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HomeMy WebLinkAbout2003-02-04; City Council; Resolution 2003-0311 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CITY COUNCIL RESOLUTION NO. 2303-031 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, TO APPROVE AN INITIAL AFFORDABLE HOUSING AGREEMENT FOR THE CONSTRUCTION OF 100 AFFORDABLE CONDOMINIUM UNITS IN PLANNING AREA 15 TO SATISFY THE INCLUSIONARY HOUSING REQUIREMENTS OF THE BRESSI RANCH MASTER PLAN APPLICANT: BRESSI RANCH VENTURE, L.L.C CASE NO: MP 178lEIR 98-04 WHEREAS, Bressi Ranch Venture, L.L.C, is the developer of the Bressi Ranch Master Plan, and; WHEREAS, the developer has received approvals to develop 623 total residential units within the Bressi Ranch Master Plan development; and WHEREAS, the development of 623 residential units will require the development of 100 residential units affordable to low income households as required by Carlsbad Municipal Code Chapter 21.85 of the City’s Inclusionary Housing Ordinance; and WHEREAS, Carlsbad Municipal Code Chapter 21.85 requires the developer of a residential development to receive approval of an Affordable Housing Agreement which details how the requirements of the Inclusionary Housing Ordinance shall be met; and WHEREAS, the developer has not yet processed a Site Development Plan but proposes to construct 100 for-sale condominium units affordable to lower income households as a means to satisfy their affordable housing requirement as permitted by Carlsbad Municipal Code Section 21.85 of the City’s Inclusionary Housing Ordinance; and WHEREAS, the developer has requested approval of an initial Affordable Housing Agreement and agreed to amend said Agreement at a later date upon approval of the required Site Development Plan for the affordable units; and /Ill * 1, -dl 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CC Reso. No.2003-031 Page 2 WHEREAS, an exception to the Inclusionary Housing Ordinance has been requested by Developer to allow for approval of an initial Affordable Housing Agreement prior to approval of the required Site Development Plan; and WHEREAS, the City Council did hold a public meeting to consider the developer’s request to approve the initial Affordable Housing Agreement without the required Site Development Plan; and WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Council considered all factors relating to the request for approval of the initial Affordable Housing Agreement for the Bressi Ranch Master Plan. NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. 2. 3. 4. /Ill Ill/ Ill/ /Ill /Ill /Ill /Ill /Ill The above recitations are true and correct. Approval of the initial Affordable Housing Agreement between the City and Bressi Ranch is consistent with the goals and objectives of the City of Carlsbad’s Housing Element, the Consolidated Plan, the Inclusionary Housing Ordinance, and the Carlsbad General Plan in that it sets forth the affordable housing requirements for the Bressi Ranch Master Plan. The proposed project will provide a total of 100 condominium units which will be sold at levels affordable to low income households. The project, therefore, has the ability to effectively serve the City’s housing needs and priorities as expressed in the Housing Element and the Consolidated Plan. That based on the information provided within the City Council Staff Report and the testimony presented during the public meeting of the City Council , the City Council hereby APPROVES the initial Affordable Housing Agreement as recommended by staff to allow for the development of a 100 unit for-sale condominium project within the Bressi Ranch Master Plan to satisfy the developer’s obligation under the City’s Inclusionary Housing Ordinance. 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CC RESO. NO. 2003-031 PAGE 3 5. That the City Council authorizes the Community Development Director to execute the initial Affordable Housing Agreement in substantially the form presented to City Council and attached hereto, subject to review and final approval by the City Attorney. 6. That the City Council authorizes the Community Development Director to execute subsequent amendments to the Affordable Housing Agreement if they are consistent with the Inclusionary Housing Ordinance, and subject to review and final approval by the City Attorney. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad, California, held on the 4% day of 1, 2003, by the following vote, to wit: FEBRUARY AYES: Council Members Lewis, Finnila, Kulchin, Hall, Packard NOES: None ABSENT: None ABSTAIN: None ATIEST: (SEAL) and density bonus conditions for the Master Development by constructing, or causing to be constructed, a minimum of 100 for sale condominium units in Planning Area 15 of the Master Plan. D. Developer is required by the Conditions of Approval to enter into an Affordable Housing Agreement as required and with the content specified by the City's Inclusionary Housing Ordinance, Carlsbad Municipal Code ("CMC") Chapter 21.85). Pursuant to Section 21.85.140 of CMC Chapter 21.85, the Agreement shall be executed and recorded prior to the approval of any final map for the subject property. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. Satisfaction of Affordable Housing Obligation and Conditions of Approval. Per the City's Inclusionary Housing Ordinance, an Affordable Housing Agreement together with an approved Site Development Plan is required to be approved and executed prior to the first final map and recorded upon first final map recordation for any residential development, including a final map for a Master Tentative Map. For the Master Development, an exception to this requirement will be granted due to the substantial benefit derived to the City of Carlsbad and the region through the timely grading and ultimate construction of Poinsettia Lane, and Master Developer will be permitted to final the Master Tentative Map (the "A" Map) which includes the creation of fifteen individual planning areas with the approval of this initial Affordable Housing Agreement prior to an approved Site Development Plan 2. Terms Governing Provision of Affordable Units. 