HomeMy WebLinkAboutCT 01-13; Wave Crest Resorts II LLC; 2004-0980137; Affordable Housing Agreement/ReleaseDOC # 2004-09801 37
City of Carlsbad
WHEN RECORDED MAIL TO:
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OCT 15,2004 8:29 AM
OFFICIAL RECORDS SAN DIEGO COUNTY RECORDER'S OFFICE GREGORh'J SMITH COUNT'< RECORDER FEES u uu FAG E S 11 City of Carlsbad
City Clerk's Office
Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad, California 92008
(Space above for Recorder's Use)
AFFORDABLE HOUSING AGREEMENT
IMPOSING RESTRICTIONS ON REAL PROPERTY
This AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON
REAL PROPERTY ("Agreement"), entered into as of the I 7 +' day of Mouemhev'
by and between the CITY OF CARLSBAD, a municipal corporation (hereinafter referred to as
the ("City"), and Wave Crest Resorts 11, LLC, a California limited liability company, (hereinafter
referred to as "Developer"), is made with reference to the following:
2003,
A. Developer is the owner of certain real property in the City of Carlsbad, in
the County of San Diego, California (hereinafter referred to as the ("Subject Property") described
in Attachment "A", which is attached hereto and incorporated herein by this reference.
B. For the purposes of this Agreement, Developer intends to construct a total
of eighteen (18) residential housing units for sale at prevailing market prices ("Market Units")
and three (3) residential housing units for sale at affordable prices ("Affordable Units"). The
City has approved Redevelopment Permit RP 01-08 and Carlsbad Tentative Tract Map CT 01-13
for the proposed development ("De~elopment~~). The City issued these approvals subject to
certain Conditions of Approval, including a condition requiring that Developer enter into an
Affordable Housing Agreement in which Developer agrees to provide three (3) dwelling units
affordable to lower-income households.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as
follows:
1. Satisfaction of Affordable Housing - Obligation and Conditions of Approval. In
order to satisfy the Conditions of Approval of Redevelopment Permit RP 01-08 and Carlsbad
Tentative Tract Map CT 01-13 and the requirements of the City's Inclusionary Housing
Ordinance, Carlsbad Municipal Code Chapter 21.85, Developer shall provide a total of three (3)
Affordable Units that shall be restricted and affordable to lower-income households. This
Agreement is an Affordable Housing Agreement pursuant to Section 21.85.140 of the Carlsbad
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Municipal Code, Developer shall submit this Agreement to the City and the Agreement shall be
executed prior to the approval of the final map for the Subject Property.
2. Terms Governing Provision of Affordable Units.
2.1. Obligation to Provide Affordable Units.
2.1.1. Developer shall provide the three (3) Affordable Units in relation
to Market Units ("Market Units") on the Subject Property. The Affordable Multifamily Units
shall include one bedroom units in the numbers and with the square footage indicated in
"Attachment B" to this Agreement. The maximum allowable income level of buyers of the
affordable units shall be restricted to a maximum of 80% of the area median income.
2.2 Schedule for Developing Affordable Units.
2.2.1. Prior to the approval of any Final Map, Grading Permit or Building
Permit for the Development this Agreement shall be duly executed and recorded. The developer
of the Affordable Units has received approval of a Redevelopment Permit for the Development.
2.2.2 Upon satisfymg the applicable conditions stated in Sections 2.2.1,
all building permits for the Development can be released for a total of eighteen (1 8) Market Units
and three (3) Affordable Units.
2.2.3. Prior to receiving final Certificate of Occupancy for the final
Market Unit, Developer shall receive final Certificate of Occupancy for the three (3) Affordable
Units.
2.3 Terms for Sale of Affordable Units.
2.3.1. The Schedule of Maximum Eligible Buyer Incomes and Affordable
Subsidized Purchase Prices (the "Schedule") attached hereto and incorporated herein as
"Attachment C'kets forth the City's requirements for determining the maximum household income
of buyers of the Affordable Units ("Eligible Buyers") and the methodology for calculation of the
subsidized purchase prices of Affordable Units which will be affordable to each of the Eligible
Buyers (the "Affordable Purchase Prices"). The Schedule also includes initial estimates of
Eligible Buyer actual incomes and the corresponding Affordable Purchase Prices. The Final
Schedule shall be established prior to sale based on the San Diego County Area Median Income
and the cost factors applicable at the time. The Final Schedule shall be submitted by the
Developer and approved by the City's Housing and Redevelopment Director prior to the
marketing of the Affordable Units.
