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HomeMy WebLinkAbout2012-11-27; City Council; 21050; Purchase Affordable Credits Roosevel GardensCITY OF CARLSBAD - AGENDA BILL AB# 21.050 Request to purchase affordable housing credits In the Roosevelt Gardens Affordable Housing Project DEPT. DIRECTORCp^ MTG. 11/27/12 Request to purchase affordable housing credits In the Roosevelt Gardens Affordable Housing Project CITY ATTORNEY DEPT. HNS Request to purchase affordable housing credits In the Roosevelt Gardens Affordable Housing Project CITY MANAGER ^ RECOMMENDED ACTION: ADOPT Resolution No. 2012-253 APPROVING a request from Zephyr Partners, property owner and developer of Ocean Street Condominiums (CT05-12), to purchase seven (7) affordable housing credits in the Roosevelt Gardens affordable housing project under the City's Inclusionary Housing Ordinance. ITEM EXPLANATION: On December 20, 2005, the Housing and Redevelopment Commission and City Council designated the Roosevelt Gardens Condominium Project (affordable housing development) as a combined housing project under the City's Inclusionary Housing Ordinance, and allowed the sale of credits to assist other private housing developers in the Northwest Quadrant to meet their inclusionary housing obligations under said Ordinance. The credit purchase price is currently set at $142,000. A total of 11 affordable housing credits were originally available within the Roosevelt Gardens Combined Affordable Housing Program. To date, one developer has purchased 2 credits in the Roosevelt Gardens. There remains a total of 9 credits available for purchase by housing developers within the Northwest Quadrant. Zephyr Partners has requested to purchase 7 credits to meet its inclusionary housing requirement for the Ocean Street Condominium development (CT05-12). Initially, this development proposed to satisfy its inclusionary through purchase of an off-site apartment complex and introduction of rent-restrictions to be affordable to low income households. However, that off-site project is no longer a feasible option due to foreclosure activity. Therefore, the developer has requested approval of the alternate method of satisfying the obligation through the purchase of credits. Planning Commission Resolution No. 6394 provides that the Affordable Housing obligation of 7 units may be satisfied by the purchase of affordable housing credits for the noted development. The proposed project is eligible to purchase credits in the Roosevelt Gardens Combined Affordable Housing Project and has executed the attached affordable housing agreement obligating it to purchase those credits prior to the Developer receiving any building permits for the condominium project. The credits are reserved for two years from date of approval of the agreement by the City Council. Ifthe developer does not purchase the credits within two years, the credits are returned to the available inventory and may be sold to an alternate developer. DEPARTMENT CONTACT: Debbie Fountain 760-434-2935; debbie.fountain@cartsbadca.gov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC • DENIED CONTINUED TO DATE UNKNOWN • CONTINUED • RETURNED TO STAFF • WITHDRAWN • OTHER-SEE MINUTES • AMENDED • Page 2 If this happens, the developer must then identify an alternate method to satisfy the inclusionary obligation, which could include participation in an alternate affordable combined housing development in the northwest quadrant and approved as such by the City Council. The Affordable Housing Policy Team (Staff) is recommending City Council approval ofthe attached affordable housing agreement to allow Zephyr Ocean Street Investors (a subsidiary of Zephyr Partners) to purchase 7 credits in the Roosevelt Gardens Condominium Affordable Housing Combined Project to satisfy its Inclusionary Housing Obligation forthe Ocean Street Condominiums. FISCAL IMPACT: The Affordable Housing Credit for the Roosevelt Gardens development is currently set at $142,000. The purchase of 7 credits by the noted developer will result in payment of approximately $994,000 to the City's Housing Trust Fund. These funds are used to assist other affordable housing projects with their development costs. With the sale of these credits, a total of 9 credits will have been purchased in the Roosevelt Gardens development; 2 credits will remain for purchase by other developers in the northwest quadrant. ENVIRONMENTAL IMPACT: City Council's action to approve the purchase of credits to satisfy the inclusionary housing obligation for the Ocean Street Condominiums to be developed by Zephyr Ocean Street Investors is exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15061(b)(3) "General Rule", as it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment and that said actions would not authorize, permit or guarantee the construction of a project that would have a significant environmental effect nor commit the City to approve any such project. EXHIBITS: 1. City Council Resolution No. 2012-253 approving purchase of 7 credits by Zephyr Ocean Street Investors in the Roosevelt Gardens Affordable Housing development. 2. Developer executed Affordable Housing Agreement for proposed development. 