HomeMy WebLinkAbout2006-05-16; City Council; 18569; Roosevelt Street Affordable Condominiums10
JOINT MEETING
OF THE
HOUSING AND REDEVELOPMENT COMMISSION
AND
CITY COUNCIL
AGENDA BILL
AB#
MTG.
DEPT.
18,569
5/16/06
H/RED
TITLE:
APPROVAL OF AN EXCLUSIVE NEGOTIATING RIGHTS
AGREEMENT AND PREDEVELOPMENT LOAN WITH SAN
DIEGO HABITAT FOR HUMANITY FOR DEVELOPMENT OF
THE ROOSEVELT STREET AFFORDABLE CONDOMINIUMS
DEPT.HD./d^^
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CITY MGR^^V
RECOMMENDED ACTION:
That the City Council ADOPT Resolution No. 2006-131 AUTHORIZING the Finance Director to
appropriate up to a maximum of $69,382.33 in Community Development Block Grant Funds and
$538,861.67 in HOME Investment Partnership funds to provide financial assistance in the form of a
predevelopment loan ($608,244 total) to San Diego Habitat for Humanity, Inc., and authorize the
Carlsbad Redevelopment Agency to administer the expenditure of said funds on behalf of the City for
construction of an eleven (11) unit affordable housing (condominium) project on property owned by
the Carlsbad Redevelopment Agency located at 2578 Roosevelt Street within the Village
Redevelopment Area.
That the Housing and Redevelopment Commission ADOPT Resolution No. *18
AUTHORIZING the Executive Director of the Carlsbad Redevelopment Agency to execute an
Exclusive Negotiating Rights Agreement (ENRA) with San Diego Habitat for Humanity, Inc., in
substantially the form submitted and subject to final approval by the City Attorney, for development of
an eleven (11) unit affordable housing (condominium) project on property owned by the Carlsbad
Redevelopment Agency located at 2578 Roosevelt Street within the Village Redevelopment Area,
and to execute the appropriate loan documents in substantially the form submitted and subject to
final approval by the City Attorney to provide a predevelopment funding loan in the amount of
$608,244 to San Diego Habitat for Humanity for said project.
ITEM EXPLANATION:
AFFORDABLE HOUSING PROJECT DESCRIPTION
In March, 2003, the Carlsbad Redevelopment Agency purchased the property located at 2578
Roosevelt Street with the intent of developing an affordable housing project for very low income
households. On January 11, 2005, the Housing and Redevelopment Commission approved a major
redevelopment permit for construction of a project known as the Roosevelt Street Affordable
Apartment Project on the noted .56 acre parcel located in the Village Redevelopment Area.
Initially, Wakeland Housing was selected to partner with the Redevelopment Agency to develop the
above noted project. The City Council and Housing and Redevelopment Commission entered into an
exclusive negotiating rights agreement (ENRA) with Wakeland Housing and approved a
predevelopment loan with Wakeland Housing in order for them to design the subject project and
process the land use permits for the affordable housing project. Following approval of the land use
permits for the noted project, the City Council and Redevelopment Agency considered financial
assistance for the project. Due to substantial subsidy costs and limited alternate funding sources, the
Council/Agency ultimately decided not to pursue the project and subsequently terminated its contract
with Wakeland Housing. As an alternative, the Council/Agency agreed to pursue the conversion of the
apartment project to a residential condominium project and to work with San Diego Habitat for
Humanity to build the project.
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San Diego Habitat for Humanity has indicated their interest in partnering with the Carlsbad
Redevelopment Agency and pursuing the development of the subject project as an 11 unit
condominium project. However, in order to proceed, they will need a commitment from the Carlsbad
Redevelopment Agency to negotiate exclusively with them for fee conveyance of the property at 2578
Roosevelt Street, and to provide initial financial assistance for all pre-development costs. The pre-
development costs amount to approximately $608,244 and include development fees (approx.
$413,830) and architecture/engineering fees (approx. $194,414).
Once the predevelopment assistance is approved, Habitat for Humanity will begin its efforts to prepare
the appropriate plans to amend the Major Redevelopment Permit for the subject project to convert it
from a rental to a condominium project and to begin its major fundraising efforts for construction of the
project. If Habitat is not successful in obtaining the additional funds or labor donations (estimated at
$2,484,080) that are required to complete construction of the project, they may need to request
additional funding from the Carlsbad Redevelopment Agency and/or City of Carlsbad. Any additional
requests for funding, however, will be presented at a later date for consideration and at the time that a
Disposition and Development Agreement (DDA) is approved, if determined to be appropriate. At this
time, the request is only for exclusive negotiating rights for the property conveyance/property
development and for predevelopment funding in the total amount of $608,244.
FINANCIAL ASSISTANCE FOR THE AFFORDABLE HOUSING PROJECT
San Diego Habitat for Humanity is requesting that the Agency/City provide financial assistance for
predevelopment activities related to development of the subject affordable housing project in the total
amount of $608,244, or $55,295 per unit. The City has previously provided assistance to this project
through acquisition of the property at a total cost of $692,058, or $69,914 per unit. If the subject
property is ultimately donated to Habitat for Humanity and the predevelopment financial assistance is
approved and fully expended, the total estimated financial contribution from the Redevelopment
Agency/City will be $1,326,037, or $120,548 per unit. The financial details of the subject project are
provided below.
It is important to note, that a predevelopment loan was previously provided to Wakeland Housing in
the total amount of approximately $175,000, or $15,874 per unit. The noted funding was used to
develop the initial plans for an affordable apartment project and to obtain the Major Redevelopment
Permit. However, new plans must now be prepared to convert the project to condominiums and an
amendment to the Major Redevelopment Permit must be approved. The requested predevelopment
funding will pay for revised plans, construction drawings, permit processing, and all city and school
fees (for both land use and building permits).
USES AND SOURCES OF FUNDS
The total cost of the Roosevelt Street Condominium Project is estimated to be $3.8 million, inclusive of
the cost of the land. This amounts to a total per unit cost of $346,374. The following chart provides a
breakdown of the project costs, or uses of funds. Based on a review of the costs, staff has found that
the costs are high on a per unit basis for the project. However, when compared to other recently
approved or pending projects in the Village Area, the costs appear to be reasonable with consideration
of the very small size of the project (11 units) and the much higher cost of land in the Village Area.
In the past, the "Developer Fee" has been a specific point for discussion. For this project, the
proposed developer fee is $130,000, which represents 3% of total project costs. The fee is quite low in
comparison to most other affordable housing projects which average anywhere between 7 to 10% of
project costs.
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USES OF FUNDS
Expense
Land*
Permits & Fees
Construction - Hard Costs
Architectural/Engineering Costs
Misc. Soft Costs
Developer Fee
Total Uses of Funds
Total Amount
$717,793
$413,830
$2,192,880
$194,414
$161,200
$130,000
$3,810,117
Per Unit Cost
$65,254
$37,621
$199,353
$17,674
$14,654
$11,818
$346,374
% of total Cost
19%
11%
58%
5%
4%
3%
100%
"includes estimated costs to convey property to Habitat for Humanity
The following chart provides a breakdown of the sources of funds for the proposed development.
Habitat for Humanity is proposing to finance the project through the use of grant funds, in-kind
donations, cash donations, and sponsorships a total value of $2,484,080, together with a land
donation and subsidy (cash) financing from the Carlsbad Redevelopment Agency in the amount of
$1,326,037. As noted previously, the Redevelopment Agency purchased the property and, if
approved, will eventually convey it to Habitat for Humanity as part of the Agency's contribution to the
project. The cash contribution, at this time, is proposed for predevelopment expenses. The
Agency/City contribution will amount to approximately 35% of the total projected cost of the project.
SOURCES OF FUNDS
Redevelopment Agency Land Transfer
Redevelopment Agency Pre-development
Loan (CDBG & HOME)
AHP Grant
In-Kind Donations
Cash Donations
Sponsorships
Total Sources of Funds
Total Amount
$717,793
$608,244
$220,000
$934,080
$120,000
$1,210,000
$3,810,117
Per Unit
$65,254
$55,295
$20,000
$84,916
$10,909
$110,000
$346,374
In-Kind donations is the area that may be the most difficult to obtain the above noted funding, and
ultimately may result in a need for Habitat to request additional (cash) funding from the Agency and/or
City. Typically, Habitat has been very successful in obtaining donations and sponsorships to construct
the homes. The other on-site improvements such as the parking lot, dry utilities, etc. are more difficult
to obtain funding, or to finance, through donations and sponsorships. Therefore, the goal is for Habitat
to identify one or more contractors that would be willing to donate labor and supplies to construct these
other improvements. If this effort proves to be unsuccessful, then Habitat will most likely find it
necessary to request additional cash assistance from the Agency and/or City to pay a contractor to
complete these improvements.
The City's proposed contribution of $120,548 per unit is higher than that which has been previously
approved for many similar projects. On average, the City has provided about $20,000 per unit for other
affordable for-sale products. However, the City Council did previously approve a $70,000 per unit
subsidy for the Laguna Pointe project which is across the street from the proposed project and also
within the Village Redevelopment Area. It should be noted that the $70,000 per unit subsidy was for 3
units to be sold at a price affordable to low income households (80% or less of the Area Median
Income). The proposed Roosevelt Condominium project will be more affordable than the Laguna
Pointe project and provide units at a price affordable to very low income households (50% or less of
the Area Median Income). Staff believes that the greater amount of assistance is warranted for several
reasons. First, the project is being developed outside of the City-wide Inclusionary Housing Program
but satisfies a portion of the Redevelopment Agency's Inclusionary requirement per State Law. In this
case, the Redevelopment Agency is the Master Developer for the project. Second, the project serves
as a redevelopment project as well as an affordable housing project, and its construction represents
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the elimination of a condition of blight within the area. In addition, the project will provide for-sale units
affordable to very low income households.
HABITAT FOR HUMANITY
San Diego Habitat for Humanity, Inc. will develop and sell the affordable units. San Diego Habitat for
Humanity is an affiliate of Habitat for Humanity International, a non-profit organization that offers
families in a need a hand up, not a handout. They build homes and sell them to low income families
with a 20 year, 0% interest mortgage. San Diego Habitat for Humanity completed its 51st home in
2005. Their intent is to build 8-12 new homes annually. Habitat builds homes by using contributions of
land, materials and money. Nearly all the labor on a project is performed by volunteers. Instead of
cash down payments, Habitat requires 500 hours of labor ("sweat equity") from each family purchasing
one of the homes they build.
EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
The proposed Exclusive Negotiating Rights Agreement (ENRA) provides a commitment from the
Redevelopment Agency not to negotiate with any other developer on the subject project and property
for a two (2) year period. The ENRA provides an opportunity for Habitat to complete certain
predevelopment tasks, including the processing of the required redevelopment permit amendment,
and appropriately raise funds for the project without risk that the Agency will convey its property to, or
initiate development discussions with, an alternate developer. The ENRA also allows the Agency an
opportunity to observe Habitat and their capacity to successfully complete the predevelopment tasks
and fundraise before being bound by a full-scale Development and Disposition Agreement (DDA). The
ENRA provides the ability for either party to walk away without liability to the other party if a DDA is not
executed despite the parties' good faith efforts within the requisite time period.
PREDEVELOPMENT LOAN AGREEMENT
As proposed, the Agency cash assistance ($608,244) will be provided in the form of a predevelopment
loan which shall be evidenced by a promissory note. The loan shall bear interest at a rate of three
percent (3%) compounded annually, and shall accrue and be due and payable at the time the principal
of the loan is due to be repaid. As security for the predevelopment loan, Habitat will be required to
assign its rights and obligations with respect to agreements, plans and specifications to the Agency.
The predevelopment loan may be used for all predevelopment costs approved by the Agency, and as
set forth within the loan agreement. The loan is required to be repaid if the project proceeds to
construction. If the project does not proceed to construction for reasons approved by the Agency, the
predevelopment loan is not repaid.
In order for the project to receive the predevelopment loan, Habitat is required to execute various loan
documents. These documents together with the Exclusive Negotiating Rights Agreement are attached
as Exhibit 4 for review. These documents are explained briefly below:
1. Predevelopment Loan Agreement states the terms and conditions relating to the Agency's
loan.
2. Promissory Note is executed by the developer and expresses their intent to repay the loan.
3. Assignment of Agreements, Plans, Specifications and approvals is executed by the
developer and expresses their intent to assign and transfer all of their rights in design
contracts, plans and specifications, and all land use approvals, building permits and any other
governmental approvals to the Carlsbad Redevelopment Agency at the time they enter into the
predevelopment loan agreement.
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4. Architect's/Engineer's Consent provides concurrence from the project architects and
engineers and allows for the assignment of project agreements, plans and specifications to the
Agency.
RISK ANALYSIS
In its role as a lender to the project, the Agency is exposed to two risks inherent to real estate
development. These risks generally include 1) predevelopment (project does not get to construction);
and, 2) construction (project cannot be completed, cost overruns, contractor problems). Adding to this
risk, any Agency/City financial assistance may ultimately be subordinated to any conventional
financing.
Construction and operation risks are mitigated by a couple of factors. The development team has a
strong track record with similar affordable housing projects and has been successful to date in all of its
efforts to construct those projects in a financially sound manner. They are well-established and
understand and are experienced in the affordable housing development business. Habitat will have
no out-of-pocket expenses to purchase the land or finance the costs of pre-development activities.
Therefore, Habitat will be able to focus all of its fundraising efforts specifically on construction of all of
the on-site improvements. Habitat has a proven track record for obtaining in-kind donations and cash
donations as well as sponsorships and ensuring that projects get built. Both the Redevelopment
Agency and Habitat will closely monitor all costs related to the project.
HOUSING COMMISSION RECOMMENDATION ON FINANCIAL ASSISTANCE
At their meeting on March 9, 2006, the Housing Commission reviewed the request from Habitat for
predevelopment financial assistance and the proposed land donation/fee conveyance. The
Commission recommended (5-0) that the Housing and Redevelopment Commission/City Council
approve the land donation/fee conveyance and predevelopment cash assistance in the amount of
$608,244 for the subject project. The Commission also recommended that the Housing and
Redevelopment Commission and the City Council adopt the attached resolutions to authorize
appropriation of the noted CDBG and HOME funds and to provide them as financial assistance to
Habitat for Humanity for predevelopment expenses related to the Roosevelt Street Affordable
Condominium Project. The Commission also has recommended that the Commission proceed with
efforts to convey the subject property to Habitat, at the appropriate time and after certain conditions
are met.
ENVIRONMENTAL REVIEW
Review under the National Environmental Protection Act (NEPA) Guidelines was previously completed
for the affordable housing project as a result of the intended use of federal funds (CDBG and HOME)
for financial assistance. City staff completed the NEPA review for the CDBG funds which resulted in a
finding of no significant impact. The City received the required Release of Funds authorization from
the US Department of Housing and Urban Development (HUD) on October 28, 2002. County of San
Diego Staff completed the NEPA review for the HOME funds which also resulted in a finding of no
significant impact. HUD provided the required Release of Funds for the HOME funds in 2002 as well.
Review under the California Environmental Protection Act (CEQA) will be completed for the project
once the feasibility studies and design work are completed by Habitat. The Predevelopment Loan is
exempt from the requirements of CEQA pursuant to Section 15262 of the CEQA Guidelines.
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FISCAL IMPACT:
The financial cash assistance in the form of a $608,244 predevelopment loan will be provided from
two sources as noted below.
Amount
$69,382.33
$538,862.67
Source
CDBG Funds
HOME Funds
Purpose
Pre-development
Pre-development & Construction
The noted funding from the CDBG and HOME programs were previously approved by the City Council
for a residential project at the subject location. The approval of these funds will authorize the Finance
Director to appropriate and provide them to the Developer via the Carlsbad Redevelopment Agency.
EXHIBITS:
1. City Council Resolution No. 2006-131 , to approve the appropriation and
expenditure of the CDBG and HOME Funds to provide predevelopment financial assistance for the
proposed Roosevelt Street Condominium Project, and authorizing the Redevelopment Agency to
administer the expenditure of those funds for the City.
2. Housing and Redevelopment Commission Resolution No. 418 authorizing the Finance
Director to appropriate up to a maximum of $608,244 in CDBG and HOME funds and to provide
them in the form of a predevelopment loan to San Diego Habitat for Humanity to assist in the
financing of predevelopment expenses for the proposed Roosevelt Street Affordable
Condominimum Project, and approving the related predevelopment loan agreement and related
documents and exclusive negotiating rights agreement.
3. Proforma Summary for the proposed Roosevelt Street Affordable Condominium Project.
4. Exclusive Negotiating Rights Agreement, Predevelopment Loan Agreement, Promissory Note and
Assignment of Agreements, Plans, Specifications and Approvals.
5. Housing Commission Staff Report dated, March 9, 2006, including draft minutes from the meeting.
6. Housing Commission Resolution No. 2005-002 recommending approval of the requested
predevelopment financial assistance for the proposed Roosevelt Street Condominium Project.
7. Proposed Project Site Map
DEPARTMENT CONTACT: Debbie Fountain, (760) 434-2815; dfoun@ci.carlsbad.ca.us
1 CITY COUNCIL RESOLUTION NO. 2006-131
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING APPROPRIATION OF
3 $69,382.33 IN COMMUNITY DEVELOPMENT BLOCK GRANT
FUNDS AND $538,861.67 IN HOME INVESTMENT PARTNERHSIP
FUNDS TO PROVIDE FINANCIAL ASSISTANCE TO SAN DIEGO
5 HABITAT FOR HUMANITY, AND TO AUTHORIZE THE CARLSBAD
REDEVELOPMENT AGENCY TO ADMINISTER AND EXPEND SAID
6 FUNDS TO FUND A LOAN WITH SAID DEVELOPER TO PROVIDE
FOR THE CONSTRUCTION OF ELEVEN (11) AFFORDABLE
7 CONDOMINIUM UNITS WITHIN THE NORTHWEST QUADRANT
OF THE CITY OF CARLSBAD AND VILLAGE REDEVELOPMENT
8 AREA AT 2578 ROOSEVELT STREET.
APPLICANT: SAN DIEGO HABITAT FOR HUMANITY
9
10 WHEREAS, San Diego Habitat for Humanity has proposed to construct eleven (11)
11 condominium units affordable to lower income households at 2578 Roosevelt Street in the Village
12 Redevelopment Area and Northwest Quadrant of the City of Carlsbad; and
13 WHEREAS, San Diego Habitat for Humanity has requested that the City of Carlsbad and
14 Carlsbad Redevelopment Agency assist in funding a predevelopment loan to assist in the construction of
15 said condominium units; and
16 WHEREAS, on the 9th day of March, 2006, City of Carlsbad Housing Commission did hold a
17 public meeting to consider a request for City financial assistance for the construction of said eleven (11)
18 affordable housing condominium units by the affordable housing developer, San Diego Habitat for
19 Humanity, and subsequently recommended approval of the request for assistance for said project; and
20 WHEREAS, the City Council and Housing and Redevelopment Commission did both hold a
21 public meeting on the date of this resolution to consider said request for City/Agency financial assistance
22 for the construction of said eleven (11) affordable housing condominium units by the affordable housing
23 developer, San Diego Habitat for Humanity; and
24 WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all
25 persons desiring to be heard, said Council considered all factors relating to the application and request for
26 financial assistance:
27 NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
28 Carlsbad, California, as follows:
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4 1. The above recitations are true and correct.
