HomeMy WebLinkAbout1995-09-05; City Council; 13293; Affordable Housing Mitigation Agreement- h
CITY OF CARLSBAD - AGEI~DA BILL
AB# /3 TITLE:
MTG. g-c AFFORDABLE HOUSING MITIGATION AGREEMENT
BETWEEN THE CITY AND KAIZA POINSETTIA
DEPT. H/RED CORPORATION I CITY MGR.
RECOMMENDED ACTION:
That the City Council ADOPT City Council Resolution No. ysd~?~~~RO~~~ the Affordable
Housing Mitigation Agreement between the City of Carlsbad and Kaiza Poinsettia Corporation.
ITEM EXPLANATION:
On January 4, 1994, with the recommendation of the Planning Commission, the City Council
approved MP-175(D), known as Poinsettia Shores Master Plan, a development of Kaiza
Poinsettia Corporation. The Poinsettia Shores Master Plan is located north of Batiquitos Lagoon
and east of the railroad right-of-way, in the Coastal Zone, within Local Facilities Management
Zone 9.
In applying for Master Plan approval, Kaiza proposed an on-site option for satisfying their
inclusionary affordable housing requirement in Planning Area “D” of the Master Plan. A site
development plan (SDP 94-08) was proposed for the on-site affordable housing project and has
been recommended for approval by the Planning Commission. SDP 94-08 provides for a 90 unit
housing project that would be 100% affordable to lower-income households, thus satisfying the
Poinsettia Shores inclusionary housing requirement. The Planning Area “D” affordable housing
project was conceived as a condominium (for sale) product but could be developed as a rental
apartment project. The Poinsettia Shores Master Plan also provides for the option of satisfying
the affordable housing requirement in an off-site project. If the obligation is met through
development of a project off-site, Kaiza intends to build an additional 23 market rate housing
units on Planning Area “D”, after discretionary review and approval by the Planning Commission.
The Corn bined Proiect
The lnclusionary Housing Ordinance provides options for satisfying the affordable housing
obligation. The option known as a Combined lnclusionary Housing Project is defined as one in
which “some or all of the inclusionary units which are associated with one development site are
produced and operated at an alternative site or sites.” With this option, the Ordinance anticipated
that developers would combine efforts and resources in contractual relationships to develop
affordable housing. Kaiza is proposing to shift from their on-site proposal to the Combined Project
(off-site) option by participating in the project known as Laurel Tree Apartments, located off
Laurel Tree Lane, south of Palomar Airport Road in the Southwest Quadrant.
The Laurel Tree Apartments development application was submitted on January 6,1995 and has
been processed through the Planning Department. The project is tentatively scheduled for
Planning Commission consideration on September 20, 1995.
PAGE 2 OF AGENDA BILL NO. 4 493
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The Affordable Housinq Mitiaation Aqreement
The Affordable Housing Mitigation Agreement between Kaiza Poinsettia Corporation and the City
of Carlsbad is attached as Exhibit 3 to this report. As required by the lnclusionary Housing
Ordinance, the Agreement insures that the Kaiza affordable housing obligation will be satisfied
in a manner acceptable to the City Council prior to final map approval. In this case, the
agreement requires Kaiza to satisfy their obligation through participation in the construction of
the Laurel Tree Apartments or make a mandatory purchase of affordable housing credits in the
Villa Loma (formerly La Terraza) project in an amount equal to their obligation and at the price
specified by the City.
While the relationship between the Laurel Tree Apartments developer (MAAC) and Kaiza is a
private transaction between those parties, the City must be comfortable that the relationship will
effectively assist in the construction of the affordable housing units. Therefore, the agreement
between these two parties is made an exhibit to the Affordable Housing Mitigation Agreement
between Kaiza and the City. Kaiza’s participation in the Laurel Tree Apartments consists of a
subsidy of approximately $1.8 million to the project.
Since the Affordable Housing Mitigation agreement represents an alternative to a previously
proposed on-site inclusionary project, Kaiza will be required to amend its approved Master Plan
to reflect the elimination and replacement of the on-site affordable housing component with
market rate units.
Summary
Kaiza’s Poinsettia Shores proposal to satisfy their inclusionary housing obligation by participating
in an off-site Combined Project utilizes the flexibility of the lnclusionary Housing Ordinance to
achieve several positive outcomes. It provides needed subsidy capital to a capable development
team and greatly enhances the feasibility of a service-enriched quality affordable housing project
at a location that has advantages over a project proposed onsite. If the Combined Project is not
successful in receiving other necessary entitlement/permit approvals and/or financing, the Kaiza
requirement converts into financial participation, through the purchase of housing credits, in the
Villa Loma Apartment project (which is also a Combined Project as defined in the lnclusionary
Housing Ordinance).
Housinq Commission Review
The Housing Commission considered the subject Affordable Housing Mitigation Agreement at
their meeting held on March 9, 1995. The Commission approved a recommendation (6-2, 1
absent) to the Council to approve the agreement. Two (2) Commissioners (Wellman, Sato)
opposed the agreement because they did not agree with the provision that requires the developer
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PAGE 3 OF AGENDA BILL NO. /q$‘.fT
to purchase housing credits within the Villa Loma Affordable Housing Project if the Laurel Tree
Project is not successful; they felt that the developer should be required to go back on-site if the
Laurel Tree project cannot be constructed. This, however, would be extremely difficult given the
time which must be allowed for the Laurel Tree Project to reach construction.
FISCAL IMPACT:
At this time, there is no fiscal impact as a result of approval of the attached Affordable Housing
Mitigation Agreement. The agreement contains no financial commitments by the City. The City
Council, acting as the Housing and Redevelopment Commission, previously approved (6128194)
a conditional commitment of $500,000 from Redevelopment Housing Set-Aside Funds to the
Laurel Tree Apartment Project. This assistance is conditioned upon the project being approved
and receiving other necessary financing.
Approval of the subject Affordable Housing Mitigation Agreement will allow Kaiza to continue
processing their final map for development of market rate units within the Poinsettia Shores
Master Plan. If the Laurel Tree Apartment Project is not successful for any reason, the Carlsbad
Redevelopment Agency will receive approximately $2.5 million from Kaiza for purchase of
housing credits in the Villa Loma Project; these funds would be available to assist with
construction of additional affordable housing units within Carlsbad. As previously stated, these
funds will only be received by the Agency if the Laurel Tree project is unsuccessful.
EXHIBITS:
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City Council Resolution No. ?sJdy .
Housing Commission Resolution No. 95-003 recommending approval of the mitigation
agreement between the City and Kaiza.
Affordable Housing Mitigation Agreement between City of Carlsbad and Kaiza Poinsettia
Corporation
Housing Commission Staff Report Dated March 9, 1995, which includes a description of the
Laurel Tree Project. (The Affordable Housing Mitigation Agreement exhibit for the Housing
Commission Staff report has been attached as Exhibit 3 to this Council report.)
Minutes from Housing Commission meeting of March 9, 1995.
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CITY COUNCIL RESOLUTION NO. 95-249
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CARLSBAD, CALIFORNIA TO APPROVE AN
AFFORDABLE HOUSING MITIGATION AGREEMENT
BETWEEN THE CITY OF CARLSBAD AND’KAIZA
POINSETTIA CORPORATION
WHEREAS, Kaiza Poinsettia Corporation has a requirement to provide
housing units affordable to lower income households within the southwest
quadrant of the City; and,
WHEREAS, Kaiza Poinsettia Corporation has expressed a desire to
financially participate in a Combined Inclusionary Housing Project known as the
Laurel Tree Apartment Project to satisfy the requirement to provide housing
affordable to lower income households; and,
WHEREAS, the Laurel Tree Apartment Project satisfies the City of
Carlsbad’s identified criteria for an acceptable Combined Inclusionary Housing
Project.
NOW, THEREFORE, BE IT JJEREBY RESOLVED by the City
Council of the City of Carlsbad, California, as follows:
1. The above recitations are true and correct.
. . . .
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CC RESO. NO. 95-249
PAGE 2
2. That the City Council hereby approves the Affordable Housing
Mitigation Agreement, in substantially the form presented, between
the City of Carlsbad and Kaiza Poinsettia Corporation which will
allow Kaiza Poinsettia Corporation to financially participate in the
construction of housing units affordable to lower income
households in an off-site Combined Inclusionary Housing Project
known as the Laurel Tree Apartments.
3. That the City Council hereby authorizes the City Manager, or his
designee, to execute said agreement in substantially the form
presented and with such modifications as City Attorney deems . necessary and appropriate.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the
City Council of the City of Carlsbad, California, held on the 12th day of
SEPTEMBER , 1995, by the following vote, to wit:
AYES: Council Members Lewis, Nygaard, Kulchin, Finniia, Ha.11
NOES: None
mm: None
ABSTAIN: None
Mayor
aQ&ac?
Aletha L. Rautenkranz
City Clerk
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EXHIBIT 2 i
HOUSING COMMISSION RESOLUTION NO. 95003 j
A RESOLUTION OF THE HOUSING COMMISSION OF THE 1 CITY OF CARLSBAD, CALIFORNIA TO RECOMMEND
APPROVAL OF AN AFFORDABLE HOUSING
MITIGATION AGREEMENT BETWEEN THE CITY OF
CARLSBAD AND KAIZA POINSETTIA CORPORATION
WHEREAS, Kaiza Poinsettia Corporation has a requirement to provide
housing units affordable to lower income households within the southwest quadrant of
the City; and,
WHEREAS, Kaiza Poisettia Corporation has expressed a desire to financially
participate in a Combined Inclusionary Housing Project known as the Laurel Tree
Apartment Project to satisfy the requirement to provide housing affordable to lower
income households; and,
WHEREAS, the Laurel Tree Apartment Project satisfies the City of
Carlsbad’s identified criteria for an acceptable Combined Inclusionary Housing
Project.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing
Commission of the City of Carlsbad, California, as follows:
1. The above recitations are true and correct.
. . . .
. . . .
. . . .