2- 1 CITY COUNCIL RESOLUTION NO. 2012-253 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REQUEST BY ZEPHYR PARTNERS FOR ZEPHYR OCEAN STREET INVESTORS, LLC TO PURCHASE SEVEN AFFORDABLE HOUSING CREDITS IN THE ROOSEVELT GARDENS AFFORDABLE HOUSING PROJECT, AS 5 CREDITS ARE AVAILABLE, IN ORDER TO SATISFY THE AFFORDABLE HOUSING OBLIGATION OF THE OCEAN STREET 6 CONDOMINIUM/SUBDIVISION PROJECT UNDER THE CITY'S INCLUSIONARY HOUSING ORDINANCE. 7 8 9 10 11 12 13 14 15 16 21 22 23 24 25 26 27 28 APPLICANT: ZEPHYR PARTNERS/ZEPHYR OCEAN STREET INVESTORS CASE NO: CT 05-12 WHEREAS, the Ocean Street Condominiums, currently owned by Zephyr Partners, has previously received approval of Tentative Map CT 05-12 for the development of a 35 unit residential air-space development; and WHEREAS, Zephyr Partners has requested approval from the City of Carlsbad City Council for the purchase of seven affordable housing credits in the Roosevelt Gardens affordable housing project, as credits are available, to satisfy the inclusionary housing requirement of 17 Tentative Map CT 05-12; and 18 WHEREAS, the City Council did hold a public meeting to consider said request for the 9 purchase of Affordable Housing Credits by Zephyr Partners, on behalf of Zephyr Ocean Street 2^ Investors; and WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Council considered all factors relating to the application and request to purchase Affordable Housing Credits: NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, Califomia, as follows: 1. That the above recitations are true and correct. 3 1 2. The project is consistent with the goals and objectives of the City of Carlsbad's Housing Element, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. 3. Based upon the analysis and recommendations of the Housing Policy Team and the Plaiming Commission, the City Council fmds that the off-site satisfaction of the inclusionary housing requirement is in the public interest. 4. That based on the information provided within the City Council Staff Report and testimony presented during the public meeting of the City Council, the City Council hereby APPROVES a request by Zephyr Partners on behalf of Zephyr Ocean Street Investors, LLC 0 to purchase seven affordable housing credits in the Roosevelt Gardens affordable housing 11 project, as credits are available, in order to satisfy the affordable housing obligation of the 12 Ocean Street Condominiums/Subdivision project under the City's inclusionary housing 1 ^ ordinance. 5. That the City Council hereby authorizes the Housing and Neighborhood Services Director to execute the Affordable Housing Agreement in substantially the form presented to the City Council as Exhibit 2 of the City Council Staff Report and to execute such other documents, or take other actions as may be necessary or appropriate to assist the developer in acquiring the Affordable Housing Credits. 14 15 16 17 18 19 20 21 22 /// 25 26 27 28 /// /// 23 /// 24 /// /// /// /// /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council of the City of Carlsbad on the 27th day of November, 2012, by the following vote to wit: AYES: NOES: Council Members Hall, Kulchin, Blackburn, Douglas, Packard None. ABSENT: None. MATT(HALL, Mayor ATTEST: LORRAINE WVVOOI^jpity Clerk Karen R. Kundtz, Assistant City Clerk (SEAL) Recording Requested by: City of Carlsbad When Recorded Mail to: City of Carlsbad City Clerk's Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad. California 92008 (Space above for Recorder's Use) AFFORDABLE HOUSING AGREEMENT (Purchase of Credits) THIS AFPORDABLE HOUSING AGREEMENT ("Agreement") is entered into this y<^day of y7^ia^iLJuA^ 2012, by and between the CITY OF CARLSBAD, a municipal corpou^ion ("City") and Zephyr Ocean Street Investors ("Developer"), a limited liability company, with reference to the following: RECITALS A. Developer is the ovmer of certain real property in the City of Carlsbad, County of San Diego, State of Califomia, described in "Exhibit A", which is attached hereto and incorporated herein by this reference, and which is the subject of a Tentative Map (CT 05-12), which provides conditional approval of the constmction of 35 residential air-space condominium dwelling units ("Project"). B. Chapter 21.85 of the Carlsbad Municipal Code requires that this Agreement shall be entered into between the City and the Developer as a means of satisfying the Developer's affordable housing obligation, as such is defined under Chapter 21.85 of the Carlsbad Municipal Code. Planning Commission Resolution No.6394 provides that the Affordable Housing Obligation of seven (7) units ("Affordable Housing Obligation") will be satisfied by the purchase of affordable housing credits, as provided for in Chapter 21.85, Section 21.85.080. NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the mutual covenants contained herein, the parties agree as follows: 1. The Recitals are true and correct. 