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HomeMy WebLinkAbout2012-11-06; City Council; Resolution 2012-2351 RESOLUTION NO. 2012-235 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, TO APPROVE A RESIDUAL RECEIPTS ^ LOAN AND APPROPRIATE HOUSING TRUST FUNDS IN THE 4 AMOUNT OF $7,408,000 TO PROVIDE FINANCIAL ASSISTANCE TO THE PARTNERSHIP OF C«&C DEVELOPMENT AND IRVINE 5 HOUSING OPPORTUNITIES FOR THE ACQUISITION OF FORTY- TWO (42) EXISTING RENTAL UNITS (21 DUPLEXES) TO BE 6 RESTRICTED FOR LOW AND MODERATE INCOME AFFORDABLE HOUSING WITHIN THE NORTHWEST QUADRANT 7 OF THE CITY OF CARLSBAD. 8 APPLICANT: C&C DEVELOPMENT AND IRVINE HOUSING OPPORTUNITIES 9 18 19 20 21 22 23 WHEREAS, C&C Development and Irvine Housing Opportunities (IHO) have partnered and have proposed to acquire 21 duplexes rental residential units (42 total units), complete some minor health and safety improvements, and convert them to rent-restricted affordable housing for 10 11 12 J ^ low and moderate income households on Harding Street, Carol Place and Magnolia Avenue in 14 the historic Barrio neighborhood of the Village Area within the Northwest Quadrant of the City 15 of Carlsbad; and 16 WHEREAS, C&C Development and IHO have requested that the City of Carlsbad provide financial assistance in the form of a property acquisition loan that will convert to a residual receipts permanent loan to assist in the development of a new, higher density affordable housing rental complex upon the property at a future date yet to be determined; and WHEREAS, C&C Development and IHO have proposed and will commit to obtain additional financing (from a private lender) to complete the property acquisition and initially provide for minor interior improvements (approximately $15,000 to $20,000 total) to said 42 24 units to address immediate health and safety issues, and overall clean-up of the exterior of the 25 properties; and 26 WHEREAS, C&C Development and IHO have proposed and will commit to income and 27 rent- restrictions on the existing 42 residential units upon close of escrow and will also proceed 28 1 immediately with designing a higher density rental development and applying for development 2 permits and required financing, with no additional cash assistance from the City of Carlsbad, for ^ the new construction of a larger apartment development at a future date yet to be determined; and WHEREAS, the public benefits of the proposed project include physical enhancement of a deteriorating neighborhood in the historic Barrio neighborhood of the Village area through clean-up of property and minor rehabilitation of existing dwelling units to improve the health and safety of the residents, and to add to the diversity of housing opportunifies for low and moderate income households within the City of Carlsbad through the rent restrictions to be set 5 6 7 8 9 jQ forth in the regulatory agreement between City and developer; and 11 WHEREAS, the proposed acquisifion will support the City's desire to encourage the 12 construction of additional new units to be affordable to low and moderate income households 1-^ and to increase the inventory of low and moderate income affordable units within the City at a 14 15 16 17 18 19 2Q recommended approval of the request for assistance; and 21 WHEREAS, the City Council did hold, on the date of this resolufion, a public meeting 22 and encouraged public participation prior to its consideration of said request for City financial 23 assistance for the acquisifion of said 42 rental units (21 duplexes) to provide for low and 94 moderate income-restricted affordable housing apartment units by the affordable housing 25 developer partnership of C&C Development and IHO; and, 26 WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, 27 " 28 future date in time; and WHEREAS, on the 16th day of October, 2012, the City of Carlsbad Housing Commission did hold a public meeting to consider the request for City financial assistance for the acquisition of said 42 lower income-restricted affordable housing apartment units by the affordable housing developer partnership of C&C Development and IHO, and subsequently 1 of all persons desiring to be heard, said City Council considered all factors relating to the 2 request for financial assistance; and, WHEREAS, the City Council intends to approve a residual receipts loan and the appropriation and expenditure of $7,408,000 from the Housing Trust Fund for the purposes of providing loan proceeds to the partnership of C&C Development and IHO to assist in the acquisition of 42 existing rental units within the historic Barrio neighborhood ofthe Village Area and to subsequently rent restrict said units for affordability to low and moderate income persons/families, and with the commitment from said development partnership that efforts will IQ be immediately initiated to complete the acquisition of all properties required for a larger project 11 at a later date, and design and process applicafions for land use entitlements and other permits 12 and financing for this larger affordable rental project to be constructed at a later date on the ^ ^ property to be acquired with this assistance. NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council ofthe City of Carlsbad, Califomia, as follows: 1. The above recitations are true and correct. 14 15 16 17 18 2. The request for City financial assistance is consistent with the goals and objecfives of the City of Carlsbad's Housing Element, CDBG/HOME 19 Consolidated Plan, and the Carlsbad General Plan. 22 20 3. The request for City financial assistance will assist the affordable housing developer to acquire a total of 42 existing two bedroom rental units (21 duplexes) 21 within the historic Barrio neighborhood of the Village Area and subsequently income and rent restrict them to be affordable for low and moderate income households. The project, therefore, has the ability to effectively serve the City's 2^ housing needs and priorities as expressed in the Housing Element and the CDBG/HOME Consolidated Plan. 24 25 4. That the City financial assistance to acquire the rental units noted above is approved subject to the developer's proposal and agreement to move forward in a 26 diligent manner to complete acquisition of all properties required to develop a larger, higher density affordable rental development (of approximately 140 rental 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 //// 22 //// 23 //// 24 //// 25 //// 26 27 //// 28 units or thereabouts) on the identified site no later than eighteen months from the date of the approval of the loan agreement with the City or such other time period as determined by the City Council, and then to subsequently design and obtain all required permits and financing to construct said larger, higher density affordable rental project within a reasonable period of time as determined by the City Council and set forth within the loan agreement. That the City Council authorizes the City Manager, or designee, including the Housing and Neighborhood Services Director, in coordination with the City Attomey to negotiate and prepare all loan documents related to provision of the City financial assistance to fund the subject residual receipts acquisition/permanent loan to the partnership of C&C Development and Irvine Housing Opportunities to provide for the subject low and moderate income- restricted affordable housing project through acquisition of existing rental units, and to retum said documents to the City Council for review and authorization to execute prior to close of escrow on said property. That the City Council authorizes the City Manager, or designee, to execute subsequent subordination agreement(s) subordinating the City's Regulatory Agreement and Deed of Trust to the Deed of Tmst for acquisition to permanent lenders, as required, subject to review and approval by the City Attomey, and subject to the City Manager finding that no other private financing that does not require subordination is reasonably available, and the loan amount subordinated to by the City does not exceed $3.2 million dollars unless good cause is demonstrated to the City Manager to exceed this amount. That the City Council authorizes the Finance Director to appropriate and disburse the loan proceeds as set forth within this approval in the total amount of $7,408,000, and appropriately account for the residual receipts permanent loan to the partnership of C&C Development and Irvine Housing Opportunities for the subject affordable housing project, and as set forth in the approved loan documents and upon confirmation that the developer has a letter of commitment from a private lender to provide the balance of funds required for said property acquisition. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED, AND ADOPTED at a regular meefing of the City Council of the City of Carlsbad, Califomia, held on the 6^^ day of November^ 2012, by the following vote, to wit: AYES: Council Members Hall, Kulchin and Blackbum NOES: Council Members Douglas and Packard ABSENT: None ABSTAESl: None MATT HALL, MAYOR ATTEST: ISTANT CITY CLERK (SEAg)