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HC RESO. NO. 95-003
PAGE 2
2. That the Housing Commission hereby recommends City Council
approval of the Affordable Housing Mitigation Agreement, in
substantially the form presented to the Housing Commission, between
the City of Carlsbad and Kaiza Poinsettia Corporation which will allow
Kaiza Poinsettia Corporation to financially participate in the
construction of housing units affordable to lower income households in
an off-site Combined Inclusionary Housing Project known as the Laurel
Tree Apartments.
3. That the Housing Commission hereby recommends to the City Council
that the City Manager, or his designee, be authorized to execute said
agreement in substantially the form presented and with such
modifications as City Attorney deems necessary and appropriate.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the
Housing Commission of the City of Carlsbad, California, held on the 9th day of
March, 1995, by the following vote, to wit:
AYES:
NOES:
Vice-Chairperson Calverley, Commissioners: Scarpelli,
Escobedo, Noble, Rombotis & Rose.
Commissioners: Wellman & Sato.
ABSENT: Chairperson Avis.
ABSTAIN: None.
ATTEST:
Evan Becker,
Housing aud Redevelopment Director
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Recording Requested by:
City of Carlsbad
When Recorded Mail to:
City of Carlsbad City Clerk's Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, California 92008
AFFORDABLE HOUSING MITIGATION AGREEMENT
THIS AFFORDABLE HOUSING MITIGATION AGREEMENT ("Agreement") is entered into as of 5CP-reMclQx I4 1995, by and among 'the CITY OF CARLSBADr a municipal corporation ("City") and KAIZA POINSETTIA CORPORATION, a California Corporation ("Kaiza"); with regard to the following facts:
A. This is an affordable housing mitigation agreement entered into pursuant to Chapter 21.85 of the Carlsbad Municipal Code ("Code").
B. Chapter 21.85 and 21.86 of the Code establish requirements for providing housing that is restricted to and affordable by lower-income households for all approved residential units. These requirements are generally referred to as "Inclusionary Housing Requirements."
C. Kaiza is the owner and developer of certain real property legally described on attached Exhibit "A" that is located in Local Facilities Management Zone 9 of City ("Kaiza Property"). The Kaiza Property is the subject of and has received all discretionary approvals from City for a Master Plan (MP-175(D)) commonly known as Poinsettia Shores Master Plan, General Plan Amendment, GPA 91-05, Local Control Plan, LCPA 91-02 and Local Facilities Management Plan, LFMP 87-09(A), as contained in City Council Resolution No. 94-29 and Ordinance No. NS-266.
D. Pursuant to Chapter 21.85 and 21.86 of the Code and the approvals and conditions referred to in Recital C above, Kaiza must provide housing units restricted to and affordable to lower-income households in an amount equal to twenty percent (20%) of the "Base Residential Units" as defined in Chapter 21.85 and 21.86 of the Code approved for developed on the Kaiza Property. It is estimated that this requirement will be ninety (90) but a final determination of the total number of affordable units required will be based on the actual maximum number of units approved for development on the Kaiza Property.
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(90) but a final determination of the total number of affordable units required will be based on the actual maximum number of units approved for development on the Kaiza Property.
E. Laurel Tree Investment Company, a California limited partnership (YLaurel Tree"), is the owner of certain real property legally described on attached Exhibit 'IB'l that is located in Local Facilities Management Zone 5 of City ("Laurel Tree Apartment Property"). Metropolitan Area Advisory Committee on Anti-Poverty of San Diego, Inc. (%AACII), has acquired an option (llOptionV') to acquire the Laurel Tree Apartment Property and intends to develop it only with residential units that are restricted to and affordable by lower-income households in accordance with the Code. Exhibit "Cl1 attached hereto outlines the unit mix and affordability levels of MAAC's intended development of the Laurel Tree Apartment Property.
F. Pursuant to Code Sections 21.85.110 and 21.85.120(f), City will allow a developer that owns real property that is subject to the Inclusionary Housing Requirements to participate in a Combined Inclusionary Housing Project where units are constructed and operated at an alternative development site within the same quadrant of City or contiguous quadrants if the Combined Inclusionary Housing Project is located on the quadrant boundary.
G. Both the Kaiza Property and the Laurel Tree Apartment Property are located within the Southwest Quadrant of the City, and the Laurel Tree Apartment Property generally conforms with the provisions for location criteria for affordable housing projects as described in Code Section 21.85.120.
H. Kaiza and City desire for Kaiza to meet its affordable housing obligation to City and to comply with its applicable Tentative Subdivision Map conditions with respect to the Kaiza Property by participating in the Combined Inclusionary Housing Project proposed for the Laurel Tree Apartment Property through a participation payment to MAAC for the development of that project as provided for,in that certain Agreement and Escrow Instructions between Kaiza and MAAC dated as of 1995, a copy of which is attached hereto as Exhibit I'D" (VIAAC'AgreementlV).
NOW THEREFORE, in consideration of the foregoing and for other valuable consideration, Kaiza and City agree as follows:
1. SATISFACTION OF KAIZA'S INCLUSIONARY HOUSING
REQUIREMENTS AND TENTATIVE MAP CONDITIONS
Kaiza shall fully satisfy the Inclusionary Housing Requirements applicable to the Kaiza Property as set forth in the Code by paying to MAAC pursuant to the MAX Agreement (or to City
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031495 (1) 148-147 2
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or its designee as hereafter provided) the "Participation Payment" as defined in the MAAC Agreement, which pursuant to the MAAC Agreement shall be not less than One Million Eight Hundred Forty-Five Thousand Dollars ($1,845,000).
The Participation Payment represents the participation by
Kaiza that is necessary to assist in the production of ninety (90) restricted housing units to meet Kaiza's inclusionary housing requirement based on the intended development of the Kaiza Property. If the actual development of housing units on the Kaiza Property results in a restricted housing obligation applicable thereto that is: (a) less than ninety (90) units then that difference may be retained by MAAC for MAAC to offer to third parties in accordance with Chapter 21.85 of the Code; or (b) more than ninety (90) units, then Kaiza must fully satisfy the Inclusionary Housing Requirements as to those excess units in accordance with the Code.
Kaiza shall also fully satisfy all conditions imposed by City relative to Inclusionary Housing on the Poinsettia Shores Master Plan MP-175(D) ("Conditions") by entering into this Agreement and by fully satisfying the Inclusionary Housing Requirements applicable to the Kaiza Property in accordance with this Agreement. If Kaiza or its successor-in-interest does not perform according to the terms of this Agreement, Kaiza or its successor-in-interest will not have satisfied the Conditions of Approval of the Poinsettia Shores Master Plan (MP-175(D)), and City may use any or all remedies available to it with respect to the Kaiza Property and its failure to satisfy its Conditions of Approval.
2. ALTERNATE SATISFACTION OF OBLIGATION BY KAIZA
In the event, prior to Kaiza's payment of the Participation Payment to MAAC pursuant to the MAAC Agreement: (i) MAAC defaults under the MAAC Agreement; (ii) MAAC defaults under the Option; (iii) the Option terminates; (iv) MAAC withdraws its application to City for discretionary project approvals as to the Laurel Tree Apartment Property without refiling an application therefor or City denies that application; (v) MAAC is unable to obtain a construction loan for its development of housing that
meets the Inclusionary Housing Requirements on the Laurel Tree Apartment Property by June 30, 1997; ,or (vi) the Low-Income Housing Tax Credits relating to affordable housing projects ("Tax Credits") are not allocated to MAAC for the Laurel Tree Apartment Property after no more than two attempts to receive an allocation, then Kaiza shall fully satisfy the Inclusionary Housing Requirements applicable to the Kaiza Property and the Conditions by paying directly to the City or City's designee for application to the affordable housing project on that certain real property legally described on attached Exhibit "E" known as "La Terraza," a total amount ("La Terraza Payment") equal to the number of units which are Kaiza’s Inclusionary Housing Requirement times an amount per unit established by the City Council. If the MAAC Agreement terminates or any of the above events (i) through (vi) should occur, then Kaiza shall cause the
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security provided by Kaiza under the MAX Agreement to be delivered to City, which City shall hold as security for Kaiza's payment obligations provided for in this Paragraph. Kaiza shall secure the difference between the amount of the security provided by Kaiza under the MAAC Agreement and the amount of the La Terraza Payment to City or City's designee with a form of security acceptable to the City. City may extend the time within which Kaiza may make the alternate payment in City's sole discretion.
3. NO FUTURE OBLIGATIONS OF KAIZA
Except as provided for in this Agreement, Kaiza shall have no responsibility or any other obligation whatsoever as to the Inclusionary Housing Requirements or the Conditions for the Kaiza Property or as to the financial agreements for the development and construction of the affordable housing project on the Laurel Tree Apartment Property or any other project or the process for obtaining discretionary approvals from City for said projects. As additional consideration for City's entry into and performance of this Agreement, Kaiza waives any right to pursue other options or provisions of Chapter 21.85 of the Code in satisfying its affordable housing obligation as to the Kaiza Property.
4. INDEMNIFICATION
Kaiza shall defend, indemnify and hold harmless City and its officers, employees and agents from any claim or liability arising our of Kaiza's actions in carrying out the terms and conditions of this Agreement except for any such actions arising out of City's sole negligence, breach of contract or willful misconduct.
5. CONTRACT ADMINISTRATOR
Kaiza and City each designate its Contract Administrator, who is the individual listed below as authorized by it to represent it in the routine administration of this Agreement. City's Contract Administrator is authorized to extend the time within which Kaiza is required to perform any provision of this Agreement, and/or waive any technical default in the performance of this Agreement. Either party may change its Contract Administrator by giving written notice of that change to the other party.
