HomeMy WebLinkAbout1994-03-22; City Council; 12639; Acquisition Of Affordable Housing Property.
.
“‘TY OF CARLSBAD - AC-\IDA BILL $& aM
URSEMENT AGREEMENT BETWEEN THE
DEPT. RED.
CITY OF CARLSBAD AND REDEVELOPMENT AGENCY FOR
ACQUISITION OF AFFORDABLE HOUSING PROPERTY WITH
CDBG FUNDS AND AUTHORIZATION TO EXECUTE AN “OPTION
TO LEASE” PROPERTY TO THE BRIDGE HOUSING CORPORATION CITY MGR-
RECOMMENDED ACTION: SDP 93-6
Adopt Resolution No. q+fi approving a reimbursement agreement between the
City of Carlsbad and the Carlsbad Redevelopment Agency for acquisition of affordable
housing property with federal Community Development Block Grant Funds and
authorizing the City Manager to execute an “option to lease” the acquired property to
the BRIDGE Housing Corporation for development of the Villas Affordable Housing
Project.
ITEM EXPLANATION:
On October 26, 1993, after making the required findings, the Agency agreed to assist
in providing interim financing in the amount of $2 million to acquire real property
outside the Village Redevelopment Area for the purposes of developing affordable
housing for persons/families within low and very low income households. Also on
October 26th, the City of Carlsbad agreed to reimburse the Redevelopment Agency for
the interim financial assistance when feasible and appropriate through the City’s
Community Development Block Grant (CDBG) Program.
On November 15, 1993, the City of Carlsbad exercised a “purchase option” held by
Aviara Land Associates to acquire real property at 9156 El Camino Real, through use
of the Redevelopment Agency’s Low and Moderate Income Housing Set-Aside funds
for the purposes of developing the approved Villas at El Camino Real Affordable
Housing Project.
Prior to reimbursing the Redevelopment Agency as agreed through the use of CDBG
funds, the City was required to receive environmental clearance from the U.S
Department of Housing and Urban Development (HUD). On December 25, 1993,
HUD provided the clearance required to release $880,000 in previously allocated
CDBG funds for the purposes of financing the acquisition of property for the Villas
at El Camino Real Affordable Housing Project.
Since the City must reimburse the Redevelopment Agency $2 million for the property
acquisition, an application for a Section 108 CDBG Loan was submitted to HUD on
January 27, 1994 to obtain the additional $1.2 million required to complete the
reimbursement transaction. The City’s Section 108 Loan application received approval
of the local HUD office in Los Angeles; it has been forwarded to HUD Headquarters
in Washington, D.C. for final review and approval. At this time, it is staff’s
expectation that the loan application will be approved by the end of March, 1994.
AIM /fl. #q
PAGE 2’
The agreement attached as Exhibit 2 is forwarded at this time to the City Council for
review. Staff is recommending that the Council approve this agreement to allow the
City to reimburse the Redevelopment Agency, with CDBG funds, in two (2) separate
payments. The first payment will be made by April 30, 1994 and the second will be
made as soon as the Section 108 loan funds are received by the City from HUD. It is
anticipated that the second payment shall be made to the Redevelopment Agency no
later than September 30, 1994.
The second action requested by the City Council is approval of authorization for the
City Manager to execute an “option to lease” the acquired property to the BRIDGE
Housing Corporation for development of the Villas Affordable Housing Project. The
“option to lease” will allow BRIDGE the ability to “hold” the subject property for
development purposes for at least one (1) year while applying for the funds required
to finance the Villas project.
FISCAL IMPACT:
The City will use approximately $800,000 in previously allocated CDBG funds and
$1.2 million in Section 108 CDBG Loan funds to reimbursement the Carlsbad
Redevelopment Agency, in the total amount of $2 million, for property acquisition for
affordable housing purposes. Once reimbursed, the Redevelopment Agency will have
funds available again to provide additional financial assistance to the Villas project, if
necessary, and/or to assist in the development of other affordable housing projects both
inside and outside the Village Redevelopment Area.