5 2. The request for City financial assistance is consistent with the goals and objectives of the
City of Carlsbad's Housing Element and Consolidated Plan, and the Carlsbad General
6 Plan.
7 3. The request for City financial assistance will assist the affordable housing developer to
construct a total of eleven (11), one and two bedroom affordable condominium units. The
8 project, therefore, has the ability to effectively serve the City's housing needs and
priorities as expressed in the Housing Element and the Consolidated Plan.
9
4. That the City Council of the City of Carlsbad hereby APPROVES $69,382.33 in
10 Community Development Block Grant (CDBG) Funds and $538,861.67 in HOME
Investment Partnership Funds to provide financial assistance in the form of a
11 predevelopment loan to San Diego Habitat for Humanity for construction of the proposed
affordable housing project known as the Roosevelt Street Condominiums.
12
5. That the City Council authorizes the Carlsbad Redevelopment Agency to administer the
13 expenditure of the noted funds on behalf of the City and execute all appropriate loan
documents related to provision of the City assistance, including but not limited to a
14 Predevelopment Loan Agreement, Promissory Note and Assignment of Agreements,
Plans, Specifications and Approvals in substantially the form presented to the City
15 Council, and subject to review and final approval by the Agency's General Counsel.
16 6. That the City Council authorizes the City Manager, or his/her designee, to submit all
applicable documents to the U.S Department of Housing and Urban Development and/or
17 County of San Diego to allow for appropriation and release of $69,382.33 in Community
Development Block Grant Funds and $538,861.67 in HOME Funds to provide proceeds
18 for the predevelopment loan for the subject affordable housing project.
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7. That the City Council authorizes the Finance Director to appropriate and provide said
funds to the Carlsbad Redevelopment Agency to fund a predevelopment loan in the total
amount of $608,244 to San Diego Habitat for Humanity for the subject affordable housing
project.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of
the City of Carlsbad, California, held on the 16th day of _Jta^_1 2006, by the following vote, to
wit:
AYES: Council Members Lewis, Hall, Kulchin, Packard, Sigafoose
NOES: None
ABSENT: None
ABSTAIN:
ATTEST:
LORRAINE M. WOOD, city cierk
4$^*^O V ,.UR£».•'..-* 1
1 HOUSING AND REDEVELOPMENT COMMISSION RESOLUTION NO. 418
2 A RESOLUTION OF THE HOUSING AND REDEVELOPMENT
COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA,
3 AUTHORIZING THE EXECUTIVE DIRECTOR OF THE CARLSBAD
REDEVELOPMENT AGENCY TO EXECUTE AN EXCLUSIVE
NEGOTIATING RIGHTS AGREEMENT AND PREDEVELOPMENT
5 LOAN AGREEMENT AND RELATED DOCUMENTS WITH SAN
DIEGO HABITAT FOR HUMANITY TO PROVIDE FUNDING IN THE
6 AMOUNT OF $608,2449 TO ASSIST WITH PREDEVELOPMENT
EXPENSES FOR CONSTRUCTION OF ELEVEN (11) AFFORDABLE
7 CONDOMINIUM UNITS WITHIN THE NORTHWEST QUADRANT
OF THE CITY OF CARLSBAD AND WITHIN THE VILLAGE
8 REDEVELOPMENT PROJECT AREA, AND TO AUTHORIZE THE
CARLSBAD REDEVELOPMENT AGENCY TO ADMINISTER AND
9 EXPEND $69,382.33 IN COMMUNITY DEVELOPMENT BLOCK
GRANT FUNDS AND $538,861.67 IN HOME INVESTMENT
PARTNERSHIP FUNDS TO FUND SAID PREDEVELOPMENT LOAN.
11 APPLICANT: _ SAN DIEGO HABITAT FOR HUMANITY
12
1 3 WHEREAS, the Carlsbad Redevelopment Agency desires to enter into an Exclusive Negotiating
14 Rights Agreement with San Diego Habitat for Humanity to develop an eleven (11) unit condominium
15 project which shall be affordable to lower income households on property owned by the Carlsbad
Redevelopment Agency and located at 2578 Roosevelt Street in the Northwest Quadrant of the City of
Carlsbad, which is located within the boundaries of the Village Redevelopment Project Area; and
WHEREAS, the Carlsbad Redevelopment Agency intends to convey said property to San Diego
Habitat for Humanity to develop said project if specified preconditions are satisfied; and
2Q WHEREAS, San Diego Habitat for Humanity has requested that the Housing and Redevelopment
2j Commission provide financial assistance in the form of a predevelopment loan in the total amount of
22 $608,244 to assist in the construction of said condominium units on said property; and
23 WHEREAS, the Redevelopment Agency of the City of Carlsbad, hereinafter referred to as
24 "Agency", is a Community Redevelopment Agency organized and existing under the Community
25 Redevelopment Law, Health and Safety Code Section 33000, etc.seq., hereinafter referred to as the "Act",
and desires to assist in the predevelopment financing of said project to be developed by San Diego Habitat
27 for Humanity; and
28 \0
1 WHEREAS, the Agency is authorized to implement the Redevelopment Plan for the Carlsbad
2 Village Redevelopment Project Area; and
3 WHEREAS, to carry out the purposes of increasing and improving the community's supply of
4 low and moderate income housing, Section 33334.2(e) of the Act states that the Agency may exercise any
5 or all of its powers, including without limitations, acquiring land or building sites, improving land or
6 building sites with onsite or offsite improvements, donating land to private or public persons or entities,
7 constructing buildings or structures, acquiring buildings or structures, providing subsidies to, or for the
8 benefit of, very low income households, lower income households, or persons or families of low and
9 moderate income, or other powers to carry out the purposes of the Act; and
10 WHEREAS, on the 9th day of March, 2006, City of Carlsbad Housing Commission did hold a
11 public meeting to consider a request for City/Agency financial assistance for the construction of said
12 eleven (11) affordable housing condominium units by the affordable housing developer, San Diego
13 Habitat for Humanity, and subsequently recommended approval of the request for assistance for said
14 project; and
15 WHEREAS, the City Council and Housing and Redevelopment Commission did hold a joint
16 public meeting on the date of this resolution to consider said request for City and/or Agency financial
17 assistance for the construction of said eleven (11) affordable housing condominium units by the affordable
18 housing developer, San Diego Habitat for Humanity; and,
19 WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all
20 persons desiring to be heard, said City Council and Housing and Redevelopment Commission considered
21 all factors relating to the application and request for predevelopment financial assistance; and,
22 WHEREAS, the City Council authorized the Carlsbad Redevelopment Agency to administer and
23 expend $69,382.33 in Community Development Block Grant Funds and $538,861.67 in HOME
24 Investment Partnership Funds on behalf of the City of Carlsbad to fund a predevelopment loan to assist
25 with the construction of an eleven (11) unit condominium project located on property owned by the
26 Carlsbad Redevelopment Agency at 2578 Roosevelt Street within the Village Redevelopment Area; and
27 ////
28 ////
1 WHEREAS, the Housing and Redevelopment Commission has approved the expenditure of said
2 Community Development Block Grant Funds and HOME Investment Partnership Funds in the total
3 amount of $608, 244 for the purposes of providing loan proceeds to fund a predevelopment loan to San
4 Diego Habitat for Humanity to construct eleven (11) condominium units for very low income
5 persons/families.
6 NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing and Redevelopment
7 Commission of the City of Carlsbad, California, as follows:
8 1. The above recitations are true and correct.
9 2. The Carlsbad Redevelopment Agency has selected San Diego Habitat for Humanity as the
developer of the subject affordable housing development, known as the Roosevelt Street
10 Condominiums, and hereby approves an Exclusive Negotiating Rights Agreement with said
developer in substantially the form submitted and subject to final approval by the Agency
11 General Counsel.
3. The Developer's request for Agency financial assistance for predevelopment expenses is
consistent with the goals and objectives of the City of Carlsbad's Housing Element and
Consolidated Plan, the Carlsbad General Plan, and the Redevelopment Plan for the Village
Redevelopment Project Area.
4. The request for Agency financial assistance for predevelopment expenses will assist the
affordable housing developer to construct a total of eleven (11), one and two bedroom
affordable condominium units. The project, therefore, has the ability to effectively serve the
City's housing needs and priorities as expressed in the Housing Element and the Consolidated
Plan as well as meet the housing needs and inclusionary housing requirements for the Village
Redevelopment Project Area in the City of Carlsbad.
18 5. That the Housing and Redevelopment Commission authorizes the Agency's Executive
Director or his/her designee to execute all loan and related documents to fund the
predevelopment loan in the total amount of $608,244 to San Diego Habitat for Humanity for
development of said project and to execute the Exclusive Negotiating Rights Agreement in
substantially the form presented to the Commission and subject to final approval by Agency's
General Counsel. Said predevelopment loan will be funded with $69,382.33 in Community
Development Block Grant Funds and $538,861.67 in HOME Investment Partnership Funds.
22
6. That the Housing and Redevelopment Commission authorizes the Finance Director to
23 appropriate and expend the funds set forth within this approval for the predevelopment loan to
San Diego Habitat for Humanity for the subject affordable housing project, and as set forth in
24 the approved loan documents).
25 7. That the Housing and Redevelopment Commission hereby accepts $69,382.33 in Community
Development Block Grant funds and $538,861.67 in HOME Investment Partnership Funds to
26 provide proceeds for the subject predevelopment loan to be provided to San Diego Habitat for
Humanity for the subject affordable housing project.
27 "
28 ////
12-
1
2
3
4
5
6
7
8
9
10
11
12
13
15
16
17
18
19
20
21
22
23
24
25
26
27
28
8. That the Housing and Redevelopment Commission hereby agrees that it shall convey the
subject property owned by the Carlsbad Redevelopment Agency to San Diego Habitat for
Humanity for the purposes of developing said affordable housing project at such time as all
specified preconditions are satisfied by San Diego Habitat for Humanity.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing
and Redevelopment Commission of the City of Carlsbad, California, held on the _16th day of May .
2006, by the following vote, to wit:
AYES: Commissioners Lewis, Hall, Kulchin, Packard, Sigafoose
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST:
RAYMOND R. PATCHETT, Secretary
•of ESTABLISHED';
5:: in _
13
EXHIBIT 3
PROFORMA SUMMARY
ROOSEVELT STREET AFFORDABLE CONDOMINIUMS
Habitat for Humanity - Roosevelt Gardens Condominiums
Project Costs:
Land Acquisition (incl. fees.taxes, etc)
Land Subtotal
On/Off-Site Improvements
SDG&E
Bonds
House/Garage Construction
General Conditions
Contingency
Contracter Overhead
Construction Subtotal
Plan Check & Inspection Fees
Permit Fees
Impact/Capacity Fees
City Fees Subtotal
Architect Fees (incl. noise report & landscape)
Civil Engineering Fees
Dry Utilities
Subdivision Processing (incl. CC&Rs, HOA)
Preconstruction Geotechnical
Construction Geotechnical
Contingency
Architecture/Engineering Fees Subtotal
Property Insurance during Construction
Construction Loan Interest
Construction Loan Fees
Marketing/Advertisement
Homebuyer Screening/Education
Legal
Closing/Title/Sales Costs:
Misc. Soft Costs Subtotal
Developer Fee
Developer Fee Subtotal
Total Land Costs
Total Construction Costs
Total Project Costs
$ 717,793.00
$ 717,793.00
$ 378,500.00
$ 12,000.00
$ 12,000.00
$ 1,210,000.00
$ 30,380.00
$ 300,000.00
$ 250,000.00
$ 2,192,880.00
$ 62,248.00
$ 7,389.00
$ 344,193.00
$ 413,830.00
$ 74,600.00
$ 59,050.00
$ 5,000.00
$ 13,000.00
$ 3,000.00
$ 24,764.00
$ 15,000.00
$ 194,414.00
$ 12,000.00
$ 78,000.00
$ 13,200.00
$ 5,000.00
$ 25,000.00
$ 20,000.00
$ 8,000.00
$ 161,200.00
$ 130,000.00
$ 130,000.00
$ 717,793.00
$ 3,092,324.00
$ 3,810,117.00
Per Unit
City
$ 717,793.00
$ 717,793.00
$
$
$
$
$
$
$
$
$ 62,248.00
$ 7,389.00
$ 344,193.00
$ 413,830.00
$ 74,600.00
$ 59,050.00
$ 5,000.00
$ 13,000.00
$ 3,000.00
$ 24,764.00
$ 15,000.00
$ 194,414.00
$
$
$
$
$
$
$
$
$
$
$ 717,793.00
$ 608,244.00
$ 1,326,037.00
$ 120,548.82
Habitat
$
$
$ 378,500.00
$ 12,000.00
$ 12,000.00
$ 1,210,000.00
$ 30,380.00
$ 300,000.00
$ 250,000.00
$ 2,192,880.00
$
$
$
$
$
$
$
$
$
$
$
$
$ 12,000.00
$ 78,000.00
$ 13,200.00
$ 5,000.00
$ 25,000.00
$ 20,000.00
$ 8,000.00
$ 161,200.00
$ 130,000.00
$ 130,000.00
$
$ 2,484,080.00
$ 2,484,080.00
$ 225,825.45
\5
EXHIBIT 4
EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
PREDEVELOPMENT LOAN AGREEMENT
PROMISORRY NOTE
ASSIGNMENT OF AGREEMENTS, PLANS AND
SPECIFICATIONS
ROOSEVELT STREET AFFORDABLE CONDOMINIUMS
EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
(HABITAT FOR HUMANITY)
This Exclusive Negotiating Rights Agreement (this "Agreement") is entered into as of
this j£*hday of TULV , 2006 (the "Effective Date"), by and among the Carlsbad
Redevelopment Agency, a public body, corporate and politic (the "Agency") and San Diego
Habitat for Humanity, Inc., a California non-profit public benefit corporation (the "Developer"),
on the basis of the following facts:
RECITALS
A. The City Council of the City of Carlsbad adopted the Carlsbad Village
Redevelopment Plan pursuant to Ordinance No. 9591 adopted on July 21, 1981 (the
"Redevelopment Plan") establishing the Carlsbad Village Redevelopment Project Area (the
"Project Area"). The Agency is responsible for implementing the Redevelopment Plan in the
Project Area. The goals for the Redevelopment Plan include alleviation of blighting conditions
and the stimulation of economic development and affordable housing activities in the Project
Area.
B. In accordance with the Redevelopment Plan and the Agency's adopted Rules For
Business Tenant Preference and Owner Participation, the Agency has:
1. designated a specified .56-acre portion of the Project Area as a unified
development area for redevelopment by a qualified development entity; and
2. selected the Developer as the entity with which to enter into exclusive
negotiations for redevelopment of the designated area, as described in the attached Exhibit A (the
"Site").
C. The Agency desires to cause development on the Site of an eleven (11) unit
affordable housing development (the "Development").
D. Completion of the Development in the Project Area will provide needed
affordable housing, and will assist in ameliorating blighting influences in the Project Area.
E. The purpose of this Agreement is to establish procedures and standards for the
negotiation by the Agency and the Developer of a disposition, development and loan agreement
(a "DDLA") pursuant to which, among other matters, if specified preconditions are satisfied:
(1) the Agency would convey the Site to the Developer at a purchase price to be negotiated that
would enable a financially feasible development; (2) the Agency may make a construction and
permanent loan to the Developer to assist in financing the Development; and (3) the Developer
would develop the Development on the conveyed Site and thereafter sell the individual units to
income-eligible purchasers at an affordable housing cost. As more fully set forth in Section 3.1,
the Developer acknowledges and agrees that this Agreement in itself does not obligate any party
1010\13\335811.2
to acquire or convey any property, does not grant the Developer the right to develop the
Development, and does not obligate the Developer to any activities or costs to develop the
Development, except for the preliminary analysis and negotiations contemplated by this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties mutually agree as follows:
ARTICLE 1.
EXCLUSIVE NEGOTIATIONS RIGHT
Section 1.1 Good Faith Negotiations. The Agency and the Developer shall negotiate
diligently and in good faith, during the Negotiating Period described in Section 1.2, the terms of
a DDLA for the development of the Development on the Site. The Proposal shall serve as a
guide in the negotiation of the DDLA, although the parties acknowledge that review of
additional information and further discussion may lead to refinement and revision of the
development concepts set forth in the Proposal. During the Negotiating Period, the parties shall
use good faith efforts to accomplish the respective tasks outlined in Article 2 to facilitate the
negotiation of a mutually satisfactory DDLA.
Among the issues to be addressed in the negotiations are: (i) the purchase price for
conveyance of the Site by the Agency to the Developer, (ii) the physical and land title conditions
of the Site and remediation of any adverse conditions, (iii) the land use approvals necessary for
the Development, (iv) the development schedule for the Development, (vi) financing of the
Development (including the need for any Agency financial assistance), (vii) marketing and
management of the Development, and (viii) the level of housing affordability and the nature of
affordability controls.
Section 1.2 Negotiating Period. The negotiating period (the "Negotiating Period")
under this Agreement shall be two (2) years, commencing on the Effective Date and expiring on
the second (2nd) anniversary of the Effective Date.
If a DDLA has not been executed by the Agency and the Developer by the expiration of
the Negotiating Period, then this Agreement shall terminate and neither party shall have any
further rights or obligations under this Agreement. If a DDLA is executed by the Agency and
the Developer then, upon such execution, this Agreement shall terminate, and all rights and
obligations of the parties shall be as set forth in the executed DDLA.
Section 1.3 Exclusive Negotiations. During the Negotiating Period, the Agency shall
not negotiate with any entity, other than the Developer, regarding development of the Site, or
solicit or entertain bids or proposals to do so.
1010\13\335811.2
Section 1.4 Identification of Developer's Representative. The Developer's
representative to negotiate the DDLA with the Agency is Cheryl Keenan, Executive Director.
ARTICLE 2.
NEGOTIATION TASKS
Section 2.1 Overview. To facilitate negotiation of the DDLA, the parties shall use
reasonable good faith efforts to accomplish the tasks set forth in this Article 2 in a timeframe that
will support negotiation and execution of a mutually acceptable DDLA prior to the expiration of
the Negotiating Period.