FOR CITY: City Manager
FOR KAIZA: Ms. Norika Saiga
6. BINDING EFFECT: ASSIGNMENT
This Agreement shall be binding upon Kaiza and City and their respective successors-in-interest. Kaiza shall not have the right to assign this Agreement or any interest or right hereunder without the prior written consent of City, which consent may be withheld in City's sole and absolute discretion. Notwithstanding the foregoing, Kaiza shall not need City's consent to an assignment or other transfer that is made in
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connection with a transfer of the Kaiza Property after Kaiza has fully satisfied the Inclusionary Requirements applicable to the Kaiza Property as
occurring: (i) Housing provided in Paragraph 1 or 3 hereof; or (ii) prior to Kaiza's payment of the Participation Payment so long as such transfer is made either to: (a) an entity that is directly or indirectly owned or controlled by Kaiza; or (b) a third party that has financial capability that is approximately equivalent to or greater than Kaiza's current financial capability.
7. ATTORNEYS' FEES AND COSTS
In the event of any controversy, claim or dispute between or among Kaiza and City arising out of or relating to this Agreement or breach thereof, the prevailing party shall be entitled to recover from the losing party reasonable expenses, attorneys' fees and costs.
8. SEVERABILITY
In the event any limitation, condition, restriction, covenant or provision contained herein is held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be and remain in full force and effect.
9. NOTICES
Any notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the party at the address set forth below. Addresses for notice may be changed by written notification thereof to the other party.
TO CITY:
City of Carlsbad Housing and Redevelopment Department Attn: Director 2965 Roosevelt Street, Suite B Carlsbad, California 92008-2389
TO Kaiza:
Kaiza Poinsettia Corporation Attn: Ms. Norika Saiga 7220 Avenida Encinas, Suite 200 Carlsbad, California 92009
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0314% (1) 148-147 5
10. INTEGRATED AGREEMENT
This Agreement constitutes the entire agreement among the parties and no modification hereof shall be binding unless reduced to writing and signed by all parties hereto.
11. APPLICABLB LAW
All questions pertaining to the validity and interpretation of this Agreement shall be determined in accordance with the laws of the State of California applicable to contracts made and to be performed within the State of California.
12. RECORDATION
This Agreement shall be recorded in the Official Records of San Diego County, California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of , 1995.
APPROVED AS TO FORM: CITY OF CARLSBAD, A Municipal Corporation
RONALD R. BALL City Attorney By: RAY PATCHETT City Manager
KAIZA POINSETTIA CORPORATION, A California Corporation
By: Printed Name: Norika Saiga Title: President
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031495 (1) 148-147 6
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STATE OF CALIFORNIA ) ) ss. COUNTY OF 1
On before me,
I personally appeared
I personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they- executed the same in his/her/their authorized capacity(ies), and that by.his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
STATE OF CALIFORNIA ) ' ) ss. COUNTY OF 1
On before me,
I personally appeared
I personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
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031495 (1) 148-147 7
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STATE OF CALIFORNIA 1 ) ss. COUNTY OF 1
On before me,
I personally appeared
I personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
STATE OF CALIFORNIA 1 ) ss. COUNTY OF i
On before me,
? personally appeared
I personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
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EXHIBIT "A"
LEGAL DESCRIPTION OF KAIZA PROPERTY
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031495 (1) 148-147
EXHIBIT "A" A-l
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03/,15i95 10: 36 e6.m 931 8386 K.41 Z.4 PO ISSET=
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ORDER NO. 1110415-22
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:
LOT 79 OF CARLSBAD TRACT 85-14 PHASE 1, (BATIQUITOS LAGOON EDUCATIONAL
PARK), IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA PER MAP NO. 11616, FILED IN THE OFFICE OF THE RECORDER IN THE COUNTY OF SAN DIEGG, STATE OF CALIFORNIA ON SEPTEMBER 12, 1986, EXCEPTING THEREFROM THE FOLLOWING DESCRIBED REAL PROPERTY:
BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 46 OF SAID MAP NO. 11616, SAID CORNER BEING A POINT ON THE SOUTHERLY LINE OF LOT 79; THENCE S3UTH 37O10'20" WEST A DISTANCE OF 44.95 FEET; THENCE NORTH 25O41'07" WEST A DISTANCE OF 4.38 FEET; THENCE NORTH 42O21'43" EAST A
DISTANCE OF 43.13 FEET TO THE POINT OF BEGINNING.
T:O2/16/95 09:12:53 V: 1 / : : JL 00 PAGE 9
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- - A : L.‘.. -- __._’ .:- ,_(A- I --I- -2x,
03/ 15195 10:35 ~SltL931 8386
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K.iIZ.4 P0INSETTI-h
- c- - --L--i .-.- ‘2.. , ---__--_-.’ _I..-. - , --.’ _._L --;-. ,.- _ 03!15/95 lo:38 e61%q31 8386 K.4lZ.i POISSETTU t&O06 __-. .
ORDER NO. 1110420'-22
BEGINNING AT THE MOST EASTERLY CORNER OF SAID LOT 1; THENCE ALONG THE EASTERLY LINE THEREOF NORTH l.*36'13" WEST 344.61 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTHERLY ALONG THE EASTERLY LINE OF SAID
LOT 1, SOUTH lO36'13" EAST, 241.75 FEET; THENCE LEAVING SAID EASTERLY
LINE NORTH 76*00'01" WEST, 150.85 FEET; THENCE SOUTH 19O47'34" WEST,
30.15 FEET; THENCE SOUTH 65O38'13" WEST, 89.60 FEET TO A POINT ON A 326.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THE CENTER OF WHICH
BEARS SOUTH 65O15'48" WEST; THENCE NORTHWESTERLY ALONG SAID CURVE
46.99 FEET THROUGH A CENTRAL ANGLE OF 9O15'34" TO A POINT OF COMPOUND CURVE ON A 826.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THE CENTER OF WHICH BEARS SOUTH 57*00'14" WEST; THENCE NORTHWESTERLY ALONG SAID
CURVE 255.91 FEET THROUGH A CENTRAL ANGLE OF 17°45'06"; THENCE NORTH 16*42'22" EAST, 370.32 FEET; THENCE NORTH 64O12'22" EAST, 149.00 FEET TO A POINT ON‘THE NORTHEASTERLY LINE OF SAID LOT 1; THENCE SOUTHERLY ALONG SAID LINE SOUTH 25*47'38" EAST, 422.00 FEET TO THE TRUE POINTOF BEGINNING.
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03/15i 93 10:3i BSI&931 8386 Ii.1 I z.1 P0~E-r-1 @.I005
ORDER NO. 1110420-22
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LEGAL DESCRIPTION , .
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:
THAT PORTION OF LOT 1 OF PARCEL MAP NO. 13653, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANtJARY 31, 1985 AS FILE NO. 85-033316 OF OFFICIAL RECORDS, DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST EASTERLY CORNER OF SAID LOT 1; THENCE ALONG THE
EASTERLY LINE THEREOF NORTH 1*36'13" WEST 344.61 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTHERLY ALONG THE EASTERLY LINE OF SAID LOT 1, SOUTH lO36'13" EAST, 241.75 FEET; THENCE LEAVING SAID EASTERLY LINE NORTH 76*00'01" WEST, 150.85 FEET; THENCE SOUTH 19O47'34" WEST, 30.15 FEET; THENCE SOUTH 65*38'13" WEST, 89.60 FEET TO A POINT ON A 326.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THE CENTER OF WHICH BEARS SOUTH 65*15'48" WEST; THENCE NORTHWESTERLY ALONG SAID CURVE 46.99 FEET THROUGH A CENTRAL ANGLE OF 8*15'34' TO A POINT OF COMPOUND CURVE CNA 826.00 FOOT RADIUS CURVE, CONCAVE SOUTHWESTERLY, THE CENTER
OF WHICH BEARS SOUTH 57OO0'14' WEST; THENCE NORTHWESTERLY ALONG SAID
CURVE 255.91 FEET THROUGH A CENTRAL ANGLE OF 17O45'06'; THENCE NORTH
16*42'22' EAST, 370.32 FEET; THENCE NORTH 64*12'22" EAST, 149.00 FEET
TO A POINT ON THE NORTHEASTERLY LINE OF SAID LOT 1; THENCE SOUTHERLY
ALONG SAID LINE SOUTH 25*47'38" EAST, 422.00 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL B:
THOSE PORTIONS OF LOTS 1 AND 2 AND THE STREET BETWEEN SAID LOTS AS SHOWN ON PARCEL MAP NO. 13653 IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JANUARY 31, 1985 AS FILE NO. 85-033316 OF
OFFICIAL RECORDS, LYING EASTERLY OF THE EASTERLY AND NORTHEASTERLY
;hJE)OF CARLSBAD TRACT 85-14 PHASE I, (BATIQUITOS LAGOON EDUCATIONAL
IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIF;)RNIA, ACCORDING TO MAP THEREOF NO. 11616, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, SEPTEMBER 12, 1986.
EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: I .
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ORDER NO. 1099016-22
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN DIEGO, AND IS DESCRIBED AS FOLLOWS:
LOTS 1 THROUGH 9, INCLUSIVE, OF CARLSBAD TRACT NO. 94-01, POINSETTIA SHORES UNIT 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 13181, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON JANUARY 26, 1995.
PAGE 17
EXHIBIT "B"
LEGAL DESCRIPTION OF LAUREL TREE APARTMENT PROPERTY
PARCEL 1:
THAT PORTION OF THE LAND DESIGNATED AS "DESCRIPTION NO. 4, 76.89 ACRES" AS SHOWN AND DELINEATED ON RECORD OF SURVEY MAP NO. 5715, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, DECEMBER 19, 1960, ALSO BEING A PORTION OF LOT "G" OF THE RANCH0 AGUA HEDIONDA, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 823, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY, NOVEMBER 16, 1986, DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF SAID "DESCRIPTION NO. 4, 7689 ACRES"; THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL NORTH 71'35'51" EAST 676.82 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID NORTHERLY LINE NORTH 71'35'51" EAST 560.34 FEET TO A POINT ON THE EASTERLY LINE OF SAID DESCRIPTION NO. 4; THENCE FOLLOWING ALONG SAID EASTERLY LINE, SOUTH 13'36'08" WEST 5.00 FEET TO A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 570.00 FEET; THENCE SOUTHERLY 845.02 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 84'56'26"; THENCE SOUTH 71'20'18" EAST 301.37 FEET TO A POINT OF CUSP AND THE BEGINNING OF A NON-TANGENT CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 510.00 FEET TO WHICH A RADIAL LINE BEARS NORTH 14°00'09" EAST; THENCE LEAVING THROUGH A CENTRAL ANGLE OF 49'04'27"; THENCE SOUTH 54,*55'42" WEST 354.40 FEET TO THE BEGINNING OF A NON-TANGENT CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 1349.00 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 3'35'45"; THENCE NORTH 38"40'03" WEST 200.00 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 1451.00 FEET; THENCE NORTHERLY 732.93 FEET ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 28'56'28" TO THE TRUE POINT OF BEGINNING.
