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HomeMy WebLinkAbout1994-03-22; Housing & Redevelopment Commission; 246; Acquisition of Affordable Housing PropertyAB# dq’6 TITLE: APPROVAL OF REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF CARLSBAD AND CARLSBAD REDEVELOPMENT AGENCY MTG. 3122194 DEPT. RED* FOR ACQUISITION OF AFFORDABLE HOUSING PROPERTY WITH COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS HOUSING AND-:EDEVELOPMENT COMMISi-JN - RECOMMENDED ACTION: I Adopt Resolution No. aq g approving the reimbursement agreement between the City of Carlsbad and the Carlsbad Redevelopment Agency for acquisition of affordable housing property with federal Community Development Block Grant Funds. ITEM EXPLANATION: On October 26, 1993, after making the required findings, the Agency agreed to assist in providing interim financing in the amount of $2 million to acquire real property outside the Village Redevelopment Area for the purposes of developing affordable housing for persons/families within low and very low income households. Also on October 26th, the City of Carlsbad agreed to reimburse the Redevelopment Agency for the interim financial assistance when feasible and appropriate through the City’s Community Development Block Grant (CDBG) Program. On November 15, 1993, the City of Carlsbad acquired real property at 9156 El Camino Real, through use of the Redevelopment Agency’s Low and Moderate Income Housing Set-Aside funds for the purposes of developing the approved Villas at El Camino Real Affordable Housing Project. Prior to reimbursing the Redevelopment Agency as agreed through the use of CDBG funds, the City was required to receive environmental clearance from the U.S Department of Housing and Urban Development (HUD). On December 25, 1993, HUD provided the clearance required to release $880,000 in previously allocated CDBG funds for the purposes of fencing the acquisition of property for the Villas at El Camino Real Affordable Housing Project. Since the City must reimburse the Redevelopment Agency $2 million for the property acquisition, an application for a Section 108 CDBG Loan was submitted to HUD on January 27, 1994 to obtain the additional $1.2 million required to complete the reimbursement transaction. The City’s Section 108 Loan application received approval of the local HUD office in Los Angeles; it has been forwarded to HUD Headquarters in Washington, D. C. for final review and approval. At this time, it is staff’s expectation that the loan application will be approved by the end of March, 1994. AB# =fjLis Page 2 The agreement attached as Exhibit 2 is forwarded at this time to the Housing and Redevelopment Commission for review. Staff is recommending that the Commission approve this agreement to allow the City to reimburse the Redevelopment Agency, with CDBG funds, in two (2) separate payments. The first payment will be made by April 30, 1994 and the second will be made as soon as the Section 108 loan funds are received by the City from HUD. It is anticipated that the second payment shall be made to the Redevelopment Agency no later than September 30, 1994. FISCAL IMPACT: The City will use approximately $800,000 in previously allocated CDBG funds and $1.2 million in Section 108 CDBG Loan funds to reimbursement the Carlsbad Redevelopment Agency, in the total amount of $2 million, for property acquisition for affordable housing purposes. Once reimbursed, the Redevelopment Agency will have funds available again to assist in the development of affordable housing both inside and outside the Village Redevelopment Area. EXHIBITS: l- Resolution No&approving reimbursement agreement between the City of Carlsbad and Carlsbad Redevelopment Agency for acquisition of affordable housing property with federal CDBG funds. 2- Reimbursement Agreement between City of Carlsbad and Carlsbad Redevelopment Agency for acquisition of affordable housing property. b HOUSING AND REDEVELOPMENT COMMISSION RESOLUTION NO. 244 A RESOLUTION OF THE HOUSING AND REDEVELOPMENT COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA APPROVING THE REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF CARLSBAD AND THE CARLSBAD REDEVELOPMENT AGENCY FOR ACQUISITION OF AFFORDABLE HOUSING PROPERTY WITH FEDERAL COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS WHEREAS, the City of Carlsbad has identified a need to provide at least 1400 housing units affordable to households of low and very low income by 1996; and WHEREAS, on’october 26,1993, after making the required findings, the Carlsbad Redevelopment Agency agreed to assist in providing interim financing in the amount of $2 million to acquire real property outside the Village Redevelopment Area for the purposes of developing affordable housing for persons/families within low and very low income households; and WHEREAS, the City of Carlsbad acquired real property at 9156 El Camino Real, through use of the Agency’s Low and Moderate Income Housing Set-Aside funds on November 15, 1993 for the purposes of developing the approved Villas at El Camino Real Affordable Housing Project; and WHEREAS, the City agreed to reimburse the Agency for the interim financial assistance when feasible and appropriate through the City’s Community Development Block Grant (CDBG) Program; and 1 ; : 4 c c E 7 a 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . . . . WHEREAS, the U.S. Department of Housing and Urban Development has provided the City with environmental clearance to release CDBG funds for the purposes of financing the acquisition of property for the Villas at El Camino Real Affordable Housing Project. NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing and Redevelopment Commission as follows: 1. 