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HomeMy WebLinkAbout1998-07-09; Housing Commission; MinutesMinutes of HOUSING COMMISSION Time of Meeting: 6:OO P.M. Date of Meeting: Place of Meeting: JULY 9, 1998 CITY COUNCIL CHAMBERS CALL TO ORDER: Chairperson Wellman called the Regular Meeting to order at 6:lO p.m. PLEDGE OF ALLEGIANCE: Commissioner Calverley led the pledge of allegiance. ROLL CALL: Present: Chairperson Wellman, Commissioners Calverley, Latas, Noble, Rose, and Walker Absent: Commissioners Escobedo and Scarpelli Staff Present: Debbie Fountain, Housing and Redevelopment Director Craig Ruiz, Management Analyst Leilani Hines, Management Analyst Toni Espinoza, Housing Specialist I1 BobbiNunn I HOVJINCI wzw\a~,e~ Jane Mobaldi, City Attorney APPROVAL OF MINUTES: ACTION: Motion by Commissioner Rose and duly seconded, to approve the Minutes of the Regular Meeting of May 14, 1998, as submitted. Calverley, Latas, Noble, Rose, Walker, Wellman VOTE: 6-0-0 AYES: NOES: None ABSTAIN: None COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA: There were no comments from the audience. CONTINUED NEW BUSINESS: 1. CT 98-2 - COLINA ROBLE, LLC. - Application to purchase 4.2 affordable housing credits in the Villa Loma HouS'ing project. Craig Ruiz reviewed the background of the request, which is to develop 28 single-family homes on approximately 33 acres of land. This project is located along the southern border of the City and adjacent to the City of Encinitas. The development of 28 single-family homes will require the development of 4.2 affordable housing units. Because of the constraints of the site, the developers are requesting that rather than provide on-site affordable housing, they are asking if they could instead purchase credits in the Villa Loma Project. Mr. Ruiz explained that whenever somebody wants to purchase credits in the Villa Loma project, there are three items that are reviewed to see if it meets that criteria: 1) feasibility of an on-site proposal, 2) advantages and disadvantages of doing an off-site proposal, and 3) advancement of the City housing goals. HOUSING COMMISSION MINUTES JULY 9,1998 Page 2 Mr. Ruiz went over the tentative map provided in each Commissioner’s staff report. He explained the site has environ- mental constraints on it and that out of the 33 acres, 70 percent is going to be left in open space. The applicant will only be developing roughly 7 acres with 28 single-family homes on approximately 10,000 sq. ft. lots. In regard to advantages and disadvantages, Mr. Ruiz explained that by buying into the Villa Loma project, the City is able to recover the initial outlay. When small projects purchase credits, the City can use that money on other affordable projects and is able to recoup the initial investment. Mr. Ruiz also pointed out that the Villa Loma project has locational advantages because El Camino Real is located closer to services and employment opportunities than the current project. In addressing the City housing goals, Mr. Ruiz pointed out that the money in the Housing Trust Fund is used for a variety of affordable housing projects. Therefore, if this money was to come into the Housing Trust Fund, it could be used for a variety of affordable housing projects that have yet to be determined. It is Staffs opinion that the project is suitable to purchase credits in Villa Loma, and is recommending that the Commission recommend to the City Council that the applicant be allowed to purchase 4.2 credits. Chairperson Wellman asked if there were any questions for Staff. There were no questions. Chairperson Wellman invited the applicant to speak. Mr. Bob Ladwig, Ladwig Design Group, 703 Palomar Airport Road, Carlsbad, CA 92008, addressed the Commission and stated that he agreed with the Staff report and how it was presented by Craig Ruiz, and asked that the Commission consider Staffs recommendation for approval. Mr. Ladwig suggested a change in Condition 1 of the Resolution on the third line, page 2, under General Conditions. Just before the word “purchase”, Mr. Ladwig wished to insert “prior to the issuance of a building permit.” Mr. Ladwig explained that the language would make it consistent with the Housing Agreement. Kathy Van Pelt, the Minutes Clerk, read Condition 1 with the proposed change. Chairperson Wellman opened the item for discussion among the Commission members. There were no questions. Chairperson Wellman opened the item for discussion among the Staff. Mr. Ruiz stated that Staff had seen the letter, and agreed that the change is consistent with the Housing Agreement. Chairperson Wellman asked both Staff and the applicant what the purchase price per unit would be. Mr. Ruiz responded that it is presently $32,220. Chairperson Wellman asked some questions about the per unit fee for Villa Loma. Mr. Ruiz replied that originally the fee was $28,000 and every year it increases. He added that the Finance Department reviews the per unit fee. Chairperson Wellman asked if anyone wished to speak on this matter. There were no questions. ACTION: Motion by Commissioner Noble and duly seconded, that the Housing Commission ADOPT Resolution No. 98-008, recommending that the City Council APPROVE a request by Colina HOUSING COMMISSION MINUTES JULY 9,1998 Page 3 Roble LLC., to purchase 4.2 Affordable Housing Credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the Colina Roble project under the City’s Inclusionary Housing Ordinance, with the change read back by the Minutes Clerk. Calverley, Latas, Noble, Rose, Walker, Wellman VOTE: 6-0-0 AYES: NOES: None ABSTAIN: None 2. CT 97-24/SDP 98-05 - MAY SUBDIVISION - Request for recommendation of approval to the Planning Commission of two attached second dwelling units in order to satisfy the requirements of the Inclusionary Housing Ordinance for the creation of fourteen single family lots on the southeast corner of the intersection of Park Drive and Monroe Street. Craig Ruiz reviewed the background of the request and stated that this request is to build 14 single-family homes on about 4.67 acres. The subdivider’s housing obligation for affordable housing would be just under 2.5 units. The developer is proposing to build two second-dwelling units, and then for the remainder they would pay a prorated share of affordable housing credit. This project is located at the corner of Park Drive and Monroe Street, in the northwest quadrant of the city. The two second-dwelling units are located on lots 7 and 8, detached from the main unit and will therefore have their own private entry. Each of these units are going to be approximately 600 sq. ft. in size and will be one bedroom units, consistent with the Housing Commission’s second dwelling unit guidelines. These units have their own private entrance, with living room, bedroom, bathroom, and hall closet. Mr. Ruiz explained that the rent levels, as with all projects similar to this one, if rented, would be restricted to 80 percent of the area median. Mr. Ruiz added that an Affordable Housing Agreement would restrict this project to be affordable for 55 years, if it were rented. Mr. Ruiz commented that Staff feels this does meet the required criteria and that it meets and advances the City Housing Element goals. Chairperson Wellman opened the item for discussion among the Commission members. Commissioner Calverley stated that several times Mr. Ruiz stated “if these are rented” and asked if there was a requirement or could this become a studio, workshop, etc. Mr. Ruiz responded that as with all second dwelling units, the Ordinance does not require that the units be rented--they could remain vacant or family members could live in them for free. If they are rented, they are subject to that rent requirement. Mr. Latas commented that there is no mention in the Project Background (page 1) of the Staff report of how the applicant plans to satisfy the remaining .47 unit. The Project Background states only that the subdivider proposes to provide two second dwelling units. Mr. Ruiz responded that he will have to go back and check the Agreement, and if it is not in the Agreement, it will be added. Chairperson Wellman stated that it is her understanding with second dwelling units that the Ordinance is going to be changed or tightened up, and asked when this was going to take place. HOUSING COMMISSION MINUTES JULY 9,1998 Page 4 Ms. Fountain responded that there is Housing Element reform (a pilot project in San Diego County) that has been approved that allows cities to self-certify. She said the September meeting would include a presentation on self- certification and the Housing Element. Ms. Fountain explained that one of the issues that came up as part of that, was specifically second-dwelling units and whether or not they should count for affordable housing purposes. Apparently they could count for affordable housing purposes as long as you income-qualify the tenants if the second dwelling unit is rented. This currently is not a require- ment; however, with those conditions, second dwelling units would be eligible to count as affordable housing. Ms. Fountain stated that what the Commission needs to look at as a City, is in terms of managing that type of program and monitoring it, if the Commission wants to continue allowing developers to meet their inclusionary housing require- ment under those conditions. It is consistent with what the Housing Commission has been concerned about for a couple of years now on the second dwelling units, but it does become an issue of how to manage and monitor that. At the present time, there are approximately 153 second dwelling units that have either been constructed, approved, or proposed to be constructed, and to manage that with each individual homeowner is quite burdensome. Chairperson Wellman asked if there is a time frame for when this issue is going before the City Council for some kind of resolution. Ms. Fountain explained that the City has already agreed that they are going to try to participate in self-certification. The issue is whether or not they will be able to meet the goals to be able to self-certify or not, and they will be working on that further to determine whether or not they will indeed be able to self-certify or not. If not, the Housing Element will go through the state as it has in the past, and it is quite likely that the State will take on the same kind of features that the self-certification document has taken on for second dwelling units. Ms. Fountain stated that at this time Staff is proceeding as they have in the past until some determination is made as to whether or not they will continue to count them as inclusionary housing. That decision has not been made and there is no time frame. she said. Chairperson Wellman suggested passing a resolution stating that secondary dwelling units would not be counted toward a developer’s affordable housing requirement because of the perceived cumbersomeness of the City monitoring the secondary dwelling units. Ms. Fountain explained that the way the Ordinance is written, second dwelling units are considered an optional way of meeting the inclusionary housing requirements that have to be approved by the Planning Commission or City Council as a way of meeting the Inclusionary Housing Ordinance. If small developers are not allowed to meet the Inclusionary Housing Ordinance with second dwelling units and they are not in a quadrant where they can participate in a project such as Villa Loma, they really have no way of meeting their inclusionary housing requirement. Chairperson Wellman asked if Staff had the survey available that she requested last month as to the secondary dwelling units that are up and built, and how many are actually rented. Ms. Fountain stated that Staff does not have that information available yet; however, they are working on gathering the information. She said that the only way to get the information is to send out surveys to the homeowners where those units are built, and that has not yet been accomplished. She added that Staff will be working on documenting how many are actually occupied at this point in time. Ms. Fountain also explained that there are few options at the present time for these smaller developers, other than second dwelling units, but that the Commission could make other recommendations at this time. HOUSING COMMISSION MINUTES JULY 9,1998 Page 5 Ms. Calverley wished to clarify that because of the location of this project and the quadrant that it is in, it does not qualify for buying credits in Villa Loma. Mr. Ruiz responded that this is true only in the southern half of the City. Ms. Calverley mentioned that this is such a perfect project for purchasing credits, and asked if they developer expressed interest in purchasing credits. Mr. Ruiz explained that the Ordinance does not allow that; therefore, it is not an option. Ms. Calverley asked if the developer would have the option of just buying future units, and asked what the developers’ options were. Mr. Ruiz stated that they could build second units or restrict the purchase price of their market units. Ms. Fountain reiterated that there really are no options at this time unless a developer has a combined project in their quadrant. At this time, only the developments that have units in the southeast or southwest quadrants can participate in the Villa Loma project. Unless there is a combined project built in the northeast or northwest quadrant that has excess units, there are not a lot of options. There was some discussion about the Kelly Ranch project: Chairperson Wellman asked if the Kelly Ranch affordable housing project would be a project that units could be bought into if they were proposing extra units. Mr. Ruiz explained that it is in the same quadrant; however, that is not what they are proposing. Chairperson Wellman stated that if things change, there might be units, or if they were aware of that, that might be another consideration to help people out in that quadrant. Ms. Fountain stated that the City actually has to approve the project as a combined project, and was not sure the City would approve a combined project in the Kelly Ranch development, but it is a possibility. Commissioner Walker asked how they are going to be buying the .47 credit. Mr. Ruiz explained that there are two things in the fee ordinance: the credits, which were the $32,000; and an in-lieu fee. Commissioner Calverley asked if the in-lieu fee is an option. Mr. Ruiz explained that the in-lieu fee is only available for projects that are six units or less; or in the situation where you have a fractional equivalent. They could do either three second dwelling units, or two and pay the in lieu fee. Chairperson Wellman invited the applicant to speak. Mr. Jim Laret, Laret Engineering Company, 5708 Calzada Del Bosque, Rancho Santa Fe, CA 92067, addressed the Commission and stated he was present on behalf of Jim and Trish May to seek approval of this request for a Site Development Plan. It was his understanding that the only option available was to apply for these two dwelling units and then pay the prorated share of the fee requested by the City. He stated that they have a scheduled tentative map hearing before the Planning Commission next week; therefore, they would be interested in trying to seek approval for this Site Development Plan. Chairperson Wellman stated there is no mention in the Resolution of how the .47 will be satisfied. Mr. Ruiz responded that the Commission could recommend that the condition be added to the Resolution subject to the satisfaction of the City Attorney and can write it in at a later date. HOUSING COMMISSION MINUTES JULY 9,1998 Page 6 Chairperson Wellman recommended changing the Resolution, to a recommendation that the .47 fractional unit be satisfied by a payment of an in lieu fee to the City of Carlsbad, subject to the review and approval by the City Attorney. ACTION: Motion by Commissioner Noble, and duly seconded, that the Housing Commission ADOPT Resolution No. 98-009, recommending APPROVAL to the Planning Commission of two attached second dwelling units in order to satisfy the requirements of the Inclusionary Housing Ordinance for the creation of fourteen single family lots for future development on the southeast corner of the intersection of Park Drive and Monroe Street with the addition to the conditions of the in lieu fee for .47 unit. Calverley, Latas, Noble, Rose, Walker, Wellman VOTE: 6-0-0 AYES: NOES: None ABSTAIN: None NEW BUSINESS: 3. SDP 98-4 - KELLY RANCH AFFORDABLE HOUSING PROJECT - Request for recommendation of approval to the City Council of an Affordable Housing Agreement for the development of 132 affordable apartment units necessary to satisfy the inclusionary housing requirement for the Kelly Ranch development. Craig Ruiz reviewed the background of the request and stated that the Commission is being asked to review the Kelly Ranch Project, which will include an affordable apartment component and the Commission is being asked to act on the Affordable Housing Agreement. This project is going to be located off the future extension of Cannon Road to the west Mr. Ruiz showed a slide presentation of the Kelly Ranch project and said Kelly Ranch may ultimately include 877 units, which is the maximum number of units that could be developed. Of that 877, there will be 382 single-family homes, and there will be 495 multi-family homes. Of those 495 homes, there will be a combined project with some affordable units and some market-rate units. Of the 495 units, 132 will be affordable. Mr. Ruiz explained that the Kelly Ranch project is divided into 12 planning areas. Seven of those will be affected by the Affordable Housing Agreement (Villages A, D, E, G, H, I, and J). There will be five areas that will not be developed at this time which include some open space and some potential commercial property. Mr. Ruiz said this will be a combined project because it will be satisfying the housing requirements for the various villages that are subject to the Housing Agreement. Of the 495 units, 132 will be one, two, and three-bedroom affordable units. Mr. Ruiz explained that Staff is considering a four-phase release of the project. With previous projects, typically there is the approval of the Housing Agreement and the Site Development Plan and a certain number of market-rate units are allowed to go forward. They start construction of the affordable project and then another block of units can be built. Then once that affordable project is completed, the final third phase is completed. Mr. Ruiz stated that the developer and Staff have been negotiating for several months trying to reach a deal. He commented that the developer would be asking for changes to Staffs recommendation. Mr. Ruiz explained that the way in which this project differs from the norm, is the approval of this Affordable Housing Agreement will allow 144 market-rate units to go forward. After that, the applicant will get approval of the Site Development Plan, which will come back to the Commission at a later date. With the approval of the Site Development Plan, they will have to go out and grade the site for the apartment project. Then they will have to provide notice on the site by posting signs, that will be subject to the review of the City, identifying a future apartment complex in these three planning areas. Once all that has been accomplished, 28 percent of the units, or roughly 242 units can then go forward. HOUSING COMMISSION MINUTES JULY 9,1998 Page 7 Mr. Ruiz compared this project to Rancho Carrillo. He explained that once the applicant completes the foundations and the City has gone out and reviewed and completed the final inspection of those foundations, another 40 percent of the units could be released, which would be a total of 346 units. Finally, once the affordable units are completed, the remaining 16 percent of the building permits would