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HomeMy WebLinkAboutThe Olson Company - 2016-03-07 S Dept ID ED 16-06 Page 1 of 2 Meeting Date 317/2016 f CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIUHOUSING AUTHORITY ACTION MEETING DATE: 3/7/2016 SUBMITTED TO: Honorable Mayor and City Council Members/Board Members SUBMITTED BY: Fred A Wilson, City Manager/Executive Officer PREPARED BY: Ken Domer, Assistant City Manager Kellee Fritzal, Deputy Director, Business Development SUBJECT: Approve and authorize execution of an Affordable Housing Agreement with The Olson Company(Inclusionary/Density Bonus)for Beach Walk Development of 17541-17561 Newland Street Statement of Issue It is recommended that the City Council approve an Affordable Housing Agreement between the City and The Olson Company to facilitate the development of a 0 83 acre site at 17541-17561 Newland Street (west side of Newland Street, south of Slater ) Of the 13 townhomes being developed, the Agreement will restrict one (1) Inclusionary housing unit and one (1) density bonus unit to moderate income households for a period of 45 years Financial Impact Not applicable City Council Recommended Action Approve and authorize the Mayor and City Clerk to execute"Agreement Declaring Conditions, Covenants and Restrictions for Property(Resale Restrictions)" by and between Olson Urban - Huntington Beach 2, LLC and the City of Huntington Beach and authorize the Mayor and City Clerk to execute all documents Housing Authority Recommended Action: Approve and authorize the Executive Officer to execute"Agreement Declaring Conditions, Covenants and Restrictions for Property(Resale Restrictions)" by and between Olson Urban- Huntington Beach 2, LLC and the Huntington Beach Housing Authority Alternative Action(s) Do not approve and direct staff accordingly Analysis On January 12, 2016, the Olson Company received approval from the Planning Commission to develop the property at 17541 & 17561 Newland Street The project will result in 13 two-story townhomes, which will provide two (2) affordable units onsite Through a minute action, the Planning Commission suggested the City Council review the Affordability Agreement for compliance with State and local codes Based on the Affordable Housing Agreement, one (1) unit will be restricted as an Inclusionary housing unit (Inclusionary Unit) and one (1) unit will be restricted as a density bonus housing unit xB -371- Item 16. - 1 Dept ID ED 1"6 Page 2 of 2 Meeting Date 3R/2016 (Density Bonus Unit) As such, the two restricted units will fulfill both the Inclusionary and Density Bonus requirements placed on the Project, pursuant to HBZSO Section 230 14 and 230 16 In addition, both units will be restricted for a period of 45 years, requiring the owners to sell to other moderate income households during that period The maximum moderate income sales prices for both of the units will be set by the Office of Business Development in accordance with the Affordable Housing Agreement The proposed agreement is consistent with the City-wide affordable housing ordinances and _ standard affordable housing agreements prepared by the City Attorney's Office Therefore, staff recommends the City Council approve the agreement Environmental Status N/A Strategic Plan Goal Improve quality of life Attachment(s) 1 "Agreement Declaring Conditions, Covenants and Restrictions for Property (Resale Restrictions)" 2 Community Development Department Staff Report, dated January 12, 2016 Item 16. - 2 xs -372- A TACHMENT # 1 Recorded in Official Records, Orange County Hugh Nguyen, Clerk-Recorder IN �11 IE�IN�1[ 11 N IR1$ 1 11� I NO FEE * $ R 0 0 0 8 8 7 8 1 6 1 $ RECORDING REQUESTED BY 201600059690710:59 am 11128116 AND WHEN RECORDED MAIL TO: 217 405 A23 F13 33 0.00 0.00 0.00 0.00 96.00 0.00 0.00 0.00 City Clerk City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 SPACE ABOVE THIS LINE FOR RECORDERS'USE ONLY AGREEMENT DECLARING CONDITIONS, COVENANTS AND RESTRICTIONS FOR PROPERTY (RESALE RESTRICTIONS) This Agreement Declaring Conditions, Covenants and Restrictions for Property(the"Agreement") is made as of �i9ke,6� 1-, 2016, by and between OLSON —HUNTINGTON BEACH 3, LLC, a California limited liability company(the"Covenantor"),and THE CITY OF HU NTINGTON BEACH,a California municipal corporation (the"City"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH, a public body corporate and politic (the "Authority"). Collectively, the City and Authority will be referred to as the "Covenantee". RECITALS A. Covenantor is the owner of record of that certain real property located in the City of Huntington Beach, County of Orange, State of California legally described in the attached Exhibit"A". B. On / 2oi ,the City Council approved Tract No. / 30, as per map recorded as Instrument No.201b003835�6 in Book ?.16' , Pages 1/9 through 50 of Miscellaneous Maps,Records of Orange County, California ("Project"). City imposed conditions of approval on the Project, requiring Covenantor to submit an Affordable Housing Agreement, in accordance with the Affordable Housing Program, for review by the Planning Department and approval by the City Attorney and acceptance by the City Council. The City further required that the plan shall provide that two(2)of the total 13 units(consisting of one base unit and one density bonus unit), be restricted as set forth herein (said two (2) units are referred to herein as the "Restricted Units").The Restricted Units are to be made available at an Affordable Housing Cost to Moderate- Income Households for a period of forty-five (45) years. The execution and recordation of this Agreement is intended to fully satisfy that condition. NOW, THEREFORE,the parties hereto agree and covenant as follows: 1. Affordability Covenants. Covenantor agrees for itself and its successor and assigns, and every successor to Covenantor's interest in the Restricted Units,or any part thereof, that the Restricted Units, which are commonly known as Units / 4ojb /3 , further described on Exhibit"A"attached hereto,consisting of a total of two(2)residential condominium units,shall be designated as affordable and shall be held subject to this Agreement for forty-five (45) years from the date of the close of escrow for the initial sale of each such Restricted Unit as follows: a,ar W"a the CRY Of Hw °m�'sl * Beach,as con*rolaW uW Goven"awnt Code Sec.6103 and 20586.001-2509175v2 1 should b+rocoNed free of cha9e. (a) The Two (2) Restricted Units, which are commonly known as Units / AA),b /3 , are further described on Exhibit"A" attached hereto, and shall only be owned and occupied by"Moderate-Income Households", which shall mean persons or families earning not more than 120% of the Orange County median income, adjusted for household size as determined by the Authority based on statistics published by the United States Department of Housing &Urban Development or established by the State of California, pursuant to Health and Safety Code Section 50093, or a successor statute. (b) These two(2)Moderate-Income Restricted Units shall only be sold at an"Affordable Housing Cost" to "Moderate-Income Households." (c) "Affordable Housing Cost" shall mean the permitted gross sales price of the Restricted Unit as set forth in the Affordable Housing Price/Income Guidelines or successor guidelines published, from time to time, by the City for such purpose. Generally, those guidelines define Affordable Housing Cost to mean, and the Affordable Housing Cost at this Project shall be, not less than that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent(35%) of one hundred ten percent(110%)of the current Orange County monthly median income fora household equal to the number of bedrooms in the unit plus one (1) person. (d) The term of this Agreement shall commence on the date of the initial sale of each Restricted Unit to a qualifying purchaser as evidenced by a deed recorded with the Orange County Recorder's Office and shall continue, with respect to each such Restricted Unit, for forty-five (45) years from said date ("Affordability Period"). The covenant contained in this Section 1 shall run with the Restricted Unit and shall automatically terminate and be of no further force or effect upon the expiration of the Affordability Period. (e) Purchasers of the Restricted Units identified above shall enter into a promissory note and deed of trust in the forms attached hereto as Exhibit"B". 2. Transfer of Restricted Unit; Consent of Authority. During the Affordability Period no transfer of any ownership interest in a Restricted Unit shall occur until the City determines: (a) that the proposed purchaser intends to occupy the Restricted Unit as the proposed purchaser's principal residence, (b) that the proposed purchaser is a Moderate-Income Household as provided in Section 1 above, and (c) that the proposed transfer occurs at an Affordable Housing Cost. The escrow instructions and agreement for purchase and sale of a Restricted Unit shall obligate the purchaser of a Restricted Unit to execute,acknowledge and cause to be recorded a Notice of Affordability Restrictions on Transfer of Property, in form attached hereto as Exhibit"C." 3. Time of Construction; Process for Transfer Approval. (a) The Restricted Units shall be constructed prior to or concurrent with the primary Project. 20586.001-2509175v2 2 (b) In the event that the Covenantor(including successors and assigns)desires to sell the Restricted Unit, Covenantor shall send written notice thereof to the City at the following address: City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: Director of Economic Development Within seven (7) days of receiving such notice, the City shall send Covenantor transfer application forms prepared by the City. Such forms shall contain a certification of the proposed purchaser's intent with respect to his/her/its residency of the Restricted Unit and his/her/its gross income, and an affidavit of the proposed purchaser disclosing and certifying the amount of the proposed purchase price. The City shall not be obligated to approve a transfer unless and until the proposed purchaser has submitted to the City such information and completed such forms. In the interest of expediting the close of escrow for such proposed transactions, the City shall reasonably approve or disapprove such submissions as soon as practicable after submission of such forms, and in no event later than fourteen (14)days after submission of a completed form. Prior to conveyance of the Restricted Unit, each approved purchaser shall also submit to the City an executed disclosure statement which certifies that the purchaser is aware that: (i) the purchaser buying the Restricted Unit may only sell the Restricted Unit at an Affordable Housing Cost to a Moderate-Income Household as provided in Section 1 above, (ii)the maximum permitted sales price may be less than fair market value and (iii) the Restricted Unit must be owner-occupied at all times and cannot be rented or leased. The approved purchaser shall also submit an executed promissory, trust deed, notice documents, and any other documentation reasonably required by the City to effectuate the Affordable Housing Program. Covenantor shall cooperate with the City in providing such forms to proposed purchasers and in assisting proposed purchasers to prepare such forms and to provide any required information to the City in connection with only the Covenantor's sale of the Restricted Unit, provided that the Covenantor shall not be obligated to incur any out- of-pocket costs in connection therewith, other than employee time dedicated to providing such assistance. THE COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR UNDERSTAND THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO, AND THE ECONOMIC CIRCUMSTANCES OF, THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED, AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. COVENANTOR AND EACH SUCCESSOR, HEIR, OR ASSIGN OF COVENANTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE,THE PRIMARY OBJECTIVE OF THE CITY AND THIS AGREEMENT IS TO PROVIDE HOUSING TO MODERATE-INCOME HOUSEHOLDS AT AN AFFORDABLE HOUSING COST. I; Covenantor's I r0y 20586.001-2509175v2 3 4. Non-Discrimination Covenants. Covenantor covenants by and for itself, it successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race,color,religion,sex,sexual orientation,creed, ancestry, national or ethnic origin, age,family or marital status, handicap or disability, in the sale,transfer, use, occupancy,tenure or enjoyment of the Restricted Unit,nor shall Covenantor itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location,number, use or occupancy of tenants, subtenants,or vendees in the Restricted Unit. Covenantor and its successors and assigns shall refrain from restricting the sale of the Restricted Unit on the basis of race, color, religion, sex, sexual orientation, creed, ancestry, national or ethnic origin, age, family or marital status, handicap or disability, of any person. All such deeds or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clause: (a) In deeds: "The grantee herein covenants by and for himself or herself,his or her heirs, executors, administrators and assigns, and all persons claiming under or through them,that there shall be no discrimination against or segregation of,any person orgroup of persons on account of race,color,religion,sex, sexual orientation,creed, ancestry, national or ethnic origin, age,family or marital status,handicap ordisability, in the sale, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection,location, number, use oroccupancy of tenants, or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In contracts: "There shall be no discrimination against or segregation of,any person or group of persons on account of race,color, religion, sex,sexual orientation,creed,ancestry, national or ethnic origin, age, family or marital status, handicap or disability, in the sale, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferor himself or herself of any person claiming under or though him or her,establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use of occupancy of tenants, subtenants or vendee of the premises." (c) In leases: "The lessee herein covenants by and for himself or herself,his or her heirs, executors,administrators, and assignees, and all persons claiming under or though him or her,and this lease is made and accepted upon and subject to the following conditions: "That there shall be no discrimination against or segregation of any person or group of persons on account of race,color, religion,sex,sexual orientation,creed,ancestry,national or ethnic origin, age, family or marital status, handicap or disability, in the leasing, subleasing, transferring,use,occupancy,tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or though him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location,number, use,or occupancyof tenants,sublessees,subtenants,orvendees in the premises herein leased." Nothing in this Section 4(c) shall be construed to authorize the rental or lease of the Restricted Unit if such rental or lease is not otherwise permitted. 