HomeMy WebLinkAbout2021-09-28; City Council; Resolution 2021-221RESOLUTION NO. 2021-221
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, APPROVING AN AFFORDABLE HOUSING AGREEMENT FOR THE
CONSTRUCTION OF 81 AFFORDABLE UNITS TO SATISFY THE AFFORDABLE
HOUSING REQUIREMENTS FOR THE AVIARA APARTMENTS PROJECT (DEV
2017-0033)
EXHIBIT 1
WHEREAS, the developer of Aviara Apartments has proposed to construct 81 apartment units
affordable to low and moderate-income households as a means to satisfy their affordable housing
obligation as permitted by Carlsbad Municipal Code Chapter 21.85 and Section 21.53.120; and
WHEREAS, in exchange for providing additional affordable housing, the project received
approval to increase the density on the project over what would normally be allowed and modifications
to development standards, including for height, setbacks and parking as allowed in Carlsbad Municipal
Code Section 21.53.120, were granted;
WHEREAS, the affordable units will be satisfied through two parcels being created on the east
and west side of Aviara Parkway with different ownership interests. It is anticipated that once the maps
are recorded there will be two separate agreements recorded against the two respective parcels; and
WHEREAS, Carlsbad Municipal Code Chapter 21.85 requires the developer of a project to
receive approval of an Affordable Housing Agreement which details how the requirements of the
lnclusionary Housing Ordinance shall be met.
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 project is consistent with the goals and objectives of the City of Carlsbad's
Housing Element, and the General Plan.
3. That the project will provide 81 apartment homes affordable to extremely low, low, and
moderate-income households. The project, therefore, can effectively serve the city's
housing needs and priorities expressed in the Housing Element ..
4. That the Affordable Housing Agreement (Attachment A) is hereby approved.
5. That the City Council authorizes the City Manager, or designee, to prepare and execute
all documents related to the provisions of the Affordable Housing Agreement, subject
to review and approval by the City Attorney.
Sept. 28, 2021 Item #5 Page 5 of 43
RECORDING REQUESTED BY:
City of Carlsbad
AND WHEN RECORDED MAIL TO:
City of Carlsbad City Clerk's Office Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad, California 92008
Attachment A
THIS SPACE FOR RECORDER’S USE ONLY
AFFORDABLE HOUSING AGREEMENT
IMPOSING RESTRICTIONS ON REAL PROPERTY
(DEV2017-0033)
This AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY (this "Agreement"), entered into on the ___ day of __________, 2021, by and between the CITY OF CARLSBAD, a municipal corporation (hereinafter referred to as,
"City"), and SHAC SC LAUREL TREE LLC, a California limited liability company (hereinafter
referred to as, "Developer"), and made with reference to the following:
RECITALS
A.Developer is the owner of certain real property, known as Aviara Farms, in theCity of Carlsbad, in the County of San Diego, California (the "Property") described in Exhibit
A, which is attached hereto and incorporated herein by this reference. The Property, which is
bisected by Aviara Parkway, is divided into a 2.31 acre "East Parcel" and a 7.19 acre "West
Parcel."
B.Developer intends to develop two (2) separate multi-family apartmentcommunities (the "Development") on the Property totaling three hundred twenty-nine (329)
dwelling units, including eighty-two (82) Affordable Units (as defined below). The East Parcel
shall include seventy (70) Lower Income Affordable Units, as defined herein, and the West Parcel shall include two hundred forty-seven (247) market rate dwelling units (the "Market
Units") and twelve (12) Moderate Income Affordable Units, as defined herein, in exchange for increased density, additional units from the City’s excess dwelling unit bank, and related
standards modifications pursuant to Carlsbad Municipal Code (“CMC”) Chapter 21.53, and to
satisfy the inclusionary housing requirements set forth within CMC 21.85. On December 16, 2020, in connection with the Development, City certified a final environmental impact report and adopted Candidate Findings of Fact and a Mitigation Monitoring and Reporting Program (Planning Commission Resolution No. 7398, EIR 2018-0001), and issued approvals for a
tentative tract map (CT 2018-0002), site development plan (SDP 2018-0002), coastal
development permit (CDP 2018-0005), hillside development permit (HDP 2018-0001), and habitat management plan permit (HMP 2018-0001), which said approvals specify therein the granting of increased density, additional units from the City’s excess dwelling unit bank, and
Sept. 28, 2021 Item #5 Page 7 of 43
related standards modifications, subject to certain conditions of approval (Planning Commission Resolution No. 7399 "Conditions of Approval"). Said Conditions of Approval specifically
include conditions requiring a portion of the units on the West Parcel to be affordable to
moderate income households and all of the units on the East Parcel to be affordable to extremely low and low income households (except for the manager’s unit, which shall be unrestricted). Developer intends to comply with the Conditions of Approval for the Development by constructing twelve (12) Moderate Income Affordable Units on the West Parcel, and by
constructing or causing to be constructed a total of seventy (70) Affordable Units, including
seven (7) Extremely Low Income Affordable Units, sixty-two (62) Low Income Affordable Units, and one (1) unrestricted manager's unit.
