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HomeMy WebLinkAbout2010/09/14 Item 9 CITY COUNCIL AGENDA STATEMENT ::?}\'f:.. CITY OF ~CHULA VISTA September 14,2010, Item_l ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE CITY MANAGER TO EXECUTE AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE CITY OF CHULA VISTA AND LAND OWNERS IN OTAY RANCH VILLAGE 2 IN SATISFACTION OF THE CITY'S BALANCED COMMUNITIES POLICY SUBMITTED BY: ASSISTANT CITY MANAGE~ DIRECTOR OF D~PMENT SERVICES REVIEWED BY: CITY MANAGER; 4/STHS VOTE: YES D NO 0 SUMMARY The City's Balanced Communities Policy requires all new development over 50 units to provide 10% of their total units affordable to low and moderate income households. The proposed Affordable Housing Agreement documents this obligation and will be recorded against all property within Otay Ranch Village 2. As there are multiple land owners within Village 2, each land owner will satisfy their own affordable housing requirement. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the proposed project was adequately covered in previously adopted Final Second Tier Environmental Impact Report, EIR 02-02. Thus, no further CEQA review or documentation is necessary. RECOMMENDATION Council adopt the resolution. BOARDS/COMMISSION RECOMMENDATION Not Applicable 9-1 SEPTEMBER 14, 2010, Iteml Page 2 DISCUSSION On May 23, 2006, the City approved the Otay Ranch Village 2 Sectional Planning Area (SPA) Plan by Resolution Number 2006-156. The Affordable Housing Program of the SP A Plan provides for five percent of all newly constructed dwelling units in Village 2 being designated for occupancy and atIordability by low-income households and five percent for moderate-income households consistent with the City of Chula Vista Housing Element established Policy 5.1.1 of the City's Housing Element of the General Plan ("Balanced Community Policy") The Affordable Housing Agreement documents this obligation and establishes milestones for the provision of the affordable units. The Agreement shall be recorded against all property within Otay Ranch Village 2. The obligations recorded against the property will be binding on land owners and their successors and assigns in the Property. The Agreement is provided in substantially tinal form as Attachment 2. As there are multiple land owners within Village 2, each land owner will satisfy their own requirement. Each land owner's obligation shall be considered satisfied upon recordation of a subsequent regulatory agreement imposing atfordable housing covenants on a specific residential development or agreement to satisfy the obligation through an alternative method of compliance, such as payment of an in-lieu fee. As stated in the City's Housing Element of tbe General Plan, the City has a pressing need for quality atfordable housing and, in general, more balanced and varied housing, particularly in the eastern area of the City. Village 2 will provide quality housing with an integrated mix of low, moderate and market rate housing, on site amenities, and a desirable location directly adjacent to key neighborhood services, amenities and facilities. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found no property holdings within 500 feet of the boundaries of the property which is the subject of this action. CURRENT YEAR FISCAL IMP ACT No financial assistance and or incentives are required from the City of Chula Vista. Staff support costs are budgeted in the persounel portion ofthe Housing Authority budget. ONGOING FISCAL IMPACT Staff support costs associated with the ongoing monitoring for compliance with the regulatory restrictions are budgeted in the personnel portion of the Housing Authority budget. ATTACHMENTS 1. Locator Map 2. Affordable Housing Agreement Prepared hy: Leilani Hines, Principal Project Coordinator. Development Services Department - Housing Division 9-2 L ATTACHMENT 1 Locator Map 9-3 THE A TT ACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALL Y SIGNED UPON APPROVAL BY THE CITY COUNCIL .~WYl ~ Bart C. Miesfeld City Attorney Dated: BALANCED COMMUNITIES AFFORDABLE HOUSING AGREEMENT BETWEEN JPB DEVELOPMENT, LLC, BALDWIN & SONS, LLC, MCMILLIN OTA Y 233, LLC AND THE CITY OF CHULA VISTA 9-4 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Chula Vista 276 Fourth Avenue Chula Vista CA 91910 Attn: City Clerk No fee for recording pursuant to Government Code Section 27383 (Space above for Recorder's Use) BALANCED COMMUNITIES AFFORDABLE HOUSING AGREEMENT lOT A Y RANCH VILLAGE TWO] This Balanced Communities Affordable Housing Agreement ("Agreement") is made as of , 2010, by and between JPB Development, LLC, a California Limited Liability Corporation ("JPB"), Baldwin & Sons LLC, a California Limited Liability Corporation ("Baldwin & Sons"), McMillin Otay 233, LLC, a California Limited Liability Corporation ("Developer"), Rosina Vista, LP, a California Limited Partnership ("Developer"), , a ("Developer"), referred to herein individually as "Developer" or collectively referred to as "Developers", and the City of Chula Vista, a California municipal corporation ("City"), with reference to the following facts: A. The City of Chula Vista Housing Element established the City's "Balanced Communities Affordable Housing Policy" (Policy 5.1.1) which requires 10% of each housing development of 50 or more units to be affordable to Low and moderate-income households, with at least one half of those