Section 2.2 Financing and Costs of Development. Within ninety (90) days after the
Effective Date the Developer shall provide the Agency with a detailed financial analysis for the
Development containing, among other matters, a development budget and operating proforma,
and housing affordability levels supported by the budget (the "Financing Proposal"). The
financial analysis shall be refined by the parties during the Negotiating Period, as appropriate,
and will be used to evaluate the financial feasibility of the Development and to assist in the
negotiation of terms regarding payment of costs of land and development.
Section 2.3 Purchase Price for the Site. Concurrent with Developer's development of
the Financing Proposal, the Agency and the Developer shall seek to agree upon the purchase
price of the Site, and the nature, timing and cost of Agency assistance to the Development, if
any, including a write-down of the purchase price of the Site. The proposed purchase price shall
be subject to confirmation and refinement pursuant to the formal reuse appraisal and the noticed
hearing and City Council finding process to be conducted in accordance with Health and Safety
Code Section 33433, as further described in Section 2.10 below.
Section 2.4 Planning Approvals. The Developer acknowledges that the Development
requires approval by the Agency of an amendment to Major Redevelopment Permit RP 04-04
(the "Permit"). Developer shall submit a formal application for an amendment to the Permit to
the Agency no later than December 31, 2006.
Section 2.5 Schedule of Performance. Within thirty (30) days after the Effective Date,
the Developer shall provide the Agency with a proposed detailed schedule of performance for the
Development which shall be based on the summary schedule attached hereto as Exhibit B.
Section 2.6 Due Diligence. During the Negotiating Period the Developer shall
conduct due diligence activities, such as planning, soils report, hazardous materials report,
financial feasibility and title adequacy, as appropriate.
(a) Physical Adequacy Determination. The Developer shall determine
whether the Site is suitable for development of the Development, taking into account the
geotechnical and soils conditions, the presence or absence of toxic or other hazardous materials,
the massing of the proposed Development improvements and the parking requirements imposed
on Developments of this type and the other environmental and regulatory factors that the
1010\13\335811.2
Developer deems relevant. If, in the Developer's judgment based on such investigations and
analyses, the Site is not suitable for development, the Developer may notify the Agency in
writing no later than ninety (90) days after the Effective Date of its determination (an
"Unsuitability Notice"). Upon delivery of an Unsuitability Notice by the Developer within this
time period, this Agreement shall be terminated without further action of any party, and
thereafter no party shall have any further duties, obligations, rights, or liabilities under this
Agreement, except as set forth in Section 3.7. If the Developer does not deliver an Unsuitability
Notice during the first ninety (90) days after the Effective Date, then the Site shall be deemed
physically suitable for development of the Development and any executed DDLA shall not
provide for an additional opportunity for the Developer to determine the physical suitability of
the Site or for the Developer to terminate the DDLA as a result of the purported physical
Unsuitability of the Site (unless such Unsuitability arises solely from an event occurring
subsequent to the execution of the DDLA).
(b) Title Adequacy Determination. Within thirty (30) days following the
Effective Date, the Agency shall cause a reputable title company to issue a Preliminary Title
Report (the "Report") for the Site to the Developer. If the Developer objects to any exception
appearing on the Report or should any title exception arise after the date of the Report, the
Developer may object to such exception, provided such objection is made to the Agency in
writing on or before 5 P.M. (PST) on the thirtieth (30th) day following the date the Developer
receives the Report. If the Developer object to any exception to title, the Agency, within fifteen
(15) days after receipt of Developer' objection shall notify Developer in writing whether Agency
elects to (1) cause the exception to be removed of record, (2) obtain a commitment from the title
company for an appropriate endorsement to the policy of title insurance to be issued to the
Developer, insuring against the objectionable exception, or (3) terminate this Agreement unless
the Developer elects to take title subject to such exception. If any party elects to terminate this
Agreement pursuant to this Section 2.6(b), no party shall thereafter have any obligations to or
rights against the others hereunder, except for the Developer's obligation to indemnify the
Agency as set forth herein. If the Developer fail to provide any notification to the Agency
regarding this matter prior to expiration of the time period set forth herein, the condition set forth
in this Section 2.6(b) shall be deemed satisfied, this Agreement shall continue in effect, and the
condition of title at closing under any executed DDLA shall be as set forth in the Report.
Section 2.7 Reports. Unless otherwise waived by the Agency, the Developer shall
provide the Agency with copies of all reports, studies, analyses, correspondence and similar
documents prepared or commissioned by the Developer with respect to this Agreement and the
Development, promptly upon their completion.
The Agency shall provide the Developer with copies of all reports, studies, analyses,
correspondence and similar documents (collectively, "documents"), exclusive of detailed
property appraisals, prepared or commissioned by the Agency with respect to this Agreement
and the Development, promptly following execution of this Agreement with respect to
documents then in its possession or under its reasonable control, and promptly upon their
completion with respect to any subsequently prepared documents.
1010\13\335811.2
Section 2.8 Organizational Documents. The Developer shall provide the Agency with
copies of its organizational documents evidencing that the Developer exists and is in good
standing to perform its obligations under the DDLA.
Section 2.9 Environmental Review. The Agency shall prepare or cause to be prepared
any environmental documentation required by the California Environmental Quality Act
("CEQA") for consideration of approval of the DDLA; provided that nothing in this Agreement
shall be construed to compel the Agency or the City to approve or make any particular findings
with respect to such CEQA documentation. The Developer shall provide such information about
the Development as may be required to enable the Agency to prepare or cause preparation and
consideration of any CEQA-required document, and shall otherwise generally cooperate with the
Agency to complete this task.
Section 2.10 Section 33433 Report. The Agency shall prepare the necessary
documentation pursuant to Section 33433(a)(2)(B) of the California Health and Safety Code to
be submitted to the Agency Board and City Council in conjunction with the Agency's and the
City's consideration of any DDLA that is prepared under this Agreement. The Section 33433
report shall contain the estimated value of the Site determined at its highest and best use under
the Redevelopment Plan and the estimated value of the Site determined at the use and with the
conditions, covenants and development costs required pursuant to the DDLA.
Section 2.11 Progress Reports. From time to time as reasonably agreed upon by the
parties, each party shall make oral or written progress reports advising the other party on studies
being made and matters being evaluated by the reporting party with respect to this Agreement
and the Development.
ARTICLE 3.
GENERAL PROVISIONS
Section 3.1 Limitation on Effect of Agreement. This Agreement shall not obligate
either the Agency or the Developer to enter into a DDLA or to enter into any particular DDLA.
By execution of this Agreement, the Agency is not committing itself to or agreeing to undertake
acquisition, disposition, or exercise of control over the Site. Execution of this Agreement by the
Agency is merely an agreement to conduct a period of exclusive negotiations in accordance with
the terms hereof, reserving for subsequent Agency Board and City Council action the final
discretion and approval regarding the execution of a DDLA and all proceedings and decisions in
connection therewith. Any DDLA resulting from negotiations pursuant to this Agreement shall
become effective only if and after such DDLA has been considered and approved by the Agency
Board and, the City Council, following conduct of all legally required procedures, and executed
by duly authorized representatives of the Agency and the Developer. Until and unless a DDLA
is signed by the Developer, approved by the Agency Board, and executed by the Agency, no
agreement drafts, actions, deliverables or communications arising from the performance of this
Agreement shall impose any legally binding obligation on either party to enter into or support
entering into a DDLA or be used as evidence of any oral or implied agreement by either party to
enter into any other legally binding document.
1010\13\335811.2
Section 3.2 Notices. Formal notices, demands and communications between the
Agency and the Developer shall be sufficiently given if, and shall not be deemed given unless,
dispatched by certified mail, postage prepaid, return receipt requested, or sent by express
delivery or overnight courier service, to the office of the parties shown as follows, or such other
address as the parties may designate in writing from time to time:
Agency: Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Redevelopment Director
Developer: San Diego Habitat for Humanity
10222 San Diego Mission Road
San Diego, CA 92108
Attn: Executive Director
Such written notices, demands and communications shall be effective on the date shown on the
delivery receipt as the date delivered or the date on which delivery was refused.
Section 3.3 Waiver of Lis Pendens. It is expressly understood and agreed by the
parties that no lis pendens shall be filed against any portion of the Site with respect to this
Agreement or any dispute or act arising from it.
Section 3.4 Limited Right of Entry. The Agency hereby grants the Developer a
limited right of entry to enter the Site exclusively to perform the physical adequacy
determination described in Section 2.6(a) above. The Developer shall indemnify, defend (with
counsel reasonably acceptable to Agency) and hold harmless the Agency and its directors,
officers, contractors, agents and employees against any claims made against them which arise
out of the activities performed by Developer or its contractors, subcontractors, agents,
employees, licensees, invitees or guests on or concerning the Site during the term of this
Agreement. The foregoing indemnity shall not extend to any claim arising solely from the
Agency's gross negligence or intentional acts. The Developer shall restore any portion of the
Site disturbed or damaged as a result of the Developer's investigation (or investigation by the
Developer's agents, consultants, or employees) to the condition that existed immediately prior to
the disturbance or damage. In the event the Developer fails to restore the Site as set forth in this
Section 3.4, then, in addition to any other rights and remedies available to the Agency, the
Agency may in the Agency's sole discretion cause such necessary repair or restoration of the Site
and the Developer shall promptly reimburse the Agency, following the Agency's written
demand, for all costs and expenses incurred by, or on behalf of the Agency, in connection with
such repair (including but not limited to attorneys' fees), and interest payable at the highest rate
permitted by law (commencing as of the date of the Agency's expenditure of any funds for such
repair or restoration)
Section 3.5 Insurance. The Developer shall at all times during the term of this
Agreement keep in full force and effect a policy or policies of commercial general liability
insurance against liability for bodily injury to or death of any person or property damage arising
1010\13\335811.2
out of or in any way related to the Developer's entry onto the Site. The insurance shall be written
on an occurrence basis and the limits of such insurance shall be not less than Two Million
Dollars ($2,000,000) combined single limit for bodily injury and property damage. The
Developer shall also carry or cause to be carried workers' compensation insurance, with statutory
limits as required by the California Labor Code, covering all persons employed by the
Developer, as applicable, in connection with the Development and entry onto the Site under this
Agreement, which shall provide for a waiver of subrogation against the Agency.
Section 3.6 Costs and Expenses. Each party shall be responsible for its owns costs
and expenses in connection with any activities and negotiations undertaken in connection with
this Agreement, and the performance of each party's obligations under this Agreement.
Section3.7 No Commissions. Except as may otherwise be provided in any DDLA
hereafter executed by the Agency, the Agency shall not be liable for any real estate commissions
or brokerage fees that may arise from this Agreement or any DDLA resulting from this
Agreement. The Agency represents that it has engaged no broker, agent or finder in connection
with this transaction, and the Developer shall defend and hold the Agency harmless from any
claims by any broker, agent or finder retained by the Developer.
Section 3.8 Defaults and Remedies
(a) Default. Failure by any Party to negotiate in good faith as provided in this
Agreement shall constitute an event of default hereunder. The non-defaulting Party shall give
written notice of a default to the defaulting Party, specifying the nature of the default and the
required action to cure the default. If a default remains uncured fifteen (15) days after receipt by
the defaulting Party of such notice, the non-defaulting Party may exercise the remedies set forth
in subsection (b).
(b) Remedies. In the event of an uncured default by the Agency or the
Developer, the non-defaulting Party's sole remedy shall be to terminate this Agreement.
Following such termination, no Party shall have any further right, remedy or obligation under
this Agreement, except that the Developer' indemnification obligations pursuant to this
Agreement shall survive such termination.
Except as expressly provided above, no Party shall have any liability to any other Party
for damages or otherwise for any default, nor shall any Party have any other claims with respect
to performance under this Agreement. Each Party specifically waives and releases any such
rights or claims it may otherwise have at law or in equity.
Section 3.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
Section 3.10 Entire Agreement. This Agreement constitutes the entire agreement of the
parties regarding the subject matters of this Agreement.
1010\13\335811.2
Section 3.11 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
agreement.
Section 3.12 Assignment. The Developer may not transfer or assign any or all of their
rights or obligations hereunder except with the prior written consent of the Agency, which
consent shall be granted or withheld in the Agency's sole discretion, and any such attempted
transfer or assignment without the prior written consent of Agency shall be void.
Section 3.13 No Third Party Beneficiaries. This Agreement is made and entered into
solely for the benefit of the Agency and the Developer and no other person shall have any right
of action under or by reason of this Agreement.
Section 3.14 Actions by the Agency. Whenever this Agreement calls for or permits the
approval, consent, authorization or waiver of the Agency, the approval, consent, authorization, or
waiver of the Agency Executive Director shall constitute the approval, consent, authorization or
waiver of the Agency without further action of the Agency Board.
Remainder of Page Left Intentionally Blank
1010\13\335811.2
IN WITNESS WHEREOF, this Agreement has been executed, in triplicate, by the parties
on the date first above written.
DEVELOPER:
SAN DIEGO HABITAT FOR HUMANITY, INC.,
a California nonprofit public benefit corporation
By:
Its:
AGENCY:
CARLSBAD REDEVELOPMENT AGENCY, a
public body corporate and politic
Its: EXECUTIVE DIRECTOR
1010\13\335811.2
EXHIBIT A
LEGAL DESCRIPTION OF THE SITE
Lot 44 of Seaside Lands, in the City of Carlsbad, County of San Diego, State of California,
according to Map thereof No. 1722, filed in the office of the County Recorder of said San Diego
County July 28, 1921;
Excepting the Northeasterly 120 feetthereof, said Northeasterly 120 feet being measured along
the southeasterly line of said lot and parallel with the Northeasterly line of said lot 44.
1010\13\335811.2
EXHIBIT B
PRELIMINARY SCHEDULE
ACTION
1. Approval of ENRA by Agency
2. Approval of Predevelopment Loan Agreement by Agency
3. Developer submission of financing proposal to Agency
4. Developer application for an Amendment to
Major Redevelopment Permit RP 04-04
5. Developer receipt of financing commitments
6.. City Council consideration of Major Redevelopment Permit
7. Agency and City Council consideration of DDLA
8. Execution of DDLA
9. Conveyance of Site to Developer
10. Commencement of Construction
11. Completion of Construction
12. 100% occupancy of Development
FINAL DATE
May, 2006
May, 2006
August, 2006
October, 2006
May, 2007
May, 2007
June, 2007
June, 2007
July, 2007
July, 2007
March, 2009
April, 2009
1010\13\335811.2 B-l
PREDEVELOPMENT LOAN AGREEMENT
(Habitat for Humanity)
This Predevelopment Loan Agreement (the "Agreement") is entered into as of
Ha 14 | Z- , 2006 (the "Effective Date"), by and between the Carlsbad Redevelopment
Agency, a public body, corporate and politic (the "Agency") and San Diego Habitat for
Humanity, Inc., a California nonprofit public benefit corporation (the "Developer"), with
reference to the following facts, purposes and intentions.
RECITALS
A. The City Council of the City of Carlsbad adopted the Carlsbad Village
Redevelopment Plan pursuant to Ordinance No. 9591 adopted on July 21, 1981 (the
"Redevelopment Plan") establishing the Carlsbad Village Redevelopment Project Area (the
"Project Area"). The Agency is responsible for implementing the Redevelopment Plan in the
Project Area. The goals for the Redevelopment Plan include alleviation of blighting conditions
and the stimulation of economic development and affordable housing activities in the Project
Area.
B. The Agency owns a .56 acre parcel of land generally located at 2578 Roosevelt
Street in the Project Area (the "Property"). A legal description of the Property is attached as
Exhibit A. The Developer and the Agency have entered into an Exclusive Negotiating Rights
Agreement (the "ENRA"), pursuant to which the Developer has been granted an exclusive right
to negotiate the purchase of the Property by the Developer from the Agency, the terms and
conditions of which will be set forth in a Disposition, Development, and Loan Agreement
between the Developer and the Agency (the "DDLA").
C. If the DDLA is executed, the Developer intends to develop an eleven (11) unit
housing development (the "Development") on the Property. In order to meet the proposed time
schedule for development of the Development set forth in the ENRA, the Developer must
commence predevelopment activities, including studying the soil and environmental conditions
of the Property, performing feasibility analyses, design of the Development, and application for
required land use approvals (the "Land Use Approvals") and financing commitments.
D. Pursuant to this Agreement, the Agency proposes to loan and the Developer
proposes to borrow Six Hundred Eight Thousand Two Hundred Forty-Four Dollars ($608,244)
to finance certain predevelopment activities in connection with the Development (the
"Predevelopment Loan"). The Predevelopment Loan shall consist of Five Hundred Thirty-Eight
Thousand Eight Hundred Sixty-Two Dollars ($538,862) from the City's HOME Investment
Partnership Fund (the "HOME Funds") and Sixty-Nine Thousand Three Hundred Eighty-Two
Dollars ($69,382) of Community Development Block Grant funds received by the City of
Carlsbad from the United States Department of Housing and Urban Development under Title I of
the Housing and Community Development Act of 1974, as amended ("CDBG Funds").
1010\13\335823.2
E. As set forth in the ENRA, if the DDLA is executed, the Parties anticipate that it
will include a loan from the Agency to the Developer to pay a portion of the costs of construction
of the Development (the "Subsequent Loan"), if the Developer is unable to secure adequate
funding through its fundraising efforts.
F. Pursuant to the terms of the California Community Redevelopment Law (the
"CRL"), if the Developer proceeds to acquire the Property, the Developer will record restrictions
as specified in this Agreement on the units within the Development, ensuring that such units are
sold at an affordable housing cost and remain affordable to specified income categories of
occupants for a specified period.
G. The Agency intends to apply the units to be developed in the Development toward
satisfaction of its project area housing production obligation under Health and Safety Code
Section 33413(b).
H. As more fully set forth in Section 5.12, this Agreement does not authorize or
enable the funding of any Subsequent Loan, the granting of the Land Use Approvals, the
acquisition of the Property, or the construction of the Development. Such actions may be
authorized and will become possible only upon subsequent discretionary action of the City
and/or the Agency.
I. Until completion of certain feasibility studies and preliminary architectural
designs for the Development to be funded through the Predevelopment Loan, it is not possible to
provide meaningful information for environmental assessment of the Development in accordance
with the provisions of the California Environmental Quality Act ("CEQA"). It is the intention of
the parties to use the feasibility studies and preliminary architectural designs to be funded
through the Predevelopment Loan to prepare the necessary environmental assessment under
CEQA prior to approval of discretionary actions of the City and the Agency that would authorize
and enable development of the Development. The Predevelopment Loan is exempt from the
requirements of CEQA pursuant to Section 15262 of the CEQA Guidelines.