EXHIBITS:
l- Resolution No.wm approving a reimbursement agreement between the City
of ‘Carlsbad and the Carlsbad Redevelopment Agency for acquisition of
affordable housing property with federal CDBG Funds and authorizing the City
Manager to execute an “option to lease” the acquired property to the BRIDGE
Housing Corporation for development of the Villas Affordable Housing Project.
2- Reimbursement Agreement between City of Carlsbad and Carlsbad
Redevelopment Agency for acquisition of affordable housing property.
CITY COUNCIL RESOLUTION NO. 94-89
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA APPROVING THE REIMBURSEMENT
AGREEMENT BETWEEN THE CITY OF CARLSBAD AND THE
CARLSBAD REDEVELOPMENT AGENCY FOR ACQUISITION OF
AFFORDABLE HOUSING PROPERTY WITH FEDERAL CDBG FUNDS
AND AUTHORIZATION TO EXECUTE AN “OPTION TO LEASE”
PROPERTY TO THE BRIDGE HOUSING CORPORATION
7 WHEREAS, the City of Carlsbad has identified a need to provide at least 1400
0 housing units affordable to households of low and very low income by 1996; and
9 WHEREAS, on October 26,1993, after making the required findings, the Carlsbad
10 Redevelopment Agency agreed to assist in providing interim financing in the amount of $2
11 million to acquire real property outside the Village Redevelopment Area for the purposes of
12
13 developing affordable housing for persons/families within low and very low income households;
14 and
15 WHEREAS, the City of Carlsbad exercised a “purchase option” held by Aviara
16 Land Associates to acquire real property at 9156 El Camino Real, through use of the Agency’s
17 Low and Moderate Income Housing Set-Aside funds on November 15, 1993 for the purposes of
18
19
20
developing the approved Villas at El Camino Real Affordable Housing Project; and I I WHEREAS, the City agreed to reimburse the Agency for the interim financial ;
21 assistance when feasible and appropriate through the City’s Community Development Block Grant ! I
22
23
24
25
26
27
28
(CDBG) Program; and
. . . .
. . . .
. ..*
II
:
:
L
e b
f
7
E
s
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
. . . .
. . . .
WHEREAS, the U.S. Department of Housing and Urban Development has
provided the City with environmental clearance to release CDBG funds for the purposes of
financing the acquisition of property for the Villas at El Camino Real Affordable Housing
Project.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City
Council as follows:
1.
2.
3.
4.
5.
. . . .
. . . .
. . . .
. . . .
. . . .
. . . .
That the foregoing recitations are true and correct,
That the City Council shall reimburse the Carlsbad Village Redevelopment Agency
for two (2) million dollars in financial assistance provided through the use of the
Agency’s Low and Moderate Income Housing Set-Aside funds to acquire a
twenty-one (21) acre vacant parcel of property located adjacent to and west of El
Camino Real between Camino Vida Roble and Alga Road.
That the City of Carlsbad shall reimburse the Carlsbad Redevelopment Agency
with two (2) payments from the City’s federal Community Development Block
Grant (CDBG) Program. The first reimbursement payment shall be made with
$800,000 in CDBG funds previously allocated for affordable housing property
acquisition. The City shall use funds from a $1.2 million Section 108 CDBG Loan
to make the second reimbursement payment to the Agency.
That the City of Carlsbad’s Finance Director is authorized to draw down the
CDBG funds from the City’s Letter of Credit for the CDBG program and make
the first reimbursement payment to the Carlsbad Redevelopment Agency no later
than April 30, 1994.
That the City of Carlsbad shall lease the subject property to the BRIDGE Housing
Corporation, or acceptable limited partnership, for a rental housing project which
will provide 344 units of housing affordable to households of low and very low
income as approved by the City Council on October 26, 1993. ,
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
. . . .
. . . .
