HomeMy WebLinkAbout2014-07-08; City Council; 21669; Approving Purchase Affordable Housing Credits Cassia Heights Combined Affordable Housing Development by Coastal Living 10 LLCCITY OF CARLSBAD - AGENDA BILL
AB# 21,669 ADOPTION OF RESOLUTION APPROVING THE
PURCHASE OF AFFORDABLE HOUSING
CREDITS IN THE CASSIA HEIGHTS COMBINED
AFFORDABLE HOUSING DEVELOPMENT BY
COASTAL LIVING 10, LLC
DEPT. DIREaOR |^
MTG. 7/8/14
ADOPTION OF RESOLUTION APPROVING THE
PURCHASE OF AFFORDABLE HOUSING
CREDITS IN THE CASSIA HEIGHTS COMBINED
AFFORDABLE HOUSING DEVELOPMENT BY
COASTAL LIVING 10, LLC
CITYATTORNEY Xfi
DEPT. CED
ADOPTION OF RESOLUTION APPROVING THE
PURCHASE OF AFFORDABLE HOUSING
CREDITS IN THE CASSIA HEIGHTS COMBINED
AFFORDABLE HOUSING DEVELOPMENT BY
COASTAL LIVING 10, LLC
CITY MANAGER /fC^ yr
RECOMMENDED ACTION:
That the City Council adopt Resolution 2014-166 approving a request from Coastal Living 10 LLC to
purchase a total of two affordable housing credits in the Cassia Heights combined affordable housing
development in order to satisfy the inclusionary housing obligation for the Coastal 10 (CT 13-02 and
PUD 13-04) condominium development on the south side of Navarra Drive and west of Viejo Castilla
Way, within the southeast quadrant ofthe city.
ITEM EXPLANATION:
On May 24, 2011, the City Council agreed to designate the Cassia Heights Apartments as a Combined
Affordable Housing Project under the city's Inclusionary Housing Program. It provides for 56 units of
housing affordable to lower income households. These units represent "housing credits" that may be
purchased by future housing developers in the southeast and southwest quadrants ofthe city to satisfy
an Inclusionary Housing obligation. Because these affordable homes were built outside of an
inclusionary housing obligation for a market-rate housing developer, they are considered "excess"
affordable homes and therefore represent "credits" that may be sold bythe city to an approved housing
developer building within the southeast or southwest quadrant ofthe city. At the discretion ofthe City
Council, the credits may be sold at a price set by the City Council. The current credit price for the
subject units is $55,636 and there remain 22 credits that have not been reserved or purchased to date.
On October 2, 2013, Coastal Living 10 received approval of a Tentative Tract Map (CT 13-02) and
Planned Development Permit (PUD 13-04) to develop a ten unit multi-family residential air-space
condominium project on a 0.49 acre infill site generally located on the south side of Navarra Drive, west
of Viejo Castilla Way. The project is eligible to purchase credits in the Cassia Heights combined
affordable housing development because the project is located in the southeast quadrant of the city,
and represents a small development from an affordable housing perspective (only two units required).
Because of the small size of the project and the difficulty in obtaining financing, the applicant has
elected to pursue the purchase of affordable housing credits rather than constructing units on the site
ofthe market rate development. The City Council has adopted Policies 57 & 58 that govern the sale of
affordable housing credits. The policies require the examination of the feasibility of an on-site proposal,
DEPARTMENT CONTACT: Debbie Fountain 760-434-2815 debbie.fountain@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL AaiON: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF •
WITHDRAWN • OTHER-SEE MINUTES •
AMENDED •
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the advantages and disadvantages of an off-site proposal, and whether the off-site project advances the
city's housing goals and strategies. The Affordable Housing Policy Team (staff) has reviewed the above
request and utilized the criteria contained in the policies in making its recommendation to approve the
purchase of the credits for the project. The Planning Commission also supported and approved
purchase of affordable housing credits to satisfy the project's inclusionary housing obligation.
FISCAL IMPACT:
The Affordable Housing Credit price for the Cassia Heights combined affordable housing development is
currently $55,636 per credit. Coastal Living 10 is required to purchase a total of two credits. This action
would result in a payment of a minimum of $111,272 to the city's Housing Trust Fund. These funds will
be used to assist in the development of future affordable housing projects as well as programs to
provide housing assistance to low income households, as appropriate. It should be noted that the
developer/builder will pay the credit price in effect at the time that building permits are approved for
the subject development. The housing credit price for Cassia Heights Apartments has an annual
escalator based on the Consumer Price Index (CPI). Therefore, it is anticipated that the developer may
pay more than the above noted credit price depending upon any increases in CPI prior to building
permit approval.