20586.001-2509175v2 4 5. Covenants Do Not Impair Lien. No violation or breach of covenants,conditions,restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 6. Covenants For Benefit of City• All covenants without regard to technical classification or designation shall be binding for the benefit of the Covenantee and such covenants shall run in favor of Covenantee for the entire period during which such covenants shall be in force and effect, without regard to whether the Covenantee is or remains an owner of any land or interest therein to which such covenants relate. The Covenantee, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any such action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants, except the covenants against discrimination which may be enforced at law or inequity at anytime in perpetuity. The Covenantee alone shall have standing to enforce the covenants herein and no third party other than Covenantee shall have any right to enforce this Agreement. Upon a transfer of all of its interest in a Restricted Unit to a successor Covenantor pursuant to the Agreement, the transferring Covenantor shall be released from any further obligation or liability under this Agreement arising after the date of such transfer. 7. Counterparts, This Agreement may be executed in a number of counterparts,each of which shall be an original, but all of which shall constitute one and the same document. 8. Applicable Law. (a) If any provision of this Agreement or portion thereof,or the application of any provision to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of this Agreement, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby and it shall not be deemed that any such invalid provision affects the consideration for this Agreement; and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. (b) This Agreement shall be construed in accordance with the laws of the State of California. [Balance of this page intentionally left blank] 20586.001-2509175v2 5 IN WITNESS WHEREOF, the Covenantee and Covenantor have caused this instrument to be executed on their behalf by their respective officers hereunto duly authorized as of the date set forth above. COVENANTOR: OLSON— HUNTINGTON BEACH 3, LLC a California limited liability company By: IN TOWN COMMUNITIES, LLC a California limited liability company Sole Member By: OLSON URBAN HOUSING, LLC a Delaware limited liability company Member By: IN TOWN LIVING, INC. a Delaware corporati Managing f By: Name: Todd Olso Title: Preside , Communit Development By: Name: Katherine M. Ch ndler Title: SVP, General C unsel & Secretary 20586.001-2509175v2 6 COVENATEE CITY OF HUNTINGTON BEACH, A C ifornia munic al o orati n ay r Cit Clerk HOUSING AUTHORITX OF THE CITY OF HUNTINGTON BEACH, A public body o and politic By: /"t WA�utiv Director APPROVED T F RM: y orney/Authority Counsel '01 IN _T D AND APPROVED: Assistant City Manager 20586.001-2509175v2 7 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certifcate is attached, and not the truthfulness, accuracy,or validity of that document. State of California ) County of Orange ) On Fe,bCucja4 u 2016, before me, M 40tnkQk�ne( a Notary Public, personally appearedT,,�,dOi-,,o,��k,nOneft,iv---M,Ckonde,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s)-is/ee)subscribed to the within instrument and acknowledged to me that he/she/ ey executed the same in his/hef-/CREa'uthorized capacity(ies),and that by his/her/dEe'ibsignature(s)on the instrument the person(s), or the entity upon behalf of which the person(s) acted,executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. N. sTEINKELLNEU 8i ' Commission # 2002450 z Notary Public -Californiaz z Los Angeles County D My Comm. Expires Jan 26,2017 SignatureC �i A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness,accuracy, or validity of that document. State of California ) County of Orange ) On 2.016 , before me, L- CR& a Notary Public, personally appeared F,�,&Z. A . Lj/cif ,who proved to me on the basis of satisfactory evidence to be the persons) whose names) Is afe subscribed to the within instrument and acknowledged to me that ash ey executed the same in�S,i hegt4eir authorized capacity0s),and that by(gh@4t eir signature()on the instrument the person(, or the entity upon behalf of which the person) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. L. ESPARZA WITNESS my hand and official seal. Commi sion#2032750 Notary Public-California i i ` Orange County D My Comm.Expires Aug4,2017 3 Signature 1 �_ 20586.001-2509175v2 8 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness,accuracy, or validity of that document. State of California ) County of Orange ) On 6, before me, �- L • 4e7S00#4K2A a Notary Public, personally appeared S =-s »A*4DA1j who proved to me on the basis of satisfactory evidence to be the person whose name(, cafe- subscribed to the within instrument and acknowledged to me that &sha44q executed the same it&hef4#eir authorized capacity(ies),and that b is�lhe4�4eir signature)on the instrument the persono, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. _ ' P. L. ESPARZA 'rw Commission#2032750 Notary Public California i Z ' e Orange County My Comm. Expires Aug 4, 2017 Signature �4- r A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness, accuracy,or validity of that document. State of California ) County of Orange ) On 9, 2,0/6 , before me, L• F-SPA924 a Notary Public, personally appeared o7o4'v L- &VA-kJ who proved to me on the basis of satisfactory evidence to be the personas') whose names)(qafe subscribed to the within instrument and acknowledged to me that he /they executed the same in hi er faeir authorized capacityXs),and that by er thoir signatureo)on the instrument the personK or the entity upon behalf of which the person() acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. P L. ESPARZA Commission#2032750 i , ,e Notary Public-California z Z ' Orange County D My Comm. Expires Aug4,2017 Signature �- 20586.001-2509175v2 9 Exhibit A Legal Description of Restricted Units in Tract 17930 All that certain real property in the city of Huntington Beach, County of Orange, State of California, described as follows: Parcel 1: The "Moderate- Income Households" consisting of: Units 1 and 13, as shown on that certain Condominium Plan recorded on November 8, 2016 as Instrument No. 2016000554250 of Official Records of Orange County, California, covering portions of Lots 1 of Tract No. 17930, as per the Map, lying within the boundaries of said Condominium Plan (Describe 2 Restricted units) EXHIBIT "B" Promissory Note and Deed of Trust (See Attached —Moderate-Income Documents) 20586.001-2509175v2 Exhibit„B" f i (L" OFFICIAL BUSINESS Document entitled to free recording per Government Code §§ 5193 and 26373 RECORDING REQUESTED BY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Economic Development Dept./Housing Division SPACE ABOVE THIS LINE FOR RECORDERS'USE ONLY PROMISSORY NOTE TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MODERATE-INCOME) THIS PROMISSORY NOTE (the "Note") is dated this _ day of , 20_, between (collectively, "Promissor") and the Housing Authority of the City of Huntington Beach ("Authority") with reference to the following facts: A. This Promissory Note is made in reference to that property in the City of Huntington Beach, County of Orange, State of California, with the street address 17541-17561 Newland Street, 0 Huntington Beach, California , and the Assessor's Parcel No. and the Condominium Plan Tract No. Phase , recorded on as Instrument No. (the"Property"). B. An"Agreement Declaring Conditions, Covenants and Restrictions for Property"was recorded on , 20_,as Instrument Number , in the Office of the County Recorder of the County of Orange, California(the "Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold for to an"Affordable Housing Cost"to"Moderate Income Households,"as those terms are defined in the Resale Restrictions,and further defined in the current Affordable Housing Regulations of the City of Huntington Beach and the Authority Deed of Trust referred to below. C. Concurrently with executing this Note, Promissor has executed a Deed of Trust securing and modifying the Resale Restrictions (the "Authority of Deed of Trust"). D. Pursuant to the Resale Restrictions, the City has approved the sale of the Property to Promissor at an Affordable Housing Cost. To insure that any further sale, transfer or assignment of the Property to a successor purchaser or in connection with a financing or refinancing of the Property occurs with the City's approval and at an Affordable Housing Cost,the City has required as a condition of the Promissor's purchase of the Property that Promissor execute this Note. 20586.001-2509175v2 Exhibit"B"—Promissory Note- Page 1 AGREEMENT NOW, THEREFORE, the parties agree as follows: 1. Incorporation of Recitals. The recitals set forth above are incorporated by reference as though fully set forth herein. 2. Amount of the Note. The Amount of this Note is the"Transfer Price"of the Property, less the "Affordable Housing Cost" as of the date such Amount is due. The Transfer Price shall be determined according to the circumstances that cause the Amount of the Note to become due pursuant to Section 3 of this Note. In the case of the sale of the Property without the City's consent,the Transfer Price shall be the market sales price. In the case of the financing or refinancing of the Property without the City's consent, the Transfer Price shall be the loan amount in excess of the outstanding balance on the First Mortgage that the City previously approved. In all other cases, the Transfer Price shall be the fair market value of the Property as established by the Director of Economic Development of the City pursuant to an appraisal. The term "Affordable Housing Cost"shall be defined according to the current Affordable Housing Regulations as adopted by the City of Huntington Beach. Promissor promises to pay the Amount of this Note when due to the Housing Authority at 2000 Main Street, P.O. Box 190, Huntington Beach, California 92648, or at such other address as Authority may direct from time to time in writing. All sums hereunder shall be payable in lawful money of the United States of America and all sums shall be credited first to interest then due and the balance to principal. 3. Due on Sale, Transfer or Refinancing. Promissor agrees to notify the Authority not less than thirty(30)days prior to(i)the sale or transfer of fee title to the Property or(ii)any financing or refinancing of the Property. This Note shall be due and payable upon (i)such sale or transfer of the Property without the City's consent, (ii)the financing or refinancing of the Property without the City's consent, (iii) Promissor ceases to be an occupant of the Property, or(iv) Promissor is in material default of any other obligation under the Resale Restrictions, or the Authority Deed of Trust which is not cured within any cure period applicable thereto. 4. Expiration of the Note Obligation. In the event that the Amount of this Note is not then due and payable pursuant to the foregoing provisions, then, as of the Forty-Fifth anniversary of the date of this Note, Promissor shall have no obligation to pay the Note Amount to Authority and this Note shall be cancelled and returned to Promissor and shall be of no further force or effect. 5. Default. The entire unpaid Amount of this Note shall be due and payable in full in the event of a default. The following shall be deemed to be an event of default: a. Failure of Promissor to pay any real property taxes or insurance premiums on the Property as they become due following the Authority giving notice of the nonpayment and an opportunity to cure; or b. Any material breach of the Resale Restrictions or the Authority Deed of Trust, following the Authority giving notice of the breach and an opportunity to cure; or C. Failure of Promissor to pay the Note Amount when due following the Authority giving notice of the nonpayment and an opportunity to cure. 20586.001-2509175v2 Exhibit"B"—Promissory Note- Page 2 6. This Note is secured by a Deed of Trust, dated to the City of Huntington Beach, as Trustee, executed by Promissor in favor of the Authority. 