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HomeMy WebLinkAbout2018-07-24; City Council; ; Acquisition of 2686 Alameda Circle, an affordable housing unit, and appropriation of community development block grant funds in the amount of $220,000 for said purchase oCA Review gt<__ CITY COUNC I L Staff Report Meeting Date: To: From: Staff Contact: Subject: July 24, 2018 Mayor and City Council Kevin Crawford, City Manager Debbie Fountain, Community & Economic Development Director debbie.fountain@carlsbadca.gov or 760-434-2935 Acquisition of 2686 Alameda Circle, an affordable housing unit, and appropriation of community development block grant funds in the amount of $220,000 for said purchase of real property. Recommended Action Adopt a Resolution authorizing the City Manager to execute all required documents to complete acquisition of 2686 Alameda Circle, an affordable housing unit, and appropriating community development block grant funds in the amount of $220,000 and authorizing the Finance Director to disburse said funds to complete said purchase of real property. Executive Summary As part of the City of Carlsbad's loan documents for homes purchased through the city's lnclusionary Housing Program, the city entered into a Resale Restriction and Option to Purchase Agreement ("Agreement") on April 13, 2006 with the owner of property at 2686 Alameda Circle. This agreement allows the city the option to purchase the property at a restricted price at the time the owner provides notice of intent to sell or transfer ownership of the property during the 30-year term of the Agreement. The owner of said property provided notice to the city of the intent to sell on April 19, 2018. Based on prior authorization by the City Council, city staff subsequently notified owner of the city's intent to purchase the home at a restricted price on April 30, 2018, which has been calculated to be $206,200. The city and owner entered into a purchase agreement, and escrow has been opened with the intent of completing the acquisition by July 28, 2018. At this time, staff is recommending that the City Council authorize the City Manager to execute all required documents to complete the purchase of the subject property, which includes Acceptance of the Grant Deed, and authorize the appropriation and expenditure of federal community development block grant funds to complete said acquisition; staff is recommending an appropriation of $220,000 to cover the purchase price and all related escrow and other processing fees. This action by the City Council will allow for completion of the acquisition process for the subject affordable housing unit; the city will own the property at the end of this transaction and intends to resell it at a later date to an eligible low-income buyer. July 24, 2018 Item #2 Page 1 of 14 Discussion In 1993, the city adopted an inclusionary housing ordinance that requires all residential development to include 15% of the total number of homes to be affordable to low income households. The residential developer has the option to produce rental or ownership product to satisfy the inclusionary requirements. The Bressi Ranch developer produced ownership product to satisfy its inclusionary housing obligation; a total of 100 condominiums were developed and sold to low income buyers. As part of this sale, the developer transfers its financial subsidy (difference between market value of the home and restricted low-income price) to the City of Carlsbad; the city then records a silent second loan agreement (in the amount of subsidy) and a Resale Restriction and Option to Purchase Agreement against the property to ensure that the property remains affordable for a 30-year term, as required by the inclusionary ordinance. At the time an owner of a restricted condominium decides to sell the home, the city has the first option to purchase the home at a restricted price (based on low income maximums at the time of the notice to sell). On March 13, 2018, the City Council approved an amendment to its Community Development Block Grant (CDBG) Program Action Plan authorizing city staff to respond with the city's intent to exercise its option to purchase resales of affordable, restricted price homes as they become available on the market, and to utilize CDBG funds to purchase these resale units. This action would allow the city to recapture an affordable home and then resell it to an eligible low-income buyer. As the owner, the