be released, which is 145 units. Mr. Ruiz stated that it is Staff recommendation that this body recommend approval of the Affordable Housing Agreement to the City Council. Chairperson Wellman asked if there were any questions of Mr. Ruiz. Chairperson Wellman asked about the mix of one, two, and three-bedroom affordable units. Mr. Ruiz explained that the number of one and two-bedroom units is not known at this time. It is known that the inclusionary housing requirement requires that 10 percent of all the affordable units be three bedrooms; therefore, there will be 14 three-bedroom units. Ms. Fountain added that the applicant has a projected schedule that will give some information on the total number of bedrooms. Chairperson Wellman requested that Staff update the Commission as to the need of the mix of affordable units in the City, and asked for information regarding the incomes of the people at the 80 percent of median. Mr. Ruiz responded that 80 percent median is based on the family size; therefore, differing requirements. Typically, a family of four, 80 percent median income is $40,650. This information is provided by HUDD, the Housing Urban Development Department every year. By the time this project is built and completed, those numbers will change. These changes take place roughly every January. Chairperson Wellman asked what the rents translate out at. Bobbi Nunn responded that at 80 percent median for a two-bedroom, rent would be roughly $1,000. At 70 percent median, a two-bedroom would be approximately $850, and a three-bedroom would be approximately $960. Mr. Ruiz presented a tablekhart that Staff created from the Consolidated Plan showing the breakdown of low income categories which include 0-30 percent, 31-50 percent, and 51-80 percent. He said the need is at the top-half of the chart and that this project would fall under that third category of 5 1-80 percent. He added there is a need for approximately 1,000 one, two, and three bedrooms units and that this project would be providing 132 units, which is roughly 30 percent of that need. Ms. Fountain added that this chart already includes the Kelly Ranch project. There will be 51 one-bedroom units which is 39 percent, 67 two-bedroom units is 50 percent, and 14 three-bedroom units which is 11 percent of the project. Chairperson Wellman asked if there were any questions of Staff. Commissioner Latas asked if the City has plans to meet the needs of the very low-income people. Mr. Ruiz stated that at the present, the City has not met that need. Commissioner Noble asked if this project is affordable for Section 8 people. HOUSING COMMISSION MINUTES JULY 9,1998 Page 8 Mr. Ruiz responded negatively, and said that Section 8 rent would be roughly 50 to 60 percent depending on the actual unit size. Ms. Fountain responded that Section 8 helps the very low-income households. At the present, the minimum requirement per the Ordinance is at the 80 percent level. There have been a number of projects that have come through at the 50 and 60 percent, which is helpful to the Section 8 program, because it makes the rents in line with what the City can support through the Section 8 program. As long as it remains at 80 percent, it is not a program that can help the Section 8 clients, she said. Chairperson Wellman mentioned that the Commission received a brochure from Security Capital Pacific Trust, one of the co-applicants, and commented that the Commission cannot address this because they have not had time to review it. Chairperson Wellman invited the applicant to speak. Mr. Larry Clemens, Kelly Land Company, 201 1 Palomar Airport Road, Suite 206, Carlsbad, CA 92008, addressed the Commission and stated that this is a complicated project because it is different. The difference is one that Mr. Clemens feels the Commissioners should take note of. This project is unlike the Villa Loma Project, which was a completely different concept where they aggregated all of the 344 units in one project, all being at various levels of affordability, without market rate units. This was the first affordable project under the new Ordinance that the City provided. Mr. Clemens mentioned that he has heard a lot of reference to the Carrillo Ranch project, which is probably one of the more recent larger projects that the Commission has heard. The Kelly Ranch project is different in that Carrillo Ranch had a set-aside piece of land where all of the units inside that particular village inside the Master Plan were exclusively 100 percent affordable. The Kelly Ranch project is an integrated, completely blended project. All of the amenities, appearance of the affordable units, in every fashion except for the lease itself, are the same as the market rate units that are blended with it. Mr. Clemens explained the operational aspect of the project. He said the most difficult portion of trying to work out a phasing of the project was that they cannot just say that the first 132 units will be 100 percent exclusively affordable, because that flies in the face of what they are trying to accomplish, which is trying to integrate it into the overall project. Therefore, if leases were set up for the first 132 and separated those as affordable, they would not be integrated. Mr. Clemens explained that they have presented, through Staffs cooperation, a chart that shows how that will happen in a phasing plan to help clarify it. Ms. Fountain handed out copies of the chart. Mr. Clemens mentioned that another aspect of affordability that needs to be looked at, is where these are located in the City. Does it make sense for affordability to be provided? Does it serve the purpose? Mr. Clemens pointed out the importance of it to be close to transportation and employment. Kelly Ranch will be near Leg0 Land, and to the south, Carlsbad Research Park, which employs a lot of workers that are with Callaway and other golf manufacturers, and a host of other employers. Cannon Road, which Kelly Ranch will be a huge participant in building one-third of all of that road- way, will be a travel way, which will be in time, one of North County Transit’s bus routes. Mr. Clemens feels Kelly Ranch is locating in a place where there is truly a need for affordability for the people who want to be employed in the area. Mr. Clemens pointed out the importance of having employment opportunities located near affordable housing. Mr. Clemens mentioned those present at the meeting, representing Kelly Ranch, to include Mr. John Luedtke, representing Security Capital Trust, who will be building the project and ultimately managing the project as well. Mr. Clemens explained that they are very well advised on this project and they not only have the strength financially, but the know-how and capability to do projects that are integrated. Mr. Clemens explained that there is a huge difference between someone who just builds an apartment project and someone who knows how to build an integrated project where you have affordable, not only from an accounting aspect, but the management of and making sure it runs smoothly and truly is invisible between market and affordability and maintained with that sense for the tenants. HOUSING COMMISSION MINUTES JULY 9,1998 Page 9 Also available in the audience is the drafter of the agreement, Mr. Christopher Neils, Attorney with Sheppard, Mullin, Richter, and Hampton. Lastly, Mr. Clemens introduced Mr. Russ Hailey with Shea Development Company, a single- family builder, who is constructing on Village E, which is one of the very first releases. Shea is contracted with Kelly Ranch to purchase the site, and has received an approval on their tentative map from City Council and are waiting for a record map. The last condition of that record map is that they have a signed Affordable Housing Agreement. Chairperson Wellman asked Ms. Fountain to review the difference between the developer’s chart and the one Staff prepared. Ms. Fountain addressed the Commission in regard to the chart that was received from the developer, stating that she does not necessarily agree that it is necessary to change the chart that is in the Agreement, but that the developer felt strongly that there were some words that were causing them concern. Ms. Fountain explained that the first 144 market- rate building permits that are going to be issued are related to Planning Area E. Those will be released once the Council approves the Affordable Housing Agreement and the developer has provided the security for the 22 units that are required because of Planning Area E being constructed. Those are basically going on their own and are moving forward. The next step they would have to take to get anymore market-rate building permits would be to get the Site Development Plan approved by the Council. After approval, areas D, G, and H will be graded and then the signs posted. At that time, they can get additional market-rate building permits released. First they can get I10 market-rate building permits. They can also get 132 building permits to start their apartment project, which is the mixed income multi-family apartment project. Ms. Fountain stated that because the affordable housing is combined within the apartment project, Staff wanted to make sure they distinguished that the number 132 which corresponds to the affordable units, and that is why Staff was willing to give them 132 additional permits to start the apartment project. Therefore, they will get the 110 any way they want to use them; i.e., single-family or multi-family, plus at least 132 have to be used to start the apartment project, because they could, if they wanted to, use 110 for single-family homes. It wouldn’t require them to start the multi-family apartment project. Ms. Fountain explained that Staff had to pick a number, saying that if they wanted them to start the apartment project, what number of building permits Staff was willing to release at that point; therefore, Staff made it comparable to the 132 affordable units. Distinguishing between the market rate and affordable, Staff added that they would have to start the apartment project, and then issue a building permit for the clubhouse. At that point, the first 132 units would not have to be affordable. They would have to start the apartment project and then 132 units, which correspond to the affordable requirement to get the apartment project started, would be given. At that point, there would be no units, Staff would be just issuing building permits. At the next stage, all of the building permits would be issued and foundations completed, inspected, and approved for 132 apartment units. Ms. Fountain reiterated that they are not saying “affordable apartment units.” They are saying they have to have foundations complete for 132 apartment units before Staff will release another 346 market-rate building permits. At that point, they could take those 346 market-rate permits and build the rest of their multi-family apartment project. Once they have shown that they have final C of 0 and they have rent-restricted at least 132 units within that apartment project, the City will release the final amount, which is the 145 market-rate building permits. The reason for this, is the City needs to have some leverage that they hold until they physically get affordable units and they have them rent-restricted. What could happen, if for some reason there was a problem with the project and all they got constructed were 132 apartment units, Staff would expect that 132 apartment units be rent-restricted and meet their affordable housing requirement. If they build all 495 apartment units, mix through them 132 units, and have rent-restrictions on them, then the City will release the remaining 145. HOUSING COMMISSION MINUTES JULY 9,1998 Page 10 Ms. Fountain explained that it has always been intended that those units would be disbursed throughout the project, but in trying to protect the City’s positions, Staff built into this that if for some reason the City does not get all of those apartment units, they would have to rent-restrict more of those up front to fulfill their 15 percent. If they were to come to Staff and say they have developed 132 apartment units complete, and that is all they have complete, and want to build the remaining 145 single-family homes, Staff would say fine, go ahead and rent-restrict all the 132 units and would give the 145 permits for single-family homes. When they have the rent-restrictions and C of Os for the rest of the units, and come in and start moving the units around, Staff would accept that. This would have to be in conjunction with the City keeping the 145 market-rate building permits until they have assurance that the 132 units are provided. Ms. Fountain explained that the developer is concerned about the language in Exhibit B that Staff has provided in the Comment section, which states that the first 132 rental units must be designated for affordable housing purposes. They are concerned because it says that the first 132 rental units that they produce have to be the affordable units. That is the case if they do not produce any additional apartments, but if they produce additional apartments and give the rent restric- tions on 132 units, they can get the 145 market-rate building permits released. The builder’s intent is to build the whole project at once and give the 132 units before the 145 are released, but that language concerns them that the City would actually hold them to that. Ms. Fountain said she would be willing to support some change in language in the Comment section that specifies if only 132 apartment units are constructed and then they want release of the 145, Staff would expect that all of those 132 would be rent-restricted. If they built all of the apartment projects and dispersed the 132 units throughout that, then they came and requested release of the 145, they would get that. Ms. Fountain pointed out on the chart (Exhibit B) that the developer would like to remove the word “affordable” so that it would just say “132 building permits within mixed income MP project.” They also want to add that “at least 27 percent of the multi-family project must be affordable units.” Ms. Fountain explained that from her standpoint this does not need to be added because it is somewhat irrelevant when there are no units to rent-restrict to say that 27 percent of those building permits will be affordable; however, she did tell the developers that they could submit their request to the Housing Commission. Chairperson Wellman replied that it sounds like the developer is trying to clean up the Agreement Ms. Fountain reiterated that the City will not release the 145 market rate units until they have the 132 units, and that the proposed change is to assure that 27 percent of the multi-family would be affordable. Ms. Fountain pointed out another change in the second column, third row, where Staff states “346 market-rate building permits.” The developer would like to change the wording to “within the mixed income multi-family project”, and “at least 27 percent of the multi-family project must be affordable units.” Chairperson Wellman asked that with the applicant’s proposed revisions, would low-income tenants at 80 percent median income be in those units sooner than under the City’s proposal. Ms. Fountain replied potentially, and said the developer’s schedule is that they are going to have a percentage of afford- able units within each building that they are producing. If the Housing Commission wants that language to be changed to assure the developer, that is okay, but from the Staffs perspective it is not necessary. Ms. Fountain discussed the language in the final Comment section, fourth row, of Exhibit B. She said the developer would like to delete the word “first” from the first sentence; so the sentence would read “The 132 rental units must be designated for affordable housing purposes.” Ms. Fountain added the reason for the Comment section is to provide some helpful understanding by what Staff meant by the phasing plan. The real trigger points are the first column under Action HOUSING COMMISSION MINUTES JULY 9,1998 Page 11 Required in Phasing, which is basically what they would be obligated to do to get release of the market-rate permits. If the Comment section is causing the developer concern, Staff would be willing to support some changes. Chairperson Wellman recommended the wording be changed to “those need not be the first 132 units, provided, however, in the event 132 units are only constructed, then they would all be dedicated to rental.” Chairperson Wellman asked if there were any questions. There were none. Chairperson Wellman invited the applicant to speak. Christopher Neils, Attorney, for Kelly Land Company, Sheppard, Mullin Richter & Hampton LLP, 501 West Broadway, San Diego, CA 92101-3598, addressed the Commission and stated that they agree with the basic intent articulated by Ms. Fountain. Mr. Neils explained that the starting point of the concern was the word “affordable” in the second box of the second row, and that together with the comment the way it was worded in the last box of the bottom right, could be read by some to say it was the first 132 that have to be restricted. That would get in the way of the invisible blending concept, he said. The only point of changing the comment was to make it clear that it does not have to be the first 132, but it clearly does have to be 132. The business about the 27 percent was that it might add comfort to the City. The basic language in the narrative portion of the Agreement talks about proportional production of the affordable units in rough proportion to the way in which the overall units in the multi-family project are produced. If the final number turns out to be 495, and obviously the City Council has not said that is okay yet, and if the final number is 877 for the overall Kelly Ranch Project, then 15 percent of 877 is 132; and 132 divided by 495 is 27 percent; that is the proportional production concept. Every time you build a block of the combined project, 27 percent should be these affordable units, so that you keep pace with what is required in the concept of proportional production. Mr. Neil said Ms. Fountain said she was in agreement with these changes. Chairperson Wellman replied that the change in wording more accurately reflects what the parties are going to do. Chairperson Wellman asked if this change would cause low-income people to move in faster because 27 percent right up front are dedicated. Mr. Neils responded that he did not know that, and that marketing assumptions would have to be made, and perhaps this could be addressed by Mr. Luedtke. However, the idea is that a percentage of units will be set aside out of each batch that are produced, he said. He added that this is merely consistent with the narrative language in the Agreement, which states they are supposed to be built in this proportion anyway. It clarifies what is going to happen, and does not really represent a change to be faster or slower. Chairperson Wellman stated overall the 15 percent would be fulfilled before the final 145 units would be built. Mr. Neils replied affirmatively. Chairperson Wellman asked about the odds of apartments being allowed and approved in the City. Mr. Clemens responded that there is a great need of providing balanced housing in Carlsbad, which has been known for a long time, and there has been a great drought of apartment housing in Carlsbad. Particularly, with the State requirements, the Housing Plan is now up for review once again; therefore, that is something the City will want to concentrate on. Mr. Clemens stated that today’s apartments are like condominiums--the provisions are the same and they look and feel like for-sale housing. In any case, there is this tendency of people trying to negate apartments; so to help alleviate that, signs reading “Future Home