ENVIRONMENTAL IMPACT:
Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the
meaning of CEQA in that it has no potential to cause either a direct physical change in the environment,
or a reasonably foreseeable indirect physical change in the environment, and therefore does not
require environmental review.
EXHIBITS:
1. City Council Resolution No. 2014-166 approving purchase of two affordable housing credits in
the Cassia Heights combined affordable housing development by Coastal Living 10 to satisfy the
Inclusionary Housing obligations for the approved market-rate development.
2. Affordable Housing Agreement to purchase housing credits.
EXHIBIT 1
RESOLUTION NO. 2014-166
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING A REQUEST BY COASTAL LIVING 10, LLC
3 TO PURCHASE TWO AFFORDABLE HOUSING CREDITS IN THE
CASSIA HEIGHTS COMBINED HOUSING PROJECT IN ORDER TO
4 SATISFY THE AFFORDABLE HOUSING OBLIGATION OF ITS HOUSING
DEVELOPMENT UNDER THE CITY'S INCLUSIONARY HOUSING
ORDINANCE.
CASE NAME: COASTAL 10
CASE NO.: CT 13-02
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WHEREAS, the housing development identified by Tentative Map CT 13-02 has
received approval by the Planning Commission for a total of ten market rate units
(condominium homes); and
22 WHEREAS, said development has requested approval from the City of Carlsbad
12 City Council for the purchase of a total of two affordable housing credits in the Cassia Heights
13 combined affordable housing project to satisfy the inclusionary housing requirement of said
Tentative Map; and
WHEREAS, the City Council did hold a public meeting to consider said request for
the purchase of Affordable Housing Credits by said development; and
WHEREAS, at said public meeting, upon hearing and considering all testimony, if
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29 any, of all persons desiring to be heard, said Council considered all factors relating to the
20 application and request to purchase Affordable Housing Credits.
21 NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
That the above recitations are true and correct.
1. That the above recitations are true and correct.
2. The Council hereby approves the developer request to purchase credits in
the Cassia Heights affordable combined project and finds the credit purchase to be consistent
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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 completed by the city's Housing Policy Team,
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5 Planning Commission and summarized within the City Council Staff Report, the City Council
6 finds that the off-site satisfaction of the inclusionary housing requirement through purchase of
credits 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 ofthe City Council, the City Council hereby
APPROVES the request by the developer of the noted housing development (CT13-02) to
purchase two affordable housing credits in the Cassia Heights combined affordable housing
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23 development in order to satisfy the affordable housing obligations of the housing development
14 under the city's inclusionary housing ordinance
1^ 5. That the City Council authorizes the Housing and Neighborhood Services
Director to execute a standard Affordable Housing Agreement with Coastal Living 10, LLC which
will allow the developer/builder to purchase two housing credits in the Cassia Heights
combined affordable housing development as set forth within this resolution, and subject to
review and final approval by the City Attorney.
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"NOTICE TO APPLICANT"
The time within which judicial review of this decision must be sought is governed
by Code of Civil Procedure, Section 1094.6, which has been made applicable in the City of
Carlsbad by Carlsbad Municipal Code Chapter 1.16. Any petition or other paper seeking review
must be filed in the appropriate court not later than the ninetieth day following the date on
which this decision becomes final; however, if within ten days after the decision becomes final
a request for the record is filed with a deposit in an amount sufficient to cover the estimated
cost or preparation of such record, the time within which such petition may be filed in court is
extended to not later than the thirtieth day following the date on which the record is either
personally delivered or mailed to the party, or his attorney of record, if he has one. A written
request for the preparation of the record of the proceedings shall be filed with the City Clerk,
City of Carlsbad, 1200 Carlsbad Village Drive, Carlsbad, CA, 92008.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Carlsbad on the 8th day of J"'y 2014, by the following vote, to wit:
AYES: Council Members Hall, Packard, Wood, Schumacher, Blackburi|)
NOES: None.
ABSENT: None.
