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HomeMy WebLinkAbout2021-12-07; City Council; Resolution 2021-268RESOLUTION NO. 2021-268 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AN AFFORDABLE HOUSING AGREEMENT TO SATISFY THE INCLUSIONARY HOUSING REQUIREMENT FOR THE WEST OAKS DEVELOPMENT (DEV 2013-018) EXHIBIT 2 WHEREAS, the developer of West Oaks has proposed to construct 42 apartment unit!: affordable to low and very low-income households as a means to satisfy their inclusionary housin§ 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 receivec approval to increase the density on the project over what would normally be allowed and modification~. to development standards, including for height, setbacks and parking as allowed in Carlsbad Municipal Code Section 21.53.120, were granted; 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. WHEREAS, the Planning Commission approved said housing development on Jan. 20, 2021. 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'5 Housing Element, and the General Plan. The project will provide 42 units affordable to low and very low-income households. The project, therefore, can effectively serve the city's housing needs and priorities expressed in the Housing Element. 3. That the Affordable Housing Agreement (Attachment A) is hereby approved. 4. That the City Council authorizes the City Manager, or designee, to prepare and execut= all documents related to the provision of the Affordable Housing Agreement, subject t:1 review and approval by the City Attorney. Dec. 7, 2021 Item #11 Page 9 of 63 Attachment A Dec. 7, 2021 Item #11 Page 11 of 63 RECORDING REQUESTED BY: City of Carlsbad WHEN RECORDED MAIL TO: City of Carlsbad Housing and Homeless Services Department 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: City Clerk This document is recorded at the request and for the benefit of the City of Carlsbad, and is exempt from the payment of a recording fee pursuant to Government Code Sections 6103, 27383, and 27388.1 (Space above for Recorder's Use) AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY (DEV 13018) This AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY ("Agreement"), entered into this ____ day of ________ , __ , by and between the CITY OF CARLSBAD, a municipal corporation ("City"), and The Carlsbad West Oaks Project Owner, LLC. a Delaware limited liabilitv company ("Developer") is made with reference to the following: A. Developer is the owner of certain real property in the City of Carlsbad, in the County of San Diego, California ("Property") described in Exhibit "A", which is attached hereto and incorporated herein by this reference. B. Developer currently intends to construct a total of 192 residential units on the Property ("Development"), consisting of 150 market rate and 42 affordable apartments (including 1 manager's unit) .. Developer has requested and the City has approved a General Plan land use amendment, zone change, Local Coastal Program amendment, a site development plan, coastal development permit, habitat management plan permit, minor subdivision, an allocation of residential units from the Excess Dwelling Unit Bank pursuant to City Council Policy 43, and a modification to development standards, subject to certain conditions in Planning Commission Resolution No. 7397 ("Conditions of Approval") with respect to affordable housing. Condition of Approval 15 requires that forty-two (42) of the units in the Development are to be affordable to lower-income households with incomes ranging between thirty-five percent (35%) and up to seventy percent (70% ), with average affordability to not exceed sixty percent ( 60% ), of the San Diego Area Median Income in fulfillment of the City's Inclusionary Housing Ordinance, Carlsbad Municipal Code, Chapter 21.85. C. Developer is required by the Conditions of Approval to enter into this Affordable Housing Agreement Imposing Restrictions on Real Property as required and with the content specified by the City's Inclusionary Housing Ordinance (CMC Chapter 21.85), and shall be 235/0 I 6909-0611 16714484.9 al 1/18/21 1 Dec. 7, 2021 Item #11 Page 12 of 63 executed and recorded prior to the approval of any final or parcel map for the Property or, where a map is not being processed, prior to issuance of building permits. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. Satisfaction of Affordable Housing Obligation and Conditions of Approval. The Conditions of Approval of the permits described in Recital B above and the requirements of the City's Inclusionary Housing Ordinance (CMC Chapter 21.85) shall not be satisfied unless forty-two (42) units of the Development are constructed for the purpose of providing housing to be affordable to lower-income households according to the schedule and terms contained herein ("Affordable Units"). A total of 150 market rate units and 42 Affordable Units (including 1 manager's unit) may be constructed with approval of this Agreement. 