units (5% of project tolal units) being designated for low-income households (the "Affordable Housing Obligation"). B. Developers are the owners of certain real properties generally known as Otay Ranch Village 2, as shown on Exhibit "A", and located in the portion of the City of Chula Vista (referred to herein collectively as "Project"). The Project is more particularly described in Exhibit "B" (Legal Description) which is attached hereto and incorporated herein by this reference. C. On May 23, 2006, the City approved the Otay Ranch Village Two Sectional Planning Area (SPA) Plan for the Project by Resolution Number 2006-156. Condition Number 25 of the Project's SPA Plan requires that Developers enter into an affordable housing agreement with the City prior to Developer's first Final "B" Map for Village Two for purposes of further implementing its affordable housing obligation for the project, as such is defined in the Affordable Housing Plan of the SPA Plan. Such Agreement shall be in accordance with the Chula Vista Housing Element, the Ranch Wide Affordable Housing Plan, and the Village Two, Three and a portion of Four Affordable Housing Plan. The SPA Plan currently provides for the construction of approximately 2,786 total dwelling units within the Project, with a requirement 1 9-5 for five percent of these units being designated for low-income households and five percent for moderate-income households. D. On May 23, 2006, the City approved the Tentative Subdivision Map for Chula Vista Tract No. 06-05 tor Otay Ranch Village Two and Portions of Village Four ("Tentative Map") by Resolution Number 2006-157 ("Project Tentative Map"). Tentative Map Condition No. 151 requires that the Developers enter into an Affordable Housing Agreement ("Agreement") with the City ofChula Vista prior to approval of Developers' first Final "B" Map for Village Two. E. On September 18, 2007, the City approved Supplemental Subdivisiou Improvement Agreements for Village Two North Unit One and R-14 by Resolution Number 2007-238, Tentative Map Condition No. 151 was modified as follows: In satisfaction of Condition of Approval No. 151 of City Council Resolution No. 2006- 157, prior to issuauce of the 126th production building permit in Village Two, Three and a portion of Four, including Otay Ranch Village Two North Unit I and Village Two Area R-14 an Affordable Housing Agreement shall be executed by all property owners in Village Two, Three and a portion of Four. Said Affordable Housing Agreement shall be recorded in the OHice of the San Diego County Recorder over the entirety of Village Two, Three and a portion of Four. The Affordable Housing Agreement shall provide that 50% of the total number of qualified Low and Moderate-Income Housing units shall commence construction prior to the issuance of the production building permits for 50% of the total entitled residential units or at a trigger point as determined by the City Manager and City Attorney or their designees, for Village Two, Three and a portion of Four. F. Developers are required to enter into a Balanced Communities Affordable Housing Agreement acceptable to the City in satisfaction of the Balanced Communities Affordable Housing Policy of the City's Housing Element of the General Plan, Condition of Approval No. 25 of City Council Resolution No. 2006-156 and Tentative Map Condition of Approval No. 151 of City Council Resolution No. 2006-157. This Agreement represents the Affordable Housing Agreement and shall be executed and recorded against the Project prior to the 126th production building permit in Village Two, Three and a portion of Four. NOW THEREFORE, in consideration of the mutual promises described herein, and other good and valuable consideration, the parties agree as follows: 1. Definitions. Unless otherwise indicated, for purposes of this Agreement, the following terms shall mean: a. "Low Income Housing" means housing affordable to and occupied by a household of persons who claim primary residency at the sanle dwelling unit with combined incomes that do not exceed 80% of the area median income (adjusted annually) based on household size, as determined annually by the U.S. Department of Housing and Urban Development (HUD). Household size is calculated by the number of persons residing at the same unit as their primary residency. .., ~ 9-6 b. "Moderate-Income Housing" means housing affordable to and occupied by a household of persons who claim primary residency at the same dwelling unit with combined incomes between 80% and 120% of the area median income (adjusted annually) based on household size as determined annually by the U.S. Department of Housing and Urban Development (HUD). Household size is calculated by the number of persons residing at the same unit as their primary residency. The range of income levels described in the above defined terms may change from time to time in accordance with changes to federal, state and local laws. c. "Affordable Housing," for affordable housing requirements under this Agreement, means housing for which the rent, when not precluded by state law, or housing payment paid by an income qualified household does not exceed a specified fraction of the gross monthly income, adjusted for household size in conformance with applicable financing and assistance programs or California Health and Safety Code Sections 50052.5 (b) and 50053(b), for the following classes of housing: 1. Extremely