HomeMy WebLinkAbout2010/10/26 Item 5CITY COUNCIL
AGENDA STATEMENT
~~~~~ CIiYOF
"~"` CHUTA VISTA
October 26, 2010, Item 5
ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AUTHORIZING THE CITY MANAGER TO
EXECUTE AN AGREEMENT TO POST SECURITY FOR AN
AFFORDABLE HOUSING OBLIGATION RELATED TO EL
DORADO RIDGE BETWEEN THE~CITY AND C V H I, LLC
SUBMITTED BY: ASSISTANT CITY MANAGE~G'q DEVELOPMENT SERVICES
DIRECTOR
REVIEWED BY: CITY MANAGER
4-STHS VOTE: YES ~ NO
SUMMARY
Prior to recordation of its final map, C V H I, LLC (the "Developer") is conditioned to
enter into an Affordable Housing Agreement for purposes of implementing its Affordable
Housing Obligation for El Dorado Ridge (the "Project"). Tonight's action will authorize
the City Manager to approve an agreement for the Developer to post a bond as security to
satisfy this obligation prior to the issuance of building permits on the Project.
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed activity for compliance
with the California Environmental Quality Act (CEQA) and has determined that the
activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines
because the proposed action consists of the creation and execution of a governmental fiscal
mechanism which would not involve any commitment to any specific project at this time
which may result in a potentially significant physical impact on the environment. If and
when in the future, an actual project is proposed and a site is selected then, additional
environmental review will be performed and the appropriate environmental determination
made in compliance with both CEQA and the National Environmental Policy Act (NEPA)
as may be required. Therefore, pursuant to Section 15060(c)(3) of the State CEQA
Guidelines the activity is not subject to CEQA and pursuant to 24 CFR 58.34(a) the
proposal is exempt from NEPA as implemented by the U.S. Department of Housing and
Urban Development. Thus, no further environmental review is necessary at this time.
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October 26, 2010, Item 5
Page 2 of 33
RECOMMENDATION
Council adopt the resolution.
BOARDS-COMMISSION RECOMMENDATION
Not applicable.
DISCUSSION
The City's Balanced Communities Policy ("Inclusionary Policy") requires the provision of
housing for all economic groups and distribution of affordable housing throughout the City.
The City requires 10 percent of any new subdivision in excess of fifty (50) units to be made
affordable for low and moderate-income families (5% low and 5% moderate). The primary
objective of this policy is to increase affordable housing opportunities in the new planned
communities in the eastern part of the City.
On January, 10, 2006 a Tentative Subdivision Map and Rezone were approved for a project
known as El Dorado Ridge located on the eastside of Brandywine Avenue, east of the
intersection of Brandywine Avenue and Mendocino Drive. Based on a total of 104
residential housing units which are currently allowed to be constructed within the Project,
the developer has a 10.4 unit Affordable Housing Obligation. Housing staff has
determined that providing the units on the project site presents an unreasonable hardship to
the Project, due to construction costs due to product type and other expenses related to
environmental mitigation. Consistent with the Inclusionary Policy, the Developer has
agreed to alternative methods of meeting the affordable housing requirement as follows:
• Construction of a minimum of 6 Low Income Units and 5 Moderate Income Units
outside of the El Dorado Ridge development within the City of Chula Vista; or
• Payment of an in lieu fee to the City; or
• Construction of a minimum of 5 Low Income Units and 5 Moderate Income Units
outside of the El Dorado Ridge development within the City of Chula Vista, plus
payment of an in-lieu fee in the amount of $49,688 (.4 x $124,220) to satisfy the
remainder of the 11-Unit Requirement.
Accordingly, City staff is recommending that the City and C V H I, LLC enter into the
"Agreement to Post Security for Affordable Housing Obligation" (the "Agreement" see
Attachment I) in fulfillment of Tentative Map Condition #77. The Agreement will secure
compliance with the Affordable Housing Obligation, while allowing the El Dorado Ridge
Project to proceed. The agreement requires the Developer to post a bond in fulfillment of
the obligation prior to the issuance of building permits for the Project.
The City shall make all efforts to ensure that the 10.4 units required by the Affordable
Housing Obligation are constructed. In the event C V H I, LLC does not satisfy the Bond
condition for construction of the affordable units within four years of the date the Bond is
issued, the $1,291,888 shall be used for affordable housing development.
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October 26, 2010, Item S
Page 3 of 3
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and has found no property
holdings within 500 feet of the boundary of the El Dorado Ridge property which is the
subject of this action.