THE ABOVE DESCRIBED PARCEL OF LAND CONTAINS 11.264 ACRES, MORE OR LESS.
PARCEL 2:
Easements for roadway and utility purposes over those certain strips of land designated as "60.00 foot easement and 66.00 foot easement reserved for roadway and utility purposes" as shown on Record of Survey Map No. 5715, filed in the Office of the County Recorder of San Diego County, December 19, 1960, being a portion of Lot "G" of the Ranch0 Agua Hedionda in the County of San Diego, State of California, according to Map thereof No. 823, filed in the Office of the County Recorder of San Diego County, November 16, 1896.
Excepting from said 60.00 foot strip that portion which lies within Parcel 1.
The easements herein described are hereby declared to be appurtenant to and for the use and benefit of the present and future owners of all or any portion of "Description No. 4, 76.89 Acres" as shown and delineated on said Record of Survey Map No. 5715.
EXHIBIT "B" B-l
h
EXHIBIT "C"
UNIT TYPE
LAUREL TREE APARTMENTS UNIT MIX AND UNIT MIX AND AFFORDABILITY LEVELS
1 Bedroom
2 Bedroom
3 Bedroom
4 Bedroom
TOTAL: 138
NUMBER OF UNITS
27
39
45
27
* Area Median Income, San Diego County
EXHIBIT "C" C-l
RESTRICTED AND AFFORDABLE TO HOUSEHOLDS WITH INCOMES NOT EXCEEDING
60% of AMI"
60% of AMI*
60% of AMI*
60% of AMI"
BB\KAli!A.OOl
0314% (1) 148-147
.
EXHIBIT "D"
MAAC AGREEMENT
EXHIBIT "D" D-l
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AGREEMENT AND ESCROW INSTRUCTSONS (Kaiza)
This Escrow Agreement (the f'Agreementlf) is made as of 1995 by and between Metropolitan Area Advisory
Committee on Anti-Poverty of San Diego County, Inc. ("PI&AC") and Kaiza Poinsettia Corporation, a California corporation (ltKaizarl) in consideration of the following:
RECITAL.@
A. Kaiza owns certain real property in the City of Carl&ad, County of San Diego, California (the WICity~~), which is more particularly described on Exhibit2 attached hereto and incorporated herein by tzhis reference (the NKaiaa Property"). Kaiaa desires to build a residential subdivision on the Kaiza Property.
B. MAX is the optionee under that certain Amended and Restated Option Agreement dated February 11, 1995 by and between Laurel Tree Investment, L.P., a California Limited Partnership, as optionor, and MAAC, as optionee (the llOption Agreement"), pursuant to which M&AC! has the option to purchase certain real property located in the City, which real property is more particularly described on Exhibit B attached hereto and incorporated herein by this reference (the IfProject Property'!). MAAC proposes to purchase the Project Property and to develop it with an apartment project containing at least 135 units restricted and affordable to low-income households in accordance with Chapter 21.85 of the Carlsbad Municipal Code (the "Project").
C. Pursuant to Chapter 21.85 of the Carlsbad Municipal Code, Kaiza must provide housing units restricted and affordable to lower income households in connection with the development of khe Kaiaa Property. Kaiza and the City have entered into that certain Affordable Housing Mitigation Agreement dated 1995 (the ltInclusionary Agreement"), in which the City has agreei that Kaiza may satisfy its inclusionary housing obligations with respect to the Kaiza Property by providing certain sums specified in this Agreement (as defined below, the "Participation Payment") to MAAC for the development of the Project.
MAAC intends to form a limited partnership (the llPartnersh?p") of which it will be a general partner to acquire the Project Property and to develop the Project. MARC intends to make the Participation Payment that it receives from Kaiza available to the Partnership either in the farm of a contribution
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or a loan to fund the acquisition of the Project Property and the development of the Project.
E. MAAC intends to apply to the California Tax Credit Allocation Committee (IITC!JUZ~~) for a reservation of low-income housing tax credits (the "Tax Credits!') for the Project. The Tax Credits will belong to the Partnership and MARC intends to admit to the Partnership one or more irivestor limited partners to whom the Tax Credits will be allocated in exchange for their participation in the Partnership.
F, Kaiaa has agreed to pay the Participation Payment to M.AAC provided that MaAC or the Partnership uses the Participation Payment in accordance with Chapter 21,85 of the Carl&ad Municipal Code and provided that Kaiza's inclusionary housing obligations to the City are fully satisfied thereby.
G. MAAC and Kaiza desire to enter into this Agreement to set forth the terms and conditions under which MAAC will receive the Participation Payment from Kaiza.
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the amount and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Defiqitione, Capitalized terms ueed in thie Agreement and not otherwise defined in this Agreement shall have the meanings given to them below.
(a> tfE6crow Agent" shall mean First American Title Insurance Company, 411 Ivy Street, San Diego, California 92112, telephone (619) 238-1776.
lb) lmEscrow’t shall mean the escrow opened with Escrow Agent in accordance with the terms of this Agreement,
(4 "Construction Loan Closing Date" shall mean the date that the deed of trust securing the construction loan from the Project's primary construction lender is recorded in the Official Records of San Diego County, California.
(4 "Participation Payment” shall equal $1,845,000; provided, however, that such amount is predicated on MAaC also receiving approximately $500,000 from the California Home Fund Program or other sources for use in connection with the Project (the "HOME Fund Amountli), If MAAC does not receive any of the HOME Fund Amount on or before the Construction Loan Closing Date, then the Participation Payment shall be increased
2.
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by $106,666 ($1,185,18 per unit times 90 units) to $1,951,666. If MAX receives some but not all of the HOME Fund Amount by that date, then the Participation Payment shall be increased in proportion to the amount of the deficit (based upon the assumption that the HOME Fund Amount shall equal $500,000~00)1 If MAAC receives all or any part of the HOME Fund Amount after the Construction Loan Closing Date, then MAAC shall promptly repay all or the applicable portion of the increased amount of the Participation Payment to Kaiza.
(e) llParticipation Payment Bala&el? shall mean that amount which equals the Participation Payment less one-half (l/2) of all costs of the Escrow, including, without limitation, the Escrow Agent's fee. All interest accruing on the Participation Payment Balance (including, without limitation, the Deposit) prior to the Release Date (defined below) shall accrue for the benefit of Kaiza. In addition to the Participation Payment, Kaiza shall pay one-half (l/2) of all costs of the Escrow, including, without limitation, the Escrow Agent's fee. All interest accruing on the Participation Payment Balance (including, without limitation, the Deposit) from and after the Release Date shall accrue for the benefit of MAAC.
(f) WLetter of Credit" shall mean one or more irrevocable letter(s) of credit in favor of MAAC in the aggregate amount of $1,816,666, issued by a commercial bank reasonably acceptable to WAC, and in a form reasonably acceptable to MAAC, Without limiting the generality of the foregoing, the Letter of Credit shall (i) be transferable to the City or the Partnership and (ii) have an initial term of no less than one (1) year, and shall thereafter be automatically renewed for periods not less than one (1) year each, until the Letter of Credit is either drawn upon, or replaced with cash, all in accordance with the terms hereof. No later than thirty (30) days prior to the expiration of such Letter of Credit, Kaiza shall cause to be delivered to MAAC evidence reasonably substantiating the fact that such.Letter of Credit has been extended for at least one
more year. If Kalza fails to cause MAAC to be provided such evidence prior to such date, then upon receipt of written certification of such failure from MAX, Escrow Agent shall immediately release the Letter of Credit to MARC and MAAC may, after giving five (5) days' prior written notice to Kafza demanding evidence of such renewal, draw down on the Letter of , Credit prior to its expiration and deposit the proceeds thereof into Escrow. Any proceeds so deposited, up to the amount of the Participation Payment (aa it may be adjusted pursuant to Paragraph l(d), above) shall be handled by Escrow Agent in the manner provided herein with respect to the Participation Payment, and any balance shall be immediately paid to Kaiza.
3.
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(57) tlRestrictive Covenants" shall mean such covenantS and restrictions as the City may require to be recorded against the Project Property to restrict its use to housing affordable to lower income households in accordance with Chapter 21.85 of the Carlsbad Municipal Code.
2. EscrQu. Immediately upon the later of (i) the execution of this Agreement by Kaiza and MAAC, and (ii) the execution of the Inclusionary Agreement by Kaiza and the City, the parties shall open the Escrow with Escrow Agent in accordance with the terms of this Agreement, Escrow Agent shall deposit all funds delivered into the Escrow (including the proceeds of the Letter of Credit) in an interest bearing account,
3, &4..iveries bv Kaiza &J&Q Escrow. Kaiza shall make the following deliveries into escrow:
(a) P _ ' )w Within three (3) business days after the opening of Escrow, iaiaa shall deposit $135,000 (the TIDeposit") into Escrow, which deposit shall be made in cash or by Kaiaa’s company check or by wire transfer of funds. Escrow Agent shall deposit the Deposit into an interest bearing account, which interest shall accrue in accordance with the terms of Paragraph 1(e), above.
(b) Deposit of Parti-on Pdvment. No later than one (I) business day prior to the Construction Losn Closing Date (but not before June 1, 1995), Kaiaa shall deposit with Escrow Agent the Participation Payment (less the amount of the Deposit which shall be applied to the Participation Payment), which deposit shall be made in cash or by cashier's or certified check, or by wire transfer of funds. Escrow Agent shall deposit such funds into an interest bearing account, which interest shall
accrue in accordance with the terms of Paragraph l(e), above.
