developer”) and the City of Chula Vista (the “City”) and the Chula Vista Housing
Authority (“Housing Authority”) as the Successor Housing Entity (collectively, the “Lender”)
are all current parties to that certain Disposition and Development Agreement/HOME Program
Participation Agreement dated as of December 17, 1996, and recorded against a 40 unit
multifamily rental development, with eight (8) units affordable to very low income households at
50 percent of the Area Median Income (AMI), thirty-one (31) units affordable to low income
households at 60 percent of the Area Median Income (AMI) and one (1) unrestricted for a
resident manager, located at 1280 E J Street in the City of Chula Vista, known as Cordova
Village, (“Cordova”) in the Office of the Recorder of the County of San Diego on September 12,
1997, as Document 1997-0443742 (“DDA-Cordova”); and
WHEREAS, Developer received a development loan in the amount of five hundred ten
thousand dollars ($510,000) from Housing Authority’s Low and Moderate Income Housing Fund
(the “Housing Fund”) and four hundred seventy-eight thousand two hundred dollars ($478,200)
from the City’s HOME Investment Program funds (HOME funds) at three percent interest per
annum compounded monthly to be paid from 75 percent of residual receipts, with the execution
of the DDA-Cordova and other associated loan documents, to assist with the financing gap for
the construction of Cordova; and
WHEREAS, Developer, as the general partner of Trolley Terrace LP, and Lender are all
current parties to that certain Disposition and Development Agreement/HOME Program
Participation Agreement dated as of October 21, 1997, and recorded against an eighteen (18) unit
multifamily rental development, with seventeen (17) units affordable to very low income
households at 40 percent of the Area Median Income (AMI) and one (1) unrestricted for a
resident manager, located at 750 Ada Street in the City of Chula Vista, known as Trolley Terrace
Townhomes, (“Trolley”) in the Office of the Recorder of the County of San Diego on November
25, 1997, as Document 1997-0597464 (“DDA-Trolley”); and
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WHEREAS, Developer received a development loan in the amount of eight hundred
ninety-six thousand nine hundred and five dollars ($896,905) from the City’s HOME funds at
three percent interest per annum compounded monthly to be paid from 75 percent of residual
receipts, with the execution of the DDA-Trolley and other associated loan documents, to assist
with the financing gap for the construction of Trolley; and
WHEREAS, Developer, as partner of the newly formed Cordova Trolley Limited
Partnership, proposes the acquisition and rehabilitation of Cordova and Trolley to preserve their
affordability and ensure their continued long-term use and viability; and
WHEREAS, Developer proposes the acquisition and rehabilitation of both Cordova and
Trolley as “scattered sites” (collectively, the “Project”) utilizing up to $7,000,000 of tax-exempt
Multifamily Housing Revenue Bonds (Bonds) issued by the Housing Authority and companion
non-competitive four percent tax credits; and
WHEREAS, the Lender’s evaluation of the development budget, operating pro forma,
and source and uses for the Project determined that the assumption by the Developer of the
existing development loans of Lender is appropriate and necessary in order to make the Project
feasible; and
WHEREAS, Project will continue to make available housing affordable for very low and
low income persons of the neighborhood and the City for an additional fifty-five (55) years; and
WHEREAS, Lender wishing to assist with the financing gap for the acquisition and
rehabilitation of the Project proposes to terminate the existing DDAs for the Project and
concurrently enter into consolidated loan documents and a regulatory agreement with Developer
and to be recorded as encumbrances to the Project for the balance of Lender’s outstanding
development loans from its Housing funds and HOME funds, pursuant to which the Developer
would agree to acquire and operate the Project in accordance with the requirements of the
Lender’s existing DDAs, restricting occupancy of 56 of the apartment units in the Project to
very-low and low-income households and rent those units at an affordable housing cost, plus two
(2) unrestricted apartment units for resident managers at Cordova and Trolley; and
WHEREAS, the City’s Housing Advisory Commission did, on the 25th day of April,
2018, hold a public meeting to consider said request for financing of the Project; and
WHEREAS, the Housing Advisory Commission, upon hearing and considering all
testimony, if any, of all persons desiring to be heard, and considering all factors relating to the
financing of the Project, recommended to the Successor Agency and City financing be approved
on the condition that all other necessary financing be secured for the Project; and
WHEREAS, in accordance with the requirements of CEQA, the Development Services
Director has determined that the proposed project qualifies for a Class 1 Categorical Exemption
pursuant to Section 15301 Existing Facilities of the California Environmental Quality Act State
Guidelines because it involves the rehabilitation of existing facilities which would not result in
an expansion of the existing uses; and
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula
Vista, that it does hereby approve the termination of the DDAs for Cordova Village and Trolley
Terrace Townhomes and the concurrent execution and recordation of all loan documents and
regulatory agreements for the assumption and consolidation of all outstanding loan balances,
principal and accrued interest to date, from the City’s HOME Investment Program funds (HOME
funds) to Developer for the acquisition and rehabilitation of a total of 58 residential units for both
Cordova Village and Trolley Terrace Townhomes.
BE IT FURTHER RESOLVED by the Housing Authority as Successor Housing Agency
of the City of Chula Vista, that it does hereby approve the termination of the DDA for Cordova
Village and the concurrent execution and recordation of all loan documents and regulatory
agreements for the assumption and consolidation of all outstanding loan balances, principal and
accrued interest to date, from the Housing Authority’s Low and Moderate Income Housing Set -
Aside fund to Developer for the acquisition and rehabilitation of a total of 58 residential units for
both Cordova Village and Trolley Terrace Townhomes.
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista and the
Housing Authority as Successor Housing Entity, that it directs staff to prepare all necessary
documents and any actions, for the assumption and consolidation of the outstanding development
loans and authorizing the City Manager, or his designee to execute a Notice of Termination of
the Disposition and Development Agreements and all associated loan documents, and regulatory
agreement, consistent with the City’s standard documents as reviewed by the City Attorney’s
office, necessary for the financing of the proposed acquisition and rehabilitation of Project and,
at minimum, subject to the following terms and conditions:
1. Developer shall secure all other financing necessary for the acquisition and development
of the Project.
2. The loan repayment will be secured by a Deed of Trust and Amended and Restated
Promissory Notes for the property in favor of the Housing Authority as Successor
Agency and City of Chula Vista and recorded against the property.
3. The term of the Lender loans shall be fifty-five (55) years.
4. The outstanding balances shall accrue interest at 3 percent per annum.
5. Payment on the Lender loans shall be made from fifty percent (50%) of the residual
receipts of the Project.
6. Developer will be required to operate the Project consistent with the Regulatory
Agreement required by the Project’s bond and tax credit financing, the Lender’s
financing, the covenants imposed by these Agreements, and any other project
requirements.
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7. This approval remains subject to additional approval by Housing Authority and City
Council, in which Housing Authority and City Council retain its sole and unfettered
discretion to approve, deny, or to take alternative actions of, but not limited to, the final
approval of multifamily mortgage revenue bond financing for the Project.
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Presented by Approved as to form by
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney/Legal Counsel
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 18th day of December 2018 by the following vote:
AYES: Councilmembers: Diaz, Galvez, Padilla, and Casillas Salas
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
ABSTAIN: Councilmembers: McCann
Mary Casillas Salas, Mayor
ATTEST:
Kerry K. Bigelow, MMC, 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. 2018-260 was duly passed, approved, and adopted by the City Council at a
regular meeting of the Chula Vista City Council held on the 18th day of December 2018.
Executed this 18th day of December 2018.
Kerry K. Bigelow, MMC, City Clerk
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