low-income: thirty percent (30%) or thirty-three percent (33%) of the gross monthly income, adjusted for household size, at thirty (30%) percent of the county median income for rental and for-sale units, respectively; 2. Very low-income: thirty percent (30%) or thirty-three percent (33%) of the gross monthly income, adjusted for household size. at fifty (50%) percent of the county median income for rental and for-sale units, respectively; 3. Low-income: thirty percent (30%) or thirty-three percent (33%) of the gross monthly income, adjusted for household size, at sixty (60%) and seventy 00%) percent of the county median income for rental and for-sale units, respectively; and, 4. Moderate-Income: thirty percent (30%) or thirty-three percent (35%) of the gross monthly income, adjusted for household size, at one hundrcd ten 010%) percent of the county median income for rental and for-sale units, respectively. Should subsidized financing and/or other otIsets to development costs from a public agency or program be proposed and obtained, the affordable housing rent/housing payment shall be dictated by such program or granting Agency. If no affordable housing expense is specified, the affordable monthly rent! housing payment shall be established in accordance with Section 50053 and 50052.5 of the California Health and Safety Code, respectively. d. "Developer's Affordable Housing Obligation" means the individual Developer's obligation to provide 10% of the total number of residential units allocated to their property within the Project as Low and Moderate-Income Housing, with at least 5% consisting of Low Income Housing, and as more particularly set forth in the GDP, SPA, Affordable Housing Plan, and this Agreement. The Affordable Housing Obligation of each Developer shall be prorated based upon the total number of units to be constructed within each Developer's related ownership interest. Such obligation will be satisfied by each Developer implementing the requirements set forth in this Agreement. 3 9-7 e. "Regulatory Agreement" means a City-approved agreement or other similar binding instrument executed by the City and the Developer(s) imposing certain covenants, terms, and conditions on all or any portion of the Project relating to the acquisition, construction, equipping, operation, and occupancy of a residential development providing Affordable Housing for low and/or moderate-income households to ensure that such development will be developed, owned, and operated in accordance with this Agreement and the SPA Affordable Housing Plan. Such restrictions shall be recorded against that real property containing the Low and the Moderate- Income Housing as covenants running with land and shall be enforceable by the City against the Developer(s) and all future owners or successors-in-interest. 2. Duty to Build. A Developer's Affordable Housing Obligation as applied to the land covered by the Otay Ranch Village Two SPA Plan and as set forth in this Agreement shall be satisfied with respect to the Project if the following conditions are met: (a) Developer agrees to construct, equip, and operate five percent of the total number of those residential units within their ownership interest as Low Income Housing and five percent as Moderate-Income Housing, in compliance with the schedule set forth in Section 2.a below; (b) Developer records a Regulatory Agreement against the property satisfying the Affordable Housing Obligation; and (c) the Low and Moderate-Income Housing units are operated in compliance with the Regulatory Agreement; or (d) if applicable, Developer, meets its obligation through an alternative method of compliance as set forth in Section 5 below. a. Schedule for Implementing the Affordable Housing Obligations. Developer(s) shall provide the Low and the Moderate-Income Housing units pursuant to the following schedule: 1. Prior to issuance of the 126th production building permit in Village Two, Three and a portion of Four, including Otay Ranch Village Two North Unit 1 and Village Two Area R-14, this Agreement or a Regulatory Agreement shall be duly executed by the City and all property owners in Village Two, Three and a portion of Four and recorded against the Project. 2. Developer(s) may complete construction of the total number of qualified low or moderate-income housing units required within two (2) development phases. The first or "Initial Phase" for construction of the low and moderate income housing units shall be comprised of 50% of the total number of qualified low and moderate income housing units required by that Developer for the Project. Prior to the issuance of the production building permit for the residential unit representing 50% of the total units to be constructed by that Developer, Developer shall commence construction on the Initial Phase. Commencement of construction shall mean the Developer has obtained a building permit for that first building providing units affordable to and restricted for occupancy by low and moderate income households. Developer shall thereafter diligently pursue completion of construction of the Initial Phase, with construction of the Initial Phase to be completed no later than eighteen (18) months from the date of commencement of construction of said units. 