4, Letter of Credit.
(a) Kaiza‘s Deli sv_off Credit t,Cc .
mor&&iJ&iJof On or before June 1, 1995, Kaiza shall deliver the Letter of Crldit into Escrow. upon Escrow Agent's receipt of the entire Participation Payment in accordance with the terms of Paragraph 3 above, Escrow Agent shall return the Letter of Credit to Kaiaa. In the went that Kaiza does not deliver the Participation Payment to Escrow Agent prior to tha Construction Loan Closing Date, then Escrow Agent shall relaasle the Letter of Credit to MAAC and MARC shall, after giving five (5) days' prior written notice to Kaiza demanding the Participation Payment, draw down on the Letter of Credit before its expiration and deposit the proceeds thereof into the Escrow. The proceeds of the Letter of Credit, together with the Deposit,
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4.
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shall constitute the Participation Payment and shall be handled by Escrow Agent in the manner provided herein with respect to the Participation Payment,
UN Cash-Alter at’ Kaiza shall have the right at any time, in lieu of delivekzhe Letter of Credit, to deposit the plum of $1,816,664 into Escrow, which deposit shall be made in cash or by cashier's or certified check cx by wire . transfer of funds, Escrow Agent ahall deposit these funds into an interest bearing account, which interest shall accrue in accordance with the terms of Paragraph l(e), above. If at the time of such deposit Kaiaa has already delivered the Letter of Credit into Escrow, then the Letter of Credit shall be immediately returned ta Kaiza. If Kaiza has made the above deposit, then Kaiaa may deliver the Letter of Credit (which Letter of Credit shall comply with all of the terms and conditions of this Agreement) into Escrow and the above deposit, and all interest to which Kaiza is entitled in accordance with the terms of this Agreement, shall be immediately returned to Kaiza. Such cash mm (if any), together with the Deposit, up to the amount of the Participation Payment (as it may be adjusted pursuant to Paragraph l(d), above) shall be handled by Escrow Agent in the manner provided herein with respect to the Participation Payment, and any balance shall be immediatzely paid to Kaiaa.
5, me of Funds bv MaBc. MAAC agrees that it shall use the Participation Papent in aciordance with Chapter 21.85 of the Carlsbad Municipal Code to satisfy Kaiza's inclusionary housing requirements to the City.
6. Rdease of Paxtieiwxtion Pavment Balance. Escrow Agent shall release the Participation Payment Balance to MAAC or to the Partnership on the date (the "Relea86 Date!') which is the later of: (It) the date that the Restrictive Covenants are recorded (if any are required); and (ii) the Construction Loan Closing Date,
7. Default b3aq.
BY PLACING THEIR INITIALS AT THE END OF THIS PARAGRAPH, KAIZA AND MAAC AGREE THAT IF KAIZA DEFAULTS UNDER THIS AGREEMENT PRIOR TO KAIZA'S DELIVERY OF THE LETTER OF CREDIT INTO ESCROW (OR CASH IN LIEU THEREOF, IN ACCORDANCE WITH PARAGRAPH 4(b), ABOVE), MAAC'S SOLE AND EXCLUSIVE REMEDY SHALL BE TO OBTAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND NOT AS A PENALTY, THAT BECAUSE OF THE NATURE OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX MAAC'S ACTUAL DAMAGE IF SUCH A DEFAULT OCCURS AND THAT THEREFORE THE DEPOSIT SHALL BE PRESUMED TO BE THE AMOUNT OF DAMAGES MAAC
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WOULD SUSTAIN BY REASON OF SUCH A DEFAULT AND REPRESENTS A REASONABLE ESTIMATE OF THOSE DAMAGES PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1673. THROUGH 1681, INCLUSIVE.
MAAC'S INITIALS KAIZA'S INITIALS
In the event that Kaiza defaults under this Agreement at any time after Kaiza delivers the Letter of Credit into Escrow (or cash in lieu thereof, pursuant to Paragraph 4(b), above), MAAC shall have all rights and remedies provided to it by law or equity including without limitation the right to eeek specific performance of Kaiza’s obligations hereunder. In any event, and without limiting any other right or remedy of MAAC, upon a default by Kaiza (including, without limitation, any default as described in the succeeding eentence), Escrow Agent shall release the DegosLt to WC. A default by Kaiza under this Agreement shall be deemed to have occurred if the Bank fails to honor the Latter of Credit in full for any reason whatsoever except the expiration thereof in accordance with its tsrme.
8. Default bv -vents of Tern MAW defaulta under this AgreeAent* (i) (ii) MAAC defai2.t; u$Ar the Option Agreement; (iii) the Option'Agreement terminates for any reason) (iv) MAAC is unable to secure the necessary discretionary Project approvals from the City; (v) MAAC is unable to 61ecure the Tax Credits for the Project; (vi) MAAC does not acquire the Project Property; (vii) the Ccnstruction Loan CloBing Date and
the recording of the Restrictive Covenants (if any are required) do not occur by December 31, 1996; or (viii) the City defaults under the Inclusionary Agreement, then upon receipt of written certification of such event from Kaiza, Escrow Agent shall
immediately deliver to Kaiza (or its designee) all funds deposited into Escrow by Kaiza and all interest accrued thereon and the Letter of Credit, if any, and this Agreement shall automatically terminate.
9. I Effect of Chanaes in Develonment of Ku grouartv. The amount of the Participation Payment assumes that the development of the unrestricted housing units on the Kaiza Property obligates Kaiza to participate in ninety (90) reetrictad houging units and the Participation Payment will not increase or decrease if the actual development of unrestricted housing units on the Kaiza Property results in a reetricted housing obligation applicable thereto that is more or less than ninety (90) uniter. If that obligation is less than ninety (90) unite, then, because the amount of the Participation Payment is based on ninety (90) rsetricted housing units, Kaiza will have available to it one or
6.
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more Excess Restricted Units (the term "Excess Restricted Units" as used herein means ninety (90) restricted housing units less the actual number of restricted housing units required to be provided in connection with the development of the Kaiza Property) which may be used to satisfy certain inclusionary housing obligations with respect to other residential developments in the City, subject to the City’s approval, The rights to the Excess Restricted Units may be retained by Kaiza for use in connection with its development of other property in the City, or Kaiza may offer the Excess Restricted Units to MAAC for MAAC to offer to third parties in accordance with Chapter 21.85 of the Carlsbad Municipal Code. in the event that MAAC agrees to participate in the sale of the rights to the Excess Restricted Units to a third party, and such sale actually occurs, MAX shall pay to Kaiza the consideration received by PIAN for those units within three (3) business days afcar MAAC's receipt thereof; provided, however, that nothing contained herein shall obligate MAAC in any manner to participate in or be responsible for the sale or offer of the Excess Restricted Units.
10. Rewwations, Warranties and Covenante of Kaiza. Kaiza acknowledges and agrees that without the Participation Payment, MAAC will not have sufficient funds to develop the Project, that from and after the date on which Kaiza delivers the Letter of Credit into Escrow [or cash in lieu thereof, pursuant to Paragraph 4(b), above), MAAC will proceed in reliance on Kaiza's agreement to pay the Participation Payment in accordance with the terms of this Agreement and that MAZiG's decision to acquire the Project Property and to go forward with the Project will be based in part on such reliance. Without limiting the foregoing, Kaiza acknowledges and agrees that in its application to TCAC for the Tax Credits, MAAC intends to show the Participation Payment as a source of funds for the development of the Project.. Kaiza hereby represents and warrants to and agrees with MAAC as follows:
(a) Orqnization of Kai.w Kaiza i8 a corporation duly organized and existing under the laws of the State of California, enter into, and has the full power and authority to deliver, perform and carry out the terms of this Agreement. The execution and delivery of this Agreement and the performance by Kaiza of its obligations hereunder will not violate or constitute an event of default under the terms or provisions of any agreement, document or instrument to which Kaiza is a party or by which Kaiza is bound.
(b) &&&ritv to Enter Lnto Aareeme All proceedings required to be taken by or on behalf of?&za to authorize it to enter into this Agreement have been duly and properly taken, and this Agreement is the valid and binding
7.
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obligation of Kaiza and is enforceable against Kaiza in accordance with ita terms,
(c) Survival. All representations, warranties and covenants made by Kaiza in this Agreement shall be true upon the execution of this Agreement and shall survive the release of the Participation Payment Balance to MAAC.
II. Rerzesentations and Warranties of I%&$& MAAC hereby represents and warrants to and agrees with KaiAa aa follows:
(a) Oraanizati.on of WC MAAC is a nonprofit corporation duly organized and existing kder the laws of the State of California, enter into, and has the full power and authority to deliver, perform and carry out the terms of this Agreement. The execution and delivery of thie Agreement and the performance by MARC of its obligations hereunder will not violate or conetitute an event of default under the terma or provisions of any agreement, document or instrument to which MAAC is a party or by which MARC is bound.
(b) Authority to Enter Into .Aareement;. All proceedings required to be taken by or on behalf of MC to authorize it to enter into this Agreement have been duly and properly taken, and this Agreement is the valid and binding obligation of MAAC and is enforceable against MAAC in accordance with its terma.
(c) Survival. All representations, warranties and covenants made by MAX in this Agreement shall be true upon the execution of this Agreement and shall survive the release of the Participation Payment Balance to MAAC.
12. Transfer of Letter of Credit to City. In the event that by mutual agreement entered into subsequent to the opening of Escrow and the deposit of the Letter of Credit into Escrow as provided for herein, Kaiza and MAAC cancel Kaiaa's obligation to deliver the Participation Payment to MAAC, then, provided that the Letter of Credit states on its face that it is transferable, MAX shall promptly assign its beneficial intereet in the Letter of Credit to the City.
