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HomeMy WebLinkAboutReso 2003-442 - RESOLUTION NO. 2003-442 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHOU VISTA CONDITIONALLY APPROVING FINANCIAL ASSISTANCE, SUIDECr TO FUTURE APPROPRIATION, IN THE FORM OF A RESIDUAL RECEIPTS LOAN FROM HOME FUNDS IN AN AMOUNT NOT-TO-EXCEED $300,000 TO THE METROPOUTAN AREA ADVISORY COMMITTEE (MAAC) PROJECT FOR THE DEVELOPMENT OF THE PROPOSED 42-UNIT PROJECT LOCATED AT 825 BROADWAY WHEREAS, the City of Chula Vista is an entitlement/participating jurisdiction for the U.S. Department of Housing and Urban Development (HUD) funding programs and is awarded on an annual basis a formula grant from the HOME Investment Partnership Program (HOME); and WHEREAS, HOME funds are designed exclusively to create affordable housing opportunities for low-income households through the construction, purchase, and/or rehabilitation of affordable housing for rent or homeownership or provide direct rental assistance to low-income people; and WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out its affordable housing activities, the City 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 Health and Safety Code Section 33413(b), the City 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 City by private or public entities or persons other than the City shall be available at affordable housing cost to persons and families of low or moderate income; and WHEREAS, MAAC Project ("Developer") proposes to construct a mixed use project of 2,219 square feet of commercial retail and 41 apartment units available to seniors, with 20 units affordable to very low households at 45 percent of the Area Median Income (AMI), 20 units affordable to very low households at 50 percent of the Area Median Income (AMI) and 1 unit available for an on-site manager, located at 825-841 Broadway ("Project"); and WHEREAS, Developer is applying for nine percent (9%) tax credits from the Tax Credit Allocation Committee (TCAC); and WHEREAS, additional fmancing is necessary in order to make the residential use of the Project feasible; and WHEREAS, the Developer requires assistance to reduce the development costs for the construction of the residential units in order to make the Project feasible; and Resolution 2003-442 Page 2 WHEREAS, the provision of affordable housing units like the Project is consistent with and called for by the City's General Plan Housing Element, Consolidated Plan, and California Health and Safety Code; and WHEREAS, the City wishes to provide Developer with a development loan up to three hundred thousand dollars ($300,000) to assist with the financing gap for the construction of the residential units of the Project; and WHEREAS, the City's provision of funds to the residential use of the Project will directly improve the City's supply of very low income housing; and WHEREAS, the City 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 construction of new affordable rental housing units through City assistance; and WHEREAS, the residential use of the Project furthers the goals of the City 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 City's Housing Advisory Commission did, on the 23rd day of April, 2003, hold a public meeting to consider said request for financial assistance; 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 request for financial assistance, has recommended to the City Council that the appropriation be approved because the Commission believes that the City's financial participation in the development of the Project will be a sound investment based upon Developer's ability to effectively serve the City's housing needs and priorities as expressed in the Housing Element and the Consolidated Plan and the cost effectiveness of the City's financial assistance based upon the leveraging of such resources; and WHEREAS, the City Council does hereby find that the proposed project was adequately covered in previously adopted Negative Declaration IS-03-008 and, therefore, does hereby find that no further environmental review or documentation is necessary. WHEREAS, the City Council does hereby find that in the exercise of their independent review and judgment, the previously adopted Negative Declaration (IS-03-008) adequately covers the proposed project in accordance with requirements of the California Environmental Quality Act and the Environmental Review Procedures of the City of Chula Vista; and NOW, THEREFORE, BE IT RESOLVED the City of Chula Vista does hereby conditionally approve a residual receipts loan subject to future appropriation, in an amount not-to-exceed $300,000 from the City's HOME funds to Developer for the construction of the residential units of the Project subject to the City's approvals of an affordable housing and loan agreement which shall include, at a minimum, the following terms and conditions: 1. Funds shall be used only for those costs directly related to the residential units of the Project. ~~ - ~-~------~-- ~--~ ----~~--- Resolution 2003-442 Page 3 2. The loan repayment will be secured by a Deed of Trust and Promissory Note for the property on behalf of the City of Chula Vista and recorded against the Project property. 3. The term of the loan shall be fifty-five (55) years. 4. The outstanding balance shall accrue with simple interest at 3 percent per annum. 5. Payment of principal and interest on the City loan shall be made, on an annual basis, out of a fund equal to fifty percent (50%) of the "Residual Receipts", rental income from the Project minus debt service on the bonds, payment of the deferred developer fee, and reasonable operating expenses. 6. Developer will be required to operate the Project consistent with the Regulatory Agreement required by the Project's tax credit financing, the covenants imposed by the agreement, and any other project requirements. 7. Developer shall enter into a loan agreement with the City consistent with the terms set forth above and with such other terms as shall be required or approved by the City Attorney. 8. This conditional approval remains subject to final approval by the City in its sole discretion. Presented by Approved as to form by uri A. Madi~?rr~ ~~~ Ann Moore Com unity Development Director City Attorney - -~------ Resolution 2003-442 Page 4 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, -~ California, this 14th day of October, 2003, by the following vote: AYES: Councilmembers: Davis, McCann, Rindone, Salas and Padilla NAYS: Councilmembers: None ABSENT: Councilmembers: None J:tG?#- ATTEST: ~ t1~'~ Susan Bigelow, CMC, City C rk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) CITYOFCHULA VISTA ) I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing Resolution No. 2003-442 was duly passed, approved, and adopted by the City Council at a regular meeting of the Chula Vista City Council held on the 14th day of October, 2003. Executed this 14th day of October, 2003. --:::::¡ LA- ~~ ~ Susan Bigelow, CMC, City rk -