city will be able to place additional restrictions on the property and/or resale at a lower price, if necessary,-to create more affordable housing opportunities; this effort will assist with implementation of the Homeless Response Plan and the city's goals to create more affordable housing opportunities for the purpose of implementing efforts to re-house homeless residents of Carlsbad . The owner ofthe affordable, restricted condominium at 2686 Alameda Circle provided notice to the city of intent to sellthe unit on April 19, 2018. On April 30, 2018 the city responded with its intent to exercise its option to purchase the home. The restricted sales price was calculated at $206,200 and a purchase agreement was executed by the city and the owner and deposited into escrow. Per the requirements of the Resale Restriction and Option to Purchase Agreement, the city indicated its intent to complete acquisition of the resale unit within 90 days of the city's notice of intent to exercise its purchase option. To proceed with the subject acquisition, the City Council is being asked to authorize the City Manager to execute all acquisition documents, including the Grant Deed, and to authorize the Finance Director to appropriate and expend CDBG funds in an amount not to exceed $220,000 for purchase of the affordable, restricted home and related acquisition costs. Fiscal Analysis The restricted price to purchase the affordable residential property at 2686 Alameda Circle is $206,200. It is anticipated that there will be additional acquisition costs including escrow fees. Staff is requesting that the City Council approve a total appropriation of federal CDBG funds in the amount of $220,000 to cover all acquisition costs for the subject property; the City Council has an approved set-aside of $750,000 to date in CDBG funds for this purpose. The Resale Restriction and Option to Purchase Agreement states that the 6% real estate agent fee July 24, 2018 Item #2 Page 2 of 14 ($12,370) is to be paid to the City of Carlsbad at close of escrow, since the city acts as the real estate agent for the purposes of this sales transaction. These funds will be deposited to the CDBG fund to allow for additional purchases of these resale homes in the future. Next Steps All acquisition documents will be executed by the City Manager, and the city will complete the purchase of the subject affordable, restricted home and subsequently record the Grant Deed to transfer ownership of the home to the City of Carlsbad. Environmental Evaluation (CEQA) 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. Public Notification This item was noticed in accordance with the Ralph M. Brown Act and was available for public vi~wing and review at least 72 hours prior to the scheduled meeting date. Exhibits 1. City Council Resolution 2. Form of Grant Deed July 24, 2018 Item #2 Page 3 of 14 RESOLUTION NO.2018-137 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO EXECUTE ALL REQUIRED DOCUMENTS TO COMPLETE ACQUISITION OF 2686 ALAMEDA CIRCLE, CARLSBAD, CALIFORNIA, AN AFFORDABLE HOUSING UNIT, AND APPROPRIATING COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS IN THE AMOUNT OF $220,000 AND AUTHORIZING THE CITY'S FINANCE DIRECTOR TO DISBURSE SAID FUNDS TO COMPLETE SAID PURCHASE OF REAL PROPERTY. WHEREAS, the City Council of the City of Carlsbad, California has determined that it desires to exercise its option to purchase an affordable housing unit located at 2686 Alameda Circle, Carlsbad, California as set forth in the Resale Restriction and Option to Purchase Agreement executed between the city and property owner on April 13, 2006; and WHEREAS, the property owner for 2686 Alameda Circle provided notice to the city on April 19, 2018 indicating the owner's intent to sell or transfer ownership of the restricted affordable housing unit at the noted location; and WHEREAS, the city responded to the property owner of the restricted affordable housing unit on April 30, 2018 indicating its intent to exercise its option to purchase the property at 2686 Alameda Circle; and WHEREAS, the City Council approved a change in policy on March 13, 2018 and amended its Community Development Block Grant Program Action Plan authorizing city staff to respond with the city's intent to exercise its option to purchase resales of affordable, restricted price homes as they become available on the market, and to utilize CDBG funds to purchase these resale units; and WHEREAS, the