2. 3. 4. 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . That the foregoing recitations are true and correct. That the Carlsbad Redevelopment Agency shall be reimbursed by the City of Carlsbad for two (2) million dollars in financial assistance provided through the use of the Agency’s Low and Moderate Income Housing Set-Aside funds to acquire a twenty-one (21) acre vacant parcel of property located adjacent to and west of El Camino Real between Camino Vida Roble and Alga Road. That the Carlsbad Redevelopment Agency shall be reimbursed by the City of Carlsbad in two (2) payments from the City’s federal Community Development Block Grant (CDBG) Program. The first reimbursement payment shall be made with $800,000 in CDBG funds previously allocated for affordable housing property acquisition. The Agency shall accept the second reimbursement payment from the City through use of funds from a $1.2 million Section 108 CDBG Loan. That the Redevelopment Agency’s Finance Director is authorized to deposit the reimbursement payments from the CDBG funds into the Carlsbad Redevelopment Agency’s Low and Moderate Income Housing Fund upon receipt from the City. The first payment shall be deposited no later than April 30, 1994. That the City of Carlsbad shall use the subject property for a rental housing project which will provide 344 units of housing affordable to households of low and very low income as approved by the City Council on October 26, 1993. : 1 2 3 6. That the Carlsbad Redevelopment Agency’s Executive Director is authorized to execute the reimbursement agreement with the City of Carlsbad and any other documents which may be related to the transaction of funds outlined within this resolution. 4 5 6 PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing 7 and Redevelopment Commission of Carlsbad, California, held on the 77~ day of MARCH 8 -9 1994 by the following vote, to wit: 9 AYES: Commission Members Lewis, Stanton, Nygaard, Finnila 10 NOES: None 11 12 ABSENT: Commissioner Kulchin 13 14 15 16 ABSTAIN: None 17 II ATTEST: 18 19 20 23 24 25 26 27 28 EXHIBIT 2 REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF CARLSBAD ANDCARLSBADREDEVELOPMENTAGENCY FOR ACQUISITION OF AFFORDABLE HOUSING PROPERTY FEDERAL COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS THIS AGREEMENT, made and entered into as of this -@+ day of c- //l ,LLC,L/ , 19z&y and between the CITY OF CARLSBAD, a municipal corporation, hereinafter referred to as “City”, and CARLSBAD REDEVELOPMENT AGENCY, a Community Redevelopment Agency organized and existing under Community Redevelopment Law, Health and Safety Code Section 33000, et.seq., hereinafter referred to as “Agency”. RECITALS WHEREAS, the City has the need to provide at least 1400 units of affordable housing for low and very low income families within Carlsbad; and, WHEREAS, on October 26, 1993, after making the required findings, the Agency agreed to assist in providing interim financing in the amount of $2 million to acquire real property outside the Redevelopment Area for the purposes of developing affordable housing for persons/ families within low and very low income households; and, WHEREAS, the City acquired real property at 9156 El Camino Real, through use of the Agency’s Low and Moderate Income Housing Set-Aside funds, on November 15, 1993 for the purposes of developing the approved Villas at El Camino Real Affordable Housing Project; and, WHEREAS, the City agreed to reimburse the Agency for the interim financial assistance when feasible and appropriate through the City’s Community Development Block Grant (CDBG) Program; and, WHEREAS, the U.S. Department of Housing and Urban Development has provided the City with environmental clearance to release CDBG funds for the purposes of financing the acquisition of property for the Villas at El Camino Real Affordable Housing project. NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained herein, City and Agency agree as follows: 1. STATEMENT OF WORK The City shall reimburse the Agency for two (2) million dollars in financial assistance provided through the use of the Agency’s Low and Moderate Income Housing Set-Aside funds to acquire a twenty-one (21) acre vacant parcel of property located adjacent to and west of El Camino Real between Camino Vida Roble and Alga Road. The property acquisition price was based on two (2) third party, formal appraisals. The parcel number for the subject property is 215-020-l 5 and the street address is 9156 El Camino Real within the city limits of Carlsbad. The City shall reimburse the Agency for the entire two (2) million dollars provided to finance acquisition of said property. The reimbursement shall be made with eight hundred thousand dollars ($800,000) in CDBG funds previously allocated specifically for the acquisition of property for affordable housing purposes. In addition, the City shall use funds from a $1.2 million Section 108 CDBG Loan to complete the reimbursement transaction outlined within this agreement. The subject property shall be used by the City for a rental housing project which will provide 344 units of housing affordable to households of low and very low income. As approved by the City on October 26, 1993, the subject affordable housing project includes one, two, and three bedroom apartment units with rents affordable to households at 50% to 60% of the San Diego County Median. The City shall work with the development team for the subject project to produce said affordable housing units. The development team includes Hillman Properties (private local developer), BRIDGE Housing Corporation (private non-profit affordable housing developer), and Kruer/Picerne Partnership (private local developer/builder). The City shall enter into an agreement to lease the subject property to the BRIDGE Housing Corporation for development of the identified affordable housing p!oject. Every effort shall be made by the City to provide full reimbursement to the Agency for acquisition funds for the subject property by September 30, 1994. If the City will be unable to fully reimburse the Agency by the noted date, the City shall request an extension of this reimbursement agreement. 