2. THAT SATISFACTION OF DEVELOPER'S AFFORDABLE HOUSING REQUIREMENT W^ILL BE BY THE PURCHASE OF AFFORDABLE HOUSING CREDITS. (a) Performance under this Agreement satisfies the Developers' obligation for affordable housing under Chapter 21.85 of the Carlsbad Municipal Code as applied to the land covered by Carlsbad Tract No. 05-12 by reason of the approvals of the Tentative Map of CT 05- 1 CA 6/15/2011 12, including Condition No. 13 of Planning Commission Resolution No. 6394, and any other applicable approval. (b) The Developer shall purchase seven (7) affordable housing credits in the Roosevelt Gardens Affordable Housing developments (within the Northwest Quadrant of the City of Carlsbad), based on availability, for an amount established by resolution of the City Council and as required by Condition No. 13 of Planning Commission Resolution No. 6394 no later than two (2) years following City Council approval of this Agreement. The credit fee shall be paid prior to the Developer receiving any building permits for the project. The subject housing credits will be reserved for said Developer for no longer than (2) years following City Council approval of this Agreement. If the Developer does not purchase the subject credits within the Roosevelt Gardens Combined Affordable Housing Project within two (2) years of the date of this Agreement, the City may make the credits available to one or more altemate developers and the Developer for this Agreement may then be required to satisfy its inclusionary obligation through altemate methods as approved by the City including, but not limited to, the purchase of housing credits within an altemate approved combined affordable housing project within the Northwest Quadrant of the City to the extent that credits within the Roosevelt Gardens Combined Affordable Housing Project are not available to satisfy the entire credit requirement. The Housing and Neighborhood Services Director is authorized to amend and execute this agreement to allow Developer to purchase housing credits in an altemate combined affordable housing project within the Northwest Quadrant of the City, which has been previously approved by the City Council. 3. REMEDIES Failure by the Developer to perform in accordance with this Agreement will constitute failure to satisfy the requirements of Chapter 21.85 of the Carlsbad Municipal Code and Condition No. 13 of Planning Cornmission Resolution No. 6394. Such failure will allow the City to exercise any and all remedies available to it including but not limited to withholding the issuance of building permits for the lots shown on Carlsbad Tract No. 05-12. 4. HOLD HARMLESS Developer will indemnify and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including attorneys' fees and expenses) sustained or incurred because of or by reason of any and all claims, demands, suits, or actions, obtained, allegedly caused by, arising out of or pertaining in any manner to Developer's actions or defaults pursuant to this Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. This provision shall survive the term of this Agreement. 5. NOTICES All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registed or certified mail, retum receipt requested to the party to receive such notice at the address set forth below: TO THE CITY: City of Carlsbad Housing & Neighborhood Services Department Attn: Housing & Neighborhood Services Director 2 CA 6/15/2011 2965 Roosevelt Street, Suite B Carlsbad, Califomia 92008-2389 TO THE DEVELOPER: Zephyr Partners Attn: Brad Termini 11750 Sorrento Valley Rd. Suite 130 San Diego, Ca. 92121 Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. 6. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. 7. DURATION OF AGREEMENT This Agreement shall terminate and become null and void upon the payment of the affordable housing credits, or the repeal, termination, or modification of any applicable ordinance which act would render the Affordable Housing Obligation unnecessary or unenforceable. 8. SUCCESSORS This Agreement shall benefit and bind the Developer and any successive owners of affordable housing lots. // // // // // // INTENTIONALLY LEFT BLANK // // // // // // 3 CA 6/15/2011 9. SEVERABILITY In the event any provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless, be and remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the day and year first above written. DEVELOPER By: Name: Title: CTY OF CARLSBAD Debbie Fountain, Housing and Neighborhood Services Director Dated: By: Dated: 1^ Name: Dane Chapin Title: Co-Manager Dated: IH -OQ- (Chairman, president or vice-president and secretary, assistant secretary, CFO or assistant treasurer must sign for corporations. Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the office(s) signing to bind the corporation.) (If signed by an individual partner, the partnership must attach a statement of partnership authorizing the partner to execute this instrument.) (Proper notarial acknowledgment of execution by Contractor must be attached.) APPROVED AS TO FORM: Ronald R. Ball, City Attorney Jaar^^obaldi, Assistant City Attomey Dated: /Az^A/ CA 6/15/2011 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY That portion of Lot "A" of Granville Park Unit No. 2 according to Map thereof No. 2037 and that portion of Laguna Drive of Granville Park adjacent thereto (vacated by Resolution No. 918 of the City Council of the City of Carlsbad, Califomia, recorded July 19, 1963 as Document No. 126793, Records of San Diego County Califomia) according to Map thereof No. 1782 - all in the City of Carlsbad, County of San Diego, State of Califomia and filed in the Office of the County Recorder of said County. 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