CC Resolution 11631"~ _ - -.
::11631
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAMPBELL
APPROVING THE CONSOLIDATION AND MODIFICATION OF EXISTING
LOANS FOR THE SHARMON PALMS AND THE PALMS AFFORDABLE
HOUSING DEVELOPMENTS
WHEREAS, pursuant to the California Community Redevelopment Law (Health and
Safety Code Section 33.000 et-sec .; the "R'edevelopment Law"), the City Council (the "City
Council") of the City of Campbell (the "City") has adopted and, until recently, the
Redevelopment Agency of the City of Campbell (the "Dissolved RDA") was responsible for
implementing, the redevelopment plan (the "Redevelopment Plan"), pertaining to the.
Central Campbell Redevelopment Project Area (the "Project Area"); ~ ,
WHEREAS, to facilitate the provision of affordable housing within the Project Area,
the Dissolved RDA made three loans from its Low and Moderate Income Housing. Fund
(the "RDA Loans") in connection with two separate Developments, including: (1) Sharmori
Palms, a 36 unit affordable multifamily rental development; and (2) The Palms, a 24 unit
affordable multifamily rental development (collectively, the "Developments"). The current
outstanding balance of principal .and -interest on the. RDA Loans is approximately
$2,150,000. One of the RDA .Loans was. also partially funded with Community
Development Block Grant funds from the City; and `
WHEREAS, in conhection with the RDA Loans, the Dissolved RDA and the current
.owners of the Developments, which are both affiliates of MidPen Housing ("MidPen") (the
sponsor of the Developments), entered into loan agreements and related documents, (the
"Agency Loan Documents"), vJhere6y the Dissolved RDA made the RDA Loans to the-
current owners;. -
WHEREAS, the Agency was dissolved effective February 1, 2012 pursuant fo ABx1
26 enacted in June 2011 (as amended pursuant to AB 1484 enacted in June 2012, the
"Redevelopment Dissolution Law"); and
WHEREAS, Section 34176(a) of the Redeveldpment Law provides that the City, as
the entity that authorized the creation of the Dissolved RDA, may. elect to retain the housing
assets and functions previously perfdrmed°by the'former ;and ,
WHEREAS, on January 17, 2012 the City Council elected to retain the housing
assets and functions previously perfbrmed by the_Dissolved RDA in accordance with Section
34176 of the Redevelopment Law, thereby having the City take over the housing functions
of the Dissolved RDA, including the rights, powers, assets, duties and obligations
associated with the Dissolved RDA's`hbusing activities and assets; and
WHEREAS, the City submitted the Housing Asset Transfer List (the "Draft Housing
Asset List') ") to the California Department of Finance (the "Department") for approval.
The Draft Housing Asset List was a list of all "housing assets" of•the Dissolved RDA, as
defined in Health and Safety Code Section 34176(e), including: real and personal property
interests acquired for low- ahd moderate-income housing .purposes; ehcumbered funds;
loan and grant receivables for assistance provided by the Low and Moderate Income
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Housing Fund ("Housing. Fund"); rents and -payments from housing operations; and
amounts owed to.th'e Housing'Furid as a resultof Previously deferred o~ bd~rowed Housing
Fund deposits; and
WHEREAS, among the housing assets transferred to the City, as housing
successor to the Dissolved RDA, are the Agency Loan Documents and the right to control
the RDA Loans and' any loan repaymerits therefrom, as corifirmed in the letter from the
State of California Department of Finance dated August 23,,2012, approving all housing
assets listed on the Draft Housing'Asset List herein after referred to as the "Final Housing
Asset List"; and
WHEREAS, an oversight board for the Successor Agency (the "Oversight Board")
has been formed and is functioning in accordance with Health and Safety Code Section
34179;.. and __ -
WHEREAS, on September 4, 2013, the Successor Agency requested, and the
Oversight Board approved and directed the transfer of the housing assets contained in the
Fihal Housing Asset List to the City as the housing successor for the Dissolved RDA; and
WHEREAS, the Agency Loan Documents evidencing the RDA Loans associated
with the Developments were included in the Final Housing_Asset List and are housing
assets under Health and Safety Code Section 34176(e); and
WHEREAS, MidPen has requested the City's conserit to the transfer df the
Developments from the current owners to a new MidPen partnership (the "Partnership")
and to the refinance of the RDA Loans and consolidation of the Developments into a single _
development, utilizing low income housing tax credits as a source of financing. In
exchange for the City's consent, -the Partnership will rehabilitate the Developmehts~ and
provide increased affordability for,tlie existing. units plus one additional affordable unit for the ,
term of the new loah; and -
WHEREAS, to facilitate this. plah, MidPen has proposed that the three existing RDA
Loahs be consolidated into a single loan (the' "New Loan") with a proposed new term of 55
years, which shall be bear interest at a rate, determined by the City Mahager, that may range
from zero to three percent simple interest or the applicable federal rate as promulgated by the
U.S. Treasury Department (the City Manager will determine which rate is most beneficial for
the City while still allowing for the rehabilitation of the Developments). The New Loan will be
secured by a regulatory agreement (the "City Regulatory Agreement") imposing specified
affordability restrictions on the Developments which will ihcrease the term of affordability
restrictions and provide-for one additional affordable. unit. -The CDBG-funded' portion of
one of the RDA Loans .will not be part of the New Loah, but instead the CDBG-funded
portion will be split-off and trahsferred fo the County of Santa Clara, which has agreed to
administer the City's CDBG program and portfolio; ahd
WHEREAS, in connection with the proposed refinancing and renovation of the
Developments, the current owner will transfer the Developments -to the Partnership; and
the City and the Partnership de"sire fb (1) assign the RDA Loans to the Partnership; (2)
consolidate and restate the RDA Loahs (eiccluding the CDBG-fuhding portion of one of the
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RDA Loans)-into a single consolidated loan; (3)`make certain revisionsao the loan terms
affecting the New Loan, as described in the Sfaff:Report; (4) assign the City's. rights and
duties with regards to the Community Development Block Grant funds ih the amount of
$180;000 (the "CDBG Loan") to the County, and (5) reflect the foregoing actions in the
form of an amended and restated loan agreement between the City and the Partnership
and related loch documents (the. "City .Loan Documents"), .wh_ich will• ihclude the
Regulatory Agreement; and .
