HomeMy WebLinkAboutReso 2003-432RESOLUTION NO. 2003-432
(AGENCY RESOLUTION NO. 1845)
JOINT RESOLUTION OF THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA APPROVING A LOAN AGREEMENT AND RELATED
RESTRICTIVE COVENANTS AND APPROPRIATING
$1,000,000 FROM THE AVAILABLE BALANCE IN THE
AGENCY'S LOW AND MODERATE INCOME HOUSING
FUND AND $500,000 FROM THE CITY'S HOME FUNDS FOR
FINANCIAL ASSISTANCE TO CIC EASTLAKE, L.P. FOR
THE DEVELOPMENT AND OPERATION OF RANCHO
VISTA
WHEREAS, the City has been allocated funds from the United States Department of
Housing and Urban Development ("HUD") pursuant to the federal government's HOME
Investment Partnerships Program (42 U.S.C. Section 1274, et seq.) which can be used to provide
subsidies to or for the benefit of very low income and lower income households in accordance
with HOME regulations (24 C.F.R. Section 92, et seq.); and
WHEREAS, Califomia Health and Safety Code Sections 33334.2 and 33334.6 authorize
and direct the Redevelopment Agency of the City of Chula Vista (the "Agency") to expend a
certain pementage of all taxes which are allocated to the Agency pursuant to Section 33670 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 applicable law the Agency has established a Low and Moderate
Income Housing Fund (the "Housing Fund"); and
WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out its
affordable housing activities, the Agency 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, pursuant to Section 33413(b), the Agency is required to ensure that at least
15 percent of all new and substantially rehabilitated dwelling units developed within a project
area under the jurisdiction of the Agency by private or public entities or persons other than the
Agency shall be available at affordable housing cost to persons and families of low or moderate
income; and
WHEREAS, CIC Eastlake, L.P. (the "Developer") has proposed to construct a 150 unit
apartment building located at 1311 Eastlake Parkway in the City of Chula Vista (the "Project");
and
WHEREAS, in order to carry out and implement the requirements of the HOME Program
and the Redevelopment Plan for the Agency's redevelopment projects and the affordable housing
requirements thereof, the City and the Agency propose to enter into a Loan Agreement and
Related Restricted Covenants (the "Loan Agreement") with the Developer, pursuant to which the
Resolution 2003-432
Page 2
City would loan Five Hundred Thousand Dollars ($500,000) to the Developer, the Agency
would loan One Million Dollars ($1,000,000) to the Developer (the "Agency Loan"), and the
Developer would agree to construct the Project in accordance with the requirements of the Loan
Agreement, restrict occupancy of 149 of the apartment units in the Project to very low, lower
income and low and moderate income households, and rent those units at an affordable rent; and
WHEREAS, the Loan Agreement will leverage the investment of the City and the
Agency 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
multifamily mortgage revenue bond financing to be issued by the Housing Authority of the City
of Chula Vista, a private construction loan, an equity contribution by a limited partner investor in
consideration for the "4% Tax Credits" to be generated by the Project, and other outside
financing; and
WHEREAS, the City has adopted a Housing Element of the City General Plan which sets
forth the objective of providing housing to satisfy the needs and desires of various age, income
and ethnic groups of the community, and which specifically provides for the development of
rental housing units through City assistance; and
WHEREAS, the Loan Agreement furthers the goals of the City set forth in the Housing
Element as it will facilitate the creation of affordable housing which will serve the residents of
thc neighborhood and the City; and
WHEREAS, the Project is located outside of the Agency's redevelopment project areas,
but the development and operation of the Project pursuant to the Loan Agreement would benefit
the Agency's redevelopment project areas by providing affordable housing for persons who
currently live and work within those redevelopment project areas; and
WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and
Safety Code Section 33490, which sets forth the objective of providing housing to satisfy the
needs and desires of various age, income and ethnic groups of the community, and which
specifically provides for the development of rental housing units through Agency assistance; and
WHEREAS, the Loan Agreement furthers the goals of the Agency set forth in the
Implementation Plan as it will facilitate the creation of affordable housing which will serve the
residents of the neighborhood and the City; and
WHEREAS, the Legislature declares in Health and Safety Code Section 36000, et seq.,
that new forms of cooperation with the private sector, such as leased housing, disposition of real
property acquired through redevelopment, development approvals, and other forms of housing
assistance may involve close participation with the private sector in meeting housing needs,
without amounting to development, construction or acquisition of low rent housing projects as
contemplated under Article XXXIV of the State Constitution; and
WHEREAS, Health and Safety Code Section 37001(a) provides that a low rent housing
project does not include the development of privately owned housing, receiving no ad valorem
