HomeMy WebLinkAboutReso 2020-058 DocuSign Envelope ID:84370A5B-AFDA-434C-B3CF-4F1DC2562FEF
RESOLUTION NO. 2020-058
(HOUSING AUTHORITY RESOLUTION NO. 2020-001)
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) (1 ) APPROVING A LOAN OF UP TO
$1 ,036,425 FOR CONSTRUCTION-RELATED COSTS USING
THE CITY'S LOW AND MODERATE INCOME HOUSING
ASSET FUND TO WAKELAND HOUSING AND
DEVELOPMENT CORPORATION OR AN AFFILIATED
DEVELOPMENT ENTITY FOR A NEW DEVELOPMENT TO
BE LOCATED AT 748, 750-752 AND 754-760 ANITA STREET;
(2) AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE
TO NEGOTIATE AN AMENDMENT(S) TO THE EXISTING
LOAN DOCUMENTS FOR 748, 750-752 AND 754-760 ANITA
STREET TO INCORPORATE THE ADDITIONAL LMIHAF TO
THE PROJECT; AND (3) AUTHORIZING THE CITY
MANAGER OR HIS DESIGNEE TO EXECUTE ALL
AMENDED LOAN AND RELATED DOCUMENTS TO THE
LMIHAF LOAN
WHEREAS, Wakeland Housing and Development Corporation, utilizing a to-be-formed
(lillw limited partnership of which Wakeland Housing and Development Corporation will be a partner,
(the "Developer") proposes to construct a 96-unit family multifamily rental development, with
units affordable to extremely low, very low and low income households to be located at 748, 750-
752 and 754-760 Anita Street ("Sites") in the southwestern area of Chula Vista (the "Project");
and
WHEREAS, in accordance with Chula Vista Municipal Code ("CVMC") section
19.90.050,the Developer requested assistance to reduce the development costs for the construction
of the Project for its financial feasibility and, the after the City's evaluation of the development
budget, operating pro forma, and source and uses for the Project determined that additional
financing was appropriate and necessary in order to make the Project feasible, the City/Housing
Authority granted, via Resolution Nos. 2017-188 and 2018-076, financing in the amount of five
million one hundred ninety-five thousand one hundred sixty-five dollars ($5,195,165), including
one million thirty-six thousand four hundred twenty-five dollars($1,036,425) for constructed
related costs using HOME funds from HUD;and
WHEREAS, since approval of the above stated resolutions,the Developer has successfully
received a commitment for the use of the State of California's No Place Like Home ("NPLH")
funding. The Developer is also pursuing additional funding from the State Department of Housing
and Community Development's ("HCD") Multi-Family Housing Program ("MHP") (collectively
"State Funding Sources"); and
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WHEREAS, the above stated State Funding Sources have state requirements and
regulations,but the previously approved City financing using HOME funds from HCD has federal
requirements and regulations and, as a result, Developer is seeking to streamline its requirements
and wishes to have only state requirements and regulations and,to do so, the Developer seeks to
withdraw its application to the City to provide one million thirty-six thousand four hundred
twenty-five dollars ($1,036,425) for constructed related costs using HOME funds from HUD-
thereby making the financing subject only to state requirements and regulations; and
WHEREAS, to meet the gap caused by the withdrawal of its request of HUD funds noted
above,Developer is requesting Low and Moderate Income Housing Asset Fund("LMIHAF")
funds from the City's Housing authority in the amount of one million thirty-six thousand four
hundred twenty-five dollars($1,036,425) for constructed related costs;and
WHEREAS, pursuant to Health and Safety Code section 34176(d) the Housing Authority
has established a LMIHAF; and
WHEREAS,California Health and Safety Code section 34176.1 authorizes and directs 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 LMIHAF 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--which this Project furthers; and
WHEREAS, the City/Housing Authority and the Developer will enter into various
Agreements or Amendments to prior Agreements, as the case may be, to secure the City/Housing
Authority financial interest, including but not limited to, Declaration of Covenants, Conditions,
and Restrictions (2), Deed of Trust (2), a Promissory Note, a Land Acquisition and Pre-
Development Loan Agreement,Notice of Affordability Covenants and an Option of First Right of
Refusal (Loan Agreements and Related Covenants); and
WHEREAS, the Housing Authority wishes to provide Developer with an additional loan
in an amount of one million thirty-six thousand four hundred twenty-five dollars ($1,036,425)
from its LMIHAF to assist with the financing gap for the construction of the Project with the loan
to be secured against the Sites; and
WHEREAS,the additional LMIHAF funds will bring the total amount of City and Housing
Authority assistance in an amount not to exceed five million one hundred ninety-five thousand one
hundred sixty-five dollars ($5,195,165)-the amount previously approved by City Council; 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
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WHEREAS in order to carry m out and implement California Health and Safety Code section
P
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 entity and Housing
Authority Declarations, restricting occupancy of 96 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 one unrestricted apartment unit which will be the managers' unit; and
WHEREAS, the Housing Authority Loan Agreement will leverage the investment of the
Housing Authority and City 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 "4% Tax
Credits"to be generated by the Project and other financing programs; and
WHEREAS, Article XXXIV of the California Constitution (Article 34)requires that voter
approval be obtained before any "state public body" develops, constructs or acquires a "low rent
housing project." The City obtained voter approval on April 11, 1978 and subsequently on
November 6, 2006 with the passage of Proposition C, which authorized the development,
construction, and acquisition of housing for persons of low-income. With 96 total units in the
proposed Project, there remains a balance of 871 units under the City's current authority to
facilitate these activities; and
WHEREAS, in accordance with the requirements of CEQA, the Environmental Review
Coordinator has determined that the proposed project qualifies for an categorical exemption as a
Supportive Housing Project pursuant to Government Code 65651 and Public Resource Code
Section 21080(b)(1) and state legislation AB-2162, therefore no further environmental review or
documentation is required.