Any proposed off-site construction would be evaluated for environmental and conflict
issues at that time.
CURRENT YEAR FISCAL IMPACT
The developer has paid all costs associated with the processing of the Affordable Housing
Agreement.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact.
ATTACHMENTS
1. Agreement
Prepared by: Stacey Kurz, Senior Project Coordinator
Development Services Department, Redevelopment and Housing Division
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RESOLUTION NO. 2010-
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CHULA VISTA AUTHORIZING THE CITY
MANAGER TO EXECUTE AN AGREEMENT TO POST
SECURITY FOR AN AFFORDABLE HOUSING
OBLIGATION RELATED TO EL DORADO RIDGE
BETWEEN THE CITY AND C V H I, LLC
WHEREAS, the City's Balanced Communities Policy (Inclusionary Policy) requires 10
percent of any new subdivision in excess of fifty (50) units to be made affordable for low and
moderate-income families (5% low and 5% moderate); and
WHEREAS, the Inclusionary Policy provides alternative methods to meeting the
obligation when an unreasonable hardship exists to provide the affordable units on-site; and
WHEREAS, condition #77 of the January, 10, 2006 approval for the EI Dorado Ridge
Tentative Subdivision Map required C V H I, LLC (the "Developer") to enter into an agreement
with the City of Chula Vista to guarantee compliance with the Inclusionary Policy prior to
recordation of the El Dorado Ridge final map; and
WHEREAS, to comply with this condition, the City has prepared an Agreement to Post
Security for Affordable Housing Obligation (the "Affordable Housing Agreement") between the
City and Developer for City Council's consideration and approval; and
WHEREAS, the Affordable Housing Agreement requires the Developer to post a bond in
fulfillment of the obligation prior to the issuance of building permits for the El Dorado Ridge
Project.
NOW, THEREFORE BE IT RESOLVED by City Council of the City of Chula Vista that
this Council does hereby authorize the City Manager to execute the Affordable Housing
Agreement related to El Dorado Ridge, a copy of which shall be kept on file in the Office of the
City Clerk.
Presented by:
James D. Sandoval
City Manager
Approved as to form by:
Bart C. Miesfeld
City Attorney
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THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
~~ ~
Bart C. Miesfeld
City Attorney
Dated: ~ ~ ~ ~ ~ ~~ o
AGREEMENT TO POST SECURITY
FOR AFFORDABLE HOUSING OBLIGATION
BETWEEN THE CITY OF CHULA VISTA AND
CVHI,LLC
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AGREEMENT TO POST SECURITY FOR AFFORDABLE
HOUSING OBLIGATION
This ``Agreement To Post Security For Affordable Housing Obligation" (the
"Agreement") is entered into by and between the City of Chula Vista; a California
municipal corporation and charter city (the "City") and C V H I, LLC, a California
Limited Liability Company ("C V H I") (these entities may be referred to, collectively, as
the "Parties," or each individually, as a "Party"). This Agreement shall be effective as of
the date last signed by the Parties (the "Effective Date") and is entered into with respect
to the following recited facts:
RECITALS
A. The Party proposes to construct a housing project with 104 condominiums
in EI Dorado Ridge, located on Brandywine Street, in the City of Chula Vista (the
"Project").
B. The 104 units associated with the Project require the construction of a
minimum of 6 units of Low Income housing and 5 units of Moderate Income housing, for
a total of 11 Affordable Units, in accordance with the City's Housing Element Balanced
Communities ("Inclusionary") Policy. The term "unit," as used in the Inclusionary
Policy, has the same defmition of a "dwelling unit" as contained in the Uniform Building
Code (refereed to in this Agreement as a "Unit").
C. Pursuant to the Inclusionary Policy, the 11-Unit Requirement will be met
via one of the following methods:
i.) Constructing 11 Affordable Units (6 units of Low Income housing
and 5 units of Moderate Income) within the City of Chula Vista,
outside of the El Dorado Ridge Development, subject to Ciry's
approval;
(ii) Constructing 10 Affordable Units (5 units of Low Income housing
and 5 units of Moderate Income) within the City of Chula Vista,
subject to City's approval, and payment to the City in the amount
of $49,688.00; or
(iii) Paying the. Gry of Chula, Vista an, in lieu.fee inahe. amount a€
$1,291,888.00.
D. The City and C V H I desire to enter into this Agreement to secure
satisfaction of the 11-Unit Requirement and allow development of the Project to proceed
prior to actual construction of the affordable housing Units.
E. The City Housing Department staff has conducted a draft in lieu fee study.
Based on that draft study, the contribution for the 10.4-Unit Requirement in lieu of actual
units would be $1,291,888.