2.3.2. The Developer shall sell the Affordable Units only to Eligible
buyers whose household incomes have been verified by the Developer. The purchase price for an
Affordable Unit (the "Market Purchase Price") shall be the market price charged for a
comparable unit (and not to exceed fair market value), or if there is no comparable unit, then the
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market Purchase Price shall be at the value established by an appraiser approved by the City;
provided, however, that the Developer shall carry back financing equal to the difference between
the Market Purchase Price and the Affordable Purchase Price for the particular Eligible Buyer
(the "Primary Affordability Subsidy"). The carryback financing shall be assigned by the
Developer to the City, and shall be evidenced by a promissory note from the Eligible Buyer to the
City, secured by a second mortgage deed of trust on the Affordable Unit (the "City Second
Mortgage"). The balance of the Market Purchase Price shall be paid by the Eligible Buyer to the
Developer in cash, utilizing downpayment monies and first mortgage proceeds.
2.4 Terms for Re-sale of Affordable Units. After the initial sale of the inclusionary for-
sale units at a price affordable to the target income level group, inclusionary for-sale units shall
remain affordable to subsequent low income eligible buyers pursuant to a resale restriction for a
minimum term of fifteen (1 5) years. Beginning in the sixteenth (1 6) year after the initial purchase
of an Affordable Unit, for-sale units may be sold at a market price to other than targeted households
provided that the sale shall result in the recapture by the City or its designee of a financial interest in
the units equal to the amount of subsidy necessary to make the unit affordable to the designated
income group and a proportionate share of any appreciation. Funds recaptured by the City shall be
used in assisting other eligible households with home purchases at affordable prices. To the extent
possible, projects using for-sale units to satisfy inclusionary requirements shall be designed to be
compatible with conventional mortgage financing programs including secondary market
requirements.
3. City Approval of Documents.
3.1. The following documents, in form and substance acceptable to the City,
shall be used in connection with the sale of Affordable Units. Documents to be prepared by the
Developer shall be submitted to the Housing and Redevelopment director for review and
approval no later than the start of construction of the Affordable Units.
3.1.1. A marketing plan establishing the process for seeking, selecting
and determining the eligibility of buyers of the Affordable Units shall be prepared by the
Developer.
3.1.2. An educational program informing Affordable Unit purchasers of
the obligations of home ownership and the specific features of this program shall be prepared by
the Developer.
3.1.3. Purchase and Sale Agreements for sale of the Affordable Units
shall be prepared by the Developer.
3.1.4. City Second Mortgage promissory note, deed of trust, and
Borrower Disclosure Statement (Eligible Borrower Loan Documents) shall be provided by the
City, substantially in the form attached hereto respectively as Attachment D.
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3.2 Any of the documents identified in this section 3.1 may be revised by
Developer from time to time with the prior written approval of the Housing and Redevelopment
Director.
4. Mortgage Credit Certificate Proaam. Buyers of the Affordable Units may qualify
for income tax credits pursuant to Mortgage Credit Certificate (MCC) Program, for a portion of
the annual interest paid on a first mortgage used to acquire the Affordable Unit. City shall
cooperate with Developer in obtaining and providing to prospective buyers Mortgage Credit
Certificates from allocations that it may receive.
5. Reporting and Compliance Monitoring. A report verifying compliance with the
requirements of this Agreement covering the initial sales of the Affordable Units shall be
provided to the City by the Developer and approved by the Housing and Redevelopment
Director. Developer shall provide the City with other reports as reasonably required by the City
to verify compliance with this Agreement.
6. Default. Failure of the Developer to cure any default in the Developer's
obligations under the terms of this Agreement within (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) 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 not greater than 180 days) will
constitute a failure to satisfy the Conditions of Approval with respect to the Subject Property and
the requirements of Chapter 21.85 of the Carlsbad Municipal Code and void the approval of the
Final Map and Site Development Plan; and the City may exercise any and all remedies available
to it with respect to the Developer's failure to satisfy the Conditions of Approval, including but
not limited to, the withholding of building permits for the Market Units within the Subject
Property 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. Release of Subiect Property From Agreement. The covenants and conditions
herein contained shall apply to and bind the Developer and its heirs, executors, administrators,
successors, transferees, and assignees of all the parties having or acquiring any right, title or
interest in or to any part of Subject Property and shall run with and burden the Subject Property
until terminated in accordance with the provisions hereof. Prior to the issuance of building
permits, 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 the Subject Property.
Notwithstanding anything to the contrary set forth in the Agreement, individual purchasers of
units pursuant to an approved public report in compliance with the California Subdivided Lands
Act, and mortgage lenders holding deeds of trust on such individual units after sale to such
purchasers, shall not be subject to the terms of this Agreement; and the terms of this Agreement
shall be of no further force or effect with respect to such completed unit on the date of the
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recordation of a deed to the individual purchaser. Upon issuance of certificates of occupancy for
all of the Affordable Units, the entire Subject Property, with the exception of the property subject
to the approved Redevelopment Permit RP 01-08, shall be released from the burdens of this
Agreement. The burdens of this agreement shall remain in full force and effect and recorded
against the property subject to the approved Redevelopment Permit RP 01-08 for the duration of
this agreement.
