HomeMy WebLinkAbout2003-08-12; Housing & Redevelopment Commission; 359; Affordable Housing Project at 2578 Roosevelt StAB# 359 TITLE: APPROVAL OF A PRE-DEVELOPMENT LOAN AND
MTG. 8-12-03 DEVELOPMENT CORPORATION FOR AN AFFORDABLE
LOAN AGREEMENT TO WAKELAND HOUSING AND
HOUSING PROJECT LOCATED AT 2578 ROOSEVELT
DEPT. HlRED STREET
RECOMMENDED ACTION:
DEPT. HD.
CITY ATTY.
ADOPT Housing and Redevelopment Commission Resolution No. 369 APPROVING a
$200,000 pre-development loan to Wakeland Housing and Development Corporation and approval
of the Pre-Development Loan Agreement and related documents, for the development of an
affordable housing project at 2578 Roosevelt Street.
ITEM EXPLANATION:
BACKGROUND
On March 11 , 2003, the Carlsbad Redevelopment Agency (Agency) purchased a vacant .58-acre
property located at 2578 Roosevelt Street. At the time of the acquisition, the site contained an
uninhabitable, boarded-up residence and large amounts of trash and debris. As a requirement of the
Agency's purchase, the previous property owner removed the structure and all of the material on-
site. Thus, the purchase of the subject property has enabled the Redevelopment Agency to meet a
primary redevelopment objective of eliminating blight.
The property was also acquired with the intention of developing a 10-12 unit affordable apartment
project on the site (subject to Housing and Redevelopment Commission approval). After acquiring
the property, the Redevelopment Agency issued a Request for Qualifications to firms with experience
developing affordable housing projects. Staff received three responses to the Request for
Qualifications. After conducting interviews with each of the responding firms, Wakeland Housing and
Development Corporation was found to be the most qualified to develop the project, and was
therefore selected. Wakeland is an experienced non-profit affordable housing developer in the San
Diego and Southern California region. Wakeland also has local development experience, having
developed the 28-unit Vista Las Flores affordable apartment complex in Carlsbad in 2001 (located
on the southeast corner of Aviara Parkway & Cobblestone Road).
The Carlsbad Redevelopment Agency's 2000-2004 Redevelopment Implementation Strategy includes an affordable housing production plan that indicates the Redevelopment Agency intends to
assist in the production of 253 units of newly constructed affordable housing units. Development of
the subject project will assist the Agency in meeting a portion of the production goal. The subject
Strategy also requires that covenants be placed on the property to ensure the long-term maintenance
and affordability of the designated affordable housing units for a minimum of thirty (30) years. For the
ultimate development of the property, the Agency will require long-term affordability requirements for
a minimum of fifty-five (55) years.
PROJECT DEVELOPMENT
In order to proceed with development of an affordable housing project on the noted Roosevelt Street
property, plans need to be prepared and various studies need to be completed. Staff is proposing that a pre-development loan in the amount of $200,000 be provided to the Developer (Wakeland
Housing) in order to prepare the appropriate plans and determine the complete scope of the noted
project, and then, if appropriate, process the project for entitlement purposes. As part of this
transaction, staff is recommending that the Redevelopment Agency and the Developer enter into four
agreements. The first agreement is the Pre-Development Loan Agreement that details the
requirements to repay the loan. The Agreement states that if Wakeland and the City find that the
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PAGE 2 OF AGENDA BILL NO. 359
project is feasible, the loan will be repaid over the life of the project. If the City or Wakeland find that
the project is infeasible, the studies that have been completed become the property of the City, and
Wakeland is not required to repay the Pre-Development Loan to the City. The Promissory Note is the
Developer’s pledge to repay the loan. The Assignment Agreement states that in the event of a
default, all plans, studies, drawings and entitlements become the property of the Agency. If
necessary, the Agency could then use these documents to complete the construction of the project if
for any reason the Developer is not able to do so. The Exclusive N egotiating Rights Agreement
(ENR) is to establish procedures and standards for the negotiation by the Agency and the Developer
of a future agreement for the development of the property. The ENR discusses (1) the Agency would
convey or ground lease the Site to the Developer at a purchase price or rental amount to be
negotiated that would enable a financially feasible development; (2) the Agency would make a
construction and permanent loan to the Developer to assist in financing the Development; and (3) the
Developer would develop and operate the Development on the conveyed or leased Site. As more
fully set forth in the ENR, the Developer acknowledges and agrees that this Agreement in itself does
not obligate any party to acquire or convey any property, does not grant the Developer the right to
develop the Development, and does not obligate the Developer to any activities or costs to develop
the Development, except for the preliminary analysis and negotiations contemplated by this
Agree men t.
The Housing and Redevelopment Commission is permitted to enter into the above mentioned
agreements at this time. However, prior to expending the funds for the loan, the City Council will be
required to approve a Community Development Block Grant (CDBG) Sub-Recipient Agreement for
this project. That action is expected to be before the City Council in September of 2003.
As stated in the ENR, while the project is in the permit processing stage, staff and Wakeland will be
negotiating an agreement for the ultimate development of the property. The subsequent agreement
will formalize the roles and responsibilities of the Agency and Wakeland for the property
development and operation, establish the terms for the purchase or long-term lease of the property,
and the terms of the City’s construction loan to the project. The agreement will be returned to the
Housing Commission and Housing and Redevelopment Commission for their review at a later date.
PRE-DEVELOPMENT LOAN FUNDING
Staff is recommending that CDBG funds be utilized to fund the subject pre-development loan.
Separate action is required by the City Council to appropriate the CDBG funding for this purpose.
HOUSING COMMISSION RECOMMENDATION
At their meeting on July 23, 2003, the Housing Commission reviewed the pre-development loan and
loan documents related to the subject affordable housing project. The Commission voted 4-0 (Ritchie
absent) in favor of the recommended action.
STAFF RECOMMENDATION
Staff recommends that the Housing and Redevelopment Commission adopt the attached resolution
to authorize the pre-development loan and approval of the loan documents. Separate action will be
required by the City Council to appropriate the CDBG funding to fund the subject loan.
FISCAL IMPACT:
The pre-development funds will be utilized by the Developer to conduct all necessary planning,
engineering a nd a rchitectural studies, a nd p rocess the n ecessary p ermits to a llow for the project
development. The amount of the loan is to be $200,000. The funding for the loan will come from the
PAGE 3 OF AGENDA BILL NO. 359
CDBG Housing Reserve Fund, which has a current balance of $244,161. At a later date, the Housing
Commission and Housing and Redevelopment Commission will review a request for financial
assistance to construct the subject affordable housing project.
EXHIBITS:
1. Housing and Redevelopment Commission Resolution No. 369
2. Pre-development Loan Agreement, Promissory Note, Assignment Agreement, Exclusive
Negotiating Rights Agreeement
3. July 23, 2003 Housing Commission Staff Report (without attachments)
DEPARTMENT CONTACT: Craig Ruiz (760) 434-281 7, cruiz@ci.carlsbad.ca.us
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HOUSING AND REDEVELOPMENT COMMISSION RESOLUTION NO. 369
THAT THE HOUSING AND REDEVELOPMENT COMMISSION
HOUSING AND DEVELOPMENT CORPORATION AND APPROVAL
DEVELOPMENT COSTS FOR THE DEVELOPMENT OF AN
AFFORDABLE HOUSING PROJECT AT 2578 ROOSEVELT STREET
APPROVE A $200,000 PRE-DEVELOPMENT LOAN TO WAKELAND
OF T HE P RE-DEVELOPMENT LOAN A GREEMENT T 0 PAY P RE-
WHEREAS, on March 11,2003, the Carlsbad Redevelopment Agency acquired property
located at 2578 Roosevelt Street for the purposes of developing an affordable housing project;
and
WHEREAS, after acquiring the subject property, the Redevelopment Agency issued a
Request for Qualifications for the purpose of selecting a non-profit affordable housing developer
to develop, own and operate an affordable housing development on the subject site; and
WHEREAS, the Redevelopment Agency seeks to enter into a Pre-Development Loan
Agreement with Wakeland Housing and Development Corporation to fund the pre-development
activities to allow the project to receive necessary entitlement permits; and
WHEREAS, this action to enter into a pre-development loan agreement is subject to a
subsequent action by the City of Carlsbad City Council to approve a Community Development
Block Grant Sub-Recipient Agreement to allow for the expenditure of funds for this project; and
WHEREAS, the Housing Commission did, on the 23'd day of July, 2003, hold a public
meeting to c onsider the Redevelopment Agency P re-Development L oan A greement to provide
funding for the pre-development costs related to the development of an affordable housing project
at 2578 Roosevelt Street; and
WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to
be heard, said Commission considered all factors relating to the proposed Pre-Development Loan
Agreement and recommended approval of the proposal; and
e
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WRESOLUTION NO. 369
PAGE 2
WHEREAS, the Housing and Redevelopment Commission did, on the 12* day of
August, 2003, hold a public meeting to consider the Pre-Development Loan Agreement between
the Redevelopment Agency and Wakeland Housing and Development Corporation to provide
funding for the pre-development costs related to the development of an affordable housing project
at 2578 Roosevelt Street; and
WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to
be heard, said Council considered all factors relating to the proposed Pre-Development Loan
Agreement.
WHEREAS, the Housing and Redevelopment Commission finds that the Pre-
Development Loan is consistent with the goals and objectives of the City of Carlsbad’s Housing
Element, Consolidated Plan, the Inclusionary Housing Ordinance, the Carlsbad General Plan and
the Village Master Plan.
WHEREAS, the Housing and Redevelopment Commission finds that the Pre-
Development Loan will assist with the development of approximately ten to twelve (10-12)
affordable housing units which will be affordable to lower income households. The project,
therefore, has the ability to effectively serve the Agency/City’s housing needs and priorities as
expressed in the Housing Element, the Consolidated Plan and the Village Master Plan.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing and
Redevelopment Commission of the City of Carlsbad, California, as follows:
1. The above recitations are true and correct.
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2. That based on the information provided within the Housing and Redevelopment
Commission Staff Report and testimony presented during the public meeting of the
Housing Commission on July 23, 2003, the Housing and Redevelopment
Commission hereby ADOPTS Resolution No. 369 APPROVING a
$200,000 pre-development loan to Wakeland Housing and Development
Corporation, approval of the Pre-Development Loan Agreement and related
documents to pay pre-development costs for the development of an affordable
housing development at 2578 Roosevelt Street.
3. That the Redevelopment Agency Executive Director or his or her designee be
authorized to execute all documents related to provision of the Agency assistance,
including but not limited to a Pre-Development Loan Agreement, Promissory
Note, Assignment Agreement, and Exclusive Negotiating Rights Agreeement in
substantially the form presented to the Housing and Redevelopment Commission,
and subject to review and final approval by the City Attorney.
PASSED, APPROVED, AND ADOPTED at a special meeting of the Housing
and Redevelopment Commission of the City of Carlsbad, California, held on the 9th day of
SEPT. ,2003 by the following vote, to wit:
AYES: Commissioners Lewis, Finnila, Kulchin n
NOES: Commissioners Hall,
ABSENT: None
ABSTAIN: None
ATTEST:
(SEAL)
88 Resolution No. 369
Page 3
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AGREEMENT BETWEEN THE CITY OF CARLSBAD AND
WAKELAND HOUSING AND DEVELOPMENT CORPORATION FOR
FEDERAL COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS
THIS AGREEMENT, made and entered into as of this ;SCcrlb,day of &,
2003 by and between the CITY OF CARLSBAD, a municipal corporation, herehafter referred to as
“City”, and WAKELAND HOUSING AND DEVELOPMENT CORPORATION, hereinafter referred
to as “Subrecipient”.
WHEREAS, the City has applied for and received funds from the United States Government
under Title I of the Housing and Community Development Act of 1974, Public Law 93-383 as amended
to fund eligible activities which benefit persons of low and moderate income; and,
WHEREAS, the City has the need to assist in providing affordable housing to low and moderate
income households within the community; and,
WHEREAS, the Subrecipient has been, and desires to continue, providing affordable housing
for low and moderate income households with assistance from the City, and,
WHEREAS, an environmental review has been completed for development of affordable
housing at 2578 Roosevelt Street pursuant to the National Environmental Policy Act; and,
WHEREAS, the U.S. Department of Housing and Urban Development has approved Annual
Consolidated Funding Strategies and Plans for Community Development Block Grant funds for the City
(hereinafter referred to as “Annual Consolidated Plans”).
NOW, THEREFORE, in consideration of these recitals and the mutual covenants contained
herein, City and Subrecipient agree as follows:
1. STATEMENT OF WORK AND DESCRIPTION OF LOAN
For Program Year 2003-2004, the City of Carlsbad has allocated federal Community
Development Block Grant (CDBG) funds in the total amount of two hundred forty-four thousand
one hundred sixty-one dollars ($244.16 1) for development of affordable housing by the
Wakeland Housing and Development Corporation. This funding shall be provided in the form of
a no interest, deferred, and forgivable loan. The purpose of the loan is to provide funds to be used
specifically for costs related to predevelopment and construction management of approximately
eleven affordable rental units at 2578 Roosevelt Street. The Subrecipient agrees to use all
federal funds provided by the City to the Subrecipient pursuant to the provisions of this
Agreement, the Scope of Work, attached hereto as Exhibit “A”, and in accordance with the terms
of the Annual Consolidated Plan.