of Apartments” that are very visible from various aspects of the property will be posted, so HOUSING COMMISSION MINUTES JULY 9,1998 Page 12 that there are no questions about what is going to happen on that property. Mr. Clemens stated that the best they can do is try to continue to be advocates of balanced housing in Carlsbad, and as negative comments come up, remind others that these are needed types of housing. Chairperson Wellman stated that in the unlikely event that there was a major change and the proposed apartments did not go through, then they are not giving up the 15 percent requirement, or whatever would eventually be built there, and a whole new proposal would have to come before us. This is conceptual this way, but if there were changes or other changes with market or something, then it would all come back and be reviewed at that time. Mr. Clemens responded that because they are asking to release Village E ahead, Staff has asked for a security so that if something happened and the affordable could not be provided, there are lots of things that would happen if the agreement is approved as written. First, no further permits in all of Kelly Ranch could be issued. Second, the builders would have to produce some type of security to the 22 units that attach themselves to Village E. The security that Staff is recommending is that we would deed restrict Villages D, G, and H, which really would house 495 units in order to secure construction of 22 units, and that builders would have to give a letter of credit for $10,000 per unit or $220,000. Therefore, if you look at how secure this is, first, the developer could not build anything else in Kelly Ranch, which is a huge incentive when carrying the cost of all of this land. Next, you have deed restricted D, G, and H, which can produce at least 495 units, when you are only trying to build 22, and they have to put up cash or a letter of credit for $220,000. The builders believe this is overkill. Chairperson Wellman asked if the builders are proposing a change. Mr. Clemens is suggesting that the cash deposit of $10,000 per unit is okay; but they do not see the purpose in deed restricting three villages for 22 units. The only thing Staff is trying to safeguard, is that if the developer fails that the City will have land to build 22 units on. Therefore, Mr. Clemens is proposing that they provide Village D, onto which 50 units could be built. Chairperson Wellman asked for the approximate acreage on Village D. Mr. Luedtke replied 1.5 acres. Commissioner Calverley asked how many units are presently on that parcel. Mr. Clemens responded 40 units--well over 22--which is the secure requirement. Mr. Clemens added that the restriction only lasts until the Site Development Plan is approved. Mr. Noble asked Mr. Clemens to explain why restricting of D, G, and H is a problem. Mr. Clemens responded that it complicates the process for the remainder of the construction loan, as opposed to having a clean title. Commissioner Noble asked why deed restricting would create problems with builders and loans. Mr. Clemens responded that this is a well-financed project, but they will have difficulty because the deed restriction flows across the entire site. Mr. Clemens added that the City is asking for too much security for 22 affordable units. He said it would be as effective to put up cash or a letter of credit for $220,000 and deed restrict Area D; and no other permits be issued unless the developer built out the equivalent of 15 percent of all the units. HOUSING COMMISSION MINUTES JULY 9,1998 Page 13 Ms. Fountain clarified that the issue is with security, and that it is specifically related to Planning Area E. Because they are letting Planning Area E go without an approved Site Development Plan, it is different than what Staff would normally allow to happen; therefore, the City needs some additional security. Once they have an approved Site Development Plan to meet the obligation for the Kelly Ranch project, then that security is released. Mr. Noble responded that is assuming that the Planning Commission and City Council approve that. Ms. Fountain responded that the Site Development Plan has to ultimately be approved by the Council. If it is not approved, then the developer has to go back to the drawing board and try to get something else to meet their affordable housing requirement. If for some reason the City does not get a Site Development Plan approved within a reasonable amount of time, then the City would have some security to produce those 22 units. Commissioner Calverley asked for clarification on the restrictions. Mr. Clemens responded that it actually is a deeding. In the ultimate security, the City gets the property. The point that should also be considered is that if this project dissolved, this would be a windfall profit for the City. He does not think it fair that the City would get the value of all that property, when the requirement was for 22 units. The City would actually receive the deeds to all of the property, and this does not seem equitable to secure 22 units., he said. Chairperson Wellman responded that her perception is that since this is a Master Plan Community, and since there is not a site plan tonight to approve, that the proposal as it stands now, would really encourage the applicant to get that site development ready, because as soon as that was done, then all of this problem goes away. Chairperson Wellman asked if there were any questions of the applicant. There were no questions. Chairperson Wellman opened the public testimony and issued the invitation to speak. Susan Gose, 2270 Avenida Magnifica, Apt. D, Carlsbad, CA 92008, addressed the Commission and explained that she lives in Camino Point Village, which is managed by the Security Capital Pacific Trust. Ms. Gose explained that she is a Section 8 recipient in Carlsbad and has some concerns with the rents and things that fit in with this project. Ms. Gose is a native of Carlsbad, she works in Carlsbad, and her family lives and works in Carlsbad. She became a single mother by divorce 8.5 years ago and her two sons are growing up in Carlsbad. It is a strong desire of hers to be able to continue to live in Carlsbad, her hometown, and have her family nearby. She has found in the last two years that available housing is impossible to find, much less affordable. When considering job opportunities, many of the jobs are not equal to the rents that are being asked for. She wondered how the future minimum wage Leg0 employees would pay their rent. Ms. Gose asked why landlords are not asked to require to accept Section 8 recipients. She explained that she faces a lot of unknowns and being on Section 8 with changes and rents going up, she faces notices such as the one she provided for the Commission. These notices were a little frightening, she said, stating that if they did not move in 30 days, that eviction processes would be started, and then backed up with a second option, that if they wanted to stay the rent is raised $100. She added that she was asked to move two years ago because of raised rent and ended up at Camino Point because they took Section HUDD. Ms. Gose is asking that the Commission consider the Kelly Ranch Project have a certain amount of these units be allotted for Section 8 tenants, as well as any other new projects going in. Ms. Gose added she is on a program to work herself off Section 8 within five years. Her hope is that all income ranges can live and thrive in Carlsbad. Ms. Gose’s experience with Section 8 participants is that they are hard working and want to get ahead. She thanked the Commission for their consideration. Chairperson Wellman asked if there were any questions. There were none. HOUSING COMMISSION MINUTES JULY 9,1998 Page 14 Chairperson Wellman invited Mr. John Luedtke to speak. John Luedtke, Security Capital Pacific Trust, 7670 South Chester Street, Englewood, CO 801 12, addressed the Commission and asked to address Ms. Gose’s comments. Although not intimately familiar with the details of the par- ticular situation, he pointed out Camino Point was never intended to accommodate Section 8 tenants. There are no rental restrictions placed on that project; no Affordable Housing Agreement; no Regulatory Agreement, he said. He went on to explain that when you underwrite a project, you have certain economic expectations and they need to be achieved, and unless there is some type restriction on the project going in, you would not factor rental concessions into the transaction. In this particular case, they were not. Chairperson Wellman asked if the letter Ms. Gose provided came from Mr. Luedtke’s management company. Mr. Luedtke responded yes, and said the letters were only served to the Section 8 tenants. The Section 8 rental rates for those 11 tenants are approximately $150-$175 below the other tenants. The idea was to increase the rate to a comparable rent level, he said. Mr. Luedtke went on to explain that he is the Project Manager responsible for the Kelly Ranch development. He discussed Security Capital, its successes and assets, and explained that their goal is to acquire or develop high-end projects in premiere locations throughout the country. Carlsbad is a market that they are extremely interested in. He said they own three projects now, approximately 600 units total in Carlsbad. They would like to increase that by developing the Kelly Ranch Apartment Project consistent with the City of Carlsbad standards. Mr. Luedtke gave a description of both the exterior and interior of the three-story, stucco buildings ranging in size from 580 to 300 square feet. The one, two, and three-bedroom units will be equipped with high-end appliance packages. There will be two resort-style pools with spas, volleyball court, and a large clubhouse with a business center, and a fully equipped exercise room. He pointed out that there would be no distinction between the affordable units and the market rate units. Mr. Luedtke wished to conclude by saying that this is a market they are really excited about, and are planning on doing a quality project, that when complete all will be very proud of. Mr. Luedtke said that he circulated a chart/map that shows how they are planning to construct the project. The chart includes a schedule to the side that shows how many units are in each building, and how many one, two, and three- bedroom units are within each building, as well as how many units are proposed to be affordable within each building. Chairperson Wellman asked if there were any questions of the applicant. Chairperson Wellman requested language be included that states that every detail about the affordable units will be identical to the market-rate units. Chairperson Wellman asked how renting of the affordable units will be regulated. Mr. Luedtke replied that there would be a Regulatory Agreement that will deed-restrict the property. If the applicant does not meet those responsibilities, there will be certain repercussions. Chairperson Wellman asked about the unit mix in regard to the square footage of the patio areas and storage and asked about the location of the washers and dryers. She also asked if there would be enclosed garages. Mr. Luedtke replied that each unit would have a patio or balcony. He stated that washers and dryers will be located inside some units, and in enclosed closet areas located on the patios in other units. It is understood that there would be enclosed garages, carports, and open parking. HOUSING COMMISSION MINUTES JULY 9,1998 Page 15 Ms. Fountain commented that this is still a work in progress; and the Site Development Plan will be before the Housing Commission at a later date. Chairperson Wellman asked if there were any other applicants wishing to speak or make any presentations at this time. Mr. Clemens addressed the Commission and thanked them for their indulgence. He once again wanted to make sure that it is understood that Village E was released ahead, for a variety of reasons, but as it currently reads, Staff must support the SDP (Site Development Plan). He added that he does not want another condition added, which would cause the project to not move forward until such time as staff approves a SDP. That is way down the road and that was not the intent of Staff, he said. Chairperson Wellman invited Staff to comment. Ms. Fountain agreed the Resolution would not be before the Commission tonight if Staff did not support the plan. There are still some issues that need to be worked through, but at this point Staff has a plan before the Commission that they believe is supportable, she said. Chairperson Wellman opened the public testimony and issued the invitation to speak. Shayna Gordon, 2250 Avenida Magnifica, Apt Q, Carlsbad, CA 92008, addressed the Commission and stated that she is going to be resuming employment as an administrative assistant for an engineering firm in Del Mar. Ms. Gordon sat on the Mental Health Advisory Board for a few years and worked for law firms for 10 years in mental health. Ms. Gordon shared her concern in regard to the eviction notice Ms. Gose presented and her overall concern regarding the stress of being in a low-income situation. She offered her services as a medical health advocate to find out where funds become available to help low income people trying to get on their feet. Chairperson Wellman suggested Ms. Gordon speak with Bobbi Nunn to discuss Section 8 issues. Ms. Fountain read a letter from Ms. Tiffany Whisengunt, 2290 Avenida Magnifica #C, Carlsbad, CA 92008. Copies of this letter will be attached to the minutes of this meeting. Chairperson Wellman opened discussion regarding proposed modifications to the Resolution. Mr. Neils commented that the Resolution addresses an agreement. He suggested substituting the original Exhibit B that is referenced in the Resolution with the applicant’s Exhibit B, which clarifies the intent. He also recommended striking the reference to Villages G and H in Exhibit 2, Page 3, Section 2 and just have the security concept and the agreement to deed restrict the property apply to Village D. Commissioner Calverley made a comment that the security issue is overkill; however, she said she does not want the City to end up with a piece of property that has no Cannon Road, no access, no padding, and is a piece of raw dirt out in the middle of nowhere. Commissioner Calverley said she would like to see a buildable site and not a piece of raw, unacceptable land. She added that if she were the lender on the project, she would have a problem with this security issue as well. Ms. Fountain recommended that the Resolution be changed as opposed to the changing the Agreement giving the City Council final authority. Chairperson Wellman opened discussion among the Commission members. HOUSING COMMISSION MINUTES JULY 9,1998 Page 16 Commissioner Noble suggested a condition in the rental terms to include a certain percentage of affordable units for the Section 8 Rental Assistance Program. Commissioner Latas stated that he will accept the Resolution the way it is, and no changes are necessary. Chairperson Wellman commented that the applicant’s Exhibit B more accurately and more clearly defines both the intent of Staff and that of the applicant and encouraged the Commission to adopt the Resolution with the applicant’s version of Exhibit B. Chairperson Wellman requested a finding in the Resolution that all of the housing be the same for the affordable and market rate units and said the applicant does not object to this. ACTION: VOTE: AYES: NOES: AB STAIN: ACTION: VOTE: AYES: NOES: ABSTAIN: ACTION: VOTE: AYES: NOES: ABSTAIN: ACTION: VOTE: AYES: NOES: ABSTAIN: Motion by Commissioner Rose, and duly seconded, that the Housing Commission ADOPT Resolution No. 98-010, recommending APPROVAL to the City Council of an Affordable Housing Agreement for the development of 132 affordable apartment units in order to satisfy the requirements of the inclusionary housing requirement for the Kelly Ranch development. Latas, Rose Calverley, Noble, Walker, Wellman None 2-4-0 Motion by Commissioner Noble, and duly seconded, that the Housing Commission ADOPT Resolution No. 98-010, recommending APPROVAL to the City Council of an Affordable Housing Agreement for the development of 132 affordable apartment units in order to satisfy the requirements of the inclusionary housing requirement with the exception that the appli- cant’s version of Exhibit B be substituted in its entirety for the Kelly Ranch Development. Calverley, Latas, Noble, Rose, Walker, Wellman None None 6-0-0 Motion by Commissioner Noble, and duly seconded, that the Housing Commission RECOMMEND to the City Council changing the Affordable Housing Agreement, Section 2 (Inclusionary Requirements for Planning Area E), deleting the references to Villages G and H and retaining reference to Village D. Calverley, Noble, Rose Latas, Walker, Wellman None 3-3-0 Motion by Chairperson Wellman, and duly seconded, that there be a finding in the Agreement that the affordable multi-family housing be built the same as and be interchangeable with the market-rate housing. Latas, Calverley, Noble, Rose, Walker, Wellman None None 6-0-0 There was some discussion about the Section 8 Rental Assistance Program. HOUSING COMMISSION MINUTES JULY 9,1998 Page 17 ACTION: Motion by Commissioner Noble, to add to the agenda for the next meeting, modifications to Section 7 (Rental Terms) and Section 4.4 (Affordability Requirements) of the Affordable Housing Agreement requiring the applicant to participate in the Section 8 Rental Assistance Program by reducing rents slightly and accepting financial assistance from the City. Calverley, Latas, Noble, Rose, Walker, Wellman VOTE: 6-0-0 AYES: NOES: None ABSTAIN: None Ms. Fountain summarized that the Commission approved the Affordable Housing Agreement with amendments and that the Agreement would move forward to the City Council for final action, so the applicant can final a map on Planning Area E. She added that next month, Staff will bring back the issue of additional affordability possibilities for this project and participation in the Section 8 Program for the Commission’s consideration. Chairperson Wellman requested that Staff advise the Commission of the date that this is going to go before the City Council. CONTINUED INFORMATIONAL ITEMS: There was a motion to continue the informational items to next month. It was unanimously approved. 