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J. The City Council has found that this Agreement is consistent with the
City's Housing Element and all other applicable policies and regulations of the City.
AGREEMENT
NOW, THEREFORE, CITY AND C V H I agree as follows:
AFFORDABLE HOUSING OBLIGATION.
1.1 Affordable Housing Requirement. The Parties acknowledge and agree that
C V H I's affordable housing requirement (hereafter ``Affordable Housing Requirement")
associated with the El Dorado Ridge Project, pursuant to the City's Inclusionary Policy,
is the construction of 11 Affordable Housing Units within the El Dorado Ridge Project.
1.2 Altemate Methods. The Parties further acknowledge and agree that C V H
I may satisfy their aforementioned Affordable Housing Requirement by utilizing one of
the following alternate methods ("Altemate Methods"): (i) constructing 11 Affordable
Units within the City of Chula Vista, outside of the El Dorado Ridge Development,
subject to City's approval; (ii) constructing 10 Affordable Units within the City of Chula
Vista, subject to City's approval, and payment to the City in the amount of $49,688.00; or
(iii) paying the City of Chula Vista an in lieu fee in the amount of $1,291,888.00.
1.3 Obligations and Satisfaction Requirement. The Parties further
acknowledge and agree that C V H I is obligated and will satisfy its Affordable Housing
Requirement by either the construction of 11 Affordable Housing Units within the EI
Dorado Ridge Project or utilization of one of the Altemate Methods to meet that
Affordable Housing Requirement.
BONDED SECURITY.
2.1 In order to secure satisfaction of the Housing Obligation, C V H I agrees
to post a bond for the benefit of the City in the amount of the Affordable Housing
Requirement in lieu fee (the "Bond"). C V H I shall post the Bond with the City prior to
the issuance of any building. permits. for. El Dorado_Ridge. The.terms of the Bond shall..
include~the. following-.
a. The Bond shall be in the amount of $1,291,888.00;
The Bond shall be for a term of two yeazs, with two one-year
extensions, for a total term of four yeazs;
c. Subsequent to posting the Bond, C V H I shall meet the following
milestones, to the City's satisfaction:
Within two years of posting the bond, C V H I shall enter
into a regulatory agreement with the City;
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2. Within three years of posting the bond, C V H I shall obtain
all required permits (e.g., building permits) necessary to
construct the Units;
Within four yeazs of posting the bond, C V H I shall obtain
one of the following: (i) the first Certificate of Occupancy
for the Units; (ii) a business license, as may be applicable if
the Units are constructed as multi-family rental housing; or
(iii) the final, pre-occupancy inspection by the City's
Housing staff to determine the Units' compliance with
Housing Quality Standards;
d. The Bond shall be released only upon completion of the milestones
set forth in section 2.1.c., above; C V H I may request the City to
reduce the amount of the Bond requirement based on work
completed toward construction of the 11 Units; such a request may
be granted by the City Manager, or designee, at his or her
discretion;
e. The Bond shall provide for payment of the Bond proceeds to the
City, in the event the Parties do not satisfy the Bond conditions
within four years of the date the Bond is issued;
f The Bond surety shall be subject to approval by the City;
g. The Bond shall additionally secure costs and reasonable expenses
and fees, including attorneys' fees, which may be incurred by the
City in enforcing the Bond obligation; and
h. The Bond shall comply with all other bonding requirements of the
City in effect at the time the Bond is issued:
2.2 The Parties acknowledge and agree that the Bond must be posted with the
City prior to issuance of any building permits for the El Dorado Ridge Project.
2.3. The.City..agrees..tnprocess..building..permit. applications.for.theElDorado.
Ridge Project once the Bond is posted with the City.
3. GENERAL PROVISIONS.
3.1 Incorooration of Recitals. The Recitals of fact preceding this Agreement
are true and correct and aze incorporated into this Agreement, in their entirety, by this
reference.
3.2 Recordation. The City may record this Agreement in the Office of the
County Recorder of San Diego County, California.
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3.3 Notices, Demands and Communications Between the Parties.