2.1. Obligation to Provide Affordable Units. 2.1.1. Developer shall provide the One Hundred (100) Affordable Units in relation to the Market Units on the Subject Property. It is anticipated that the Affordable Units shall include two (2) and three (3) bedroom units. The numbers and square footage of the Affordable Units shall be indicated in the amended Affordable Housing Agreement and set forth on the approved Site Development Plan to be processed at a later date. Not less than ten percent (10%) of all Affordable Multifamily Units shall be three (3) bedroom units in compliance with CMC 21.85.010(A)(2). 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. Developer shall provide the Affordable Multifamily Units pursuant to the following schedule and as described in Attachment B. 2.2.1. Prior to the approval of any final map for the Master Tentative Map, for the Master Development, this initial Agreement shall be duly approved and executed. LKNNAR/BWSIRANCH INlTlAL AFFORDABLE HOUSING AGREEMENI IMPOSING RESTRICTIONS ON REAL PROPERTY 2 1113tZW3 i The Agreement shall be recorded with recordation of the final map for the Master Tentative Map. This initial agreement shall allow for no release of building permits for construction of the subject market rate or affordable housing units within the Master Development. 2.2.2. With approval of a Site Development Plan for the 100 Affordable Units and approval, execution and recordation of an amended Affordable Housing Agreement, Developer may final maps for individual residential lots within the Master Development. The subsequent release of building permits for construction of market rate and/or affordable housing units on the individually subdivided residential lots shall be as set forth in Sections 2.2.3 and 2.2.4 of this Agreement. 2.2.3 Upon satisfying the applicable conditions stated in Sections 2.2.1 and 2.2.2 building permits can be released for a total of Two Hundred and One (201) Market Rate Units and for the One Hundred (100) Affordable Units. 2.2.4 Once the building permits have been released and the foundations for the 100 Affordable Units are complete, inspected and approved, an additional One Hundred Sixty-Two (162) building permits for Market Rate Units shall be released at Developer's request. 2.2.5 Once the final Certificate of Occupancy is issued for the last of the 100 Affordable Units to be constructed (e.g., the 100th unit), the buildmg permits for the remaining One Hundred and Sixty (160) Market Rate Units shall.be released at Developer's request. 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 sets 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 initial estimates of Eligible Buyer actual incomes and the corresponding Affordable Purchase Prices will be set forth in the first addendum to this Agreement following approval of the related Site Development Plan for the Affordable Housing Project. 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. LSNNARlBRESSl RANCH WmAL AFKJRDABE HOUSING AGREEMENT IMH)SING RESTRICTIONS ON EAL PROPERTY 3 1113/2M)3 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); provided, however, that the Developer shall carry back financing (the "Carryback 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 down payment monies and first mortgage proceeds. 2.4 Terms for Resale of Affordable Units. After the initial sale of the Affordable Units at a price affordable to the target income level group, the Affordable Units shall remain affordable to subsequent low income eligible buyers pursuant to a resale restriction for a minimum term of fifteen (15) years. Beginning sixteen (16) years after the initial purchase of an Affordable Unit, the Affordable 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 Affordable Unit equal to the amount of subsidy necessary to make the Affordable 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, or to provide for the construction of additional affordable housing units within Carlsbad. 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. Citv Approval of Documents. 3.1. Acceptable Documents. The following documents, in form and substance acceptable to the City, shall be used in connection with the sale of Affordable Units. A draft of the documents to be prepared by the Developer shall be submitted to the Housing and Redevelopment Director for review and approval no later than thirty (30) days prior to start of construction of the Affordable units. Final documents shall be submitted to the Housing and Redevelopment Director for review and approval no later than sixty (60) days after 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. LENNAWBRESSI RANCH INlTlAL AFFORDABLE HOUSING AGREEMENT hmOSING RESTRICTIONS ON REAL PROPERTY 4 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 form shall be provided by the City. 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 Promam. 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 Comuliance 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 Developers and its heirs, executors, administrators, successors, transferees, and assignees of all the parties having or acquiring any right, title or LBNNAWERESSI RANCH INITIAL AFFOWABLE HOUSING AGREEMENT IMPOSING mSTRICTIONS ON ReAL PROPERTY 5 1/13/u103 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 and this Agreement shall automatically release with respect to such completed unit on the date of the 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 Site Development Plan, 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 Site Development Plan in accordance with the terms of this agreement. 