4. SECTION 8 RENTAL ASSISTANCE UPDATE 5. SAN DIEGO COUNTY REGIONAL MORTGAGE CREDIT CERTIFICATE PROGRAM - INFORMATIONAL REPORT 6. CITY OF CARLSBAD SINGLE FAMILY RESIDENTIAL REHABILITATION PROGRAM - INFORMATIONAL REPORT 7. AFFORDABLE HOUSING UPDATE ANNOUNCEMENTS: Ms. Fountain announced the groundbreaking of Laurel Tree on July 30 at 1 :30 p.m. and said that the loan documents went to Council last week and were approved. Ms. Fountain announced that Leihani Hines had terminated her employment with the City of Carlsbad. It was announced that the name of the Sambi project is now Cherry Tree Walk. ADJOURNMENT: By proper motion, the Regular meeting of July 9, 1998 was adjourned at 9: 15 p.m. Respectfully submitted, n DEBBIE FOURTAIN HOUSING COMMISSION MINUTES JULY 9, 1998 Page 18 Housing and Redevelopment Director KATHY VAN PELT Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED. Tiifany Whisenhunt 2290 Avenida Magnifica #C Cadsbad Ca 92008 July 9,1998 City of Carlsbad Housing Authority Counsel C/O Toni Espanosa @ City of Carlsbad Housing and Redevelopment Dear Sirs and Madams: My name is Tiffany Whisenhunt and I am a single mother of one daughter, a full time student at Mira Costa College majoring in Child Development, and a part time student employee on campus. I am a Section 8 recipient. I have participated in the program for the last 2 % years. I am writing to you with my concerns about the recent increase of rental prices and aversion to Section 8 by Landlords and Companies owning apartments. My family and I have been living in Carlsbad for the last 9 % years we have enjoyed the people, the cleanness, the safety, and the location very much. We have decided to call Carlsbad our home. Now with the recent housing trends I am facing a difficult situation. To move or to stay and be in position I was once in before participating in the Section 8 program, which is paying half of my income to my rent. The treatment of Section 8 participants in the last year has been unfair. For example the enormous increase in rent, (in my case $150), and the non - acceptance of the Section 8 program by Managers and Companies owning apartment complexes in Carlsbad. Are we to feel that because we are struggling and or our income is lower than others that our families and our children can not live in Carlsbad? What an awful feeling to have when life at the present is so hard for so many. I do have deep respect for the City Counsel and all the hard work done in our behalf. I do feel this issue has to be taken seriously now that it is in a crisis like situation. I would hate to have to move. But being on my own, the struggle to make ends meet and provide a safe environment for my daughter will take a toll on myself and others that have found themselves in this situation this year. I would like to raise my daughter in Carlsbad. I would like to continue living near my parents. I would like to continue to have the right of being able to choose where I would like to live with my daughter. I do agree with self sufficiency and that is why I am working so hard through school, so that I will be a more active Carlsbad resident. I believe that a great majority of the participants feel the same. I believe that a great majority of participants are very grateful, as I am, for the Section 8 program and it's Staff that works very hard for all. Thank you for listening to this letter and please know that any endeavors to help this life altering situation will be very much appreciated by myself and all involved. 0 Page1 LAY OFFICE-? OF Kirnball, Tirey & St. John Parlners T .C. Rimbnll Patricia N. Tircy U’cndy SI. John [{obcn C. -lliorn 6 Linda C. Fritz t klainc S. Ashlon Srcplicn M. Rappos June 30, 199s RE: Dear Occupants( s) : Our firni has been retained to proceed with the eviction rocess if you fail to comply with the notice that has been served. This process will begin wit R filing a lawsuit against you for Unlawful Detainer. Please understand that we will commence court action against you without further notice. In proceeding against you, we shall seek the reasonable rental value of the premises, court costs, service of process costs, additional costs as incurred, and the statutory penalty provided by law of an additional six hundred dollars ($600.00) for the unlawful detention of the premises you now occupy. If we receive a judgment against you, the Marshal or Sheriff will remove you from the premises. Our client could also garnish your wages, levy on your bank accounts, and/or attach your non-exempt personal property for judicial sale in order to collect all monies due. In the event you coni 1 with the terms of the notice within the time prescribed therein, If you desire to contact our firm regarding this matter, please coniniunicate in writing only; we will not discuss this case with you over the telephone or in person. Sincerely, however, an unlawfii PJ etainer lawsuit will not be filed based upon the notice served. S:\N DIEGO X 0 ItT lI E It N CA L I FOR N I A N E \V 1’0 11.1 U E r\ C I1 (OI(1) 234-1690 t (800) 33X-6039 (‘)25)169-1690 (916) 722-1690 (940) 476-5SXS t (800) 564-601 I (YOU) 525-1690 c NOTICE OF TERMINATION OF TENANCY TO : AND ALL OTHERS IN POSSESSION: NOTICE IS HEREBY GIVEN THAT, after service upon you of this NOTICE, namely, namely JULY 31, 1998, your tenancy at the below described real property shall be terminated. On JULY 31, 1998, you are hereby required to quit and deliver up possession of the hereinafter described premises to the undersigned or SCG REALTY :SERVICES, INC./CAMINO POINTE APARTMENTS who/which is authorized to receive the same:' The owner is electing not to renew your lease and you are being served with this NOTICE pursuant to Title 42 United States Code Section 1437f (d) (1) (B)ii. The premises herein referred to are situated in the City of Carlsbad, County an Diego, State of street number as AVENIDA MAGNIFICA, The undersigned does hereby elect to declare a forfeiture of the lease agreement by which you hold possession of the subject premises. If you fail to comply with the terms of this notice legal proceedings will be instituted against you to declare the forfeiture of the lease or rental agreement under which you occupy the hereinbelow described property and to recover possession of said premises, to recover court costs, attorney's fees as permitted by law, and may be liable for additional statutory damages of up to SIX HUNDRED DOLLARS ($600.00) in accordance with California Code of Civil Procedure Section 1174(b), as a result of your failure to comply with the terms of this notice. If such a judicial proceeding is commenced against you in State Court, you may present a defense in said action. DATED: June 30, 1998 a c &?& + CAMlN,O POINTE VILLAGE ]]ear 1 , Our records iiidicak tlinL yoti arc ctirreiitly lcasiiig your apartillelit home 011 a ino~itli to niotilli basis. We would like to iiivilc you to coiisider a six, iiiiie or twelve iiioritli lease and tlie ndvaiitages it will aTfoid you. One of tliese ndvwtagcs is llic “IIoiiie LIUJW’S Protectiori Phi. ” It is ail exciting Cusloiiier- Servicc I~rograiii, idcal if you plan to p~~rcliase a home in the ticar Tuhire. IT you decide that a lease is right for you,jusl call tllc Lcasiiig Ceiiter, wc will cxpedilc llic paperwork arid scl aside sollie tiine lo iiieet with you. 2275 I-losp Way, Suite A Carlshd, CA 920011 lkl: (760) 431-GO75 Fax: (760) 134-7059 I‘he City of Carlebad Housing dh Redewelopment Department AREPORTTOTHE HOUSING COMMXSSXON DATE: JUNE 11,1998 - CONTINUED TO JULY 9,1998 SUBJECT: CT 98-02 - COLINA ROBLE, LLC. - APPLICATION TO PURCHASE 4.2 AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA HOUSING PROJECT I. RECOMMENDATION That the Housing Commission ADOPT Resolution No. 98-008, recommending that the City Council APPROVE a request by Colina Roble LLC., to purchase 4.2 Affordable Housing Credits in the Villa Lorna housing project in order to satisfjr the affordable housing obligation of the Colina Roble project under the City’s Inclusionary Housing Ordinance. 11. BACKGROUND Colina Roble LLC., is currently processing an application for tentative map (CT 98-02) to develop 28 single family homes on approximately 33 acres. Due to the environmental and topographical constraints of the site, approximately 72% of the site will remain as open space. The project consists of one cull-de- sac street and includes home sites with a minimum parcel size of 10,000 square feet. The development of 28 homes will require the developer to provide 4.2 units of housing affordable to lower income households as required by the City’s Inclusionary Housing Ordinance. It is the applicant’s position that there are significant constraints on the site which would make it difficult to provide the affordable housing units on-site. Therefore, the applicant is requesting to purchase Affordable Housing Credits (“credits”) in the Villa Loma project in lieu of on-site construction. The City’s Inclusionary Housing Ordinance permits off-site satisfaction of an inclusionary requirement through participation in a Combined Inclusionary Housing Project (“Combined Project”) if the City Council determines that it is in the public interest. Purchase of credits in the Villa Lorna project constitutes participation in a Combined Project. There are 143 credits currently available for purchase. Policies RegardinP Off-Site Proiects and Purchase of Affordable Housinp Credits The City Council has adopted two policies which deal with off-site or Combined Projects and the sale of Affordable Housing Credits. Council Policy 57 was developed to establish the criteria to be utilized in order to make the necessary finding that off-site satisfaction of an inclusionary housing requirement, when proposed through a Combined Project, is in the public interest. Council Policy 58 was established to determine the price of credits and the mechanism to satisfjr a developers obligation under the City’s Inclusionary Housing Ordinance. . CT 98-02 - COLINA ROBLE, LLC. JUNE 11,1998 PAGE 2 DISCUSSION The Council Policies require staff to evaluate the request for off-site satisfaction of the inclusionary housing obligation and the purchase of credits based upon three primary criteria. The criteria includes: 1) feasibility of on-site proposal; 2) relative advantageddisadvantages of an off-site proposal; and 3) the advancement of housing goals and strategies. The following is a summary of staffs analysis of the criteria for the project. Feasibilitv of On-site Proposal The small scale of the developable area, the physical constraints caused by the large slope areas and the environmental constraints of Encinitas Creek effectively precludes all types of on-site affordable housing projects. Also, the smd scale of the affordable housing project makes the development economically unfeasible due the significant financial subsidy which would be required for the project. Further, the small scale of the affordable housing project makes it unlikely that the project will generate interest fiom available funding sources. Relative AdvantagedDisadvantapes of an Off-site Proposal e The participation in the off-site project will allow the City to recover the costs associated with the development of excess affordable housing units, 0 The Villa Lorna project has locational advantages over the on-site project in terms of direct access to jobs, public transportation, schools, parks as well as other amenities and services due to the being located directly on a major thoroughfare. AdvancinP HousinP Goals and Stratepies The recovery of the City’s investment in the Villa Loma Project will provide for additional financial resources which are needed to further affordable housing development in the comunity. RECOMMENDATION Based upon the analysis of the above criteria, the Affordable Housing Policy (staff) Team believes that adequate justification has been provided by the Developer to make the finding that the off-site satisfaction of the inclusionary housing requirement is in the public interest. Therefore, the staff team is recommending that the request to purchase credits be recommended for approval by the Housing Commission. EXHIBITS 1. Housing Commission Resolution No. 98-008 2. Applicant Request to Purchase Credits 3. Draft Affordable Housing Agreement . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HOUSING COMMISSION RESOLUTION NO. 98-008 A RESOLUTION OF THE HOUSING COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA, TO RECOMMEND THAT THE CITY COUNCIL APPROVE A REQUEST BY COLINA ROBLE LLC.,TO PURCHASE 4.2 AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA HOUSING PROJECT IN ORDER TO SATISFY THE AFFORDABLE HOUSING OBLIGATION OF THE COLINA ROBLE PROJECT UNDER THE CITY’S INCLUSIONARY HOUSING ORDINANCE. APPLICANT: COLINA ROBLE, LLC. CASE NO: CT 98-02 WHEREAS, Colina Roble LLC., has made application for Tentative Map CT 98-02 within the City of Carlsbad for the development of a 28 unit residential subdivision; WHEREAS, the subdivision of land for 28 residential units requires the developer to provide 4.2 units of housing affordable to lower income households as required by Carlsbad Municipal Code Section 2 1.85 of the City’s Inclusionary Housing Ordinance; WHEREAS, the Villa Loma housing project was conceived and developed with City participation based on the creation of 184 excess affordable housing units which would be available to satis@ other developers inclusionaq housing obligation; WHEREAS, Colina Roble LLC., has requested to purchase Affordable Housing Credits as a means to satis@ their affordable housing obligations as permitted by Carlsbad Municipal Code Section 2 1.85 of the City’s Inclusionq Housing Ordinance and consistent with City Council Policies 57 and 58; WHEREAS, the request to purchase Affordable Housing Credits has been submitted to the City of Carlsbad’s Housing Commission for review and consideration; WHEREAS, said Housing Commission did, on the 1 lth day of June, 1998, hold a public meeting to consider said request for the purchase of Affordable Housing Credits by Colina Roble LLC; WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Commission considered all factors relating to the application and request to purchase Affordable Housing Credits; NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the City of Carlsbad, California, as follows: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. 2. 3. 4. 5. The above recitations are true and correct. The project is consistent with the goals and objectives of the City of Carlsbad's Housing Element and Consolidated Plan, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. Based upon the analysis contained within the Housing Commission Staff Report, the Housing Commission finds that the off-site satisfaction of the inclusionq housing requirement is in the public interest. That based on the information provided within the Housing Commission Staff Report and testimony presented during the public meeting of the Housing Commission on June 1 1, 1998 the Commission recommends that the City Council APPROVE a request by Colina Roble LLC Corporation to purchase 4.2 affordable housing credits in the Villa Loma housing project in order to satis@ the affordable housing obligation of the Colina RobIe project under the city's inclusionary housing ordinance. That the Housing Commission recommends that the City Manager or his designee be authorized to execute the Affordable Housing Agreement in substantially the form presented in Exhibit 3 to the Housing Commission Staff Report and to execute such other documents, or take other actions as may be necessary or appropriate to assist the developer in acquiring the Affordable Housing Credits. General Conditions: 1. ... ... ... ... ... ... ... ... Within sixty (60) days of the City Council approval of Developer's request to purchase Affordable Housing Credits, and prior to receiving Final Map approval, Developer shall execute this Agreement and purchase 4.2 Housing Credits. Execution of this Agreement by the parties and payment of the required fee to the City by the Developer shall fully satisfjr the Developer's affordable housing obligation pursuant to Chapter 21.85 of the Carlsbad Municipal Code and the above-referenced conditions of approval. Upon execution of this Agreement and receipt of the above payment from developer, City will record an appropriate release of the developer's obligation. HC RESO. NO. 98-008 PAGE 2 i 1 c 1 C k E 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing Commission of the City of Carlsbad, California, held on the 1 day of June, 1998, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: KATHLEEN DUNN-WELLMAN, CHAIRPERSON CARLSBAD HOUSING COMMISSION DEBBIE FOUNTAIN HOUSING AND REDEVELOPMENT DIRECTOR HC RESO. NO. 98-008 PAGE 3 - OFF-SI7 AND COMBINED INCLUSIONARY HC- SING PROJECT ASSESSMENT WORKSHEET BACKGROUND 1. Applicant Name and Address: COLINA ROBLE, LLC C/O David M. Bentley 3573 East Sunrise Drive, 11221 Tucson, AZ 85718 2. ofi-site or Combined Project Name: Villa Loma 3. Description of Project wit!! lnclusionary Housing Obligation: a 30 lot, 28 unit R-1-10,000 sq. ft. subdivision 28 x 15% = 4.2 units C. Proposed On-site Project Description cif any): None 8. Proposed Off-site Project Description: None . Description of On-site Project Constraints: tolina Roble is a 28 unit subdivision with a minimum lot size of 10,000 sq. ft. with a 4.2 affordable unit requirement, there is no economy in scale because of the size. Also, the large lot size and significant public improvement requireme1 will produce a significant price difference between any onsite affordable units and the proposed single family development. Attachment "1" to Council Policy Statement Eo. 57 L -LO 57 WORKSHE€?- ~~~ - ASSESSMENT CONCLUSION (Check appropriate box) ASSESSMENT CRcTERlA 1. Feasibility of the On-site Proposal. a. Are there significant feasibilitv issues due to factors such as project size, site constraints, amount and availability of required subsidy, and competition from multiple projects that make an on-site option impractical? Brief Narrative: Yes, Although growth management calculatio-would allow 55 units, because of onsite constraints, only 28 units can be achieved. sensitive upland habitat or wetlands. 72% of the site is steep slop 1. Will an affordable housing product be difficult to intearate into the proposed market development because of significant price and product type disparity? Brief Narrative: Yes, the future homes will probably be in excess of 3,000 sq. ft. and be in.the high $300,000 to $500,000 range. A small apartment project of four units that can rent for affordable rents ($450 to $6002) would not be compatible with the area. I Does the on-site development entity have the capacitv to deliver the proposed affordable housing on-site? Brief Narrative: No, the applicant is a developer and not a builder and is not expirienced in the development of affordable housing. units does not appear to be a feasible proposal. Also, the development of four affordable Relative Advantaqes/Disadvantaaes of the Off- site Proposal. Does the off-site option offer greater feasibilitv and cost effectiveness than the on-site alternative, particularly regarding potential local public assistance? 2 <I) WORKSHEET DOES NOT SUPPORT OFFsm PROPOSAL ASSESSMW cRlEl?.M SUPPORTS OFF-Sm 1NCONCLUSlVE PROPOW ~~ Brief Narrative: Yes, Villa Lorna ig a successful.project. Lorna would assist the City recover their investment. The applicant participation in Villa SUMWMY b. Does the off-site proposal have location advantaoes over the on-site alternative, such as proximity to jobs, schools, transportation, services; less impact on other existing developments, etc.? DOES NOT SUWRT SUP.WRTS OFF-SllE OFF-SE PROR3SAL iNCOhCLUSM5 PROPOSAL Brief Narrative: Yes, Villa Lorna is on El Carnino Real and near the job center of Carlsbad. Affordable housing onsite would not be convienient to public services. c. Does the off-site option offer a development entity with the caoacity to deliver the proposed project? - d. Does the off-site option satisfy multiple developer obliaations that would be difficult to satisfy with multiple projects? Brief Narrative: Yes, one of the purposes of Villa Loma was to address this question. 