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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 .,., _. 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 2 .. . __ , 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 4