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HomeMy WebLinkAboutJAMBOREE HOUSING CORPORATION - 2006-12-18i REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYORAND-CITY COUNCIL MEMBERS SUBMITTED BY: P ELOP CULBRET GRA T, DPA, CITY ADMINISTRATOR PREPARED BY: STANLEY SMALEWITZ, DIRECTOR OF ECONOMIC DEVELOPMENT SA SUBJECT: APPROVE $1,031,673.88 HOME FUND RESERVATION AGREEMENT WITH JAMBOREE HOUSING CORPORATION Statement of Issue: The City Council is asked to: approve a commitment of Federal HOME Investment Partnership Funds in the amount of $1,031,673.88 to Jamboree Housing Corporation for an affordable housing acquisition and rehabilitation project to be commenced within six months. The proposed HOME Fund :Reservation Agreement is necessary of this time for the City to satisfy a HUD deadline to commit a portion of its Federal affordable housing funds by December 28, 2006. Funding Source: $1,031,673.88 from FY 2003/04 and FY 2004/05 Home Investment Partnership Program funds (Accounts 85180401 and 85280401). Recommended Action: Motion to: 1. Approve the attached HOME Fund Reservation > Agreement between the City of Huntington Beach and Jamboree Housing Corporation.; Alternative Action(s): Do not approve the attached HOME Fund Reservation Agreement. Analysis: As part of an ongoing effort to close out records with HUD on Federal HOME Investment Partnership Program (HOME) funded affordable housing projects, staff recently identified an unspent balance of prior years' grants in the -amount of $1,031,673.88. This discovery was made when HUD's computerized project accounting records were compared with City project files. REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 12/18/2006 DEPARTMENT ID NUMBER: ED 06-49 Typically, cities are given a limit of three years to commit HOME funds; however, because both the City and HUD were unaware of the unspent balance prior to November 28, 2006, the Los Angeles HUD Office gave the City ;30 days to commit all of the recently discovered funds. Los Angeles HUD staff will seek approval of this commitment from their Washington directors before the City will be allowed to use these funds. In the event that HUD staff in Washington does not approve the proposed. HOME Fund Reservation Agreement, the City will be required to forfeit these funds. The $1,031,673.88 commitment in the proposed Reservation Agreement is intended to satisfy HUD's requirement. It is not intended to indicate the amount of subsidy that will be necessary to complete an affordable housing project. Federal regulations limit the amount of HOME funds that can bespenton an individual property, so the City and the developer will need to leverage these funds with other affordable housing funding sources to implement one or more projects. Because Jamboree Housing Corporation entered into an agreement with the City on October 16, 2006 to implement an affordable housing project in the Oakview neighborhood and reserved an additional $400,000 for a second project in the same area, this nonprofit housing organization was selected for the current reservation of HOME funds. The potential of owning multiple apartment properties in the Oakview neighborhood will allow Jamboree to competitively apply to the State for funding sources that would be unavailable to individual property owners, such as tax-exempt bonds, and tax credits. Jamboree is currently in escrow to acquire 17372 Koledo Lane and has recently entered into a purchase agreement for 17362 Koledo Lane. In addition, Jamboree believes that it is very close to obtaining purchase contracts for two more Koledo Park area properties. The attached HOME Funds Reservation Agreement will commit $1,031,673.88 of the City's HOME funds to a future Jamboree affordable housing project, and it gives the parties six months to formalize this project. The actual subsidy amount and deal terms will be subject to negotiations between staff and Jamboree and will be delineated in an Affordable Housing Agreement that will require Council approval. HUD has recognized a prior Reservation Agreement with Jamboree as a commitment of the City's HOME funds specifically because Jamboree qualifies as a local Community Development Housing Organization (CHDO). A CHDO is a non-profit, community based organization that develops affordable housing within the community it serves. At least 15% of the City's HOME grant must be invested in CHDO projects. Staff recommends approval of the attached HOME Funds Reservation Agreement, which was prepared by the City Attorney's Office. This Agreement has been reviewed and recommended for approval by the City's economic consultant, Keyser Marston and Associates. The Agreement is consistent with the Jamboree proposal that was recommended for approval by the Council's Economic Development Committee on September 11, 2006. -2- 12/4/2006 7:10 PM REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 12/18/2006 DEPARTMENT ID NUMBER: ED 06-49 Environmental Status: Categorically excluded under the National Environmental Protection Act (NEPA). Categorically exempt under the California Environmental Quality Act (CEQA), Section 15061(b)(3). Attachment(s): City Clerk's '..