3. Advancinq Housing Goals and StrateqE a. Does the off-site proposal advance andor support City housing goals and policies expressed in the Housing Element, CHAS and lnclusionary Housing Ordinance? Brief Narrative: Yes, Villa Lorna has a large number of units and a diversity of affordable housing stock with its 344 units. c Ladwig Design Oreup, lnc. COLINA ROBLE PROJECT DESCRIPTION Colina Roble is a proposed 30 lot residential subdivision within LFM Zone 11 in the southeast portion of the City of Carlsbad., It is a 28 unit R1-10,000 square foot minimum lot size standard subdivision located south of the southwest comer of Rancho Santa Fe Road and Olivenhain Road. The property consists of 35.4 acres of which only approximately 10 acres, or about 28%, will be developed; the remaining 25* acres, approximately 72% of the site, would remain as natural open space. This development project represents approximately on-half of the development density that is allowed under growth management criteria; 55 units are allowed and 28 units are being requested or a density of 1.6 Dwelling Units per acre where 3.2 is allowed. The southern portion of the property is characterized by coast live oak woodlands and steep slopes. The development will cause no impact to the coast live oak habitat and only about four-tenths of an acre of impact to southern mixed chaparral as a result of constructing the access road into the property. Encinitas Creek, a major open space corridor under the proposed Carlsbad Habitat Management Plan (HMP) passes through the northern portion of the property. Development is being kept away from the existing wetlands with only 0.28 of an acre being directly impacted. There is adequate room onsite to mitigate this minor impact. Based on extensive survey results and field meetings with the project biologists and representatives fiom the City of Carlsbad, the Army Corps of Engineers, the State Fish & Game Department, and the U.S. Fish & Wildlife Service, the manufactured slopes adjacent to the wetlands (Lots 1-19) have been relocated several times fiom our original plan to avoid habitat impacts and to facilitate additional habitat buffer areas. The top of slope on these lots will have a fence or wall and be the southerly edge of the wetlands buffer. To achieve the habitat buffer setbacks, the alignment of “A” Street adjacent to Lots 3-7 was adjusted in a southerly direction’and will require a crib type wall along the south edge of “A’? Street. As a result of the sensitive wetlands habitat on the northern portion of the property and the sensitive upland habitat and steep slopes on the southern portion of the property, the access and development options for the property are limited. The only source of access to the development is Rancho Santa Fe Road, which runs along the eastern portion of the ownership, In order to properly service the project while preserving the estimated 72% open space and avoiding impact to the property’s sensitive habitat areas, a variance for cul-de-sac length will be required. The project’s cul-de-sac street is 1,500 lineal feet as proposed; the’standard maximum length is 1,200 feet. Due to the lack of access alternatives, the larger lots, 1,000 feet of single loaded street, and the small project size, we believe this variance request is very reasonable and supportable; a separate justification for this variance is attached. Based on the not-yet-approved Shelley Property, shown as Carlsbad Tract 90-03, this project may necessitate an intersection spacing variance on Rancho Santa Fe Road; 500 feet versus the 600 foot standard. An intersection with fill left and right turning movements is required for Colina Roble. In light of the project’s limited fiontage along Rancho Santa Fe Road and the small size of the development, we will request that the project not be required to construct planned widening and related improvements to Rancho Santa Fe Road. Instead, we will request that our project pay the required fee established for this area so that the entire section of Rancho Santa Fe Road can be improved at one time in the future. In addition to paying the proportionate share fee, we will offer to set aside a portion of the property as a mitigation area for the wetlands impact that will likely occur as a result of the widening of Rancho Santa Fe Road where it crosses Encinitas Creek. As part of the Olivenhain Road widening project, the City of Carlsbad recently completed construction of Detention Basin “D on the northwestern portion of the property. As part of this project, we will request the City to vacate portions of the dike easements and inundation easements that the City acquired as part of the detention basin construction. The construction of Colina Roble will eliminate the need for all or portions of these City easements. The project has five panhandle lots (lots 19,22,23,25, and 26) which integrate well into the project’s overall layout and larger lot design. A separate justification has been prepared for this request. Our project application includes a request to the Council Policy 57 and 58 Committee relative to affordable housing. Included with this transmittal is a letter from the previous housing and redevelopment director in which he recommends that this project be allowed to purchase the required affordable housing credits in the Villa Loma Project. With 28 residential units proposed, the project’s affordable requirement is 4.2 units (28 x 15% = 4.2). The proposed Carlsbad Trail System Segment Number 55A has not been shown within the boundaries of this project. The siting criteria suggests that the trail could connect with the traffic signal at Olivenhain Road. In addition, Trail Segment 56A is suggested to be a sidewalkhike lane type of a trail system. Because of the significant wetlands along the north side of Encinitas Creek and its sensitive value as a habitat corridor, it seems unlikely that this would be a good location for a public trail system. We would suggest that the public trail system be in the right-of-way on the west edge of Rancho Santa Fe Road to the City of Encinitas Boundary. Overall, we believe the proposed development responds well to the City’s development criteria as well as the property’s unique physical constraints while blending a high quality residential housing opportunity with an extraordinary level of natural resource protection. L-1039.042 1/9/98 P P ;i P P I I I I I I I I I I I I I I I' I I I 1 I I c DISCLOSURE STATEMENT Applicant’s statement or disclosure of certain ownership interests on all applications which will require discretionary action on the part of the City Council or any appointed Board, Commission or Committee. The following information must be disclosed: 1. APPLICANT List the names and addresses of all persons having a financial interest in the application. David M. Bentlev 3573 East Sunrise Dr., #221 Tucson, AZ 85718 2. OWNER List the names and addresses of all persons having any ownership interest in the property involved. Wiegand Properties Partnership John Wiegand Haro Id W ie g and P.O. Box 998 Dixon, CA 95620 2352 Altisma Wy. Carlsbad, CA 92009 (See pg. 2 for additional owners) 3. If any person identified pursuant to (1) or (2) above is a corporation or partnership, list the names and addresses of all individuals owning more than 10% of the shares in the corporation or owning any partnership interest in the partnership. 4. If any person identified pursuant to (1) or (2) above is a non-profit organization or a trust, list the names and addresses of any person serving as officer or director of the non-profit organization or as trustee or beneficiary of the trust. 2075 Las Palmas Dr. - Carlsbad. CA 92009-1576 0 (619) 438-1161 - FAX (619) 438-0894 @ ,n?a - I 5. Have you had n 3 than $250 worth of business trar,,Jcted with any member of City staff, Boards, Commissions, Committees and/or Council within the past twelve (1 2) months? Yes NO If yes, please indicate person(s): C\l&+? L. -& CI L,-.=<kL4* 1, c_ & L-- $24 sw. Person is defined as "Any individual, firm, co-partnership, joint venture, association, social club, fraternal organization, corporation, estate, trust, receiver, syndicate,-this and any other county, city and county, city municipality, -district or other *political subdivision or any other group or combination acting as a unit." NOTE: Attach additional sheets if necessary. Signature of applicant/date 2. Owners - Continued Carl Wiegand 415 S. Almond Dixon, CA 95620 Dan Wiegand 359 Via Andalusia Encinitas, CA 92024 Disclosure Statement 10/96 Page 2 of 2 RECORDING REQUESTED BY: City of Carlsbad WHEN RECORDED MAIL TO: City of Carlsbad City Clerk’s Office Attn: CitvClerk 1200 Carlsbad Village Drive Carlsbad, California 92008 (space above for Recorder ’S Use) AFFORDABLE HOUSING AGREEMENT THIS AFFORDABLE HOUSING AGREEMENT (“Agreement”) is entered into this day of , 1998, by and between the CITY OF CAIUSBAD, a municipal corporation (hereinafter referred to as the ”City“), and Colina Roble LLC., (hereinafler referred to as the “Developer”), is made with reference to the following: . RECITALS A. Developer is the owner of certain real property in the City of Carlsbad, County of San Diego, State of California, described in “Attachment A”, which is attached hereto and incorporated herein by this reference, and which is the subject of a Tentative Map (CT 98-02), which provides conditional approval of the construction of 28 single family dwelling units (“Project”). B. Condition No. of Planning Commission Resolution No. , states that this Affordable Housing Agreement shall be entered into between the City and the Developer as a means of satisfLing the Developers’ affordable housing obligation (“Affordable Housing Obligation”), as such is defined under Chapter 21.85 of the Carlsbad Municipal Code. Planning Commission Resolution No. provides that the Affordable Housing Obligation of four and two-tenths (4.2) units will be satisfied by applying the requirements set forth in this Agreement. NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the mutual covenants contained herein, the parties agree as follows: 1. THE RECITALS ARE TRUE AND CORRECT. 2. SATISFACTION OF AFFORDABLE HOUSING REQUIREMENTS THROUGH THE PAYMENT OF AFFORDABLE HOUSING CREDITS. (a) Performance under this Agreement satisfies the Developers’ obligation for aordable housing under Chapter 21.85 of the Carlsbad Municipal Code as applied to the land covered by Carlsbad Tract No. 98-02 by reason of the approvals of the Tentative Map of CT 98-08, including Condition No. listed in Planning Commission Resolution No. , and any other applicable approval. (b) The Developer shall pay for four and two-tenths (4.2) Affordable Housing Credits as of Planning Commission Resolution . The fee shall be paid prior to the Developer receiving a building permit for the project. established by the City and as required by Condition No. No. 3. REMEDIES Failure by the Developer to perform in accordance with this Agreement will constitute failure to of Planning Commission Resolution No. . Such failure will allow the City to exercise any and all remedies available to it including but not limited to withholding the issuance of building permits for the lots shown on Carlsbad Tract No. 98-02. satisfy the requirements of Chapter 2 1.85 of the Carlsbad Municipal Code and Condition No. 4. HOLD HARMLESS Developer will indemnity and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as “Indemnitees”), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands suits, actions, obtained, allegedly caused by, arising out of or retaining in any manner to Developers’ actions or defaults pursuant to this Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. Developer shall obtain, at its expense, comprehensive general liability insurance for development of the ($1,000,000) purchased by the Developer from an insurance company duly licensed to engage in the business of issuing such insurance in the State of California, with a current Best’s Key Rating of not less than A-V, such insurance to be evidenced by an endorsement which so provi’des and delivered to the City Clerk prior to the issuance of any building permit for the Project. 5. NOTICES All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registed or certified mail, return receipt requested to the party to receive such notice at the address set forth below: TO THE CITY: City of Carlsbad Housing and Redevelopment Department Am: Housing & Redevelopment Director 2965 Roosevelt Street, Suite B Carlsbad, California 92008-2389 TO THE DEVELOPER: Colina Roble LLC. C/o David Bently 3573 E Sunrise Drive #22 1 Tucson, AZ 8571 8 Any party may change the address to which notices are to be sent by notifjmg the other parties of the new address, in the manner set forth above. 6. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. 7. DURATION OF AGREEMENT This Agreement shall terminate and become null and void upon the payment of the Affordable Housing Credits, or the repeal, termination, or modification of any applicable ordinance which act would render the Affordable Housing Obligation unnecessary or unenforceable. 8. SUCCESSORS This Agreement shall benefit and bind the Developer and any successive owners of Affordable Housing Lots. 9. SEVERABILITY In the event any provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless, be and remain in fkll force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the day and year frst above written. DEVELOPER CITY Colina Roble LLC. limited liability company By: (Title) City of Carlsbad, a municipal corporation By: MARTIN ORENYAK Community Development Director APPROVED AS TO FORM: RONALD R. BALL CITY ATTORNEY ATTACHMENT A LEGAL DESCRIPTION OF SUBJECT PROPERTY me City of Carlubad Hou6in.g dk Redewelopment Deparfment AREPORT TO THE HOUBXNe COMMISSION ~~ DATE: JUNE 11,1998 - CONTINUED TO JULY 9,1998 SUBJECT CT 97-2qSDP 98-05 - MAY SUBDIVISION - REQUEST FOR RECOMMENDATION OF APPROVAL TO THE PLANNING COMMISSION OF TWO ATTACHED SECOND DWELLING UNITS IN ORDER TO SATISFY THE REQUIREMENTS OF THE INCLUSIONARY HOUSING ORDINANCE FOR THE CREATION OF FOURTEEN SINGLE FAMILY LOTS ON THE SOUTHEAST CORNER OF THE INTERSECTION OF PARK DRIVE AND MONROE STREET. I. 11. 111. RECOMMENDATION That the Housing Commission ADOPT Resolution No. 98-009, recommending APPROVAL to the Planning Commission of two attached second dwelling units in order to satisfy the requirements of the Inclusionary Housing Ordinance for the creation of fourteen single family lots for future development on southeast comer of the intersection of Park Drive and Monroe Street. PROTECT BACKGROUND The applicant is proposing to subdivide a 4.67-acre site into fourteen single family lots. The subdivider’s inclusionary housing obligation is 2.47 total units. proposes to satisfy this requirement by providing two attached second dwelling units. The subdivider AFFORDABLE PROTECT DESCRIPTION A. Location The May Subdivision is located on southeast comer of the intersection of Park Drive and Monroe Street. The affordable second dwelling units will be located on Lots 7 and 8 as shown on proposed Tentative Map CT 97-24 (See attached Exhibit 3). CT 97-24/SDP 98-05 -MAY SUBDIVISION JUNE 11,1998 PAGE 2 B. UnitMix The two Second Dwelling Units will both be 603 square feet one-bedroom units. Both units are detached from the primary dwelling and have a private entrance. The units have been designed consistent with the Second Dwelling Guidelines as established V. VI. the Housing Commission. AFFORDABLE UNITS 1 TOTAL MARKET UNITS I SECOND UNITS 1 BR's I SIZE 14 2 I1 I 603 - SITE The site is located on the southeast corner of the intersection of Park Drive and Monroe Street. The site currently contains one single family home and the remainder of the site is utilized for agricultural purposes (green house and storage buildings). The existing structures will be demolished to provide for the development of the new subdivision. AFFORD ABILITY A. Rent and Income Levels If rented, each unit will be rent restricted at levels which do not exceed 80% of the area median. B. Terms of Affordability An Affordable Housing Agreement will be executed with the developer to ensure the affordability for the project's useful life or 55 years, as required by the City's Inclusionary Housing Ordinance C. Target Population The affordable units will be targeted to lower-income households. With a growing number of lower-income jobs in Carlsbad, there is a sigruficant demand for affordable housing for families which will improve the jobs/housing balance. c CT 97-24/SDP 98-05 -MAY SUBDIVISION JUNE 11,1998 PAGE 3 D. Housing Element/Consolidated Plan Consistency The proposed affordable housing supports several Housing Element Goals and objective, including Objective 3.5 (Lower Income New Construction), Objective 3.6 (Inclusionary Housing), and Goal 4 (Jobs-Housing Balance). The City of Carlsbad's Consolidated Plan identifies housing opportunities for lower-income renter families as a top ranking priority. The proposed project meets the priorities, goals and objectives of the City for affordable housing. VII. VIII. FINANCIAL At this time, the developer is not requesting financial assistance for the development of the two affordable units. SUMMARY It is the role of the Housing Commission to make recommendations to the City Council based on several considerations with respect to affordable housing projects. These are: The proposal's effectiveness in serving the City's needs and priorities as expressed in the Housing Element of the General Plan and the HUD Consolidated Plan. The proposal's consistency with the City's affordable housing policies and ordinances as expressed in the Housing Element, Inclusionary Housing Ordinance, Density Bonus Ordinance, etc. The proposal's development and operating feasibility, emphasizing the development team capacity, financing sources and the role of the City in providing financial assistance or incentives. In summary, the proposal is consistent with Second Dwelling Unit Guidelines as adopted by the Housing Commission. Further, the project is consistent with the City's goals and policies adopted for the provision of affordable housing. Therefore, staff is recommending that the Housing Commission approve a recommendation to the Planning Commission to approve the Site Development Plan to approve the May Subdivision Affordable Housing Project and the related affordable housing agreement, in substantially the form presented at this time. IX. EXHIBITS 1. Housing Commission Resolution No. 98-009 2. Draft Affordable Housing Agreement 3. Reduced Plan Exhibits c 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HOUSING COMMISSION RESOLUTION NO. 98-009 THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE PLANNING COMMISSION OF TWO AITACHED SECOND DWELLING UNITS IN ORDER TO SATISFY THE REQUIREMENTS OF THE INCLUSIONARY HOUSING ORDINANCE FOR THE CREATION OF FOURTEEN RESIDENTIAL LOTS ON THE SOUTHEAST CORNER OF PARK DRIVE AND MONROE STREET. APPLICANT: MAY CASE NO: CT 97-24/ SDP 98-05 WHEREAS, the developer is currently processing Carlsbad Tract Map CT 97-24 and Site Development Plan SDP 98-05 to create fourteen single family residential lots; and WHEREAS, the developer has proposed to construct two attached second dwelling units affordable to lower income households as a means to satis@ their affordable housing obligations as permitted by Carlsbad Municipal Code Section 2 1.85 of the City's Inclusionary Housing Ordinance; and WHEREAS, the developer's proposal has been submitted to the City of Carlsbad's Housing Commission for review and consideration; and WHEREAS, said Housing Commission did, on the 1 1" day of June, 1998, hold a public meeting to consider said proposal to construct two attached second dwelling units; WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Commission considered all factors relating to the proposal to provide said affordable second dwelling units; 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 project is consistent with the goals and objectives of the City of Carlsbad's Housing Element, Consolidated Plan, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. 3. The project will provide a total of two second dwelling units with rents which do not exceed 80% of the county median which meets a "medium priority" affordable housing need as outlined within the City of Carlsbad's approved 1995-2000 Consolidated Plan. The project, therefore, has the ability to effectively serve the City's housing needs and priorities as expressed in the Housing Element and the Consolidated Plan. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 June 11, 1998, the Housing Commission ADOPT Resolution No. 98-009, recommending APPROVAL to the Planning Commission of two attached second dwelling units in the May Subdivision in order to satis@ the requirements of the Inclusionary Housing Ordinance 5. That the Housing Commission recommends that the City Manager or his designee be authorized to execute the Affordable Housing Agreement in substantially the form presented in Exhibit 4 to the Housing Commission Staff Report, subject to review and approval by the City Attorney. Conditions: 1. Recommendation of approval is granted for Site Development Plan 98-05, incorporated by reference and on file in the Housing and Redevelopment Department. Development shall occur substantially as shown unless otherwise noted in the conditions of project approval by the City Council. PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing Commission of the City of Carlsbad, California, held on the 1 l* day of June, 1998, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: KATHLEEN DU"-WELLMAN, CHAIRPERSON CARLSBAD HOUSING COMMISSION DEBBIE FOUNTAIN HOUSING & REDEVELOPMENT DIRECTOR HC RESO. NO. 98-009 PAGE 2 8 .- RECORDING REQUESTED BY: City of Carlsbad WHEN RECORDED MAIL TO: City of Carlsbad City Clerk‘s Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, California 92008 (Space above for Recorder’s use) AFFORDABLE HOUSING AGREEMENT THIS AFFORDABLE HOUSING AGREEMENT (“Agreement1’) is entered into this - day of , 1998, by and between the CITY OF CARLSBAD, a municipal corporation (hereinafter referred to as the “City”), and , is made with reference to the following: RECITALS A. Developers are the owner of certain real property in the City of Carlsbad, County of San Diego, State of California, described in “Attachment A”, which is attached hereto and incorporated herein by this reference, and which is the subject of a Tentative Map (CT97-24) which provides conditional approval of the construction of 14 single family dwelling units (“Project”). Condition No. - of Planning Commission Resolution No. -, states that this Affordable Housing Agreement shall be entered into between the City and the Developers as a means of satisfying the Developers’ affordable housing obligation (“Affordable Housing Obligation”), as such is defined under Chapter 21.85 of the Carlsbad Municipal Code. Planning Commission Resolution No. provides that the Affordable Housing Obligation will be satisfied by applying the requirements set forth in this Agreement for two (2) affordable housing lots (“Affordable Housing Lots”). The Affordable Housing Lots which are subject to this Agreement are: Lots 7, and 8 of Carlsbad Tract No 97-24, in the City of Carlsbad, County of San Diego, State of California, according to Map thereof No. filed with the County Recorder of San Diego County on NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the mutual covenants contained herein, the parties agree as follows: 1. The Recitals Are True And Correct. . 2. SATISFACTION OF AFFORDABLE HOUSING REQUIREMENTS THROUGH CONSTRUCTION OF SECOND DWELLING UNITS. Performance under this Agreement satisfies the Developers’ obligation for affordable housing under Chapter 2 1.85 of the Carlsbad Municipal Code as applied to the land covered by Carlsbad Tract No. 97-23 by reason of the approvals of the Tentative Map of CT97-24, including Condition No. , listed in Planning Commission Resolution No. -, and any other applicable approval. 3. SECOND DWELLING UNITS. (a) Construction of Second Dwelling Units. Developers shall at the time a residential structure is constructed on the Affordable Housing Lot, include in such residential structure a Second Dwelling Unit as defined under and subject to the requirements contained in Municipal Code Section 21.10.015. (b) Restriction on Rental of Second Dwelling Unit. The maximum monthly rent for any Second Dwelling Unit, subject to this Agreement, which becomes rented or leased shall not exceed an amount of 1/12’ of thirty percent (30%) of the gross monthly income of a low- income household, adjusted for household size, at eighty percent (80%) of the San Diego County median income, as such median income is published by the United States Department of Housing and Urban Development from time to time. A sample schedule showing the calculation of the maximum rental amount as for 1996 is attached to this Agreement as Attachment “B”. (c) Declaration. Developers shall require the purchaser from Developers of an Affordable Housing Lot upon which a Second Dwelling Unit has been constructed to sign an affidavit or declaration under penalty of perjury, in a form prescribed by the City Planning Director, which states that if the Second Dwelling Unit on the Affordable Housing Lot is rented that it shall be rented at a monthly rental rate not to exceed the rate set forth in Paragraph 2(b). Developers shall forward the original declaration to the City Planning Director for maintenance in the City’s files, and retain a copy for its own files in the event proof becomes necessary. (d) Deed Restriction. Prior to the sale of an affected lot, the Developers shall provide proof to the City Planning Director that the language contained in Exhibit “C” has been included in each deed prior to the sale of an affected property and will run with the land so as to restrict subsequent transfers. 4. CONSTRUCTION PHASING OF PROJECT AND AFFORDABLE HOUSING LOTS. Developers will build the Project in accordance with SDP 97--. Further, the Second Dwelling Units must be constructed in a reasonable proportion to the Project construction. 5. REMEDIES Failure by the Developers to perform in accordance with this Agreement will constitute failure to satisfl the requirements of Chapter 21.85 of the Carlsbad Municipal Code and Condition No. of Planning Commission Resolution No. -. Such failure will allow the City to exercise any and all remedies available to it including but not limited to withholding the issuance of building permits for the lots shown on Carlsbad Tract No. 97-24. 6. HOLD HARMLESS Developers will indemnity and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as “Indemnitees”), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands suits, actions, obtained, allegedly caused by, arising out of or retaining in any manner to Developers’ actions or defaults pursuant to this Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. Developers shall obtain, at its expense, comprehensive general liability insurance for development of the ($1,000,000) purchased by Developers from an insurance company duly licensed to engage in the business of issuing such insurance in the State of California, with a current Best’s Key Rating of not less than A-V, such insurance to be evidenced by an endorsement which so provides and delivered to the City Clerk prior to the issuance of any building permit for the Project. 7. NOTICES All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested to the party to receive such notice at the address set forth below: TO THE CITY: City of Carlsbad Housing and Redevelopment Department Attn: Housing & Redevelopment Director 2965 Roosevelt Street, Suite B Carlsbad, California 92008-23 89 TO THE DEVELOPERS: Any party may change the address to which notices are to be sent by notifLing the other parties of the new address, in the manner set forth above. 8. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. 9. DURATION OF AGREEMENT This Agreement shall terminate and become null and void upon repeal, termination, or molfication of any applicable ordinance which act would render the Affordable Housing Obligation unnecessary or unenforceable. The restriction set forth in Paragraph 2(b) above shall terminate as to the Affordable Housing Lot at such time as the Second Dwelling Unit on the Affordable Housing Lot has reached the end of its useful life, which is assumed to be not less than 55 years from the date of completion of original construction. 10. SUCCESSORS This Agreement shall benefit and bind Developers and any successive owners of Affordable Housing Lots. 11. SEVERABILITY In the event any provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement shall nevertheless, be and remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the day and year first above written. DEVELOPERS CITY (Insert Name) City of Carlsbad, a Municipal corporation By: By: (Name) MARTIN ORENYAK Community Development Director By: (Title) APPROVED AS TO FORM: RONALD R. BALL CITY A'ITORNEY t ATTACHMENT A LEGAL DESCRIPTION OF SUBJECT PROPERTY ”- 4 ATTACHMENT B MAXIMUM MONTHLY RENTAL AMOUNT ATTACHMENT C DEED RESTRICTION A Second Dwelling Unit has been constructed as part of this property, and shall be maintained and utilized in accordance with the requirements of Carlsbad Municipal Code Section 21.10.015 for the useful life of the main structure (estimated to be 55 years). The maximum monthly rent for the Second Dwelling Unit, if rented or leased, shall not exceed an amount equal to thirty percent (30%) of the gross monthly income of a low-income household, adjusted for household size, at eighty percent (80%) of the San Diego County median income as such median income is published by the United States Department of Housing and Urban Development from time to time. Prior to subsequent transfers of the property, seller shall require the purchaser to submit a signed affidavit or declaration under penalty of perjury on a form satisfactory to the City Planning Director, to the Planning Department, which acknowledges that the purchaser has read and understand the restrictions as they relate to the Second Dwelling Unit. i J t c .- _._ I 4 i -1 ! '. - I i .LEFT ELEVATION The Cltyof CazZsbad Housing& Redevelopment Department AREPORTTOTHE HOUSTNG CTOMXISSXON DATE: SUBJECT: JULY 9,1998 SDP 98-4 KEL LY RANCH AFFORDABLE HOUSING PROJECT - REQUEST FOR RECOMMENDATION OF APPROVAL TO THE CITY COUNCIL OF AN AFFORDABLE HOUSING AGREEMENT FOR THE DEVELOPMENT OF 132 AFFORDABLE APARTMENT UNITS NECESSARY TO SATISFY THE INCLUSIONARY HOUSING REQUIREMENT FOR THE KELLY RANCH DEVELOPMENT. I. RECO MMEN DATIO N That the Housing Commission ADOPT Resolution No. 98-01 0, recommending APPRO VAL to the City Council of an Affordable Housing Agreement for the development of 132 affordable apartment units in order to satisfy the requirements of the inclusionary housing requirement for the Kelly Ranch Development. 11. PROJEC T BACKGROUND The Kelly Ranch Development is currently processing applications for the development of up to 877 housing units. For planning purposes, Kelly Ranch is divided into 12 Planning Areas (Planning Areas A-K). Planning Areas A, D, E, G, H, I and J are proposed for residential development and are the subject of this affordable housing agreement. Planning Areas B, C, F, L, and K are a combination of open space (B & C), future commercial development (F) or future residential development (L & K) and will be required to satisfy their respective inclusionary housing requirements at such time as they develop. Pursuant to the City’s Inclusionary Housing Ordinance, 15% of the base dwelling units in the Development must be provided for lower income households. The Affordable Housing Agreement (Exhibit B) for Kelly Ranch establishes the phasing and development of the inclusionary housing for the Development pursuant to Chapter 2 1.85 of the City of Carlsbad Zoning Ordinance. Approval of a site development plan will be required to ensure consistency with the applicable affordable housing agreement and provides the inclusionary housing for the entire Development. SDP 98-4 - KELLY RANCH AFFORDABLE HOUSING PROJECT JULY 9, 1998 PAGE 2 2 Bedroom 3 Bedroom Kelly Ranch will allow for the development of up to 877 residential units. Of the 877 units, there will be 382 single family homes and a 495 unit apartment project. All of the single family homes will be sold at “market rate.” Planning Areas D, G and H will contain the 495 unit apartment project. The 132 affordable units will be dispersed throughout the apartment project. For purposes of the Affordable Housing Agreement, the apartment project is a Combined Affordable Housing Project as defined by Chapter 21.85 of the Carlsbad Municipal Code. The Combined Project will satisfy the affordable housing requirement for Planning Areas A, D, E, G, H, I, and J. 984- 1 1254 0-1 15 7- 103 1340 50 20 Generally, when an affordable housing agreement is before the Commission, there will also be a recommendation for the corresponding Site Development Plan. In this particular instance, City staff has not completed its review of the proposed Site Development Plan. The Commission has been provided with the applicant’s most recent application submittal. However, there are several issues related to site design, architecture, and density that are still to be resolved. It is very likely that the project will be revised at a later date. Therefore, the Site Development Plan will be returned to the Commission for future review and comment. 111. PROJEC T DESCRIPTION A. Location The Kelly Ranch Apartment Project will be located at the northeast comer of the fhre intersection of Cannon Road and Faraday Road. The project is to be located on Lots 161-174, as shown on the proposed Tentative Map CT 97-16. B. Unit Mix The proposed apartment project consists of 363 market rate units and 132 affordable units. The affordable units will be dispersed throughout the apartment project. The affordable units will be a mixture of one, two and three bedrooms. A minimum of 14 of the three bedroom units will be restricted to affordable rent levels. The size of the apartment units are as follows: SDP 98-4 - KELLY RANCH AFFORDABLE HOUSING PROJECT JULY 9, 1998 PAGE 3 IV. V. VI. C. Other Features and Amenities The project will feature a 5,400 square foot recreation buildiqg, two swimming pools a tennis court and 1024 parking spaces. In addition, each individual unit will include a washer and dryer located on the patio or balcony area. DEVELOPMEN T TEAM The affordable housing developer is Security Capital Pacific Trust. The developer is a real estate investment trust that develops and manages apartment projects throughout the Western United States. The developer has recently purchased several properties within the City of Carlsbad which they now manage. A. Site Control The site is currently owned by Kelly Land Company. With the recordation of the final map for the project, Kelly Land Company will sell the different planning areas to various builders and developers. It is anticipated that Shea Homes will develop Planning Areas E and J, while Security Capital will develop Planning Areas D, G, H and I. C. Site Characteristics The affordable units will be located within Planning Areas D, G and H in the Kelly Ranch Development. The subject property is vacant and is bordered by Agua Hedionda Lagoon to the north, mobile homes to the east, residential development to the south and the Carlsbad Ranch Master Plan to the west. As part of the Kelly Ranch Development, Cannon Road will be extended from its current termination east of Interstate 5 to El Camino Real. Faraday Road will also be constructed as part of this development. AFFORD ABILITY A. Rent and Income Levels The 132 affordable units will be restricted and affordable to households with incomes not exceeding 80% of the area median (AMI). Security Capital is seeking to finance the project in part through the use of private placement bonds. SDP 98-4 - KELLY RANCH AFFORDABLE HOUSING PROJECT JULY 9, 1998 PAGE 4 B. Target Population The affordable units will be targeted to lower-income families. With a growing number of lower-income jobs in Carlsbad, there is a significant demand for affordable housing for families which will improve the jobshousing balance. C. Terms of Affordability The Affordable Housing Agreement will be executed with the developer to ensure the affordability for the project’s useful life or 55 years, as required by the City’s Inclusionary Housing Ordinance. D. Housing Element/Consolidated Plan Consistency The proposed affordable housing supports several Housing Element Goals and Objectives, including Objective 3.5 (Lower Income New Construction), Objective 3 .G (Inclusionary Housing), Objective 3.2 (Larger Units) and Goal 4 (Jobs-Housing Balance). The City of Carlsbad’s Consolidated Plan identifies housing opportunities for large, lower-income renter families as a top ranking priority. The proposed project meets the priorities, goals and objectives of the City for affordable housing. VII. CONST RUCTION P HASING As with all combined affordable housing projects to date, construction of the development will be phased. A Phasing Schedule is contained within the Affordable Housing Agreement as Exhibit B. Approval of the Affordable Housing Agreement will allow for the recordation of the final map and the development of 144 (16% of the total project) single family homes for Village E. Once the Site Development Plan is formally approved by the City Council, the entire apartment project site has been graded, and the site posted with signs indicating the forthcoming apartment project, 242 (28%) building permits will be issued. Of these permits, 110 will be for market rate units and 132 will be for the affordable units. Next, once all building permits have been issued, building foundations complete, inspected and approved for the 132 affordable units, 346 (40%) market rate building permits may be issued. Finally, once final certificate of occupancy permits have been issued for all 132 affordable units, the final 145 (17%) market rate building permits may be issued. The construction phasing noted above allows for the developer to proceed with construction of a reasonable number of the market rate homes before construction must begin on the affordable housing units. Staff believes that the phasing plan set forth within the agreement is also consistent with the inclusionary housing ordinance which requires concurrent construction of the affordable housing units. SDP 98-4 - KELLY RANCH AFFORDABLE HOUSING PROJECT JULY 9, 1998 PAGE 5 VIII. IX. X. FNTITLEMEN T S The Kelly Ranch project is currently processing several applications for the development. The City Council has previously approved the tentative map for Planning Area E and the final map is currently under review by City Staff. The final map will not be approved until such time as the Affordable Housing Agreement is approved and executed. The tentative map and related applications for the remainder of the project are currently under review by City staff. The pending applications will all require approval by both the Planning Commission and City Council at a future date. The site development plan, which includes elevations and floor plans for the affordable housing project will be brought back to the Housing Commission at a later date for additional review. ON-GOING REOUI REMENTS OF THE CIT Y The City will monitor the development of the project and its on-going management. A Regulatory Agreement with Security Capital will be required regarding affordability requirements and the management of the project. The developer will be required to file an annual report with the Housing and Redevelopment Department regarding compliance with the Agreement. SUMMARY AND RECOMMENDATIONS It is the role of the Housing Commission to make recommendations to the Planning Commission and City Council based on several considerations with respect to affordable housing projects. These are: The proposal’s effectiveness in serving the City’s needs and priorities as expressed in the Housing Element of the General Plan and the HUD Consolidated Plan. The proposal’s consistency with the City’s affordable housing policies and ordinances as expressed in the Housing Element, Inclusionary Housing Ordinance, Density Bonus Ordinance, etc. The proposal’s development and operating feasibility, emphasizing the development team capacity, financing sources and the role of the City in providing financial assistance or incentives. As indicated above, the Housing Commission is requested to make a recommendation on the Affordable Housing Agreement only. The site development plan will be returned to the Commission for further review and consideration. However, based upon the conceptual plans that have been provided, it appears that the proposed affordable housing project will serve the needs and priorities set forth within the City’s Housing Element, Consolidated Plan, and the City’s affordable housing policies and ordinances. Kelly SDP 98-4 - KELLY RANCH AFFORDABLE HOUSING PROJECT JULY 9, 1998 PAGE 6 Ranch has selected a developer which has experience in developing and managing apartment projects and has the necessary resources to finance the project. At this time, there is no request for financial assistance from the City. Staff is recommending approval of the proposed affordable housing agreement, as presented, to satisfy the inclusionary housing obligation of the Kelly Ranch Project. As required by the Inclusionary Housing Ordinance, the developer and the City must enter into an Affordable Housing Agreement prior to recordation of a final map for development within the Kelly Ranch Project. As mentioned previously, the Affordable Housing Agreement presented for review and a recommendation of approval by the Housing Commission records specific requirements of the Inclusionary Ordinance, including unit type, affordability levels and construction timing. In summary, staff is recommending that the Housing Commission approve a recommendation to the Planning Commission and City Council to approve the Affordable Housing Agreement for the Kelly Ranch Project, in substantially the form presented at this time. XI. EX HIBITS 1. 