HomeMy WebLinkAbout2026-06-09; City Council; Resolution 2026-108Exhibit 2 RESOLUTION NO. 2026-108
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING A LOAN TO THE CHESTNUT APARTMENTS, LP,
FROM THE HOUSING TRUST FUND IN AN AMOUNT NOT TO EXCEED
$850,000 FOR GAP FINANCING TOWARD DEVELOPMENT COSTS OF THE
CHESTNUT APARTMENTS
WHEREAS, on Dec. 24, 2014, the City of Carlsbad executed a loan of $2,646,000 from the city’s
Housing Trust Fund to Solutions Chestnut, LLC, a subsidiary of Solutions for Change, Inc. (collectively
Solutions for Change), to acquire Chestnut Apartments, a 16-unit apartment complex at 945 Chestnut
Ave. to provide affordable housing for homeless families; and
WHEREAS, on Dec. 24, 2014, a regulatory agreement and declaration of restrictive covenants
was executed, and recorded in the Office of the Recorder of the County of San Diego, State of California
on Dec. 26, 2014, as Instrument No. 2014-0570837 to restrict the use of the property; and
WHEREAS, Solutions for Change could not fulfill the obligations identified in the 2014 loan
documents recorded against the property and decided to turn the property over to the City of Carlsbad
in lieu of loan repayment; and
WHEREAS, on May 21, 2024, the City Council adopted Resolution No. 2024-111, authorizing the
City Manager to execute all documents necessary to complete the City’s acquisition of the property;
and
WHEREAS, Kingdom Development, Inc. has created a limited partnership, The Chestnut
Apartments, LP, that will be the legal entity to borrow the funding and acquire and operate the
property; and
WHEREAS, the request for financial assistance was submitted to the City of Carlsbad’s Housing
Commission for review and consideration at their public meeting on May 14, 2026, on which date the
Housing Commission approved Resolution No. 2026-004 recommending that the City Council approve
the financial assistance requested in the amount not to exceed $850,000 from the Housing Trust Fund.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.The proposed action is categorically exempt from environmental review under
California Environmental Quality Act, or CEQA, Guidelines Section 15301 because it
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involves the leasing, operation, maintenance and minor alteration of existing facilities
with negligible or no expansion of the existing or former use. No exceptions to the
categorical exemption as set forth in CEQA Guidelines Section 15300.2 or Carlsbad
Municipal Code Section 19.04.070(C) apply.
3.That the request for a loan commitment from the Housing Trust Fund to The Chestnut
Apartments, LP, a subsidiary of Kingdom Development, Inc., in an amount not to exceed
$850,000 for gap financing toward development costs of Chestnut Apartments is
consistent with the goals, objectives and programs of the City of Carlsbad's Housing
Element, City Council Policy No. 90 guidelines, and the city’s Housing Trust Fund
underwriting practices.
4.That the City Manager, or designee, is authorized to assign and appropriate up to
$850,000 from the Housing Trust Fund to The Chestnut Apartments, LP, or another
related business entity, for the Chestnut Apartments affordable housing project once all
project funding is secured by the developer.
5.That the City Manager, or designee, is authorized to prepare and execute all documents
related to the city loan, subject to review and approval by the City Attorney.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City
of Carlsbad on the 9th day of June, 2026, by the following vote, to wit:
AYES: Blackburn, Bhat-Patel, Acosta, Burkholder, Shin.
NAYS: None.
ABSTAIN: None.
ABSENT: None.
______________________________________
KEITH BLACKBURN, Mayor
______________________________________
SHERRY FREISINGER, City Clerk
(SEAL)
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