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
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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
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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
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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
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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
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