purchase approval by City Council allows for the city to recapture an affordable home and extend its affordability for an indefinite period of time, if so desired, and to resell it to an eligible buyer at a lower price, if necessary, to implement the city's affordable housing goals and policies; and WHEREAS, the purchase approval by City Council will also assist with implementation of the city's Homeless Response Plan and the city's goals to create more affordable housing opportunities for the purpose of implementing efforts to re-house homeless residents of Carlsbad. July 24, 2018 Item #2 Page 4 of 14 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the City Council hereby authorizes the City Manager to execute all acquisition documents, including the Acceptance of the Grant Deed, for the purchase of the affordable housing unit located at 2686 Alameda Circle, Carlsbad, California at the restricted purchase price of $206,200. 3. That the City Council hereby authorizes the city's Finance Director to appropriate and expend Community Development Block Grant funds in an amount not to exceed $220,000 for purchase of the affordable, restricted home and related acquisition costs for the property located at 2686 Alameda Circle, Carlsbad, California. PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of Carlsbad on the 24th day of ~2018, by the following vote, to wit: AYES: NOES: ABSENT: M. Hall, K. Blackburn, M. Schumacher, C. Schumacher, M. Packard. None. None. (SEAL) July 24, 2018 Item #2 Page 5 of 14 RECORDING REQUESTED BY: Chicago Title San Diego DOC# 2018-0307898 111111111111 lllll 1111111111111111111111111 lllll lllll 111111111111111111 Jul 27, 2018 04:59 PM OFFICIAL RECORDS Ernest J. Dronenburg, Jr., AND WHEN RECORDED MAIL TO: SAN DIEGO COUNTY RECORDER FEES: $0.00 (SB2 Atkins: $0.00) PCOR: YES Mall Tax statements to: Allen Edwards City of Carlsbad, a municipal Corporation Housing and Nelborhood Services Department, 1200 Carlsbad Village Drive Carlsbad, CA 92008 Grant Deed (Please fill In document title(s) on this line) PAGES: 7 1 0 Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that is subject to the imposition of documentary transfer tax, or, 2 0 Exempt from fee per GC27388.1 due to being recorded in connection with a transfer that was subject to documentary transfer tax which was paid on document recorded previously on _______ (date*) as document number ___________ of Official Records, or, 3 D Exempt from fee per GC27388.l due to the maximum fees being paid on documents in this transaction, or, 4 D Exempt from fee per GC27388.l due to the maximum fees having been paid on documents in the transactlon(s) recorded previously on _________ (date*) as document number(s) ______________________ of Official Records, or, 5 D Exempt from fee per GC27388.1, document transfers real property that is a residential dwelling to an owner-occupier, or, document is recorded In connection with concurrent transfer that is a residential dwelling to an owner-occupier, or, 6 D Exempt from fee per GC27388.1 due to it being recorded In connection with a transfer of real property that is a residential dwelling to an owner-occupier. The recorded document transferring the dwelling to the owner-occupier was recorded on _________ (date*) as document number(s) 7 ll] Exempt from fee per GC27388.1 due to being executed or recorded by the federal government in accordance with the Uniform Federal Lien Registration Act, by the state, or any county, municipality or other political subdivision of the state, or, 8 D Exempt from the fee per GC 27388.1 (a) (1); Not related to real property, or, 9 D Exempt from fee under GC27388.1 for the following reasons: Rev 5/18 TH IS PAGE ADDED TO PROVIDE SENAlEBIU.2 EXEMPTIONINFORMA11ON (Additional recording fee applies) *The Prior Recording Reference must have been recorded within the last 60 days and is subject to review July 24, 2018 Item #2 Page 6 of 14 .. '' RECORDING REQUESTED BY: Chicago Title Company When Recorded Mail Document and Tax Statement To: Allen Edwards City of Carlsbad, a municipal corporation Housing and Neighborhood Services Department, 1200 Carlsbad Village Drive Carlsbad, CA 92008 Escrow Order No.: 73718006413 APN/Parcel ID(s): 213-190-04-29 SPACE ABOVE THIS LINE FOR RECORDER'S USE Exempt from fee per GC 27388.1 (a) (2); recorded in connection with a transfer subject to the imposition of documentary transfer tax. ~ R&T 11922 GRANT DEED The grantee is (s~e United St t · The undersigned grantor(s) declares <!