2dyy
T\ (lALL, Mayor
MA
ATTEST:
B^eAJJA ENGLESON, City Clerk
''^<tn^^^^<^'^
-3-
Recording Requested bv:
City of Carlsbad
When Recorded Mail to:
City of Carlsbad
City Clerk's Office
Attn: CityClerk
1200 Carlsbad Village Drive
Carlsbad. Califomia 92008
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENTv2
(Purchase of Credits)
TfflS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into this
9^ day of OjrtJU^ , 2014, by and between the CITY OF CARLSBAD, a municipal
corporation ("Cit^') andCtoastal Living 10 LLC, ("Developer"), a Califomia limited liability
corporation, with reference to the following:
RECITALS
A. Developer is the owner of certam real property in the City of Carlsbad, County of San
Diego, State of California, described in "Exhibit A", which is attached hereto and incorporated
herein by this reference, and which is the subject of a Tentative Map (CT 13-02), which provides
conditional approval of the constmction of ten (10) 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 ofthe Carlsbad Municipal
Code. Planning Commission Resolution No. 7012 provides that the Affordable Housing
Obligation of two (2) 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 ofthe
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 WILL 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. 13-2 by reason of the approvals ofthe Tentative Map of CT 13-2,
including Condition No. 14 of Planning Commission Resolution No.7012, and any other
applicable approval.
1 CA 2/5/2013
(b) The Developer shall purchase two (2) affordable housing credits in the Cassia
Heights Affordable Housing developments (within the Southwest/Southeast 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. 14 of Planning Conraiission Resolution No. 7012 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 two (2) years of
the date of this Agreement, the City shall make the credits available to one or more alternate
developers and the Developer for this Agreement shall then be required to satisfy its inclusionary
obligation through altemate methods as approved by the City.
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. 14 of Planning Commission Resolution No. 7012. Such failure will allow the
City to exercise any and all remedies available to it mcluding but not limited to withholding the
issuance of building permits for the lots shown on Carlsbad Tract No. 13-02.
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, fix)m and against all loss, all risk of loss and all
damage (including attomeys' 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 Indenmitees, and any of them with respect thereto. This provision shall
survive the term of this Agreement.
5. NOTICES
All notices requu*ed pursuant to this Agreement shall be in writmg 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: Housmg & Neighborhood Services Director
1200 Carlsbad Village Drive
Carlsbad, Califomia 92008
TO THE DEVELOPER: Brian Merritt
Coastal Living 10, LLC
7668 El Camino Real 104-108
Carlsbad, Ca. 92009
C A 2/5/2013
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.
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CA 2/5/2013
9. SEVERABILITY
In the event any provision contained in this Agreement is to be held invalid, void or
xmenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement
shall nevertheless, be and remain in fiill 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 ^
CC./3J75^^ /ic^''^<h /a LLC
By: -S"tf" Ass/f^y /TffiA/A r^i^./n/r^^ //^.
Titie: /y/^AJj9G,/?'/0
Dated: <yu/^/C Z^. 2.<?y''i
By:
OF CARLSBAD
2L^
Debbie Fountain, Housing and
Neighborhood Services Director
Dated: 7^//^
By:
Name: '<^AL/^7y^A/ ^f^lS/g
Titie: ^nAS>i dfi^j-
Dated: ^/ZT///
(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:
Celia A. Brewei?, CiJy Attorney
bbaldi. Assistant City Attomey
Dated: : y-
CA 2/5/2013
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Lot 40 of La Costa South Unit 1, according to the map thereof No. 6117, filed in the office of the
County Recorder of San Diego County, June 3,1968.
APN: 216-170-19
CA 2/5/2013
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California
All-Purpose Acknowledgmerit
state of Califomia
County of ss.
On :y^^^^r'^'i before me, ^:2£w:^L^^^
personally appeared S'fi-Ul^ ^/^g/e — ^—
who proved to me on the basis of satisfactory evidence to be the person(j^ whose
namefcs^ is/9<p subscribed to the within instrument and acknowledged to me that
he/sj:^h^y executed the same in his/l)^/ths[r authorized capacity(jjss^, and that by
his/h^th^ir signature^^ on the instrument the personj^, or the entity upon behalf
of which the person^ acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California
the foregoing paragraph is true and correct.
DON S. PARK t
Ji^^^L Commission # 2021655 I
WITNESS my hand icial seal
SignatOre^f Notary Public
DON S. PARK
Commission # 2021655
Notary Public • California z
Orange County g
My Comm. Expires May 21.20171
;a for offk;iai notariai sea!
My commission expires on: ,0jAifjy.iJk3.jf/
Phone No.: _ „_ .„