NOW, THEREFORE, in consideration of the recitals hereof and the mutual promises and
covenants set forth in this Agreement, the parties agree as follows:
ARTICLE 1
PREDEVELOPMENT LOAN PROVISIONS
Section 1.1 Predevelopment Loan. Subject to satisfaction of the conditions set forth in
Section 1.3, the Agency shall lend to the Developer the principal sum not to exceed Six Hundred
Eight Thousand Two Hundred Forty-Four Dollars ($608,244) for the purposes set forth in
Section 1.2 of this Agreement. The Predevelopment Loan shall be evidenced by a promissory
note (the "Predevelopment Note") in a form to be provided by the Agency, which shall be
executed by the Developer concurrently herewith. The Predevelopment Loan shall bear interest
at a rate of three percent (3%), subject to the provisions for a default interest rate set forth in the
Note and in Section 1.6 of this Agreement. Interest due on the Predevelopment Loan shall
1010\13\335823.2
accrue and be due and payable at the time of the principal of the Predevelopment Loan is due to
be repaid.
Section 1.2 Use of Funds. Proceeds of the Predevelopment Loan may be used only for
the predevelopment costs of the Development, generally in the amounts and for the cost items set
forth in Exhibit B to this Agreement, unless the Agency Executive Director approves in writing a
different use of the funds.
Section 1.3 Security. As security for the Predevelopment Loan, and as part of the
consideration for entering into this Agreement, the Developer hereby:
(a) Assigns to the Agency its rights and obligations with respect to certain
agreements, plans and specifications, and approvals, pursuant to the terms of the Assignment of
Agreements, Plans and Specifications, and Approvals, in a form to be provided by the Agency
(the "Assignment of Plans"), which shall be executed concurrently herewith. The Assignment of
Plans, the Predevelopment Note and this Agreement are referred to herein as the
"Predevelopment Loan Documents".
(b) Agrees that, subject to Agency and City approval of the DDL A and any
Subsequent Loan, concurrently with the purchase by the Developer of the Property, and as to be
provided in the DDLA, the Developer will execute a new promissory note evidencing any
Subsequent Loan (which Subsequent Loan will include the principal and accrued interest on the
Predevelopment Loan) and the Developer will execute and record against the Property a deed of
trust to the Agency, securing the Developer's obligations under the DDLA.
(c) Agrees that upon a Default under Section 4.1 or termination of this
Agreement, the Developer shall cooperate with the Agency to implement the Assignment of
Plans and immediately deposit with the Agency for the Agency's use, all documents, reports,
surveys, materials, architectural drawings and specifications, and any information related to the
Development (collectively the "Documents").
Section 1.4 Conditions to Funding. The Agency shall fund the Predevelopment Loan
upon satisfaction of the following conditions:
(a) Execution by the Developer and delivery to the Agency of the
Predevelopment Note and the Assignment of Plans;
(b) Receipt of a written request from the Developer setting forth the proposed
use of funds and the amount of funds needed, and attaching a copy of the bill or invoice covering
the costs incurred or to be incurred;
(c) The Developer has delivered to the Agency a copy of the Developer's
organizational documents and a corporate authorizing resolution authorizing the Developer's
execution of this Agreement, the Predevelopment Note, the Assignment of Plans, and the
transactions contemplated by the Predevelopment Loan Documents.
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(d) The Developer has furnished the Agency with evidence of the insurance
coverage meeting the requirements of Section 2.4 below.
(e) The Developer has certified in writing to the Agency, and the Agency has
approved such certification and has been provided any documentation, reasonably requested by
the Agency, supporting such certification, that the undisbursed proceeds of the Predevelopment
Loan, together with other funds or firm commitments for funds that the Developer has obtained
in connection with the Property are not less than the amount that is necessary to pay for the
predevelopment tasks and activities set forth in this Agreement and to satisfy all of the covenants
contained in this Agreement.
Notwithstanding any other provisions of this Agreement, the Agency shall have no
further obligation to disburse any portion of the Predevelopment Loan to the Developer
following: (i) termination of this Agreement; or (ii) notification by the Agency to the Developer
of a Developer Default under the terms of this Agreement.
Section 1.5 Termination of Agreement. This Agreement may be terminated under the
following circumstances. Following termination, neither party shall have any rights or
obligations under this Agreement, except that the provisions of Sections 1.6 and 5.4 shall survive
such termination and remain in full force and effect.
(a) Developer Default. If a Default by the Developer occurs under this
Agreement pursuant to Section 4.1 below, which Default is not cured with the applicable time
period in Section 4.1, the Agency may elect in its sole discretion to terminate this Agreement by
providing written notice of such termination to the Developer.
(b) Subsequent Loan. If, by June 30, 2008, or such later date as the Agency
Executive Director and the Developer may agree upon in writing, the Agency has not approved
the DDLA, this Agreement may be terminated by either party by giving written notice of such
termination to the other party.
Section 1.6 Repayment of the Predevelopment Loan.
(a) If Subsequent Loan is Approved and Funded. If a Subsequent Loan and
DDLA are subsequently approved by the Agency and executed by the parties and if all or any
portion of the Subsequent Loan is then funded, this Agreement shall be terminated, the
Predevelopment Note shall be cancelled, and the Predevelopment Loan shall be combined with
the Subsequent Loan for purposes of repayment and thereafter shall bear interest and be repaid in
accordance with the terms of the DDLA. Prior to funding of any portion of the Subsequent
Loan, the Predevelopment Loan shall bear interest at the rate of three percent (3%).
(b) If Subsequent Loan Agreement is not Executed or Subsequent Loan is not
Funded. If this Agreement is terminated without execution of the Subsequent Loan Agreement,
or if the Subsequent Loan Agreement is executed but subsequently terminated without funding
of any portion of the Subsequent Loan, the principal amount and accrued interest on the
Predevelopment Loan shall be due and payable by the Developer to the Agency on the sooner of:
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(i) expiration of the Term (as defined in Section 1.8), or (ii) within thirty (30) days after receipt
by the Developer of written notice from the Agency of such payment obligation (collectively, the
"Due Date").
(c) If Developer Defaults. In the event of a Default by the Developer under
this Agreement (as defined in Section 4.1) that remains uncured after expiration of the applicable
cure period, the principal amount and all accrued interest on the Predevelopment Loan shall be
immediately due and payable, and the principal amount shall commence to bear interest at the
lesser often percent (10%) per annum or the maximum rate permitted by law, from the
expiration of the applicable cure period to the date of repayment in full of the principal amount
of the Predevelopment Loan and any interest due thereon. In this regard, payments received
from the Developer shall be applied to interest accrued first and the remaining balance, if any, to
principal.
Section 1.7 Forgiveness of Predevelopment Loan in Certain Circumstances. The
Agency shall forgive the principal and accrued interest on the Predevelopment Loan upon
termination of this Agreement pursuant to Section 1.5(b) or Section 1.6(b) above if both of the
following conditions are satisfied:
(a) the Developer is not in Default under the terms of this Agreement (as
defined in Section 4.1) as of the date of termination of this Agreement; and
(b) prior to the Due Date, the Developer takes all actions necessary to
implement the assignment of documents, contracts, and approvals pursuant to the Assignment of
Plans and deposits the Documents with the Agency.
If repayment of the Predevelopment Loan is not forgiven due to a failure to satisfy one or
both of the preceding conditions, the principal amount of the Predevelopment Loan shall bear
interest at the lesser often percent (10%) per annum or the maximum rate permitted by law, from
the Due Date to the date of repayment in full of the principal and interest of the Predevelopment
Loan. In this regard, payments received from the Developer shall be applied first to accrued
interest and then to principal.
Section 1.8 Term of Agreement. This Agreement and the Predevelopment Loan shall
have a term (the "Term") that commences as of the Effective Date of this Agreement and shall
terminate on the two (2)-year anniversary of the Effective Date. Notwithstanding the foregoing,
the indemnification provisions of Section 5.4 shall survive termination of this Agreement.
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ARTICLE 2
DEVELOPER OBLIGATIONS
Section 2.1 Predevelopment Tasks and Schedule. The Developer shall perform the
following tasks, among others, with the proceeds of the Predevelopment Loan. The tasks
described below shall be completed no later than the dates set forth in the predevelopment
schedule attached to this Agreement as Exhibit C.
(a) Studies. The Developer shall cause preparation of engineering surveys,
archeological site reviews, environmental and geological studies, and traffic studies as necessary
for the proposed Development.
(b) Design Review Process. The Developer shall cause preparation by the
Davis Group, or such other licensed architect reasonably acceptable to the Agency, of
architectural designs, and shall submit an application to the City for design review of the
Development. The Developer shall diligently pursue completion of the City's design review
process to obtain approval of an amendment to the Major Redevelopment Permit RP 04-04 for
the Development.
(c) Reports. Upon reasonable notice, as from time to time requested by the
Agency, the Developer shall make oral or written progress reports advising the Agency on
progress made and next steps to be taken by the Developer in the performance of the
predevelopment tasks.
Section 2.2 Affordability Restrictions. If the Developer proceeds to purchase the
Property, then following the completion of construction of the Development the Agency and the
Developer shall cause to be recorded against each unit, concurrently with the close of escrow for
the sale of each individual unit to an income-eligible purchaser, a Resale Restriction Agreement
and Option to Purchase (the "Resale Agreement") providing, among other matters, for the sale of
the unit at affordable housing cost to low- and moderate-income households, with specific
affordability levels as defined in the Resale Agreement, for a time period no less than forty-five
(45) years.
Section 2.3 Use. The Development shall be used only for the development of
affordable housing for low and moderate income households consistent with this Agreement and
the DDLA.
Section 2.4 Insurance. The Developer shall maintain and keep in force, at the
Developer's sole cost and expense, the following insurance applicable to the Development in a
form acceptable to the City Risk Manager with evidence of such coverage provided to the Risk
Manager within ten (10) days after execution of this Agreement, but in no event later than the
initial disbursement of Predevelopment Loan funds pursuant to this Agreement:
(a) Worker's Compensation insurance, in scope and amount required by law.
1010\13\335823.2
(b) Comprehensive General Liability insurance with limits not less than Two
Million Dollars ($2,000,000) each occurrence. The Agency and the City shall be named as
additional insureds on this policy, and the policy shall include a statement that the insurance is
primary to any other insurance available to the Agency or City.
(c) Comprehensive Automobile Liability insurance with limits not less than
One Million Dollars ($1,000,000) each occurrence.
(d) For any design professionals working on the Development, errors and
omission coverage in a minimum amount of One Million Dollars ($1,000,000).
(e) Upon the Developer's acquisition of the Property, property insurance
covering the improvements on the Property covering all risks of loss, excluding earthquake and
flood, for one hundred percent (100%) of the replacement value, with deductible, if any,
acceptable to the Agency, naming the Agency as a Loss Payee, as its interests may appear.
Comprehensive General Liability, and Comprehensive Automobile Liability shall be
endorsed to name as additional insureds the Agency and its board members, officers, agents, and
employees. All policies and bonds shall contain (a) the agreement of the insurer to give the
Agency at least thirty (30) days' notice prior to cancellation (including, without limitation, for
non payment of premium) or any material change in said policies; (b) an agreement that such
policies are primary and non contributing with any insurance that may be carried by the Agency;
(c) a provision that no act or omission of the Developer shall affect or limit the obligation of the
insurance carrier to pay the amount of any loss sustained; and (d) a waiver by the insurer of all
rights of subrogation against the Agency and its authorized parties in connection with any loss or
damage thereby insured against.
Section 2.5 Transfers. The Developer shall not cause or permit a sale, encumbrance or
other transfer of its right, title, and interest in this Agreement (including, but not limited to any
assignment of the Predevelopment Loan) or the Development (a "Transfer") without the prior
written approval of the Agency, which the Agency may grant or deny in its sole discretion.
Section 2.6 Non-Discrimination. The Developer covenants by and for itself and its
successors and assigns that there shall be no discrimination against or segregation of a person or
of a group of persons on account of race, color, religion, creed, disability, sex, sexual orientation,
marital status, familial status, ancestry or national origin in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Development, nor shall the Developer or any person
claiming under or through the Developer establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the Development.
Section 2.7 Mandatory Language in All Subsequent Deeds, Leases and Contracts. All
deeds, leases or contracts made or entered into by the Developer, its successors or assigns, as to
any portion of the Development shall contain therein the following language:
1010\13\335823.2
(a) In Deeds:
"Grantee herein covenants by and for itself, its successors and assigns that
there shall be no discrimination against or segregation of a person or of a
group of persons on account of race, color, creed, religion, disability, sex,
sexual orientation, marital status, familial status, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the property herein conveyed nor shall the grantee or any
person claiming under or through the grantee establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the property herein conveyed. The
foregoing covenant shall run with the land."
(b) In Leases:
"The lessee herein covenants by and for the lessee and lessee's heirs,
personal representatives and assigns and all persons claiming under the
lessee or through the lessee that this lease is made subject to the condition
that there shall be no discrimination against or segregation of any person
or of a group of persons on account of race, color, creed, religion,
disability, sex, sexual orientation, marital status, familial status, national
origin or ancestry in the leasing, subleasing, transferring, use, occupancy,
tenure or enjoyment of the land herein leased nor shall the lessee or any
person claiming under or through the lessee establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
sublessees, subtenants, or vendees in the land herein leased."
(c) In Contracts:
"There shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, disability, sex,
sexual orientation, marital status, familial status, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the property nor shall the transferee or any person claiming
under or through the transferee establish or permit any such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees of the land."
Section 2.8 CDBG Requirements.
(a) Developer shall comply with all applicable laws and regulations governing
the use of the HOME Funds and CDBG Funds as set forth in 24 CFR 570 et seg. In the event of
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any conflict between this Agreement and applicable laws and regulations governing the use of
the HOME and CDBG Funds, the applicable laws and regulations shall govern.
(b) The laws and regulations governing the use of the HOME and CDBG
Funds include (but are not limited to) the following:
(1) Environmental and Historic Preservation. Section 104(f) of the
Housing and Community Residence Act of 1974 and 24 CFR Part 58, which prescribe
procedures for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-
4361), and the additional laws and authorities listed at 24 CFR 58.5.
(2) Applicability of OMB Circulars. The applicable policies,
guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-l 10 and A-122.
(3) Architectural Barriers. The requirements of the Architectural
Barriers Act of 1968 (42 U.S.C. 4151-4157).
(4) Lead-Based Paint. The requirement of the Lead-Based Paint
Poisoning Prevention Act, as amended (42 U.S.C. 4821 et seq.) and implementing regulations at
24 CFR Part 35.
(5) Relocation. The requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, and state relocation laws. If and
to the extent that development of the Development results in the permanent or temporary
displacement of residential tenants, homeowners, or businesses, then Developer shall comply
with all applicable local, state, and federal statutes and regulations with respect to relocation
planning, advisory assistance, and payment of monetary benefits. Borrower shall be solely
responsible for payment of any relocation benefits to any displaced persons and any other
obligations associated with complying with such relocation laws.
(6) Handicap Discrimination. The requirements of Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794), and federal regulations issued pursuant thereto,
which prohibit discrimination against the handicapped in any federally assisted program, and the
applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of 1990
(42 U.S.C. 12131 et sea.).
(7) Training Opportunities. The requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701, requiring that to the
greatest extent feasible opportunities for training and employment be given to lower income
residents of the project area and agreements for work in connection with the project be awarded
to business concerns which are located in, or owned in substantial part by persons residing in, the
areas of the project. Borrower agrees to include the following language in all subcontracts
executed under this Agreement:
"The work to be performed under this agreement is a project
assisted under a program providing direct federal financial
1010\13\335823.2
assistance from HUD and is subject to the requirements of Section
3 of the Housing and Urban Development Act of 1968, as amended
12 U.S.C. 1701. Section 3 requires that to the greatest extent
feasible opportunities for training and employment be given to
lower income residents of the project area and agreements for work
in connection with the project be awarded to business concerns
which are located in, or owned in substantial part by persons
residing in, the areas of the project."
(8) Davis-Bacon Act. The prevailing wage requirements of the Davis-
Bacon Act and implementing regulations.
(9) Drug Free Workplace. The requirements of the Drug Free
Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 CFR Part 24.
(10) HUD Regulations. Any other HUD regulations present or as may
be amended, added, or waived in the future pertaining to the HOME and CDBG Funds, including
but not limited to HUD regulations as may be promulgated regarding subrecipients.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE
DEVELOPER
Section 3.1 Representations and Warranties. The Developer hereby represents and
warrants to the Agency as follows:
(a) Organization. The Developer is duly organized, validly existing
California nonprofit public benefit corporation and is in good standing under the laws of the
State of California and has the power and authority to own its property and carry on its business
as now being conducted.
(b) Authority of the Developer. The Developer has full power and authority
to execute and deliver this Agreement and to make and accept the borrowings contemplated
hereurider, to execute and deliver the Predevelopment Loan Documents and all other documents
or instruments executed and delivered, or to be executed and delivered, pursuant to this
Agreement, and to perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the
Predevelopment Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered by the Developer, pursuant to this Agreement have
been executed and delivered by persons who are duly authorized to execute and deliver the same
for and on behalf of the Developer, and all actions required under the Developer's organizational
documents and applicable governing law for the authorization, execution, delivery and
performance of this Agreement and the Predevelopment Loan Documents and all other
documents or instruments executed and delivered, or to be executed and delivered, pursuant to
1010\13\335823.2 10
this Agreement, have been duly taken (to the extent such actions are required as of the date of
execution and delivery of the above-named documents).
(d) Valid Binding Agreements. This Agreement and the Predevelopment
Loan Documents and all other documents or instruments which have been executed and
delivered by the Developer pursuant to or in connection with this Agreement constitute or, if not
yet executed or delivered, will when so executed and delivered constitute, legal, valid and
binding obligations of the Developer enforceable by and against it in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, and other
similar laws affecting the rights of creditors generally and general principles of equity.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Predevelopment Loan Documents by the Developer or of any other
documents or instruments executed and delivered, or to be executed or delivered by the
Developer, pursuant to this Agreement, nor the performance by the Developer of any provision,
condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any
statute, rule or regulation, or any judgment, decree or order of any court, board, commission or
agency whatsoever binding on the Developer, or any provision of the organizational documents
of the Developer, or will conflict with or constitute a breach of or a default under any agreement
to which the Developer is a party, or will result in the creation or imposition of any lien upon any
assets or property of the Developer, other than liens established pursuant hereto.
(f) Compliance With Laws: Consents and Approvals. The predevelopment of
the Property will comply with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government
or agency.