-es or an agency or instrumentality thereof a state or territory, or political subdivsion thereof. ' D This transfer is exempt from the documentary transfer tax. 0 The documentary transfer tax is $ 0, l1) )I( and is computed on: 0 the full value of the interest or property conveyed. D the full value less the liens or encumbrances remaining thereon at the time of sale. The property is located in 0 the City of Carlsbad. FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Jaci Michele Johnson, an unmarried woman hereby GRANT(S) to City of Carlsbad, a municipal corporation the following described real property in the City of Carlsbad, County of San Diego, State of California: SEE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF Dated: July 2, 2018 ITNESS WHEREOF, the undersigned have executed this document on the date(s) set forth below. / Grant Deed SCA0000129.doc I Updated: 11.20.17 MAIL TAX STATEMENTS AS DIRECTED ABOVE Printed: 07.02.18@03:32 PM CA-CT-FWDO-02180.055824-73718006413 July 24, 2018 Item #2 Page 7 of 14 APN/Parcel ID(s): 213-190-04-29 GRANT DEED (continued) A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ~=~~t:fo_f_a~::::::=:::::~iQ,...~!,l:::1..a:,::!.:-=~"---- On 7 \ \5 \ 1..-0)'6': befor-e-me-, -r\-t~->0---:-~,_g__~-~ (here insert name and title oAhe officer) , Notary Public, personally appeared -.Jc:;_~ f'v\ \c.i..--.Q.._ \..e-, = Seth M -<Dt--, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies ), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Signature Grant Deed SCA0000129.doc I Updated: 11.20.17 (Seal) Notary Public • California ;: San Diego County ~ ,' Commission# 2171989 ~ My Cornm Expires Dec 13. 2020' , . ..,.~~,... ~-... ~~-0 C ♦♦¥-~ Printed: 07.02.18@ 03:32 PM CA-CT-FWD0-02180.055824-73718006413 July 24, 2018 Item #2 Page 8 of 14 CERTIFICATE OF ACCEPTANCE (Pursuant to Government Code 27281) This is to certify that the interest in real property conveyed by the Grant Deed from To.~ ~ICV\~\~ Jol1~e City of Carlsbad, a municipal corporation (the "City"), is hereby accepted on u.\ "2.lo , 20\~, by the undersigned officer or agent on behalf of the City pursuant to authori conferred by resolution of the City Council adopted on ll.l\u ;ll, ,~11, and the City Council consents to the recordation of said document in the Office of the Recorder of San Diego County, State of California l01011712367843.2 , a municipal corporation By: Name: Ke✓v Lo Cxn W\OYd 1ts: t;t:) o£ Ga..v-\~bru:,i July 24, 2018 Item #2 Page 9 of 14 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of San Diego On ju._\ ~ ).U/ 1 J.() l t before me, Morgen Fry, Notary Public (insert name and title of the officer) personally appeared ~V \ V\ ~ , , who proved to me on the basis of satisfactory evidence to be the perso~ whose name~ is.l8f;Q subscribed to the within instrument and acknowledged to me that he/el 1eftl 1e, executed the same in his/Mii"J'tflsir authorized capacity(~ and that by his/~ri'tl 1eh signature~on the instrument the person('s.l, or the entity upon behalf of which the person~) acted, executed the instrument. I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature \ ~~(Seal] July 24, 2018 Item #2 Page 10 of 14 EXHIBIT A Order No.: 73718006413 For APN/Parcel ID(s): 213-190-04-29 A CONDOMINIUM UNIT COMPOSED OF: PARCEL 1 (COMMON AREA INTEREST): AN UNDIVIDED FRACTIONAL INTEREST AS TENANT IN COMMON IN AND TO THE COMMON AREA OF PHASE 2 AS DESCRIBED ON THE MULBERRY AT BRESSI RANCH CONDOMINIUM PLAN (THE "CONDOMINIUM PLAN") RECORDED ON FEBRUARY 11, 2005, AS DOCUMENT NO. 2005-0117224, IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, CALIFORNIA, BEING A PORTION OF LOT 1 OF CARLSBAD TRACT MAP CT 03-03, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 14800, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY ON MAY 21, 2004. THE UNDIVIDED FRACTIONAL INTEREST HEREBY CONVEYED IS THE RECIPROCAL OF THE NUMBER OF RESIDENTIAL UNITS SHOWN ON THE CONDOMINIUM PLAN AS BEING WITHIN PHASE 2 OF THE CONDOMINIUM PLAN. EXCEPTING THEREFROM ALL RESIDENTIAL UNITS SHOWN ON THE CONDOMINIUM PLAN. EXCEPTING THEREFROM THE EXCLUSIVE RIGHT TO POSSESSION AND USE OF ANY EXCLUSIVE USE AREA SHOWN ON THE CONDOMINIUM PLAN. PARCEL 2 (RESIDENTIAL UNIT): RESIDENTIAL UNIT NO. 79, AS SHOWN UPON THE CONDOMINIUM PLAN. PARCEL 3 (EXCLUSIVE USE AREAS): THE EXCLUSIVE RIGHT TO USE ANY EXCLUSIVE USE AREA SHOWN ON THE CONDOMINIUM PLAN AS BEING APPURTENANT TO THE RESIDENTIAL