HomeMy WebLinkAboutReso 2021-182RESOLUTION NO. 2021-182
(Housing Authority Resolution No. 2021-004)
RESOLUTION OF THE HOUSING AUTHORITY AS THE
SUCCESSOR HOUSING ENTITY TO THE CITY OF CHULA
VISTA AND THE CITY COUNCIL OF THE CITY OF CHULA
VISTA CONDITIONALLY APPROVING FINANCIAL
ASSISTANCE FROM THE HOME INVESTMENT
PARTNERSHIP ACT (HOME) PROGRAM IN AN AMOUNT
NOT-TO-EXCEED $2,000,000 AND UP TO $1,000,000 FROM
THE CITY’S LOW- AND MODERATE-INCOME HOUSING
ASSET FUND TO CHELSEA INVESTMENT CORPORATION
OR AN AFFILIATED DEVELOPER (MILLENIA II CIC, LP)
FOR A NEW 200-UNIT AFFORDABLE HOUSING
DEVELOPMENT KNOWN AS COLUMBA APARTMENTS TO
BE LOCATED IN THE OTAY RANCH MILLENIA MASTER
PLAN COMMUNITY
WHEREAS, pursuant to applicable law the Successor Housing Agency has established a
Low- and Moderate-Income Housing Fund (“LMIHF”); and
WHEREAS, the use of LMIHF is consistent with the statutory requirements of this funding
source to provide a minimum of 30 percent of expenditures for extremely low-income persons
served by the Project, as being proposed by the Project Sponsor (CA H&S Section
34176.1(a)(3)(B); and
WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out its
affordable housing activities, the Successor Housing 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, the City of Chula Vista (“City”) 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, on August 24, 2021, the City Council approved the HOME funds via an
Annual Action Plan amendment that includes funding for the production of affordable rental
housing for low-income households; and
WHEREAS, the City has available funds from its LMIHFs and HOME funds due to loan
repayments and HUD entitlement funds; and
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WHEREAS, Millenia II CIC LP and Chelsea Investment Corporation or its affiliate and/or
assigns, the “Developer”, proposes to construct a 200-unit family multifamily rental development,
within the Otay Ranch Millenia Master Planned Community (“Family Project”); and
WHEREAS, Developer will receive an allocation of Multifamily Housing Revenue Bonds
from the California Debt Limit Allocation Committee (CDLAC); and
WHEREAS, Developer will receive four percent (4%) tax credits from the California Tax
Credit Allocation Committee (CTCAC); 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
WHEREAS, the Developer requires assistance to reduce the development costs for the
construction of the Project for its financial feasibility; and
WHEREAS, the Successor Housing Agency wishes to provide Developer with a
development loan in the amount not to exceed one million dollars ($1,000,000) from its Housing
Fund to assist with the financing gap for the construction of the Project; and
WHEREAS, the Project furthers the goals of the Successor Housing Agency as it will
facilitate the creation of affordable housing which will serve the extremely low-income residents;
and
WHEREAS, the City wishes to provide Developer with a development loan in the amount
not to exceed two million dollars ($2,000,000) from its Fiscal Year 2021 HOME funds to assist
with the financing gap for the construction of the Project; and
WHEREAS, the City’s development loan does not exceed the HOME maximum per-unit
subsidy limits based on the Section 221(d)(3) limits established by HUD; and
WHEREAS, the City’s 2021-2029 Housing Element of the General Plan which sets forth
the objective of providing balanced and varied housing opportunities throughout the City to satisfy
needs and desires of various age, income, and ethnic groups of the community, and which
specifically provides for the construction of new affordable housing units through City assistance;
and
WHEREAS, in order to carry out and implement the Successor Housing Agency’s
earmarks, the City’s Consolidated Plan and Housing Element of the General Plan and the
affordable housing requirements and goals thereof, the Successor Housing Entity and City propose
to enter into a Successor Agency and City Loan Agreement and Related Restricted Covenants (the
“Agency/City Loan Agreement”), a City HOME Loan Agreement and Related Restricted
Covenants (the “HOME Loan Agreement”), respectively, with the Developer, to be recorded as
encumbrances to the Project, pursuant to which the Successor Agency and City would make the
loans to the Developer, and the Developer would agree to develop and operate the Project in
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accordance with the requirements of the Successor Housing Agency/City Loan Agreement and
HOME Agreement, restricting occupancy of 200 of the apartment units in the Project including
but not limited to 198 units to be occupied by extremely low, very low and low-income households
at an affordable housing cost, as defined by Health and Safety Code 50053 and 24 CFR§ 92.252,
plus 2 unrestricted apartment units which will be the managers’ units; and
WHEREAS, the Agency/City Loan and HOME Loan will leverage the investment of the