(g) Pending Proceedings. The Developer is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever, and there
are no claims, actions, suits or proceedings pending or, to the knowledge of the Developer,
threatened against or affecting the Developer or the Property, at law or in equity, before or by
any court, board, commission or agency whatsoever which might, if determined adversely to the
Developer, materially and adversely affect the Developer's ability to repay the Predevelopment
Loan or impair the security to be given to the Agency pursuant hereto.
(h) Title to Land. At the time of the Developer's acquisition of the Property,
the Developer will have good and marketable fee title to the Property and there will exist thereon
or with respect thereto no mortgage, lien, pledge or other encumbrance of any character
whatsoever other than those liens approved by the Agency, liens for current real property taxes
and assessments not yet due and payable, and liens in favor of the Agency or approved in writing
by the Agency.
(i) Financial Statements. The financial statements of the Developer and other
financial data and information furnished by the Developer to the Agency fairly present the
information contained therein. As of the date of this Agreement, there has not been any adverse,
1010\13\335823.2
material change in the financial condition of the Developer from that shown by such financial
statements and other data and information.
(j) Sufficient Funds. Following execution of this Agreement (and including
the Predevelopment Loan funds), the Developer holds sufficient funds and/or binding
commitments for sufficient funds to pay predevelopment expenses of the Development.
ARTICLE 4
DEFAULT
Section 4.1 Default. A "Default" shall consist of any material breach of any covenant,
agreement, provision or warranty contained in this Agreement or the Predevelopment Note,
which has not been cured by the defaulting party within thirty (30) days after receipt of written
notice of such breach from the non-defaulting party. If the DDLA has been executed but not
funded (and this Agreement therefore remains in effect), a default by either party under the
DDLA (subject to expiration of applicable notice and cure periods) shall also constitute a Default
under this Agreement. In the event of a Default, the non-defaulting party may apply to a court
for specific performance of this Agreement or an injunction against any violation of this
Agreement, or any other remedies at law or in equity (including, if the Agency is the non-
defaulting party, acceleration of the amount due under the Predevelopment Note and exercise of
the Agency's rights under the Assignment of Plans, if executed) or any such other actions as shall
be necessary or desirable so as to correct non-compliance with this Agreement.
ARTICLE 5
GENERAL PROVISIONS
Section 5.1 Relationship of Parties. Nothing contained in this Agreement shall be
interpreted or understood by any of the parties, or by any third persons, as creating the
relationship of employer and employee, principal and agent, limited or general partnership, or
joint venture between the Agency and the Developer or the Developer's agents, employees or
contractors, and the Developer shall at all times be deemed an independent contractor and shall
be wholly responsible for the manner in which it or its agents, or both, perform the services
required of it by the terms of this Agreement for the development of the Development. In
regards to the development of the Development, the Developer shall be solely responsible for all
matters relating to payment of its employees, including compliance with Social Security,
withholding and all other laws and regulations governing such matters, and shall include
requirements in each contract that contractors shall be solely responsible for similar matters
relating to their employees. The Developer agrees to be solely responsible for its own acts and
those of its agents and employees.
The firm of Davis Group has been selected by the Developer as the architect for the
Development, and Linvedt McColl Engineers has been selected as the civil engineer for the
Development. The Developer may, from time to time, select other consultants and vendors for
the Development. Notwithstanding the preceding paragraph, the Agency shall have the right to
1010\13\335823.2 12
provide input regarding the selection and, if necessary, the replacement of such other consultants
or vendors employed by the Developer to perform the predevelopment tasks contemplated by
this Agreement, and shall have the right to provide input regarding the replacement of the
previously selected architect, if necessary. The Developer shall consider in good faith such input
from the Agency, and shall confer with the Agency, upon request, regarding such selection and
replacement decisions.
Section 5.2 No Claims. Nothing contained in this Agreement shall create or justify
any claim against the Agency, by any person the Developer may have employed or with whom
the Developer may have contracted relative to the purchase of materials, supplies or equipment,
or the furnishing or the performance of any work or services with respect to the development of
the Development, and the Developer shall include similar requirements in any contracts entered
into for the development of the Development.
Section 5.3 Amendments. No alteration or variation of the terms of this Agreement
shall be valid unless made in writing by the parties.
Section 5.4 Indemnification. Except as directly caused by the Agency's or City's gross
negligence, the Developer agrees to indemnify, protect, hold harmless and defend (by counsel
reasonably satisfactory to the Agency) the Agency, the City and their respective board members,
officers and employees, from all suits, actions, claims, causes of action, costs, demands,
judgments and liens arising out of the Developer's performance or non-performance of its
obligations under this Agreement, arising from Developer's purchase and ownership of the
Property, the development, marketing, rental, operation and management of the Development or
any documents executed by the Developer in connection with the Development.
Section 5.5 Non-Liability of Agency and City Officials, Employees and Agents. No
member, official, employee or agent of the Agency or the City shall be personally liable to the
Developer, or any successor in interest, in the event of any Default or breach by the Agency, or
for any amount which may become due to the Developer or its successor or on any obligation
under the terms of this Agreement.
Section 5.6 No Third Party Beneficiaries. There shall be no third party beneficiaries
to this Agreement.
Section5.7 Action by the Agency. Except as may be otherwise specifically provided
herein, whenever any approval, notice, direction, consent, request, extension of time, waiver of
condition, termination, or other action by the Agency is required or permitted under this
Agreement, such action may be given, made, or taken by the Agency Executive Director without
further approval by the Agency Board, and any such action shall be in writing. The amount of
the Predevelopment Loan may not be increased without approval of the Agency Board.
Section 5.8 Notices, Demands and Communications. Formal notices, demands, and
communications between the Agency and the Developer shall be sufficiently given if and shall
not be deemed given unless dispatched by registered or certified mail, postage prepaid, return
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receipt requested, or delivered by express delivery service, return receipt requested, or delivered
personally, to the principal office of the Agency and the Developer as follows:
Agency:
Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Executive Director
Developer:
San Diego Habitat for Humanity, Inc.
10222 San Diego Mission Road
San Diego, CA 92108
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected party may from time to time designate by mail as provided in this
Section. Receipt shall be deemed to have occurred on the date shown on a written receipt for
delivery or refusal of delivery.
Section 5.9 Applicable Law. This Agreement will be governed by California law.
Section 5.10 Parties Bound. Except as otherwise limited herein, the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, legal representatives, successors and assigns.
Section 5.11 Severability. If any term of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall
continue in full force and effect unless the rights and obligations of the parties have been
materially altered or abridged by such invalidation, voiding or unenforceability.
Section 5.12 Future City and Agency Actions. The parties acknowledge and agree that:
(a) This Agreement does not constitute Agency or City approval of the
Subsequent Loan, the DDLA, the Land Use Approvals, acquisition of the Property by the
Developer, or construction of the Development;
(b) The Agency and City retain full discretion to approve or disapprove the
Subsequent Loan, the DDLA, and the Land Use Approvals; and
(c) Prior to consideration of the Subsequent Loan the DDLA, and the Land
Use Approvals, the Agency and City must first perform all applicable statutory preconditions to
such consideration, including completion of any required CEQA review and documentation.
1010\13\335823.2 14
Section 5.13 Multiple Originals: Counterparts. This Agreement may be executed in
multiple originals, each of which shall be deemed to be an original, and may be executed in
counterparts.
Remainder of Page Left Intentionally Blank
1010\13\335823.2 15
WHEREFORE, this Agreement has been entered into by the undersigned as of the date
first above written.
DEVELOPER:
SAN DIEGO HABITAT FOR
HUMANITY, INC., a California nonprofit
public benefit Corporation
By:
TO O.Its: (£> V? du n *A5
AGENCY:
CARLSBAD REDEVELOPMENT
AGENCY, a public body corporate and
Its: KXECUTIVE DIRECTOR
1010\13\335823.2 16
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
Lot 44 of Seaside Lands, in the City of Carlsbad, County of San Diego, State of California,
according to Map thereof No. 1722, filed in the office of the County Recorder of said San Diego
County July 28, 1921;
Excepting the Northeasterly 120 feet thereof, said Northeasterly 120 feet being measured along
the Southeasterly line of said lot and parallel with the Northeasterly line of said lot 44.
1010\13\335823.2
EXHIBIT B
PREDEVELOPMENT COSTS TO BE FUNDED BY PREDEVELOPMENT LOAN
The following costs up to a maximum of $608,244 may be funded by said predevelopment loan:
1. Plan Check & Inspection Fees
2. Permit Fees
3. Impact/Capacity Fees
4. Architect Fees (incl. noise report and landscape)
5. Civil Engineering Fees
6. Dry Utilities
7. Subdivision Processing
8. Preconstruction Geotechnical
9. Construction Geotechnical
10. Contingency (predevelopment)
11. Other misc. predevelopment costs (as may be approved by the Housing and
Redevelopment Director)
1010\13\335823.2 B-l
EXHIBIT C
PREDEVELOPMENT TIME SCHEDULE
Action
Approval of ENRA by Agency
Approval of Predevelopment Loan Agreement
by Agency
Developer submission of financing proposal to
Agency
Developer submission of application for
Amendment to Major Redevelopment Permit
RP 04-04
Developer receipt of financing commitments
Housing and Redevelopment Commission
consideration of Major Redevelopment Permit
Amendment Application
Agency and City Council consideration of
DDLA
Execution of DDLA
Conveyance of Site to Developer
Commencement of Construction
Completion of Construction
100% Occupancy of Development
Final Date
May, 2006
May, 2006
August, 2006
October, 2006
May, 2007
May, 2007
June, 2007
June, 2007
July, 2007
July, 2007
March, 2009
April, 2009
1010M3V335823.2 C-l
PROMISSORY NOTE
(Predevelopment Loan)
$608,244 Carlsbad, California
IZ .2006
FOR VALUED RECEIVED, San Diego Habitat for Humanity, Inc., a California
nonprofit public benefit corporation (the "Borrower"), promises to pay to the Carlsbad
Redevelopment Agency (the "Agency"), or order, the principal sum of Six Hundred Eight
Thousand Two Hundred Forty-Four Dollars ($608,244), or so much thereof as is advanced to
Borrower pursuant to Article 1 of the Predevelopment Loan Agreement (as defined below), as
provided below.
1. Loan Agreement. This promissory note (the "Note") is made pursuant to the
terms of the Predevelopment Loan Agreement dated of even date herewith, entered into between
the Borrower and the Agency (the "Predevelopment Loan Agreement"). All capitalized terms
used but not defined in this Note shall have the meanings set forth in the Predevelopment Loan
Agreement. Upon acquisition of the Property, Borrower shall execute and record a Regulatory
Agreement imposing affordability restrictions on the Property as required by law.
2. Repayment Terms: Interest. The indebtedness evidenced by this Note shall be
due and payable at the times and in the manner set forth in Section 1.6 of the Predevelopment
Loan Agreement. The outstanding principal balance of this Note shall bear interest at a rate of
three percent (3%) compounded annually; provided however, if a Default occurs, interest on the
principal balance shall accrue in accordance with Section 4 of this Note.
3. Security. As the security for this Note, Borrower has assigned to the Agency its
rights and obligations with respect to certain documents, approvals, and agreements as provided
in the Assignment of Plans.
4. Acceleration Pursuant to Default. As more fully set forth in Section 1.6(c) of the
Predevelopment Loan Agreement, upon the occurrence of an event of default in the
Predevelopment Loan Agreement, the Agency shall have the right to declare all of the principal
immediately due and payable, which amount shall bear interest at the lesser often percent (10%)
per annum, or the maximum amount permitted by law, from the expiration of the applicable cure
period for the default to the date of repayment in full of the principal amount of the
Predevelopment Loan and any interest due thereon. All payments received shall be applied first
to the accrued interest and second to the principal outstanding. Neither acceptance by the
Agency of the payments provided for herein nor any failure by the Agency to pursue its legal and
equitable remedies upon default shall constitute a waiver of the Agency's right to require prompt
payments when due of all principal and interest owing or to declare a default and exercise all of
its rights under this Note and the Predevelopment Loan Agreement.
1010\13\340864.1
5. No Offset. The Borrower hereby waives any rights of offset it now has or may
hereafter have against the Agency, its successors and assigns, and agrees to make the payment
called for herein in accordance with the terms of this Note.
6. Waiver: Attorney's Fees. The Borrower, for itself, its heirs, legal representatives,
successors and assigns, waives diligent presentment, protest and demand, and notice of protest,
dishonor and non-payment of this Note, and expressly waives any rights to be released by reason
of any extension of time or change in terms of payment, or change, alteration or release of any
security given for the payments hereof, and expressly waives the right to plead any and all
statutes of limitations as a defense to any demand on this Note or agreement to pay the same, and
agrees to pay all costs of collection when incurred, including reasonable attorneys' fees. If an
action is instituted on this Note, the undersigned promises to pay, in addition to the costs and
disbursements allowed by law, such sum as a court may adjudge reasonable as attorneys' fees in
such action.
7. Manner and Place of Payment. All payments of principal and interest shall be
payable in lawful money of the United States of America at the office of the Agency as set forth
in Section 5.8 of the Predevelopment Loan Agreement or at such other address as the Agency
may provide to the Borrower by notice in accordance with Section 5.8 of the Predevelopment
Loan Agreement.
8. Assignment. The Agency's rights under this Note may be assigned by the Agency
in its discretion.
9. Conflict. If any term or provision of this Note conflicts with any term or
provision of the Predevelopment Loan Agreement, the term of provision of the Predevelopment
Loan Agreement shall control to the extent of such conflict.
SAN DIEGO HABITAT FOR HUMANITY, INC.,
a California nonprofit public benefit corporation
By:
Its: i^
1010\13\340864.1
ASSIGNMENT OF AGREEMENTS, PLANS AND SPECIFICATIONS, AND APPROVALS
FOR VALUE RECEIVED, the undersigned, San Diego Habitat for Humanity, Inc., a California
nonprofit public benefit corporation (the "Developer"), hereby assigns and transfers to the Carlsbad
Redevelopment Agency, a public body corporate (the "Agency"), all of its right, title and interest in and
to:
(1) All architectural, design, engineering, and construction contracts and development
agreements, and any and all amendments, modifications, supplements, addenda and
general conditions thereto (collectively "Agreements"), heretofore or hereafter entered into
by any Contractor (as defined below);
(2) All plans and specifications, shop drawings, working drawings, amendments,
modifications, changes, supplements, general conditions and addenda thereto (collectively
"Plans and Specifications") heretofore or hereafter prepared by any Contractor (as defined
below); and
(3) All land use approvals, building permits, and other governmental approvals of any
nature obtained for the Development (collectively, the "Land Use Approvals").
This Assignment is made pursuant to the terms of the Predevelopment Loan Agreement dated as
of T^H f^.' 2006, entered into between the Developer and the Agency (the "Predevelopment Loan
Agreement"). Capitalized terms used but not defined in this Assignment shall have the meanings set forth
in the Predevelopment Loan Agreement. The Property with respect to which the Agency has made the
Predevelopment Loan to the Developer under the Predevelopment Loan Agreement is described in
Attachment No. 1 attached to this Assignment.
For purposes of this Assignment, the term "Contractor" means any architect, construction
contractor, engineer or other person or entity entering into Agreements with the Developer and/or
preparing Plans and Specifications for the Developer with respect to the Development.
The Developer hereby irrevocably appoints the Agency as its attorney-in-fact (which agency is
coupled with an interest) to, upon the occurrence of a Default by Developer (after notice and opportunity
to cure) or an event which, with notice or the passage of time or both would constitute a Default (after
notice and opportunity to cure) under and as defined in Section 4.1 of the Predevelopment Loan
Agreement, demand, receive, and enforce any and all of the Developer's rights with respect to the Plans
and Specifications, Agreements and Land Use Approvals, and perform any and all acts in the name of the
Developer or in the name of the Agency with the same force and effect as if performed by the Developer
in the absence of this Assignment.
The Developer represents and warrants to the Agency that no previous assignment(s) of its rights
or interest in or to the Plans and Specifications, Agreements, and/or Land Use Approvals, has or have
been made, and the Developer agrees not to assign, sell, pledge, transfer, mortgage, or hypothecate its
rights or interest therein (without prior written approval of the Agency Executive Director) so long as the
Agency holds or retains any security interest under the Predevelopment Loan Agreement.
1010\13\340869.1
This Assignment is made to secure: (1) payment to the Agency of all sums now or hereafter
owing under the Predevelopment Note dated as of the date hereof made by the Developer to the order of
the Agency, and any and all additional advances, modifications, extensions, renewals and amendments
thereof; and (2) payment and performance by the Developer of all its obligations under the
Predevelopment Loan Agreement.
This Assignment shall be governed by the laws of the State of California, except to the extent that
Federal laws preempt the laws of the State of California, and the Developer consents to the jurisdiction of
any Federal or State Court within the State of California having proper venue for the filing and
maintenance of any action arising hereunder and agrees that the prevailing party in any such action shall
be entitled, in addition to any other recovery, to reasonable attorneys' fees and costs.
This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives,
assigns, and successors-in-interest of the Developer and the Agency; provided, however, this shall not be
construed and is not intended to waive the restrictions on assignment, sale, transfer, mortgage, pledge,
hypothecation or encumbrance by the Developer contained in the Predevelopment Loan Agreement.
Attachment No. 1 and the Architect's/Engineer's Consent are attached hereto and incorporated
herein by reference.
Executed by the Developer on c^QAAS *2"S 2006.
DEVELOPER:
SAN DIEGO HABITAT FOR HUMANITY, INC., a
California nonprofit public benefit corporation
By:
Its:
1010\13\340869.1
ARCHITECT'S/ENGINEER'S CONSENT
The undersigned architect and/or engineer (collectively referred to as "Architect") hereby
consents to the foregoing Assignment of Agreements, Plans and Specifications, and Approvals
("Assignment"), of which this Architect's/Engineer's Consent ("Consent") is apart, and
acknowledges that there presently exists no unpaid claims presently due to the Architect except
as disclosed to the Agency arising out of the preparation and delivery of the Plans and
Specification to the Developer and/or the performance of the Architect's obligations under the
Agreements, as the term "Agreements" is defined in the Assignment.
Architect agrees that if, at any time, the Agency shall become the owner of said Property,
or, pursuant to its rights under the Predevelopment Loan Agreement, elects to undertake or cause
the completion of construction of the Development on any of the Property, in accordance with
the Plans and Specifications, and gives Architect written notice of such election; then so long as
the Architect has received, receives or continues to receive the compensations called for under
the Agreements, the Agency may, at its option, use and rely on the Plans and Specifications for
the purposes for which they were prepared, and Architect will continue to perform its obligations
under the Agreements for the benefit and account of the Agency in the same manner as if
performed for the benefit or account of the Developer in the absence of this Assignment.
