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HomeMy WebLinkAboutCC Reso No 2009-45 Page 1 of 4 RESOLUTION NO. 2009-45 RESOLUTION OF CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING A LOAN OF HOPE VI MAIN STREET GRANT FUNDS TO POTTERY COURT HOUSING ASSOCIATES, L.P. FOR AN AFFORDABLE HOUSING PROJECT KNOWN AS POTTERY COURT WHEREAS, the City is a municipal corporation organized and existing under the laws of the State of California. The City has been awarded a One Million Dollar ($1,000,000) grant (the "HOPE VI Main Street Grant") from the United States Department of Housing and Urban Development ("HUD") pursuant to the federal HOPE VI Authorization which was appropriated by the Consolidated Appropriations Act, 2008 (Pub. L. 110-161) under the heading "Revitalization of Severely Distressed Public Housing ("HOPE VI Program") for purposes of strengthening public-private partnerships to provide decent, safe, sanitary, and affordable housing, with primary attention to rental housing, for very low income and lower income households in the City, and particularly for the Project (as defined below); and WHEREAS, the City has entered into a Grant Agreement dated May 21, 2009 with HUD setting forth specific terms and conditions relating to the use of the funds; and WHEREAS, by action of the City Council pursuant to Chapter 2 of the California Community Redevelopment Law (Health & Safety Code 33000 et seq.) ("Redevelopment Law") the City has established the Redevelopment Agency of the City of Lake Elsinore (the "Agency"), whose purposes include increasing, improving and preserving the community's supply of housing affordable to and occupied by low and moderate income households pursuant to 33334.2, 33334.3, 33334.6 and 33413 of the Redevelopment Law; and WHEREAS, Pottery Court Housing Associates, L.P. ("Developer") is a California limited partnership, whose general partner is an experienced affordable housing developer, and whose purpose is to construct, operate and manage the Project (as defined below); and WHEREAS, on May 26, 2009, the Agency and Developer entered into that certain Disposition and Development Agreement (Pottery Court) (the "DDA"), which provides for (1) the disposition by the Agency to the Developer of approximately 4.3 acres of real property located within the boundaries of Rancho Laguna Redevelopment Project Area No. I and generally bounded by Pottery Street and Sumner Avenue between the outflow channel of Lake Elsinore and Langstaff Street (the "Property"); (2) the loan from the Agency's Low and Moderate Income Housing Fund to the Developer in an amount not to exceed Four Million Sixty One Thousand Dollars ($4,061,000) ("Agency Loan"); and (3) the development of approximately one-hundred eleven (111) units restricted to occupancy by very low income households at an affordable rent, two F1 (2) manager units, and community space which will provide a study room, a music practice room, a great room for parties, a full kitchen, a pool, BBQs and one tot lot all in CITY COUNCIL RESOLUTION NO. 2009-45 PAGE 2 OF 4 accordance with the Project Description attached as Attachment No. 3 to the DDA, the Development Proposal submitted to HUD under the Grant Agreement and Tentative Parcel Map 36193 and Residential Design Review No. 2009-02 approved by the City Council of City on June 23, 2009 (the "Project"); and WHEREAS, on June 9, 2009, Developer submitted an application for an allocation of nine percent (9%) Low Income Housing Tax Credits pursuant to Section 42 of the Internal Revenue Code and/or California Revenue and Taxation Code sections 17057.5, 17058, 23610.4, and 23610.5 and California Health and Safety Code section 50199 et seq. for the Project (the "TCAC Application"). Developer anticipates the Tax Credit syndication proceeds will be in the amount set forth in the Preliminary Project Budget, and WHEREAS, Developer requires financial assistance from City in order to cover certain eligible predevelopment costs that Developer will incur in connection with the Project; and WHEREAS, the City desires to provide financial assistance to Developer for certain eligible predevelopment costs in the form of a City Loan in the aggregate amount not to exceed One Million Dollars ($1,000,000) (the "City Loan"); and WHEREAS, Agency currently owns the Property and has agreed to convey the Property to Developer subject to and in accordance with the DDA. The City Loan F11 proceeds will not be used by Developer for acquisition of the Property from Agency; and WHEREAS, Developer and City agree that the City Loan will facilitate the development of the Project which is in the vital and best interest of the City, is necessary for the protection of the health, safety and welfare of the City's residents, and is in accord with the public purposes and provisions of applicable federal, state and local laws and requirements. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The foregoing recitals are true and correct and are incorporated as substantive findings of the City by this reference. SECTION 2. The Agency hereby authorizes the City Manager to provide a loan from the HOPE VI Main Street Grant in an amount not to exceed $1,000,000 to Developer, to be used for costs and expenses approved by the City Manager, or his designee, which are customarily incurred and shall have been actually incurred by Developer for the predevelopment and development of Pottery Court. SECTION 3. The City Loan shall require that the use of funds will be consistent r with the requirements of the Grant Agreement, provide for 3% simple interest, provide for annual payments of residual receipts (revenues less operating cost and debt service) on a pro rata basis with the Agency and County loans, and require that any CITY COUNCIL RESOLUTION NO. 2009-45 PAGE 3 OF 4 remaining outstanding balance be payable due in 55 years, or on such other favorable repayment terms and schedule as the City Manager determine are in the best interests of the City and Pottery Court. SECTION 4. As a condition of the City Loan, the City will require that the loan be secured by a Deed of Trust which will be recorded against the Pottery Court property upon the property transfer from the Agency to the Developer pursuant to the DDA. SECTION 5. That the making of the City Loan shall be contingent on and subject to such other appropriate terms and conditions as the City Manager may establish. SECTION 6. All loan documents shall be reviewed and approved by the City Attorney for form and legality prior to execution. SECTION 7. Subject to all applicable laws, including all notice and hearing requirements relating to Pottery Court, the City Council hereby authorizes the City Manager to execute a loan agreement along with any ancillary documents, administer the City Loan, and take any other action with respect to the loan and Pottery Court consistent with this Resolution and its basic purpose. SECTION 8. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this 14th day 200 R RT E. MAG MAYOR CITY OF LAKE EfAINORE vD.EBORA THOMSEN - CITY CLERK APP - OVED AS,, 8ARBARA ZEI LEIBOLD CITY ATTORNEY CITY COUNCIL RESOLUTION NO. 2009-45 i PAGE 4OF4 STATE OF CALIFORNIA COUNTY OF RIVERSIDE SS CITY OF LAKE ELSINORE I, DEBORA THOMSEN, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2009-45 was adopted by the City Council of the City of Lake Elsinore at a regular meeting held on the 14th day of July 2009, and that the same was adopted by the following vote: AYES: Mayor Robert E. Magee, Mayor Pro Tem Melissa Melendez, Councilmember Amy Bhutta, Councilmember Thomas Buckley, Councilmember Daryl Hickman NOES: None ABSTAIN: None ABSENT: None DEBORA THOMSEN CITY CLERK ' ev= F