9. 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 expense) 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 performance or non-performance pursuant to this
Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. The
provisions of this section shall survive expiration or other termination of this Agreement or any
release of part or all of the Property from the burdens of this Agreement? and the provisions of
this Section 9 shall remain in full force and effect
10. Insurance Requirements: Developer shall obtain, at its expense, comprehensive
general liability insurance for the development of the Subject Property naming Indemnitees as
additional named insureds with one million dollars ($1,000,000) per occurrence and aggregate
limits of not less than two million dollars ($2,000,000) for bodily injury and death and property
damage, including coverages for contractual liability and products and completed operations,
purchased by Developer or its successors 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-:V, such insurance to be evidenced by an endorsement which so provides and
delivered to the Housing and Redevelopment Department prior to the issuance of any building
permit for the Subject Property.
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 addressed set forth below:
TO THE CITY OF CARLSBAD
CITY OF CARLSBAD
Housing and Redevelopment Department
Attn: Housing and Redevelopment Director
2965 Roosevelt Street, Suite B
Carlsbad, California 92008-23 89
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TO THE DEVELOPER:
William L. Canepa
Wave Crest Resorts II LLC
829 Second Street #A
Encinitas, CA 92024
With copy to:
Richard A. Gant
1740 Alta Vista Way
San Diego, CA 92109
Any party may change the address to which notices are to be sent by
notifjmg the other parties of the new address in the manner set forth above.
12.
the parties and no modification hereof shall be binding unless reduced to writing and signed by
the parties hereto.
Integrated Agreement. This Agreement constitutes the entire Agreement between
13. Duration of Agreement. This Agreement shall terminate and become null and
void upon the earlier of: (a) the closing of the sale of the last of the Affordable Units to an
individual purchaser pursuant to a sale on an approved public report in compliance with the
California Subdivided Lands Act, or (b) upon the granting of a written release by the Community
Development Director. This Agreement, and any section, subsection, or covenant contained
herein, may be amended only upon the written consent of Developer and the Community
Development Director.
14. Recording of Agreement. The parties hereto shall cause this Agreement to be
recorded against the Subject Property in the Official Records of he County of San Diego.
****** .....
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15. 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.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed as of the day and year first above written.
DEVELOPERS CITY
, LLC, a California Municipal corporation
%-
its Managing Member Community Development Director
Proper notarial acknowledgment of execution by contractor must be attached. If a Corporation,
Agreement must be signed by one corporate officer from each of the following two groups.
*Group A.
Chairman, Secretary,
President, or
Vice-president
**Group B.
Assistant Secretary,
CFO or Assistant Treasurer
Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under
corporate seal empowering the officer(s) signing to bind the corporation.
APPROVED AS TO FORM:
RONALD R. WL, City Attorney
Assis t City Attorney T
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CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California 1 I ss. County of
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On /(/‘?lo ?i I before me,
Name@) o#Signer(s)
personally appeared wi 1 /(m
,!%personally known to me C proved to me on the basis of satisfactory
evidence
to be the persono whose name@ is/*
subscribed to the within instrument and
acknowledged to me that he/- executed
the same in his- ’ authorized
capacity- and that by his/+w&ek
signature@) on the instrument the persono, or
the entity upon behalf of which the person($)
acted, executed the instrument.
Signature of flota@ublic I
OPTlONA L
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ATTACHMENT A
LEGAL DESCRIPTION OF SUBJECT PROPERTY
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA,
COUNTY OF SAN DIEGO AND IS DESCRIBED AS FOLLOWS:
LOT 1 OF CITY OF CARLSBAD TRACT NO. 01-13, IN THE CITY OF CARLSBAD,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF
NO. 14797, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY, MAY 17,2004, AS FILE NO. 2004-0446317 OF OFFICIAL RECORDS.
REV. 02/03/03
Location
Unit I
Unit 2
Unit 3
Attachment B
Location. Size. and Bedroom Count
Size Bedroom Count
815 sq. ft 1
842 sq. ft
852 sq. ft
ATTACHMENT C
Maximum Gross Anual Income
Monthly Affordable Housing Cost
Schedule of Maximum Eligible Buyer Incomes
and Affordable Subsidized Purchase Prices
$ 40,850
$ 1 ,I 91
I 11-bedroom I
Cost to Buyer $ 136,500
Appraised Value I $ 150,000 I
Mortgage Payment
Taxes
HOA
$ 858
$ 150
$ 150
Loan Amount I $ 129,000
Utility Allowance
Monthlv Housing Costs
31
$ 1,189
Assumed Household Sizes 1 bedroom unit = 2 person household
Assumptions:
30 year loan at 7% interest
Cost to Buyer = Loan Amount + 5% down payment (5% of appraised value)
Sales prices are assumed, actual sales price is subject to appraised value of the unit.
Monthly Affordable Housing Cost is 35% of buyers grost monthly income