Architect further agrees that, in the event of a breach by the Developer of the
Agreements, or any agreement entered into with Architect in connection with the Plans and
Specifications, so long as the Developer's interest in the Agreements and Plans and
Specifications is assigned to the Agency, Architect will give written notice to the Agency at the
address shown below of such breach. The Agency shall have thirty (30) days from the receipt of
such written notice of Default to remedy or cure said Default; provided, however, nothing herein
shall require the Agency to cure said Default or to undertake completion of construction of the
Improvements.
Architect warrants and represents that it/he/she has no knowledge of any prior
assignment(s) of any interest in either the Plans and Specifications and/or the Agreements.
Except as otherwise defined herein, the terms used herein shall have the meanings given them in
the Assignment or the Predevelopment Loan Agreement, as applicable.
1010\13\340869.1
Executed on this &' of
Address of Agency:
Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Executive Director
20^.
Address of Architect:
1010U3Y340869.1
ATTACHMENT NO. 1 TO ASSIGNMENT
PROPERTY DESCRIPTION
Lot 44 of Seaside Lands, in the City of Carlsbad, County of San Diego, State of California,
according to the Map thereof No. 1722, filed in the office of the County Recorder of San Diego
County July 28, 1921;
Excepting the Northeasterly 120 feet thereof, said Northeasterly 120 feet being measured along
the Southeasterly line of said lot and parallel with the Northeasterly line of said lot 44.
1010\13\340869.1
ARCHITECT'S/ENGINEER'S CONSENT
The undersigned architect and/or engineer (collectively referred to as "Engineer") hereby
consents to the foregoing Assignment of Agreements, Plans and Specifications, and Approvals
("Assignment"), of which this Architect's/Engineer's Consent ("Consent") is a part, and
acknowledges that there presently exists no unpaid claims presently due to the Engineer except
as disclosed to the Agency arising out of the preparation and delivery of the Plans and
Specification to the Developer and/or the performance of the Architect's obligations under the
Agreements, as the term "Agreements" is defined in the Assignment.
Engineer agrees that if, at any time, the Agency shall become the owner of said Property,
or, pursuant to its rights under the Predevelopment Loan Agreement, elects to undertake or cause
the completion of construction of the Development on any of the Property, in accordance with
the Plans and Specifications, and gives Engineer written notice of such election; then so long as
the Architect has received, receives or continues to receive the compensations called for under
the Agreements, the Agency may, at its option, use and rely on the Plans and Specifications for
the purposes for which they were prepared, and Engineer will continue to perform its obligations
under the Agreements for the benefit and account of the Agency in the same manner as if
performed for the benefit or account of the Developer in the absence of this Assignment.
Engineer further agrees that, in the event of a breach by the Developer of the
Agreements, or any agreement entered into with Engineer in connection with the Plans and
Specifications, so long as the Developer's interest in the Agreements and Plans and
Specifications is assigned to the Agency, Engineer will give written notice to the Agency at the
address shown below of such breach. The Agency shall have thirty (30) days from the receipt of
such written notice of Default to remedy or cure said Default; provided, however, nothing herein
shall require the Agency to cure said Default or to undertake completion of construction of the
Improvements.
Engineer warrants and represents that it/he/she has no knowledge of any prior
assignment(s) of any interest in either the Plans and Specifications and/or the Agreements.
Except as otherwise defined herein, the terms used herein shall have the meanings given them in
the Assignment or the Predevelopment Loan Agreement, as applicable.
1010\13\340869.1
Executed on this 29*^ of <JcVwcT 200^.
Address of Agency: Address of Engineer:
Carlsbad Redevelopment Agency 2,310
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Executive Director
^ M
1010\13\340869.1
ATTACHMENT NO. 1 TO ASSIGNMENT
PROPERTY DESCRIPTION
Lot 44 of Seaside Lands, in the City of Carlsbad, County of San Diego, State of California,
according to the Map thereof No. 1722, filed in the office of the County Recorder of San Diego
County July 28, 1921;
Excepting the Northeasterly 120 feet thereof, said Northeasterly 120 feet being measured along
the Southeasterly line of said lot and parallel with the Northeasterly line of said lot 44.
1010\13\340869.1
Building
houses,
building
hope
San Diego
Habitat
for Humanity0
RESOLUTION OF THE BOARD OF DIRECTORS
OF
SAN DIEGO HABITAT FOR HUMANITY.INC.
This Resolution was made during the Board's regular meeting on April 25, 2006. Upon
motion and second it was unanimously resolved that the Executive Director be authorized
to execute a loan agreement and all supporting documents and to take all necessary
actions to enter into an Agreement for Development with the City of Carlsbad for the
development of Roosevelt Village Condominiums.
Secretary pro tern
Date
10222 San Diego Mission Road
San Diego, CA 92108-2135
(619) 283-HOME (4663)
Fax (619) 516-5264
www.sdhfh.org
1427529
'X c' ft.- !.._,,. ,.Cot:f-j~
' )
ARTICLES OF INCORPORATION
JAN 2 0 1988
OF THE
TIJUANA-SAN DIEGO F°NG EU'
HABITAT FOR HUMANITY, INC.
A California Nonprofit Public Benefit Corporation
I.
The name of the corporation is the Tijuana-San Diego Habitat
for Humanity, Inc.
•II.
The name and address in California of the corporation's
initial agent for service of process is:
, Dr. Dennis Briscoe
1544 Borana Street
San Diego, CA 92111
III.
This corporation is a nonprofit public benefit corporation
and is not organized for the private gain of any person. It is
organized under the Nonprofit Public Benefit Corporation Law for
charitable purposes.
IV.
The specific purpose of this corporation is:
(a) To implement the gospel of Jesus Christ throughout the
United States and around the world by working in partnership with
economically disadvantages people to help them create a better
human habitat in which to live and work;
(b) To endeavor to build new or to rehabilitate existing
family residences, whether single, duplex, or multiple family
residence units, in the San Diego-Tijuana area, for sale at cost
) to low-income families without regard to.religion, race, sex, or
national origin who could not otherwise purchase decent housing
accommodations;
(c) To cooperate with other charitable organizations,
through grants and otherwise, which are working to develop a
better habitat for economically disadvantaged people, emphasizing
the Christian and ecumenical nature of the purposes of this
corporation;
(d) To communicate God's love by means of the spoken word
and by the doing of charitable deeds;
(e) To receive, maintain and accept, as assets of the
corporation, any property, whether real, personal or mixed, by
way of gift, bequest, devise or purchase, from any person, firm,
trust or corporation, to be held, administered and disposed of in
accordance with and pursuant to the provisions of these Articles
of Incorporation; but no gift, bequest, devise or purchase of any
such property shall be received or made and accepted if it is
conditioned or limited in such manner as shall require the
disposition of income or principal to any organization other than
a "charitable organization" or for any purpose other than
•charitable purposes" within the respective meanings of such
quoted terms as defined in Articles VIII and IX, or which would
jeopardize the Federal Income Tax exemption of this corporation
pursuant to Section 501(c)(3) of the Internal Revenue Code of
1954, or the corresponding provision of any future U.S. Internal
) Revenue law or the deductibility of contributions under Section
170(c) (2) of the Internal Revenue Code of 1954 or the corres-
ponding provision of any future U.S. Internal Revenue law.
VI.
The corporation shall hold and manage all property received
and accepted by it to be administered hereunder, and shall pay
over, transfer, distribute, administer, or otherwise deal with
the principal and income thereof, in such manner or manners, and
at such time or times, as in the judgment of the Board of
Directors of the corporation shall be suited to carrying out the
foregoing purposes, including without hereby limiting the
generality of the foregoing language, the acquisition by
purchase, gift, rental or otherwise, and the management, care,
sale or lease or other disposition of, real property, and
interest in real property, including buildings and other improve-
ments, the acquisition by purchase, gift, rental or otherwise,
and the preparation, sale, dispensation, lease or other disposi-
tion of equipment, supplies, and other personal property and
interests in personal property of whatsoever name or nature, and
the retention of the services (whether directly or through
contract or other arrangement with others), or employment of
professional personnel, managers, administrators, assistants,
) secretaries, and other persons, agents, servants and employees,
provided, always, however, that no part of all the property held
-2-
by the corporation/ or the earnings thereon, shall inure or be
payable to or for the benefit of any director, trustee, officer,
) private shareholder or member of the corporation, or any
individual. No substantial part of the activities of the
corporation shall be the carrying on of lobbying or propaganda,
or otherwise attempting to influence legislation, except as
provided in Section 501(h) of the Internal Revenue Code of 1954,
and the corporation shall not participate in or intervene in
(including the publishing or distributing of statements) , any
political campaign on behalf of any candidate for public office.
VII.
In the event of the dissolution of this corporation to the
extent allowed under applicable law, and after paying or
adequately providing for the debts, obligations and liabilities
of the corporation, all of the remaining assets of the corpo-
ration shall be distributed to another organization organized and
operating for the same purposes for which this corporation is
organized and operating, or to one or more corporations, funds or
foundations organized and operating exclusively for religious,
charitable, scientific, literary or educational purposes, which
said corporations, funds or foundations shall be exempt under
Section 501(c)(3) of the Internal Revenue Code of 1954, or the
corresponding provision of any future U.S. Internal Revenue law,
which shall be selected by the board of directors of the corpo-
") ration. In the event that for any reason upon the dissolution of
the corporation the board of directors of the corporation fail to
act in the manner herein provided within a reasonable time, the
Judge of the Superior Court of San Diego County shall make such
distribution as herein provided upon the application of one or
more persons having a real interest in the corporation or its
assets.
VIII.
In these Articles of Incorporation and in any amendments
thereto, the terms "charitable organizations" or "charitable
organization" shall mean corporations, trusts, funds, founda-
tions, community chests, or other organizations created or
organized in the United States or any of its possessions, whether
under the laws of the United States or any of its possessions,
whether under the laws of the United States, any state or state
or territory of the United States, the District of Colombia, or
any possessions of the United States, and operated exclusively
for charitable purposes, no part of the net earnings of which
inures or is payable to or for the benefit of any director,
trustee, officer, private shareholder or member of said
charitable organization, or any individual, and no substantial
part of the activities of which is for the purpose of carrying on
^) lobbying or propaganda, or otherwise attempting to influence
legislation, except as provided in Section 501(h) of the Internal
-3-
Revenue Code of 1954, and which do not participate in, or
-, intervene (including the publishing or distributing of
) statements) in any political campaign on behalf of any candidate
for public office. The organizations described in this Article
VIII shall be such only as are entitled to exemption from income
tax under Section 501(c)(3) of the Internal Revenue Code of 1954,
or the corresponding provision of any future U.S. Internal
Revenue law.
IX.
In these Articles of Incorporation and any amendments
thereto, the term "charitable purposes" shall mean, and shall be
limited to and shall include only, religious, charitable,
scientific, literary or educational purposes within the meaning
of those words as used in Section 501 (c) (3) of the Internal
Revenue Code of 1954, or the corresponding provision of any
future D.S. Internal Revenue law.
X.
As a means of accomplishing the foregoing charitable
religious and educational purposes, the corporation shall have
the following additional powers:
J (1) To adopt, amend and alter by-laws of the corporation
governing its internal affairs;
(2) To elect and appoint officers, agents, and employees,
consistent with said by-laws and these Articles of Incorporation
and not in violation of State law;
(3) To borrow money, and from time to time, to make,
accept, endorse, execute, and issue bonds, debentures, promissory
notes, bills of exchange, and other obligations of the corpo-
ration for moneys borrowed or in payment for property acquired
for any of the other purposes of the corporation, and to secure
the payment of any such obligations by mortgage, pledge, deed of
trust, indenture, agreement or other instrument of trust or by
other privilege, agreement or other instrument of trust or by
other privilege upon, assignment of, or agreement in regard to
all or any part of the property, rights or privileges of the
corporation wherever situated, whether now owned or hereafter to
be acquired;
(4) To invest and reinvest its funds in such stock, common
or preferred, bonds, debentures, mortgages or in such other
securities and property as may be provided for in the by-laws of
the corporation subject to the limitations and conditions con-
tained in any bequest, devise, grant or gift, provided such
J limitations and conditions are not in conflict with the pro-
visions of Section 501(c) (3) of the Internal Revenue Code or the
corresponding provision of any future D.S. Internal Revenue law;
-4-
(5) To exercise such other povers which are now or
hereafter may be conferred by law upon a corporation organized
for the purposes hereinabove set forth, or reasonably necessary
to the attainment of the purposes of the corporation, subject to
the further limitation and conditions that, notwithstanding any
other provisions of these Articles of Incorporation, only such
powers shall be exercised as are in furtherance of the tax-exempt
purposes of the corporation and as may be exercised by an
organization exempt under Section 501 (c) (3) of the Internal
Revenue Code and its regulations or the corresponding provision
of any future U.S. Internal Revenue law, and by an organization
contributions to which are deductible under Section 170{c)(2) of
such Code or the corresponding provision of any future U.S.
Internal Revenue law.
XI.
The name of the existing unincorporated association now
being incorporated by the filing of these articles is the
Tijuana-San Diego Habitat for Humanity.
Dated : JU, 11,
3 DENNIS BRISCOE
-5-
DECLARATION
Dr. Dennis Briscoe and Dr. Jin Jackson, Jr., declare under
penalty of perjury under the laws of California that they are the
President and Secretary, respectively, of Tijuana-San Diego
Habitat for Humanity referred to in Article XI of these Articles
of Incorporation to which this declaration is attached, and that
that association has duly authorized and approved in accordance
with its rules and procedures its incorporation by means of these
Articles.
Executed at sj^/v. e^ -oyx*^ , on
19 <p;L . e U
DENNIS BRISCOE, President
ecretary
J"TSDAC:CPW8
-6-
Internal Revenue Service
Date: December 25, 2C04
HABITAT FOR HUMANITY INTERNATIONAL INC
SAN DIEGO HABITAT FOR HUMANITY
%TOMDURWOOD
10222 SAN DIEGO MISSION RD
SAN DIEGO CA 92108
Department of the Treasury
P. 0. Box 2508
Cincinnati, OH 45201
Parson to Contact:
Steve Brcwn 3.-C7422
Customer Service Recresentative
Toll Free Telephone Number:
8:00 a.m. tc S:30 p.m. EST
877-829-55CO
Fax Number:
513-263-3756
Federal Identification Number:
33-0259190
Group Exemption Number:
8545
Dear Sir or Madam:
This is in response to your request of December 28, 2004, regarding your organization's tax-
exempt status.
Your organization is exempt under section 501 (c)(3) of the Code because it is included in a
group ruling issued to Habitat for Humanity International, Inc., located in Mio, Michigan.
Our records indicate that contributions to your organization are deductible under section 170 of the
Code, and that you are qualified to receive tax deductible bequests, devises, transfers or gifts under
section 2055, 2106 or 2522 of the Internal Revenue Code.
If you have any questions, please call us at the telephone number shown in the heading of this letter.
Sincerely,
Janna K. Skufca, Director, TE/GE
Customer Account Services
EXHIBIT 5
HOUSING COMMISSION STAFF REPORT
WITH DRAFT MINUTES
DATED MARCH 9,2006
ROOSEVELT STREET AFFORDABLE CONDOMINIUMS
TTOT
Staff: Debbie Fountain
Housing and Redevelopment Director
Item No. 2
DATE: MARCH 9,2006
SUBJECT: RP 04-04(a) - ROOSEVELT GARDEN CONDOMINIUMS -
RECOMMENDATION OF APPROVAL TO THE HOUSING AND
REDEVELOPMENT COMMISSION TO PROVIDE A TOTAL OF
$1,326,037 IN FINANCIAL ASSISTANCE, INCLUDING A LAND
DONATION AND CASH ASSISTANCE, FOR CONSTRUCTION
OF ELEVEN (11) AFFORDABLE CONDOMINIUM UNITS IN THE
VILLAGE REDEVELOPMENT AREA.
I. RECOMMENDATION
That the Housing Commission ADOPT Resolution No. 2006-002, recommending
APPROVAL to the Housing and Redevelopment Commission to provide $1,326,037
in financial assistance, including a land donation and pre-development funding, to
Habitat for Humanity for construction of eleven (11) condominium residential units
in the Village Redevelopment Area.
II. PROJECT BACKGROUND
In March, 2003, the Carlsbad Redevelopment Agency purchased the property located
at 2578 Roosevelt Street with the intent of developing an affordable housing project
for very low income households. In December, 2004, the Housing and
Redevelopment Commission approved the major redevelopment permit for the
Roosevelt Street Affordable Apartments development. It was approved at that time as
an eleven (11) unit apartment project which would be affordable to very low income
households (50% of AMI). Initially, Wakeland Housing was selected to partner with
the Redevelopment Agency to develop the subject project. On March 24, 2005, the
Housing Commission approved financial (cash) assistance for the subject project in
the total amount of $2,384,081 ($216,734 per unit). Subsequently, the City Council
considered the financial assistance requested by Wakeland Housing. As the Housing
Commission had indicated during its consideration, the per unit subsidy required for
the project was extremely high.
RP 94-04(a>- ROOSEVELT STREET APARTMENTS
March 9, 2006
PAGE 2
The Council ultimately decided not to pursue the project and subsequently terminated
its contract with Wakeland Housing. As an alternative, the Council agreed to pursue
the conversion of the apartment project to a residential condominium project and to
work with Habitat for Humanity to build the project, and then sell (rather than rent)
the units to very low income households.
Habitat for Humanity has indicated their interest in pursuing development of the
subject project as an 11 unit condominium project. However, in order to proceed,
they will need a commitment from the Carlsbad Redevelopment Agency to donate the
land to them and to provide initial financial assistance for all pre-development costs.
Ultimately, Habitat for Humanity may also need additional financial (cash) assistance
for construction of the on-site improvements. However, at this time, the request is for
donation of the land and cash assistance in the total amount of $1,326,037
($120,548/unit) to pay for architects, engineers, permit fees and other related pre-
development costs. Once this assistance is approved, Habitat will begin its efforts to
raise other donations, sponsorships, grants, etc. to pay for the actual construction of
the on-site improvements. If Habitat is not successful in raising the additional funds
or labor donations ($2,484,080 value) that are required to complete construction of
the project, they may need to request additional funding from the Carlsbad
Redevelopment Agency and/or City Council. Any additional requests for funding will
be presented to the Housing Commission at a later date for consideration.
III. PROJECT DESCRIPTION
The subject project will be located on a .56 acre parcel that is located at 2578
Roosevelt Street in the Village Redevelopment Area.
