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CC Resolution 10862 CITY OF CAMPBELL RESOLUTION NO. 10862 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAMPBELL AUTHORIZING EXECUTION OF A FIRST AMENDMENT TO DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT BETWEEN THE CITY OF CAMPBELL REDEVELOPMENT AGENCY AND CAMPBELL AVENUE, LLC, AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW IN CONNECTION WITH DEVELOPMENT OF THE CAMPBELL AVENUE AFFORDABLE HOMES DEVELOPMENT RESOLVED, by the City Council (the "City Council") ofthe City of Campbell (the "City"), that: WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq., the "Redevelopment Law"), the City Council of the City has adopted a redevelopment plan by Ordinance No. 1461 dated June 21, 1983, as amended and restated by: (i) Ordinance No. 1830 dated January 15,1991, (ii) Ordinance No. 1860 dated June 16, 1992, (iii) Ordinance No. 1512 dated December 6,1994, (iv) Ordinance No. 2028 dated February 18,2003, and (v) Ordinance No. 2041 dated March 2,2004 (the "Redevelopment Plan"), pertaining to the Central Campbell Redevelopment Project Area as described therein (the "Project Area"); WHEREAS, a central objective of the Redevelopment Plan and the Redevelopment Law is the creation of new housing to provide long-term affordable housing opportunities for low and moderate income households; WHEREAS, the City of Campbell Redevelopment Agency (the "Agency") is responsible for administering the Redevelopment Plan to cause redevelopment of the Project Area, including assembly, site preparation and redisposition of property both within and outside the Project Area for private redevelopment consistent with the Redevelopment Plan; WHEREAS, the Agency has entered into a Purchase and Sale Agreement with the Santa Clara Valley Water District pursuant to which the Agency intends to purchase certain real property generally located at the intersection of West Campbell Avenue and San Tomas Expressway at 511 and 555 West Campbell Avenue (the "Property"); WHEREAS, the Agency desires to cause redevelopment of the Property through the development of up to forty (40) single family homes and related parking, landscaping and other ancillary facilities (the "Development"); WHEREAS, pursuant to resolution 2005-4, adopted by the Agency on April 19, 2005, and pursuant to resolution 10488, adopted by the City Council on April 19, 2005, the Agency entered into a disposition, development, and loan agreement (the "Agreement") with Campbell Avenue, LLC, a California limited liability company (the "Developer"), governing the 103\35\521685.1 construction of the Development and the removal of existing improvements including existing wells and water storage tanks from the Property, and under which agreement the Agency would sell the Property to the Developer for a purchase price of Four Million Five Hundred Thousand Dollars ($4,500,000), and make a loan to the Developer in an amount not to exceed Three Million Eight Hundred Seventy-Two Thousand One Hundred Eighty-Seven Dollars ($3,872,187) (the "Initial Loan") to finance acquisition of the Property and predevelopment costs associated with the Development; WHEREAS, due to unanticipated costs associated with the development of the Development, the Developer has requested, and the Agency desires, to increase the amount of the Initial Loan by Ninety-Two Thousand Dollars ($92,000), for a total amount of Three Million Nine Hundred Sixty-Four Thousand One Hundred Eighty-Seven Dollars ($3,964,187) (the "Agency Loan"); WHEREAS, to evidence the Agency Loan, the Agency and the Developer desire to enter into a First Amendment to the Agreement (the "First Amendment"), the Agreement and the First Amendment are collectively referred to as the "DDLA"; WHEREAS, the Agency has established an Affordable Housing Fund (the "Housing Fund") pursuant to Health and Safety Code Sections 33334.2 and 33334.3; WHEREAS, Health and Safety Code Section 33334.2(g)(1) authorizes expenditure of Housing Fund monies outside the Project Area from which the funds originated upon findings by the Agency and the City Council that such use will be of benefit to such Project Area; WHEREAS, the Agency Loan will provide benefit to the Project Area, by assisting in the development of affordable housing for persons living and/or working in the Project Area, and serve major goals and objectives ofthe 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; WHEREAS, the Agency Board, by resolution adopted concurrently herewith, has made the finding of benefit required by Health and Safety Code Section 33334.2(g)(1) with respect to the use of the Agency's Housing Fund to fund the Agency Loan; WHEREAS, redevelopment of the Property pursuant to the DDLA will serve the purposes of Section 33334.2 of the Redevelopment Law, as well as the goals and objectives of the Redevelopment Plan, by improving and increasing the community's supply of affordable housing; WHEREAS, the Agency intends to apply the units to be developed in the Development toward satisfaction of its Project Area affordable housing production obligation under Section 33413(b)(2)(A)(ii) of the Redevelopment Law; WHEREAS, the Agency has placed on file a copy of the DDLA and the summary called for in Section 33433 of the Redevelopment Law (the "Amended Section 33433 Summary"), and has made the DDLA and the Amended Section 33433 Summary available for public inspection 103\35\521685.1 2 and copying pursuant to Section 33433 of the Redevelopment Law. The Amended Section 33433 Summary is incorporated in this Resolution by this reference; WHEREAS, the City Council and the Agency have conducted a duly noticed public hearing on the DDLA pursuant to Section 33433 of the Redevelopment Law for the purpose of receiving the