4 9-8 Once building permits have been issued and the foundations for the Initial Phase of the Low and Moderate-Income Housing units are completed, inspected and approved by the City, building permits up to 75% of the total residential units for the Project may be released by the City. Thereafter, the Developer shall commence construction of the remaining numbcr of qualified low and moderate income housing units required, on or before the City's issuance of the building permit for the residential unit representing 75% of the total number of units to be constructed by that Developer for the Project ("Final Phase"). Developer shall diligently pursue completion of construction of the Final Phase with construction of the Final Phase to be completed no later than eighteen (18) months from the date of commencement of construction of said phase. Once building permits have been issued and the foundations for the Final Phase of the Low and Moderate-Income Housing units are completed, inspected and approved by the City, all other building permits for the Project may be released by the City. Upon issuance of the final Certificates of Occupancy for one hundred percent (100%) of the Low and Moderate-Income Housing units, all of the Project shall be released of the burden of this Agreement as specified in Section 9 below. b. Progress report. Developer(s) shall provide the City a report documenting progress the Developer(s) has made toward meeting Developer's Obligation for low and moderate-income housing, including identification of sites, financing, and submittal of entitlement applications for the Low and Moderate Income Housing units, in a form to be determined by the City Managcr. No further reports shall be required upon satisfaction of this obligation. c. Completion of construction. For purposes of paragraph 2(a) of this Agreement, construction shall be considered completed when tinal inspection of the Low or Moderate Housing units have been completed and occupancy and utility clearances have been issued in writing by the City. d. Existing Low income housing unit credits. It is acknowledged and agreed that lPB and Baldwin and Sons have available affordable housing credits from development and operation of an affordable housing project located in neighborhood R-47 of Village One known as Harvest Ridge and Sunrose Apartments and accessory dwelling units within Village Six of Otay Ranch. The Affordable Housing Credits will be used first and foremost to satisfy the Affordable Housing Obligations of Villages Six and Seven and any remaining credits may be used to satisfy, any or all, of these Developers' obligation with regard to Low Income Housing within Village Two. A determination of those credits to be used for the Low Income Housing obligation for Village Two shall be made no later than such time lPB and Baldwin and Sons must commence construction of their Initial Phase ofthe Affordable Housing Obligation. 5 9-9 d. Minor delays. The thresholds described herein for commencing construction of Low and Moderate-Income Housing units are based upon the current phasing proposals for the Project as shown on the Tentative Map. City and Developer acknowledge that changes to the Project may be required from time to time which could have a minor or insubstantial impact on the timing of construction of the Low or Moderate-Income Housing units. Accordingly, changes to the Project that could result in a delay in the construction of such units may, in the City's sole discretion, be considered minor or insubstantial by the City's Development Services Director and made without amendment to this Agreement. All other changes shall require a written amendment to this Agreement. 3. Surplus Affordable Housing Units. If the Project includes more Low Income Housing Units than five percent (5%) of the total number of units in the SPA Plan and as shown on the Project's Tentative and Final Maps ("Surplus Units"), a Developer may, with the City's approval, be entitled to obtain credit for any of the Surplus Units, known as "Affordable Housing Credits". The City's approval of such Credits shall be determined by the City at such time the City and Developer(s) execute a Regulatory Agreement for that project satisfYing any or all of Developer(s)' Low Income Housing obligation (to be known as the "Project Level Agreement") and shall be governed by the criteria described below. The extent to which a Developer(s) or other patty is entitled to credit by the City for the Surplus Units shall be governed by the City's consideration of the criteria described below and any other such criteria that may be agreed to by the parties pursuant to the applicable Project Level Agreement. The following criteria shall be considered by the City: a. The Developer(s)' contribution, if any, to the Surplus Units; b. The City's contribution, if any, to the Surplus Units for which the City may require reimbursement or require use of the credits by the other Developers within Village Two; c. Other public sector contribution, if any, to the Surplus Units; d. The level of affordability achieved by the affordable housing project; e. The concentration of affordable housing units within the neighborhood that the Surplus Units are planned. A contribution may include, but is not limited to, direct financial assistance, conveyance of land, standards modifications or any other financial, land use, or regulatory concession which would result in identifiable cost reductions enabling the provision of affordable housing. If Developer(s) is provided Affordable Housing Credits by the City, Developer(s) may either: I) apply such credits against Developer(s)' obligation to provide Low Income Housing units in developments outside of the Project and located within the City of Chula Vista, 2) apply such credits against Developer(s)' obligation to provide Moderate-Income Housing units within the Project, or 3) convey the credits to another person or entity in full or partial satisfaction of their obligation to provide Low and/or Moderate-Income Housing within the Project. 