13. BindinsXfti. e This Agreement shall be binding upon the parties hkreto and th&.r respective heirs, representatives, transferees, successors and assigns. KaSza shall not have the right to assign this Agreement or any interest OY right hereunder or underrths Escrow without the prior written consent of MAAC, which consbnt may be withheld in MAX's sole snd absolute discretion. Notwithstanding the foregoing, Kaiza shall
8,
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not need IQ&C's consent to an assignment or other transfer that is made in connection with a rranofer of the Kaiza Property occurring: (i) after the Deposit and the Letter of Credit or cash equivalent have been delivered fnto Escrow pursuant to Paragraphs 3(a) and 4 above; or (ii) prior to such delivery so long aa such transfer is made either to: (a1 an entity that ie directly or indirectly owned or controlled by Kaiza, or (b) one or more third party(ies) that has/have financial capability that fs equivalent to or greater than Kaiaa's current financial capability (provided that Kaiza ehall cause MAW to receive reasonable evidence substantiating such financial capability).
14. Notices. All notices required or permitted to be given hereunder shall be in writing and shall be deemed given upon (a) personal service or delivery by messenger or courier, (b) on the date shown on tli attempted delivery, followi E:
[‘return receipt aa the date of first g-deposit in the United Statee certified mail, postage prepaid, return receipt requested, (c) on the date shown on the courier's records a&the date of first attempted delivery, fo'llowing deposit with a reputable overnight courier or service, or (d) facsimile transmission (confirmation received), provided a hard 'copy of such transmission shall be thereafter delivered by one of the methods described in the foregoing (a) through (cl. :.The addresses -of the respective parties are as set forth below or such'o0@f addresses and to such other persons as the partiee may hereafter designate by written notice to the or.her’phrties hereto:
To Kaiza:
copy to :
To P&RAC:
j Kaiza Poinsettia Corporation c/o Benchmark Pacific . . . La Costa Ranch House I 2300 Alga Road i Carlsbad, CA 92009 Attn: Noriko Saiga, President .;.:: Tel. ephone ; (619) 931-1677 Fax No,: (619) 931-1946
Attn: Telephone: .Fax No.:
MA?iC Project 140 West 16th Street
($19) 474-5035
: ,”
; W6
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copy to: Ssntre Partners 600 B Street, Suite ZOO0 San Diego, CA 92101 Attn: Steve Kuptz Telephone: (619) 234-5600 Fax No.: (619) 234-7917
copy to: Riardan 6 McKinzie 300 S. Grand Avenue, 29th Floor ..Los Angeles, CA 90071 Attn: Lance Bocarsly, Esq. Telephone: (213) 229-8454 ' Fax No,: (213) 229-8550
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15. CounterW' several counterparts, .:: This Agreement may be executed in and all so executed shall constitute one agreement binding on all pa)kies hereto, notwithstanding that all parties are not signatoriesf-,@' the original or the same counterpart. : 16, JYime of EsPenck. Time is of the e8aence of Agreement.
17, yof. This Agreement
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supersedes any prior agreement, oral or written, and contains the entire agreement between the parties pertaining to the subject matter hereof.
18. +w, . I&j&is33 The prevailing party in an action tk proceeding between the'parties hereto with respect to thig Agreement and the transactiona contemplated hereby ahall be'entitled to have and recover all costs, expenses and reasonable attorneys' fees incurred in connection therewith, including any such fess and costs incurred upon any appeals. This Agreement shall be interpreted in accordance with the laws of the State of California, The
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paragraph headings of this Agreement are for cvnvenience only and are not to be used in the ifttypretation of thus Agreement.
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The undersigned Escrow Agent agrees to (i) accept the foregoing Agreement, (ii) be the escrow agent under the Agreement, and (iii) be bound-:by the Agreement in the performance of its duties as Escrow Agent; however, the undersigned will have no obligations, liabilities&r responsibilitiee under (i) this consent or otherwise, signed by t=he parties, unles@and until the Agreement, fully has been delivered to the undersigned, or (ii) any amendment to the mont unless and until the
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[Legal Description of Kaiza Property]
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RESERVED FUR ROAI?VlAY AND UTILITY pyRPOSES" , , AS SHOWN ON RECORt3 OF
MAP NO. 5715, FILED IN THE OFFICE OF THE COUNTY RECOWGR OF E@N
DIEGO COUNTY, dECE~E~--, ~ 3960, BEING A PORTION OF.LOT 'G" OT.-TtE ~ __ __---- ____ __ &+CHO Ada ~~DIo~A, 1~ ~;coEfijTy OF SAN DIEGO, STATE OF ~~F~~~&, ___ -,.- -- ___ _ d ACCORDING TO MRP THEREOF NOi- 823, FILED IN THE OFFIfs ur' -fHE L'uuP~~
RECORDER OF SAN DIEGO COUNT$,~NOVEMBER 16, 1896.
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EJUZEPTING FROM SAID 60.00 F&+RTF' TKAT f$ORTXON WHICH LIES WITHIN
PARCEL A ABOVE. ; ?..A '( _, .g _
THE EASEMENTS HEREIN DESCRIii$\'m HER&Y bECmED TO BE APhRTENm TO AND FOR THE USE AND BENEFXT OF THE PXESENT ANII) FUTVRE OW’NERS OF ?d& OR ANy PORTION OF "DESCRIqT;ON NO. 4, 76.89 ACRES" As SHOWN AND
DELINEATED ON SAID RECORD OF BURVEY MAP NO. 5715.
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EXHIBIT “E”
LEGAL DESCRIPTION OF LA TERRAZA PROPERTY
EXHIBIT "E" E-l
(Remainder Parasl) C.E. 659, M.0. 93-07 I .,
All that por$$,*:,:of parcel 2 of Parcel Map 1188, recorded: December 20, 1972, as F$,J@Mo; 340334, being a portion of Fractional Section .ip 32 Se)uth, Range 4 West, San Bernardino Meridian, being fJ$ki I’kd Catlsbad, County of San Diego, State of Califotn!a, J$q$.,~e particularly described as follows: . . . . I,, ;:.,
Beginning at-&,koufheaet corner of the above described Parcel 2: thence n+rth@rty:f&*g *he easterly line of said Parcel 2, North O*33'081t ,Easf, 6#Ip.,23 feet (record: North O'33*171t East, PM 1188), to an iqter&t,i$n 'with a line being 45.00 feet easterly and parallel to i&Is j.z.Bn$erlino of El Camino Real, as shown on Road Survey J8OOt$) $&n&e southerly along said sideline, South 37*03137'! We$, U71,:99 feet, to the beginning of a tangent 1455.00 foot radius .cur~~e, concave southeasterly, thence southwesterly along the are of.j%x# curve, through a central angle of 23'52'51~~, a distance ok 6i)6:44 feet, to an intersection with the southerly line of said~P~&ol'~2; thence easterly along said southerly line, South 89f32@2$? ,I@s,t-, 352.64 feet, (record: South 89'32'Oltl East, PM 1188), to:.$ht;fNuthea,st corner of said Parcel 2, also being the point ofib@@$jg.' :, _ ,' ):.'
This parFe1 &~$&n;q: 3.31 acres. .' . : :'!.:, ,I
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‘ROJECT l)l AP& ; I”~~?J/ILL+s= MINOR SUBDIVISION PROJECT NO.
PLAT FOR CH3~~~~$~E OF COMPLIANCE “;=“i 963. . . t
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PLAT FOR CjZy6&fwTE .OF COMPLIANCE MB& 963;;7 “6” I . WT. 2 OF i .
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EXHIBIT 4
STAFF REPORT
DATE: March 9, 1995
TO: HOUSING COMMISSION
FROM: HOUSING AND REDEVELOPMENT DEPARTMENT
SUBJECT: AFFORDABLE HOUSING MITIGATION AGREEMENT- Request for
recommendation of approval of an Affordable Housing Mitigation Agreement
between the City of Carlsbad and Kaiza Poinsettia Corporation.
I. RECOMMENDATION
That the Housing Commission ADOPT Resolution No. 95-003 RECOMMENDING
APPROVAL of an Affordable Housing Mitigation Agreement between the City of Carlsbad
and Kaiza Poinsettia Corporation which pertains to the requirement that Kaiza provide
affordable housing in connection with its development commonly known as Poinsettia Shores
(MP-175D) in the Southwest Quadrant of the City.
II. ITEM EXPLANATION
On January 4, 1994, with the recommendations of the Planning Commission, the City
Council approved MP-175(D), known as Poinsettia Shores Master Plan, a development of
Kaiza Poinsettia Corporation. The Poinsettia Shores Master Plan is located north of
Batiquitos Lagoon and east of the railroad right-of-way, in the Coastal Zone, within Local
Facilities Management Zone 9.
Affordable Housing Oblieation
As required by the Inclusionary Housing Ordinance and the Residential Density Bonus
Ordinance, Chapters 21.85 and 21.86, respectively, of the Carlsbad Municipal Code, the Poinsettia Shores development was conditioned to provide 20% of its total developed housing
units as affordable to lower-income households. Based on the approved plan, Kaiza will
provide 90 affordable housing units. Also as a condition of approval and prior to final map
approval, Kaiza must enter into an Affordable Housing Agreement with the City. The
Agreement describes specifically the method by which the inclusionary housing requirement
will be satisfied. In applying for Master Plan ‘approval, Kaiza proposed an on-site option for
satisfying their inclusionary housing requirement in Planning Area “D” of the Master Plan. A
site development plan (SDP 94-08) was proposed for the on-site affordable housing project
and has been recommended for approval by the Planning Commission. SDP 94-08 provides
for a 90 unit project that would be 100% affordable to lower-income households, thus
satisfying the Poinsettia Shores requirement. The Planning Area “D” affordable housing
project was conceived as a condominium (for sale) product but could be developed as a rental
Kaiza Poinsettia
March 9, 1995
Page 2
Agreement
apartment project. The Poinsettia Shores Master Plan also provides for the option of
satisfying the affordable housing requirement in an off-site project. If the obligation is met
through development of a project off-site, Kaiza intends to build an additional 23 market rate
housing units on Planning Area “D”, after discretionary review and approval by the Planning
Commission.