7. Notice, All payments, notices, consents, waivers and other communications under this Agreement must be in writing and shall be deemed to have been given when (a) delivered by hand, or, (b) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case addressed as set forth below: If to PROMISSOR: If to AUTHORITY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attention: City Clerk and, Economic Development Director City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 8. Governing Law. This Agreement is governed by and shall be construed in accordance with the laws of the State of California without giving effect to the conflict of laws principles thereof. The parties agree to personal jurisdiction in the State Courts in Orange County,California and specifically waive any claims of forum non conviens. 9. Modification. This Agreement shall not be amended or modified, except in writing,signed by both parties. 20586,001-2509175v2 Exhibit"B"—Promissory Note- Page 3 10. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns under this Note. This Note shall not be assigned without the express written consent of Authority. Dated: 20_ By: HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH Dated: 20 By: Deputy Executive Director APPROVED AS TO FORM: Dated: 20_ By: City AttorneyjA Al 20586.001-2509175v2 Exhibit"B"—Promissory Note- Page 4 �-a �9 OFFICIAL BUSINESS Document entitled to free recording per Government Code §§ 5193 and 26373 RECORDING REQUESTED BY: Housing Authority of the City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 Attn: Economic Development Dept./Housing Division SPACE ABOVE THIS LINE FOR RECORDERS'USE ONLY DEED OF TRUST WITH ASSIGNMENTS OF RENTS TO SECURE AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (MODERATE-INCOME) THIS DEED OF TRUST is made this _ day of 20 , by and between whose address is, Huntington Beach, California 92648 (collectively, the"Trustor") and the CITY OF HUNTINGTON BEACH, a municipal corporation (the"Trustee"), and the HOUSING AUTHORITY OF THE CITY OF HUNTINGTON BEACH,a public body corporate and politic (the"Beneficiary"),whose address is 2000 Main Street,Huntington Beach, California 92648,with reference to the following facts: A. This Deed of Trust is made in reference to that property in the City of Huntington Beach, County of Orange,State of California,described legally in the Legal Description attached hereto as Exhibit"A" and incorporated herein with the street address of 17541-17561 Newland Street, I] Huntington Beach, California and the Assessor's Parcel No. and the Plan Tract No, Phase recorded on as Instrument No. (the "Property"). B. An"Agreement Declaring Conditions, Covenants and Restrictions for Property"was recorded on , 20_,as Instrument Number ,in the Office of the County Recorder of the County of Orange, California (the"Resale Restrictions"). Among other things, the Resale Restrictions limit the price that the Property may be sold for to an "Affordable Housing Cost" to "Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the current affordable housing regulations of the City of Huntington Beach and this Deed of Trust. C. Pursuant to this Deed of Trust,the Resale Restrictions as applied to the Property are to expire forty-five (45) years from the date this Deed of Trust is recorded (the "Expiration Date"), which date is approximately , 20_. NOW, THEREFORE, TRUSTOR HEREBY irrevocably grants, transfers and assigns, to Trustee, in trust, with power of sale of the Property, together with (a) all buildings, improvements and fixtures, now or hereafter placed thereon, it being understood and agreed that all classes of property attached or unattached 20586.001-2509175v2 Exhibit B —Deed of Trust- Page 1 used in connection herewith shall be deemed fixtures, (b)rents, issues and profits thereof, (c)any water rights and/or stock which are appurtenant or pertain to said land,and(d)all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement forthe sale thereof,SUBJECT, HOWEVER,to the right, power and authority hereinafter given to and conferred upon Beneficiary to collect and apply such rents, issues and profits, and all sums of money payable on the purchase price of the Property secured by a lien thereon or payable under any agreement. A. FOR THE PURPOSE OF SECURING: 1. Payment of the indebtedness evidenced by a promissory note executed by Trustor on , 20_(the"Note"). The Amount of the indebtedness is the"Transfer Price"of the Property,less the"Affordable Housing Cost."The calculation of the Amount of the indebtedness is set forth with specificity in the Note, which is on file with the Economic Development Department of the City of Huntington Beach. 2. Performance of each and every obligation, covenant, promise and agreement of the Resale Restrictions, as amended by this Deed of Trust. B. TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES: 1. Trustor agrees for itself, and its successors and assigns, and every successor to Trustor's interest in the Property, or any part thereof that for forty-five (45) years from the date this Deed of Trust is recorded (the "Expiration Date"), to perform all obligations due under the Resale Restrictions, as those obligations are restated and modified as set forth below: (a) The Property shall only be owned and occupied by persons or families of"Moderate-Income." "Moderate-Income" shall mean persons or families earning one hundred twenty percent (120%) or less of Orange County median income, adjusted for family size. (b) The Property may only be sold at an"Affordable Housing Cost"to households of"Moderate- Income," as those terms are defined in current Affordable Housing Regulations as adopted by the City of Huntington Beach. Generally,those Regulations define Affordable Housing Cost to mean that purchase price which would result in monthly housing payments which do not exceed Thirty-Five Percent (35%) of one hundred ten percent(110%)of the current Orange County monthly median income for a household equal to the number of bedrooms in the unit plus one (1) person. In determining monthly housing payments, the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent(10%) down payment. The mortgage interest rate will be the prevailing Fannie Mae thirty(30)year mortgage rate,or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. (c) The Trustor shall further comply with the Affordable Housing Guidelines promulgated by the City for purposes of administering the Affordable Housing Program of the City of Huntington Beach. (d) No transfer of fee title to the Property shall occur until the City of Huntington Beach determines (a) that the proposed purchaser intends to occupy the Property as the proposed purchaser's principal residence, (b)that the proposed purchaser is a person or family of Moderate Income and(c)that the proposed transfer occurs at an Affordable Housing Cost. The City of Huntington Beach shall not be obligated to approve a transfer until and unless the proposed purchaser has submitted to the City of Huntington Beach such information and completed such forms as the City of Huntington Beach shall request to certify the proposed 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 2 purchaser's intent with respect to its residency of the Property and its gross income, and the proposed purchaser has submitted an affidavit disclosing and certifying the amount of the proposed purchase price. Prior to conveyance of the Property, each approved purchaser shall submit to the City of Huntington Beach an executed disclosure statement which certifies that the purchaser is aware that the purchaser may only sell the unit at an Affordable Housing Cost to a Moderate Income person or family, that the maximum permitted sales price may be less than fair market value and that the unit must be owner-occupied at all times and cannot be rented or leased. TRUSTOR AND EACH SUCCESSOR, HEIR OR ASSIGN OF TRUSTOR UNDERSTANDS THAT THE DETERMINATION OF THE AFFORDABLE HOUSING COST CAN BE MADE ONLY AT THE TIME OF THE PROPOSED TRANSFER, TAKING INTO CONSIDERATION INTEREST RATES, THE TERMS OF SALE OFFERED TO AND THE ECONOMIC CIRCUMSTANCES OF THE PROPOSED PURCHASER AND OTHER FACTORS THAT CANNOT BE ACCURATELY PREDICTED,AND THAT THE TRANSFER PRICE PERMITTED HEREUNDER MAY BE LESS THAN THE FAIR MARKET VALUE OF THE PROPERTY AND MAY NOT INCREASE OR DECREASE IN THE SAME MANNER AS OTHER SIMILAR REAL PROPERTY WHICH IS NOT ENCUMBERED BY THIS RESTRICTION. TRUSTOR AND EACH SUCCESSOR,HEIR ORASSIGN OF TRUSTOR FURTHER ACKNOWLEDGES THAT AT ALL TIMES IN SETTING THE TRANSFER PRICE THE PRIMARY OBJECTIVE OF THE BENEFICIARY AND THIS DEED OF TRUST IS TO PROVIDE HOUSING TO ELIGIBLE PERSONS OR FAMILIES AT AN AFFORDABLE HOUSING COST. Trustor Initials Trustor Initials (e) The City of Huntington Beach may impose any conditions on the approval of any transfer of the Property as it determines are reasonably necessary for the effective administration of its Affordable Housing Program. (f) The Covenants contained in this Section 1 shall run with the land and shall automatically terminate and be of no further force or effect forty-five(45)years from the date this Deed of Trust is recorded. In any event, this Deed of Trust shall be reconveyed to Trustor upon termination of the Note. 2. Trustor covenants by and for itself,its successors and assigns,and all persons claiming under or through them that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status; national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the said property, nor shall Trustor itself or any person claiming under or through it,establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in said property. Trustor and its successors and assigns,shall refrain from restricting the rental or lease(if permitted by Trustor) or sale of said property on the basis of race, color, religion, sex, marital status, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 3 (a) In deeds:"The grantee herein covenants by and for himself or herself,his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of,any person orgroup of persons on account of race,color, religion,sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (b) In leases:"The lessee herein covenants by and for himself or herself, his or her heirs, executors,administrators and assigns,and all persons claiming under or through him or her,. and this lease is made and accepted upon and subject to the following conditions: "There shall be no discrimination against or segregation of any person or group of persons on account of race, color, religion, sex, marital status, ancestry or national origin in the leasing, subleasing,transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under to through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises herein leased." (c) In contracts:"There shall be no discrimination against or segregation of,any person,or group of persons on account of race,color, religion,sex, marital status, ancestry or national origin, in the sale, lease,sublease,transfer, use,occupancy,tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her,establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessee or vendees of the premises." Nothing in this Section 2 shall be construed to authorize the rental or lease of the Property if such rental or lease is not otherwise permitted. 3. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Deed of Trust shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest. 4. Trustor has made certain representations and disclosures as a requirement underthe Resale Restrictions in order to induce Beneficiary to approve the sale of the Property to Trustor. In the event that Trustor has made any material misrepresentation or failed to disclose any material fact regarding said transaction, Beneficiary at its option and without notice to Trustor, shall have the right to declare a material breach of the Resale Restrictions and the Note. Beneficiary may make a written declaration of default and demand for sale as provided in paragraph No.6 herein set forth. Trustee,upon presentation to it of an affidavit signed by Beneficiary setting forth facts showing a default by Trustor under this paragraph, is authorized to accept as true and conclusive all facts and statements therein, and to act thereon hereunder. 5. All covenants without regard to technical classification or designation shall be binding for the benefit of the Beneficiary and such covenants shall run in favor of the Beneficiary for the entire period during which such covenants shall be in force and effect, without regard to whether the Beneficiary is or remains an 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 4 owner of any land or interest therein to which such covenants relate. The Beneficiary, in the event of any breach of any such covenants, shall have the right to exercise all the rights and remedies and to maintain any action at law or suits in equity or other proper legal proceedings to enforce and to cure such breach to which it or any other beneficiaries of these covenants may be entitled during the term specified for such covenants. 