HomeMy WebLinkAbout2012-02-14; City Council; Resolution 2012-0301 RESOLUTION NO. 2012-030
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2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, TO APPROVE A REQUEST TO
3 AMEND THE LOAN AGREEMENT WITH CARLSBAD FAMILY
HOUSING PARTNERSHIP TO RESTRUCTURE SAID LOAN.
4 AND TO ALLOW FOR A CHANGE IN PARTNERSHIP
MEMBERS.
5 APPLICANT: CARLSBAD FAMILY HOUSING PARTNERSHIP
CASE NO: SDP 97-15
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WHEREAS, Carlsbad Family Housing Partnership has developed 116-apartment
units affordable to lower income households as a means to satisfy a portion of the
affordable housing obligation for the Rancho Carnllo Master Plan as permitted by
Cartsbad Municipal Code Section 21.85 of the City's Inclusionary Housing Ordinance;
and
13 WHEREAS, the City Council did, on the 17*^ day of February, 1998, hold a public
14 meeting to consider a request for City financial assistance for the construction of said
15 116 affordable housing apartment units by the affordable housing owner, Cartsbad
16 Family Housing Partnership; and
WHEREAS, at said public meeting, the City Council did approve documents
related to provision of the City assistance, including but not limited to a Loan
Agreement, Promissory Note, Deed of Trust, and Regulatory Agreement and
Declaration of Restnctive Covenants, in substantially the form presented to the Housing
Commission on February 12,1998, and subject to the review by the City Attorney; and
WHEREAS, Carlsbad Family Housing Partnership has requested, and the City of
24 Cartsbad agrees to, amend the original loan agreement to make some modifications to
25 the terms of said loan, and to allow a change in partner members for the Cartsbad
26 Family Housing Partnership.
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1 NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council ofthe City
2 of Carisbad as follows:
1. The above recitations are true and correct.
2. That based on the information provided within the City Council staff report
and the comments provided during the public meeting of the City Council, the
City Council hereby APPROVES the request to amend the loan agreement
and related documents by and between the City of Cartsbad and the Carisbad
9 Family Housing Partnership, and to accept and approve the partnership
10 member changes.
^ ^ 3. That the City Council authorizes the City Manager or designee to execute the
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First Amendment to the Loan Agreement and related documents, in
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substantially the form presented to the City Council as approved by the City
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Attorney.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council
of the City of Cartsbad on the 14*^ day of Febmary 2012, by the following vote to wit:
AYES:
NOES:
Council Members Hall, Kulchin, Blackburn, Douglas, Packard.
None.
ABSENT: None.
MATT(HALL, Mayor
ATTEST:
(--^-ORIRAINE M. WOOD, City Clerk
(SEALX4'?.^?.?^0o>,
Exhibit 2
Draft Agreement
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO;
City of Carlsbad
City Clerk's Office
Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad. CA 92008
(Space above for Recorder's Use)
FIRST AMENDMENT TO THE
LOAN AGREEMENT
(Carlsbad Family Housing Partnership- Rancho Carrillo)
This First Amendment to the Loan Agreement and ("First Amendment") is made and
entered into this day of , 2012, by and between the City of
Carlsbad, a municipal corporation ("City") and Carlsbad Family Housing Partnership, a
Califomia limited partnership ("Owner").
RECITALS
A. WHEREAS, Lender and Borrower entered into that certain Affordable Housing
Loan Agreement (Financing Agreement) dated as of January 8, 1999 (the "Loan Agreement"),
pursuant to which Lender made a Loan to Borrower in the original principal amount of
$1,160,000 (the "City Loan"). Except as otherwise provided herein, all capitalized terms
appearing in this Agreement have the same meaning as in the Loan Agreement;
B. WHEREAS, in addition to executing the Loan Agreement, Borrower executed
certain other related documents of even date in connection with the Loan, including a Promissory
Note (the "City Note"), a Regulatory Agreement and Declaration of Restrictive Covenants as
amended by that certain First Amendment to the Regulatory Agreement and Declaration of
Restrictive Covenants (the "City Regulatory Agreement"), and a Deed of Trust, which
encumbers certain real property located in the City of Carlsbad, County of San Diego, State of
Califomia (the "Property") (collectively, the "Loan Documents");
C. WHEREAS, Pacific Housing, Inc., a Califomia nonprofit public benefit
corporation ("Pacific"), Barone Galasso & Associates Incorporated, a Delaware corporation
("BGA"), BCCC, Inc., a Massachusetts corporation ("BCCC"), The Califomia Corporate Tax
Credit Fund III, a Massachusetts Limited Partnership, Fund" and collectively with Pacific, BGA
and BCCC, the "Existing Partners"), have entered into a sale of their interests on the Carlsbad
Family Housing Partnership (the "Interest Sale") with USA Carlsbad, Inc., a Califomia