The Combined Project Option
The Inclusionary Housing Ordinance provides options for satisfying the affordable housing
obligation. The option known as a Combined Inclusionary Housing Project is defined as one
in which “some or all of the inclusionary units which are associated with one development
site are produced and operated at an alternative site or sites.” With this option, the Ordinance
anticipated that developers would combine efforts and resources in contractual relationships
to develop affordable housing. Kaiza is proposing to shift to the Combined Project option by
participating in the project known as Laurel Tree Apartments, located off Laurel Tree Lane,
a south of Palomar Airport Road in the Southwest Quadrant. The Laurel Tree Apartments
development application was submitted on January 6, 1995 and is currently being processed
through the Planning Department. Project issues, particularly road infrastructure
requirements, have been identified and the applicant will be working with staff to address
them, Also, related to the Laurel Tree Project, the Housing Commission recommended and *
the City Council approved a conditional financial commitment of $500,000 to the Project.
This commitment is conditioned upon the Project receiving its entitlement approvals and
other required financing. A description of the project is attached as Exhibit 2.
The off-site option of a Combined Project is a sensible choice for the City and developers
provided that a number of criteria are addressed by the proposed Project. Of primary concern
is that a proposed Combined Project site present advantages in its location and feasibility,
whereas the proposed on-site project presents corresponding disadvantages or feasibility
issues. The Inclusionary Housing Ordinance also establishes requirements of Combined
Projects, including the requirement that participants must be within the same quadrant.
The Affordable Housing Mitigation Agreement
The Affordable Housing Mitigation Agreement between Kaiza Poinsettia Corporation and the
City of Carlsbad is attached as Exhibit 3 to this report. As intended by the Inclusionary
Housing Ordinance, this Agreement insures that the Kaiza obligation will be satisfied in a
manner acceptable to the City Council prior to final map approval. In this case, there is a
binding agreement that Kaiza will satisfy their obligation through participation in the Laurel
Tree Apartments or make a mandatory purchase of affordable housing credits in the La
Terraza project in an amount equal to their obligation and at the specified price. If the Laurel
Tree Apartments is not successful in obtaining its City approvals or necessary financing, the
Kaiza Poinsettia Agreement
March 9, 1995
Page 3
required purchase of credits in the La Terraza Affordable Housing Project shall be
“triggered” as the method by which the affordable housing obligation will be satsified for
Kaiza.
While the relationship between the Laurel Tree Apartments developer @WAC) and Kaiza is
a private transaction between those parties, the City must be comfortable that the
relationship will effectively result in the construction of affordable housing units. The
agreement between these parties is, therefore, made an exhibit to the City’s Affordable
Housing Mitigation Agreement with Kaiza. The essence of Kaiza’s participation in the
Combined Project is further defined within in the Laurel Tree Apartments description (see
Exhibit 2) and consists primarily of a subsidy infusion of approximately $1.8 million into the
project.
Since the Affordable Housing Mitigation agreement represents an alternative to a previously
proposed on-site inclusionary project, Kaiza will be required to amend its approved Master
Plan to reflect the elimination and replacement of the on-site affordable housing component
with market rate units.
III. SUMMARY
Kaiza’s Poinsettia Shores proposal to satisfy their inclusionary housing obligation by
participating in an off-site Combined Project utilizes the flexibility of the Inclusionary
Housing Ordinance to achieve several positive outcomes. It provides needed subsidy capital
to a capable development team and greatly enhances the feasibility of a quality project at a
location that has advantages over a project proposed onsite. If the Combined Project is not
successful in receiving other necessary entitlement/permit approvals and/or financing, the
Kaiza requirement converts into financial participation, through the purchase of housing
credits, in the La Terraza Apartment project. Given the described features of the Kaiza
Affordable Housing Mitigation Agreement, staff recommends that the Housing Commission
support the agreement and recommend that the City Council approve it.
Iv. EXHIBITS
1. Housing Commission Resolution No. 95-003 approving a recommendation to the City
Council to approve an Affordable Housing Mitigation Agreement between the City of
Carlsbad and Kaiza Poinsettia Corporation.
2. Description of the Laurel Tree Apartments Combined Affordable Housing Apartment
Project.
3. Affordable Housing Mitigation Agreement between the City of Carlsbad and Kaiza
Poinsettia Corporation.
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HOUSING COibIlkIISSION RESOLUTION NO. 95003
A RESOLUTION OF THE HOUSING COMMISSION OF THE
CITY OF CARLSBAD, CALIFORNIA TO RECOMMEND
APPROVAL OF AN AFFORDABLE HOUSING
MITIGATION AGREEMENT BETWEEN THE CITY OF
CARLSBAD AND KAIZA POINSETTIA CORPORATION
WHEREAS, Kaiza Poinsettia Corporation has a requirement to provide
housing units affordable to lower income households within the southwest quadrant of
the City; and,
WHEREAS, Kaiza Poisettia Corporation has expressed a desire to financially
participate in a Combined Inclusionary Housing Project known as the Laurel Tree
Apartment Project to satisfy the requirement to provide housing affordable to lower
income households; and,
WHEREAS, the Laurel Tree Apartment Project satisfies the City of
Carlsbad’s identified criteria for an acceptable Combined Inclusionary Housing
Project.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing
Commission of the City of Carlsbad, California, as follows:
1. The above recitations are true and correct.
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2E
HC RESO. NO. 95-003
PAGE 2
2. That the Housing Commission hereby recommends City Council
approval of the Affordable Housing Mitigation Agreement, in
substantially the form presented to the Housing Commission, between
the City of Carlsbad and Kaiza Poinsettia Corporation which will allow
Kaiza Poinsettia Corporation to financially participate in the
construction of housing units affordable to lower income households in
an off-site Combined Inclusionary Housing Project known as the Laurel
Tree Apartments.
3. That the Housing Commission hereby recommends to the City Council
that the City Manager, or his designee, be authorized to execute said
agreement in substantially the form presented and with such
modifications as City Attorney deems necessary and appropriate.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the
Housing Commission of the City of Carlsbad, California, held on the 9th day of
March, 1995, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Nancy Calverley, Vice-Chairperson
Housing Commission
ATTEST:
Evan Becker, Housing and Redevelopment Director .
LAUREL TREE APARTMENTS
AF-‘RDABLE HOUSING PROPOSED F-JJECT
SUMMARY
EXHIBIT 2
PRODUCT.
The proposed project consists of 138 rental apartments. Additional amenities will
include facilities for recreational activities as well as daycare, after school and job
training/education programs.
There will be 14 one bedroom units (703 sq.ft each), 64 two bedroom units (870
sq.ft each), 46 three bedroom units (1000 sq.ft each) and 14 four bedroom units
(1200 sq.ft each).
DEVELOPMENT TEAM ,
The Development Team shall consist of the following members:
0 Landowner/Developer: Dwight Spiers
0 Non-Profit Developer: Metropolitan Area Advisory Committee (MAAC
Project)
0 Land Planner: Jack Henthorn and Associates
l Architect: Lorimer-Case
l Financial Consultant: Steve Kuptz, Sentre Partners
0 General Contractor: to be determined
.o Lender/Tax Credit Investor: California Equity Fund
The team possesses considerable development experience from both the private
and non-profit standpoint. The MAAC Project has recently completed a 144-unit
affordable housing development within the City of San Diego. This project has
already been highly acclaimed for its design quality, affordability and as a
successful public-private development effort.
SITE/LAND USE.
The Laurel Tree Apartments Project is proposed for an approximately 8.5 acre site
located South of Palomar Airport Road at College Boulevard. The site is currently
designated for office and will require a rezoning and General Plan Amendment. The
project has been submitted as a development application and will be processed
through the City’s Comprehensive Land Use Review Process prior to final approval
by the City Council.
AFFORDABILITY.
The project will be affordable to households with incomes not to exceed sixty
percent’ (60%). of the Area Median Income. Based on current income levels
provided by the U.S.. Department of Housing and Urban Development, the range
Laurel Tree Description
Page 2 -
of incomes for the project shall be approximately $15,350 to $34,740. Consistent
with the requirements of the tax credit program, the units would remain affordable
for a minimum of fifty-five (55) years.
The level and term of affordability, particularly for larger size units, meets the.
highest priority need for the City of Carlsbad as outlined with the City’s approved
Comprehensive Housing Affordability Strategy (CHAS). All units will meet the
affordability requirements of the City’s lnclusionary Housing Ordinance (CMC
Chapter 21.85). Also, the number of units will assist the City in meeting a portion
of the goal (1400 units) for providing new units as outlined within the Carlsbad
Housing Element.
FfNANCING.
A proforma for the Laurel Tree Apartment Affordable Housing project indicates that
the total development costs will be approximately $13 million. Typical of most
affordable housing projects, the financing for this project will be accomplished
through a variety of sources. Nearly one-half of the required funding will be raised
through Tax Credit Equity. It is anticipated that the remaining funds for the project
will be provided through a private bank loan, an Affordable Housing Program Loan
from the Federal-Home Loan Bank, private developer contributions, State or County
HOME funds and city assistance.
PRODUCT/ON SCHEDULE.
It is anticipated that the project will be under construction by the Spring of 1996
and construction will be completed within 13 months of the start date. According
to this proposed schedule, the units should be available for lease by the
summer/fall of 1997.
C/N FINANCIAL ASS/STANCE TO PROJECT.
A $500,000 contribution from the Low and Moderate Income Housing Set-Aside
Fund for this project has been approved by the City of Carlsbad and Housing and
Redevelopment Commission to assist in the financing.
- EXHIBIT 5
Minutes of: HOUSING COMMISSION
Time of Meeting: 6:00 P.M.
Date of Meeting: March 9, 1995
Place of Meeting: CITY COUNCIL CHAMBERS
CALL TO ORDER:
Vice-Chairman Calverley called the Regular Meeting to order at 6:OZ p.m.
PLEDGE OF ALLEGIANCE:
The pledge of allegiance was led by Commissioner Scarpelli.