6. Upon default by Trustor in the obligations of the Note, in the performance of any obligation under this Deed of Trust or under the terms of any First Lender's Deed of Trust which is or appears to be prior or superior to this Deed of Trust, Beneficiary may declare all sums secured by this Deed of Trust immediately due and payable by delivering to Trustee of a written declaration of default and demand for sale and a written notice of default and election to sell the Property. Default in the payment of any indebtedness secured by this Deed of Trust, in the obligation of the Note, or in the performance of any agreement under this Deed of Trust constitutes a default only under this Deed of Trust and the Note and does not constitute a default under the First Lender's Deed of Trust. Trustee shall cause the notice of default to be recorded. Beneficiary also shall deposit with Trustee this Deed of Trust, the Note, and all documents evidencing any additional expenditures secured by this Deed of Trust. After the lapse of such time as then may be required by law following recordation of such notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in such notice of sale, whether as a whole or in separate parcels, and in such order as it may determine, at public auction to the highest bidder qualified under the Resale Restrictions and this Deed of Trust in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to such purchaser its Deed conveying the Property so sold, but without any covenant or warranty,express or implied, The recital in such Deed of any matters of fact shall be conclusive of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary as hereinafter defined, may purchase at such sale. Trustee may also sell at any such sale and as part thereof any shares of corporate stock securing the obligations secured hereby, and Trustor waives demand and notice of such sale. (Beneficiary at its option may also foreclose on such shares by independent pledge sale, and Trustor waives demand and notice of such sale.)After deducting all costs, fees and expenses of Trustee, and of this Trust, including cost of evidence of title in connection with this sale, Trustee shall apply the proceeds of sale to payment,first; all sums expended under the terms hereof, not then repaid,with accrued interest at the rate then payable under the First Lender Deed of Trust secured hereby,and then of all other sums secured hereby, and, if there are any proceeds remaining, shall distribute them to the person or persons legally entitled thereto. 7. Trustor shall keep the Property in good condition and repair; to allow Beneficiary or its representatives to enter and inspect the Property at all reasonable times,and access thereto shall be permitted for that purpose; not to remove or demolish any building thereon; not to make alterations thereto without the consent of the Beneficiary;to suffer or permit no change in the general nature of the occupancy of the Property without Beneficiary's written consent; to complete or restore promptly and in good workmanlike manner any building which may be constructed,damaged or destroyed thereon,including,without restricting the generality of the foregoing, damage from termites and dry-rot; to pay when due all claims for labor performed and materials furnished in connection with the Property and not to permit any mechanic's lien against the Property; to comply with all laws affecting the Property or requiring any alterations or improvements to be made thereon; not to initiate or acquiesce in any zoning reclassification without Beneficiary's written consent;not to commit or permit waste thereon; not to commit, suffer or permit any act upon the Property in violation of the law;to paint, cultivate, irrigate,fertilize, fumigate, prune,and do all other acts that from the character or use of the Property 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 5 may be reasonably necessary; and to promptly pay all amounts due others upon agreements of lease or conditional sale of all fixtures, furnishings and equipment located thereon. 8. Trustor shall provide, and maintain in force at all times with respect to the Property, fire and other types of insurance as may be required by Beneficiary. All of such insurance shall have a loss payable endorsement in favor of Beneficiary,shall be for a term and in form,content,amount and in such companies as may be satisfactory to Beneficiary,and the policies therefore shall be delivered to and remain in possession of Beneficiary as further security for the faithful performance of these trusts. At least thirty(30)days prior to the expiration of any such insurance policy,a policy or policies renewing orextending such expiring insurance shall be delivered to Beneficiary together with written evidence showing payment of the premium therefore and, in the event any such insurance policy and evidence of the payment of the premium therefore are not so delivered by Trustor to Beneficiary, Trustor by executing this Deed of Trust specifically requests Beneficiary to obtain such insurance and Beneficiary, without obligation to do so, without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may obtain such insurance through or from any insurance agency or company acceptable to it, pay the premium thereof, and may add the amount thereof to the indebtedness secured hereby, which amount shall bear a like rate of interest. Beneficiary may furnish to any insurance agency or company, or any other person, any information contained in or extracted from any insurance policy delivered to Beneficiary pursuant hereto and any information concerning the loan secured hereby. Neither Trustee nor Beneficiary shall be responsible for such insurance or for the collection of any insurance monies, or for any insolvency of any insurer or insurance underwriter, In case of insurance loss, Beneficiary is hereby authorized either(a)to settle and adjust any claim under the insurance policies provided for in this document without the consent of the Trustor, or (b) to allow Trustor to agree with the insurance company or companies on the amount to be paid upon the loss. In either case,the Beneficiary is authorized to collect and make receipt of any such insurance money. If Trustor is obligated to restore or replace the damaged or destroyed buildings or improvements under the terms of any lease or leases which are or maybe prior to the lien of this Deed of Trust and such damage or destruction does not result in cancellation or termination of such lease, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse the Trustor for the cost of rebuilding or restoring the buildings or improvements on said premises. In all other cases, such insurance proceeds shall be applied for the cost of the rebuilding or restoring the buildings or improvements on said premises. Such buildings and improvements shall be so restored or rebuilt as to be of at least equal value and substantially the same character as prior to the damage or destruction, and shall be in a condition satisfactory to Beneficiary. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Any and all unexpired insurance shall inure to the benefit of,and pass to the purchaser of,the property conveyed at any Trustee sale held hereunder. All rights of Trustee and Beneficiary under the provisions of this Section 8 shall be subject and subordinate to the rights of any senior lender holding a senior lien upon the Property, including the First Lender's Deed of Trust (as defined below), and, in the event of any conflict between Section 8 of this Deed of Trust and such senior lien, the senior lien shall control. 9. Trustor shall pay: (a)at least ten (10)days before delinquency,all general and special City and County taxes, and all assessments on appurtenant water stock,affecting the Property, (b)when due,all special assessments for public improvements, without permitting any improvement bond to issue for any special assessment, (c) when due, all encumbrances, charges and liens, with interest, on the Property, or any part thereof,which are or appears to be prior to superior hereto, (d)if the security of this Deed of Trust is leasehold estate,to make any payment or do any act required of the Lessee or its successor in interest under the terms of the instrument or instruments creating said leasehold, (e)all costs,fees and expenses of this trust, (f)for any statement regarding the obligation secured hereby any amount demanded by Beneficiary not to exceed the 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 6 maximum allowed by law therefor at the time when such request is made, (g)such other charges for services rendered by Beneficiary and furnished at Trustor's request or that of any successor in interest to Trustor as the Beneficiary may deem reasonable. 10. Should Trustor fail to make any payment or do any act as provided in this Deed of Trust, the Beneficiary or Trustee, but without obligation to do so, and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may(a)make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon the Property for such purposes, (b) commence, appear in, or defend any action or proceeding purporting to affect the security hereof or the property covered by this Deed of Trust,or the rights or powers of Beneficiary or Trustee, (c) pay, purchase, contest or compromise any encumbrance, charge or lien, which in the judgment of either is or appears to be prior or superior hereto, and (d) in exercising any such powers, pay necessary expenses, employ counsel and pay his reasonable fees. Trustor agrees to repay any amount so expended on demand of Beneficiary, and any amount so expended may be added by Beneficiary to the indebtedness secured hereby and shall bear a like rate of interest. 11. Trustor shall appear in and defend any action or proceeding purporting to affect the security hereof or the Property which is covered by this Deed of Trust,or the rights or powers of Beneficiary or Trustee, and whether or not Trustor so appears or defends,to pay all costs and expenses, including cost of evidence of title and attorney's fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may appear by virtue of being made a party defendant or otherwise irrespective of whether the interest of Beneficiary or Trustee in the Property is directly questioned by such action, including any action for the condemnation or partition of said premises, and in any suit brought by Beneficiary to foreclose this Deed of Trust. 12. Trustor shall pay immediately and without demand,all sums expended under the terms of this Deed of Trust by Beneficiary or Trustee, with interest from the date of expenditure at the rate which the principal obligation secured hereby bears at the time such payment is made, and the repayment of such sums shall be secured hereby. 13. Should Trustor or any successor in interest to Trustor in the Property drill or extract,or enter into a lease for drilling or extraction of oil, gas or other hydrocarbon substances or any mineral of any kind or character,or sell,convey,further encumber,or alienate the Property,or any part thereof,or any interest therein in violation of this Deed of Trust or the Note secured hereby,or be divested of his title or any interest therein in any manner or way,whether voluntarily or involuntarily, Beneficiary shall have the right,at its option,to declare any obligations secured hereby irrespective of the maturity date specified in any Note evidencing the same, immediately due and payable, and no waiver of this right shall be effective unless in writing. 14. Any award, settlement or damages for injury or damages to the Property, and any award of damages in connection with any condemnation for public use of or injury to the Property,or any part thereof, is hereby assigned and shall be paid to Beneficiary,who may apply or release such monies received by it in such manner and with the same effect as above provided for the disposition of proceeds of fire or other insurance. All rights of Trustee and Beneficiary under the provisions of this Section 14 shall be subject to and subordinate to the rights of any senior lender holding a senior lien upon the Property, including the First Lender's Deed of Trust(as defined below), and, in the event of any conflict between Section 14 of this Deed of Trust and such senior lien, the senior lien shall control. 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 7 15. By accepting payment of any sums secured by this Deed of Trust after its due date, or by making any payment, performing any act on behalf of Trustor,that Trustor was obligated hereunder,but failed, to make, or perform, or by adding any payment so made by Beneficiary to the indebtedness secured hereby, Beneficiary does not waive its right either to require prompt payment when due of all other sums so secured or to declare a default for failure so to pay. 16. At any time, or from time to time, without liability of the Beneficiary or Trustee thereof, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, or the lien of the Deed of Trust upon the remainder of the Property for the full amount of the indebtedness then or thereafter secured hereby, or the rights or powers of Beneficiary or the Trustee with respect to the remainder of the Property, Trustee may: (a) reconvey any part of the Property, (b) consent to the making of any map or plat thereof; (c)join in granting any easement thereon, (d)join in any agreement subordinating the lien or charge hereof. 