Loading...
HomeMy WebLinkAbout2013-07-23; City Council; 21308; Reporting Authorization Sell Housing UnitCITY OF CARLSBAD - AGENDA BILL AB# 21,308 REPORTING OUT AND AUTHORIZATION TO SELL AFFORDABLE HOUSING UNIT AT 7003 FORSTERS TERN DRIVE DEPT. DIRECTOR (^0^ MTG. 7/23/13 REPORTING OUT AND AUTHORIZATION TO SELL AFFORDABLE HOUSING UNIT AT 7003 FORSTERS TERN DRIVE CITY ATTY<::^^.^M.^ DEPT. CED REPORTING OUT AND AUTHORIZATION TO SELL AFFORDABLE HOUSING UNIT AT 7003 FORSTERS TERN DRIVE CITY MGR. ^ RECOMMENDED ACTION: Report Out on closed session of September 25, 2012 and adopt City Council Resolution No. 2013-184 authorizing the City Manager to execute all documents associated with the sale of 7003 Forsters Tern Drive, Carlsbad, California. ITEM EXPLANATION: Pursuant to the City's Inclusionary Housing Ordinance, the Bay Collection development was required to sell twenty-four units at an affordable price to lower income persons. A four bedroom affordable unit in the development located at 7003 Forsters Tern Drive, Carlsbad CA, was sold in 2005 for $220,300 to an income qualified couple. In consideration for the assistance from the City's affordable housing program, the buyers were required to enter into a Resale Restriction Agreement with the City. The agreement requires the owners to obtain City approval before giving additional security interests in the property. In violation of this requirement, in September of 2006, the owners obtained an equity loan securing repayment of the loan with a deed of trust recorded on title to their home at 7003 Forsters Tern Drive. The City became aware of this prohibited equity loan in September of 2011 when staff received a notice from the lender's trustee that the home owners were in default on their loan. The owners attempted to sell their property to cure the default on their equity loan. However, the lender would not allow them to sell the property for the restricted affordable price as required by the Resale Restriction Agreement because the home was appraised for substantially more than the restricted price. City staff attempted unsuccessfully to work with the lender to avoid a City foreclosure. The City then recorded its own default notice on the property in March of 2012 as a result of the owners receiving the equity loan without City approval, and a non-judicial foreclosure sale was completed on May 29, 2013, with the City retaining title to the property. Staff is currently working with a real estate agent to find another income qualified buyer for the unit. The maximum affordable sales price for the property is now $251,225. The City will not need to subsidize the sale. DEPARTMENT CONTACT: Frank Boensch 760-434-2818 frank.boensch(5)carlsbadca.gov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED ^ DENIED • WITHDRAWN • AMENDED • CONTINUED TO DATE SPECIFIC • CONTINUED TO DATE UNKNOWN • RETURNED TO STAFF • COUNCIL RECEIVED THE • REPORT/PRESENTATION OTHER - SEE MINUTES • Page 2 It is estimated that seller closing costs, including real estate commission, and other expenses related to the sale will total approximately $16,000. Proceeds from the sale of the property will be used to pay those costs as well as approximately $11,000 in delinquent property taxes which are liens on the property. The new City loan amount will be the difference between the affordable sale price and the current appraised market value. FISCAL IMPACT: Sale of the unit for $251,225 will help to offset approximately $27,000 in seller costs. The remaining proceeds from the sale will be deposited into the City's Housing Trust Fund. ENVIRONMENTAL IMPACT: The recommended action is exempt from environmental review pursuant to CEQA Guidelines Section 15061 (b) (3). since it can be seen with certainty that there is no potential that the recommended action will cause a significant effect on the environment. EXHIBITS: 1. Resolution No. 2013-184 authorizing the City Manager to execute all documents associated with the sale of 7003 Forsters Tern Drive, Cartsbad, California for affordable housing. 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 RESOLUTION NO. 2013-184 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS ASSOCIATED WITH THE SALE OF 7003 FORSTERS TERN DRIVE, CARLSBAD, CALIFORNIA FOR AFFORDABLE HOUSING AND CONCURRING WTH A CITY PLANNER DETERMINATION THAT THE SALE IS EXEMPT FROM CEQA. WHEREAS, the City has an interest in maintaining affordable housing and Policy C.1 of the Implementing Policies and Action Programs for residential uses in the City's General Plan Land Use Element encourages the provision of low and moderate income dwelling units to meet the objectives of the City's Housing Element; further. Goal 1 ofthe Housing Element is "Carlsbad's existing housing stock preserved, rehabilitated, and improved with special attention to housing affordable to lower-income households;" and WHEREAS, title to the affordable housing located at 7003 Forsters Tern Drive was retained by the City as Grantee of a Deed of Trust foreclosed upon in a non-judicial foreclosure sale due to the default on a City loan on the property to prevent loss of the affordable housing; and WHEREAS, it is now the desire of the City Council to resell that condominium unit at an affordable pnce to an income qualified buyer and reinstate the affordable restrictions on the property; and WHERAS the City Planner has determined that the sale of the property is exempt from environmental review pursuant to CEQA Guidelines Section 15061 (b) (3), since it can be seen with certainty that there is no potential that the recommended action will cause a significant effect on the environment. NOW, THEREFORE BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, as follows: 1. That the above recitations are true and correct; 2. That the City Council hereby makes the finding that sale of property at 7003 Forsters Tern Drive, Carlsbad, California is consistent with Policy C.I of the Implementing Policies and Action Programs for residential uses in the City's General Plan Land Use Element encouraging the provision of low and moderate income dwelling units; 3. That the City Planner has determined that the sale of the property is exempt from environmental review pursuant to CEQA Guidelines Section 15061 (b) (3), since it can be seen with certainty that there is no potential that the recommended action will cause a significant effect on the environment; 4. That the City Council authorizes the City Manager to execute all documents associated with the sale of 7003 Forsters Tern Drive, Cartsbad, California, assessor's parcel number 214-620-14-00, as an affordable housing unit; 3 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 5. That the net proceeds from the sale be deposited into the Housing Trust Fund after payment of all sale costs. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 23'"'^ day of July, 2013, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood, Blackburn and Douglas. None. ABSENT: None. XTT MALL, Mayor MATT HALL, Mayor ATTEST: BAR^B^ENGLESerlvJ, City Clerk