ROLL CALL:
Present: Vice-Chairman Calverley, Commissioners Escobedo, Noble, Rose, Rombotis,
Sato, Scarpelli, and Wellman
Absent: Chairman Avis
Staff Present: Evan Becker, Housing and Redevelopment Director
Reggie Harrison, Housing Program Manager
Debbie Fountain, Senior Management Analyst
Leilani Hines, Management Analyst
Clint Phillips, Senior Management Analyst
COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA:
There were no requests to address the Commission.
APPROVAL OF MINUTES:
ACTION: Motion by Commissioner Scarpelli, and duly seconded, to approve the Minutes of the
Regular Meeting of January 12,1995, as submitted.
VOTE: 6-O-2
AYES: Calverley, Rose, Rombotis, Sato, Scarpelli, Wellman
NOES: None
ABSTAIN: Escobedo, Noble
NEW BUSINESS:
Vice-Chairman Calverley stated that Chairman Avis is representing one of the applicants on the agenda
tonight and would be seated in the audience.
1. AFFORDABLE HOUSING MITIGATION AGREEMENT - Request for approval of a recommendation
to approve an Affordable Housing Mitigation Agreement between the City of Carlsbad and Bramalea
California, Inc.
Evan Becker, Housing and Redevelopment Director, stated that Agenda items #l and #2 are interrelated
and his report would be discussing both items together.
He explained that Bramalea is required to provide 45 affordable units for their Mariner’s Point project and
Kaiza Poinsettia is required to provide 90 affordable units for their Poinsettia Shores project. Bramalea is
calculated on a straight 15% while Kaiza Poinsettia has requested a density bonus, so a 20% calculation is
4-J
HOUSING COMMISSION March 9, 1995 PAGE 2
required. Bramalea has an approved site plan which has been approved by the City Council. Kaiza
Poinsettia’s site plan has been approved by the Planning Commission but has not yet been seen by the
Housing Commission.
Mr. Becker stated the lnclusionary Housing Ordinance provides an option wherein some or all of the +
inclusionary units for one development may be produced and operated at an alternative site(s). Bramalea
is proposing to shift to the Combined Project option by participating in a project known as Laurel Tree
Apartments, located off Laurel Tree lane and Palomar Airport Road. The off -site option of a combined
project is a sensible choice for the City and developers and presents advantages in its location and
feasibility, whereas an on-site project has certain disadvantages.
He stated that affordable housing agreements establish the way in which developers will be satisfying their
affordable housing requirements. Project approvals go through a different process than the affordable
housing agreement, but both parts meet up when they go to the City Council for approval. If the Laurel
Tree Apartments is not successful in obtaining its City approvals or necessary financing, the required
purchase of credits in the La Terraza Affordable Housing Project shall be triggered as the method by which
the affordable housing obligation will be satisfied by both Bramalea and Kaiza Poinsettia.
Commissioner Escobedo was under the impression that affordable housing would be spread throughout
the City rather than all together at one location. She does not like the concentration of affordable units at
one site.
Commissioner Wellman stated that she has been told over and over that the people who will occupy the
affordable housing will not be the poorest of the poor. She thinks more consideration should be given to
land if Laurel Tree fails. She doesn’t like having La Terraza as a fall back position.
Vice-Chairman Calverley opened the public testimony and issued the invitation to speak.
Doug Avis, 2300 Alga Road, Carlsbad, Project Director for Kaiza Poinsettia, addressed the Commission
and explained the various methods which developers have at their disposal to satisfy the inclusionary
housing requirement. He feels this joint project is the best alternative for the City and the developers.
Furthermore, it is large enough to get tax credits. Small projects don’t have a chance to get tax credits.
Without tax credits, affordable housing becomes a very costly issue.
Dorian Johnson, Vice President, Bramalea Planning, addressed the Commission and discussed the
differences between this project and the La Terraza project. He stated that the Laurel Tree project is more
economically feasible and he feels the final product will be superior to La Terraza.
Commissioner Wellman is very concerned that there are still a number of things which could jeopardize
this project (Laurel Tree) and cause it to not be built. She feels it is like a house of cards--if it fails, it
creates a domino effect on other projects. She would like the developers to be more creative in fulfilling
their inclusionary housing requirement. Mr. Johnson (Bramalea) replied that he sees no reason why Laurel
Tree will not occur as planned.
Sylvia Martinez, MAAC Project, addressed the Commission and stated that the Laurel Tree project will be
more than just housing. The MAAC Project is a co-partner in this venture and will be the property
managers of Laurel Tree. She noted that all MAAC projects provide special amenities such as child care
and learning centers, where people can hone their job skills and become productive citizens. These
amenities are not found in a typical apartment project. In order for the federal government to even
consider funding for an affordable housing project, it requires significant support at the local level. The
developer funds provide the needed local support. It shows that the City is serious about providing
affordable housing. She noted that tax credits must be applied for in July but notification does not come
-
HOUSING COMMISSION March 9, 1995 PAGE 3
until September. The tax credits are a big part of this project because they assist the developer in
providing a quality project. She feels that when Laurel Tree is completed, it will make the City very proud.
There being no other persons desiring to address the Commission on this topic, Vice Chairman Calverley
declared the public testimony closed and opened the item for discussion among the Commission members.
The Commissioners discussed the project in detail and staff responded to various questions regarding the
agreements. In the end, Commissioner Wellman stated that she could not support the project because she
is opposed to having La Terraza as a fall back position. She does not feel it is in the best interest of the
citizens. She would like the land in Kaiza and Bramalea Master Plans to remain available for affordable
housing and that units should be built on-site if the Laurel Tree project is not successful.
ACTION: Motion was made by Commissioner Scarpelli, and duly seconded, to adopt Resolution
No. 95-002 recommending approval of an Affordable Housing Mitigation Agreement
between the City of Carlsbad and Bramalea California, Inc. which pertains to the
requirement that Bramalea provide affordable housing in connection with its
development commonly known as Mariner’s Point (CT 91-12) in the southwest quadrant
of the City..
VOTE: 6-2
AYES: Calverley, Escobedo, Noble, Rose, Rombotis, Scarpelli
NOES: Sato, Wellman
ABSTAIN: None
2. AFFORDABLE HOUSING MITIGATION AGREEMENT - Request for approval of a recommendation
to approve an Affordable Housing Mitigation Agreement between the City of Carlsbad and Kaiza
Poinsettia Corporation.
Since the Affordable Housing Mitigation Agreement for Kaiza Poinsettia and Bramalea are interrelated, the
two staff reports and public testimony periods were combined.
ACTION: Motion was made by Commissioner Rombotis, and duly seconded, to adopt Resolution
No. 95-003 recommending approval of an Affordable Housing Mitigation Agreement
between the City of Carlsbad and Kaiza Poinsettia Corporation which pertains to the
requirement that Kaiza provide affordable housing in connection with its development
commonly known as Poinsettia shores (MP-l 750) in the southwest quadrant of the City.
VOTE: 6-2
AYES: Calverley, Escobedo, Noble, Rose, Rombotis, Scarpelli
NOES: Sato, Wellman
ABSTAIN: None
RECESS
The Housing Commission recessed at 7:47 p.m. and reconvened at 7:54 p.m.
INFORMATIONAL ITEMS
3. INCLUSIONARY HOUSING CALCULATION
Evan Becker, Housing and Redevelopment Director, used an overhead chart and explained the calculation
of the 15% inclusionary housing requirement. He showed examples of projects with and without density
bonuses. A discussion period followed regarding the feasibility of interspersing low income units
throughout a development. Commissioner Wellman is very opposed to the philosophy of having projects
HOUSING COMMISSION March 9, 1995 PAGE 4
that are totally low income. Mr. Becker replied that low income housing is predominately rentals and it is
not feasible to scatter low income rental units throughout a “for sale” market rate project.
4. FOUR BEDROOM HOUSING NEED
Leilani Hines, Management Analyst, reviewed the results of the 1990 U. S. Census which shows there is a
small surplus of three bedroom homes but a deficiency of four bedroom units. In most developments, the
financing programs dictate the bedroom mix percentages. For instance, the requirement for three
bedroom units is normally in the neighborhood of 10%. There is a need for affordable three and four
bedroom units in Carlsbad. The construction of large family units is a priority within the City and is
pursued by staff on an on-going basis.
Ms. Hines stated that the 1990 Census results are well documented in the CHAS.
5. ASSESSMENT OF HOMELESS PROBLEMS AND NEEDS
Leilani Hines, Management Analyst, reported that the 1990 U. S. Census identified a range of 941 - 1,213
homeless persons living in Carlsbad. There are 17 migrant camps in and around Carlsbad. Consequently,
the majority of homeless fall into the Rural Homeless category, commonly used for migrant farm workers.
Legal/illegal status was not considered when headcounts were taken in migrant camps. The census states
that only 5% of the homeless in Carlsbad are classified as Urban Homeless.
Carlsbad encourages non-profit agencies to provide shelter for the homeless. In 1994-95, the Cii spent
approximately $92,500 to assist non-profit agencies in this effort. Non-profit agencies provide services for
a variety of causes, including youth run-aways, mental illness, alcoholism, and those fleeing domestic
violence. The only city in North County that provides temporary shelter for the homeless during inclement
weather is Vista. Other cities are trying to work together on a regional approach to this issue.
ADJOURNMENT:
By proper motion, the Regular meeting of March 9, 1995 was adjourned at 8:27 p.m.
Respectfully submitted,
EVAN BECKER
Housing and Redevelopment Director
BETTY BUCKNER
Minutes Clerk
h
I Ci -
September 19, 1995
Gregory J. Smith San Diego County Recorder Post Office Box 1750 San Diego, CA 92112-4147
Enclosed for recordation is the following described document:
Affordable Housing Mitigation Agreement with Kaiza Poinsettia Corporation
Also enclosed are instructions on how the City is to be billed for the recordation fees incurred.
Thank you for your assistance in this matter.
KRK:ijp
IZnclosures
_-~--..- .____ 1 :?OO CilrlC;hilCi Village Drive - Carlsbad, California 92008-l 989 - (619) 434-2808 @