input and comments of the public on the DDLA; WHEREAS, the acquisition of the Property and construction of the Development will also be financed by a commercial lender loan (the "Bank Loan") which will be evidenced by a loan agreement, and a promissory note secured by a deed of trust on Property (the "Bank Deed of Trust"); WHEREAS, the Bank will require subordination of the affordability covenants set forth in Article 8 of the DDLA to the Bank Deed of Trust; and WHEREAS, by staff report accompanying this Resolution and incorporated into this Resolution by this reference (the "Staff Report"), the Cit Council has been provided with additional information upon which the findings and actions set forth in this Resolution are based. NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: 1. The City Council hereby finds that the above Recitals are true and correct and have served, together with the Amended 33433 Summary and the Staff Report, as the basis for the findings and approvals set forth below. 2. Pursuant to Section 33433 of the Redevelopment Law, the City Council hereby finds that the consideration to be given by the Developer under the DDLA is not less than the fair reuse value of the Property at the use and with the covenants, conditions, and development costs authorized by the DDLA. This finding is based on the facts and analysis set forth in the Staff Report and the Amended Section 33433 Summary accompanying this Resolution, which may be briefly synopsized as follows: a. The fair reuse value of the Property has been determined to be $535,813 which is the amount of money the Developer can afford to pay for the Property, given the projected costs to build the Development and the proceeds of sale that will be received when the homes are sold to low and moderate income households for the below-market restricted sales prices required under the DDLA; b. Although the DDLA provides for the Developer to pay the Agency $4,500,000 for the Property, the Developer will pay a portion of the purchase price in cash and will sign a promissory note to the Agency for the balance of the purchase price plus the amount of additional funds provided by the Agency for development costs of the Development; and c. Upon sale of the homes in the Development to income qualified buyers at affordable housing cost, amounts due under the Agency Loan will be forgiven, such that the net 103\35\521685.1 3 payment by the Developer to the Agency under the DDLA will be $535,813, an amount equal to the fair reuse value of the Property. 3. Pursuant to Section 33433 of the Redevelopment Law, the City Council hereby finds that the conveyance of the Property pursuant to the DDLA will assist in the elimination of blight in the Project Area, will provide housing for low- and moderate-income persons, and is consistent with the implementation plan adopted pursuant to Section 33490 of the Redevelopment Law. These findings are based on the facts and analysis set forth in the Section 33433 Summary and the Staff Report accompanying this Resolution, which may be briefly synopsized as follows: a. The sale of the Property to the Developer and construction of the Development pursuant to the DDLA will provide 40 units of needed affordable housing to the Campbell community and eliminate the blighted conditions of the Property as the property is currently semi-vacant, improved only by large water storage tanks, and is situated in a highly visible urban location, creating a gap in the urban design and physical development of the area. Construction of the Development will create attractive, quality and affordable housing designed to compliment the surrounding developed area and will fill the void of dirt and unattractive infrastructure that currently exists; and b. The development of the Development will implement several specific goals of the Agency's Implementation Plan and is a specifically enumerated and budgeted activity in the Implementation Plan for the Agency to fulfill its Low and Moderate Income Housing Fund expenditure and housing production obligations. 4. Based on information and analysis set forth in the above Recitals and contained in the Staff Report, the City Council hereby finds and determines pursuant to Health and Safety Code Section 33334.2(g)(I) that the use of moneys from the Housing Fund to fund the Agency Loan will be of benefit to the Project Area and the program of redevelopment pursuant to the Redevelopment Plan. 5. Pursuant to Section 33433 of the Redevelopment Law: the City Council hereby approves the First Amendment and all ancillary documents; approves execution by the Agency Executive Director of the First Amendment and all ancillary documents in substantially the form on file with the City Clerk and the Agency Secretary, with such changes as are approved by the Agency signatory (such approval to be conclusively evidenced by the execution of the First Amendment); and approves the sale of the Property and the provision of the Agency Loan by the Agency pursuant to the provisions of the DDLA; 6. The City designates the City Clerk and the Secretary of the Agency as the custodian of the documents and other material which constitute the record of proceedings upon which the decision herein is based. These documents may be found at the office of the City Clerk located at 70 North First Street, Campbell, California. 7. adoption. This Resolution shall become effective immediately upon its passage and 103\35\521685.1 4 PASSED AND ADOPTED February 5, 2008, by the City of Campbell City Council by the following vote: AYES: Councilmembers: Furtado, Low, Hernandez, Burr NOES: Councilmembers: None ABSTAIN: Councilmembers: None ABSENT: Councilmembers: Kennedy APPRO~. ~~~ uonald R. Burr, Mayor AT~ Anne Bybee, City Clerk 5 103\35\521685.1