17. Notwithstanding any other provision herein,this Deed of Trust shall be subordinate to any deed of trust in favor of an institutional lender to secure repayment of a loan to acquire the Property pursuant to a transfer of the Property to a"Moderate Income Household"at an"Affordable Housing Cost"(the"First Lender's Deed of Trust"), provided that such lien is being created in good faith and for value. Notwithstanding anything herein to the contrary,this Deed of Trust shall also be subordinate to any Refinancing(as defined below)of the First Lender's Deed of Trust. The holder of any such senior deed of trust(the"First Lienholder")shall agree to provide Beneficiary with written notice of any default under such senior deed of trust and provide Beneficiary with not less than ninety (90) days thereafter in which to cure such default before proceeding with any foreclosure or deed in lieu of foreclosure with respect to the Property. Any notice delivered to Beneficiary under this paragraph shall be delivered in the manner specified in paragraph 7 of the Note. Upon timely cure of the default under such senior deed of trust and Beneficiary's acquisition, at its election, of Trustor's interest in the Property, Beneficiary shall have the right to assume the loan secured by such senior deed of trust so long as Beneficiary maintains ownership of the Property,and,in that event,so long as Beneficiary continues as Trustor, the First Lienholder shall not exercise any due on sale clause contained in such senior deed of trust. In the event that Beneficiary fails to timely cure a default under such senior deed of trust and the First Lienholder proceeds with foreclosure or a deed in lieu of foreclosure of such senior deed of trust, then any provisions herein shall terminate and shall have no further force or effect on subsequent owners or purchasers of the Property. Beneficiary's Executive Director shall have the authority on behalf of Beneficiary to execute subordination agreements confirming the above subordination in such form as reasonably approved by the Executive Director and Beneficiary's legal counsel consistent with the foregoing provisions. For purposes of this paragraph, "Refinancing" means the execution of any deed of trust in favor of an institutional lender to secure repayment of a loan,the proceeds of which are used only for the purpose of repaying the First Lender's Deed of Trust described above or any successor loan executed in connection with refinancing of the prior encumbrance, provided that the loan is being created in good faith and for value and the amount does not exceed the then outstanding sum secured by the First Lender's Deed of Trust or a successor loan executed in connection with refinancing of the prior encumbrance plus reasonable closing costs associated with the refinancing. Trustor shall notify Beneficiary in writing within three days of receiving any notice of default, delinquency or foreclosure with respect to any lien or agreement(including any defaults under the covenants, conditions and restrictions applicable to the condominium development of which the Property is a part or any default under the First Lender's Deed of Trust)which could potentially affect Trustor's right,title and interest in 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 8 the Property. Beneficiary shall have the option, but not the obligation, to advance any sums due or take any other actions necessary to stay or cure the default,delinquency or foreclosure,and Beneficiary shall thereafter be entitled to immediately recover from Trustor and Trustor shall immediately pay to Beneficiary any payments, costs and expenses incurred in connection with the stay and/or cure, including but not limited to attorneys'fees and court costs, together with interest thereon at the rate of ten percent (10%) per annum from the date advanced or incurred until the date repaid. 18. The lien hereof shall remain in full force and effect during any postponement or extension of time of payment of the indebtedness secured hereby, or any part thereof. 19. As additional security,Trustor irrevocably assigns to Beneficiary the rents,issues,and profits of the Property for the purposes and upon the terms and conditions set forth below. This assignment shall not impose upon Beneficiary any duty to produce rents from the property affected by this Deed of Trust,or cause Authority to be (a) "mortgagees in possession" for any purpose; (b) responsible for performing any of the obligations of the lessor under any lease; or(c) responsible for any waste committed by lessees or any other parties, for any dangerous or defective condition of the property affected by this Deed of Trust, or for any negligence in the management, upkeep, or control of such rights to rents, issues and profits and such assignment is not contingent upon, and may be exercised without possession of,the property affected by this Deed of Trust. Beneficiary confers upon Trustor a license("License")to collect and retain the rents,issues and profits of the property affected by this Deed of Trust as they become due and payable, until the occurrence of a default hereunder. Upon such default, the License shall be automatically revoked and Beneficiary may collect and retain the rents, issues and profits without notice and without taking possessions of the property affected by this Deed of Trust. This right to collect rents, issues and profits shall not grant to Beneficiary or Trustee the right to possession, except as otherwise provided herein; and neither said right, nor termination of the License, shall impose upon Beneficiary or Trustee the duty to produce rents, issues or profits or maintain all or any part of the Property affected by this Trust Deed, If Trustor shall default as aforesaid, Trustor's right to collect any such money shall cease and Beneficiary shall have the right, with or without taking possession of the property affected hereby, to collect all rents, issues, royalties and profits and shall be authorized to, and may, without notice and irrespective of whether declaration of default has been delivered to Trustee and without regard to the adequacy of the security for the indebtedness secured hereby,either personally or by attorney or agent without bringing any action or proceeding,or by receiver to be appointed by the Court,enter into possession and hold, occupy, possess and enjoy the Property, make, cancel,enforce and modify leases, obtain and eject tenants, and set and modify rents and terms of rents, and to sue, and to take, receive and collect all or any part of the said rents, issues, and profits of the property affected hereby, and after paying such costs of maintenance, operation of the Property,and of collection including reasonable attorneys'fees,as in itsjudgment it may deem proper, to apply the balance upon any indebtedness then secured hereby, the rents, issues, royalties and profits of the Property being hereby assigned to Beneficiary for said purposes. The acceptance of such rents, issues, royalties and profits shall not constitute a waiver of any other right which Trustee or Beneficiary may enjoy under this Deed of Trust or under the laws of California. Failure of or discontinuance by Beneficiary at any time, or from time to time, to collect any such rents, issues, royalties or profits shall not in any manner affect the subsequent enforcement by Beneficiary of the right, power and authority to collect the same. The receipt and application by said Beneficiary of all such rents,issues, royalties and profits pursuant hereto,after execution and delivery of declaration of default and demand for sale as hereinafter provided, or during the pendency of Trustee's sale proceedings hereunder, shall not cure such breach or default nor affect sale proceedings, or any sale made pursuant thereto, but such rents, issues, royalties and profits, less all costs of 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 9 operation, maintenance, collection and reasonable attorneys' fees, when received by Beneficiary, shall be applied in reduction of the indebtedness secured hereby, from time to time, in such order as Beneficiary may determine. Nothing contained herein, nor the exercise of the right by Beneficiary to collect, shall be, or be construed to be, an affirmation by Beneficiary of any tenancy, lease or option, nor an assumption of liability under, nor subordination of the lien or charge of this Deed of Trust to, any such tenancy, lease or option. 20. If the security of this Deed of Trust is a leasehold estate,the Trustor agrees that: (a)the term "Lease" as used herein shall mean the lease creating the "leasehold estate" (b) Trustor shall not amend, change or modify his leasehold interest, or the Lease, or agree to do so, without the written consent of the Beneficiary; (c)Trustor will promptly advise Beneficiary regarding any notice, request or demand received by him from the lessor under the Lease and promptly furnish Beneficiary with a copy of any such notice,request or demand; (d) as long as any of the indebtedness secured hereby shall remain unpaid, unless the Beneficiary shall otherwise consent thereto in writing,the leasehold estate shall not merge with the fee title but shall always be kept separate and distinct, notwithstanding the union of said estates in any party; (e)Trustor agrees that it will promptly,strictly,and faithfully perform,fulfill,and comply with all covenants,agreements,terms,conditions and provisions under any lease affecting the premises and to neither do anything, nor to permit anything to be done which may cause modification or termination of any such lease or of the obligations of any lessee or person claiming through such lease or the rents provided for therein or the interest of the lessor or the Beneficiary therein or thereunder. Trustor further agrees he will not execute a Deed of Trust or mortgage which may be or become superior to any leasehold estate that is security for this Deed of Trust. In the event of a violation of any of the covenants set forth in this paragraph, Beneficiary shall have the right, at its option, to declare all sums secured hereby immediately due and payable. Consent to or waiver of one of said violations shall not be deemed to be a consent to or waiver of any other violation. If the security for this Deed of Trust is a leasehold estate, the term "property" as used in this Deed of Trust shall be deemed to mean the leasehold estate whenever the context so requires for the protection of the Beneficiary. 21. Trustor waives, to the fullest extent permissible by law, the right to plead any statute of limitations as a defense to any demand secured hereby. 22. Beneficiary may, from time to time, by instrument in writing, substitute a successor or successors to any Trustee named herein or acting hereunder,which instrument, executed and acknowledged by Beneficiary and recorded in the office of the recorder of the county or counties where the Property is situated, shall be conclusive proof of proper substitution of such successor Trustee or Trustees, who shall, without conveyances from the Trustee predecessor, succeed to all its title, estate, rights, powers and duties, including but not limited to the power to reconvey the whole or any part of the property covered by this Deed of Trust. Such instrument must contain the name of the original Trustor,Trustee and Beneficiary hereunder,and the book and page where this Deed of Trust is recorded. If notice of default shall have been recorded, this power of substitution cannot be exercised until after the costs,fees and expenses of the then acting Trustee shall have been paid to such Trustee,who shall endorse receipt thereof upon such instrument. The procedures herein provided for substitution of Trustee shall not be exclusive of other provisions for substitution provided by law. 23. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto,their heirs, legatees,devisees,administrators,executors, successors and assigns. The term"Beneficiary"shall mean the owner and holder, including pledgee,of the Note secured hereby,whether or not named as Beneficiary herein. In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 10 24. That in the event of a demand for, and the preparation and delivery of a written statement regarding the obligations secured by this Deed of Trust pursuant to Sections 2943 and 2954 of the Civil Code of California, Beneficiary shall be entitled to make a reasonable charge, not exceeding the maximum amount which is permitted by law at the time the statement is furnished. Beneficiary may also charge Trustor a reasonable fee for any other services rendered to Trustor or rendered in Trustor's behalf in connection with the Property of this Deed of Trust, including changing Beneficiary's records, pertaining to this Deed of Trust in connection with the transfer of the Property, or releasing an existing policy of fire insurance or other casualty insurance held by Beneficiary and replacing the same with another such policy. 25. Trustee accepts this Trust when this Deed of Trust,duly executed and acknowledged,is made a public record as provided by law. Trustee is not obligated to notify any party hereto of pending sale under any other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary,or Trustee shall be a party unless brought by Trustee. 