UNIT DESCRIBED IN PARCEL 2 ABOVE. PARCEL 4 (EASEMENT OVER ASSOCIATION PROPERTY): A NON-EXCLUSIVE EASEMENT FOR USE AND ENJOYMENT OF AND ACCESS OVER THE ASSOCIATION PROPERTY ("ASSOCIATION PROPERTY" IS DEFINED IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS FOR MULBERRY AT BRESSI RANCH DESCRIBED BELOW), EXCEPTING ANY EXCLUSIVE USE AREA. THE EASEMENT HEREBY RESERVED, WHICH IS APPURTENANT TO THE RESIDENTIAL UNIT DESCRIBED ABOVE, IS FOR ACCESS AND USE OF THE ASSOCIATION PROPERTY, SUBJECT TO THE PROVISIONS OF THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS FOR MULBERRY AT BRESSI RANCH AND THE RULES AND REGULATIONS OF THE MULBERRY AT BRESSI RANCH HOMEOWNERS ASSOCIATION, A CALIFORNIA NONPROFIT MUTUAL BENEFIT CORPORATION. EXCEPTING THEREFROM FROM ALL PARCELS ALL EASEMENTS FOR ACCESS, DEVELOPMENT, ENCROACHMENTS, MAINTENANCE AND OTHER PURPOSES SET FORTH IN THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RESERVATION OF EASEMENTS FOR MULBERRY AT BRESSI RANCH (REFERRED TO AS THE "MULBERRY DECLARATION"). THE MULBERRY DECLARATION IS DESCRIBED BELOW. July 24, 2018 Item #2 Page 11 of 14 EXHIBIT A (continued) ALSO EXCEPTING FROM ALL PARCELS, FOR THE BENEFIT OF GRANTOR, ITS SUCCESSORS IN INTEREST AND ASSIGNEES, THE RIGHT TO ENTER THE LOT (I) TO COMPLETE AND REPAIR ANY IMPROVEMENTS OR LANDSCAPING LOCATED THEREON AS DETERMINED NECESSARY BY GRANTOR, IN ITS SOLE DISCRETION, (11) TO COMPLY WITH REQUIREMENTS FOR THE RECORDATION OF THE SUBDIVISION MAP DESCRIBED ABOVE OR THE GRADING OR CONSTRUCTION OF THE PROPERTIES, AS DEFINED IN THE MULBERRY DECLARATION, OR (Ill) TO COMPLY WITH REQUIREMENTS OF APPLICABLE GOVERNMENTAL AGENCIES. GRANTOR SHALL PROVIDE REASONABLE NOTICE TO GRANTEE BEFORE SUCH ENTRY. IF GRANTEE REFUSES TO COOPERATE WITH GRANTOR'S EXERCISE OF THIS RIGHT, GRANTOR MAY ENFORCE THIS RIGHT OF ENTRY IN A COURT OF LAW GRANTEE. July 24, 2018 Item #2 Page 12 of 14 To the members of the: CITYCOUNOL ACbiil CA~ QZ; V Date 1 1& CM v'cOO _ July 24, 2018 Council Memorandum To: Honorable Mayor Hall and Members of the City Council From: Gary Barberio, Assistant City Manager ~ (\ Via: Scott Chadwick, Chief Operations Officer~ Re: Responses to Questions from July 23 Council Briefings Agenda Item No. 2 -Acquisition of 2686 Alameda Circle {cityof Carlsbad Question 1: What was the original purchase price for the unit and how much equity gain will the seller realize? Answer: The original purchase price for 2686 Alameda Circle was $163,600; the home was originally purchased in 2006. The current restricted purchase price is $206,200. The seller will realize a total equity gain of $42,600. The seller must pay the full 6% realtor commission to the city, which is $12,372. Therefore, the seller will receive an estimated $30,228 upon close of escrow. Agenda Item No. 6 -Fire Station 5 Storage Building Roof Note: City staff is recommending that this item be rescheduled to a future City Council meeting. Agenda Item No. 7 -Carlsbad Public Safety and Service Center Improvements Note: City staff is recommending that this item be rescheduled to a future City Council meeting. Agenda Item No. 10 -State Agreement for Federal Aid Projects Question: What were the specific changes to the Agreement? Answer: An Additional Material/Information Memo has been prepared and distributed to address this question. ( Agenda Item Nq. 11-Trail Connectivity to Tamarack State Beach and the ADA Beach Access Study Projects Question: Will the contractor coordinate with the California State Department of Parks and Recreation? Answer: An Additional Material/Information Memo has been prepared and distributed to address this question. Agenda Item No.12-Short-Term Vacation Rentals Question: How many legally permitted STVR's exist in the coastal zone? City Manager's pffice City Hall 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2820 t July 24, 2018 Item #2 Page 13 of 14 ' Responses to Questions from July 23 Coundl Briefings . July 24, 2018 t:· · ' - Page 2 . \' ., .:! . .,·~ w"-~ , ~-! Answer: According to the Finance Department, we have 257 legally permitted STVRs in the coastal zone; 118 of those 257 permits were issued in the last year. Agenda Item No. 17 -TEFRA Hearing-6408 Halyard Place -Vista Las Flores Question: What year was the project built? Answer: Vista Las Flores was built in 2001, and satisfied the inclusionary obligation of the Mariano development. cc: City Attorney City Manager City Clerk " July 24, 2018 Item #2 Page 14 of 14