corporation ("USA Carlsbad") in that certain Partner Interest Purchase and Sale Agreement dated
as of December 19, 2011 (the "Purchase Agreement") pursuant to which the Existing Partners
shall sell their respective partnership interests in the Borrower to the USA Carlsbad, Inc. .and
certain designees thereof
2/2/2012 7
D. WHEREAS, subsequent to the Interest Sale, USA Carlsbad shall act as the
administrative general partner of the Borrower, Riverside Charitable Corporation, a Califomia
nonprofit public benefit corporation ("Riverside") shall act as the managing general partner of
the Borrower, and Avanath Carlsbad, LLC, a Delaware limited liability company ("Avanath" and
collectively with USA Carlsbad and Riverside, the "New Partners") shall act as the limited
partner of the Borrower; and
E. WHEREAS, in connection with the Interest Sale, the Lender and the Borrower
have agreed to amend certain terms of the City Loan, including, without limitation, to provide
that for the remainder of the Term, the Borrower shall make annual payments to the Lender of
$43,093.08 with all unpaid amounts payable upon the end of the Term, all as more fully set forth
herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Confirmation of Debt. Borrower and Lender hereby ratify, reaffirm and confirm
the Loan Documents are in full force and effect and, except to the extent amended or modified by
this First Amendment, have not been otherwise amended or modified. Lender hereby confirms
that as of the date of this First Amendment, (i) the outstanding principal balance of the City Loan
is $1,157,548.41, (ii) the Term ofthe City Loan ends on December 28, 2055, (iii) all interest due
on the City Loan as of the date hereof has been paid in full, and (iv) the Borrower is not in
default under any term or condition of the Loan Documents.
2. Lender Consent to Interest Sale. The Lender hereby consents to (allow the
obligations of the Existing Partners to be assumed in full by the New Partners;.
3. Amendments to Loan Agreement.
(a) Secfion 4.3 of the Loan Agreement is hereby rescinded in its entirety and
replaced with the following:
"4.3. Repayment. On the fifteenth day of January of each year
commencing upon January 15, 2013, the Borrower shall pay to
Lender an amount equal to $43,093.08, which amount shall first be
applied to any accmed and unpaid interest and thereafter to
outstanding principal. Any portion of the principal and interest on
the City Loan not sooner paid shall be due and payable upon the
earlier of: (i) the occurrence of an Event of Default hereunder; (ii)
expiration of the Term; or (iii) sale or transfer of the Developer
other than a transfer described in Section 4.5 below."
(b) Section 4.14 of the Loan Agreement is hereby rescinded in its entirety.
(c) The reference to the "Master Developer" in Section 8.15 of the Loan
Agreement is hereby deleted.
2/2/2012 ^
(d) The notice address for the Borrower set forth in Section 10.3 of the Loan
Agreement is hereby deleted and replaced with the following:
Carlsbad Family Housing Partnership
c/o USA Carlsbad, Inc.
2440 Professional Drive
Roseville, CA 95661
Attn: Steven Gall
With a Copy to:
Avanath Carlsbad, LLC
c/o Avanath Affordable Housing I, LLC
2211 Michelson, Suite 830
Irvine, CA 92612
Attention: Ron Juskiewicz
4. Limited Partner Provisions.
(a) Section 9.7 of the Loan Agreement is hereby rescinded in its entirety and
replaced with the following:
"9.7. Removal of General Partner by Limited Partner. The City
agrees that the removal of any general partner of the Borrower by the
limited partner of Borrower pursuant to the terms of the Borrower's
limited partnership agreement will not in and of itself constitute a default
under any of the City Loan Documents or allow acceleration of the City
Loan. If any other entity, which is not either the limited partner or one of
its affiliates, becomes a general partner of Borrower, the limited partner
shall obtain the approval of the City of such replacement general partner
within three (3) months thereafter, which approval shall not be
unreasonably withheld."
(b) The reference to "Boston Capital" in Section 10.5 of the Loan Agreement
shall be replaced with "Avanath" so that Avanath is the sole third party beneficiary of the Loan
Agreement with respect to Section 9.2 and Section 9.7.
5. Median Income. For the purposes of the Loan Documents, the term "Median
Income" shall mean the median gross yearly income adjusted for actual household size, in the
County of San Diego, Califomia, as determined from time to time by the U.S. Department of
Housing and Urban Development pursuant to Section 8(f)(3) of the United States Housing Act of
1937, as amended. In the event that such income determinations are no longer published, or are
not updated for a period of at least eighteen (18) months, the City shall provide the Owner with
other income determinations which are reasonably similar with respect to methods of calculation
to those previously published by HUD, unless the federal Low Income Housing Tax Credit
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(LIHTC) program utilizes different area median income limits, in which event the LIHTC
program area median income limits shall be utilized.