6 9-10 4. Incentive Credit. The Affordable Housing Obligation set forth in Section 2 of this Agreement may be reduced as follows: a. If Very Low Income units are provided in lieu of required Moderate Income units, a credit of two (2) Moderate-Income units for every one (1) Very Low Income unit shall be provided. b. If Low Income units are provided in lieu of required Moderate Income units, a credit of 1.5 Moderate-Income units for everyone (1) Low Income unit shall be provided. 5. Alternative Methods of Compliance. Based upon the attributes of those properties of related ownership interests, such as size, density and location, the applicable Affordable Housing Obligation, difficulty in integrating Low and/or Moderate-Income Housing due to price and product disparity, developer capability, the new construction of the Low and/or Moderate-Income Housing within residential development on such properties may present a hardship and alternative methods of compliance may be required. In lieu of including Low and/or Moderate-Income Housing, specifically those Developer(s) with minority property ownership and/or smaller Affordable Housing Obligations within Village Two, may request to satisfy the Low and/or Moderate-Income Housing obligation through one or more of the alternatives set forth in this Agreement. Approval of satisfaction of the Affordable Housing Obligations through an alternative method of compliance shall be at the sole discretion of the City and based upon those considerations described above. a. In Lieu Housing Fee. The City's Development Services Department Housing staff has conducted a draft in lieu fee study. Based on that draft study, the contribution per Affordable Housing unit is $124,220. Prior to the issuance of the residential building pernlit (excluding models) representing 35 percent of the total units to be constructed by the Developer, Developer shall execute an agreement with the City acknowledging and agreeing to the satisfaction of the affordable housing obligation associated with their residential development through payment to the City of an in lieu housing fee. Developer(s) may make payment ofa fee in lieu of all or some of the Low and/or Moderate-Income Housing units. The in-lieu fee shall be paid prior to issuance of the building permits for their residential development. Developer may, at its discretion and as specified in the agreement, defer payment of the in lieu housing fee until such time, but no later than, building permits have been issued for the residential unit representing 50 percent of the total units to be constructed by that Developer. Should the City establish an updated in lieu fee, Developer(s) shall make payment to the City in accordance with the current fee in effect at that time. Partial Affordable Housing Obligations shall be assessed on a pro-rata basis. b. Off-Site. Developer(s) may construct, convert existing non-restricted, acquire and rehabilitate, or acquire the use of Affordable Housing Credits towards its Affordable Housing Obligation at a property outside of the Project or at a Residential Development within the Project but not within the Developer(s)'ownership interest, also known as an Otr-Site Alternative. Developer(s)' Affordable Housing Obligation as set forth in this Agreement shall be satisfied with respect to the Project if the following conditions are met: (i) Developer(s) record a Regulatory Agreement against that real property providing for affordable Low and/or Moderate- 7 9-11 Income Housing; and (ii) the Low and Moderate-Income Housing units are operated in compliance with that Regulatory Agreement. Allowing some or all of the Low and/or Moderate- Income Housing units associated with the Project to be produced or operated at a site other than within the Project should advance the City's housing goals and the relative advantages of the alternative methods of compliance should substantially outweigh the disadvantages. 6. Duty to Identify. The Otay Ranch Village Two Sectional Planning Area (SPA) Plan for the Project identifies potential sites for the construction of both the Low and Moderate- Income Housing,. Final identification of sites for Low and Moderate Income Housing shall be based upon their proximity to and availability of existing and proposed public transit facilities and services, community facilities and services, and employment opportunities. Identification of potential target sites in this Agreement describes one way in which the Affordable Housing Obligation might be met, and is not meant to require that affordable units be constructed on any specific sites nor to preclude other alternatives, including those mcthods identified in Section 5. Such alternatives might include, by way of example, the aggregation of rental housing affordable to Low and/or Moderate-Income households within one particular development site. A final determination as to the location and type of the affordable housing sites will occur with subsequent entitlements, approvals and agreements. 