2. Terms Governing Provision of Affordable Units. Provision of the Affordable Units shall be governed by the following terms: 2.1 Income Level. Unit Size and Bedroom Count. The Affordable Units in the Development shall include forty-two ( 42) one, two, and three-bedroom dwelling units (22 percent of the total dwelling units) as affordable to lower-income households (with incomes ranging from 35% to 70% of the San Diego County Area Median Income ("AMI") for 55 years, in accordance with the requirements and process set forth in Chapter 21.85 of the Carlsbad Municipal Code. No fewer than four of the units shaJl be affordable to households with incomes at or below 35% AMI; no fewer than six of the units shall be three-bedroom units, at least one of which shall be affordable at or below 35% AMI; no unit shall exceed 70% AMI affordability; and the average affordability for all restricted units shall not exceed 60% AMI. The 42 units (including one unrestricted manager's unit) are expected to be provided in the unit size with the square footages and income restriction indicated in the table below. Unit mix may be adjusted to maximize ability to obtain tax credit financing as approved by the City, but in no event shall it deviate below the requirements of Section 2.1 above. Unit Size Number of Units by Income Level Total Number of Approx. Extremely Very low low Low bedrooms net square Low Income Income Income Income feet 35% 50% 60% 70% 1 bedroom 500-550 3 3 12 1 19 2 bedrooms 700-750 1 1 9 1 12 3 bedrooms 900-1020 1 1 7 1 10 5 5 28 3 41 • Plus 1 unrestricted manager's unit 2.2 Affordabilitv Requirements. The Affordable Units shall be restricted to occupancy by households with incomes ranging from 35% to 70% of AMI, adjusted for actual household size, as indicated in the table above. Monthly rents of the Affordable Units 2 Dec. 7, 2021 Item #11 Page 13 of 63 shall not exceed I/12th of 30% of the targeted household AMI for San Diego County, adjusted for assumed household size appropriate for the unit pursuant to the Regulatory Agreement. For purposes of this Agreement, "Rent" shall include a utility allowance as established and adopted by the City of Carlsbad Housing Authority, as well as all required monthly payments required by 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 (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). Median income figures shall be those determined by the United States Department of Housing and Urban Development from time to time, and as published by the California Department of Housing and Community Development. For purposes of this Agreement, "assumed household size appropriate for the unit" shall mean a household of 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 calculating assumed household size which is less than these assumed household sizes. With respect to each Affordable Unit, the affordability requirements of this Section 2.2 shall continue for 55 years from the date of issuance of a Certificate of Occupancy by the City for such unit or another comparable unit based upon substitution provisions pursuant to the Regulatory Agreement. The affordability requirements of this Section 2.2 shall be set forth in the Regulatory Agreement between the Developer or its successors and the City, provided for below, which shall supersede this Agreement upon recordation of the Regulatory Agreement. 2.3 Schedule for Developing Affordable Multi-family Units. Developer shall provide the Affordable Units concurrent with the Project's market rate units. In order to satisfy this requirement Developer and/or its successor shall receive a release of building permits for the market rate and Affordable Units on the schedule set forth herein: (i) Building Permits for the Affordable Units may be released at any time following execution and recordation of this Agreement; (ii) Following execution and recordation of this Agreement, the Developer may begin to obtain building permits for the market rate units, with no more than 40% ( or 60 units total) of the market rate unit building permits released by the city in this phase, (iii) Upon submitting a copy of the Recorded Deed to the City of Carlsbad Housing and Homeless Services Director confirming full transfer of ownership of the identified property for the Affordable Units from the Developer and/or its successor to the Affordable Housing Developer, Developer may obtain building permits for an additional 32% of the market rate units ( or an additional 48 market rate building permits), and (iv) Developer may obtain a final release of building permits from the City