Every effort shall be made by the Subrecipient to expend the allocated funds in their entirety by
June 30, 2004. If the Subrecipient will be unable to expend all of the funds allocated to the
project by the noted date, the Subrecipient shall request an extension from the City for continued
use of the funds on the approved project based on progress made by the Subrecipient towards
completing the subject project. The City will either agree to grant the extension or notify the
Subrecipient that the funds must be reallocated to another eligible activity due to slow project
progress.
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6.
TERM OF LOAN
The term of this loan shall be for a period of fifty-five (55) years. The fifty-five year term of the
loan shall expire fifty-five (55) years after the final Certificate of Occupancy is issued for the
subject project. Subrecipient acknowledges that the subject loan is given in connection with the
construction and operation of affordable housing units only. The loan is not assumable by
transferees of the Property unless prior written approval is granted by the City Council. The loan
shall be due and payable in full upon 1) the date the Property is first sold or transferred, or, 2)
upon failure of Subrecipient to operate the units for low and moderate income households. The
loan shall be forgivable upon expiration of the term of the loan if the units have been maintained
and operated consistent with the requirements as set forth within this Agreement.
DISBURSEMENT OF FUNDS
The City shall disburse no greater than two-hundred forty-four thousand one-hundred six-one
dollars ($244,161) of the loan proceeds for the construction of the proposed units. Loan
proceeds for the project will be disbursed only after the City has received the Subrecipient's
disbursement request and any required documentation to support the request. If a payment is to
be made directly to the contractor the Subrecipient must certify in writing that the work for
which disbursement is requested has been completed (although the City reserves the right to
inspect the work and make an independent evaluation), and authorizes the City to pay the
contractor or provider directly.
PROGRAM INCOME
The Subrecipient shall report, to the City, any interest, or other income, earned as a direct result
of the use of federal CDBG funds for the project outlined within this Agreement. All reported
program income may be retained by the Subrecipient for costs related to the subject program
activities. However, the program income, retained by the Subrecipient, must be expended before
additional funds are requested from the City. The requirements are set forth in the federal
regulations Section 570.504 which are incorporated herein by reference.
LABOR. MATERIALS AND SUPPLIES:
The Subrecipient shall furnish all labor, materials and services and bear all expenses necessary to
construct the subject project and subsequently provide the proposed programs as outlined in this
Agreement. Under this Agreement, the City's only financial obligation to the Subrecipient is to
provide the CDBG funds of $244,161 maximum in the form of a no interest, deferred and
forgivable (after 55 years) loan as approved by the City Council for affordable housing purposes.
RECORDS AND REPORTS
As applicable, the Subrecipient shall maintain all records required by the Federal regulations
specified in 24 CFR Part 570.506 that are pertinent to the construction activities to be funded
under this Agreement. Such records may include, but are not be limited to:
a.
b.
C.
d.
Records providing a full description of each activity undertaken;
Records demonstrating how each activity undertaken meets one of the National Objectives of
the CDBG program;
Records required to determine the eligibility of activities;
Records demonstrating compliance with Section 570.505 regarding change of use of real
property acquired or improved with CDBG assistance;
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e. Records demonstrating compliance with the requirements in Section 570.606 regarding
acquisition, displacement, relocation, and replacement housing;
f. Records documenting compliance with the fair housing and equal opportunity components of
the CDBG program;
g. Documentation of all CDBG funds received from the City, eligible expenses incurred for administration of each activity, and other financial records as required by 24 CFR Part
570.502, and OMB Circular A-1 10; and,
h. Any other related records as the City shall require to demonstrate compliance with applicable
Federal, state, and local rules and regulations governing these funds.
The Subrecipient shall submit quarterly "Progress Reports" within fifteen (15) calendar days of
the end of each quarter until a final Certificate of Occupancy is issued for the project. For the
full term of the subject loan, the Subrecipient shall provide annual performance reports as related
to the clients served by the subject facility following final Certificate of Occupancy. The
performance reports shall include the following information:
a.
b.
c.
d.
e.
Total number of personshouseholds participating in the program during reported period;
Total number of participants from Carlsbad;
Number of low/moderate income Carlsbad personshouseholds participating in the
program during the reporting period;
Age and ethnic background of Carlsbad participants; and,
Summary of program(s) provided to Carlsbad participants.
The Subrecipient shall maintain client data demonstrating client eligibility for services provided.
Such data shall include at the minimum client name, address, ethnicity, income level or other
basis for determining eligibility, and description of service provided. This data shall assist the
Subrecipient in completing the required quarterly progress reports to be submitted to the City.
The Subrecipient shall maintain separate accounting records for the federal CDBG funds
provided by the City. The City, 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 Subrecipient which directly pertain to the above project for
the purpose of audit, examination, excerpts and transcriptions.
Unless otherwise notified by the City, the Subrecipient shall retain all financial records,
supporting documents and statistical reports related to the project identified under this agreement
for a period of five (5) years after the termination of all activities funded under this Agreement.
All records subject to litigation, claims, audit findings, negotiations, or other actions must be
retained for five (5) years from the date such action commenced or until completion of the action
and resolution of all issues by the appropriate officials and the Subrecipient has been given
official written notice, whichever occurs later.
For each fiscal year during the full term of the subject loan, the Subrecipient shall be required to
submit to the City a comprehensive financial audit prepared by an independent, neutral third-
party auditor. The audit shall cover financial operations of the Subrecipient for the period from
July 1 to June 30 for each year this Agreement remains in effect. The required audit shall be
submitted to the City no later than October 1 for the preceding fiscal year of operations.
PROGRAM REQUIREMENTS
The Subrecipient agrees to comply with the requirements of Title 24 of the Code of Federal
Regulations, Part 570 (the Housing and Urban Development regulations concerning Community
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Development Block Grants). The Subrecipient also agrees to adhere to the terms of the City's
CDBG Application and Subrecipient Agreement and with assurances and agreements made, by
the City, to the United States Department of Housing and Urban Development.
The Subrecipient 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 Subrecipient shall carry out allactivities in compliance with all Federal laws and regulations
as described in Subpart K of the CDBG Program Regulations, such as affirmatively furthering
fair housing, labor standards (Davis Bacon Act), displacement, relocation and acquisition, and
employment and contracting opportunities, except that:
a. The Subrecipient will not assume the City's environmental responsibilities as described
in Section 570.604; and
b. The Subrecipient will not assume the City's responsibility for initiating the review
process required under the provisions of 24 Code of Federal Regulations Part 52.
The provisions of Subpart K, of the CDBG Program Regulations, are set forth, by reference, as a
condition of this agreement.
The Subrecipient shall comply with all federal regulations related to the use of CDBG funds by
religious organizations, if applicable to this agreement and the approved project outlined herein.
8. CHANGES IN USE OF FUNDS
Changes in the use of CDBG funds must be approved by the City Council and the U.S.
Department of HUD. If the Subrecipient desires a change in the use of the CDBG funds
following approval of this agreement, a written request must be submitted to the City for formal
review by the City Council. No change in use of the CDBG funds will be permitted by the City
without prior formal approval by the City Council of the City of Carlsbad.
9. CHANGES IN USE OF FACILITY
Subrecipient shall use the subject facility for affordable housing purposes only.
10. NONDISCRIMINATION CLAUSE
The Subrecipient shall comply with all state and federal laws regarding nondiscrimination in the
provision of services and the equal opportunity employment of personnel.
11. 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 the Subrecipient fails to comply with any term(s)
of the award and/or the award is terminated for convenience. Section 24, Parts 85.43 and 85.44
of the Code of Federal Regulations are set forth, by reference, as provisions of this agreement.
12. REPAYMENT OF GRANT FUNDS
Repayment of all of the CDBG funds paid to Subrecipient under this Agreement will be required
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if at any time during the fifty-five (55) year term of this Agreement the property is sold or
transferred or the property is no longer used for its intended purposes as set forth within this
Agreement.
13. HOLD HARMLESS AGREEMENT
The City, its officers, and employees shall not be liable for any claims, liabilities, penalties,
fines, or any damage to goods, properties, or effects of any person whatsoever, nor for personal
injuries or death caused by, or claimed to have been caused by, or resulting from, any intentional
or negligent acts, errors or omission of Subrecipient or Subrecipient's agents, employees, or
representatives in completion of the project outlined in this agreement.
Subrecipient agrees to defend, indemnify, and save free and harmless the City and its officers
and employees against any of the foregoing liabilities or claims of any kind and any codand
expense that is incurred by the City on account of any of the foregoing liabilities, including
liabilities or claims by reason of alleged defects in any plans and specifications for the project or
facility.
14. ASSIGNMENT OF AGREEMENT
The Subrecipient shall not assign this agreement or any monies due thereunder without the prior
written consent of the City Council of the City of Carlsbad.
15. SUCCESSORS OR ASSIGNS
Subject to the provisions of this Subrecipient Agreement Paragraph 13, "Hold Harmless
Agreement," all terms, conditions, and provisions hereof shall insure to and shall bind each of the
parties hereto, and each of their respective heirs, executors, administrators, successors, and
assigns.
16. INSURANCE
The Subrecipient shall obtain and maintain policies of general liability insurance and a combined
policy of worker's compensation and employers liability insurance from an insurance company
authorized to do business in the State of California which meets the requirements of City Council
Resolution No. 91-403 in an insurable amount of not less than one million dollars ($l,OOo,O00)
each, unless a lower amount is approved by the City Attorney or the City Manager.
This insurance shall be in force during the term of this agreement and shall not be canceled
without thirty (30) days prior written notice to the City sent by certified mail.
The City shall be named as an additional insured on these policies. The Subrecipient shall
furnish certificates of insurance to the City before commencement of work.
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... .
Executed by Subrecipient this
S UBRECl PI ENT:
(name of Subrecipidht
day of
l9U.GdW
BY: f&?&Jq ;A (sign here)
By: (sign here)
(print namekitle) City Clerk
(Proper notarial acknowledgment of execution by Subrecipient must be attached.
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 officer(s) signing to bind the corporation.)
APPROVED AS TO FORM:
RONALD R. BALL, City Attorney
BY:
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.
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
personally appeared Kbne-d
0 proved to me on the basis of satisfactory
evidence
n I State of California
personally appeared Kbne-d “7 @+??&onally known to me
0 proved to me on the basis of satisfactory
evidence
i4 to be the personGraJ whose namewish
subscribed .to the . within instrum.ent and
acknowledged to me that he/- executed
the same in his- ‘ authorized
capacity-, and that by hisl”^r”L--;l
signatureNon the instrument the personM or
the entity upon behalf of which the personw
acted, executed the instrument.
Place Notary Seal Above
OP
Though the information below is not required by law, it may prove valuaM to persons relying on the document
and could prevent fraudulent removal and reaitachment of this form to another document.
Description of Attached Document
Title or Type of Document:
Document Date: Number of Pages:
Signer(s) Other Than Named Above:
Capacity(ies) Claimed by Signer
Signer’s Name:
0 Individual
0 Corporate Officer - Title(s):
0 Partner - 0 Limited 0 General
0 Attorney in Fact
0 Trustee
0 Guardian or Conservator
0 Other:
Signer Is Representing:
EXHIBIT “A”
CITY OF CARLSBAD
COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
SCOPE OF WORK
Contract Tern July 1, 2003 to June 30,2004
Subrecipient Name:
Address:
Project Description:
Project Goals & Objectives: (PleaseMach Additional Sheets As Necessary..)
1. CDBG funds will be used to fund the following activities in compliance with the project description
outlined and in conformance with the Federal regulations for the CDBG program: (Please specifr if
CDBGfundr will be used tofund costs associated with srafing, rents, utilities, supplies, etc.)
Funds will be used on predeveloprnent activities such as engineering studies, architect fees,
development/permit fees, and other predevelopment activities. Funds may also be used for construction
management services.
WAKELAND HOUSING AND DEVELOPMENT CORPORATION
625 Broadway, Suite 11, San Diego, CA
Development of affordable housing at 2578 Roosevelt Street.
2. Project objectives performance measures:
a. Provide quarterly performance reports to ~.e City of Carlsbat
Department on the CDBG Quarterly Performance Report form as provided.
b. Maintain records, invoices, and relevant statistics supporting the quarterly reports.
c. Provide a final performance report, including an evaluation report of the program’s success in
meeting established goals, to the City of Carlsbad Housing and Redevelopment Department
within 15 days of termination of the contract date on the CDBG Annual Performance Report
form as provided.
d. Provide notification to the City of any audits or investigations including results, findings, andor
liens.
