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Home My WebLink AboutCC Reso No 2013-065 City Council ResoRESOLUTION NO. 2013 -065 A RESOLUTION OF THE CITY OF LAKE ELSINORE APPROVING TRANSFER OF WATERMARK APARTMENTS TO PROVIDENCE NORTH LAKE APARTMENTS, LLC, AND APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF RELATED DOCUMENTS WHEREAS, in 1999, the former Redevelopment Agency of the City of Lake Elsinore (the "Former Agency') issued $5,000,000 principal amount of Redevelopment Agency of the City of Lake Elsinore Multifamily Housing Revenue Bonds (Lakeside Village Project), 1999 Refunding Series A (the "Bonds ") pursuant to a Trust Indenture, dated as of November 1, 1999 (the "1999 Indenture "); and WHEREAS, the Former Agency loaned the proceeds of the Bonds to Steadfast Lakeside, L.P., a California limited partnership ( "Steadfast'), pursuant to a Loan Agreement, dated as of November 1, 1999 (the "1999 Loan Agreement') to refinance a 128 -unit multifamily rental housing project (the 'Project') located in the City of Lake Elsinore (the "City ") currently known as Watermark Apartments (and formerly known as Lakeside Village and North Lake Apartments); and WHEREAS, in connection with the issuance of the Bonds, the Former Agency, the then trustee for the Bonds and Steadfast entered into a Regulatory Agreement and Declaration of Restrictive Covenants, dated as of November 1, 1999 (the "Original Regulatory Agreement'), which requires, among other matters, that not less than twenty percent (20 %) of the units in the Project be occupied, or held vacant and available for occupancy by, Low /Moderate Income Tenants (as defined in the Original Regulatory Agreement) and that an additional twenty percent (20 %) of the units in the Project be occupied, or held vacant and available for occupancy by, Moderate Income Tenants (as defined in the Original Regulatory Agreement); and WHEREAS, in March of 2001, the Former Agency entered into an Amended and Restated Trust Indenture, dated as of March 15, 2001, which amended and restated the 1999 Indenture, and at that time the Former Agency also entered an Amended and Restated Loan Agreement, dated as of March 15, 2001 (the "2001 Loan Agreement') with Steadfast, which amended and restated the 1999 Loan Agreement, and a First Amendment to Regulatory Agreement, dated as of March 15, 2001 (the "First Amendment to Regulatory Agreement'), with the then trustee for the Bonds and Steadfast, which amended the Original Regulatory Agreement; and WHEREAS, in 2002, Steadfast sold its interests in the Project to ALS Lakeside, LP, a Colorado limited partnership ( "ALS "), and at that time Steadfast, ALS, the Former Agency, the then trustee for the Bonds and the Federal Home Loan Mortgage Corporation ( "FHLMC "), entered into an Assignment, Assumption and Consent Agreement, dated as of August 12, 2002 (the "2002 Assignment Agreement'), pursuant to which ALS assumed the obligations of Steadfast under (i) the Original Regulatory City Council Resolution No. 2013 -065 Page 2 of 4 Agreement, as amended by the First Amendment to Regulatory Agreement and by a Second Amendment to Regulatory Agreement, dated as of August 12, 2002, among the Former Agency, the then trustee for the Bonds and Steadfast (the Original Regulatory Agreement, as so amended, being referred to below as the "Regulatory Agreement'), (ii) the 2001 Loan Agreement, as amended by a First Amendment to Loan Agreement, dated as of August 12, 2002, between the Former Agency and Steadfast (the 2001 Loan Agreement, as so amended, being referred to below as the "Loan Agreement'), (iii) the Deed of Trust and the Note (as such terms are defined in the 2002 Assignment Agreement), and (iv) a Continuing Disclosure Agreement, dated as of March 15, 2001, between Steadfast and the then trustee for the bonds (the "Disclosure Agreement' and, collectively with the Regulatory Agreement, the Loan Agreement, the Deed of Trust and the Note, the "Bond Documents "); and WHEREAS, in December of 2005, ALS sold its interests in the Project to DAV -A North Lake, LLC, a California limited partnership ( "DAV -A" ), and at that time ALS, DAV - A, the Former Agency, the then trustee for the Bonds and the FHLMC entered into an Assignment, Assumption and Consent Agreement, dated as of December 28, 2005, pursuant to which DAV -A assumed the obligations of ALS under the Bond Documents; and WHEREAS, the Former Agency was dissolved on February 1, 2012 pursuant to ABx1 26, and pursuant to California Health and Safety Code Section 34176 the City elected to retain the housing assets and functions of the Former Agency, including its interests in the Bond Documents to which the Former Agency was a party; and WHEREAS, DAV -A has now expressed its interest in selling the Project to Providence North Lake Apartments, LLC, a California limited liability company ('Provident') and, in connection therewith, DAV -A will enter into an Assignment and Assumption Agreement with Provident (the "2013 Assignment Agreement') pursuant to which Provident will assume the obligations of DAV -A under the Bond Documents upon transfer of title of the Project from DAV -A to Provident; and WHEREAS, Section 11 of the Regulatory Agreement requires that the City, as successor to the housing assets of the Former Agency, consent to the transfer of the Project to Provident, and Provident has submitted various information to the City Attorney and City Staff regarding it and its proposed manager for the Project; and WHEREAS, Section 2.5 of the Loan Agreement provides for the payment of a mitigation fee by the owner of the Project (the "Mitigation Fee ") intended to offset the loss of property tax revenue to the City if the Project owner qualifies the Project for a property tax exemption under Section 214 of the California Revenue and Taxation Code (the "Property Tax Exemption "); and City Council Resolution No. 2013 -065 Page 3 of 4 WHEREAS, in connection with the transfer of the Project to DAV -A, the Former Agency agreed to waive the Mitigation Fee based upon representations at the time by DAV -A to the effect that it did not qualify for the Property Tax Exemption; and WHEREAS, Provident has represented and warranted in the 2013 Assignment Agreement that it is not eligible for the Property Tax Exemption and will take no action to obtain the same so long as it is the owner of the Project; and WHEREAS, the City now desires to consent to the transfer of the Project to Provident, and a waiver of the Mitigation Fee as to Provident, as contemplated by a City Consent in the form attached to the 2013 Assignment Agreement, all in order to preserve the low and moderate multifamily housing units provided by the Project. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The above recitals are true and correct. SECTION 2. The City, as successor to the housing assets of the Former Agency, hereby approves the transfer of the Project from DAV -A to Provident, subject to receipt by the City Manager of a fully executed 2013 Assignment Agreement in the form presented to the City Council at this meeting, together with such additions thereto or changes therein as the City Manager, upon consultation with the City Attorney and the City's Bond Counsel shall approve, along with (a) an executed opinion of counsel to Provident, and (b) an opinion of the City's bond counsel, each as referenced in Section 11 of the Regulatory Agreement. The City Manager is hereby authorized and directed to execute and deliver the City Consent in the form attached to the final form of the 2013 Assignment Agreement, and the execution and delivery by the City Manager of such City Consent shall be conclusive evidence of the approval by the City of the 2013 Assignment Agreement and the transfer of the Project to Provident. SECTION 3. The City Council hereby consents to a waiver of the Mitigation Fee so long as Provident owns the Project and does not apply for the Property Tax Exemption. The City Manager is hereby authorized to confirm such waiver in writing to The Bank of New York Mellon Trust Company, N.A., the current trustee for the Bonds. SECTION 4. The City Manager is hereby authorized to execute such other certificates and documents to evidence the City's approval of the transfer of the Project to Provident as may be reasonably requested by Provident or DAV -A, subject to the review and approval of any such documents by the City Attorney and Bond Counsel, and so long as such documents do not impose any obligation on the City not already contemplated by the Bond Documents. City Council Resolution No. 2013 -065 Page 4 of 4 SECTION 5. This Resolution shall take effect from and after the date of its passage and adoption. RESOLVED, APPROVED AND ADOPTED by the City Council of the City of Lake Elsinore on this 10th day of December 2013. „ J / bert E. Magee, kfaybr j ATTEST: )N" � JOX4'-� irgini . BlooV C'ty Clerk APPROVED AS TO FORM: Z. Leibok:l, City Attorney STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Virginia J. Bloom, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2013 -065 was adopted by the City Council of the City of Lake Elsinore, California, at a regular meeting held on the 10 day of December 2013, and that the same was adopted by the following vote: AYES: Council Member Manos, Mayor Pro Tern Johnson, Council Member Tisdale, Council Member Hickman, and Mayor Magee NOES: None ABSENT: None ABSTAIN: None Virgini . Blot City Clerk