7. Duty to Implement Affordable Housing Program. Developer(s) shall cause the Low and Moderate-Income Housing to be developed, marketed, rented (when not precluded by state law)/sold in accordance with the City's goals, policies and programs contained in the Housing Elemcnt of the General Plan and the Affordable Housing Program Implementation Guidelines, and the Project's Sectional Planning Area (SPA) Affordable Housing Program, as they may be adopted and amended from time to time, the terms and conditions of which are hereby incorporated by this reference. In the event that there is an inconsistency between this Agreement and the City's affordable housing policies (collectively the "Affordable Housing Policies"), this Agreement shall control and the parties agree, as City deems necessary, to seek any appropriate modifications to the Affordable Housing Policies to create consistency with the terms and conditions hereof. 8. Demand to Build. Notwithstanding the provISIons of paragraph 2 of this Agreement. if the City reasonably believes that Developer(s) will not reach the building permit thresholds described in paragraph 2 (which would trigger the construction of the Low Income Housing units) or not complete construction of the Low and/or Moderate-Income Housing units, the City shall have the right to demand that Developer(s) construct a proportional amount of Low and/or Moderate-Income Housing units relative to the total number of residential building permits that have been issued for the Project. The City shall provide Developer(s) with the written demand to construct the units within a reasonable period of time for Developer(s) to commence construction of said units. Developer(s) shall complete construction of the Low and/or Moderate-Income Housing units, as required by this paragraph, within one year of the commencement of construction of the units so demanded. The duty contained in this paragraph is non-cumulative to the duty in paragraph 2 with the City providing Developer(s) with the appropriate amount of credit for completed construction. 8 9-12 9. Right to Withhold Permits. The City has the absolute and unfettered right to withhold the issuance of any building permit for any residential unit within any residential development within the Project that has not been released in accordance with paragraph 9 herein if Developer(s) of that residential development is not in compliance with the terms and/or obligations of this Agreement. 10. Development Permits, Maps and Documents. Developer(s) shall at its sole expense, cause the preparation and diligent processing of all permits, agreements, plans, maps, and other documents, including but not limited to, market strategy plans, design development plan, and any amendments to the Project's General Development Plan and Scction Planning Arca Plan that may be necessary to meet the Developer(s)' Obligation in the time frames set forth herein as Exhibit C, or shall cause such actions to occur. City and Developer(s) agree to cooperate with each other in processing Developer(s)' permits for the Project. Any unreasonable delay caused by City in this regard that is not caused by the fault of Developer(s) shall not be cause for City declaring Developer(s) in default hereunder and Developer(s)' implementation schedule may be extended for a reasonable number of permits based upon recent absorption over a period of time equal to such delay provided that Developer(s) has used, and continues to use, its best efforts to cause Project completion in a timely manner. 9. Release. a. This Agreement shall run with the land and bind any future owner to the Affordable Housing Obligation described herein. If Developer(s) transfers any portion of the Project which is subject to the burden of this Agreement, the City, at its sole discretion, may release the portion so transferred of the burden of this Agreement as to such assigned portion, if the Development Services Director determines that: 1) Such portion has complied with the requirements of this Agreement; or 2) Other land within the Project will accommodate Developer(s)' duty to build the Low and Moderate-Income Housing units. b. Upon the sale of any individual unit to a homebuyer, the parties agree that such unit shall be automatically released from the provisions of this Agreement. . Such release shall not limit or modifY in any way Developer(s)' duty to build. c. City further agrees to timely consider any request for release by Developer(s) pursuant to (a) above. When such release is granted, Developer(s) and City agree to amend Exhibit C to identifY those other sites to accommodate the affordable housing units in place of those sites originally identified and subsequently released of such burden. Said amendment shall be completed administratively and shall require no further action by the City Council and/or Redevelopment Agency. d. In the event that a parcel is requested to be released pursuant to the provisions of paragraphs (a) or (b) above, the parties agree to execute and record such documentation as is reasonably required by a reputable title insurance company to evidence such release. All costs related to any such release shall be paid by Developer(s) or its assignee; City shall have no responsibility of such costs. 