- Number No. Description 1 HOME Fund Reservation Agreement. -3- 12/4/2006 7:10 PM ATTACHMENT #1 i, HOME FUND RESERVATION AGREEMENT THIS HOME FUND RESERVATION AGREEMENT (the "Agreement") is hereby j entered into as of 1A Am by and between the CITY OF HUNTINGTON BEACH, a California municipal corporation (the "City"), and JAMBOREE HOUSING CORPORATION, a California nonprofit public benefit corporation (the "Developer"). I RECITALS I A. Developer is a nonprofit corporation duly organized under the laws of the State of California, representing that it is experienced in the acquisition, development, rehabilitation and operation of housing which is affordable to persons of low- and moderate -income. Developer has further represented to the City that it satisfies all of the requirements for designation as a { "Community Housing Development Organization," as that term is defined in 24 CFR 92.2. j B. The City is a municipal corporation which has received funds from the United States Department of Housing and Urban Development ("HUD") pursuant to the federal HOME Program, 42 U.S.C. Section 12701, et seq., to be used for the purposes of providing decent, safe and sanitary housing to the citizens of Huntington Beach in accordance with the HOME Program. C. The City is currently implementing a coordinated program to improve living conditions and to reduce crime in certain areas of the City. D. By this Agreement, and subject to the terms and conditions herein, the City desires to reserve financial assistance from the HOME Program to Developer in the amount of One Million, Thirty -One Thousand, Six Hundred Seventy -Three Dollars and Eighty -Eight Cents ($1,031,673.88), and the parties desire to negotiate an Affordable Housing Agreement whereby the Developer would acquire, rehabilitate and operate one or more existing apartment buildings within the Oakview focus neighborhood of the City (the "Property"), and lease some or all of the apartment units therein to Very Low Income families and Lower Income families at an Affordable Rent (as those terms are defined in the HOME Program). 1 NOW, THEREFORE, the parties hereto agree as follows: 1. Reservation of Funds. The City hereby reserves the sum of One Million, Thirty - One Thousand, Six Hundred Seventy -Three Dollars and Eighty -Eight Cents ($1,031,673.88) from the funds allocated to the City in Fiscal Year 2004-05 and Fiscal. Year 2003-04 pursuant to the HOME Program, for the use of the Developer. The delivery of such funds to or on behalf of the Developer is expressly conditioned upon (i) the City's determination that the Developer is a Community Housing Development Organization pursuant to the HOME Program, (ii) the selection of a mutually acceptable Property within the Oakview focus neighborhood of the City, and (iii) the execution by the parties of a mutually acceptable Affordable Housing Agreement l 06-735/6204 which meets all of the requirements of Section 2 below. This reservation of funds shall terminate and be of no further force or effect in the event that the parties do not enter into the Affordable Housing Agreement by the time set forth in this Agreement. The City intends that the reservation of funds which is made pursuant to this Section l shall qualify as a "commitment" of funds pursuant to 24 CFR 92.2, as a written agreement reserving a specific amount of funds to a Community Housing Development Organization. 2. Negotiating Period. The City agrees to diligently and in good faith negotiate with the Developer, and the Developer agrees to diligently and in good faith negotiate with the City, for a six (6) month period from the date of execution of this Agreement ("Negotiating ; Period"), in order to jointly select a mutually acceptable Property within the Oakview focus i neighborhood of the City, and to agree upon a mutually acceptable Affordable Housing Agreement for the Developer's acquisition of the Property, the rehabilitation of the existing apartment units upon the Property, and the operation of the rehabilitated Property. The Affordable Housing Agreement shall contain such matters as the total amount of assistance to be made, whether the assistance will be in the form of a grant or a loan, eligible uses of the assistance, security for repayment