2 2. SCHEDULE OF PAYMENTS The City shall make two (2) lump sum payments for reimbursement to the Agency. The first reimbursement payment in the amount of $800,000 shall be made no later than April 30, 1994. The second reimbursement payment in the amount of $1.2 million shall be made no later than September 30, 1994. The funds used to make said reimbursement payments shall be drawn down from the City’s Letter of Credit with the United States Department of Housing and Urban Development (HUD) as appropriate and consistent with federal regulations for the CDBG Program. 3. RECORDS AND REPORTS The City shall maintain all appropriate records to account for the expenditure of the federal CDBG funds, including the Section 108 CDBG Loan funds, to reimburse the Agency for property acquisition as outlined within this agreement. The Federal Grantor Agency, Comptroller General of the United States, or any of their duly-authorized representatives shall have access to all books, documents, papers and records maintained by the City which directly pertain to the above project for the purpose of audit, examination, excerpts and transcriptions. Unless otherwise notified by HUD, the City shall retain all financial records, supporting documents and statistical reports related to the project identified under this agreement until September 30, 1997. All records subject to an audit finding shall be retained for three (3) years from the date the finding is made or until the finding has been cleared by appropriate officials and the City has been given official written notice. As required by the Federal Single Audit Act, the City shall be required to have a comprehensive financial audit prepared by an independent, neutral third-party auditor for the use of CDBG funds. The audit shall cover financial operations of the City’s CDBG program for the period beginning July 1, 1993 and ending June 30, 1994. The City shall also ensure that an audit is completed for the period covered under fiscal year beginning July 1, 1994 and ending June 30, 1995 for any reimbursement funds paid after June 30, 1994. 4. PROGRAM REQUIREMENTS The City will adhere to the terms of the City’s CDBG and Section 108 Loan application and with assurances and agreements made to the United States Department of HUD. 3 The City shall comply with applicable Uniform Administrative Requirements as described in Section 570.502 of the federal regulations for the CDBG Program; the federal requirements are set forth, by reference, as a provision of this agreement. The City shall carry out all activities in compliance with all Federal laws and regulations as described in Subpart K, such as labor standards and fair housing requirements. The provisions of Subpart K, of the CDBG Program Regulations, are set forth, by reference, as a condition of this reimbursement agreement. 5. CHANGES IN USE OF FUNDS This agreement allows the City to reimburse the Agency for interim financial assistance provided to acquire property for the purpose of developing the identified affordable housing project only. No other use of said funds is permitted without proper public review and City action. 6. NONDISCRIMINATION CLAUSE The City shall comply with all state and federal laws regarding nondiscrimination in the provision of services and the equal opportunity employment of personnel. 7. SUSPENSION AND TERMINATION OF AGREEMENT In accordance with Section 24, Parts 85.43 and 85.44 of the Code of Federal Regulations, this agreement may be suspended or terminated if either party fails to comply with any term(s) set forth herein. Section 24, Parts 85.43 and 85.44 of the Code of Federal Regulations are set forth, by reference, as provisions of this agreement. 8. REVERSION OF ASSETS The subject property shall be required to be used for the identified affordable housing project and/or an alternate CDBG eligible project, as approved by City, for a minimum of five (5) years. If the property is not used for the identified or other eligible project for a minimum of five (5) years, it must be disposed of in a manner that results in the federal government being reimbursed in the full amount of the current market value of the property less any portion of the value attributable to expenditures of non-CDBG funds for acquisition of, or improvement to, the property. 9. ASSIGNMENT OF AGREEMENT The Agency shall not assign this agreement or any monies due thereunder without the prior written consent of the City. 10. SUCCESSORS OR ASSIGNS Subject to the provisions of this Agreement, all terms, conditions, and provisions hereof shall insure to and shall bind each of the parties hereto, and each of their respective, executors, administrators, successors, and assigns. IN WITNESS WHEREOF the parties hereto have caused this agreement to be executed as of the day and year first written above. CARLSBAD REDEVELOPMENT AGENCY, a Community Redevelopment Agency of e State of California ATTEST: RANZ CITY CLERK KAREN R. KUNDTZ, ant'city Clerk APPROVED AS TO FORM: RON BALL, CITY ATTORNEY 3/,3 /5-H 5