The proposed 11-unit condominium residential project will consist of two separate
two-story buildings with surface level parking. It is currently anticipated that there
will be 8 one bedroom/one bath units (674sf) and 3 two bedroom/two bath units
(900sf). All of the 11 units will be sold at prices affordable to households earning
50% or less of the San Diego County Area Median Income (AMI). The current
income levels are noted in the below chart:
HH Size
Income
1
$24,150
2
$27,600
3
$31,050
4
$34,500
It is important to note that the current Major Redevelopment Permit for the subject
project will need to be amended to allow the conversion of the project from rental to
ownership. The developer will be required to prepare the appropriate plans required
RP 94-04(a) - ROOSEVELT STREET APARTMENTS
March 9, 2006
PAGES
to amend the land use permit and to obtain the required building permits for said
project.
IV. DEVELOPMENT TEAM
San Diego Habitat for Humanity, Inc. will develop and sell the affordable units. San
Diego Habitat for Humanity is an affiliate of Habitat for Humanity International, a
non-profit organization that offers families in need a hand up, not a handout. They
build homes and sell them to low income families with a 20 year, 0% interest
mortgage. San Diego Habitat for Humanity completed its 51st home in 2005. Their
intent is to build 8-12 new homes annually. Habitat builds homes by using
contributions of land, materials and money. Nearly all the labor on a project is
performed by volunteers. Instead of cash down payments, Habitat requires 500 hours
of labor ("sweat equity") from each family purchasing one of the homes they build.
V. FINANCIAL ASSISTANCE
A. Cost Reasonableness
The attached summary development proforma reflects the anticipated costs for the
subject affordable housing project. It has been reviewed by staff and now presented to
the Housing Commission (See Attachment 2) for review. Since development costs
are one of the key variables determining the need for subsidies, it is important that
those costs be reasonable. At approximately $3.8 million, including the cost of the
land, the average unit cost of $346,374 is reasonable when consideration is given to
the current costs of construction and the small size of the project which has reduced
economies of scale. A summary of the costs is noted in the chart below:
Cost
Land Donation
Construction
Fees/Permits
Architect/Engineering
Misc. Soft Costs
Developer Fee
Total
Total
$717,793
$2,192,880
$413,830
$194,414
$161,200
$130,000
$3,810,117
Per Unit
$65,254
$199,352
$37,621
$17,674
$14,655
$11,818
$346,374
Per Square
Foot*
$81.02
$247.53
$46.71
$21.95
$18.20
$14.67
$430.08
*8,859 square feet of improvements
RP 04-04(a>- ROOSEVELT STREET APARTMENTS
MARCH 9, 2006
PAGE 4
B. Undue Gain
It is important that any financial assistance have the effect of making the units
more affordable and not creating undue gain for any party. The Developer is
proposing to receive a "Developer Fee" of $130,000, or approximately 3% of
total project costs (including land). The developer fee is quite low in
comparison to other affordable housing projects which average anywhere
from 7 to 10%. However, it should be noted at this time, the staff
recommendation is to provide a land donation and pre-development funding
only for the project. The Redevelopment Agency assistance at this time would
not be used for payment of the developer fee. Once Habitat has had an
opportunity to begin their fundraising and sponsorships efforts, a
determination will be made as to whether or not any additional financial
(cash) assistance will be required from the Agency and/or City. This
additional financial assistance request will be returned to the Housing
Commission at a later date for consideration, as appropriate and necessary.
C. Subsidy Analysis
The Developer is proposing to finance the project through the use of grant
funds, in-kind donations, cash donations, and sponsorships at a total value of
$2,484,080 together with a land donation and subsidy (cash) financing from
the Carlsbad Redevelopment Agency in the amount of $1,326,037. As
previously mentioned, the land was previously purchased by the Carlsbad
Redevelopment Agency at a total cost of $692,058. The financial assistance
from the Carlsbad Redevelopment Agency is proposed to, therefore, be
provided in two forms. The land transfer/donation and then direct financial
(cash) assistance. The direct financial assistance to Habitat for Humanity, at
this time will total $608,244, or approximately $55,295 per affordable unit.
With the addition of the land transfer cost (estimated at $717,793), the total
Agency subsidy at this time will be approximately $120,549 per affordable
unit.
The $120,549 per unit subsidy is larger than what has been previously
approved for various affordable housing projects in Carlsbad. However, as
staff mentioned previously, this project is different than the other projects in
that it was initiated by the Carlsbad Redevelopment Agency and intended to
function as a partnership project. In this case, the Agency is acting as a Master
Developer. Following are the reasons to provide the financial assistance to the
project:
RP 04-04(a) - ROOSEVELT STREET APARTMENTS
MARCH 9, 2006
PAGES
1. The Carlsbad Redevelopment Agency currently has an obligation to
produce a total of 11 units of very low income housing (6% of total new
housing in Village Area) as a result of previous housing projects
constructed within the project area since 1981. This obligation comes
from the construction of Jefferson House I and II (105 units total), the
Village by the Sea (65 units) and the Laguna Pointe project (21 units).
This project will help the Carlsbad Redevelopment Agency to satisfy the
very low income housing requirements for the Village Redevelopment
Area.
2. The project itself will not produce adequate income to make it financially
feasible. Therefore, subsidy is required from the Redevelopment Agency
in order to ensure that the units can be constructed and sold to very low
income households. The Redevelopment Agency has funding available
that must be spent in a timely manner before sanctions are imposed due to
lack of expenditures to date. This funding comes from the Redevelopment
Agency Low/Moderate Income Housing fund. Therefore, there is
appropriate and adequate funding available to provide the required
subsidy.
3. The project will produce 11 new residential units within the Village Area
and provide for an attractive development, which will be of benefit to the
efforts to revitalize and redevelopment the area.
The following is a summary of the sources and uses of funds based on the
estimated development costs and the proposed financing structure. The
developer's detailed proforma is attached as Exhibit 2:
SUMMARY PROFORMA'"<! , ; , ,
PERMANENT SOURCES OF FUNDS
Carlsbad Redevelopment Agency (cash)
Redevelopment Agency Land Tranfser
AHP Grant (Habitat)
In Kind Donations* (Habitat)
Cash Donations (Habitat)
Sponsorships (Habitat)
Total Sources
TOTAL
$608,244
$717,793
$220,000
$934,080
$120,000
$1,210,000
$3,810,117
PER UNIT
$55,295
$65,254
$20,000
$84,916
$10,909
$110,000
$302,973
RP 04-04(a) - ROOSEVELT STREET APARTMENTS
MARCH 9, 2006
PAGE 6
In-Kind Donations is the area that may be the most difficult to obtain the above noted
funding goal, and ultimately may result in a need for Habitat to request additional
(cash) funding from the Carlsbad Redevelopment Agency and/or City of Carlsbad.
Typically, Habitat has been extremely successful in obtaining donations and
sponsorships to construct the homes. The other on-site improvements such as the
parking lot, dry utilities, etc. are more difficult to obtain funding through donations
and sponsorships. Therefore, the goal is for Habitat to identify one or more
contractors that would be willing to donate labor and supplies to construct these other
improvements. If this effort proves to be unsuccessful, then Habitat will most likely
find it necessary to request additional cash assistance from the Redevelopment
Agency/City to pay a contractor to complete these on-site improvements.
D. Form of Assistance
It is proposed that the Redevelopment Agency donate the subject property on
Roosevelt Street to Habitat for Humanity and provide cash assistance for pre-
development costs which includes all fees and costs related to architects and
engineers to prepare the appropriate entitlement plans and construction drawings.
If approved, the financial assistance will be provided from the City of Carlsbad's
Redevelopment Agency Housing Set-Aside Funds.
E. Security
The Redevelopment Agency will take a security interest in the property for the
affordable housing project. The Agency's assistance is structured as a loan that is
repaid to the Agency upon sale of the unit by the very low income homebuyer. Any
real appreciation is shared between the Agency and the homebuyer based on the
contribution to the initial purchase. No "windfall" is provided to the subsidized
buyer, and the Agency's position is protected.
If sold during the first 15 years of the 45 year loan term, the homeowner must sell the
unit to another very low income household at the Agency-approved affordable price.
If the unit is sold during years 16 through 45, the homeowner may sell the unit to a
non-very low income household at a market rate. However, during this sale, the
Agency recaptures the total subsidy on the unit together with contingent interest
and/or shared appreciation.
F. Risk
In its role as a lender to the project, the Agency will be exposed to two risks inherent
to real estate development. These risks generally include 1) predevelopment (project
does not get to construction); and, 2) construction (project cannot be completed, cost
overruns, contractor problems). Adding to this risk, any Agency financial assistance
RP 04-04(a) - ROOSEVELT STREET APARTMENTS
MARCH 9,2006
Page?
will most likely be subordinated to conventional financing, if necessary to initially
finance the project until the donations and sponsorship funding is received.
A number of factors mitigate the risks. First, the development team has a strong track
record with similar affordable housing projects and has been successful to date in all
of its efforts to construct those projects in a financially sound manner. The
Developer will have no out-of-pocket expenses to purchase the land or finance the
costs of pre-development activities. Therefore, the Developer will be able to focus all
of its fundraising efforts specifically on construction of all of the on-site
improvements. The Developer has a proven track record for obtaining in-kind and
cash donations as well as sponsorships and ensuring that projects do get built. Both
the Redevelopment Agency and the developer will closely monitor the costs of the
project.
VI. FINANCIAL ASSISTANCE AGREEMENT
With a recommendation from the Housing Commission and approval of the Housing
and Redevelopment Commission, appropriate documents to allow for the land
transfer from the Carlsbad Redevelopment Agency to San Diego Habitat for
Humanity and to provide the cash assistance, including a Financial Assistance
Agreement, Regulatory Agreement, Promissory Note and Deed of Trust, will be
prepared and executed to set forth the terms of the financial assistance and its
repayment.
VII. SUMMARY AND STAFF RECOMMENDATION
It is the role of the Housing Commission to make financial assistance
recommendations to the Housing and Redevelopment Commission/City Council
based on several considerations with respect to affordable housing projects. These
are:
• The proposal's effectiveness in serving the City and Agency's
needs and priorities as expressed in the Housing Element of the
General Plan, Consolidated Plan and Redevelopment Plan.
• The proposal's consistency with the City and Agency's affordable
housing policies and ordinances as expressed in the Housing
Element, Inclusionary Housing Ordinance, Village Redevelopment
Plan and Village Master Plan and Design Manual.
• The proposal's development and operating feasibility, emphasizing
the development team capacity, financing sources and the role of
the City and/or Agency in providing financial assistance or
incentives.
RP 04-04(a) - ROOSEVELT STREET APARTMENTS
MARCH 9, 2006
PageS
The Roosevelt Street Affordable Condominium development is proposed by a
capable development team that is committed to affordable housing. The proposed
Agency assistance meets the City's three key underwriting goals of a strong borrower,
reasonable project costs based on the project size and requirements and an acceptable
level of leveraging. Redevelopment Agency and City housing goals are supported by
the project's affordability.
It is staffs recommendation that the Housing Commission approve the resolution of
support recommending to the Housing and Redevelopment Commission that the
Redevelopment Agency provide a total of $608,244 in financial cash assistance to
San Diego Habitat for Humanity to fund pre-development activities for the subject
affordable condominium development, and to also donate the subject property located
at 2578 Roosevelt Street to San Diego Habitat for Humanity for construction of said
project.
VIII. EXHIBITS
1. Housing Commission Resolution No. 2006-002.
2. Project Summary Proforma .
3. Reduced copies of project plans, as originally approved.
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HOUSING COMMISSION MINUTES
MARCH 9, 2006
PAGE 7 of 16
DRAFT
—"~^-^ ' -^-"-"""^Ms. NuTm^cQinmented that at any time you can submit an amendmenttojwartive-year plan or your annual plan
throughout merepTJrtingjjeriod.
VOTE:
AYES: BoddyrKifchie, Scarpelli,^cliraiHlraadSmith
NOES: _
None Roosevti-T ^T- AFFORDABLE
Ms. Debbie Fountain presented a project that has some history. In 2003 the Redevelopment Agency purchased a
piece of property on Roosevelt. The intent at that time was to build an affordable housing project on it. It is a little
over a half acre site. We did some conceptual studies of how many units would fit on the site and looked at what
kind of product we wanted to do. At the time, we decided about 11 or 12 units could fit on the site and meet all of
our standards downtown. We decided to pursue a project on the site. We started working with Wakeland Housing,
which is a local affordable housing developer that had actually done one other project in the city, the Vista Las
Flores Apartment Project. We worked on a permit for an apartment project that was approved in December of 2004,
an 11 unit apartment project. We looked at providing that in terms of affordable housing for very low income
persons so that would be people at 50% or less of the area median income. The reason we were focusing on that
very low income group is the redevelopment area has a requirement of its own for inclusionary housing. Even if we
didn't have a city-wide inclusionary housing program, redevelopment areas have inclusionary requirements and one
of those requirements is to provide housing for low income persons and the other is very low income persons. The
very low income requirement had not been met for the redevelopment area. We've been able to meet the low income
requirement at 80% or less of the area median income but not the very low so the redevelopment agency decided to
initiate a project and that is why we bought the property and started working with Wakeland Housing.
In March of 2005 the Housing Commission approved financial assistance for that rental project. At that time, you
recommended to the Council almost 2.4 million dollar cash assistance. As you might remember from that
discussion, there was concern about the cost of that project and the overall subsidy that was required. However, the
recommendation was forwarded to the City Council and the City Council took quite a bit of time trying to figure out
if that project was still feasible and whether they wanted to move forward with it as an apartment project. They
ultimately decided not to pursue the rental project primarily because of the amount of cash subsidy that would be
required from the City to make that work. We researched a lot of other sources of funding and could find no other
funding available for it so pretty much the entire subsidy would have to come from the City of Carlsbad. The
Council decided not to pursue that. We did submit a number of options to the Council at the time of then-
consideration of it like purchasing an existing rental project and maybe rehabbing it and reducing the rents like we
did on Tyler Court Apartments or trying to find another site that was bigger and could produce more units so the per
unit subsidy would be less. One of the ideas we threw out at the time, this was a more recent occurrence that came
up after the Housing Commission had taken action on this item, is Habitat for Humanity has entered into the condo
business. They used to build single-family homes and would do maybe one, two, three, four at a time, and they
weren't doing larger projects. When we first looked at our property, we couldn't get enough units through Habitat
for Humanity if you were just doing single-family homes. When we discovered they were actually getting into the
condo business and had already done one project in Escondido, we decided to contact them again and see if they
might be interested in partnering with us on a condo project on this site. Habitat for Humanity indicated they were
interested in partnering with us and that option was presented to the Council as a possibility that we could go do that
instead of the rental product. The Council liked that idea and said they wanted to pursue that so we have been
meeting with Habitat for Humanity to try to figure out how much in financial assistance they would need to do the
project. As you are probably aware with Habitat for Humanity, they work with volunteers and sponsorships and
material donations and that type of thing to get their projects built. So they could bring additional resources to the
table that we weren't able to get to the table with Wakeland Housing when we were using them. This is what Habitat
does and this is not what Wakeland does. It was nothing against Wakeland. It was just a different product and a
different way of accomplishing a goal. The Council told us to work with Habitat for Humanity and see what we
could come up with and then come back to the Council with the financial assistance request. That is what we have
HOUSING COMMISSION MINUTES
MARCH 9, 2006
PAGE 8 of 16
been working on for the last few months; trying to figure out what it will take. Typically, Habitat does require you to
donate your land to them; they don't buy the land from you. You would have to donate the land plus cash assistance
to the project.
Tonight we are proposing that we take forward a recommendation to the Council from the Housing Commission that
would recommend donation of the Roosevelt Street property to Habitat for Humanity with cash assistance. The cash
assistance that Habitat is looking for is to cover predevelopment type of costs because those are the types of
donations they can't really get. Those are for preparation of architectural plans to get their permits, do their
construction drawings, to pay the fee the city has, and any other impact fees like school fees. That is where cash is
needed and that is generally not the type of donations they get. They get donations and sponsorships for actually
building the units themselves.
In your report is the request for a total value assistance of $1,326,037. It works out to about $120,548 per unit. That
does include the land and costs of transferring the land to Habitat of about $717,000 and then direct cash assistance
of about $608,000. Until Habitat for Humanity actually gets a commitment on the land donation and they have some
money to start working on the plans, they can't go out and ask for the sponsorships. They don't actually know at this
time the exact value of their sponsorships so we may have to come back to the Housing Commission at a later date
and say they didn't quite raise everything they thought they were going to raise and there might be some additional
assistance required.
This is different than the way we have come to you before because before when we've asked for assistance, it's for
everything we think they are going to need. We enter into the loan agreements and then we move forward. On this
particular project, as you may remember, we did give predevelopment monies to Wakeland because they were in a
similar situation where they didn't have that initial money to be able to create the project. We will benefit from that
because they are going to be using the same architect that Wakeland was using. So it is just the additional work to
change them to condos from a rental project so it isn't starting from scratch with the architects, which is somewhat
helpful. They do have to do additional plans because now there is a condo plan required. There are different utility
requirements for a condo project versus a rental project so they will have to revise those plans and get new
construction drawings done.
At this point, the project is going to be similar to the one you saw before but it is going to be condos instead of
apartments. The projected number of units, 11 units, is going to be the same; the sizes of those units are going to be
pretty comparable so they still are going to be primarily one bedroom, one-bath units. Within the project, there will
be eight one-bedroom, one-bathroom units which will be around 670 square feet so they are small units and it is
expected that it would probably be more for seniors or one person households. Possibly the disabled might benefit
more from this project than others. There will be three two-bedroom, two-bathroom units that are around 900 square
feet. All of these units, as I mentioned earlier, will be sold to very low income households. I included on page 2 of
your report the current income charts. Those will probably change fairly soon. We usually get the new income
numbers for each year about this time, but we haven't received the new 2006 ones yet. These are the 2005 numbers.
So if you were a household of one, that would mean you would me making under $24,150 to be eligible to purchase
one of those units. These prices are going to be down much lower then we have seen in any of our other projects. It
is also important to note that we do have to amend the Redevelopment Permit that we had on this project. So we are
still going to have to go through that process of amending the Redevelopment Permit and to get started on that,
Habitat for Humanity would need some of this funding that is being requested.
As I mentioned, Habitat for Humanity is the development company that would be working on this. The San Diego
Habitat for Humanity is an affiliate of the Habitat for Humanity International. They just produce in San Diego, this
particular group. Up until this point, they have produced a little over 50 homes in San Diego County. Habitat for
Humanity International has done much larger numbers than that. Generally they sell them, as I mentioned, to very
low income families. They do a 20 year zero interest mortgage on the units. They typically like to build between
eight to twelve new homes annually. This will be 11 so if they only did this project, they would meet their goal for
this year, but they actually have several projects in the works right now. They do build the homes by using
HOUSING COMMISSION MINUTES
MARCH 9, 2006
PAGE 9 of 16
contributions of land, materials and money. Interestingly enough, as soon as the Council took action and there was
an article in the paper, we started getting phone calls from people who wanted to volunteer to work on the project so
I don't think they will have a big problem with getting volunteers. Maybe the donations and the sponsorships might
be different, but the volunteers might be easier for them to get. They do require each home buyer to put in 500 hours
of sweat equity or labor. That labor actually can be on construction or it can be working in their offices or there are
other ways people can do things if they are not physically able to actually build a house. So they are able to
accommodate the needs of the households.