for the remaining market rate units ( 42 total) upon commencement of construction of the Affordable Units on the Property. However, no certificate of occupancy or occupancy otherwise granted on for the final forty-two ( 42) market rate units until such time as the construction of the Affordable Units are complete and the Affordable Units are ready for occupancy. For purposes of this section, "building permit" shall mean a permit issued in accordance with the requirements of the California Building Code, California Code of Regulations, Title 24, Part 2, Volumes I and 2, Section 105, and as amended by Carlsbad Municipal Code Section 18.04.020. For purposes of this section, "commencement of construction" shall mean certification of building pads and initiation of framing construction activity consistent with the approved building permit(s) for the Affordable Units and which results in at least one approved inspection by the City. For purposes of this section, "construction of the Affordable Units is complete and the Affordable Units are ready for occupancy" shall mean shall mean final inspection of the Affordable Units by the City's Building Inspector ( or designee) has occurred confirming construction is in compliance with the issued 3 Dec. 7, 2021 Item #11 Page 14 of 63 building permit( s ), no additional corrections are required, and a certificate of occupancy or equivalent may issue. 3. City Approval of Documents. The following documents, to be approved in writing by the City, shall be used in connection with the rental of Affordable Units. 3.1 A marketing plan 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 form of Rental Agreement. 3.3 A Property Management Plan. 3.4 A form of regulatory agreement between the Developer and the City ("Regulatory Agreement"), in a form approved by the Housing and Homeless Services Director and City Attorney. The Regulatory Agreement shall incorporate the terms governing provision of Affordable Units set forth herein and shall be recorded against the Affordable Units for a term of 55 years. 4. Compliance Report. Following completion of construction of the Affordable Units, a Compliance Report meeting the requirements of CMC Section 21.85.140 of the Inclusionary Ordinance, verifying compliance of all completed Affordable Units with the terms of this Agreement and certified as correct by a third-party, shall be submitted annually to the Housing Services Manager, commencing on the first Report Date that is twelve (12) months from the completion of construction of the Affordable Units. 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 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 Housing Services Manager with a third party certification addressed to the City. 5. Release of Subject Propertv from Agreement. The covenants and conditions herein contained shall apply to and bind the 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 the provisions of Section 12 hereof. The 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 or pursuant to Section 12, shall remain in full force and effect and recorded against the Development for the 55-year duration of this Agreement. 6. Default. Failure of the Developer to cure any default in the Developer's obligations under the terms of this Agreement within ninety (90) days after the delivery of a notice of default from the City (or where the default is of the nature which cannot be cured within such ninety (90) day period, the failure of the Developer to commence to cure such default within the ninety (90) day period or the 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 4 Dec. 7, 2021 Item #11 Page 15 of 63 constitute a failure to satisfy the Conditions of Approval with respect to the Property and the requirements of Chapters 21.85 and 21.86 of the CMC. The City may exercise any and all remedies available to it with respect to the Developer's failure to satisfy the Conditions of Approval and Chapters 21.85 and 21.86 of the CMC, including but not limited to, the withholding of further building permits and certificates of occupancy for the market rate units within the Development until such cure is completed. 7. 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 the City's obligations under this Agreement. 8. 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, 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 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. 9. Insurance Requirements. Prior to commencement of construction, 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 Housing Services Manager prior to the issuance of any building permit for the Property. 10. 