WHEREAS, the Partnership's assumption, donsolidation ahd modification of the RDA
Loans will enhance.the Partnership's ability to raise needed capital for the rehabilitation of the
Developments, and .will 'provide.- for an extended term of affordability for units at the
Developments; and,
WHEREAS, the Low and Moderate Income Housing Fuhds utilized to fund the RDA
Loans, have provided and will continue to provide benefit to the Project Area; by assisting
ih the development, renoyation, creation ahd retention of affordable, housing for persoris
living and/or working ih the Project Area, and have served arid will cohtihue to serve major
goals and objectives of the Redevelopment Plan by increasing the amount of housing
available at affordable housing cost in the community, thereby decreasing the market
pressure on the supply of affordable housing in the community and the Project Area; and
.WHEREAS, for the purpose of compliance with-the California Environmental Quality
Act ("CEQA"), the City has determined that, pursuaht to the California Code of Regulations
Section 15301, the approval and implementation of the consolidation of the RDA Loans,
and the resulting renovation of the Developments is categorically exempt from CEQA.
WHEREAS; the staff report (the "Staff Report") accompahying this Resolution
contains additional information and analysis upon which the findings and actions set forth
in this Resolution are based.
NOW, THEREFORE, BE IT RESOLVED, that the City Council hereby finds and
determines that the foregoing recitals are true ,and correct, and together with the following
documents and information form the basis for the approvals, authorizations, findings, and
determinations set forth in this Resolution: (1) the. Final Housing Asset List; (2) the Staff
Report; and (3) the information provided. by,the Successor' Agency and City staff and the
public.
BE IT FURTHER RESOLVED that, based on information and analysis set forth in
the above Recitals and contained in the- Staff Report, the City Council hereby finds,
determines and reconfirms; pursuant td Health and' Safety Code Section 33334.2(8), that
the previous use of moneys-from the Dissolved RDA's ;Low and Mdderate Income Housing
Fund to fund a. portion of the RDA Loans, as modified by the City Loah Documents, has.
been and will Fie of benefit to the Project Area and`the program_of redevelopment pursuant
to the Redevelopment Plan.
BE IT FURTHER- :RESOLVED that, the City Couhcil hereby authorizes the
assignment of the RDA Loans to the Partnership and.the consolidation of. such lochs ihto_
the New Loan, in accordance with the City Loah Documents. .
BE IT FURTHER RESOLVED that,. the City Council hereby authorizes the
assignment of the'CDBG-portion of.the RDA Loans to the County. .
BE IT FURTHER RESOLVED that the City Council hereby. authorizes the City
Manager or the .City. Mahager's designee to prepare or have prepared City. Loan.
Documents with respect to the New Loan and the assignment of the CDBG-portion of the
RDA Loans, incluiiing, without limitation, an amended and restated loan agreement, an
assignment agreement, the Regulatory Agreement, a promissory note, a deed of trust and
any subordination agreements in compliance with all applicable sections of the Community
Redevelopment Law, in consultation with the City's special legal cdunsel.
BE IT FURTHER RESOLVED that, the City Council hereby .authorizes the City
Manager or the Cify Manager's designee to execute the.City Loan. Documents on behalf of
the City, and to take all actions necessary to provide and implement the New Loan, as _
modified by the City,Loan Documents. '
ADOPTED by the City Council of the City of Campbell at a regular meeting of the
City Council-held on,the 7~h. day of January, 2014, by the following vote:.
AYES: Councilmembers:~ Baker,,LOw~; Kotowski, Cristina, Waterman
NOES: Councilmembers: None
ABSTAIN: Councilmembers: None'
ABSENT: Councilmembers: None
APPROVED:
Richard M. Wa erman, Mayor
ATTEST:
/~Z._ .
Anne Bybee, City Clerk
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