6. That the City Manager is authorized to execute an “option to lease” agreement
with BRIDGE Housing Corporation and/or a limited partnership, of which
BRIDGE is a general partner, for the subject property to be used for development
of the Villas Affordable Housing Project.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City
Council of Carlsbad, California, held on the 22tid day of MARCH , 1994 by the following
vote, to wit:
AYES: Council Members Lewis, Stanton, Nygaard, Finnila
NOES: None
ABSENT: Council Member Kulchin
ABSTAIN: None
ATTEST:
ALETHA RAUTENKRANZ, City Clerk \
- EXHIBIT 2
REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF CARLSBAD
AND CARLSBAD REDEVELOPMENT AGENCY
FOR ACQUISITION OF AFFORDABLE HOUSING PROPERTY
FEDERAL COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
THIS AGREEMENT, made and entered into as of this Jq” day of
, 19:&y and between the CITY OF CARLSBAD, a municipal
corporation, hereinafter referred to as “City”, and CARLSBAD REDEVELOPMENT
AGENCY, a Community Redevelopment Agency organized and existing under
Community Redevelopment Law, Health and Safety Code Section 33000, et.seq.,
hereinafter referred to as “Agency”.
RECITALS
WHEREAS, the City has the need to provide at least 1400 units of affordable
housing for low and very low income families within Carlsbad; and,
WHEREAS, on October 26, 1993, after making the required findings, the Agency
agreed to assist in providing interim financing in the amount of $2 million to acquire real
property outside the Redevelopment Area for the purposes of developing affordable
housing for persons/ families within low and very low income households; and,
WHEREAS, the City acquired real property at 9156 El Camino Real, through use
of the Agency’s Low and Moderate Income Housing Set-Aside funds, on November 15,
1993 for the purposes of developing the approved Villas at El Camino Real Affordable
Housing Project; and,
WHEREAS, the City agreed to reimburse the Agency for the interim financial
assistance when feasible and appropriate through the City’s Community Development
Block Grant (CDBG) Program; and,
WHEREAS, the U.S. Department of Housing and Urban Development has
provided the City with environmental clearance to release CDBG funds for the purposes
of financing the acquisition of property for the Villas at El Camino Real Affordable
Housing project.
NOW, THEREFORE, in consideration of these recitals and the mutual covenants
contained herein, City and Agency agree as follows:
1. STATEMENT OF WORK
The City shall reimburse the Agency for two (2) million dollars in financial
assistance p.rovided through the use of the Agency’s Low and Moderate Income
Housing Set-Aside funds to acquire a twenty-one (21) acre vacant parcel of
property located adjacent to and west of El Camino Real between Camino Vida
’ Roble and Alga Road. The property acquisition price was based on two (2) third
party, formal appraisals. The parcel number for the subject property is 215-020-l 5
and the street address is 9156 El Camino Real within the city limits of Carlsbad.
The City shall reimburse the Agency for the entire two (2) million dollars provided
to finance acquisition of said property. The reimbursement shall be made with
eight hundred thousand dollars ($800,000) in CDBG funds previously allocated
specifically for the acquisition of property for affordable housing purposes. In
addition, the City shall use funds from a $1.2 million Section 108 CDBG Loan to
complete the reimbursement transaction outlined within this agreement.
The subject property shall be used by the City for a rental housing project which
will provide 344 units of housing affordable to households of low and very low
income. As approved by the City on October 26, 1993, the subject affordable
housing project includes one, two, and three bedroom apartment units with rents
affordable to households at 50% to 60% of the San Diego County Median.
The City shall work with the development team for the subject project to produce
said affordable housing units. The development team includes Hillman Properties
(private local developer), BRIDGE Housing Corporation (private non-profit
affordable housing developer), and Kruer/Picerne Partnership (private local
developer/builder).
The City shall enter into an agreement to lease the subject property to the
BRIDGE Housing Corporation for development of the identified affordable housing
project.
Every effort shall be made by the City to provide full reimbursement to the Agency
for acquisition funds for the subject property by September 30, 1994. If the City
will be unable to fully reimburse the Agency by the noted date, the City shall
request an extension of this reimbursement agreement.
2
2. SCHEDULE OF PAYMENTS
The City shall make two (2) lump sum payments for reimbursement to the
Agency. The first reimbursement payment in the amount of $800,000 shall be
made no later than April 30, 1994. The second reimbursement payment in the
amount of $1.2 million shall be made no later than September 30, 1994. The
funds used to make said reimbursement payments shall be drawn down from the
City’s Letter of Credit with the United States Department of Housing and Urban
Development (HUD) as appropriate and consistent with federal regulations for the
CDBG Program.