C. Developer is required by the Conditions of Approval to enter into this Agreement as required and with the content specified by City's Inclusionary Housing Ordinance, set forth
within CMC Chapter 21.85. This Agreement will be executed and recorded prior to the approval
of any final map for the Property or the first building permit, whichever may occur first.
D. City hereby approves this Agreement pursuant to the terms set forth herein and agreed to by both Developer and City.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties that:
1. Satisfaction of Affordable Housing and Negotiated Density Increase Obligation
and Conditions of Approval. In order to satisfy the Conditions of Approval of tentative tract map CT 2018-0002 and site development plan SDP 2018-0002, and in exchange for an approved density increase, additional units from the city’s excess dwelling unit bank and related standards modifications for said Development per said permits and CMC 21.53, a total of eighty-two (82) units of the Development, seven (7) Extremely Low Income Affordable Units and sixty-two (62)
Low Income Affordable Units as well as one (1) unrestricted manager's unit on the East Parcel, and twelve (12) Moderate Income Affordable Units on the West Parcel, as further defined herein, shall be constructed for the purpose of providing housing to be affordable to lower and moderate-income households according to the schedule and terms contained herein (the "Affordable Units"). A total of two hundred forty-seven (247) Market Units and at least eighty-
one (81) Extremely Low, Low and Moderate Income Affordable Units may be constructed with approval of this Agreement.
2. Terms Governing Provision of Affordable Housing and Density Increase. Provision of the Affordable Units shall be governed by the following terms:
2.1 Size and Bedroom Count. Eighty-one (81) Extremely Low, Low and
Moderate Income Affordable Units in the Development shall be built in the aggregate as follows:
Unit Size Number of Units by Income Level (% AMI) Total
Number of bedrooms Approx. square feet Extremely Low Low Moderate
30% 60% 90%
EAST PARCEL
Studio 445-450 s.f. 2 12 14
One bedroom 606-625 s.f. 2 21 23
Two bedroom 702-860 s.f. 2 24 26
Sept. 28, 2021 Item #5 Page 8 of 43
Unit Size Number of Units by Income Level (% AMI) Total
Number of
bedrooms
Approx.
square feet
Extremely Low Low Moderate
30% 60% 90%
Three bedroom* 986 s.f. 1 5 6
WEST PARCEL
One bedroom 711-785 s.f. 12 12
TOTALS 7 62 12 81
*Plus 1 unrestricted manager’s unit 2.2 Affordability Requirements.
2.2.1 East Parcel. A total of seven (7) Extremely Low Income
Affordable Units on the East Parcel shall be restricted to occupancy by households with
extremely low incomes not exceeding thirty percent (30%) of the area median income ("AMI") for San Diego County, adjusted for actual household size. Monthly Rent of the Extremely Low Income Affordable Units shall not exceed the product of one-twelfth (1/12) times thirty percent (30%) times thirty percent (30%) of the household AMI for San Diego County adjusted for
assumed household size appropriate for the unit pursuant to the East Parcel Regulatory
Agreement (as defined below and to be approved separately from this Agreement). A total of sixty-two (62) Low Income Affordable Units on the East Parcel shall be restricted to occupancy by households with low incomes not exceeding sixty percent (60%) of the AMI for San Diego County, adjusted for actual household size. Monthly rent of the Low Income Affordable Units
shall not exceed the product of one-twelfth (1/12) times thirty percent (30%) times sixty percent
(60%) of the household AMI for San Diego County adjusted for assumed household size appropriate for the unit pursuant to the East Parcel Regulatory Agreement.