In terms of the financial assistance itself, I did provide you with a basic summary of their development pro forma
within the report. It reflects right now what the anticipated costs are for the project. We see construction costs
continuing to go up in costs in Carlsbad so the overall costs are continuing to be pretty high at an approximately 3.8
million dollars. That would average unit costs of about $346,000 per unit. Again, as I mentioned last time, the
problem is the small size of the project. If it was a bigger project, some of these costs could be amortized a little
better over the different areas, but it is reasonable when you look at the current costs of construction and the small
size of the project. Again, they will be using primarily volunteers to construct so this is a value they have placed on
that. They will get sponsorships that will actually pay for that. They most likely will not have to hire a contractor to
do it because they manage that themselves, but if they did have to hire a contractor and pay them, this is what they
are valuing what that cost would be.
When we look a pro forma and if we are going to provide assistance, a lot of times we want to look at what the
developer fee would be for the project to make sure they are not walking away with some huge windfall. Habitat for
Humanity does work a lot differently so their developer fee is actually quite small. It is only a $130,000 for the
project, which represents about 3% of the total project costs. We've seen the developer fee average between 7 to
10%. We have had some a little bit higher then 10%, but it is usually 7 to 10% so they are actually fairly low. At
this time, since we are just proposing that a land donation and cash assistance for the predevelopment, we actually
wouldn't even be providing funding for the developer fee. That would come through their sponsorships or other
cash donations they receive. I just wanted to share that information since we look at that pretty much on every
project just so you can see how it compares to other projects and what is being done out there.
If you just look at the subsidy analysis itself and if we are looking at the assistance we would be providing to Habitat,
the direct financial assistance again would be about $608,000 and mat would be about $55,295 per affordable unit.
It is higher than what we have typically provided to other developers. The only one we have had higher than that has
been on the Laguna Point project where the Council provided $70,000 per unit in subsidy. That was a cash subsidy
to that developer. If you add the land to that and consider that part of your subsidy, than you are up to about
$120,000 per unit, which again is much larger. But this is a different project in terms of the fact that the
Redevelopment Agency is a partner in it where all of these other projects we actually have a master developer that
has a requirement for the affordable housing. In this case we have to consider ourselves the master developer and
those master developers are usually putting a lot of cash to make the affordable housing. They are putting land
donations and cash assistance. So we have moved ourselves into a master developer where before we were helping
to finance the project so it does change the dynamics as to what is happening with the projects.
Outlined on page 5 of the report are the different sources of funding to build this project. If you look at that bottom
chart, the cash assistance from the agency and the land transfer would be the City's contribution at this point. They
are looking for an affordable housing program grant of about $220,000 which Habitat has always been pretty
successful in getting so that would help with the project. Then their in-kind donations and their cash donations and
sponsorships are the largest portion of where the funding comes in for these projects. I have put an asterisk next to
the in-kind donations because this is the area there is the most uncertainty as to what they will actually get. As far as
their sponsorships and their cash donations, they are usually pretty good at figuring out what they believe they will
receive. The in-kind donations are harder because what we would be looking for in terms of on-site improvements,
they might need an engineer that could come out; they might need someone to actually do those on-site
improvements because they don't use the volunteers. On-site improvements would be like their parking lot or their
dry utilities, their sewer or their water. The volunteers and the sponsorships and cash donations go to actually
HOUSING COMMISSION MINUTES
MARCH 9, 2006
PAGE 10 of 16
building the building and they find it harder to find people who will donate services for these other types of
improvements because it is not as glitzy to say "I built a parking lot" as it is to say "I built buildings people are living
in." That is the area there is still a little bit uncertainty. When I said earlier we may be back again to look at some
more financial assistance, will depend on how successful they are in getting those types of contributions. So if you
know anybody who does those things that might be willing to donate, that would be great for them.
The form of assistance will come with the donation of the subject property and the cash assistance that we'll provide
as a loan like we do all of our assistance, but it will actually run as a second on the mortgages or the loans on the
property itself. If the unit is sold, that is how we recapture our funding, which is typical of how we provide all of our
assistance so we are able to get that funding back if the unit is sold to another person who is not a very low income.
This project will have the same restrictions as our for-sale projects in that for the first 15 years they have to sell them
to another very low income person at the very low income affordable price. After 15 years up to 45 years, they can
sell it to a non low-income person at a market rate, but that is when we recapture our loan amount plus any shared
equity we have in the project. That is typical of how we have structured all of our other deals. In terms of the risk
analysis we do, this is similar to other types of projects we have done where we have this predevelopment risk where
we get all of this done and it doesn't go to construction, which is what we faced with Wakeland since the project
didn't go to construction on an apartment project. Hopefully, we won't lose as much because we are moving over
into the for-sale project and we can use a lot of that information. We also have risk that construction gets started and
doesn't get finished. Those risks we share with you in every single project. Adding to the risk is that we are
subordinate to any conventional financing on the project. We do think there is a number of factors that mitigate the
risk. The development team does have a strong record. Habitat for Humanity has been around for quite a while and
has been successful in what they are doing. Their projects do tend to take longer though than most projects because
they are relying on volunteer labor so it is when the volunteers can work and most of the volunteers can only work on
the weekends. They are basically working on the project on the weekends, where if you had another project, they
would be doing construction during the week and probably moving a lot quicker. All of this will depend on how
many volunteers they get and when those volunteers can work.
In this particular case, the developer is not going to have any out-of-pocket expenses to purchase the land or to
finance costs of predevelopment, which helps to ensure there is a better chance of success because they do not have
to put the money out at that level and can use their money towards construction. That helps the project to be a little
less risky, at least from our investment standpoint. As I said, any development project has risks on any level. If your
money is the first in, you are sharing more of the risk then any other coming in at a later date.
That completes the presentation. We are asking the Housing Commission to take a look at this, see if this is
something that you do want to recommend to the Housing and Redevelopment Commission and City Council. If it is
not something you want to recommend to them, then we would take that action forward as well.
Commissioner Smith asked about Ms. Fountain stating that when the Habitat for Humanity comes in, they work
voluntarily so if I wanted to purchase a condo, I might not be able to purchase it for about a year or something like
that.
Ms. Fountain answered yes. Their current project timeline is conservative and it is projected that it will be two years
before these units will be available. They did say that will all depend on how quickly their sponsorships come in and
how many volunteers they get and when those volunteers can work. They anticipate it will probably be less then two
years, but they are saying two years so people don't get too upset with them if it takes longer.
Commissioner Smith commented she is so impressed with this project.
Ms. Fountain said that Habitat for Humanity has shown they have been successful so it is a well established
organization.
HOUSING COMMISSION MINUTES
MARCH 9, 2006
PAGE 11 of 16
Commissioner Ritchie said she would like to see us go forward with this project because I think we need to explore
any and every opportunity we have to increase our affordable housing and particularly for very low income. It is a
very significant project even though it is small.
Commissioner Boddy had a question about the land donation. Would the transfer of the land to Habitat for
Humanity be contingent upon their successful completion of the project such that it would revert back to the City if
there was some problem such as the project didn't get built? Does that get worked in to the document?
Ms. Fountain said yes, that is part of our directive to our attorneys is we want to make sure there is some trigger
point that if the project, for whatever reason, can't go forward, then the property comes back to the City of Carlsbad.
I think at this point, they are just looking for a commitment that we are willing to do this so they can go raise the
monies.
Chairperson Scarpelli commented that he has had first-hand involvement with San Diego Habitat for Humanity in
their last project in Escondido, which was a great success. My involvement was through the Rotary District 5340,
which really got behind this as a volunteer organization, as support. I think that was 16 units. Our own Rotary Club
in Carlsbad was actively involved with both cash donations and actually work in-kind. I have had the opportunity to
meet with the Board of Habitat for Humanity. I have had the opportunity to be on site a number of times during the
construction of that project, and I have also had the opportunity to meet with some of the people in the City of
Escondido as it related to this build out in Escondido, which was completed last year. I even had the opportunity of
being there for the dedication of the opening of the project. All of that experience indicated that they know what
they are doing, they are very successful at what they do, and they are able to get both the cash donations and the in-
kind donations. Through third party contacts, for example in Rotary, were able to get donations of all the finish
material for the units. I know our club was there one weekend and we painted one or two of the units' interiors.
They have it very well organized. I too would support this. I think I might have even mentioned that we look into
this at that time, I don't recall. The success that Habitat for Humanity had in assisting the affordable housing in
Escondido was so good that the City of Escondido immediately donated a second piece of property, which is now
being developed in the City of Escondido on Mission Avenue. That success caused the City of Escondido to move
ahead directly on another project with them. I am looking forward to this as well. One question I do raise, and only
because I ran into this situation in another city just today, is the weekend work. We normally have a noise factor as
to the kind of work that can be done on a Saturday but we don't have anything that says anybody can work on a
Sunday so that is one issue the City may have to look at its own regulations as it pertains to that. A lot of the noisy
work that would not be allowed on a Saturday is the kind of work that will be done on this kind of a project. Just a
note to you that we have to check into that area. I am happy to see that our City is considering becoming involved
with Habitat for Humanity in helping us to meet our affordable housing goals, and in particular for-sale properties,
especially the very low income range.
Commissioner Schraml asked if there is any information available as to what the cost per unit would be to the buyer.
Ms. Fountain said they haven't actually calculated that number yet because we usually wait until we get a little bit
closer. I can give you a general idea. The general rule I tell people when they try to figure out the price, if you take
the income level and multiply it by three, that is generally the maximum price that you are going to be able to pay.
Some of it depends on what the homeowner's association fees might be, if there are any, because that all has to
calculate into your approval. We are thinking probably these will be in the $70,000 to $80,000 range. If it is still
two years away, the income levels will go up and it may end up being higher. It just depends on what the income
levels do at that point. You are looking at no more then a $100,000 unit that people will be allowed to purchase. A
lot of it depends on how much down payment is required.
Commissioner Smith made a motion that the Housing Commission recommend approval to the Housing and
Redevelopment Commission of $1,326,037 in financial assistance including land donation and cash assistance from
the Village Redevelopment Agency housing set aside funds to San Diego Habitat for Humanity for construction of
HOUSING COMMISSION MINUTES
MARCH 9, 2006
PAGE 12 of 16
eleven affordable condominium residential units to be located at 2578 Roosevelt Street in the Village
Redevelopment Area of the City of Carlsbad.
Board Member Ritchie seconded the motion.
VOTE: 5-0-0
AYES: Boddy, Ritchie, Scarpelli, Schraml, and Smith
NOES: None
ABSTAIN: None
Is. Debbie Fountain said the next project is also for assisting very low income persons, which went with the first
irbtn on the rental assistance and having very low income people being assisted through that program. We^actually
haveXproject that is currently under construction called the Bluffs. It is overlooking the Agua Hadiopda Lagoon
where tneswater sports place is off of 1-5. That project has a requirement to build ten units affordable to very low
income persons. The reason they ended up agreeing to do very low income on this project/even though the
requirement is fcJxkiw, is that we gave them a two unit credit for going to very low. The originaJrequirement was to
do twelve units. Theycouldn't quite work all the units on the site that they needed so they asked us if we would give
them incentive credit ifihev did them at very low. We agreed to do that. Again, the income levels are the same as
what we were talking abourbefore. These are small units. They do have primarily one-bedroom units. These are
actually smaller than the ones ws^were talking about on the Roosevelt Street project They are 555 square feet and
they do have one three-bedroom, tWo-bathroom unit at 952 square feet. The reason we felt these smaller units are
okay for this very low income group is^e do tend to see more seniors, more^erisabled in this very low income group
where the smaller household size seems tbsbe appropriate. Especially ififis a for-sale product. Trying to make it
affordable, the smaller unit is necessary. W\were a little concerned/iff first when we looked at the site plans for
these on the sizes for one bedrooms, but when we looked at the layouts of them and gave it some analysis, we felt
they were okay. They originally started out with much smallerXnd we actually got them up to that number. The
project is primarily one bedroom so there are nine on,e-bed«K>m units and one three-bedroom unit, which is an
inclusionary requirement that they have to do one three-beHrcrom unit.
Only one model of the one-bedroom unit is at 555 square feetNThe rest of them are at 777 square feet. What this
developer is asking for is not financial assistance to/me developer^which a lot of tunes we are giving the money to
the developer for constructing units. In this particular case, the deveteper is asking for the assistance for the home
buyers so it is basically down payment assistance of $20,000 per unitNWe had a similar request from this same
developer on the Village By The Sea thatybii might remember in the do\ntown area. They had an eleven unit
requirement. Originally they were working with the California Housing Finance Agency to get low-interest loans
that were down at about 4% and both ofthese projects were moving along to get thqse low interest loans for the low
and very low income households. At the last minute CalHFA changed their positionNhat these home buyers would
be eligible for these low interest^oans because of the restrictions that we have on the prqj«ct for shared appreciation.
We weren't willing to change/our requirements because the Council has felt very strongly that if a unit is sold, there
should not be a windfall to/me homeowner so we share in the equity. CalHFA had a problem wjth our share of that
and ultimately wouldnVapprove it. Although, initially they said they didn't have a problem wiuvour restrictions.
That is unfortunate foi'those home buyers that were getting ready to move forward to buy units becau^now they are
not able to unless Jmey can come up with an additional down payment. We proposed to the Housing Commission
and you recommended to the City Council that we provide down payment assistance to those home buyers sostfiere is
no money going to the developers. It is just straight to the home buyers to help them be able to afford the oown
payment ajra closing costs on the unit so the loan amount they can get will be a little higher to be able to afford
higher interest rates they will have to pay on the units. It is harder, especially for the very low income group, to have
enougn money in savings to be able to make those down payments. So the developer is actually requesting, on
tfalf of the home buyers, that the City Council provide $20,000 in down payment assistance to each of these ten
iiome buyers. That would be a $200,000 investment from the City of Carlsbad. Staff is recommending that we do
EXHIBIT 6
HOUSING COMMISSION RESOLUTION NO. 2005-02
DATED MARCH 9,2006
ROOSEVELT STREET AFFORDABLE CONDOMINIUMS
6
7
HOUSING COMMISSION RESOLUTION NO. 2006-002
THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE HOUSING AND
REDEVELOPMENT COMMISSION OF $1,326,037 IN FINANCIAL ASSISTANCE,
INCLUDING LAND DONATION AND CASH ASSISTANCE, FROM THE VILLAGE
REDEVELOPMENT AGENCY HOUSING SET-ASIDE FUNDS TO SAN DIEGO HABITAT
FOR HUMANITY FOR CONSTRUCTION OF ELEVEN (11) AFFORDABLE CONDOMINIUM
RESIDENTIAL UNITS TO BE LOCATED AT 2578 ROOSEVELT STREET IN THE VILLAGE
REDEVELOPMENT AREA OF THE CITY OF CARLSBAD.
APPLICANT: ROOSEVELT GARDEN CONDOMINIUMS
CASE NO: RP 04-04(A)
WHEREAS, the San Diego Habitat for Humanity has proposed to construct 11 condominium
9 residential units affordable to very low income households within the City of Carlsbad and has requested
financial assistance from the City of Carlsbad to assist in the financing of said affordable housing project;
and,
12 WHEREAS, the request for financial assistance to construct said units has been submitted to the
City of Carlsbad's Housing Commission for review and consideration; and
14 WHEREAS, said Housing Commission did, on the 9th day of March, 2006, hold a public meeting
to consider the request for Redevelopment Agency financial assistance for the construction of said 11
affordable condominium units by the affordable housing developer, San Diego Habitat for Humanity; and
WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to be
18 heard, said Commission considered all factors relating to the proposal to construct said affordable housing
19 units.
20
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 RESOLUTION NO. 2006-02
PAGE 2
2
3 2. The request for Redevelopment Agency financial assistance is consistent with the goals
4 and objectives of the City of Carlsbad's Housing Element, Consolidated Plan, the
5 Inclusionary Housing Ordinance, the Carlsbad General Plan, the Village Redevelopment
Plan, and the Village Master Plan and Design Manual.
7 3. The request for Redevelopment Agency financial assistance will assist the affordable
o housing developer to construct a total of 11, one and two bedroom affordable
condominium units which will be affordable to households earning 50% of area median
income for San Diego County or less. The project, therefore, has the ability to effectively
,, serve the City and Redevelopment Agency's housing needs and priorities as expressed in
, „ the Housing Element, the Consolidated Plan and Redevelopment Plan.
4. That based on the information provided within the Housing Commission Staff Report and
testimony presented during the public meeting of the Housing Commission on March 9,
2006, the Housing Commission hereby ADOPTS Resolution No. 2006-02,
recommending APPROVAL to the Housing and Redevelopment Commission to donate16
the Redevelopment Agency-owned property at 2578 Roosevelt Street to San Diego
Habitat for Humanity and to provide up to $608,244 in financial cash assistance from the
18
Village Redevelopment Housing Set-Aside Fund to San Diego Habitat for Humanity for
pre-development costs associated with the construction of eleven (11) affordable
20
residential condominium units to be located on said property within the Village
21
Redevelopment Area of the City of Carlsbad.
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HC RESOLUTION NO. 2006-002
PAGE 3
5. That the Housing Commission recommends that the Redevelopment Agency Executive
Director or his or her designee be authorized by the Housing and Redevelopment
Commission to prepare and execute all documents related to the transfer of property
ownership from the Carlsbad Redevelopment Agency to the San Diego Habitat for
Humanity and for the provision of the Agency cash assistance to San Diego Habitat for
Humanity for pre-development expenses for said affordable housing project, subject to
review and approval by Agency Counsel.
PASSED, APPROVED, AND ADOPTED at a meeting of the Housing Commission of the City
of Carlsbad, California, held on the 9th of March, 2006, by the following vote, to wit:
AYES: BODDY, RITCHIE, SCARPELLI, SCHRAML, AND SMITH
NOES: NONE
ABSENT: NONE
ABSTAIN: N/A
EDWARDCARPELIJfCHAIRPERSON
CARLSBAD HOUSING COMMISSION
^r*~> - -1
Jh k' . -feu^ fcuO
DEBORAH K. FOUNTAIN
HOUSING AND REDEVELOPMENT DIRECTOR
EXHIBIT 7
PROJECT SITE MAP
ROOSEVELT STREET AFFORDABLE CONDOMINIUMS
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