Housing and Redevelopment
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EXHIBIT “B”
CITY OF CARLSBAD COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
BUDGET
Contract Term: July 1, 2003 to June 30,2004
Subrecipient Name:
Address:
Wakeland Housing and Development Corporation
625 Broadway, Suite 11, San Diego, CA 92101
Project Description: Development of affordable housing at 2578 Roosevelt Street.
Cost Breakdown: All funds will be used on predevelopment activities, development/permit fees,
and construction management services.
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EXHIBIT 2
PREDEVELOPMENT LOAN AGREEMENT
(Roosevelt Villas.)
This Predevelopment Loan Agreement (the "Agreement") is entered into as of % -,
2003 (the "Effective Date"), by and between the Carlsbad Redevelopment Agency, a public
body, corporate and politic (the "Agency") and Wakeland Housing, Inc., a California nonprofit
public benefit corporation (the "Developer"), with reference to the following facts, purposes and
intentions.
RECITALS
A. The City Council of the City of Carlsbad adopted the Carlsbad Village
Redevelopment Plan pursuant to Ordinance No. adopted on (the "Redevelopment Plan") establishing the Carlsbad Village Redevelopment Project Area (the
"Project Area"). The Agency is responsible for implementing the Redevelopment Plan in the
Project Area. The goals for the Redevelopment Plan include alleviation of blighting conditions
and the stimulation of economic development and affordable housing activities in the Project
Area.
B. The Agency owns a .56 acre parcel of land generally located at 2578 Roosevelt
Street in the Project Area (the "Property"). A legal description of the Property is attached as
Exhibit A. The Developer and the Agency have entered into an Exclusive Negotiating Rights
Agreement (the "ENRA"), pursuant to which the Developer has been granted an exclusive right
to negotiate the lease or purchase of the Property by the Developer fiom the Agency, the terms
and conditions of which will be set forth in a Disposition, Development, and Loan Agreement
between the Developer and the Agency (the IIDDLAI'). The parties anticipate that the DDLA
will be considered for approval by the Agency and the City Council no later than A
2004.
C. If the DDLA is executed, the Developer intends to develop a ten (10) to thirteen
(1 3) unit housing development (the "Development") on the Property. In order to meet the
proposed time schedule for development of the Development set forth in the ENRA, the
Developer must commence predevelopment activities, including studying the soil and
environmental conditions of the Property, performing feasibility analyses, design of the
Development, and application for required land use approvals (the "Land Use Approvals") and
financing commitments.
D. Pursuant to this Agreement, the Agency proposes to loan and the Developer
proposes to borrow Two Hundred Thousand Dollars ($200,000) to finance certain
predevelopment activities in connection with the Development (the "Predevelopment Loan").
The Predevelopment Loan shall consist of Dollars ($ ) funds fiom the
Agency's Low and Moderate Income Housing Fund and Dollars ($ ) of
Community Development Block Grant funds received by the City of Carlsbad fiom the United
States Department of Housing and Urban Development under Title I of the Housing and
Community Development Act of 1974, as amended ("CDBG Funds").
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E. As set forth in the ENRA, if the DDLA is executed, the Parties anticipate that it
will include a loan from the Agency to the Developer to pay a portion of the costs of construction
of the Development (the "Subsequent Loan").
F. Pursuant to the terms of the California Community Redevelopment Law (the
"CRL"), if the Developer proceeds to acquire or lease the Property, the Developer will record
restrictions as specified in this Agreement on units within the Development, ensuring that such
units remain affordable to specified income categories of occupants for a specified period.
G.
satisfaction of its project area housing production obligation under Health and Safety Code
Section 33413(b).
The Agency intends to apply the units to be developed in the Development toward
H. As more hlly set forth in Section 5.13, this Agreement does not authorize or
enable the funding of the Subsequent Loan, the granting of the Land Use Approvals, the
acquisition or lease of the Property, or the construction of the Development. Such actions may
be authorized and will become possible only upon subsequent discretionary action of the City
and/or the Agency.
I. Until completion of certain feasibility studies and preliminary architectural
designs for the Development to be funded through the Predevelopment Loan, it is not possible to
provide meaningfbl information for environmental assessment of the Development in accordance
with the provisions of the California Environmental Quality Act ("CEQA"). It is the intention of
the parties to use the feasibility studies and preliminary architectural designs to be funded
through the Predevelopment Loan to prepare the necessary environmental assessment under
CEQA prior to approval of discretionary actions of the City and the Agency that would authorize
and enable development of the Development. The Predevelopment Loan is exempt from the
requirements of CEQA pursuant to Section 15262 of the CEQA Guidelines.
NOW, THEREFORE, in consideration of the recitals hereof and the mutual promises and
covenants set forth in this Agreement, the parties agree as follows:
ARTICLE 1
PREDEVELOPMENT LOAN PROVISIONS
Section 1.1 Predevelopment Loan. Subject to satisfaction of the conditions set forth in
Section 1.3, the Agency shall lend to the Developer the principal sum not to exceed Two
Hundred Thousand Dollars ($200,000) for the purposes set forth in Section 1.2 of this
Agreement. The Predevelopment Loan shall be evidenced by a promissory note (the
"Predevelopment Note") in a form to be provided by the Agency, which shall be executed by the
Developer concurrently herewith. The Predevelopment Loan shall bear interest at a rate of three
percent (3%), subject to the provisions for a default interest rate set forth in the Note and in
Section 1.6 of this Agreement. Interest due on the Agency Loan shall accrue and be due and
payable at the time of the principal of the Agency Loan is due to be repaid.
1010\13\169806.2 7/3/03 2
Section 1.2 Use of Funds. Proceeds of the Predevelopment Loan may be used only for
the predevelopment costs of the Development, generally in the amounts and for the cost items set
forth in Exhibit B to this Agreement, unless the Agency Executive Director approves in writing a
different use of the fbnds.
Section 1.3 Security. As security for the Predevelopment Loan, and as part of the
consideration for entering into this Agreement, the Developer hereby:
(a) Assigns to the Agency its rights and obligations with respect to certain
agreements, plans and specifications, and approvals, pursuant to the terms of the Assignment of
Agreements, Plans and Specifications, and Approvals, in a form to be provided by the Agency
(the "Assignment of Plans"), which shall be executed concurrently herewith. The Assignment of
Plans, the Predevelopment Note and this Agreement are referred to herein as the
"Predevelopment Loan Documents".
.
(b) Agrees that, subject to Agency and City approval of the DDLA and the
Subsequent Loan, concurrently with the purchase or lease by the Developer of the Property, and
as to be provided in the DDLA, the Developer will execute a new promissory note evidencing
the Subsequent Loan (which Subsequent Loan will include the principal and accrued interest on
the Predevelopment Loan) and the Developer will execute and record against the Property a deed
of trust to the Agency, securing the Developer's obligations under the DDLA.
(c) Agrees that upon a Default under Section 4.1 or termination of this
Agreement, the Developer shall cooperate with the Agency to implement the Assignment of
Plans and immediately deposit with the Agency for the Agency's use, all documents, reports,
surveys, materials, architectural drawings and specifications, and any information related to the
Development (collectively the "Documents").
Section 1.4 Conditions to Funding. The Agency shall fund the Predevelopment Loan
upon satisfaction of the following conditions:
(a) Execution by the Developer and delivery to the Agency of the
Predevelopment Note and the Assignment of Plans;
(b) Receipt of a written request from the Developer setting forth the proposed
use of funds and the amount of finds needed, and attaching a copy of the bill or invoice covering
the costs incurred or to be incurred;
(c) The Developer has delivered to the Agency a copy of the Developer's
organizational documents and a corporate authorizing resolution authorizing the Developer's
execution of this Agreement, the Predevelopment Note, the Assignment of Plans, and the
transactions contemplated by the Predevelopment Loan Documents.
(d) The Developer has furnished the Agency with evidence of the insurance
coverage meeting the requirements of Section 2.5 below.
1010\13\169806.2
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(e) The Developer has certified in writing to the Agency, and the Agency has
approved such certification and has been provided any documentation, reasonably requested by
the Agency, supporting such certification, that the undisbursed proceeds of the Predevelopment
Loan, together with other funds or firm commitments for funds that the Developer has obtained
in connection with the Property are not less than the amount that is necessary to pay for the
predevelopment tasks and activities set forth in this Agreement and to satisfy all of the covenants
contained in this Agreement.
Upon satisfaction of these conditions, the Agency shall from time to time, but in no event
more often than monthly, disburse the Predevelopment Loan (or so much thereof as is required)
for cost items and in amounts generally consistent with those shown in Exhibit B. The
Predevelopment Loan proceeds shall be disbursed by the Agency in two phases, as follows: (i)
up to Twenty Thousand Dollars ($20,000) shall be disbursed to reimburse Developer for the
costs of feasibility studies related to the Development, as shown in Exhibit B as the "Feasibility
Phase"; and (ii) the remaining Predevelopment Loan proceeds, up to One Hundred Eighty
Thousand Dollars ($180,000) shall be disbursed to Developer to cover remaining
predevelopment costs, as shown in Exhibit B, but only after the Agency received copies of the
feasibility studies prepared by the Developer and submitted to the Agency as part of the
Feasibility Phase, and the Agency has made a reasonable determination based on such studies
that the Development is feasible. Notwithstanding any other provisions of this Agreement, the
Agency shall have no further obligation to disburse any portion of the Predevelopment Loan to
the Developer following: (i) termination of this Agreement; or (ii) notification by the Agency to
the Developer of a Developer Default under the terms of this Agreement.
Section 1.5 Termination of Agreement. This Agreement may be terminated under the
following circumstances. Following termination, neither party shall have any rights or
obligations under this Agreement, except that the provisions of Sections 1.6 and 5.4 shall survive
such termination and remain in full force and effect.
(a) Developer Default. If a Default by the Developer occurs under this
Agreement pursuant to Section 4.1 below, which Default is not cured with the applicable time
period in Section 4.1, the Agency may elect in its sole discretion to terminate this Agreement by
providing written notice of such termination to the Developer.
(b) Subsequent Loan. If, by January 3 1 , 2004, or such later date as the
Agency Executive Director and the Developer may agree upon-in writing, the Agency has not
approved the DDLA, this Agreement may be terminated by either party by giving written notice
of such termination to the other party.
Section 1.6 Repayment of the Predevelopment Loan.
(a) If Subsequent Loan is Apuroved and Funded. If a Subsequent Loan and
DDLA is subsequently approved by the Agency and executed by the parties and if all or any
portion of the Subsequent Loan is then funded, this Agreement shall be terminated, the
Predevelopment Note shall be cancelled, and the Predevelopment Loan shall be combined with
the Subsequent Loan for purposes of repayment and thereafter shall bear interest and be repaid in
1010\13\169806.2 7/3/03 4
accordance with the terms of the DDLA. Prior to funding of any portion of the Subsequent
Loan, the Predevelopment Loan shall bear interest at the rate of three percent (3%).
(b) If Subsequent Loan Agreement is not Executed or Subsequent Loan is not
Funded. If this Agreement is terminated without execution of the Subsequent Loan Agreement,
or if the Subsequent Loan Agreement is executed but subsequently terminated without funding
of any portion of the Subsequent Loan, the principal amount and accrued interest on the
Predevelopment Loan shall be due and payable by the Developer to the Agency on the sooner of:
(i) expiration of the Term (as defined in Section 1.8), or (ii) within thirty (30) days of receipt by
the Developer of written notice from the Agency of such payment obligation (collectively, the
"Due Date").
(c) If Developer Defaults. In the event of a Default by the Developer under
this Agreement (as defined in Section 4.1) that remains uncured after expiration of the applicable
cure period, the principal amount and all accrued interest on the Predevelopment Loan shall be
immediately due and payable, and the principal amount shall commence to bear interest at the
lesser of ten percent (10%) per annum or the maximum rate permitted by law, from the
expiration of the applicable cure period to the date of repayment in full of the principal amount
of the Predevelopment Loan and any interest due thereon. In this regard, payments received
from the Developer shall be applied to interest accrued first and the remaining balance, if any, to
principal.
Section 1.7 Forgiveness of Predevelopment Loan in Certain Circumstances. The
Agency shall forgive the principal and accrued interest on the Predevelopment Loan upon
termination of this Agreement pursuant to Section 1.5(b) or Section 1.6(b) above if both of the
following conditions are satisfied:
(a) the Developer is not in Default under the terms of this Agreement (as
defined in Section 4.1) as of the date of termination of this Agreement; and
(b) prior to the Due Date, the Developer takes all actions necessary to
implement the assignment of documents, contracts, and approvals pursuant to the Assignment of
Plans and deposits the Documents with the Agency.
If repayment of the Predevelopment Loan is not forgiven due to a failure to satisfy one or
both of the preceding conditions, the principal amount of the Predevelopment Loan shall bear
interest at the lesser of ten percent (10%) per annum or the maximum rate permitted by law, from
the Due Date to the date of repayment in full of the principal and interest of the Predevelopment
Loan. In this regard, payments received from the Developer shall be applied first to accrued
interest and then to principal.