6. No Other Changes. Except as expressly provided in this First Amendment, the
Loan Agreement and all of the other Loan Documents shall remain unchanged and in full force
and effect.
7. Effective Date. This First Amendment shall be effective upon execution of this
First Amendment by all parties as set forth in the date and year first above written.
IN WITNESS WHEREOF, the City and Owner have executed this First Amendment by
duly authorized representatives,
CARLSBAD FAMILY HOUSING
PARTNERSHIP, a Califomia limited
partnership
By:
By:
Titie:
Date:
Riverside Charitable Corporation,
Inc., a Califomia nonprofit public
benefit corporation. Managing
General Partner
(Proper notarial acknowledgment of
execution by Owner must be attached)
Chairman, president or vice-president and
secretary, assistant secretary, CFO or
assistant treasurer must sign for
corporations. Otherwise, the corporation
must attach a resolution certified by the
secretary or assistant secretary under
corporate seal empowering the officer(s)
signing to bind the corporation.)
By: USA Carlsbad Properties Fund, Inc.,
a Califomia Corporation
Administrative General Partner
By:
Titie:
Date:
By: Avanath Carlsbad, LLC,
a Delaware limited liability
company, Sole Limited Partner
By:
Titie:
Date:
2/2/2012
CITY OF CARLSBAD, a municipal
corporation
By:
Lisa Hildabrand, City Manager
Date:
APPROVED AS TO FORM:
By:
Jane Mobaldi
Assistant City Attomey
Date:
01/06/99
Rancho Carrillo Regulatory Agreement
EXHIBIT A
Property Description
Lot 207 of Carisbad Tract 97-02 Rancho Carrillo Villages "A Through D"
according to Map No. 13582 filed with the County Recorder of San Diego
County on June 10, 1998.
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BARONE GALASSO & ASSOCJATES, INC
January 23, 2012
Ms. Debbie Fountain
Director of Housing & Neighborhood Services
City of Carlsbad
2965 Roosevelt Street, Suite B
Carlsbad. CA 92008
Dear Ms. Fountain:
As you know, Rancho Canillo is a 116-unit family affordable housing project
located at 6053 Paseo Acampo. The property was built in 1999 and
financed with Low income Housing Tax Credits, debt issued by the Califomia
Housing Finance Agency (CHFA), a Master Developer Loan and Purchase
Price Loan, and a City of Carlsbad loan. We are presently under contract to
sell the partnership interest in the property as follows.
USA Properties Fund, Inc. ("USA"), Avanath Capital ("Avanath"), and
Riverside Charitable Corporation ("RCC") are acquiring the partnership
interests of Cartsbad Family Housing Partnership, a California Limited
Partnership (the "Partnership") which owns the Rancho Carrillo
Apartments. USA Carlsbad will replace Barone Galasso & Associates,
Inc., a Delaware Corporation as the Administrative General Partner ofthe
Partnership. Riverside Charitable Corporation, a California nonprofit
public benefit corporation will replace Pacific Housing, Inc., a California
nonprofit public benefit corporation as the Managing General Partner of
the Partnership. Avanath Carisbad LP, LLC wili replace The California
Corporate Tax Credit Fund III and BCCC, Inc., a Massachusetts
Corporation and will be the sole limited partner of the Partnership.
(Please see attached organization chart).
The purchase price of the interests in the Partnership Is $10,900,000 of
which $3,550,000 shall be paid in cash by USA/Avanath with the
remainder being outstanding Partnership debt at closing. At closing, the
existing $6,200,000+/- CalHFA loan and the $1,160,000 City of Carlsbad
loan will remain as Partnership obligations. Concurrentiy with closing, the
Partnership shall pay approximately $180,000 of accnjed interest on the
City Loan and existing Partnership debt held by D.R. Horton will be
retired.
[ 1528
India. Street
San Diego
C a I i f 0 r [1 i 3
92101
5!0.232-2!DO
Fax 232.2 12/
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The proposed City of. Carisbad Loan Modification Agreement, as drafted by
USA's attomey, reflects the temns of a loan assumption under this structure.
Specifically, the proposal includes restmcturing the loan as an amortized
payment schedule rather than a function ,of Surplus Cash as cun-ently
modeled. The Loan Modification Agreement is reattached for your review.
We greatly appreciate your consideration of the above. We look fonward to
working with you to' develop. a timeline and approval process for the
proposed City of Carlsbad loan modification and, as has been discussed, we
are targeting a February U'^ 2012 City Council hearing.. Please feel free tp
contact me with any questions.
Sincereiy,
Carisbad Family Housing Partnership
<:V—kj . , /
James V. Barone
Barone Galasso & Associates, Inc.
cc: Michelle Keldorf
Steve Gail
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