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CC Resolution 11262CITY OF CAMPBELL CITY COUNCIL RESOLUTION NO. 11262 A RESOLUTION OF THE CITY OF CAMPBELL CITY COUNCIL AUTHORIZING EXECUTION OF A DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT WITH SUMMERHILL LATIMER, LLC, AND MAKING FINDINGS AND APPROVALS PURSUANT TO THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW IN CONNECTION WITH DEVELOPMENT OF 511-555 W. CAMPBELL AVENUE RESOLVED, by the City of Campbell City Council (the "City"), that: WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et se ., the "Redevelopment Law"), the City Council (the "City Council") of the City of Campbell (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 re-disposition of property both within and outside the Project Area for private redevelopment consistent with the Redevelopment Plan; 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, on October 20, 2010 the Agency entered into a Memorandum of Understanding with Summerhill Homes with the goal of negotiating a Disposition, Development and Loan Agreement with the Agency establishing terms and conditions for the purchase and development of 511-555 W. Campbell Avenue with 40 dwelling units of which 24 would be made affordable to low and moderate income persons; and WHEREAS, The Agency is committing $3,964,404 as subsidy in the form of loans that will allow 16 of the dwelling units to be made affordable to persons earning 70% of the County median income and eight (8) of the units to be affordable to persons 103\35\521366.2 earning 90% of the median income and will be evidenced by a deed of trust and promissory note and 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 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; WHEREAS, the City Council, 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, in accordance with the requirements of the California Environmental Quality Act and the accompanying state and local implementing guidelines (collectively, "CEQA"), the Agency and the City Council prepared and, by resolutions adopted on April 19, 2005, have approved a negative declaration which evaluated the physical impacts of the DDLA and construction of the Development; and WHEREAS, in considering approval of this Resolution and the DDLA, the City Council has used the negative declaration as the environmental document for compliance with the requirements of CEQA, in the manner fully set forth below; and 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 "Section 33433 Summary"), and has made the DDLA and the Amended Section 33433 Summary available for public inspection and copying pursuant to Section 33433 of the Redevelopment Law. The Section 33433 Summary is incorporated in this Resolution by this reference; 103\35\521366.2 2 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; WHEREAS, Health and Safety Code Section 33334.14(a)(2) requires certain findings to be made by the Agency prior to subordination of the affordability covenants set forth in Article 8 of the DDLA; WHEREAS, by resolution 2005-3, adopted by the Agency on April 19, 2005, the Agency serving as lead agency under the California Environmental Quality Act (CEQA), made the required findings pursuant to CEQA for the approval of the Development (the "CEQA Findings"); and WHEREAS, by staff report accompanying this Resolution and incorporated into this Resolution by this reference (the "Staff Report"), the Agency 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 hereby finds that the above Recitals are true and correct and have served, together with the Section 33433 Summary and the Staff Report, as the basis for the findings and approvals set forth below. 2. In connection with approval of the Development, the Agency prepared and the City Council has approved Negative Declaration No. 10487 (the "Negative Declaration") pursuant to the requirements of CEQA that determined that the development of the Development would not result in the occurrence of any unmitigated significant environmental impacts. None of the following conditions has occurred since the preparation and approval of the Negative Declaration that would preclude the use of the Negative Declaration as the document for consideration of the environmental effects of the implementation of the DDLA (see 14 Cal Code of Regulations Section 15162): a. there have not been substantial changes related to the Development which would require major revisions to the Negative Declaration; 103\35\521366.2 b. there have not been substantial changes with respect to the circumstances under which DDLA will be implemented or the Development will be developed which would require major revisions in the Negative Declaration; and c. there has not been the appearance of new information which was not known and could not have been known as of the date of approval of the Negative Declaration which is relevant to the approval of Negative Declaration. For these reasons, the Negative Declaration has served as the environmental document pursuant to CEQA for the City Council's consideration of approval of this Resolution and the DDLA. Based on the foregoing CEQA considerations, the City Manager or his designee is authorized and directed to file the appropriate notice of determination document pursuant to CEQA in connection with the actions and approvals set forth in this Resolution. 3. Pursuant to Section 33433 of the Redevelopment Law, the City 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 $2,116,096 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 $2,116,096 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 payment by the Developer to the Agency under the DDLA will be $2,116,096 an amount equal to the fair reuse value of the Property. 4. Pursuant to Section 33433 of the Redevelopment Law, the City 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 103\35\521366.2 4 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 dwelling units of which 24 units will be needed affordable housing to the Campbell community in helping it satisfy its Regional Needs Housing Assessment (RHNA) and eliminate the blighted conditions of the Property as the property is currently vacant 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. 5. Based on information and analysis set forth in the above Recitals and contained in the Staff Report, the City hereby finds and determines pursuant to Health and Safety Code Section 33334.2(g)(1) 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. 6. The City hereby approves the subordination of the affordability covenants set forth in Article 8 of the DDLA to the Bank Deed of Trust, and finds that an economically feasible alternative method of financing the Development on substantially comparable terms and conditions to the Bank Loan, but without subordination, is not reasonably available. 7. Pursuant to Section 33433 of the Redevelopment Law: the City hereby approves the DDLA and all ancillary documents; approves execution by the Agency Executive Director of the DDLA 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 DDLA); and approves the sale of the Property and the provision of the Agency Loan by the Agency pursuant to the provisions of the DDLA; 8. The Agency Executive Director is authorized to take those actions delegated to the Executive Director in the DDLA and is hereby authorized to effectuate minor changes to the DDLA that do not substantially change the economics or affordability component. 9. The City hereby appropriates such funds as may be necessary to fulfill the Agency's obligations under the DDLA including the funding of the Agency Loan and the 5 103\35\521366.2 guarantee of the State BEGIN funds and amends the Agency budget to the extent necessary to implement such appropriation. 10. 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. 11. This Resolution shall become effective immediately upon its passage and adoption. PASSED AND ADOPTED March 1, 2011 by the City of Campbell City Council by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: Waterman, Low, Cristina, Kotowski, Baker None ABSTAIN: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS None None ~~ APPROVED: r `~ J so T. Baker, Mayor ATTEST: ne Bybee, City Clerk 6 103\35\521366.2