Section 1.8 Term of Agreement. This Agreement and the Predevelopment Loan shall
have a term (the "Term") that commences as of the Effective Date of this Agreement and shall
terminate on the one (1)-year anniversary of the Effective Date. Notwithstanding the foregoing,
the indemnification provisions of Section 5.4 shall survive termination of this Agreement.
1010\13\169806.2 7/3/03 5
ARTICLE 2
DEVELOPER OBLIGATIONS
Section 2.1 Predevelopment Tasks and Schedule. The Developer shall perform the
following tasks, among others, with the proceeds of the Predevelopment Loan. The tasks
described below shall be completed no later than the dates set forth in the predevelopment
schedule attached to this Agreement as Exhibit C.
(a) archeological site reviews, environmental and geological studies, and traffic studies as necessary
for the proposed Development.
Studies. The Developer shall cause preparation of engineering surveys,
(b) Preliminary Design Review Process. The Developer shall cause
preparation by Karnac and Associates, of preliminary archtectural designs, shall submit an
application to the City for preliminary design review of the Development, and shall diligently
pursue completion of the City's preliminary design review process.
(c) Reports. Upon reasonable notice, as from time to time requested by the
Agency, the Developer shall make oral or written progress reports advising the Agency on
progress made and next steps to be taken by the Developer in the performance of the
predevelopment tasks.
Section 2.2 Affordabilitv Restrictions. If the Developer proceeds to purchase or lease
the Property, the Agency and the Developer shall cause to be recorded against the Property
concurrently with the close of escrow, a Regulatory Agreement and Declaration of Restrictive
Covenants (the "Regulatory Agreement") providing, among other matters, for the lease of at least
one hundred percent (1 00%) of the units in the Development at affordable housing cost to low-
and moderate-income households, with specific affordability levels as defined in the Regulatory
Agreement, for a time period no less than fifty-five (55) years.
Section 2.3 Use. The Development shall be used only for purposes consistent with
this Agreement and the DDLA.
Section 2.4 Insurance. Developer will obtain and maintain for the duration of the
Agreement and any and all amendments, insurance against claims for injuries to persons or
damage to property which may arise out of or in connection with performance of the services by
Developer or Contractor's agents, representatives, employees or subcontractors. The insurance
will be obtained from an insurance carrier admitted and authorized to do business in the State of
California. The insurance carrier is required to have a current Best's Key Rating of not less than
I'A-:V". Coverages and Limits shall be as follows:
Developer will maintain the types of coverages and minimum limits indicated below,
unless City Attorney or City Manager approves a lower amount. These minimum amounts of
coverage will not constitute any limitations or cap on Contractor's indemnification obligations
under this Agreement. City, its officers, agents and employees make no representation that the
limits of the insurance specified to be carried by Developer pursuant to this Agreement are
1010\13\169806.2
7/3/03 6
adequate to protect Contractor. If Developer believes that any required insurance coverage is
inadequate, Developer will obtain such additional insurance coverage, as Developer deems
adequate, at Contractor's sole expense.
(a) Commercial General Liability Insurance. $1,000,000 combined single-limit per
occurrence for bodily injury, personal injury and property damage. If the submitted policies
contain aggregate limits, general aggregate limits will apply separately to the work under this
Agreement or the general aggregate will be twice the required per occurrence limit.
(b) Automobile Liability (if the use of an automobile is involved for Contractor's
work for City). $1,000,000 combined single-limit per accident for bodily injury and property
damage.
(c) Workers' Compensation and Employer's Liability. Workers' Compensation limits
as required by the California Labor Code and Employer's Liability limits of $1,000,000 per
accident for bodily injury. Workers' Compensation and Employer's Liability insurance will not
be required if Developer has no employees and provides, to City's satisfaction, a declaration
stating this.
(d) Professional Liability. Errors and omissions liability appropriate to Contractor's
profession with limits of not less than $1,000,000 per claim. Coverage must be maintained for a
period of five years following the date of completion of the work.
(e) Additional Provisions. Developer will ensure that the policies of insurance
required under this Agreement contain, or are endorsed to contain, the following provisions:
(0 The City will be named as an additional insured on General Liability.
(g) Developer will obtain occurrence coverage, excluding Professional Liability,
which will be written as claims-made coverage.
(h) This insurance will be in force during the life of the Agreement and any
extensions of it and will not be canceled without thirty (30) days prior written notice to City sent
by certified mail pursuant to the Notice provisions of this Agreement.
(i) Failure to Maintain Coverage. If Developer fails to maintain any of these
insurance coverages, then City will have the option to declare Develop rin breach, or may
purchase replacement insurance or pay the premiums that are due on existing policies in order to
maintain the required coverages. Developer i s responsible for any p ayments m ade b y C ity to
obtain or maintain insurance and City may collect these payments from Developer or deduct the
amount paid from any sums due Developer under this Agreement.
0') Submission of Insurance Policies. City reserves the right to require, at anytime,
complete and certified copies of any or all required insurance policies and endorsements.
1010\13\169806.2 7/3/03 7
Section 2.5 Transfers. The Developer shall not cause or permit a sale, encumbrance or
other transfer of its right, title, and interest in this Agreement or the Development (a "Transfer")
without the prior written approval of the Agency, which the Agency may grant or deny in its sole
discretion.
Section 2.6 Non-Discrimination. The Developer covenants by and for itself and its
successors and assigns that there shall be no discrimination against or segregation of a person or
of a group of persons on account of race, color, religion, creed, disability, sex, sexual orientation,
marital status, familial status, ancestry or national origin in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Development, nor shall the Developer or any person
claiming under or through the Developer establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or vendees in the Development.
Section 2.7 Mandatory Language in All Subsequent Deeds, Leases and Contracts. All
deeds, leases or contracts made or entered into by the Developer, its successors or assigns, as to
any portion of the Development shall contain therein the following language:
(a) InDeeds:
"Grantee herein covenants by and for itself, its successors and assigns that
there shall be no discrimination against or segregation of a person or of a
group of persons on account of race, color, creed, religion, disability, sex,
sexual orientation, marital status, familial status, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the property herein conveyed nor shall the grantee or any
person claiming under or through the grantee establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the property herein conveyed. The
foregoing covenant shall run with the land."
(b) InLeases:
"The lessee herein covenants by and for'the lessee and lessee's heirs,
personal representatives and assigns and all persons claiming under the
lessee or through the lessee that this lease is made subject to the condition
that there shall be no discrimination against or segregation of any person
or of a group of persons on account of race, color, creed, religion,
disability, sex, sexual orientation, marital status, familial status, national
origin or ancestry in the leasing, subleasing, transferring, use, occupancy,
tenure or enjoyment of the land herein leased nor shall the lessee or any
person claiming under or through the lessee establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
sublessees, subtenants, or vendees in the land herein leased."
1010\13\169806.2 7/3/03 8
(c) In Contracts:
"There shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, disability, sex,
sexual orientation, marital status, familial status, national origin or
ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the property nor shall the transferee or any person claiming
under or through the transferee establish or permit any such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants,
sublessees or vendees of the land."
Section 2.8 CDBG Requirements.
(a) Developer shall comply with all applicable laws and regulations governing
the use of the CDBG Loan Funds as set forth in 24 CFR 570 et seq. In the event of any conflict
between this Agreement and applicable laws and regulations governing the use of the CDBG
Funds, the applicable laws and regulations shall govern.
(b) The laws and regulations governing the use of the CDBG Funds include
(but are not limited to) the following:
(1) Environmental and Historic Preservation. Section 104(f) of the
Housing and Community Residence Act of 1974 and 24 CFR Part 58, which prescribe
procedures for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-
4361), and the additional laws and authorities listed at 24 CFR 58.5.
(2) Applicability of OMB Circulars. The applicable policies,
guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-1 10 and A-122.
(3) Architectural Barriers. The requirements of the Architectural
Barriers Act of 1968 (42 U.S.C. 4151-4157).
(4) Lead-Based Paint. The requirement of the Lead-Based Paint
Poisoning Prevention Act, as amended (42 U.S.C. 4821 et seq.) and implementing regulations at
24 CFR Part 35.
(5) Relocation. The requirements of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, and state relocation laws. If and
to the extent that development of the Development results in the permanent or temporary
displacement of residential tenants, homeowners, or businesses, then Developer shall comply
with all applicable local, state, and federal statutes and regulations with respect to relocation
planning, advisory assistance, and payment of monetary benefits. Borrower shall be solely
responsible for payment of any relocation benefits to any displaced persons and any other
obligations associated with complying with such relocation laws.
1010\13\169806.2
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is
(6) Handicap Discrimination. The requirements of Section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794), and federal regulations issued pursuant thereto,
which prohibit discrimination against the handicapped in any federally assisted program, and the
applicable requirements of Title I1 and/or Title I11 of the Americans with Disabilities Act of 1990
(42 U.S.C. 12131 et seq.).
(7) Training Opp ortunities. The requirements of Section 3 of the
Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701, requiring that to the
greatest extent feasible opportunities for training and employment be given to lower income
residents of the project area and agreements for work in connection with the project be awarded
to business concerns which are located in, or owned in substantial part by persons residing in, the
areas of the project. Borrower agrees to include the following language in all subcontracts
executed under this Agreement:
"The work to be performed under this agreement is a project
assisted under a program providing direct federal financial
assistance from HUD and is subject to the requirements of Section
3 of the Housing and Urban Development Act of 1968, as amended
12 U.S.C. 1701. Section 3 requires that to the greatest extent
feasible opportunities for training and employment be given to
lower income residents of the project area and agreements for work
in connection with the project be awarded to business concerns
which are located in, or owned in substantial part by persons
residing in, the areas of the project."
(8)
(9)
Davis-Bacon Act. The prevailing wage requirements of the Davis-
Bacon Act and implementing regulations.
Drug Free Workplace. The requirements of the Drug Free
Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 CFR Part 24.
(1 0) HUD Regulations. Any other HUD regulations present or as may
be amended, added, or waived in the future pertaining to the CDBG Funds, including but not
limited to HUD regulations as may be promulgated regarding subrecipients.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE
DEVELOPER
Section 3.1 Representations and Warranties. The Developer hereby represents and
warrants to the Agency as follows:
(a) Organization. The Developer is duly organized, validly existing
California nonprofit public benefit corporation and is in good standing under the laws of the
1010\13\169806.2 7/3/03 10
State of California and has the power and authority to own its property and carry on its business
as now being conducted.
(b) Authority of the Developer. The Developer has full power and authority
to execute and deliver this Agreement and to make and accept the borrowings contemplated
hereunder, to execute and deliver the Predevelopment Loan Documents and all other documents
or instruments executed and delivered, or to be executed and delivered, pursuant to this
Agreement, and to perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the
Predevelopment Loan Documents and all other documents or instruments executed and
delivered, or to be executed and delivered by the Developer, pursuant to this Agreement have
been executed and delivered by persons who are duly authorized to execute and deliver the same
for and on behalf of the Developer, and all actions required under the Developer's organizational
documents and applicable governing law for the authorization, execution, delivery and
performance of this Agreement and the Predevelopment Loan Documents and all other
documents or instruments executed and delivered, or to be executed and delivered, pursuant to
this Agreement, have been duly taken (to the extent such actions are required as of the date of
execution and delivery of the above-named documents).
(d) Valid Binding Agreements. This Agreement and the Predevelopment
Loan Documents and all other documents or instruments which have been executed and
delivered by the Developer pursuant to or in connection with this Agreement constitute or, if not
yet executed or delivered, will when so executed and delivered constitute, legal, valid and
binding obligations of the Developer enforceable by and against it in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, and other
similar laws affecting the rights of creditors generally and general principles of equity.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of
this Agreement and the Predevelopment Loan Documents by the Developer or of any other
documents or instruments executed and delivered, or to be executed or delivered by the
Developer, pursuant to this Agreement, nor the performance by the Developer of any provision,
condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any
statute, rule or regulation, or any judgment, decree or order of any court, board, commission or
agency whatsoever binding on the Developer, or any provision of the organizational documents
of the Developer, or will conflict with or constitute a breach of or a default under any agreement
to which the Developer is a party, or will result in the creation or imposition of any lien upon any
assets or property of the Developer, other than liens established pursuant hereto.
(f) Compliance With Laws; Consents and Approvals. The predevelopment of
the Property will comply with all applicable laws, ordinances, rules and regulations of federal,
state and local governments and agencies and with all applicable directions, rules and regulations
of the fire marshal, health officer, building inspector and other officers of any such government
or agency.
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17
(g) Pending - Proceedings. The Developer is not in default under any law or
regulation or under any order of any court, board, commission or agency whatsoever, and there
are no claims, actions, suits or proceedings pending or, to the knowledge of the Developer,
threatened against or affecting the Developer or the Property, at law or in equity, before or by
any court, board, commission or agency whatsoever which might, if determined adversely to the
Developer, materially and adversely affect the Developer's ability to repay the Predevelopment
Loan or impair the security to be given to the Agency pursuant hereto.