of the assistance, conditions to disbursement of the assistance, whether any repayment proceeds must be returned by the Developer to the City or retained for HOME Program activities, the scope and schedule of the rehabilitation work, the number and size of affordable units, the rent limitation formulas for affordable units, income limits for tenants of affordable units, ongoing maintenance and operation requirements, a recordable regulatory agreement, other HOME Program requirements, specifically including without limitation the requirements of 24 CFR 92.300, 24 CFR 92.504(c)(3), and such other matters as the parties find necessary or appropriate: Except as this Agreement is extended pursuant to the following paragraph or is amended by mutual written agreement of the parties, if at the end of the Negotiating Period the Developer has not signed and submitted an Affordable Housing Agreement mutually acceptable to the f Developer and the City Administrator or his or her designee, then this Agreement shall j automatically expire and terminate. Upon such expiration and termination both parties knowingly agree that neither party shall have any further rights or obligations to the other under this Agreement. If an Affordable Housing Agreement mutually acceptable to the Developer and the City Administrator or his or her designee is signed and submitted by the Developer within the I Negotiating Period, then the term of the Negotiating Period and this Agreement shall automatically be extended, subject to the termination provisions of Section 4 hereof, for a period of forty-five (45) days from the date of such submittal to enable the City's staff to take and coordinate the action necessary to bring such Affordable Housing Agreement before the City for consideration, action, and authorization to sign, if such is approved. Subject to the termination j provisions of Section 4 hereof, the parties by mutual written agreement of the Developer; and the j City Administrator or his or her designee may extend the Negotiating Period for up to two additional periods of thirty (30) days each. 3. City Cooperation. The City further agrees to cooperate with the Developer in identifying suitable sites within the Oakview focus neighborhood of the City, negotiating with j owners of those sites, and supplying the Developer with any information and analyses the City has which are pertinent to the subject matter of this Agreement. 2 06-735/6204 4. Nature of Agreement; Termination of Agreement. This Agreement is not intended to constitute a binding agreement to pay any money or convey any real property to the Developer, nor is it intended to constitute a binding agreement to enter into an Affordable j Housing Agreement or any other contract. Neither party shall be legally bound to consummate the acquisition, rehabilitation or operation of the Property as outlined herein unless and until an Affordable Housing Agreement or other contract has been executed and delivered by both f parties. Each party reserves the right to, upon the default of the other party which has not been cured by the time set forth in Section 6 hereto, terminate this Agreement upon thirty (30) days prior written notice to the other party, thereby withdrawing from such negotiations within any liability to the other party. 5. Relocation Assistance. The Affordable Housing Agreement shall provide for the allocation between the parties of the cost of relocation of the occupants of the Property, if any, in I accordance with all applicable relocation laws, statutes, regulations and other requirements. The Developer shall not contact, negotiate with, or enter into any agreements with any owners or managers of real property in the City without the prior approval of the City Administrator or his or her designee. Until and unless the parties enter into an Affordable Housing Agreement or other agreement with respect to relocation costs, the Developer shall indemnify, defend and hold' harmless the City and its officers, employees, agents, representatives and volunteers, from any claims, actions, judgments, damages, costs, or liabilities that arise or payments which are required as a result of the displacement of any person in connection with the Developer's activities under this Agreement, or which otherwise arise in connection with this Agreement. 