9 9-13 e. Upon (i) the recordation of a City-approved Regulatory Agreement imposing affordable housing covenants, unless such Regulatory Agreement otherwise expressly provides and the issuance 0 f final certificates of occupancy for one hundred percent (100%) of the Low and Moderate-Income units required for each Developer in compliance with this Agreement and the Regulatory Agreement or (ii) upon payment to the City of the applicable in lieu housing fee, the provisions of this Affordable Housing Agreement shall no longer be applicable to such portion of thc Project within the Developer's ownership interest, and the recordation of a Regulatory Agreement or payment of the in lieu housing fee shall operate to release such portion of the Project from the terms hereof. f. The release of a portion of the Project from the terms of the Affordable Housing Agrecment shall in no way alter the obligations of Developer(s) under the Affordable Housing Agreement with respect to other portions of the Project which shall continue in full force and effcct until such time as Developer(s) satisfies, in full, Developer(s)' obligation hereunder. 10. Subordination and Notice. a. Subordination. Developer(s) shall enter into subordination agreements with all lien holders having any interest in the Project to ensure that the provisions of this Agreement bind such lien holders should they take title to all or part of the property through quitclaim deed, sale, foreclosure or any other means of transfer of property. Developer(s) shall deliver to the City the fully executed subordination agreements in a form acceptable to the City Attorney and suitable for recording on or before the issuance of the first building permit for the Project. b. Notice. Developer(s) shall provide written notice of the terms of this Agreement (which could be a copy of this Agreement) to all purchasers and potential purchasers of real property within the Project, excluding however, a buyer of an individual housing unit. 11. General Provisions. a. Authority of Signatories. The individuals signing this Agreement on behalf of the City warrant that (i) he or she is duly authorized to sign and deliver this Agreement on behalf of the City in accordance with a duly adopted resolution of the City Council of the City and (ii) this Agreement is binding upon the City in accordance with its terms. Developer(s) and each individual signing this Agreement on behalf of Developer(s) warrants that (i) he or she is duly authorized to sign and deliver this Agreement on behalf of Developer(s), and (ii) this Agreement is binding upon the corporation in accordance with its terms. b. Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed to be an original, but all of which together will constitute one instrument. c. Applicable Law. This Agreement will be construed and enforced in accordance with the laws of the State ofCalifomia. 10 9-14 d. Successors. All terms of this Agreement will be binding upon and inure to the benefit of the parties and their respective administrators or executors, successors and assigns. Developer(s) hereby subject the Project to the covenants, reservations and restrictions set forth in this Agreement. Developer(s) and the City hereby declare their express intent that the covenants, reservations and restrictions set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Developer(s)' successors in title to the Project; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Project or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations and restrictions, regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instruments. e. Modifications. No modification, waiver or discharge of this Agreement will be valid unless the same is in writing and signed by the parties to this Agreement. f. Entire Agreement. This Agreement contains the entire agreement between the parties relating to the transaction contemplated hereby and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein. g. Attorney's fees and costs. If either party commences litigation for the judicial interpretation, reformation, enforcement or rescission hereof, the prevailing party will be entitled to a judgment against the other for an amount equalto reasonable attorney's fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is awarded substantially the relief sought. h. Exhibits. All exhibits referred to in this Agreement are attached, and are a part of, this Agreement. i. Captions, Captions in this Agreement are inserted for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement. j. Recording, The parties hereto shall cause this Agreement to be recorded in the Ofticial Records ofthe County of San Diego. k. No Third party Beneficiary. No claim as a third-party beneficiary under this Agreement by any person, corporation or any other entity, shall be made or be valid against City or Developer(s). I. Incorporation of Rccitals. The recitals set forth herein are part of this Agreement. m. Assignment. The obligations of Developer(s) under this Agreement shall not be assigned in whole or apart, without the express written consent of the City in its sole discretion. Any unapproved assignment shall be null and void. II 9-15 n. Severability. The unenforceability, invalidity, or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid, or illegal. (Next pages are Signature Pages) 12 9-16 SIGNATURE PAGE TO AFFORDABLE HOUSING AGREEMENT OTA Y RANCH VILLAGE TWO IN WITNESS WHEREOF, City and Developer(s) have executed this Agreement this day of ,2010. CITY OF CHULA VISTA DEVELOPER Cheryl