property tax exemption, other than exemptions granted pursuant to subdivision (f) or (g) of
Section 214 of the Revenue and Taxation Code, not fully reimbursed to all taxing entities; and
not more than 49 pement of the dwellings, apartments, or other living accommodations of the
development may be occupied by persons of low income; and
Resolution 2003-432
Page 3
WHEREAS, the Project will be privately owned, will receive no ad valorem property tax
exemption, other than exemptions wanted pursuant to subdivision (f) or (g) of Section 214 of the
Revenue and Taxation Code, and not more than 49 percent of the apartment units in the Project
are restricted to very low and lower income persons pursuant to the Loan Agreement; and
WHEREAS, Health and Safety Code Section 37001.5 provides that a public body does
not develop, construct or acquire a low rent housing project under Article XXXIV of the State
Constitution when the public body provides assistance to a low rent housing project and monitors
construction or rehabilitation of the project to the extent of carrying out routine governmental
functions, performing conventional activities of a lender, and imposing constitutionally
mandated or statutorily authorized conditions accepted by a grantee of assistance; and
WHEREAS, the Loan Agreement provides for assistance by the City and Agency to the
Project, and the monitoring of construction of the Project by the City and Agency to the extent of
carrying out murine governmental functions, performing conventional activities of a lender, and
imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of
assistance; and
WHEREAS, the City Council and the Agency have duly considered all terms and
conditions of the proposed Loan Agreement and believe that the Loan Agreement is in the best
interests of the City and the Agency and the health, safety, and welfare of the residents of the
City, and in accord with the public purposes and provisions of applicable Federal, State and local
law requirements.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA AND
THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA DO JO1NTLY RESOLVE AS FOLLOWS:
Section 1. The City Council and the Agency hereby find that the use of funds from the
Agency's Low and Moderate Income Housing Fund pursuant to the Loan Agreement, for the
acquisition, development and operation of real property which is outside of the Agency's
redevelopment project areas, will be of benefit to the Agency's redevelopment project areas for
the masons set forth above.
Section 2. The City Council and the Agency hereby determine that the Project is not a "low
rent housing project" within the meaning of Article XXX1V of the State Constitution, and that
the assistance to be provided pursuant to the Loan Agreement does not constitute development,
construction or acquisition of a low-mnt housing project within the meaning of Article XXXIV
of the State Constitution. This resolution is hereby deemed to constitute a final approval of a
proposal which may result in housing assistance benefiting persons of low income, within the
meaning of Health and Safety Code Section 36005.
Section 3. The City Council and the Agency hereby approve the Loan Agreement in
substantially the form presented to the City Council and Agency, subject to such revisions as
may be made by the City Manager/Agency Executive Director or his designee. The Mayor and
City Manager and their designees are hereby authorized to execute the Loan Agreement on
behalf of the City. The Chairman and Executive Director of the Agency and their designees are
hereby authorized to execute the Loan Agreement on behalf of the Agency. A copy of the Loan
Agreement when executed by the City and Agency shall be placed on file in the office of the
City Clerk.
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Page 4
Section 4. The Mayor and City Manager (or their designee) on behalf of the City, and the
Chairman and Executive Director (or their designee) on behalf of the Agency, are hereby
authorized to make revisions to the Loan Agreement which do not materially or substantially
increase the obligations of the City or Agency thereunder or materially or substantially change
the uses or development permitted on the site, to sign all documents, to make all approvals and
take all actions necessary or appropriate to carry out and implement the Loan Agreement and to
administer the obligations, responsibilities and duties of the City and Agency to be performed
under the Loan Agreement and related documents.
Presented by
Approved as to form by
Laur~ Madigan J (2/
Comrhunity Development Director
Resolution 2003-432
Page 5
PASSED, APPROVED, and ADOPTED by the City Council and the Redevelopment
Agency of the City of Chula Vista, California, this 7th day of October, 2003, by the following
vote:
AYES:
Agency/Councilmembers: Davis, MeCann, Rindone, Salas and Padilla
NAYS:
Agency/Councilmembers: None
ABSENT:
ATTEST:
Agency/Councilmembers:
None
Susan Bigelow, CMC, City Clerk
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CHULA VISTA
I, Susan Bigelow, City Clerk of Chula Vista, Califomia, do hereby certify that the foregoing City
Council Resolution No. 2003-432/Redevelopment Agency Resolution No. 1845 was duly
passed, approved, and adopted by the City Council and Redevelopment Agency at a regular
meeting held on the 7th day of October, 2003.
Executed this 7th day of October, 2003.
Susan Bigelow, CMC, City-Clerk