2.2.2 West Parcel. The twelve (12) Moderate Income Affordable Units on the West Parcel shall be restricted to occupancy by households with incomes not exceeding
ninety percent (90%) of the AMI for San Diego County, adjusted for actual household size.
Monthly Rent of the Moderate Income Affordable Units shall not exceed the product of one-twelfth (1/12) times thirty percent (30%) times ninety percent (90%) of the household AMI for San Diego County, adjusted for assumed household size appropriate for the unit pursuant to the West Parcel Regulatory Agreement (as defined below).
2.2.3 In General. For purposes of this Agreement, "Rent" shall include
a utility allowance as established and adopted by City of Carlsbad Housing Authority, as well as all required monthly payments made by the tenant to the lessor in connection with use and occupancy of a housing unit and land and facilities associated therewith, including any separately charged fees, utility charges, or service charges assessed by the lessor and payable by the tenant (but not including fees or charges resulting from any default by the tenant or damage caused by
the tenant, or fees or charges paid by the tenant to third party utilities or other providers). AMI figures shall be those published annually by the California Department of Housing and Community Development for San Diego County. For purposes of this Agreement, “assumed household size appropriate to the unit” shall mean a household of one person in a studio unit, two persons in a one-bedroom unit, three persons in a two-bedroom unit, and four persons in a three-
bedroom unit, unless the requirements of another funding source require an alternate method of
Sept. 28, 2021 Item #5 Page 9 of 43
calculating assumed household size. With respect to each Affordable Unit, the affordability requirements of this Section 2.2 shall continue for fifty-five (55) years from the date of issuance
of a Certificate of Occupancy by City for such unit or another comparable unit based upon
substitution provisions pursuant to the Regulatory Agreements (as defined below).
2.3 Schedule for Developing Affordable Units. Developer shall provide the Extremely Low, Low and Moderate Income Affordable Units concurrently with the Market Units of the Development, as further outlined in Section 5 below.
3. City Approval of Documents. The following documents, to be approved in
writing by City, which approval shall not be unreasonably withheld, conditioned or delayed shall be used in connection with the rental of Affordable Units. Nothing in the requirements of this Section 3 shall apply to the Market Units.
3.1 A marketing plan for the East Parcel consistent with the terms of this
Agreement, establishing the process for seeking, selecting and determining the eligibility of
tenants of the Affordable Units.
3.2 A marketing plan for the West Parcel consistent with the terms of this Agreement, establishing the process for seeking, selecting and determining the eligibility of tenants of the Affordable Units.
3.3 A form of Rental Agreement for the East Parcel.
3.4 A form of Rental Agreement for the West Parcel.
3.5 A Property Management Plan for the East Parcel.
3.6 A Property Management Plan for the West Parcel.
3.7 A form of regulatory agreement between Developer (or its successor-in-interest) and City for the East Parcel (the "East Parcel Regulatory Agreement"), in form and
substance reasonably acceptable to Developer (or its successor-in-interest) and City.
3.8 A form of regulatory agreement between Developer (or its successor-in-interest) and City for the West Parcel (the "West Parcel Regulatory Agreement"), in form and substance reasonably acceptable to Developer (or its successor-in-interest) and City (the East Parcel Regulatory Agreement and the West Parcel Regulatory Agreement, collectively referred
to herein as, the "Regulatory Agreements").
4. Compliance Report. Following completion of construction of the Affordable Units located on the West Parcel or the East Parcel, a Compliance Report meeting the requirements of (a) CMC Section 21.85.140, and (b) CMC Chapter 21.53, verifying compliance by Developer as to the Affordable Units on the West Parcel or the East Parcel with the terms of
this Agreement and certified as correct by a third party, shall be submitted annually to the City’s Housing Services Manager, commencing on the first Report Date that is twelve (12) months from the completion of construction of the Affordable Units on the West Parcel or East Parcel, as applicable. If similar reports on some or all of the Affordable Units are required for regulatory compliance with other financing programs, those reports may be deemed satisfactory for the
purpose of this section by the City’s Housing Services Manager, with respect to the Affordable Units covered by such reports, provided that copies of those reports are provided on an annual basis to the City’s Housing Services Manager with a third party certification addressed to City.