Cox, Mayor By: lPB DEVELOPMENT, LLC, a California limited liability company By: By: Attest: By: Donna Norris, City Clerk Approved as to form hy City Attorney 13 9-17 DEVELOPER By: BALDWIN & SONS, LLC, a California limited liability company By: Stephen M. Haase Vice President Date: 14 9-18 DEVELOPER McMillin Otay 233, LLC a Dclaware limited liability company By: McMillin Real Estate Services, L.P. a California limited partnership Its: Manager By: MCM Real Estate Group, Inc. a California corporation Its: General Partner Its: By: ~#~ r:~ Its: 15 9-19 16 9-20 DEVELOPER By: Rosina Vista, L.P., a California limited partnership By: Rosina Genpar, LLC, a California limited liability company By: Its: Manager < E- ..... Cl:I ..... ..... ..... ;..: "" o ::: E- "" ~ < ...l ...l - ~ ::I: u z < ~ ;;.. < E- O " ~ '" ::; - " ~ - ~ .2 - " '" '", ~ '" '" "'" ~ " b '- '" ~ ?s, 'cY c. ..= on ... ., c :: o ~ -.: ~ ti S ~ .... ..c c. '" :is .~ - '" S ~ 6 -s' a '" '" ~ c5 ~ ~ ~ .2 ~ - :;: - '" '- <2, '1:i " l' ::; ?s, .:2 '" '" " :::;. o.,N ~w ;;0 ~<< ~ ,. <-:'::I ~~~ =>". c: ...... UJ !: ----:..: 2u')s - 4 I ~Z:; .:.' <:{.'; ={Y'~ ~>-{.< I ~6 { ~. '" ~ J ~ @~ I = ...~2 a'l ~~~ai5 Z _I ~Il'f"i:!f.i ~i fl.~~.J ,1 ~-< .---1 9-21 I I , I I I I I i I , i I , I i I ~ , < EXHIBIT B Description of Subject Property To be provided by Developers. B-1 9-22 EXHIBIT C OTAY RANCH VILLAGE TWO Balanced Communities Affordable Housing Obligation by Ownership (Table is providedfor information purposes only. Ownership interests of property and dwelling units may be subjecllo fitlure change.) Neighborhood Land Use Dus Aff Hsg Obligation R-4 SF - - - R-5a MF 95 4.8 4.8 9.5 R-5b MF 35 1.8 1.8 3.5 R-6 SF 63 3.2 3.2 6.3 R-7 SF 40 2.0 2.0 4.0 R-8 SF 50 2.5 2.5 5.0 R-9a SF 62 3.1 3.1 6.2 R-9b SF 45 2.3 2.3 4.5 R-10 MF 90 4.5 4.5 9.0 R-11 MF 144 7.2 7.2 14.4 R-12 MF 295 14.8 14.8 29.5 R-13a MF 49 2.5 2.5 4.9 R-13b MF 100 5.0 5.0 10.0 R-14 MF 165 8.3 8.3 16.5 R-15 SF 37 1.9 1.9 3.7 R-16 MF 74 3.7 3.7 7.4 R-17 MF 119 6.0 6.0 11.9 R-18a SF 65 3.3 3.3 6.5 R-18b SF 48 2.4 2.4 4.8 R-19 SF 83 4.2 4.2 8.3 R-20 SF 83 4.2 4.2 8.3 Subtotal 1,742 87.1 87.1 174.2 C-I 9-23 EXHIBIT C Neighborhood Land Use Dus Arr Hsg Obligation Low Mod TOTAL R-21 SF 62 3.10 3.10 6.20 R-23 SF 71 3.55 3.55 7.10 R-24 SF 41 . 2.05 2.05 4.10 R-25a SF 34 1.70 1.70 3.40 R-25b SF 34 1.70 1.70 3.40 R-26 MF 75 3.75 3.75 7.50 R-27 MF 110 5.50 5.50 11.00 R-28 MF 85 4.25 4.25 8.50 R-29 MF 134 6.70 6.70 13.40 R-30 1 MF 278 13.90 13.90 27.80 MU-I MU 10 0.50 0.50 1.00 MU-2 MU 12 0.60 0.60 1.20 MU-3 MU 38 1.90 1.90 3.80 Subtotal 984 49.20 49.20 98.40 TOTAL 2,726 13 6.3 13 6.3 272.6 A Regulatory Agreement imposing certain covenants, terms, and conditions on R-30 relating to the acquisition, construction, equipping, operation; and occupancy of twcnty- eight (28) units as affordable housing for low and/or moderate-income households was recorded as Document Number 2010-0431652 on August 19, 2010 in the official records of the San Diego County Recorder's Office, in satisfaction of the Developer's affordable housing obligation for R-30 under this Agreement. C-2 9-24 RESOLUTION NO. 2010- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE CITY MANAGER TO EXECUTE AN AFFORDABLE HOUSING AGREEMENT BY AND BETWEEN THE CITY OF CHULA VISTA AND LAND OWNERS IN OT A Y RANCH VILLAGE 2 IN SA TISF ACTION OF THE CITY'S BALANCED COMMUNITIES POLICY WHEREAS, on May 23,2006, the City approved the Otay Ranch Village Two Sectional Planning Area (SP A) Plan by Resolution Number 2006-156; and WHEREAS, the Affordable Housing Program of the SPA Plan provides for five percent of all newly constructed dwelling units being designated for occupancy and affordability by low- income households and five percent for moderate-income households consistent with the City of Chula Vista Housing Element established Policy 5.1.1 of the City's Housing Element of the General Plan ("Balanced Communities Policy"); and WHEREAS, an Affordable Housing Agreement (the "Agreement") documents the obligation and will be recorded against all property within Otay Ranch Village 2; and WHEREAS, as there are multiple land owners within Village 2, each land owner will satisfy their own requirement; and WHEREAS, the obligations recorded against the property will be binding on Developer and its successors and assigns in the Property; and WHEREAS, the Environmental Review Coordinator has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the proposed project was adequately covered in previously adopted Final Second Tier Environmental Impact Report, EIR 02-02; and WHEREAS, no further CEQA review or documentation is necessary. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA does hereby authorize the City Manager to execute the Affordable Housing Agreement by and between the City and the Land Owners in Otay Ranch Village 2, in substantially the form presented to the City, and make such modifications, changes or additions to the Agreement and other documents, in consultation with the Office of the City Attorney, as may be necessary or advisable. The approval of any modification, change or addition to the Agreement and any related document shall be evidenced conclusively by the execution and delivery thereof by the City Manager. 9-25 Council Resolution No. 2010- Page 2 Presented by Approved as to form by /~.Ae Bart C. Miesfeld City Attorney Gary Halbert, A1CP, PE Assistant City Manager/Director of Development Services 9-26