3. RECORDS AND REPORTS
The City shall maintain all appropriate records to account for the expenditure of
the federal CDBG funds, including the Section 108 CDBG Loan funds, to
reimburse the Agency for property acquisition as outlined within this agreement.
The Federal Grantor Agency, Comptroller General of the United States, or any of
their duly-authorized representatives shall have access to all books, documents,
papers and records maintained by the City which directly pertain to the above
project for the purpose of audit, examination, excerpts and transcriptions.
Unless otherwise notified by HUD, the City shall retain all financial records,
supporting documents and statistical reports related to the project identified under
this agreement until September 30, 1997. All records subject to an audit finding
shall be retained for three (3) years from the date the finding is made or until the
finding has been cleared by appropriate officials and the City has been given
official written notice.
As required by the Federal Single Audit Act, the City shall be required to have a
comprehensive financial audit prepared by an independent, neutral third-party
auditor for the use of CDBG funds. The audit shall cover financial operations of
the City’s CDBG program for the period beginning July 1, 1993 and ending June
30, 1994. The City shall also ensure that an audit is completed for the period
covered under fiscal year beginning July 1, 1994 and ending June 30, 1995 for
any reimbursement funds paid after June 30, 1994.
4. PROGRAM REQUIREMENTS
The City will adhere to the terms of the City’s CDBG and Section 108 Loan
application and with assurances and agreements made to the United States
Department of HUD.
3
The City shall comply with applicable Uniform Administrative Requirements as
described in Section 570.502 of the federal regulations for the CDBG Program;
the federal requirements are set forth, by reference, as a provision of this
agreement.
The City shall carry out all activities in compliance with all Federal laws and
regulations as described in Subpart K, such as labor standards and fair housing
requirements.
The provisions of Subpart K, of the CDBG Program Regulations, are set forth, by
reference, as a condition of this reimbursement agreement.
5. CHANGES IN USE OF FUNDS
This agreement allows the City to reimburse the Agency for interim financial
assistance provided to acquire property for the purpose of developing the
identified affordable housing project only. No other use of said funds is permitted
without proper public review and City action.
6. NONDISCRIMINATION CLAUSE
The City shall comply with all state and federal laws regarding nondiscrimination
in the provision of services and the equal opportunity employment of personnel.
7. SUSPENSION AND TERMINATION OF AGREEMENT
In accordance with Section 24, Parts 85.43 and 85.44 of the Code of Federal
Regulations, this agreement may be suspended or terminated if either party fails
to comply with any term(s) set forth herein. Section 24, Parts 85.43 and 85.44 of
the Code of Federal Regulations are set forth, by reference,‘as provisions of this
agreement.
8. REVERSION OF ASSETS
The subject property shall be required to be used for the identified affordable
housing project and/or an alternate CDBG eligible project, as approved by City,
for a minimum of five (5) years. If the property is not used for the identified or
other eligible project for a minimum of five (5) years, it must be disposed of in a
manner that results in the federal government being reimbursed in the full amount
of the current market value of the property less any portion of the value
attributable to expenditures of non-CDBG funds for acquisition of, or improvement
to, the property.
9. ASSIGNMENT OF AGREEMENT
The Agency shall not assign this agreement or any monies due thereunder
without the prior written consent of the City.
10. SUCCESSORS OR ASSIGNS
Subject to the provisions of this Agreement, all terms, conditions, and provisions
hereof shall insure to and shall bind each of the parties hereto, and each of their
respective, executors, administrators, successors, and assigns.
IN WITNESS WHEREOF the parties hereto have caused this agreement to be
executed as of the day and year first written above.
CARLSBAD REDEVELOPMENT AGENCY, a Community Redevelopment Agency of
he State of California
ATTEST:
NZ, CITY CLERK
KAREN R. KUNDTZ, nt City Clerk
APPROVED AS TO FORM:
RON BALL, CITY ATTORNEY 3/a /5-Y;
5