9. Right to Transfer Master Proiect. With this initial Agreement, Developer shall have the right to sell, mortgage, hypothecate, assign or transfer ("Transfer") the Master Development in whole to any person, partnership, joint venture, firm, corporation or other entity, including, without limitation, any affiliate of Developer ("Transferee") at any time during the term of this Agreement. It is understood and agreed by the parties that portions of the Subject Property may be subdvided solely for the putposes of separating the non-residential parcels from the residential parcels after the date of this Agreement. The ownership of one or more of the non-residential parcels may be transferred for development. No further subdivision of the residential planning areas into individual residential lots within the Master Development will be permitted until the Master Developer has received approval and executed an amendment to this Agreement and received approval of a Site Development Plan for the Affordable Housing project. 10. 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 land 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 11. 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 aggregate limits of not less than five million dollars ($5,000,000) 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.. 12. 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, CA 92008-2389 TO THE DEVELOPER: 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. 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 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. 15. 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. LENNARIBRESSSI RANCH INITIAL AWORDABLE HOUSING AGReEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY I 11131m3 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. CooDeration. The parties acknowledge and agree that this Agreement will require mutual good faith and cooperation in the timely implementation and performance of this Agreement and that time is of the essence herein. Each party covenants to the other to expeditiously proceeding good faith to implement this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed as of the day and year first above written. DEVELOPER CITY BRESSI RANCH VENTURE LLC, City of Carlsbad, a Municipal corporation a Delaware limited liability company By: By: Name: Sandra L. Holder Title: Community Development Director LENSAFUBRESSI RANCH INlllAL AFFORDABLE HOUSINO AGREEMENT IMPOSING ReSTRlCTlOSS OS REAL PROPERN 8 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. **Group B. Chairman, Secretary, President, or Assistant Secretary, Vice-president 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. BALL, City Attorney By: WNAWBRESSI WM INITIAL AFWRDABLE HOUSING AGREEMENT IMWSING RESTRICTIONS ON REAL PROPERTY 9 lll3RW3 ATTACHMENT A LEGAL DESCRIPTION OF SUBJECT PROPERTY LENNARIBRESSIRANCH IMPOSING R6sTRICTIONS ON REAL PROPBRTY AFFORDABLE HOUSING AOREEhENT ATTACHMENT B BRESSI RANCH AFFORDABLE HOUSING AGREEMENT PHASING FOR DEVELOPMENT AND CONSTRUCTION AFFORDABLE UNITS AND MARKET-RATE UNITS ACTION REQUIRED Initial Affordable Housing Agreement recorded and fully executed and Council approved by the City SDP approved by City Council for 100 Affordable Units and amended Affordable Housing Agreement approved by Community Development Director and fully executed Foundations :omplete, inspected and approved for 100 affordable housing units Certificates of 3ccupancy issued For all 100 affordable housing mits rOTAL MASTER TENTATIVE OR FINAL MAPS RELEASED Master Tentative Map (“A” Map) may receive final approval Final maps for subdivision of any individual residential neighborhood may receive approval No additional Final Maps No additional Final Maps Up to 623 housing units maximum LENNAWBRESSI RANCH AFFORDABLE HOUSING AGREMENT hlPOSING RESTRICTIONS ON REAL PROPERTY BUILDING PERMITS RELEASED None Building Permits for 201 Market Rate Units and 100 Affordable Units Building Permits for an additional 162 Market Rate Units Building Permits for an additional 160 Market Rate Units Rate Units and np to Up to 523 Market 100 Affordable Units % OF TOTAL PERMITS FOR PROJECT NIA Up to 38% of Released and 100% Market Rate Units of Affordable Units Released Market Rate Units Up to 69% of Released Market Rate Units Released up to 100% of 100% COMMENTS No affordable housing Site Developmeni Plan required at this point; this was permitted because of the substantial benefit provided to construction of the City through the Poinsettia Lane. Once final maps are recorded for individual residential neighborhood subdivisions, developer may obtain release of, building permits as noted. At this time, building permits will have been released for a total of 349 market rate units and At this time, 100 affordable units building permits for all of the market rate and affordable units will have been released. ATTACHMENT C METHODOLOGY FOR COMPUTATION OF MAXIMUM ELIGIBLE BUYER INCOMES AND UNITS SALES PRICES Assumptions: San Diego Area Median Income as released for the year of sale will be utilized in the maximum buyer income and sales price computations. Maximum buyer income will be 80% of San Diego Area Median Income, adjusted for household size. Household size assumption of four persons for a two bedroom unit and six persons for a three bedroom unit. Housing allowance of a maximum of 35% of maximum buyer income. Allowance for homeowner association dues as determined by Dept. of Real Estate budgets. Allowance for utility costs as determined by City Guidelines. Allowance for property taxes, assuming existing tax rates and use of homeowner exemption. Prevailing mortgage interest rate for 30 year conforming loan. Down payment of 5% of appraised value of unit. Note: All assumptions will be approved by the City’s Housing and Redevelopment Director prior to commencement of sales to reflect actual conditions. LENNAWBRESSI RANCH AFFORDABLE HOUSING AGR-T IMPOSING RESTRICTIONS ON REAL PROPERTY 1/1312M)3