Sept. 28, 2021 Item #5 Page 10 of 43
5. West Parcel Condition Precedent. The Construction Commencement Date (as defined below) for the dwelling units on the East Parcel shall occur prior to the issuance of any
building permits for construction on the West Parcel. As used in this Section 5, the
"Construction Commencement Date" shall mean the date upon which Developer (or its successor-in-interest for the East Parcel) has done all of the following: (i) for the East Parcel, provides evidence satisfactory to the City that Developer has secured sufficient funding to construct the Affordable Units on the East Parcel from either (a) an allocation of tax credits and
tax-exempt bonds or (b) private financing, suitable to Developer in its sole and absolute
discretion; (ii) obtained a building permit for the construction of the project on the East Parcel in accordance with the requirements of the California Building Code, California Code of Regulations, Title 24, Part 2, Volumes 1 and 2, Section 105, and as amended by Carlsbad Municipal Code Section 18.04.020; and (iii) provided a completion guarantee to the City (on
substantially the same form that such developer routinely provides to its lenders) from a
reputable, creditworthy entity, guaranteeing completion of the project on the East Parcel.
6. Intentionally Deleted.
7. Release of Subject Property from Agreement. Subject to the provisions of Section 18, the covenants and conditions herein contained shall apply to and bind Developer and its heirs, executors, administrators, successors, transferees, and assignees having or acquiring any
right, title or interest in or to any part of Property and shall run with and burden the Property until terminated in accordance with this Agreement. Developer shall expressly make the conditions and covenants contained in this Agreement a part of any deed or other instrument conveying any interest in such property. The burdens of this Agreement, except for such burdens as may be released as set forth above, shall remain in full force and effect and recorded
against the Development for the fifty-five (55)-year duration of this Agreement.
8. Default. Failure of Developer to cure any default in Developer's obligations under the terms of this Agreement within ninety (90) days after the delivery of a notice of default from City (or where the default is of the nature which cannot be cured within such ninety (90)-day period, the failure of Developer to commence to cure such default within the ninety (90)-day
period or Developer's failure to proceed diligently to complete the cure of such a default within a reasonable time period, but in no event greater than one-hundred eighty (180) days will constitute a failure to satisfy the Conditions of Approval with respect to the Property and the requirements of Chapter 21.85 of the CMC. After expiration of such notice and cure period, City may exercise any and all remedies available to it with respect to Developer's failure to satisfy the
Conditions of Approval and Chapter 21.85 of the CMC, including but not limited to, the withholding of further building permits for the Market Units within the Development until such cure is completed.
9. Appointment of Other Agencies. At its sole discretion, City may designate, appoint or contract with any other public agency, for-profit or non-profit organization to perform
City's obligations under this Agreement.
10. Hold Harmless. Except to the extent caused by City's gross negligence or willful misconduct, Developer will indemnify and hold harmless 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, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating
Sept. 28, 2021 Item #5 Page 11 of 43
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.
11. Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the party to receive such notice at the addresses set forth below:
TO THE CITY OF CARLSBAD:
City of Carlsbad
Housing and Homeless Services Department Housing Services 1200 Carlsbad Village Drive Carlsbad, California 92008
Attn: Housing and Homeless Services Director
with a copy to: City of Carlsbad Office of the City Attorney
1200 Carlsbad Village Drive Carlsbad, California 92008 Attn: City Attorney
TO THE DEVELOPER:
SHAC SC Laurel Tree LLC 2 Venture, Suite 360 Irvine, California 92618 Attn: Keven Doherty, Vice President Development
with a copy to:
SHAC SC Laurel Tree LLC 777 California Avenue Palo Alto, California 94304 Attn: General Counsel
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.
12. Insurance Requirements. Developer shall obtain, at its own expense, commercial general liability insurance for development of the Property naming Indemnitees as additional
named insureds with aggregate limits of not less than five million dollars ($5,000,000), for bodily injury and death and property damage, including coverage for contractual liability and projects and completed operations, purchased by Developer or its successor or assigns from an insurance company duly licensed to engage in the business of issuing such insurance in the State, with a current Best’s Key Rating of not less than A:VII, such insurance to be evidenced by an
endorsement which so provides and delivered to the City’s Housing and Homeless Services
Sept. 28, 2021 Item #5 Page 12 of 43
Director, Housing and Homeless Services Department, City of Carlsbad prior to the issuance of any building permit for the Property.
13. Integrated 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.
14. Duration of Agreement. This Agreement shall remain in effect for fifty-five (55) years following the date Certificates of Occupancy have been issued by City for all
Affordable Units. This Agreement, and any section, subsection, or covenant contained herein,
may be amended only upon the written consent of Developer and the Director.
