HomeMy WebLinkAboutReso 2007-064
RESOLUTION NO. 2007-064
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA CONDITIONALLY APPROVING FINANCIAL
ASSISTANCE, SUBJECT TO FUTURE APPROPRIATION FROM
THE HOME INVESTMENT PARTNERSHIP (HOME) PROGRAM
IN AN AMOUNT NOT-TO-EXCEED $920,000 TO CHELSEA
INVESTMENT CORPORATION FOR THE DEVELOPMENT OF
THE PROPOSED 92-UNIT AFFORDABLE RENTAL
COMMUNITY, KNOWN AS THE LANDINGS AT WINDING
WALK
WHEREAS, the City ofChula Vista is an entitiementlparticipatingjurisdiction for the U.S.
Department of Housing and Urban Development (HUD) funding programs and is awarded on an
anoual 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, Chelsea Investment Corporation (Developer) proposes to construct a 92 unit
multifamily rental development, with 25 units affordable to low-income households at 60 percent of
the Area Median Income (AMI), 22 units for low-income households at 55 percent of the AMI, 12
units for very low-income at 50 percent of the AMI, and 32 units affordable to extremely low-income
households at 30 percent of the AMI, within the Otay Ranch Village Eleven (also known as
"Winding Walk") master planoed community on a vacant 14 acre (gross) site known as
Neighborhood R1910cated on the corner of Discovery Falls Road and Crossroads Street in the City
of Chula Vista (Project); and
WHEREAS, Developer is applying for an allocation of Multifamily Housing Revenue Bonds
from the California Debt Limit Allocation Committee (CDLAC), four percent (4%) tax credits from
the Tax Credit Allocation Committee (TCAC), and Multifamily Housing Program from the State of
California Housing and Community Development Department; and
WHEREAS, subsidies were obtained in the form of a land donation from the master
developer, Brookfield Shear Otay, LLC, and the Developer is proposing to defer a portion of their
development fee to assist in the financing of the Project; and
WHEREAS, the City's evaluation of the development budget, 45-year operating pro forma,
sources and uses for the Project has determined that additional financing is appropriate and necessary
in order to make the Project feasible; and
Resolution No. 2007-064
Page 2
WHEREAS, the City wishes to provide Developer with a development loan of nine hundred
twenty thousand dollars ($920,000) from its HOME funds to assist with the financing gap for the
construction of the Project, more particularly for eleven floating "HOME-assisted" units for
extremely low-income households; 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 provision of funds to the Project will directly improve the City's
supply of extremely low, very low and low-income housing within the area of the City east of
Interstate-80S; and
WHEREAS, the City has adopted a Housing Element of the General Plan which sets forth the
objective of providing balanced and varied housing opportunities throughout the City 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 Project furthers the goals of the City set forth in the Housing Element and
the Consolidated 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 28th day of February,
2007, 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 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 fmancial 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, in accordance with the requirements of NEP A, the proposed project will be
reviewed prior to the appropriation of funds from the HOME Program; and
WHEREAS, the development of the Project implements the affordable housing requirements
for Otay Ranch Village Eleven, impacts were previously analyzed in the certified EIR for the Otay
Ranch Village Eleven GDP and SPA Plan (Final Second Tier EIR-Ol-02), and the Project is in
compliance with the previously certified EIR, therefore, no further action is required under CEQA.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City ofChula Vista does
hereby conditionally approve financial assistance subject to future appropriation in an amount not-to-
exceed $920,000 from the City's HOME funds to Developer for the construction of the Project
subject to the City's approval of an affordable housing regulatory and loan agreement and, at a
minimum, the following terms and conditions:
Resolution No. 2007-064
Page 3
I. Certification of the appropriate NEP A documentation prior to appropriation of any HOME funds
for the Project.
2. Developer shall secure all other financing necessary for the acquisition and development of the
Project.
3. Developer shall enter into a regulatory and loan agreement with the City to be considered at a
later date by the City Council. The approval of this agreement remains subject to final approval
by the City Council which retains its sole and unfettered discretion as to that decision.
4. The loan repayment will be secured by a Deed of Trust and Promissory note for the property on
behalf ofthe City of Chula Vista and recorded against the Project property.
5. The term of the loan shall be fifty-five (55) years.
6. Developer will be required to operate the Project consistent with the Regulatory Agreement
required by the Project's tax credit financing, bond financing, the City's Affordable Housing
Program, and the City's HOME financing, the covenants imposed by these Agreements, and any
other project requirements.
7. The 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
Community Development Department. 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 City assistance.
8. This conditional approval remains subject to final approval by the City in its sole and unfettered
discretion.
Approved as to form
Ann Hix
Acting Community Development Director
/
Resolution No. 2007-064
Page 4
PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista,
California, this 20th day of March 2007 by the following vote:
AYES:
Councilmembers:
Castaneda, McCann, Ramirez, Rindone, and Cox
NAYS:
Councilmembers:
None
ABSENT:
Councilmembers:
None
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Cheryl cox,~ay r
ATTEST:
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Susan Bigelow, City Clerk of Chula Vista, California, do hereby certify that the foregoing
Resolution No. 2007-064 was duly passed, approved, and adopted by the City Council at a regular
meeting of the Chula Vista City Council held on the 20th day of March 2007.
Executed this 20th day of March 2007.
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~s~igelow, MMC, City lerk