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 addressed set forth below: 5 Dec. 7, 2021 Item #11 Page 16 of 63 TO THE CITY OF CARLSBAD: City of Carlsbad Housing and Homeless Services Department Housing Services Division 1200 Carlsbad Village Drive Carlsbad, CA 92008 Attn: Housing and Homeless Services Director Email: Housingra"1carlsbadca.gov Fax: 760-720-2037 TO THE DEVELOPER: The Carlsbad West Oaks Project Owner, LLC 888 San Clemente, Suite I 00 Newport Beach, CA 92660 Attn: Lance Waite, Principal Caren Read, Chief Legal Officer Telephone: (949) 720-3612 Facsimile No.:(949) 720-3613 E-Mail: Lwaite@integralcommunities.com cread@integralcommunities.com 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. 11. 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. 12. Duration of Agreement. This Agreement shall remain in effect for fifty-five (55) years unless terminated by both of the following occuring: (i) recordation of the Regulatory Agreement, and (ii) construction of the Affordable Units is complete and the Affordable Units are ready for occupancy (as defined in Section 2.3). This Agreement, and any section, subsection, or covenant contained herein, may be amended only upon the written consent of the Developer and the Housing and Homeless Services Director. 13. Recordine 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. 14. Severabilitv. 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. 6 Dec. 7, 2021 Item #11 Page 19 of 63 CAUFORNlA .ACKNOWil.EDGIViEl\rf CIVIL CODE § 1189 A notary public or otherofficer completing this certificate verifies onlythe identity-ofthe individual who signed the document to whkh this certificate is attached, and not the truthfulness, accuracy; or validity of that document. State of California C--} County of ..) 0\11"\ D~ 0 \\\ \Cf:> l-iozx . before me, C-0\'\t'\or \< V\O..c..\<:. I ~o½r11 Pub\~~ · Date Here /nseli: Name and Title of the Oi11Ler • personally appeared __ ...::.L_o._t\_u_e __ __cw __ c,..,_~_\.-_e. __________________ _ On Name(s) of Signer(s) 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 acknowledg.ed 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 in"'i.rument the person.(s), or the entity upon behalf of which the person(s) acted, executed the instrument. CONNOR KNACK Notary Public • California a; San Di~o County ~ ·commission It 2361885 y Comm. Expires Jun 19,"2025 Place Notary Seal and/or Stamp Above I certify under PENAL TY OF Pl::RJURY under the Jaws of the State of Californiq that the foregoing_ paragraph is true and correct. WITNESS my hand and official seal. Signatu~e . ~ Signature of Notary Public OPTION._AL Completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document Description of Attached Document Title o; Type of Document _A,!t"-t:ocJ~..!b;,,l\~e.~_rH~o~u!.::~~~~~........l.~rr_:.ie.i!'.!e.~W\~e~n2+~--------- DocumentDate: \ \ \~ '1-0'2.\ Numberof Pages: ____ _ Signer(s) Other Than Named Above: _________________________ _ Capacity(ies) Claimed by Signer(s) Signer's Name: ____________ _ Signer's Name: □ Corporate Officer -Titie(s): _______ _ □ Corporate Officer -Title(s): _______ _ □ Part.Iler -□ Limited □ General □ Partner -o Limited □ General D fndividua[ o Attorney in Fact □ Individual □ Attorney in Fact □ Trustee o Guardian or Conservator □ Trustee □ Guardian or Conservator □ Other: o Other: Signer is Representing: _________ _ · Signer is Representing: _________ _ ffl§ . ~ ~~======= ~ I ©2018 Nationaf Notary Association Dec. 7, 2021 Item #11 Page 20 of 63 235/016909-0811 16714484.9 a11/18/21 EXHIBIT A To be attached after recordation of the final map. LEGAL DESCRIPTION OF PROPERTY 8 Dec. 7, 2021 Item #11 Page 21 of 63 ATTACHMENT B PHASING SCHEDULE FOR WEST OAKS Schedule of Construction Activities/Triggers for Release of Buildinf! Permits Affordable Housing Agreement recorded concurrent with recording of Fina/Map Copy of Recorded Deed documenting formal transfer of property ownership for Affordable Unit parcel of land from Developer to Affordable Unit Developer Commencement of Construction ol 235/016909-0611 16714484.9 a11/18/21 Market Rate Number of Certificate of Building Market Rate Occupancy Permits Building Released Permits (150 total) Grading 0 permits Building Permits for 0 Affordable Units (42 total) Building Permit for 0 Club House No restriction Building 60 total on Certificate Permits for (40%) of Occupancy Buildinf!s 7-9 Building 48 total No restriction Permits for (32%) on Certificate Buildings 5-6 of Occupancy 9 Dec. 7, 2021 Item #11 Page 22 of 63 the Affordable Units, which means certification of pads and building framing construction activity underway 235/016909-0611 16714484.9 a11/18/21 Building Permits for Buildings 3-4 . 42 total Market rate (28%) units may proceed with construction, but will not be approved for certificate of occupancy until affordable housing units complete construction and receive certificate of occupancy or equivalent 10