15. Recording of Agreement. The parties hereto shall cause this Agreement to be recorded against the Property in the Official Records of the County of San Diego. The execution and recordation of this Agreement shall be governed by the requirements set forth in CMC
21.85.140(A).
16. Severability. In the event any limitation, condition, restriction, covenant or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless be and remain in full force and effect.
17. Intentionally Deleted.
18. Assignment. Developer’s rights and obligations set forth in this Agreement shall be transferable and assignable to any subsequent fee owner of all or any portion of the Property only with the express written approval of the City (the City Manager shall have the authority to approve any such assignment), which approval will not be unreasonably withheld, conditioned or delayed. Such approval shall be granted by the City if the proposed assignee is a reputable
developer, owner or operator of apartment communities similar to the Development or portion thereof; provided, however, in the event that Developer transfers or assigns its interest in all or any portion of the Property to an entity which is affiliated with Developer or in connection with or as a part of a reorganization, consolidation or merger of Developer, no consent from the City shall be required for such transfer or assignment. Developer has provided to the City
background information and operating experience for Wermers GP MGR, LLC, a California limited liability company and R & V Real Estate Services, a California corporation (collectively “Wermers Properties”) and Bridge Housing Corporation, and the City, having reviewed such information, hereby agrees as of the date hereof that Wermers Properties (as to its proposed acquisition of the entire Property from Developer) and Bridge Housing Corporation (as to its
proposed acquisition of the East Parcel from the Developer who owns the Property) are each a reputable developer, owner or operator of apartment communities similar to the Development or portion thereof for all purposes of this Section 18, provided, however, that the foregoing does not itself accomplish the assignment of this Agreement to Wermers Properties or to Bridge Housing Corporation and that separate assignments of this Agreement would need to be entered into in
order to effect such assignments of this Agreement. After the City approves such transfer or assignment of Developer’s fee interest in all or any portion of the Property, Developer shall (i) notify City in writing of the transfer/assignment and (ii) deliver to City an assignment and assumption agreement executed by Developer and its transferee/assignee pursuant to which Developer’s transferee/assignee assumes all of Developer’s remaining executory obligations set
forth herein with respect to the Property or the portion thereof so transferred. After the date that such transfer/assignment occurs and a copy of the fully executed assignment and assumption
Sept. 28, 2021 Item #5 Page 13 of 43
agreement has been delivered to City, the transferor/assignor shall be released from all liabilities and obligations hereunder. As used in this Agreement, the term "Developer" shall be deemed to
include any such transferee/assignee after the date such transfer/assignment occurs.
19. Counterparts. This Agreement may be executed in two or more counterparts, each of which when so executed and delivered shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument.
20. Non-Waiver. No delay or omission by either party in exercising any right or
power accruing upon the compliance or failure of performance by the other party under the
provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by one party of a breach or failure of performance by the other party of any of the covenants, conditions, or agreements hereof to be performed by such other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements,
restrictions, or conditions herein.
21. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of the County of San Diego, State of California, or in the Federal District Court in the Southern District of California in San Diego County.
[SIGNATURE PAGE FOLLOWS]
Sept. 28, 2021 Item #5 Page 14 of 43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written:
DEVELOPER:
CITY:
SHAC SC LAUREL TREE LLC, a California limited liability company
By: SummerHill Apartment Communities, a California corporation, its managing member
By:__________________________________
Name: Title: By: __________________________________ Name: ____________________________
Title: _____________________________ Dated:
CITY OF CARLSBAD, a municipal corporation
By:__________________________________ Name: Title:
Dated:
(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 Developer must be attached.)
APPROVED AS TO FORM: Celia A. Brewer, City Attorney
By:__________________________________ Name: Title: Dated:
Sept. 28, 2021 Item #5 Page 15 of 43
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 ______________________ )
On _________________________, before me, , (insert name of notary) Notary Public, personally appeared , 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 PENALTY 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)
Sept. 28, 2021 Item #5 Page 16 of 43
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
[TO BE PROVIDED]
ADDRESS: 1205 Aviara Parkway, Carlsbad, California 92011
ASSESSOR PARCEL NO.: 212-040-56-00
Sept. 28, 2021 Item #5 Page 17 of 43