2. Draft Affordable Housing Agreement 3. Reduced Plan Exhibits Housing Commission Resolution No. 98-010 1 2 3 4 5 6 7 0 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HOUSING COMMISSION RESOLUTION NO. 98-010 THAT THE HOUSING COMMISSION RECOMMEND TO THE CITY COUNCIL APPROVAL OF AN AFFORDABLE HOUSING AGREEMENT FOR THE DEVELOPMENT OF 132 AFFORDABLE APARTMENT UNITS NECESSARY TO SATISFY THE INCLUSIONARY HOUSING REQUIREMENT FOR THE KELLY RANCH DEVELOPMENT. APPLICANT: KELLY LAND COMPANY AND PTR DEVELOPMENT CASE NO.: SDP 98-04 WHEREAS, the developer of the Kelly Ranch Development has proposed to construct 132 apartment units affordable to lower income households as a means to satisfy their affordable housing obligation as permitted by Carlsbad Municipal Code Section 21.85 of the City’s Inclusionary Housing Ordinance; and WHEREAS, the Affordable Housing Agreement for the developer’s proposal to construct said units has been submitted to the City of Carlsbad’s Housing Commission for review and consideration; and WHEREAS, said Housing Commission did, on the 91h day of July, 1998, hold a public meeting to consider the Affordable Housing Agreement for said proposal to construct 132 affordable apartment units; and WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Commission considered all factors relating to the proposal to construct said affordable housing units. NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the City of Carlsbad, California, as follows: 1. 2. The above recitations are true and correct. The Affordable Housing Agreement is consistent with the goals and objectives of the City of Carlsbad’s Housing Element and Consolidated Plan, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. ... ... 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3. 4. 5. The Affordable Housing Agreement provides a total of 132, one, two and three bedroom affordable apartment units. The project, therefore, has the ability to effectively serve the City’s housing needs and priorities as expressed in the Housing Element and the Consolidated Plan. That based on the information provided within the Housing Commission Staff Report and testimony presented during the public meeting of the Housing Commission on July 9, 1998, the Housing Commission ADOPTED Resolution No. 98-010, recommending APPROVAL to the City of an Affordable Housing Agreement for the potential development of 132 affordable apartment units in order to satisfy the requirements of the inclusionary housing requirement for the Kelly Ranch Development. That the Housing Commission recommends that the City Manager or his designee be authorized by the City Council to execute the Affordable Housing Agreement as presented by the applicant to the Commission on July 9, 1998, and subject to review and 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 gth day of July, 1998, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: KATHLEEN DUNN-WELLMAN, CHAIRPERSON CARLSBAD HOUSING COMMISSION DEBBIE. FOUNTAIN HOUSING AND REDEVELOPMENT DIRECTOR HC RESO. NO. 98-010 PAGE 2 - Exhibit 2 RECORDING REQUESTED BY AND WHEN RECORDED MAII City of Carlsbad City Clerk's Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad, California 92008 c- TO: ABOVE SPACE FOR RECORDER'S USE AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY This AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY ("Agreement"), entered into this (the "Effective Date"), by and between the CITY OF CARLSBAD, a Municipal Corporation (hereinafter referred to as the "City"), KELLY LAND COMPANY, a Delaware corporation (hereinafter referred to as "Kelly"), and PTR DEVELOPMENT SERVICES INCORPORATED, a Delaware corporation (which is affiliated with Security Capital Pacific Trust, a Maryland real estate investment trust) (hereinafter referred to as "PTR"), is made with reference to the following: day of , 1998 A. Kelly is the record owner of certain real property located in the City of Carlsbad, California (the "Kelly Ranch") described in "Exhibit A," which is attached hereto and incorporated herein by this reference. The Kelly Ranch consists of several planning areas, also designated in "Exhibit A." As used herein, the term "Planning Area" shall refer, as indicated, to one or more of such planning areas so designated on "Exhibit A." The various Planning Areas as shown on "Exhibit A" either are, or will become, separate legal parcels in accordance with the applicable legal requirements of the State of California and the City. B. Upon their creation as separate legal parcels, Kelly intends to convey or cause conveyance of record title to Planning Areas K and L, respectively, to other persons pursuant to contractual commitments not related to this Agreement. Any further development activity with respect to either Planning Area K or Planning Area L will be the responsibility of the respective transferee. All of the Planning Areas of the Kelly Ranch, other than Planning Areas K and L, are herein referred to collectively as the "Kelly Ranch Project." Kelly is the developer of the Kelly Ranch Project. C. The parties anticipate that the total number of dwelling units for the Kelly Ranch Project will not exceed eight hundred seventy-seven (877). In order to satisfy the affordable housing requirements for the entire Kelly Ranch Project, it is the intent of the parties that a combined inclusionary project (the "Combined Project") be developed on -1 - Planning Areas D, G and H, for the development of Affordable Units (as hereinafter defined) in relation to unrestricted units ("Market Units") in the Kelly Ranch Project (including the Combined Project) according to the chart set forth in "Exhibit B" . The parties acknowledge that the Affordable Units in the Combined Project will satisfy the inclusionary housing requirements for the Kelly Ranch Project, so long as the aggregate number of dwelling units does not exceed eight hundred seventy-seven (877) for the Kelly Ranch Project. D. Kelly has filed a separate application for tentative subdivision map and site plan with respect to Planning Area E. As of the Effective Date, Planning Area E is the subject of certain development approvals received from the City including without limitation: the Tentative Subdivision Map (C.T. 96-07), Planned Unit Development Permit (PUD 97-04), Hillside Development Permit (HDP 96-1 3) and Coastal Development Permit (CDP 96- 13), approved by Resolution No. 96-68, adopted by the City on April 7, 1998. E. Kelly has filed a separate application for a General Plan Amendment, rezoning and a master tentative map (the "Master Tentative Map") with respect to Planning Areas D, F, G, H, I and J, as well as K and L. Planning Areas K and L are being processed merely to create them as legal parcels, with the Master Tentative Map intended to note that further mapping of parcels K and L, respectively, will be required prior to any development of them. Kelly has also filed a proposed amendment to the Zone 8 Local Facilities Management Plan. In addition, Kelly and PTR have filed or intend to file a separate application for approval of a site development plan with respect to Planning Area J, a planned development permit with respect to Planning Area I and a site development plan for Planning Areas D, G and H. F. Kelly and PTR have entered into that certain Purchase Agreement dated , 1998 (the "Purchase Agreement"), whereby Kelly has agreed to sell Planning Areas D, G, H, I and J to PTR subject to the terms and conditions set forth therein. Among other things, said terms require that PTR take Title to all the Master Tentative Map land, but that concurrently with recordation of the final map for such land (i) PTR will Deed Planning Area F to Kelly, and (ii) PTR will Deed Planning Areas K and L to the Kelly Family Trust and to Wayne Callaghan, respectively. G. It is anticipated that the Combined Project will be developed by PTR within Planning Areas D, G and H (the "Security Property"). H. The City issued an approval for Planning Area E subject to certain conditions of approval, including a requirement that Kelly enter into an Affordable Housing Agreement in which Kelly causes to be provided at least twenty-two (22) units affordable to low income households (the "Planning Area E Inclusionary Requirement"). NOW, THEREFORE, in consideration of the mutual covenants and promises of the parties herein contained, it is mutually agreed by and between the undersigned parties as follows: -2 - 1. Satisfaction of Affordable Housing Obligation and Conditions of Apuroval. In order to satisfy the Conditions of Approval for CT 96-07 and the requirements of the City’s Inclusionary Housing Ordinance, Carlsbad Municipal Code Chapter 2 1.85, the developers of Kelly Ranch shall provide a minimum of one hundred thirty-two (132) units which shall be restricted and affordable to lower income households according to the schedule and terms contained herein. This Agreement is an Affordable Housing Agreement pursuant to Section 21.85.030(b)(5) of Chapter 2 1.85 of the Carlsbad Municipal Code. Developer shall submit this Agreement to the City and this Agreement shall be recorded concurrently with the recordation of the final map for the subject property. 2. Inclusionarv Requirements for Planning Area E. Prior to the recordation of the Affordable Housing Agreement, Kelly has voluntarily agreed to provide additional security to insure the construction of the Affordable Units required for Village E. The additional security will include (1) a cash deposit or letter of credit in the amount of $220,000, (2) The recordation of a deed restriction, in a form acceptable to the City of Carlsbad, upon Villages D, G and H which will limit development to that which can satisfy the affordable housing requirement for the Kelly Ranch Project, and (3) executed and acknowledged grant deeds from Kelly and PTR to the City for Planning Areas D, G, and H, sufficient to convey title to the City (the “Security Grant Deeds”). The City shall hold the Security Grant Deeds as security for the Developer’s construction of the Affordable Units required for Planning Area E and shall not accept the grand deeds or record them in the Official Records of the County of San Diego unless it so elects in the event the Developer fails to obtain Site Development Plan approval for the Combined Project prior to June 1,2000, as required pursuant to Section 2.1 below. The acceptance and recordation of the Security Grant Deeds shall be solely at the discretion of the City. The additional security is not an In-Lieu contribution as defined by Chapter 21.85 of the Carlsbad Municipal Code. Subsequent to the recordation of this Agreement, the developer of Planning Area E shall be entitled to construct up to a maximum of one hundred forty-five (145) Market Units. 2.1 Satisfaction of the Inclusionarv Requirements for Planning Area E Upon City approval of a Site Development Plan for the Combined Project , as defined in Section 4.1 below, City inspection and final approval of the grading of Villages D, G and H, and the installation by Kelly of one or more signs on the subject property acceptable to the City identifying the future apartment project to the satisfaction of the City, the additional security obligations described in paragraph 2 above shall be released by the City. In the event that the Site Development Plan for the Combined Project is not approved prior to July 1,2000, the City may cause Kelly to forfeit the security deposit and at the discretion of the City, the City may record the Security Grant Deeds, or extend the deadline and require the developer to continue efforts to obtain approval of a Site Development Plan in the City’s sole discretion. 3. Inclusionarv Requirements for Planning Areas A, D, G, H, I and J 3.1 Conveyance to PTR. In order to satisfy the Inclusionary Ordinance with respect to the balance of the entire Kelly Ranch Project, and subject to the terms and conditions set forth -3 - in the Purchase Agreement, Kelly shall convey the Security Property to PTR for development of the Combined Project. When the obligations set forth below have been satisfied with respect to the Combined Project, the Combined Project shall be deemed to satisfy the Inclusionary Ordinance and all inclusionary housing requirements for the remainder of the Kelly Ranch Project. 4. Terms Governing Provision of Affordable Units. 4.1 Number of Affordable Units. The Combined Project shall include up to four hundred ninety-five (495) rental housing units, a minimum of one hundred thirty-two (1 32) of which shall be rent-restricted and affordable to lower income households as required and defined by Chapter 21.85 of the Carlsbad Municipal Code (the “Affordable Units”), and as shown in “Exhibit B”. The requirement for one hundred thirty-two (132) Affordable Units is based on fifteen percent (1 5%) of eight hundred seventy-seven (877) aggregate dwelling units (including the Affordable Units) for the entire Kelly Ranch Project. The maximum number of dwelling units for the entire Kelly Ranch Project shall not exceed eight hundred seventy-seven (877). The maximum number of Market Units shall not exceed seven hundred forty-five (745). 4.2 Location of Affordable Units. The Combined Project shall be located in Planning Areas D, G and H. Specific Affordable Units within the Combined Project shall be distributed throughout the Combined Project, and shall be as provided as designated in an approved Site Development Plan. Modifications to the location and timing of the Affordable Units shall be subject to the approval of the Housing and Redevelopment Director. 4.3 Size and Bedroom Count. The Affordable Units in the Combined Project shall have the number of bedrooms and square footage as shown in “Exhibit C”. 4.4 Affordability Requirements. The Affordable Units shall be available to households with incomes not exceeding 80% of the median income for San Diego County, adjusted for actual household size. Monthly Rents of the Affordable Units shall not exceed 1/12th of 30% of 80% of median income for San Diego County, adjusted for assumed household size appropriate for the unit. For purposes of this Agreement, “Rent” shall include a utility allowance as established and adopted by the City of Carlsbad Housing Authority , as well as all monthly payments made by the tenant to the lessor in connection with use and occupancy of a housing unit and land and facilities associated therewith, including and separately charged fees, utility charges, or service charges assessed by the lessor and payable by the tenant. Median income figures shall be those published annually by the United States Department of Housing and Urban Development. Assumed household size figures shall be provided to Developer upon request to the City of Carlsbad Housing and Redevelopment Department. With respect to each Affordable Unit, the affordability requirements of this Section 4.4 shall continue for fifty-five (55) years from the date of issuance of a Certificate of Occupancy by the City for such unit or another comparable unit based upon substitution provisions pursuant to the Regulatory Agreement. The affordability requirements of this Section 4.4 shall be set forth in the -4 - \-- Regulatory Agreement between the Developer or its successor and the City, provided for in Section 5 below, which shall supersede this Agreement upon recordation of the Regulatory Agreement. 4.5 Schedule for Developing Affordable Units. 4.5.1 Prior to recordation of this agreement, Kelly shall provide the additional security as described in Section 2 of this Agreement. 4.5.2 Concurrent with the recordation of the first map for Kelly Ranch, this agreement shall be executed and recorded against the Kelly Ranch Project. 4.5.3 Prior to the Construction of any units within any Planning Area, other than Planning Area E, the developer of the Combined Project shall have received approval for a Site Development Plan for the Combined Project. The Site Development Plan shall designate the location, size and phasing of construction of the Affordable Units. 4.5.4 The Affordable Units shall be developed in accordance with the approved Site Development Plan for the Combined Project and as more fully detailed in Exhibit B of this agreement. The release of building permits for all units within the Kelly Ranch Project shall be in accordance with Exhibit B of this Agreement. Subject to tentative receipt of all necessary City and other public agency approvals, PTR intends to complete the Combined Project by December 3 1 , 2000. 4.5.5 The first 22 units completed within the Combined Project shall be designated Affordable Units to satisfl the affordable housing requirement of Village E. 5. City Approval of Documents The following documents, in form and substance acceptable to the City, shall be used in connection with the rental of Affordable Units. Such documents shall be prepared by the PTR and shall be submitted to the Housing and Redevelopment Director for review and approval no later than the start of construction of the Affordable Units. 5.1 A marketing plan consistent with the terms of this Agreement, establishing the process for seeking, selecting and determining the eligibility of tenants of the Affordable Units. 5.2 Form of Rental Agreement. 5.3 A Property Management Plan. 5.4 A Form of Regulatory Agreement between PTR and City (the "Regulatory Agreement"), following the format designated by City and provided to PTR. -5 - 5.5 Any of the documents identified in section 5 may be revised by PTR from time to time with the prior written approval of the Housing and Redevelopment Director. 6. Request for Bond Issuance Participation Upon receipt of a written request from PTR, the City may consider to make all necessary applications for the issuance of revenue bonds pursuant to Health and Safety Code Section 52075, et. Sea. 7. Rental Terms. The Affordable Units shall be rent-restricted as described in "Exhibit D" for a period of fifty-five (55) years commencing on the date the certificate of occupancy is issued for the first Affordable Unit. The Schedule of Maximum Eligible Tenant Incomes and Affordable Rents (the "Schedule") attached hereto and incorporated herein as "Exhibit D" sets forth the City's requirements for maximum household income of Tenants of the Affordable Units ("Eligible Tenants") and the methodology for calculation of the rents of Affordable Units which will be affordable to each of the Eligible Tenants (the "Affordable Rents"). The Affordable Rents will vary depending on the number of bedrooms in the Affordable Unit, and the applicable information from "Exhibit D" as the same varies from time to time. The Schedule also includes initial estimates of Eligible Tenant actual incomes and the corresponding Affordable Rents. The final Schedule shall be established prior to lease up based on the San Diego County Area Median Income and the cost factors applicable at the time. The final Schedule shall be submitted by PTR and approved by the City's Housing and Redevelopment Director. 