NOW,THEREFORE,BE IT RESOLVED by the City Council of the City 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 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.
BE IT FURTHER RESOLVED by the City, as a 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.
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BE IT FURTHER RESOLVED by the City and 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 loans from its Housing Funds to Developer for a new development to offer
approximately 96 rent-and income-restricted residential units for extremely low, very-low and
low-income households to be located at 748, 750-752 and 754-760 Anita Street in the
southwestern area of Chula Vista in an amount up to(or not to exceed)one million thirty-s ix
thousand four hundred twenty-five dollars($1,036,425) in LMIHAF Funds for constructions costs
to be secured against the Sites and repaid from cash surplus (residual receipts, if any) in annual
installments.
BE IT FURTHER RESOLVED by the City 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 California Health and
Safety Code section 34176(d) to commit the Housing Funds, and authorizing the City Manager,
or his designee to negotiate and execute an Amendment(s)to the executed City/Housing Authority
Predevelopment 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 other necessary actions for financing of the Project, and,
at minimum, subject to the following terms and conditions:
1. Certification of the appropriate CEQA documentation is one file prior to any Housing
Authority Loan disbursements for any portion of the Project.
2. Developer shall secure all other financing necessary for the acquisition and development
of the Project. If Developer is unable to receive commitment of financing within two years,
the Housing Authority Loan shall become due and payable in full or Sites shall be
transferred to the Housing Authority.
3. The loan repayment of the LMIHAF will be secured by an Amendment(s) to the existing
Deeds of Trust and Promissory Notes for the properties in favor of the Housing Authority
and recorded against the Project Sites and include the additional investment of said funds.
The Housing Authority's loan will be junior to the Permanent Financing and the deferred
developer fees on the Project.
4. The loan repayment of the LMIHAF funds will be secured by a Deed of Trust, Promissory
Note, and Regulatory Agreement in favor of the City and recorded against the Project
property(748, 750-752 and 754-760 Anita Street).
5. The term of the Housing Authority loan covenant and loan term shall be fifty-five (55)
years.
6. The outstanding balances shall all accrue simple interest at 3 percent (3%) per annum.
However, interest shall not accrue during the predevelopment time period.
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7. Payment of principal and interest on the Housing Authority loan and City HOME 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.
8. 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/City's financing, the covenants imposed by these Agreements,
and any other project requirements.
9. The Housing Authority and City assistance is based upon the assumptions presented within
the sources and uses of funds, development budget, development proforma 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/City assistance.
10. That it authorizes a budget amendment to the 2019/2020 Housing Authority's LMIHAF.
[SIGNATURES ON THE FOLLOWING PAGE]
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Resolution No. 2020-058
HA Resolution No.2020-001
Page No. 6
Presented by Approved as to form by
DocuSigned by: DocuSigned by:
04E6EC224BA74B0._ CF406508504448F...
Kelly G. Broughton, FASLA Glen R. Googins
Director of Development Services City Attorney
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 17th day of March 2020 by the following vote:
AYES: Councilmembers: Diaz, Galvez, McCann, and Casillas Salas
NAYS: Councilmembers: None
ABSENT: Councilmembers: Padilla
CDocuSigned by:
062BFD7C0386456...
Mary Casillas Salas, Mayor
ATTEST:
DocuSigned by:
3074D104EAF342E...
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
City Council Resolution No. 2020-058 was duly passed, approved, and adopted by the City
Council at a regular meeting of the Chula Vista City Council held on the 17th day of March 2020.
Executed this 17th day of March 2020.
DocuSigned by:
30740104EAF342E...
Kerry K. Bigelow, MMC, City Clerk