6. Default. Except as to the extent required by or otherwise permitted by this Agreement, failure or delay by any party to perform any obligation imposed by this Agreement constitutes a default under this Agreement. Prior to a failure or delay being deemed a default hereunder, or the period to cure, correct or remedy being deemed to have commenced, the nondefaulting party shall serve the defaulting party with notice of default. Upon receipt of notice of default, the party who so fails or delays to perform must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy within thirty(30) days. If the failure or delay is not cured, corrected or remedied within the required period of time, the defaulting party shall be liable for any damages caused by such default and the nondefaulting party may thereafter commence an action for damages with respect to such default or for specific performance of this Agreement. 7. Notices. Any notices, request or approvals given under this Agreement from one j parry to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, to the address of the other party as stated in this paragraph, and shall be deemed to have been given at the time of personal delivery or three (3) days after the t date of deposit for mailing. Notices shall be sent to: I 3` 06-735/6204 I City: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: City Administrator i cc: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Director of Economic Development j Developer: Jamboree Housing Corporation i 2081 Business Center Drive, Suite 110 Irvine, California 92612 Attn: Laura Archuleta I 8. Governing Law. This Agreement shall be governed by the laws of the State of i California.. Any legal action brought under this Agreement must be instituted in the Superior Court of Orange County, State of California, in an appropriate court in that county, or in the Federal District Court in the Central District of California. i' 9. Interpretation. This Agreement shall be interpreted as a whole and in accordance with its fair meaning and as if each party participated equally in its drafting. Captions are for reference only and are not to be used in construing meaning. 10. Assignment Prohibited. In no event shall the Developer assign or transfer any portion of Developer's rights or obligations under this Agreement without the prior express written consent of the City, which consent may be withheld in the City's sole and absolute discretion. The parties understand and acknowledge that the assignability of this Agreement and the HOME Program funds reserved hereunder is governed by the requirements of the HOME Program. I 11. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except b a written agreement executed by the Developer and the City. i 12. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all prior negotiations, discussions and previous agreements between the City and the Developer concerning all or any part of the subject matter of this Agreement. 4 06-735/6204 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above. JAMBOREE HOUSING CORPORATION, CITY OF HUNTINGTON BEACH, a I A California nonprofit public benefit corporation municipal corporation of the State of California r I By: ayor print name i ITS: (circle one) Chairm residers ice President City Clerk ; Y I B APPROVED AS TO FORM: print name WT. ITS: (circle one) Sec t /Chief Financial Officer/Asst. Secretary - Treasurer r City Attorney INITIATED AND APPROVED: { REVIEWED AND APPROVED: Director of Economic elopment ? Cit Administrator I i 1 i i 5 06-735/6204 i i f RCA ROUTING SHEET INITIATING DEPARTMENT: Economic ,Development Department SUBJECT: Approve Home Fund Reservation Agreement with Jamboree Housing Corporation COUNCIL MEETING DATE: December 18, 2006 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached El Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached Not Applicable Tract Map, Location Map and/or other Exhibits Attached Not Applicable Contract/Agreement (w/exhibits if applicable) Attached (Signed in full by the City Attorney) Not Applicable El Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by qfy Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached El Not Applicable Bonds (If applicable) Attached Not Applicable Staff Report (If applicable) Attached ❑ Not Applicable Commission, Board or Committee Report (if applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED ' FORVAARDED Administrative Staff Deputy City Administrator (Initial) ( ) ( } City Administrator (initial) ( ) ( ) City Clerk EXPLANATION FOR RETURN OF ITEM: :- a •. • • RCA Author Holtz (5901) 0, � CITY OF HUNTINGTON BEACH C9 2000 MAIN STREET CALIFORNIA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN December 20, 2006 CITY CLERK Laura Archuleta Jamboree Housing Corporation 2081 Business Center Drive, Suite 110 Irvine, CA 92612 Dear Ms Archuleta: Enclosed for your records is a copy of the Home Fund Reservation Agreement approved by Council at the December 18, 2006 Council meeting., Sincerely, Joan L. Flynn.. City Clerk - JF:pe Enclosure: agreement G:fo(towup:agrmtltr (Telephone: 714-536-5227)