26. Any notice which any party hereto may desire or be required to give to the other party shall be in writing. The mailing thereof must be certified mail addressed to the Trustor at his address hereinabove set forth or to the Beneficiary at his office or at such other place as such parties hereto may designate in writing. [Balance of this page intentionally left blank] 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 11 THE UNDERSIGNED TRUSTOR REQUESTS that a copy of any notice of default and of any notice of sale hereunder be mailed to him at his address hereinbefore set forth. TRUSTOR Dated: 20_ By: Dated: 20_ APPROVED AS TO (FORM By: 1 Michael Gates,City Attorney 20586.001-2509175v2 Exhibit"B"—Deed of Trust- Page 12 EXHIBIT"C Notice of Affordability Restrictions on Transfer of Property (See Attached) 20586.001-2509175v2 Exhibit"C" U� Recording Requested By: Housing Authority City of Huntington Beach 2000 Main Street Huntington Beach, California 92648 SPACE ABOVE THIS LINE FOR RECORDER'S USE Exempt from recording fees per Govt.Code Sec.6103 NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY (Coastal Walk) NOTICE IS HEREBY GIVEN by owner of the property located at , Unit , Huntington Beach, California 92648, and more particularly described in Exhibit"A" attached hereto (the"Property"or"Unit"), that: 1. The Property is subject to an"Agreement Declaring Conditions, Covenants, and Restrictions for Property(Resale Restrictions)"recorded on ,as Instrument Number No. in the Office of the County Recorder of the County of Orange,California(the"Resale Restrictions"). Among other things,the Resale Restrictions limit the price that the Property may be sold at to an"Affordable Housing Cost" for"Moderate Income Households, as those terms are defined in the Resale Restrictions." 2. The administration of the Resale Restrictions shall be governed by the Affordable Housing Regulations of the City of Huntington Beach as they exist now and may be amended in the future. 3. In summary, the term "Affordable Housing Cost," means that the purchase price that would result in monthly housing payments that do not exceed Thirty-Five Percent(35%)of One Hundred Ten Percent (110%)of the current Orange County monthly median income for a household containing a number of persons equal to the number of bedrooms in that Unit,plus one. In determining monthly housing payments,the City will assume principal and interest payments on a conventional home mortgage after paying a ten percent(10%) downpayment. The mortgage interest rate will be the prevailing Fannie Mae or Freddie Mac thirty(30) year mortgage rate,or a City-selected equivalent. Monthly housing costs will also include homeowner's association dues, utilities, homeowner's insurance, maintenance costs and property taxes. The effect of relying on prevailing interest rates to determine the Affordable Housing Cost is to make the resale price of the Property sensitive to interest rates. For example, if interest rates rise, the resale price will fall, and if interest rates fall,the resale price will rise. This could result in the permitted Affordable Housing Cost sales price decreasing below the original purchase price. 5. The Resale Restrictions imposed on the Property are scheduled to expire on the date which is Forty-Five (45)Years from the date of recordation of this Notice. 20586.001-2509175v2 Exhibit"C"—Page 1 This Notice is recorded for the purpose of providing notice only and it in no way modifies the provisions of the Resale Restrictions. Dated: 2015_ BY: Assistant City Manager APPROVED AS TO FORM: Dated: , 2015_ BY: City Attorney 20586.001-2509175v2 Exhibit°C—Page 2 Exhibit"A A condominium composed of: PARCEL NO. 1 Unit No. , consisting of certain airspace and surface elements, as shown and described in the Condominium Plan ("Plan") for Olocated on Lot _ of Tract , as shown on a Subdivision Map recorded on , in Book , at Pages through _, inclusive, of Miscellaneous Maps, in the Office of the Orange County Recorder ("Official Records"), which plan was recorded on as Instrument No. of Officials Records of Orange County, California. PARCEL NO. 2 An undivided (1/_th)fee simple interest as a tenant in common in and to Module B shown on the Plan and defined in the Declaration referred to below as the "Common Area". EXCEPTING THEREFROM, all oil, gas, minerals, and other hydrocarbon substances lying below the depth of 500 feet without any right to enter upon the surface or the subsurface of said land above a depth of 500 feet, as provided in deeds of record. PARCEL NO. 3 Nonexclusive easements for access, ingress, egress, use, enjoyment, drainage, encroachment, support, maintenance, repairs, and for other purposes, all as may be shown in the Plan, and as are described in the Declaration. PARCEL NO. 4 Exclusive easements appurtenant to Parcels No. 1 and No. 2 described above for use for parking purposes described as Exclusive Use Areas in the Declaration, over portions of Lot_of Tract shown and assigned in the Plan. PARCEL NO. 5 An exclusive easement appurtenant to Parcels No. 1 and No.2 described above,for use for patio,balcony,and fire escape staircase purposes described as Exclusive Use Areas in the Declaration, as applicable, over portions of Lot_of Tract as shown, assigned and described in the Plan. SUBJECT TO: 1. The terms and conditions of the "Agreement Declaring Conditions, Covenants and Restrictions for Property (Resale Restrictions)" recorded on , as Instrument Number No. in the Office of the County Recorder of the County of Orange, California (the "Resale Restrictions"). The Resale Restrictions limit the price that the Property may be sold at to an "Affordable Housing Cost for"Moderate Income Households," as those terms are defined in the Resale Restrictions, and further defined in the Affordable Housing Regulations of the City of Huntington Beach as they exist now and may be amended in the future. 20586.001-2509175v2 Exhibit"C"—Page 3 2. The prohibition contained in the Resale Restrictions against discrimination against or segregation of any person or group of persons on account of sex, marital status, race,color,creed, religion,national origin,or ancestry in the sale, lease, rental, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property. AP# 20586.001-2509175v2 Exhibit°C—Page 4 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy,or validity of that document. State of California ) County of ) On before me, a Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by his/her/theirsignature(s)on the instrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature 20586.001-2509175v2 Exhibit"C—Page 5 =AATITAuHMENT #2 City of Huntington Beach Community Development Department LIM I M STAFF REPORT M4INTING70N BEACH 11 TO: Planning Commission FROM: Scott Hess,AICP, Director of Community Development BY: John P Ramirez, AICP, Project Planner DATE January 12, 2016 SUBJECT: TENTATIVE TRACT MAP NO. 17930/CONDITIONAL USE PERMIT NO. 15- 030 APPLICANT: Aaron Orenstem, The Olson Company, 3010 Old Ranch Parkway, Suite 100, Seal Beach, CA 90740 PROPERTY OWNER: Pastor Richard Winter,Coast Community Church, 16061 Burgess Circle, Westminster CA 92683 LOCATION: 17541 & 17561 Newland Street, 92647 (west side ofNewland Street, approximately 220 feet south of Slater Avenue) STATEMENT OF ISSUE: • Tentative Tract Map (TTM) No 17930 and Conditional Use Permit (CUP) No. 15-030 represent a request to consolidate two parcels into one lot for condominium purposes in order to develop an approximately 0 829 acre site consisting of. a) 13 for-sale townhome units with associated open space and infrastructure; b) A density bonus of one additional unit with one incentive for reduced parking, c) A multiple family development that abuts an arterial highway; d) A multiple family development that includes dwelling units more than 150 feet from a public street, and e) A multiple family development that includes buildings exceeding 25 feet in height. • Staff s Recommendation- Approve Tentative Tract Map No 17930 and Conditional Use Permit No 15-030 based on the following: - Consistent with surrounding zoning and land use designations; - Does not result in the loss of an existing or planned recreational resource; - Provides for the creation of new housing units in the City, including affordable housing; - Consistent with the site's zoning and General Plan land use designations, - Complies with the Huntington Beach Zoning and Subdivision Ordinance (HBZSO), - Compatible with other residential uses surrounding the project site; - Meets the requirements of the Subdivision Map Act and has been reviewed by the Subdivision Committee for compliance. Item 16. - 36 HB -406- ONE m■■■■■m i`\ WE MINNIE -•- M = ' u■ •�- I� '� Sri � � -� � •n �,�s�. �- ,.�1_=-_` �: ~ ■. It�of FoU�1 V� 175 14 uou tk � _ �_ ate:•. �+,�� � _ - '' ��� h} "'` .i I(I t x,- - :i f i IN 7 CONDOMINIUMS-DAN VICINITY MAP TENTATIVE TRACT MIAP NO. 17930/CONDITIONAL USE PERART NO. 15-030 17541 ; slob • � • RECOMMENDATION: Motion to: A "Approve Tentative Tract Map No. 17930 with findings and suggested conditions of approval (Attachment No. 1)," B. "Approve Conditional Use Permit No. 15-030 with findings and suggested conditions of approval (Attachment No. 1)" ALTERNATIVE ACTION(S): The Planning Commission may take alternative actions such as- A "Deny Tentative Tract Map No 17930 and Conditional Use Permit No. 15-030 with findings for denial." B. "Continue Tentative Tract Map No 17930 and Conditional Use Permit No 15-030 and direct staff accordingly." PROJECT PROPOSAL: Tentative Tract Map 17930/Conditional Use Permit No. 15-030 represent requests by the Olson Company for the following. A. To consolidate two parcels into one 0 829 net acre lot for condominium purposes pursuant to Section 250.14 of the HBZSO B To permit the development of a 13 unit condominium subdivision, including a density bonus for one unit with one incentive for reduced parking pursuant to Section 230 14 of the HBZSO; a multiple family development that abuts an arterial highway, includes dwelling units more than 150 feet from a public street and includes buildings exceeding 25 feet in height, pursuant to Section 210 04 of the HBZSO. The project site consists of two parcels, one of which is developed with a single family home and a daycare facility The other lot contains a play area and storage for the daycare facility The single family home and daycare facility previously served the adjacent religious assembly to the south Surrounding and immediately adjacent to the site are multi-family residential uses to the north and west, a religious assembly to the south and single family residential uses to the east (across Newland Street within the City of Fountain Valley). The project is proposing one driveway from Newland Street to provide access to the site. Four detached two-story buildings are proposed throughout the property and are composed of a mixture of two to four attached residential units. All 13 units are proposed with three bedrooms each. Open space is provided in a central common area courtyard and private open space for each unit that consists of a private rear yard, balcony or deck. The applicant is also requesting a density bonus and one incentive in accordance with State Law and the HBSZO to construct one additional unit above the allowed density (for a total of 13 units where only 12 would be allowed) and apply a lower parking standard per unit, which would result in the project containing 2 parking spaces less than what code would require (39 spaces required; 37 proposed). The PC Staff Report—01/12/16 3 16sr02—Newland Condornimums Item 16. - 38 HB -408- applicant is proposing two affordable for-sale units on site, which exceeds the City's affordable housing requirements for 10% of the total units (total of 15 38% of affordable units). As part of the request for a density bonus and associated incentive, Olson Company proposes an Affordable Housing Agreement with the City that establishes two of the 13 units as affordable units for persons and families of moderate income for a period of 45 years (Attachment No 4). Study Session The project was introduced to the Planning Commission (PC) on November 10, 2015, at a study session The PC inquired about several project-related issues that are identified and expanded upon below: Onsite Parking Control Measures As part of the project proposal, the applicant submitted a parking management plan (Attachment No 5) that will ensure onsite parking spaces will be open and available at all times for vehicular parking There will be restrictions on utilizing garage areas as storage, as well as specific prohibitions on parking in the drive aisle or blocking any parking spaces This parking management plan will be included in the CC&Rs and enforced by the homeowners' association. Parking Availability in Vicinity There is no on-street parking on either side of Newland Street between Slater Avenue and Talbert Avenue due to the bike lanes on the street The nearest on street parking is approximately 100 feet north of Slater Avenue on the west side of Newland Street Applicable Affordability Period for Proposed Affordable Units California Government Code Sections 65915-65918 (generally known as State Density Bonus Law) and the HBZSO Section 230 26 (Affordable Housing) set the parameters and requirements for the provision of affordable housing within the City. Both State Law and the HBZSO require a 55-year affordable period for rental units No specific duration of time is identified in State Law applicable to for-sale units, however HBZSO Section 230.26(e) 3 requires a 45-year period of affordability for ownership units For-sale units cannot exceed levels affordable to moderate income households (120% of median income) As part of this request, the applicant has submitted a draft Affordable Housing Agreement (Attachment No 4) that complies with both State Law and the HBZSO Evaluation of Affordab ility Status for Existing Onsite Units