(h) Title to Land. At the time of the Developer's acquisition of the Property,
the Developer will have good and marketable fee title to the Property and there will exist thereon
or with respect thereto no mortgage, lien, pledge or other encumbrance of any character
whatsoever other than those liens approved by the Agency, liens for current real property taxes
and assessments not yet due and payable, and liens in favor of the Agency or approved in writing
by the Agency.
(i) Financial Statements. The financial statements of the Developer and other
financial data and information fwrnished by the Developer to the Agency fairly present the
information contained therein. As of the date of this Agreement, there has not been any adverse,
material change in the financial condition of the Developer from that shown by such financial
statements and other data and information.
(i) Sufficient Funds. Following execution of this Agreement (and including
the Predevelopment Loan funds, the Developer holds sufficient funds and/or binding
commitments for sufficient funds to pay predevelopment expenses of the Development.
ARTICLE 4
DEFAULT
Section 4.1 Default. A "Default" shall consist of any material breach of any covenant,
agreement, provision or warranty contained in this Agreement or the Predevelopment Note,
which has not been cured by the defaulting party within thirty (30) days of receipt of written
notice of such breach from the non-defaulting party. If the DDLA has been executed but not
funded (and this Agreement therefore remains in effect), a default by either party under the
DDLA (subject to expiration of applicable notice and cure periods) shall also constitute a Default
under this Agreement. In the event of a Default, the non-defaulting party may apply to a court
for specific performance of this Agreement or an injunction against any violation of this
Agreement, or any other remedies at law or in equity (including, if the Agency is the non-
defaulting party, acceleration of the amount due under the Predevelopment Note and exercise of
the Agency's rights under the Assignment of Plans, if executed) or any such other actions as shall
be necessary or desirable so as to correct non-compliance with this Agreement.
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ARTICLE 5
GENERAL PROVISIONS
Section 5.1 Relationship of Parties. Nothing contained in this Agreement shall be
interpreted or understood by any of the parties, or by any third persons, as creating the
relationship of employer and employee, principal and agent, limited or general partnership, or
joint venture between the Agency and the Developer or the Developer's agents, employees or
contractors, and the Developer shall at all times be deemed an independent contractor and shall
be wholly responsible for the manner in which it or its agents, or both, perform the services
required of it by the terms of this Agreement for the development of the Development. In
regards to the development of the Development, the Developer shall be solely responsible for all
matters relating to payment of its employees, including compliance with Social Security,
withholding and all other laws and regulations governing such matters, and shall include
requirements in each contract that contractors shall be solely responsible for similar matters
relating to their employees. The Developer agrees to be solely responsible for its own acts and
those of its agents and employees.
The firm of Karnac and Associates has been selected by the Developer as the architect for
the Development, and
Development. The Developer may, from time to time, select other consultants and vendors for
the Development. Notwithstanding the preceding paragraph, the Agency shall have the right to
provide input regarding the selection and, if necessary, the replacement of such other consultants
or vendors employed by the Developer to perform the predevelopment tasks contemplated by
this Agreement, and shall have the right to provide input regarding the replacement of the
previously selected architect, if necessary. The Developer shall consider in good faith such input
from the Agency, and shall confer with the Agency, upon request, regarding such selection and
replacement decisions.
has been selected as the civil engineer for the
Section 5.2 No Claims. Nothing contained in this Agreement shall create or justify
any claim against the Agency, by any person the Developer may have employed or with whom
the Developer may have contracted relative to the purchase of materials, supplies or equipment,
or the fbmishing or the performance of any work or services with respect to the development of
the Development, and the Developer shall include similar requirements in any contracts entered
into for the development of the Development.
Section 5.3 Amendments. No alteration or variation of the terms of this Agreement
shall be valid unless made in writing by the parties.
Section 5.4 Indemnification. Except as directly caused by the Agency's'or City's gross
negligence, the Developer agrees to indemnify, protect, hold harmless and defend (by counsel
reasonably satisfactory to the Agency) the Agency, the City and their respective board members,
officers and employees, from all suits, actions, claims, causes of action, costs, demands,
judgments and liens arising out of the Developer's performance or non-performance of its
obligations under this Agreement, arising from Developer's purchase and ownership of the
Property, the development, marketing, rental, operation and management of the Development or
any documents executed by the Developer in connection with the Development.
1010\13\169806.2
7/3/03 13 I?
Section 5.5 Non-Liability of Agency and City Officials, Employees and Agents. No
member, official, employee or agent of the Agency or the City shall be personally liable to the
Developer, or any successor in interest, in the event of any Default or breach by the Agency, or
for any amount which may become due to the Developer or its successor or on any obligation
under the terms of this Agreement.
Section 5.6
to this Agreement.
No Third Party Beneficiaries. There shall be no third party beneficiaries
Section 5.7 Action by the Agency. Except as may be otherwise specifically provided
herein, whenever any approval, notice, direction, consent, request, extension of time, waiver of
condition, termination, or other action by the Agency is required or permitted under this
Agreement, such action may be given, made, or taken by the Agency Executive Director without
further approval by the Agency Board, and any such action shall be in writing. The amount of
the Predevelopment Loan may not be increased without approval of the Agency Board.
Section 5.8 Notices, Demands and Communications. Formal notices, demands, and
communications between the Agency and the Developer shall be sufficiently given if and shall
not be deemed.given unless dispatched by registered or certified mail, postage prepaid, return
receipt requested, or delivered by express delivery service, return receipt requested, or delivered
personally, to the principal office of the Agency and the Developer as follows:
Agency:
Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Executive Director
Developer:
Wakeland Housing, Inc.
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such
other addresses as the affected party may from time to time designate by mail as provided in this
Section. Receipt shall be deemed to have occurred on the date shown on a written receipt for
delivery or refusal of delivery.
1010\13\169806.2 7/3/03 14
Section 5.9 Amlicable Law. This Agreement will be governed by California law.
Section 5.10 Parties Bound. Except as otherwise limited herein, the provisions of this
Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors,
administrators, legal representatives, successors and assigns.
Section 5.1 1 Attorneys' Fees. If any lawsuit is commenced to enforce any of the terms
of this Agreement, the prevailing party will have the right to recover its reasonable attorneys'
fees and costs of suit from the other party.
Section 5.12 Severability. If any term of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall
continue in full force and effect unless the rights and obligations of the parties have been
materially altered or abridged by such invalidation, voiding or unenforceability.
Section 5.13 Future City and Agency Actions. The parties acknowledge and agree that:
(a) This Agreement does not constitute Agency or City approval of the
Subsequent Loan, the DDLA, the Land Use Approvals, acquisition or lease of the Property by
the Developer, or construction of the Development;
(b) The Agency and City retain full discretion to approve or disapprove the
Subsequent Loan, the DDLA, and the Land Use Approvals; and
(c) Prior to consideration of the Subsequent Loan the DDLA, and the Land
Use Approvals, the Agency and City must first perform all applicable statutory preconditions to
such consideration, including completion of any required CEQA review and documentation.
WHEREFORE, this Agreement has been entered into by the undersigned as of the date
first above written.
DEVELOPER:
WAKELAND HOUSING, INC., a
California nonprofit public benefit
corporation
By:
AGENCY:
1010\13\169806.2
7/3/03 15
1010\13\169806.2 7/3/03
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
A- 1
EXHIBIT B
PREDEVELOPMENT COSTS TO BE FUNDED BY PREDEVELOPMENT LOAN
Feasibility
rOTAL Phase
$1 20,000 $1 0,000
$1 0,000 $0
$20,000 $0
$8,000 $0
$5,000 $2,000
$1 5,000 $0
$0 $0
$7,000 $1,000
$200,000 $20,000
$1 5,000 $7,000
Architecture & Engineering
Special Studies (soils, market, etc.)
Construction & Perm. Lender Orig. Fees
City Fees (SDP, plan check, etc.)
Appraisal
Reim bursa bles
Escrow & Title
Insurance
MisclContingency
Remaining
Predev.
$1 10,000
$10,000
$20,000
$8,000
$3,000
$15,000
$0
$6,000
$1 80,000
$8,000
TOTAL
1010\13\169806.2
7/3/03 B- 1 33
EXHIBIT C
PREDEVELOPMENT TIME SCHEDULE
101 0\13\169806.2 7/3/03 c- 1
PROMIS S ORY'NOTE
(Predevelopment Loan - Wakeland Housing, Inc.)
$200,000 Carlsbad, California
Wy -9 2003
FOR VALUED RECEIVED, Wakeland Housing, Inc., a California nonprofit public
benefit corporation (the "Borrower"), promises to pay to the Carlsbad Redevelopment Agency
(the "Agency"), or order, the principal sum of Two Hundred Thousand Dollars ($200,000), or so
much thereof as is advanced to Borrower pursuant to Article 1 of the Predevelopment Loan
Agreement (as defined below), as provided below.
1. Loan Agreement. This promissory note (the "Note") is made pursuant to the
terms of the Predevelopment Loan Agreement dated of even date herewith, entered into between
the Borrower and the Agency (the "Predevelopment Loan Agreement"). All capitalized terms
used but not defined in this Note shall have the meanings set forth in the Predevelopment Loan
Agreement. Upon acquisition or lease of the Property, Borrower shall execute and record a
Regulatory Agreement imposing affordability restrictions on the Property as required by law.
2. Repayment Terms; Interest. The indebtedness evidenced by this Note shall be
due and payable at the times and in the manner set forth in Section 1.6 of the Predevelopment
Loan Agreement, The outstanding principal balance of this Note shall bear interest at a rate of
three percent (3%) compounded annually; provided however, if a Default occurs, interest on the
principal balance shall accrue in accordance with Section 4 of this Note.
3. Security. As the security for this Note, Borrower has assigned to the Agency its
rights and obligations with respect to certain documents, approvals, and agreements as provided
in the Assignment of Plans.
4. Acceleration Pursuant to Default. As more fully set forth in Section 1.6(c) of the
Predevelopment Loan Agreement, upon the occurrence of an event of default in the
Predevelopment Loan Agreement, the Agency shall have the right to declare all of the principal
immediately due and payable, which amount shall bear interest at the lesser of ten percent (10%)
per annum, or the maximum amount permitted by law, from the expiration of the applicable cure
period for the default to the date of repayment in full of the principal amount of the
Predevelopment Loan and any interest due thereon. All payments received shall be applied first
to the accrued interest and second to the principal outstanding. Neither acceptance by the
Agency of the payments provided for herein nor any failure by the Agency to pursue its legal and
equitable remedies upon default shall constitute a waiver of the Agency's right to require prompt
payments when due of all principal and interest owing or to declare a default and exercise all of
its rights under this Note and the Predevelopment Loan Agreement.
101 0\13\169941.1 617 7/03
5. No Offset. The Borrower hereby waives any rights of offset it now has or may
hereafter have against the Agency, its successors and assigns, and agrees to make the payment
called for herein in accordance with the terms of this Note.
6. Waiver; Attorney's Fees. The Borrower, for itself, its heirs, legal representatives,
successors and assigns, waives diligent presentment, protest and demand, and notice of protest,
dishonor and non-payment of this Note, and expressly waives any rights to be released by reason
of any extension of time or change in terms of payment, or change, alteration or release of any
security given for the payments hereof, and expressly waives the right to plead any and all
statutes of limitations as a defense to any demand on this Note or agreement to pay the same, and
agrees to pay all costs of collection when incurred, including reasonable attorneys' fees. If an
action is instituted on this Note, the undersigned promises to pay, in addition to the costs and
disbursements allowed by law, such sum as a court may adjudge reasonable as attorneys' fees in
such action.
7. Manner and Place of Payment. All payments of principal and interest shall be
payable in lawful money of the United States of America at the office of the Agency as set forth
in Section 5.8 of the Predevelopment Loan Agreement or at such other address as the Agency
may provide to the Borrower by notice in accordance with Section 5.8 of the Predevelopment
Loan Agreement.
8.
in its discretion.
Assiment. The Agency's rights under this Note may be assigned by the Agency
9. Conflict. If any term or provision of this Note conflicts with any term or
provision of the Predevelopment Loan Agreement, the term of provision of the Predevelopment
Loan Agreement shall control to the extent of such conflict.
WAKELAND HOUSING, INC., a California
nonprofit public benefit corporation
By:
Its:
1010\13\169941.1 61i 7/03
ASSIGNMENT OF AGREEMENTS, PLANS AND SPECIFICATIONS, AND APPROVALS
FOR VALUE RECEIVED, the undersigned, Wakeland Housing, Inc., a California nonprofit
public benefit corporation (the "Developer"), hereby assigns and transfers to the Carlsbad Redevelopment
Agency, a public body corporate (the "Agency"), all of its right, title and interest in and to:
(1) All architectural, design, engineering, and construction contracts and development agreements, and any and all amendments, modifications, supplements, addenda and
general conditions thereto (collectively "Agreements"), heretofore or hereafter entered into
by any Contractor (as defined below);
(2) modifications, changes, supplements, general conditions and addenda thereto (collectively
"Plans and Specifications") heretofore or hereafter prepared by any Contractor (as defined
below); and
All plans and specifications, shop drawings, working drawings, amendments,
(3) nature obtained for the Development (collectively, the "Land Use Approvals").