Successor Agency and City by requiring the Developer to obtain additional financing for the
construction and operation of the Project through a combination of a loan(s) obtained from the
proceeds of multi-family mortgage revenue bond financing and an equity contribution by a limited
partner investor in consideration for the “4% Tax Credits” to be generated by the Project; and
WHEREAS, the City’s Housing Advisory Commission did, on the 11th day of August,
2021, 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, recommended to the Successor Housing Entity and City that
financial assistance be approved on the condition that all other necessary financing be secured for
the Project, and
WHEREAS, the Housing Advisory Commission found 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 Consolidated Plan and the cost effectiveness of the City’s financial assistance based
upon the leveraging of such sources; and
WHEREAS, the Development Services Director has reviewed the proposed project for
compliance with the California Environmental Quality Act (CEQA) and has determined that the
Project was adequately covered in previously certified Final Second Tier Environmental Impact
Report (EIR-07-01)-SCH No. 2007041074 for Otay Ranch Eastern Urban Center (EUC) Sectional
Planning Area (SPA) Plan and Tentative Map. Therefore, no further CEQA review or
documentation is necessary; and
WHEREAS, the development of the Project is subject to completing an environmental
review under NEPA prior to construction.
NOW, THEREFORE, BE IT RESOLVED by the Housing Authority as Successor Housing
Agency of the City of Chula Vista, that it does hereby conditionally approve a residual receipts
loan from the Successor Housing Entity’s Low- and Moderate-Income Housing Set-Aside fund to
Developer in an amount not to exceed $1,000,000 and the City conditionally approves and
commits up to $2,000,000 of its HOME Investment Partnership Act funds (HOME) for the Project
within the Otay Ranch Millenia master planned community.
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BE IT FURTHER RESOLVED by the Housing Authority as Successor Housing Agency
of the City of Chula Vista and the City Council of the City of Chula Vista, that it directs staff to
prepare all necessary documents and any actions, as required by HUD or California Health and
Safety Code Sections 33334.2 and 33334.6 to commit the HOME and Successor Housing Agency
funds, and authorizing the City Manager, or his designee to execute an Agency/City Loan
Agreement, HOME Loan Agreement, and all associated loan documents, and regulatory
agreements, consistent with the City’s standard documents as reviewed by the City Attorney’s
office, necessary for the financing of the proposed Project and, at minimum, subject to the
following terms and conditions:
1. Certification of the appropriate CEQA and NEPA documentation prior to any City and
Successor Housing Agency Loan disbursements for any portion of the Project.
2. Developer shall secure all other financing necessary for the acquisition and development
of the Project.
3. The loan repayment will be secured by Deeds of Trust and Promissory Notes for the
property in favor of the Housing Authority as Successor Agency and City of Chula Vista
and recorded against the Project property.
4. The term of the Agency loan shall be fifty-five (55) years.
5. The outstanding balances shall all accrue simple interest at a 3 percent (3%) per annum.
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 City's Affordable Housing
Program, and the Successor Housing Agency's financing, the covenants imposed b y these
Agreements, and any other project requirements.
7. The Successor Housing Agency 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 City 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 Successor Housing Agency
and City assistance this approval remains subject to additional approvals by Housing
Authority and City Council, in which Housing Authority and City Council retains its sole
and unfettered discretion to approve, deny, or to take alternative actions, of, but not limited
to the following: the commitment of up to $1,000,000 LMIHF and up to $2,000,000 from
the City’s HOME funds, and final approval of multi-family mortgage revenue bond
financing for the Project.
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Presented by Approved as to form by
Tiffany Allen Glen R. Googins
Development Services Director City Attorney
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 24th day of August 2021 by the following vote:
AYES: Councilmembers: Cardenas, Galvez, McCann, Padilla, and Casillas Salas
NAYS: Councilmembers: None
ABSENT: Councilmembers: None
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. 2021-182 was duly passed, approved, and adopted by the City Council at a regular
meeting of the Chula Vista City Council held on the 24th day of August 2021.
Executed this 24th day of August 2021.
Kerry K. Bigelow, MMC, City Clerk
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