On January 1, 2015, AB2222 became effecting making significant changes to the State's Density Bonus Law These changes relate to unit replacement requirements and revised affordability periods. The updated legislation indicates that housing developments will only retain eligibility for density bonus/incentives if the project replaces low or very low income affordable rental units existing on the property within five years preceding the date of application. Currently the site contains two residential type structures (17541 and 17551 Newland Street). The applicant evaluated the two structures and confirmed that they have not been occupied by low or very low income households, and do not meet the requirements to qualify as affordable, per AB2222 One of the existing structures has operated as a daycare since 1998 and has not served as housing within the past 17 years. The second structure has been - occupied by the same tenant for approximately four years Through working with the property owner, the applicant procured the renter's 2014 1040 tax form. This document indicates the renter filed as single with no dependents, with an income of$61,844. This income places him at the moderate income level, above PC Staff Report—01/12/16 4 16sr02—Newland Condonuruums HB -409- Item 16. - 39 the median income for a single person household in Orange County Prior to the current tenant, the residential unit was occupied for several years by a secretary of the adjacent religious assembly, and her husband, who worked as an air-traffic controller. Due to the time that has elapsed since their tenancy, neither the applicant nor the owner was able to obtain tax records for this couple to confirm their combined salaries However, based on their occupations, it is reasonable to assume that the couple would not have been considered a low or very low income household The apphcant has included this information in an Affordable Housing Plan letter(Attachment 6) Waiver/Reduction of Development Impact Fees? This project does not include any request for a waiver or reduction of development impact fees. The applicant's only concession request is related to the parking ratio applicable to the project in accordance with State Law. Detail Information Required In Proforma According to HBZSO Section 210.10, any request for modifications to minimum property development standards needs to be accompanied by a detailed pro-forma, rental guidelines, deed restrictions, and other types of documentation to demonstrate the need for a reduction of the development standard Requested modifications may include, but are not limited to, setbacks, parking requirements and open space Although the HBZSO includes this requirement for modifications to parking requirements, State Density Bonus Law does not require the submittal of a pro-forma or other documentation to demonstrate the need for a reduction in the parking standard In this case, State Law takes precedence. Therefore the applicant only needs to request the parking ratio identified in State Law and the City is obligated to apply this parking ratio to the entirety of the project An excerpt from State Law is provided below (p)(1) Upon the request of the developer, no city, county, or city and county shall require a vehicular parking raho, inclusive of handicapped and guest parking, of a development meeting the criteria of subdivision (b), that exceeds the following ratios (A)Zero to one bedroom one onsite parking space (B) Two to three bedrooms two onsite parking spaces (C)Four and more bedrooms two and one-half parking spaces (2)If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number For purposes of this subdivision, a development may provide "onszte parking"through tandem parking or uncovered parking but not through on street parking (GC 65915 Quimby Act Fees (Park Fees) As required by the Huntington Beach Municipal Code(HBMC 17 76), all Parkland Acquisition and Park Facilities Development Impact Fees will apply to this project. Currently this impact fee is$13,385/unrt Provision of Onszte Bicycle Parking As required by the HBZSO 23120, one bicycle space is required for every four units for multiple family developments The site plan will be required to be updated prior to issuance of building permits to reflect the four code-required bicycle parking spaces The applicant is deliberating the exact location of the required spaces PC Staff Report—01/12/16 5 16sr02—Newland Condominiums Item 16. - 40 Hs -410- ,Community Outreach Efforts During the development review process, the applicant performed community outreach in order to assess the concerns of the most impacted neighbors (those within a 500' radius of the site), and sought input during the design process The applicant held two community meetings; one in October 2013, when the applicant previously controlled the property and was considering a similar site plan, and one in May 2015, pertaining to this recent proposal. Approximately 15 people attended each meeting and the tone was supportive The new development was viewed as a way to improve the frontage along Newland Street and ultimately increase surrounding property values. At these meetings, community members urged the applicant to develop an appealing architectural plan that would stand out from the surrounding uses. Neighbors of the site were eager to see new for-sale housing similar to Olson's Coastal Walk project on Airport Circle. In addition to concerns related to design, neighbors wanted to ensure that the driveway entry was safe and designed to provide good visibility The applicant specifically reached out to the property owner immediately west of the site, where there is a seven to nine foot grade difference between the project site and the adjacent property. The applicant was never able to make direct contact with this property owner; however,they did have conversations with the owner of the property to the southwest of the site This neighbor conveyed additional feedback related to sunlight/shade. Based on these conversations, the architectural design was modified to diminish impacts to these properties (increased setback along the rear property line and a redesign of the rear units from one building into two separate buildings). Both of these changes reduce the impacts to privacy as well as shade/sunlight impacts to the properties west of the site. The applicant has provided a letter detailing their community outreach efforts (Attachment 7). Historic Status of Onsite Structures There are two primary structures on site along with five accessory structures. The two primary structures consist of a daycare facility (17551 Newland Street) that has been in operation since 1998 and a single family home (17541 Newland Street) that is a rental unit. Of the five accessory structures, one of them is a two-car garage serving the rental unit and the other four serve as storage and an outdoor patio for the daycare facility. In 2014, a Citywide Historic Context and Survey Report was prepared to update the Historic and Cultural Resources Element(HCRE) of the City's General Plan The purpose of the survey was to identify, measure, and classify historic sites and structures, and possible candidates for historic districts as they pertain to the history and events that have contributed to the development of the city's built environment. Properties that receive a status code of 1-5 are presumed to be "historical resources" for the purposes of CEQA Properties that receive a status code of 6 or 7 are not historical resources for the purposes of CEQA unless a qualified professional determines that there is a preponderance of evidence demonstrating significance. Based on the survey, the daycare facility (17551 Newland Street) was assigned a status of 7R and the single family home (17541 Newland Street) was assigned a status of 6L Therefore, neither structure is considered a historic resource for the purposes of CEQA Undergrounding Of Utilities As required by the Huntington Beach Municipal Code (HBMC 17 64), all existing and new utilities are required to be undergrounded This requirement applies to all overhead utilities along the project frontage on Newland Street, including all existing overhead electrical distribution lines (12 kV) and any communication lines. PC Staff Report—01/12/16 6 16sr02—Newland Condormruums HB -411- Item 16. - 41 ISSUES: Subject Property And Surrounding Land Use,Zoninz And General Plan Desuanations: LOCATION GENERAL PLAN ZONING LAND USE Subject Property. RM-15 (Residential RM(Residential Single family residence, Medium Density— 15 Medium Density) commercial daycare, and dwelling units/acre) vacant North of Subject RM-15 RM Multi-family residential Property East of Subject NA-City of Fountain NA- City of Fountain Single Family Property(across Valley Valley Residential Newland Street). South of Subject RM-15 RM Religious Assembly Property West of Subject RM-15 RM Multi-family residential Property General Plan Conformance: The General Plan Land Use Map designation on the subject property is RM-15 (Residential Medium Density— 15 du/acre) and the zoning designation is RM (Residential Medium Density) The proposed project will implement both the General Plan and zoning designations of the site The proposed project is consistent with the intent of these designations, and the goals, objectives, and policies of the City's General Plan as follows A. Land Use Element Obiective LU1 1 Provide for the timing of residential, commercial, and industrial development coincident with the availability of adequate market demand to ensure economic vitality. Obiectwe L U 8 1 Maintain the pattern of existing land uses while providing opportunities for the evolution, including intensification and re-use, of selected subareas in order to improve their character and identity Goal LU9 Achieve the development of a range of housing units that provides for the diverse economic,physical, and social needs of existing and future residents of Huntington Beach Objective L U 9 3. Provide for the development of new residential subdivisions and projects that incorporate a diversity of uses and are configured to establish a distinct sense of neighborhood and identity. Policy L U 9 2 1: Require that all new residential development within existing residential neighborhoods (i e., infill) be compatible with existing structures. PC Staff Report—01/12/16 7 16sr02—Newland Condomimums Item 16. - 42 HB -412- The proposed project will improve an underutilized and partially vacant property by allowing the development of residential uses within close proximity to compatible uses The residential project will implement the residential land use category appropriate for the site's General Plan land use designation and establish a development consistent with the size, scale, mass and pattern of existing development in the area The introduction of newly constructed three-bedroom ownership units into the area provides for home ownership opportunities in an area that contains primarily multiple family rental units. The surrounding residential uses will benefit with the introduction of newly constructed housing in the neighborhood as the existing aging structures on site will be removed The development will provide new housing stock in the area and will potentially attract first-time homebuyers by providing an expanded opportunity for ownership in the area. B Urban Design Element Goal UD 1 Enhance the visual unage of the City of Huntington Beach Objective UD 1 1 Identify and reinforce a distinctive architectural and environmental image for each district in Huntington Beach. The project will enhance the character of the neighborhood and improve property values. The proposed buildings will be compatible with existing development at similar heights and massing and incorporate a Spanish-themed architectural palette into the area, providing interest and high-quality design to the streetscape Common open space central and to the rear of the project combined with enhanced landscaping will create visual interest from the frontage along Newland Street. Garages and open parking spaces are primarily located facing away from the street frontages. A decorative paving treatment frames the drive aisle entry to the site and creates visual interest while also serving as pedestrian access into the site C Dousing Element ,Policy 31 Encourage the production of housing that meets all economic segments of the community, including lower, moderate, and upper income households, to maintain a balanced community ,Policy 3.2. Utilize the City's Inclusionary Housing Ordinance as a tool to integrate affordable units within market rate developments Continue to prioritize the construction of affordable units on-site, with provision of units off- site or payment of an in-lieu housing fee as a less preferred alternative. ,Policy 3 3- Facilitate the development of affordable housing through regulatory incentives and concessions, and/or financial assistance, with funding priority to projects that include extremely low income units Proactively seek out new models and approaches in the provision of affordable- housing. PC Staff Report—01/12/16 8 16sr02—Newland Condonumums HB -413- Item 16. - 43 Policy 41 Support the use of density bonuses and other incentives, such as fee deferrals/waivers and parking reductions, to offset or reduce the costs of developing affordable housing while ensuring that potential impacts are addressed. Policy 61 - implement the City's Green Building Program to ensure new development is energy and water efficient. The