All land use approvals, building permits, and other governmental approvals of any
This Assignment is made pursuant to the terms of the Predevelopment Loan Agreement dated as
2003, entered into between the Developer and the Agency (the "Predevelopment Loan of
Agreement"). zpitalized terms used but not defined in this Assignment shall have the meanings set forth
in the Predevelopment Loan Agreement. The Property with respect to which the Agency has made the
Predevelopment Loan to the Developer under the Predevelopment Loan Agreement is described in
Attachment No. 1 attached to this Assignment.
For purposes of this Assignment, the term "Contractor" means any architect, construction
contractor, engineer or other person or entity entering into Agreements with the Developer andor
preparing Plans and Specifications for the Developer with respect to the Development.
The Developer hereby irrevocably appoints the Agency as its attorney-in-fact (which agency is
I coupled with an interest) to, upon the occurrence of a Default by Developer (after notice and opportunity
to cure) or an event which, with notice or the passage of time or both would constitute a Default (after
notice and opportunity to cure) under and as defined in Section 4.1 of the Predevelopment Loan
Agreement, demand, receive, and enforce any and all of the Developer's rights with respect to the Plans
and Specifications, Agreements and Land Use Approvals, and perform any and all acts in the name of the
Developer or in the name of the Agency with the same force and effect as if performed by the Developer
in the absence of this Assignment.
The Developer represents and warrants to the Agency that no previous assignment(s) of its rights
or interest in or to the Plans and Specifications, Agreements, and/or Land Use Approvals, has or have
been made, and the Developer agrees not to assign, sell, pledge, transfer, mortgage, or hypothecate its
rights or interest therein (without prior written approval of the Agency Executive Director) so long as the
Agency holds or retains any security interest under the Predevelopment Loan Agreement.
This Assignment is made to secure: (1) payment to the Agency of all sums now or hereafter
owing under the Predevelopment Note dated as of the date hereof made by the Developer to the order of
1010\13\169890.2
7/3/03 27
the Agency, and any and all additional advances, modifications, extensions, renewals and amendments
thereof; and (2) payment and performance by the Developer of all its obligations under the
Predevelopment Loan Agreement.
This Assignment shall be governed by the laws of the State of California, except to the extent that
Federal laws preempt the laws of the State of California, and the Developer consents to the jurisdiction of
any Federal or State Court within the State of California having proper venue for the filing and
maintenance of any action arising hereunder and agrees that the prevailing party in any such action shall
be entitled, in addition to any other recovery, to reasonable attorneys' fees and costs.
This Assignment shall be binding upon and inure to the benefit of the heirs, legal representatives,
assigns, and successors-in-interest of the Developer and the Agency; provided, however, this shall not be
construed and is not intended to waive the restrictions on assignment, sale, transfer, mortgage, pledge,
hypothecation or encumbrance by the Developer contained in the Predevelopment Loan Agreement.
Attachment No. 1 and the ArchitectWEngineer's Consent are attached hereto and incorporated
herein by reference.
Executed by the Developer on -9 2003.
DEVELOPER:
WAKELAND HOUSING, INC., a California nonprofit
public benefit corporation
By:
1010\13\169890.2
7/3/03
ARCHITECT'SENGINEERS CONSENT
The undersigned architect and/or engineer (collectively referred to as ltArchitect'') hereby
consents to the foregoing Assignment of Agreements, Plans and Specifications, and Approvals
("Assignment"), of which this Architect'sEngineer's Consent ("Consent") is a part, and
acknowledges that there presently exists no unpaid claims presently due to the Architect except
as disclosed to the Agency arising out of the preparation and delivery of the Plans and
Specification to the Developer and/or the performance of the Architect's obligations under the
Agreements, as the term "Agreements'' is defined in the Assignment.
Architect agrees that if, at any time, the Agency shall become the owner of said Property,
or, pursuant to its rights under the Predevelopment Loan Agreement, elects to undertake or cause
the completion of construction of the Development on any of the Property, in accordance with
the Plans and Specifications, and gives Architect written notice of such election; then so long as
the Architect has received, receives or continues to receive the compensations called for under
the Agreements, the Agency may, at its option, use and rely on the Plans and Specifications for
the purposes for which they were prepared, and Architect will continue to perform its obligations
under the Agreements for the benefit and account of the Agency in the same manner as if
performed for the benefit or account of the Developer in the absence of this Assignment.
Architect fwrther agrees that, in the event of a breach by the Developer of the
Agreements, or any agreement entered into with Architect in connection with the Plans and
Specifications, so long as the Developer's interest in the Agreements and Plans and
Specifications is assigned to the Agency, Architect will give written notice to the Agency at the
address shown below of such breach. The Agency shall have thirty (30) days from the receipt of
such written notice of Default to remedy or cure said Default; provided, however, nothing herein
shall require the Agency to cure said Default or to undertake completion of construction of the
Improvements.
Architect warrants and represents that it/he/she has no knowledge of any prior
assignment(s) of any interest in either the Plans and Specifications and/or the Agreements.
Except as otherwise defined herein, the terms used herein shall have the meanings given them in
the Assignment or the Predevelopment Loan Agreement, as applicable.
1010\13\169890.2 7/3/03
Executed on this of ,200-.
Address of Agency: Address of Architect:
Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Executive Director
Architect:
Name:
Its:
1010\13\169890.2
7/3/03
1010\13\169890.2
7/3/03
ATTACHMENT NO. 1 TO ASSIGNMENT
PROPERTY DESCRIPTION
31
ARCHITECT'S/ENGINEERS CONSENT
The undersigned architect and/or engineer (collectively referred to as "Architect'') hereby
consents to the foregoing Assignment of Agreements, Plans and Specifications, and Approvals
("Assignment''), of which this Architect'sEngineer's Consent ("Consent") is a part, and
acknowledges that there presently exists no unpaid claims presently due to the Architect except
as disclosed to the Agency arising out of the preparation and delivery of the Plans and
Specification to the Developer and/or the performance of the Architect's obligations under the
Agreements, as the term "Agreements" is defined in the Assignment.
Architect agrees that if, at any time, the Agency shall become the owner of said Property,
or, pursuant to its rights under the Predevelopment Loan Agreement, elects to undertake or cause
the completion of construction of the Development on any of the Property, in accordance with
the Plans and Specifications, and gives Architect written notice of such election; then so long as
the Architect has received, receives or continues to receive the compensations called for under
the Agreements, the Agency may, at its option, use and rely on the Plans and Specifications for
the purposes for which they were prepared, and Architect will continue to perform its obligations
under the Agreements for the benefit and account of the Agency in the same manner as if
performed for the benefit or account of the Developer in the absence of this Assignment.
Architect further agrees that, in the event of a breach by the Developer of the
Agreements, or any agreement entered into with Architect in connection with the Plans and
Specifications, so long as the Developer's interest in the Agreements and Plans and
Specifications is assigned to the Agency, Architect will give written notice to the Agency at the
address shown below of such breach. The Agency shall have thirty (30) days from the receipt of
such written notice of Default to remedy or cure said Default; provided, however, nothing herein
shall require the Agency to cure said Default or to undertake completion of construction of the
Improvements .
Architect warrants and represents that it/he/she has no knowledge of any prior
assignment(s) of any interest in either the Plans and Specifications and/or the Agreements.
Except as otherwise defined herein, the terms used herein shall have the meanings given them in
the Assignment or the Predevelopment Loan Agreement, as applicable.
1010\13\169890.2
7/3/03 32
Executed on this of ,200-.
Address of Agency: Address of Engineer:
Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Executive Director
Engineer:
By:
Name:
1010\13\169890.2
7/3/03 33
ATTACHMENT NO. 1 TO ASSIGNMENT
PROPERTY DESCRIPTION
1010\13\169890.2
7/3/03 34
EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT
( HOUSING DEVELOPMENT)
This Exclusive Negotiating Rights Agreement (this "Agreement") is entered into as of
this day of , 2003 (the "Effective Date"), by and among the Carlsbad
Redevelopment Agency, a public body, corporate and politic (the "Agency") and Wakeland
Housing, Inc., a California non-profit public benefit corporation (the "Developer"), on the basis
of the following facts:
RECITALS
A. The City Council of the City of Carlsbad adopted the Carlsbad Village
Redevelopment Plan pursuant to Ordinance No. - adopted on (the "Redevelopment
Plan") establishing the Carlsbad Village Redevelopment Project Area (the "Project Area"). The
Agency is responsible for implementing the Redevelopment Plan in the Project Area. The goals
for the Redevelopment Plan include alleviation of blighting conditions and the stimulation of
economic development and affordable housing activities in the Project Area.
B. In accordance with the Redevelopment Plan and the Agency's adopted Rules For
Business Tenant Preference and Owner Participation, the Agency has:
1. designated a specified S6-acre portion of the Project Area as a unified
development area for redevelopment by a qualified development entity;
2. solicited and evaluated development proposals from affected property
owners in the designated area and other development entities; and
3. based on such evaluation, selected the Developer as the entity with which
to enter into exclusive negotiations for redevelopment of the designated area, as described in the
attached Exhibit A (the "Site").
C. The Agency desires to cause development on the Site of a ten (10)- to thirteen
(1 3)-unit affordable housing development (the "Development"), generally consistent with the
request for qualifications issued by the Agency on March 14,2003, and the responsive proposal
dated March 23,2003, submitted by the Developer, copies of which are attached to this
Agreement as Exhibit B (together, the "Proposal").
D. Completion of the Development in the Project Area will provide needed
affordable housing, and will assist in ameliorating blighting influences in the Project Area.
E. The purpose of this Agreement is to establish procedures and standards for the
negotiation by the Agency and the Developer of a disposition, development and loan agreement
(a "DDLA") pursuant to which, among other matters, if specified preconditions are satisfied:
(1) the Agency would convey or ground lease the Site to the Developer at a purchase price or
101 0\13\1 0\1\169714.2 with 169714.1
6/12/03
1
rental amount to be negotiated that would enable a financially feasible development; (2) the
Agency would make a construction and permanent loan to the Developer to assist in financing
the Development; and (3) the Developer would develop and operate the Development on the
conveyed or leased Site. As more fully set forth in Section 3.1, the Developer acknowledges and
agrees that this Agreement in itself does not obligate any party to acquire or convey any
property, does not grant the Developer the right to develop the Development, and does not
obligate the Developer to any activities or costs to develop the Development, except for the
preliminary analysis and negotiations contemplated by this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties mutually agree as follows:
ARTICLE 1.
EXCLUSIVE NEGOTIATIONS RIGHT
Section 1.1 Good Faith Negotiations. The Agency and the Developer shall negotiate
diligently and in good faith, during the Negotiating Period described in Section 1.2, the terms of
a DDLA for the development of the Development on the Site. The Proposal shall serve as a
guide in the negotiation of the DDLA, although the parties acknowledge that review of
additional information and fiu-ther discussion may lead to refinement and revision of the
development concepts set forth in the Proposal. During the Negotiating Period, the parties shall
use good faith efforts to accomplish the respective tasks outlined in Article 2 to facilitate the
negotiation of a mutually satisfactory DDLA.
Among the issues to be addressed in the negotiations are: (i) the purchase price or rental
amount for conveyance or lease of the Site by the Agency to the Developer, (ii) the physical and
land title conditions of the Site and remediation of any adverse conditions, (iii) the land use
approvals necessary for the Development, (iv) the development schedule for the Development,
(vi) financing of the Development (including the need for any Agency financial assistance), (vii)
marketing and management of the Development, and (viii) the level of housing affordability and
the nature of affordability controls.
Section 1.2 Negotiating Period. The negotiating period (the "Negotiating Period")
under this Agreement shall be one hundred fifty (1 50) days, commencing on the date of this
Agreement, subject to extension by mutual agreement of the parties in writing. The Negotiating
Period may be extended on the Agency's behalf for up to an additional ninety (90) days by the
Redevelopment Director of the Agency if, in the Redevelopment Director's judgment, sufficient
progress toward a mutually acceptable DDLA has been made during the initial one hundred fiftv (150) day negotiating period to merit such extension.
1010\13\10\1\169714.2 with 169714.1
611 2/03
2
36
If a DDLA has not been executed by the Agency and the Developer by the expiration of
the Negotiating Period (as the Negotiating Period may be extended pursuant to the preceding
paragraph), then this Agreement shall terminate and neither party shall have any further rights or
obligations under this Agreement. If a DDLA is executed by the Agency and the Developer
then, upon such execution, this Agreement shall terminate, and all rights and obligations of the
parties shall be as set forth in the executed DDLA.