3.3.1 Notices. Any and all notices submitted by any Party to any other
Party pursuant to or as required by this Agreement shall be proper, if in writing and
transmitted to the address of the Party set forth in Section 3.3.2 by one or more of the
following methods: (a) messenger for immediate personal delivery, (b) a nationally
recognized overnight (one business day) delivery service (i.e., Federal Express, United
Parcel Service, etc.) or (c) registered or certified United States mail, postage prepaid,
return receipt requested. Such notices may be sent in the same manner to such other
addresses as either Party may designate, from time to time, by notice. Any notice shall
be deemed to be received by the addressee, regardless of whether or when any return
receipt is received by the sender or the date set forth on such return receipt, on the day
that it is delivered by personal delivery, on the date of delivery by a nationally recognized
overnight courier service (or when delivery has been attempted twice, as evidenced by
the written report of the courier service) or four (4) calendar days after it is deposited
with the United States Postal Service for delivery, as provided in .this Section 3.3.
Rejection, other refusal to accept, the inability to deliver a notice because of a changed
address of which no notice was given, or other action by a person to whom notice is sent,
shall be deemed receipt of the notice by such person. Delivery of a notice to any courtesy
copy recipient shall not be a prerequisite to the validity or effectiveness of any Notice.
3.3.2 Addresses. The following aze the authorized addresses for the
submission of notices to the Parties, as of the Effective Date:
To the City: Housing Manager
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
To C V H I: Michael Grant
110 Town Center Pazkway
Santee, California 92071
3.4 ReIationshio of Parties.` _The.Parties each`intend"and agree that he City _.
and C V H I aze independent contracting entities and do not intend by this Agreement to
create any partnership, joint venture, or similar business arrangement, relationship or
association among or between them.
3.5 Non-liability of Officials Emnlovees and Aeents. No elected official,
officer, director, employee or agent of the City, shall be personally liable to C V H I, or
any successor-in-interest of C V H I, in the event of any default or breach by the City
under this Agreement.
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3.6 Indemnification and Hold Harmless.
3.6.1 Indemnification. C V H I shall indemnify and defend City in any
lawsuit or claim which challenges City's approval of this Agreement or the participation
by City in this Agreement.
3.6.2 Hold Harmless. It is understood and agreed that City, as
indemnitee, or any officer or employee thereof, shall not be liable for any injury to
person(s) or property occasioned by reason of the acts or omissions of C V H I its agents
or employees, related to this Agreement. C V H I further agrees to protect arid hold
harmless City, its officers and employees from any and all claims, demands, causes of
action, liability or loss of any sort, because of the arising out of acts or omissions of C V
H I, (including any assignee of C V H I, but only to the extent of specific improvements,
acts or omissions of such assignee), its agents or employees, related to this Agreement.
The provisions of this Section shall become effective upon execution of this Agreement
and shall remain in full force for three years following posting of the Bond with the City.
This Section is not intended, nor shall it be construed, to require C V H I or City to
indemnify or hold the other harmless from their own negligent acts or omissions.
3.7 Interpretation. No inference in favor of or against any Party shall be
drawn from the fact that such Party has drafted any part of this Agreement. The Parties
have all participated substantially in the negotiation, drafting, and revision of this
Agreement, with advice from legal and other counsel and advisers of their own selection.
3.8 GoveminQ Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement, without application of conflicts of laws
principles. The Parties acknowledge and agree that this Agreement is entered into, is to
be fully performed in and relates to real property located in the City of Chula Vista,
County of San Diego, State of California. All legal actions arising from this Agreement
shall be filed in the Superior Court of the State in and for the County or in the United
States District Court with jurisdiction in the County.
3.9 Binding on Successors and Assi¢rrs. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective legal representatives,
successors and assigns..
3.I0 No Ether Renresentations or Warranties. Except as expressly set forth in
this Agreement, no Party makes any representation or warranty material to this
Agreement to any other Parry.
3.11 Execution in Counterparts. This Agreement may be executed in multiple
counterpart originals, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
3.12 Assi~mnent. Any assignment by C V H I is subject to the consent of the
assignment or transfer by the City. Such consent shall not be unreasonably withheld.
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3.13 Capacity of Parties. Each signatory and Party to this Agreement warrants
and represents to the other Party that it has legal authority, capacity and direction from its
principal to enter into this Agreement, and that all resolutions or other actions have been
taken so as to enable it to enter into this Agreement.
[Signatures blocks appear on the next page]
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SIGNATURE PAGE
TO
AGREEMENT TO POST SECURITY FOR AFFORDABLE HOUSING
OBLIGATION
The Parties have signed this Agreement by and through the signatures of their authorized
representatives, as set forth below:
CITY
CVHI
CITY OF CHULA VISTA, a California CVHI, LLC, a California limited liability
municipal corporation and charter city compan
James D. Sandoval, City Manager
Dated:
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
By:
Michae Grant, re ide t/CEO
Dated: /O -/ ~- ?~/d
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