8. ReDortina and Compliance Monitoring. PTR shall submit an annual report to the City as required under the Regulatory Agreement, identifying which units are Affordable Units, the monthly rent, vacancy information for each Affordable Unit, and monthly income of the tenants of each Affordable Unit for the prior year, together with such other information as reasonably required by the City to verify compliance with this Agreement. 9. Release of Subiect ProDertv From APreement. The covenants and conditions herein contained shall apply to and bind the heirs, executors, administrators, successors, transferees and assignees of all the parties having or acquiring any right, title or interest in or to any part of the Subject Property, and shall run with and burden the Subject Property until terminated in accordance with the provisions hereof. Prior to the issuance of building permits, Developer shall expressly make the conditions and covenants contained in this Agreement a part of any deed or other instrument conveying any interest in the Subject Property. Notwithstanding anything to the contrary set forth in this Agreement, individual purchasers of single-family units pursuant to an approved public report in compliance with the California Subdivided Lands Act, and mortgage lenders holding deeds of trust on such individual units after sale to such purchasers, shall not be subject to the terms of this Agreement; and the terms of this Agreement shall be of no further force or effect with respect to such completed unit on the date of the recordation of a deed to the individual purchaser. Upon final inspection and issuance of a certificate of occupancy for 132 Affordable Units, all Planning Areas, with the exception of Planning Areas D, G and H, shall be released from the burdens of this Agreement. The burdens of this agreement shall remain in full -6 - force and effect and recorded against Planning Areas D, G and H for the 55 year duration of this agreement. 10 Default. Failure of Kelly or PTR to cure any default in either Kelly's or PTR's obligations under the terms of this Agreement within ninety (90) days after the delivery of a notice of default from the City (or where the default is of the nature which cannot be cured within such ninety (90) day period, the failure of Kelly or PTR to commence to cure such default within the ninety (90) day period or Kelly's or PTR's failure to proceed diligently to complete the cure of such a default within 180 days) will constitute a breach of the Agreement and the requirements of the Carlsbad Municipal Code chapter 21.85 and the City may exercise any and all remedies available to it with respect to Kelly's and PTR's failure to satisfy the Conditions of Approval and chapter 2 1. 85 of the Carlsbad Municipal Code, including, but not limited to, the withholding of building permits for the market rate units within Kelly Ranch.. 1 1. Appointment of Other Agencies. At its sole discretion, the City may designate, appoint or contract with any other public agency, for-profit or non-profit organization to perform the City's obligations under this Agreement. 12. Hold Harmless. Kelly and PTR will each indemnify and hold harmless (without limit as to amount) the City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating to PTR's construction of the Combined Project, and shall protect and defend Indemnitees, and any of them with respect thereto; provided, however, that this section shall not be applicable to matters involving any gross negligence or willful misconduct on the part of any Indemnitee. The foregoing obligation shall be covered by appropriate insurance policies for the Combined Project naming Indemnitees as additional named insureds with aggregate limits of not less than five million dollars ($5,000,000) purchased by PTR at its sole expense from an insurance company duly licensed to engage in the business of issuing such insurance in the State, with a current Best's Key Rating of not less than A-V, such insurance to be evidenced by an endorsement which so provides and delivered to the City Clerk prior to the issuance of the first building permit for the Combined Project. 14 Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the party to receive such notice at the addresses set forth below: TO THE CITY OF CARLSBAD: CITY OF CARLSBAD -7 - --. Housing and Redevelopment Department Attn: Housing and Redevelopment Director 2965 Roosevelt Street, Suite B Carlsbad, California 92008-2389 TO KELLY: Kelly Land Company Attn: D. L. Clemens c/o Hillman Properties West, Inc. 201 1 Palomar Airport Road, Suite 206 Carlsbad, California 92008 with copies to: Sheppard, Mullin, Richter & Hampton LLP Attn: Christopher B. Neils, Esquire 501 West Broadway, 19th Floor San Diego, California 92 101 -3598 PTR DEVELOPMENT SERVICES INCORPORATED Attn: Kevin M. Hampton, Vice President 25B Technology Drive, Suite 2 10 Irvine, California 926 18 Security Capital Pacific Trust Attn: Pam Porter 7670 South Chester Street Englewood, CO 801 12 Mayer, Brown & Platt Attn: Mark Mears, Esquire 190 South La Salle Street Chicago, Illinois 60603-3441 Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. Such notice shall be deemed effective upon delivery, if personally delivered, two (2) business days after mailing in accordance with the requirements set forth above. 1 5. Integrated Ameement. This Agreement constitutes the entire Agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. -8 - 16. Duration of Agreement; Effect on PTR. This Agreement shall terminate upon the earlier of 55 years from the date of this Agreement and/or the granting of a written release by the Community Development Director. This Agreement, and any section, subsection, or covenant contained herein, may be amended only upon the written consent of Kelly, PTR and the Community Development Director. 17. Permitted Delays. Performance by any party of its obligations under this Agreement shall be excused during any period of delay caused at any time by reason of acts of God or civil commotion, riots, strikes, picketing or other labor disputes, shortage of materials or supplies, damage to work in progress by reason of fire, floods, earthquake or other casualty, restrictions imposed or mandated by governmental or quasi-governmental entities, enactment of conflicting laws, litigation, acts or neglect of the other parties, or any other cause beyond the reasonable control of a party, but not including failure to obtain financing. Each party shall promptly notify the other parties of any delay hereunder as soon as possible after the same has been ascertained. The term of this Agreement and the time deadlines for such performance shall be extended by the period of any such delay. 18. Rinht to Transfer. Kelly shall have the right to sell, mortgage, hypothecate, assign or transfer ("Transfer") the Kelly Ranch Project in whole or in part to any person, partnership, joint venture, firm or corporation including, without limitation, PTR ("Transferee") at any time during the term of this Agreement. Kelly and PTR shall also have the right to Transfer their respective rights under this Agreement as they pertain to the Combined Project, the Kelly Ranch Project, or any portion thereof. It is understood and agreed by the parties that portions of the Kelly Ranch Project may be subdivided after the date of this Agreement. One or more of such subdivided parcels may be Transferred to persons for development by them in reliance upon the provisions of this Agreement. The obligations of Kelly and any such Transferees are several and not joint. 19. Recording: of Agreement. The parties hereto shall cause this Agreement to be recorded against the Kelly Ranch Project, which is the burdened land and the benefitted land, in the official Records of the County of San Diego. 20. Severability. In the event any limitation, condition, restriction, covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless, be and remain in full force and effect. -9 - IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. KELLY: CITY: KELLY LAND COMPANY, a Delaware A Municipal Corporation corporation CITY OF CARLSBAD, BY BY Martin Orenyak Its Community Development Director PTR: APPROVED AS TO FORM PTR DEVELOPMENT SERVICES INCORPORATED, a Delaware corporation RONALD R. BALL City Attorney BY Its -10 - “EXHIBIT A” DESCRIPTION OF KELLY RANCH -12 - _-- “EXHIBIT B” KELLY RANCH - BUILDING PERMIT PHASING PLAN -13 - Exhibit B KELLY RANCH - BUILDING PERMIT PHASING PLAN Action Required/ Phasing Receive Approval of Affordable Hsg. Agreement by City Council & provide agreed upon security for 22 affordable housing units for Village b. Site Development Plan approved by City Council for Affordable Housing Project (I 32 units). Villages D, G & H must be graded. In addition, one or more signs must be installed on the site, which are acceptable to the City, to identify the future apartment project. All building permits issued and foundations complete, inspected and approved for 132 apartment units. Final Certificate of Occupancy must be issued for at least 132 rental units and rent restricted at the affordable rates. # of Building Permits & Type Released 144 market rate building permits 110 market rate building permits (SF and/or MF) and 132 affordable building permits within mixed income MP project and Building Permits for clubhouse in MF project 346 market rate building permits 145 market rate building permits % of Total Permits for Pro-iect 16% 13% and 15% 40% 17% Comments Allowed to proceed without- formally approved Site Development Plan for affordable project. SDP, however, must be deemed supportable by Staff. At this point, the total market rate permits allowed to be issued would be 254 or 29% of the total number of units projected; these permits can be used to construct single family or multi-family units at the discretion of the developer/ builder. The total # of building permits for housing, including the affordable, would be 386 or 44% of the total ## of housing units projected (877 units). At this point, there could be a total of 600 market rate units under construction which represents 68% of the total # of units w/in the project. These units will be a combination of single family and multi-family. The multi- family rental project is a mixed income (495 units) project which includes 132 affordable units. The first 132 rental units must be designated for affordable housing purposes. As other units receive final C of 0, the 132 units with rent restrictions may be disbursed more evenly w/in the project. -14 - .- "EXHIBIT C" AFFORDABLE UNITS SIZE AND BEDROOM COUNT -15 - . .- "EXHIBIT D" SCHEDULE OF MAXIMUM ELIGIBLE TENANT INCOMES AND AFFORDABLE RENTS [ATTACH CITY SCHEDULE] -16 - I I 1 I i 1 ! I j I I Exhibit 3 i - -- + i I I i I -+ 1.74 ~ -- t ! I I i i ! 1 I I I ! I 1 I I I 1 I , i : ! I B -0 I- > i: z P I r. e e , 8'-6" + , 18'-0" -. .__ , 18'-0' ; . /- fi -El li I@ I I ! , i i I I I 1 I I I I . I I i UZ JI 7 . 0 U I .- .. - '. -1 The City of Caslmbad Hou6ins d& Redeuelopment Depastment AREPORT TO TEE HOUSXN- CO~ISSXON 1 Xtem No. 4 DATE: JUNE 11,1998 - CONTINUED TO JULY 9,1998 SUBJECT: SECTION 8 RENTAL ASSISTANCE UPDATE I. RECOMMENDATION Informational item only. No action required. 11. BACKGROUND The City of Carlsbad Housing Authority (HA) administers the Section 8 Tenant-Based Rental Assistance program. This program is funded by the Housing and Urban Development Department (HUD). Current funding supports 503 units to assist very low-income households. 111. DISCUSSION Staff will provide the Housing Commission with a presentation on the rental assistance program. The presentation will give a general overview of the program; who we assist, statistical information, the Family Self-sufficiency component and challenges in the current rental market. The City of Carlabad Housing & Redeuelopment Department AREPORT TO THE HOUSING COMMXSSXON I Staff: LeilaniHine- Management mal- l xtem NO. 5- DATE: JUNE 11,1998 - CONTINUED TO JULY 9,1998 SUBJECT: SAN DIEGO COUNTY REGIONAL MORTGAGE CREDIT CERTIFICATE PROGRAM - INFORMATIONAL REPORT I. RECOMMENDATION No action is required. Informational report only. 11. PROJECT BACKGROUND Since 1994, the City of Carlsbad has participated with the County of San Diego and other participating cities to form a Regional Mortgage Credit Certificate (MCC) Program for the purpose of increasing homeownership opportunities for low and moderate income households. As a participant in the San Diego County Regional MCC Program, the City will receive an MCC allocation each year the Regional MCC Program is successful in its application to the California Debt Limit Allocation Committee. 111. PROJECT DESCRIPTION The MCC Program, authorized in the Tax Reform Act of 1984, is a publicly-sponsored financial assistance program which provides assistance to first time home buyers in the purchase of single family housing. The MCC operates as an IRS tax credit. With an MCC, the qualified home buyer can take a federal income tax credit of twenty percent (20%) of the annual interest paid on the mortgage. The tax credit reduces the federal income taxes due to the federal government from the home buyer, resulting in an increase in the home buyer’s net earnings. Increased home buyer income results in increased buyer ability to qualify for a mortgage loan. In accordance with program regulations, a home buyer qualifies if their household income does not exceed $50,800 for a family of one to two persons (100% of median San Diego County income) or $58,420 for a family of three or more persons (115% of median San Diego County income). A “qualified” home must have a purchase price at or below $149,933 for a new home and $167,232 for a previously occupied home (these prices represent 90% of the average San Diego County purchase price). An MCC can be used for new or existing single family homes throughout Carlsbad, including single family detached homes, condominiums, half plexes, or townhouses. The home buyer applies for an MCC through any of the participating lenders at the same time he/she makes a formal application for a mortgage loan. SAN DIEGO COUNTY REGIONAL MORTGAGE CREDIT CERTIFICATE PROGRAM - INFORMATIONAL REPORT JUNE 11, 1998 PAGE 2 1994 1995 Since 1994, the City has received a total of $1,098,190 in MCC credit to assist first time home buyers purchase a home in Carlsbad. As of May 31, 1998, 39 households, of which nine (9) were low income, received an MCC to assist them with the purchase of their home. The City has a remaining balance of $107,514 in MCC credit. It is anticipated that the balance remaining will assist approximately four (4) first time home buyers. 199,969 223,949.00 10 323.531 281.482.00 12 MCC Credit I MCEszydit I I Available MCCs Issued 1996 1997 304,880 343,776 .OO 13 176.772 141,469.00 4 I 998 TOTAL 93,039 1,098.1 91 990.676 39 Funding for this program has been significantly reduced each year. Funding for 1998 was reduced 47 percent from the prior year. It is unknown if the City of Carlsbad will continue to receive funding through the Regional MCC Program for first time home buyer assistance. IV. EXHIBITS 1. San Diego County Regional Mortgage Credit Certificate Program Summary The City of Carlebad Housing & Redevelopment Department A-PORT TO THE HOUSING COMMXSSION DATE: JUNE 11,1998 - CONTINUED TO JULY 9,1998 SUBJECT: CITY OF CARLSBAD SINGLE FAMILY RESIDENTIAL REHABILITATION PROGRAM - INFORMATIONAL REPORT I. RECOMMENDATION No action is required. Informational report only. 11. PROJECT BACKGROUND Since 1994, the City of Carlsbad has provided loans and grants to low income households throughout the City to assist in the rehabilitation of owner-occupied single family or mobile homes. The City’s Single Family Residential Rehabilitation Program is administered by the County of San Diego Housing Authority on behalf of the City of Carlsbad and has been funded through the City’s Coininunity Development Block Grant (CDBG) and HOME Program 111. PROJECT DESCRIPTION The City offers four residential rehabilitation loaidgrant programs to eligible property owners: 1) Below Market Interest Subsidy Loan for those able to qualify; 2) Zero Interest Deferred Loan; 3) Elderly/Handicapped Grant; and 4) Weatherization Grant. A summary of these loan/grant programs is attached as Exhibit 1. Eligible participants are limited to owner occupants of singe family dwellings or mobile homes with a gross household income less than 80 percent of the San Diego County median income (low income households). Although the program is open to all eligible resident property owners, city-wide efforts will target those homes located in Census Tract 179.00, which includes the Barrio area. This census tract represents the highest concentration of lower income households in Carlsbad. The rehabilitation of owner occupied single family homes is funded entirely through the City’s Community Development Block Grant (CDBG) and HOME Program. Over the years, the City has allocated a total of $862,152 in CDBG and HOME funds for administration and implementation of the Single Family Residential Rehabilitation Program. As of May 31, 1998, the City has a remaining balance of $561,449 available. CITY OF CARLSBAD SINGLE FAMILY RESIDENTIAL REHABILITATION PROGRAM INFORMATIONAL REPORT JUNE 11, 1998 PAGE 2 Description CDBG I Available Funding ($) 260,610.73 HOME Sinale Familv (14) 601,541 .OO Mobile homes (4) Administration TOTAL I 862,151.73 Expended to Date ($) Balance ($) 250.51 1.85 To date, the City of Carlsbad has provided residential rehabilitation loans/grants to fourteen (14) single family home owners and four (4) mobile home owners, with approximately $275,092 in CDBG and HOME funds. of approximately twenty (20) single family dwellings and three (3) mobile homes. There are currently ten (1 0) applicants on the City’s interest list and the County will begin processing the first three applicants by June 30, 1998. It is anticipated that the balance remaining will assist in the rehabilitation Rehabilitation of housing will preserve the integrity of single family homes in the community and provide a stable, safe and sanitary living environment for lower income residents. Additionally, the rehabilitation of housing will prevent the potential degradation of neighborhoods. IV. EXHIBITS 1. City of Carlsbad Single Family Residential Rehabilitation Program Summary I'he City of Carlmbad ROUE- dk Redevelopment Department AREFORT TO THE HOUSXN- COMMXBSXON 1 Xtem No. 7 DATE: JUNE 11,1998 - CONTINUED TO JULY 9,1998 SUBJECT: AFFORDABLE HOUSING UPDATE I. RECOMMENDATION Informational item only. No action required. II. DISCUSSION Since its inception, the Housing Commission has reviewed numerous afTordable housing projects and programs. The Affordable Housing Project Status Chart (Exhibit No. 1) details the various affordable housing projects in the City. StafY will provide the Commission with an oral presentation regarding the affordable housing projects and programs contained in the Chart. III. EXHIBITS 1. Affordable Housing Project Status Chart m c, cp a 3i Y vi Y s 8 m e4 n X :& cd v n -7 Y I v1 .c, a 3i Q Q) Q) w Q) .^ Q) Y 1 0 \o I Y s E a 0 37 5& L- 00 m CI 0 UJ 0 -z . n 00 m N 0 \o 0 . . a n * h > 6 E rJ a I 4 3 2 - 4