Section 1.3 Exclusive Negotiations. During the Negotiating Period (as such
Negotiating Period may be extended pursuant to Section 1.2), the Agency shall not negotiate
with any entity, other than the Developer, regarding development of the Site, or solicit or
entertain bids or proposals to do so.
Section 1.4 Identification of Developer’s Representative. The Developer’s
representative to negotiate the DDLA with the Agency is
ARTICLE 2.
NEGOTIATION TASKS
Section 2.1 Overview. To facilitate negotiation of the DDLA, the parties shall use
reasonable good faith efforts to accomplish the tasks set forth in this Article 2 in a timeframe that
will support negotiation and execution of a mutually acceptable DDLA prior to the expiration of
the Negotiating Period.
Section 2.2 Financing and Costs of Development. Within sixty (60) days after the
Effective Date the Developer shall provided the Agency with a detailed financial analysis for the
Development containing, among other matters, a development budget and operating proforma,
and housing affordability levels supported by the budget (the “Financing Proposal”). The
financial analysis shall be refined by the parties during the Negotiating Period, as appropriate,
and will be used to evaluate the financial feasibility of the Development and to assist in the
negotiation of terms regarding payment of costs of land and development.
Section 2.3 Purchase Price or Rent for the Site. Concurrent with Developer’s
development of the Financing Proposal, the Agency and the Developer shall seek to agree upon
the purchase price or lease cost of the Site, and the nature, timing and cost of Agency assistance
to the Development, if any, including a write-down of the purchase price or a below market lease
of the Site. The proposed purchase price shall be subject to confirmation and refinement
pursuant to the formal reuse appraisal and the noticed hearing and City Council finding process
to be conducted in accordance with Health and Safety Code Section 33433, as hrther described
in Section 2.10 below.
Section 2.4 Planning Approvals. The Developer acknowledges that the Development
requires approval by the City of a Major Redevelopment Permit (the “Permit”). During the
Negotiating Period, the Developer shall submit conceptual site plans and preliminary designs for
the Development to the Agency and the appropriate City departments for their informal review.
Developer shall submit a formal application for the Permit to the City no later than SeDtember 1,
1010\13\10\1\169714.2 with 169714.1
611 2/03
3
37
2003, and shall obtain approval of the Permit no later than February 1,2004. The Agency and
the Developer anticipate and intend that the DDLA shall be scheduled for consideration by the
Agency Board and City Council concurrently with their consideration of the Permit.
Section 2.5 Schedule of Performance. Within thirty (30) days after the Effective Date,
the Developer shall provide the Agency with a proposed detailed schedule of performance for the
Development which shall be based on the summary schedule attached hereto as Exhibit C.
Section 2.6 Due Diligence. During the Negotiating Period the Developer shall
conduct due diligence activities, including but not limited to planning, soils report, hazardous
materials report, financial feasibility and title adequacy.
(a) Physical Adequacy Determination. The Developer shall determine
whether the Site is suitable for development of the Development, taking into account the
geotechnical and soils conditions, the presence or absence of toxic or other hazardous materials,
the massing of the proposed Development improvements and the parking requirements imposed
on Developments of this type and the other environmental and regulatory factors that the
Developer deems relevant. If, in the Developer's judgment based on such investigations and
analyses, the Site is not suitable for development, the Developer may notify the Agency in
writing no later than sixty (60) days after the Effective Date of its determination (an
"Unsuitability Notice"). Upon delivery of an Unsuitability Notice by the Developer within this
time period, this Agreement shall be terminated without further action of any party, and
thereafter no party shall have any further duties, obligations, rights, or liabilities under this
Agreement, except as set forth in Section 3.7. If the Developer does not deliver an Unsuitability
Notice during the first sixty (60) days after the Effective Date, then the Site shall be deemed
physically suitable for development of the Development and any executed DDLA shall not
provide for an additional opportunity for the Developer to determine the physical suitability of
the Site or for the Developer to terminate the DDLA as a result of the purported physical
unsuitability of the Site (unless such unsuitability arises solely from an event occurring
subsequent to the execution of the DDLA).
(b) Title Adequacy Determination. Within thirty (30) days following the
Effective Date, the Agency shall cause a reputable title company to issue a Preliminary Title
Report (the "Report") on the Site to the Developer. If the Developer objects to any exception
appearing on the Report or should any title exception arise after the date of the Report, the
Developer may object to such exception, provided such objection is made to the Agency in
writing on or before 5 o'clock P.M. on the thirtieth (30th) day following the date the Developer
receives the Report. If the Developer object to any exception to title, the Agency, within fifteen
(15) days of receipt of Developer' objection shall notify Developer in writing whether Agency
elects to (1) cause the exception to be removed of record, (2) obtain a commitment from the title
company for an appropriate endorsement to the policy of title insurance to be issued to the
Developer, insuring against the objectionable exception, or (3) terminate this Agreement unless
the Developer elects to take title subject to such exception. If any party elects to terminate this
Agreement pursuant to this Section 2.6(b), no party shall thereafter have any obligations to or
rights against the others hereunder, except as set forth in Section 3.7. If the Developer fail to
provide any notification to the Agency regarding this matter prior to expiration of the time period
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set forth herein, the condition set forth in this Section 2.6(b) shall be deemed satisfied, this
Agreement shall continue in effect, and the condition of title at closing under any executed
DDLA shall be as set forth in the Report.
Section 2.7 Reports. Unless otherwise waived by the Agency, the Developer shall
provide the Agency with copies of all reports, studies, analyses, correspondence and similar
documents prepared or commissioned by the Developer with respect to this Agreement and the
Development, promptly upon their completion.
The Agency shall provide the Developer with copies of all reports, studies, analyses,
correspondence and similar documents (collectively, “documents”), exclusive of detailed
property appraisals, prepared or commissioned by the Agency with respect to this Agreement
and the Development, promptly following execution of this Agreement with respect to
documents then in its possession or under its reasonable control, and promptly upon their
completion with respect to any subsequently prepared documents.
Section 2.8 Organizational Documents. The Developer shall provide the Agency with
copies of its organizational documents evidencing that the Developer exists and is in good
standing to perform its obligations under the DDLA.
Section 2.9 Environmental Review. The Agency shall prepare or cause to be prepared
any environmental documentation required by the California Environmental Quality Act
(“CEQA”) for consideration of approval of the DDLA; provided, that nothing in this Agreement
shall be construed to compel the Agency or the City to approve or make any particular findings
with respect to such CEQA documentation. The Developer shall provide such information about
the Development as may be required to enable the Agency to prepare or cause preparation and
consideration of any CEQA-required document, and shall otherwise generally cooperate with the
Agency to complete this task.
Section 2.10 Section 33433 Report. The Agency shall prepare the necessary
documentation pursuant to Section 33433(a)(2)(B) of the California Health and Safety Code to
be submitted to the Agency Board and City Council in conjunction with the Agency’s and the
City’s consideration of any DDLA that is prepared under this Agreement. The Section 33433
report shall contain the estimated value of the Site determined at its highest and best use under
the Redevelopment Plan and the estimated value of the Site determined at the use and with the
conditions, covenants and development costs required pursuant to the DDLA.
Section 2.1 1 Promess Reports. From time to time as reasonably agreed upon by the
parties, each party shall make oral or written progress reports advising the other party on studies
being made and matters being evaluated by the reporting party with respect to this Agreement
and the Development.
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ARTICLE 3.
GENERAL PROVISIONS
Section 3.1 Limitation on Effect of Agreement. This Agreement shall not obligate
either the Agency or the Developer to enter into a DDLA or to enter into any particular DDLA.
By execution of this Agreement, the Agency is not committing itself to or agreeing to undertake
acquisition, disposition, or exercise of control over the Site. Execution of this Agreement by the
Agency is merely an agreement to conduct a period of exclusive negotiations in accordance with
the terms hereof, reserving for subsequent Agency and City Council action the final discretion
and approval regarding the execution of a DDLA and all proceedings and decisions in
connection therewith. Any DDLA resulting from negotiations pursuant to this Agreement shall
become effective only if and after such DDLA has been considered and approved by the Agency
Board and, if required by law, the City Council, following conduct of all legally required
procedures, and executed by duly authorized representatives of the Agency and the Developer.
Until and unless a DDLA is signed by the Developer, approved by the Agency Board, and
executed by the Agency, no agreement drafts, actions, deliverables or communications arising
from the performance of this Agreement shall impose any legally binding obligation on either
party to enter into or support entering into a DDLA or be used as evidence of any oral or implied
agreement by either party to enter into any other legally binding document.
Section 3.2 Notices. Formal notices, demands and communications between the
Agency and the Developer shall be sufficiently given if, and shall not be deemed given unless,
dispatched by certified mail, postage prepaid, return receipt requested, or sent by express
delivery or overnight courier service, to the office of the parties shown as follows, or such other
address as the parties may designate in writing from time to time:
Agency: Carlsbad Redevelopment Agency
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008
Attn: Redevelopment Director
Developer: Wakeland Housing, Inc.
Attn: Executive Director
Such written notices, demands and communications shall be effective on the date shown on the
delivery receipt as the date delivered or the date on which delivery was refused.
Section 3.3 Waiver of Lis Pendens. It is expressly understood and agreed by the
parties that no lis pendens shall be filed against any portion of the Site with respect to this
Agreement or any dispute or act arising fiom it.
Section 3.4 Right of Entry. The Agency hereby grants the Developer a right of entry
to enter the Site to perform the physical adequacy determination described in Section 2.6(a)
above. Developer shall indemnify, defend (with counsel reasonably acceptable to Agency) and
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hold harmless the Agency and its directors, officers, contractors, agents and employees against
any claims made against them which arise out of the activities Developer or its, contractors,
subcontractors, agents, employees, licensees, invitees or guests on or concerning the Site during
the term of this Agreement:. The foregoing indemnity shall not extend to any claim arising solely
from the Agency's gross negligence or intentional acts.
Section 3.5 Insurance. The Developer shall at all times during the term of this
Agreement keep in full force and effect a policy or policies of commercial general liability
insurance against liability for bodily injury to or death of any person or property damage arising
out of or in any way related to the Developer's entry onto the Site. The insurance shall be written
on an occurrence basis and the limits of such insurance shall be not less than Two Million
Dollars ($2,000,000) combined single limit for bodily injury and property damage. The
Developer shall also carry or cause to be carried workers' compensation insurance, with statutory
limits as required by the California Labor Code, covering all persons employed by the
Developer, as applicable, in connection with the Development and entry onto the Site under this
Agreement, which shall provide for a waiver of subrogation against the Agency.
Section 3.6 Costs and Expenses. Each party shall be responsible for its owns costs
and expenses in connection with any activities and negotiations undertaken in connection with
this Agreement, and the performance of each party's obligations under this Agreement.
Section 3.7 No Commissions. Except as may otherwise be provided in any DDLA
hereafter executed by the Agency, the Agency shall not be liable for any real estate commissions
or brokerage fees that may arise from this Agreement or any DDLA resulting from this
Agreement. The Agency represents that it has engaged no broker, agent or finder in connection
with this transaction, and the Developer shall defend and hold the Agency harmless from any
claims by any broker, agent or finder retained by the Developer.
Section 3.8 Defaults and Remedies
(a) Default. Failure by any Party to negotiate in good faith as provided in this
Agreement shall constitute an event of default hereunder. The non-defaulting Party shall give
written notice of a default to the defaulting Party, specifying the nature of the default and the
required action to cure the default. If a default remains uncured fifteen (1 5) days after receipt by
the defaulting Party of such notice, the non-defaulting Party may exercise the remedies set forth
in subsection (b).
(b) Remedies. In the event of an uncured default by the Agency or the
Developer, the non-defaulting Party's sole remedy shall be to terminate this Agreement.
Following such termination, no Party shall have any further right, remedy or obligation under
this Agreement, except that the Developer' indemnification obligation pursuant to Section 3.6
shall survive such termination.
Except as expressly provided above, no Party shall have any liability to any other Party
for damages or otherwise for any default, nor shall any Party have any other claims with respect
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to performance under this Agreement. Each Party specifically waives and releases any such
rights or claims it may otherwise have at law or in equity.
Section 3.9 Attorneys' Fees. The prevailing party in any action to enforce this
Agreement shall be entitled to recover attorneys' fees and costs from the other party.
Section 3.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
Section 3.11- Entire Ameement. This Agreement constitutes the entire agreement of the
parties regarding the subject matters of this Agreement.
Section 3.12 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
agreement.
Section 3.13 Assignment. The Developer may not transfer or assign any or all of their
rights or obligations hereunder except with the prior written consent of the Agency, which
consent shall be granted or withheld in the Agency's sole discretion, and any such attempted
transfer or assignment without the prior written consent of Agency shall be void.
Section 3.14 No Third Party Beneficiaries. This Agreement is made and entered into
solely for the benefit of the Agency and the Developer and no other person shall have any right
of action under or by reason of this Agreement.
Section 3.15 Actions By The Agency. Whenever this Agreement calls for or permits
the approval, consent, authorization or waiver of the Agency, the approval, consent,
authorization, or waiver of the Agency Executive Director shall constitute the approval, consent,
authorization or waiver of the Agency without further action of the Agency Board.
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IN WITNESS WHEREOF, this Agreement has been executed, in triplicate, by the parties
on the date first above written.
DEVELOPER:
WAKELAND HOUSING, INC., a
California nonprofit public benefit corporation
By:
Its:
AGENCY:
CARLSBAD REDEVELOPMENT AGENCY, a
public body corporate and politic
By:
Its:
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EXHIBIT A
LEGAL DESCRIPTION OF THE SITE
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EXHIBIT B
PROPOSAL
B- 1
ACTION
EXHIBIT C
PRELIMINARY SCHEDULE
FINAL DATE
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12.
Approval of ENRA by Agency
Approval of Predevelopment Loan Agreement by Agency
Developer submission of financing proposal to Agency
Developer application for Major Redevelopment Permit
Developer receipt of financing commitments
City Council consideration of Major Redevelopment Permit
Agency and City Council consideration of DDLA
Execution of DDLA
Conveyance or Lease of Site to Developer
Commencement of Construction
Completion of Construction
100% occupancy of Development
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ATTACHMENT 3
Grand Ave
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EXHIBIT 3
The City of CazIsbad Houslng& Redevelopment Desartxnent
AREPORTTOTHE
HOUSING+ C01118[MISSION I
XtemNo. 1
DATE: JULY 23,2003
SUBJECT: ROOSEVELT STREET AFFORDABLE HOUSING PROJECT
RECOMMENDATION OF APPROVAL TO THE HOUSING AND
DEVELOPMENT LOAN TO WAKELAND HOUSING AND DEVELOPMENT
AGREEMENT AND RELATED DOCUMENTS, AND THAT $244,161 FROM
THE COMMUNITY DEVELOPMENT BLOCK GRANT HOUSING RESERVE
THE DEVELOPMENT OF AN AFFORDABLE HOUSING PROJECT AT 2578
ROOSEVELT STREET
REDEVELOPMENT COMMISSION TO PROVIDE A $200,000 PRE-
CORPORATION, APPROVAL OF THE PRE-DEVELOPMENT LOAN
FUND BE REALLOCATED TO PAY PRE-DEVELOPMENT COSTS FOR
I. RECOMMENDATION
That the Housing Commission ADOPT Resolution No. 2003-003 recommending APPROVAL
to the Housing cind Redevelopment Commission to provide a $200,000 pre-development loan to
Wakeland Housing and Development Corporation, approval of the Pre-Development Loan
Agreement and related documents, and that $244,16 1 from the Community Development Block
Grant Housing Reserve Fund be reallocated to pay pre-development costs related to the
development of an affordable housing project at 2578 Roosevelt Street.
11. PROJECT DESCRIPTION
On March 11,2003, the Carlsbad Redevelopment Agency (Agency) purchased a vacant .%acre
property located at 2578 Roosevelt Street. The property was acquired for the purpose of
developing affordable housing. The Agency anticipates that a 10-12 unit apartment project can be
built on the site (subject to City CounciYHousing and Redevelopment Commission approval). It
is the Agency’s intention to work with a non-profit housing developer to construct, ownand
operate the development.
The property is located in Land Use District 8 of the Carlsbad Village Redevelopment Area. In
the Redevelopment Area, the Carlsbad Village Redevelopment Master Plan and Design Manual
(Master Plan) is the land use and design regulatory document. Under the Master Plan
regulations, multi- family housing is a permitted land use. Further, the General Plan and Master
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Plan allow for a maximum density of 19 dwelling units per acre. The surrounding land uses
include a 3-story office building to the north, single-family residences to the east, multi-family
apartments to the south, and an office and trailer park to the west. The property is within close
proximity of many of the service facilities, retail locations, mass transit and other amenities
offered within the Redevelopment Area.
At the time the Redevelopment Agency initiated the acquisition, the site contained an
uninhabitable, boarded-up residence. In addition, the site contained large amounts of trash and
debris. As a requirement of the Agency’s purchase, the previous property owner removed the
structure and all of the material stored on-site. In addition to providing affordable housing, the
purchase and development of the subject property will assist the Redevelopment Agency to meet
the primary redevelopment objective of eliminating blight.
The Carlsbad Redevelopment Agency’s 2000-2004 Redevelopment Implementation Strategy
includes an affordable housing production plan that indicates the Redevelopment Agency intends
to assist in the production of 253 units of newly constructed affordable housing units.
Acquisition of the subject property will assist the Agency in meeting a portion of the production
goal. The subject Strategy also requires that covenants be placed on the property to ensure the
long-term maintenance and affordability of the designated affordable housing units for a
minimum of thirty ( 30) years. F or the u ltimate d evelopment o f t he p roperty, the Agency will
require long-term affordability requirements for a minimum of fifty-five (55) years.
As stated above, the proposed action before the Housing Commission is to approve the Pre-
Development Loan Agreement and related documents. Wakeland will utilize the pre-
development funds to conduct all necessary planning, engineering and architectural studies, and
process the necessary permits to allow for the project development. At a later date, the Housing
Commission will review a request for financial assistance to construct the subject affordable
housing project.
111. DEVELOPMENT TEAM
After acquiring the property in March, 2003, the Redevelopment Agency issued a Request for
Proposals to firms with experience developing affordable housing projects. After reviewing the
three responses and conducting interviews, Wakeland Housing and Development Corporation
was selected to develop the site. Wakeland is an experienced non-profit affordable housing
developer in the San Diego and Southern California region. In 2001 Wakeland developed the 28-
unit Vista Las Flores affordable apartment complex in Carlsbad (southeast corner of Aviara
Parkway & Cobblestone Road).
IV. FINANCIAL ASSISTANCE
In acquiring the property, the Agency utilized funding from the Redevelopment Low and
Moderate Income Housing Fund (LowMod), the Federal Community Development Block Grant
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(CDBG) Program, and the Federal Home Investment Partnership Program Fund (HOME)
Program. CDBG regulations state that such hnds may only be used for land acquisition and pre-
development activities, but not on actual construction activities. Therefore, the Pre-Development
Loan will utilize CDBG funds exclusively.
As stated in the attached Pre-Development Loan Agreement, the amount of the loan i s to be
$200,000. The CDBG Housing Reserve Fund has a current balance of $244,161. Staff is
requesting that the entire balance be reallocated for pre-development activities for this project.
The $44,161 difference between the loan amount and the allocated CDBG amount would be
reserved as a contingency fimd for the pre-development portion of the project. If some or all of
the contingency hds were not used, it would be returned to the Housing Reserve Fund to be use
for a fbture project.
While the project is in the p ermit processing s tage, staff and W akeland w ill b e negotiating a
development agreement. The agreement will formalize the roles and responsibilities of the
Agency and Wakeland for the property development and operation, establish the terms for the
purchase or long-term lease of the property, and the terms of the City's construction loan to the
project. The agreement will be returned to the Housing Commission for its review at a later date.
V. LOAN-DOCUMENTS
As part of this transaction, the Agency and the developer will be entering into three agreements.
The first agreement is the Pre-Development Loan Agreement that details the requirements to
repay the loan. The
Assignment Agreement states that in the event of a default, all plans, studies, drawings and
entitlements become the property of the Agency. If necessary, the Agency could then use these
documents to complete the construction of the project.
The Promissory Note is the developer's pledge to repay the loan.
VI. SUMMARY AND STAFF RECOMMENDATION
It is the role of the Housing Commission to make financial assistance recommendations to the
City Council and Housing and Redevelopment Commission based on several considerations with
respect to affordable housing projects. These are:
The proposal's effectiveness in serving the Agency/City's needs and priorities as
expressed in the Housing Element of the General Plan and the Consolidated Plan.
The proposal's consistency with the Agency/City's affordable housing policies and
ordinances as expressed in the Housing Element and Inclusionary Housing Ordinance.
2578 ROOSEVELT STREET
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0 The proposal's development and operating feasibility, emphasizing the development team
capacity, financing sources and the role of the Agency/City in providing financial
assistance or incentives.
The subject affordable apartment project will b e developed by a capable non-profit developer
that is committed to affordable housing. The financing structure, which will utilize a variety of
federal, City and private funding sources, is sound. The proposed City assistance meets the
City's underwriting goals of a strong borrower and reasonable project costs. The project location
is close to numerous service facilities, retail locations, mass transit and other amenities offered
within the Redevelopment Area. Finally, the project, through the removal of a previously non-
habitable structure and removal of trash and debris, will accomplish several redevelopment
revitalization goals along with the provision of affordable housing.
It is staffs recommendation that the Housing Commission approve the resolution of support
recommending conditional approval of the proposed City financial assistance for pre-
development associated with the subject affordable housing project to be located at 2578
Roosevelt Street.
VII. ATTACHMENTS
1. Housing Commission Resolution No. 2003-003
2. Draft Pre-development Loan Agreement, Promissory Note and Assignment Agreement
3. Vicinity Map
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HOUSING COMMISSION RESOLUTION NO. 2003-003
THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE
DEVELOPMENT LOAN TO WAKELAND HOUSING AND DEVELOPMENT
AGREEMENT AND RELATED DOCUMENTS, AND THAT $244,161 FROM
THE COMMUNITY DEVELOPMENT BLOCK GRANT HOUSING
COSTS FOR THE DEVELOPMENT OF AN AFFORDABLE HOUSING
PROJECT AT 2578 ROOSEVELT STREET
HOUSING AND REDEVELOPMENT COMMISSION OF A $200,000 PRE-
CORPORATION, APPROVAL OF THE PRE-DEVELOPMENT LOAN
RESERVE FUND BE REALLOCATED TO PAY PRE-DEVELOPMENT
WHEREAS, on March 1 1 , 2003, the Carlsbad Redevelopment Agency acquired property
located at 2578 Roosevelt Street for the purposes of developing an affordable housing project;
and
WHEREAS, after acquiring the subject property, the Redevelopment Agency issued a
Request for Qualifications for the purpose of selecting a non-profit affordable housing developer
to develop, own and operate an affordable housing development on the subject site; and
WHEREAS, the Redevelopment Agency seeks to enter into a Pre-Development Loan
Agreement with Wakeland Housing and Development Corporation to fund the pre-development
activities to allow the project to receive necessary entitlement permits; and
WHEREAS, the Housing Commission did, on the 23'd day of July, 2003, hold a public
meeting to consider the Redevelopment Agency Pre-Development Loan Agreement to provide
funding for the pre-development costs related to the development of an affordable housing
project at 2578 Roosevelt Street; and
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HC RESOLUTION NO. 2003-003
PAGE 2
WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring
to be heard, said Commission considered all factors relating to the proposed Pre-Development
Loan Agreement.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of
the City of Carlsbad, California, as follows:
1. The above recitations are true and correct.
2. The Pre-Development Loan Agreement is consistent with the goals and objectives
of the City of Carlsbad’s Housing Element, Consolidated Plan, the Inclusionary
Housing Ordinance, the Carlsbad General Plan and the Village Master Plan.
3. The Pre-Development Loan Agreement will assist the development of
approximately ten to twelve (10-12) affordable housing units which will be
affordable to lower income households. The project, therefore, has the ability to
effectively serve the AgencyICity’s housing needs and priorities as expressed in
the Housing Element, the Consolidated Plan and the Village Master Plan.
4. That based on the information provided within the Housing Commission Staff
Report and testimony presented during the public meeting of the Housing
Commission on July 23, 2003, the Housing Commission hereby ADOPTS
Resolution No. 2003-003, recommending APPROVAL to the Housing and
Redevelopment Commission to provide a $200,000 pre-development loan to
Wakeland Housing and Development Corporation, approval of the Pre-
Development Loan Agreement and related documents and that $244,161 fiom the
Community Development Block Grant Housing Reserve Fund be reallocated to
pay pre-development costs for the development of an affordable housing
development at 2578 Roosevelt Street
Ill
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5. That the Housing Commission recommends that the Redevelopment Agency
Executive Director or his or her designee be authorized by the Housing and
Redevelopment Commission to execute all documents related to provision of the
Agency assistance, including but not limited to a Pre-Development Loan
Agreement, Promissory Note and Assignment Agreement, in substantially the
form presented to the Housing Commission on July 23, 2003, and subject to
review and final approval by the City Attorney.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing
Commission of the City of Carlsbad, California, held on the 23'd day of July, 2003, by the
following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
EDWARD SCARPELLI, CHAIRPERSON
CARLSBAD HOUSING COMMISSION
DEBORAH K. FOUNTAIN
HOUSING AND REDEVELOPMENT DIRECTOR
HC RESOLUTION NO. 2003-003
PAGE 3