project consists of 13 residential units, which contributes to the City's housing stock. The project includes a request for a density bonus for one additional unit and one incentive for reduction in parking standards in exchange for affordable housing as allowed by State Law and the HBZSO. As part of the request for a density bonus and associated incentive, the applicant is entering into an Affordable Housing Agreement with the City to establish two of the 13 units as affordable units for persons/families of moderate income for a period of 45 years The development request as proposed is consistent with the intent of the policies identified above As such, the project will contribute to the City's overall housing goals Additionally, sustainable features and construction practices will be incorporated ui the project includmg energy-efficient lightmg, water efficient plumbing fixtures, recycling of construction waste, and tankless water heaters. Zoning Compliance: This project complies with the requirements of the RM zoning district. A zoning conformance table (Attachment No. 8) shows an overview of the project's conformance to the development standards In addition, a list of City Code Requirements of the applicable provisions of the (HBZSO) and Municipal Code has been provided to the applicant(Attachment No 9). Density Bonus Request In March 2007, the City Council adopted a density bonus ordinance (Zoning Code Section 230 14) to conform to requirements of Government Code Section 65915. Based on the updated density bonus ordinance, when a developer of a residential property which is zoned and general planned to allow five or more dwelling units proposes to provide affordable housing, he or she may request a density bonus and incentives/concessions through a Conditional Use Permit, if the project provides for construction of one of the following: a) Ten percent(10%) of the total uruts for lower income households; or b) Five percent (5%) of the total units for very low income households, or c) A senior citizen housing development or mobile home park that limits residency based on age requirements for housing for older persons; or d) Ten percent (10%) of the total dwelling units in a common interest development (condominium) for persons and families of moderate income. The amount of density bonus varies according to the amount by which the percentage of affordable housing units exceeds the muumum percentage established above. In addition to the density bonus, eligible projects may receive one to three additional development incentives, depending on the percentage of affordable units and level of targeted income. According to State Law, available incentives including reduction in site development standards must be offered by the City to reduce PC Staff Report—01/12/16 9 16sr02—Newland Condominiums Item 16. - 44 HB -414- development/construction costs. Consequently, concessions resulting in lower construction costs are intended to increase affordable housing opportunities In addition, at the request of the developer, the City must permit a parking ratio (inclusive of handicapped and guest parking) of 1 space for 0-1 bedroom units, 2 spaces for 2-3 bedroom units, and 2.5 spaces for four or more bedrooms. It is important to note that a density bonus request pursuant to the provisions contained within the code cannot be denied unless the project is denied in its entirety. The RM General Plan Land Use and zoning designations allow 12 units on the 0 829 acre site The applicant is proposing two affordable for-sale units for persons and families of moderate income, which would provide 15 38% of the total dwelling units as affordable units As allowed by State Law and the HBZSO, the applicant is requesting a density bonus and one incentive to construct one additional unit above the allowed density (for a total of 13 units where only 12 would be allowed) and apply a lower parking standard per unit, which would result in the project containing 2 parking spaces less than what code would require(39 spaces required, 37 proposed). Based on State Law and HBZSO, the amount of density bonus to which the applicant is entitled varies according to the amount by which the project's percentage of affordable housing exceeds a base percentage identified in State Law. For housing developments meeting the moderate-income criteria (a development providing at least 10% of the total dwelling units in a common interest development for persons and families of moderate income), the base density bonus of 5% shall be increased by 1% for every 1% increase in the percentage of moderate-income units over 10%, with a maximum density bonus of 35% As required by State Law and the HBZSO, all fractional amounts shall be rounded up. The applicant is proposing 15 38% (16%) of the total dwelling units at a moderate-income affordability level. Based on State Law and the HBZSO, and as illustrated in the Density Bonus Chart below, this project is entitled to a density bonus of 11% based on the affordable unit percentage proposed Therefore the allowed density for this request is 16.65 du/acre With this density bonus allowance and based on the net acreage of the property, the applicant is entitled to construct 13 8, or 14, dwelling units. Since the request is for the construction of 13 units resulting in a density of 15 68 du/acre, the applicant's request is consistent with State Law and the HBZSO DENSITY BONUS CHART* vd 5% 20 00% NA NA 6% :22_50%== NA "`,V�JNA 7% 25 00% NA NA 8% 27.50%' '° NA -`` -NA ' 90/0 30 00% NA NA 10%a 32.50%r" 20.0% 11% 35 00% 21 5% 6% 12% _35.00%:, - 23.0% _a; 7%- PC Staff Report—01/12/16 10 16sr02—Newland Condonmums HB -415- Item 16. - 45 13% 35 00% 24 5% 8% 14% 35.00% 26.0% 9% 15% 35.00% 27 5% 10% 16% 35.00% 29 0% -1i% 17% 35.00% 30 5% 12% ---:=18% = -35.00%_. _ -32.0%,-%,4 -,- -13016, - 19% 35.00% 33 5% 14% ,20%_- 35'00% 35 00/&'"1"' All density bonus calculations resulting in fractions are rounded up to the next whole number **Affordable unit percentage is calculated excluding units added by a density bonus The applicant has requested that the City permit a parking ratio (inclusive of handicapped and guest parking) of 2 spaces for 3 bedroom units, in accordance with State Law This ratio would result in a parking requirement of 26 spaces for the proposed 13 three bedroom units The parking table below illustrates the difference between the parking requirements of the HBZSO and State Law, and the amount of parking being provided for the project. Although the City is applying the State Law parking ratio, the applicant is providing 37 spaces for the development, in excess of the minimum parking requirements. Instead of a reduction of 13 spaces as allowed by State Law, a reduction of two spaces is being proposed Since the request is to allow 37 spaces and is more than the minimum requirement of 26 spaces for the project, the applicant's request is consistent with State Law and the HBZSO PARKING TABLE I Iultifamil°lbwelhn BBZSO Re-'d Parkin - State-Law Re-'d Parking Provided Parkin' 3 BR Units 2.5 spaces(1 enclosed)and 0.5 2 spaces(inclusive of 2 85 spaces per unit spaces for guest per unit guest spaces)per unit Total for 13 Units 39 spaces 26 open spaces 37 spaces -Mnumum 13 enclosed spaces -26 enclosed spaces -Minimum 7 guests aces - 11 guest spaces Urban Design Guidelines Conformance: The character of the development is consistent with the existing neighborhood in size, scale and massing of other residential structures in the vicinity The project creates visual interest along the street frontage by incorporating enhanced landscaping and paving, providing a variety of trees,as well as functional open space in one common area and private yards, and maintains high quality architectural design. Grading will be minimized by filling low areas and maintaining the existing grade of the site. Two-story massing of the buildings create a proportional scale to the street and surrounding uses Furthermore, roof lines are segmented and building facades contain wall offsets and decorative features to vary the overall horizontal context of the buildings Balconies are appropriately inserted to break up the massing and wall planes are adorned with wood trim, tile, shutters, and wrought iron decorative details. Decorative paving is integrated at the site entry as a pedestrian walkway along the main drive aisle, creating a safe and visually attractive pedestrian access. Common open space area is sited centrally within the property to maximize accessibility and use by residents. Overall the layout of the development provides efficient access for both pedestrians and vehicles and the buildings will be constructed of quality architecture and colors. PC Staff Report—01/12/16 11 16sr02—Newland Condominiums Item 16. - 46 HB -416- Environmental Status: The project is categorically exempt pursuant to Section 15332, Class 32 of the California Environmental Quality Act,which exempts from environmental review projects characterized as in-fill development meeting the conditions described below- a) The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations. b) The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses. c) The project site has no value as habitat for endangered, rare or threatened species d) Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality e) The site can be adequately served by all required utilities and public services Staff has prepared an expanded and detailed Notice of Exemption (Attachment No. 10) for filing with the County of Orange demonstrating the project meets the conditions identified in Section 15332, Class 32 (In-Fill Development) of the California Environmental Quality Act. Coastal Status Not applicable. Design Review Board: Not applicable. Subdivision Committee: The proposed tentative tract map was reviewed by the Subdivision Committee on December 8, 2015. Staff presented the proposed subdivision including the access points and vehicular drive aisles within the tract as well as access to the development, and the layout of the condominiums. The Subdivision Committee reviewed the recommended conditions of approval for the tentative map from the Community Development, Fire and Public Works Departments. The Subdivision Committee unanimously recommended approval of the proposed project to the Planning Commission subject to minor modifications/clarifications to wording related to the dedication of the frontage along Newland Street and the requirement of City Council action related to the Affordable Housing Agreement. Other Departments Concerns and Requirements: The Departments of Public Works, Police, Fire, Office of Business Development, and Community Development have reviewed the project and identified a list of recommended conditions that are incorporated into the suggested conditions of approval as well as code requirements (Attachment No 9) applicable to the project Public Notification: Legal notice was published in the Huntington Beach/Fountain Valley Independent on December 31, 2015, and notices were sent to property owners of record and tenants within a 500 ft. radius of the subject property, individuals/organizations requesting notification (Planning Division's Notification Matrix), PC Staff Report—01/12/16 12 16sr02—Newland Condominiums HB -417- Item 16. - 47 applicant, and interested parties As of January 5, 2016, no communication supporting or opposing the request has been received Application Processing Dates: DATE OF COMPLETE APPLICATION, MANDATORY PROCESSING DATE(S) October 16, 2015 January 16, 2016 ANALYSIS: Compatibility with Surrounding Uses and Compliance with HBZSO/Subdivision Map Act The proposed two-story development will be compatible with the nearby and surrounding properties Properties to the north are developed with two and three story multiple family dwellings and properties to the west are developed with single story multiple family dwellings (duplexes) Although the adjacent duplexes are single story and there is an 8-10 foot grade difference between the project site and the adjacent properties, the applicant increased the setback along this property line to 12 feet along most of this elevation to provide a larger buffer between the new homes and the property line The applicant also placed the common area central to and adjacent to this property line to further minimize any impacts related privacy, shade and/or shadow to the adjacent properties The architecture is traditional Spanish and incorporates stucco, the roof, and various building offsets and earth-tone colors. It is designed to be consistent in massing and scale with structures in the neighborhood. The project will also include sustainable design features and construction practices such as energy-efficient lighting, water fixtures, drip irrigation, and recycling of construction waste The site is relatively flat with an approximate two-foot grade difference (sloping generally from south to north) As mentioned previously, there is an 8-10 foot grade difference between the project site and the properties to the west There is also a 0-3 foot grade difference along the northerly property line with the adjacent properties (the grade difference increases in a westerly direction) Minimal grading is proposed to level the site for building placement and accommodate on site drainage. At most, an approximate two- foot difference between the existing grade and new pad elevations would occur for the two northerly buildings and less than a foot difference for the two southerly buildings There is existing retaining/block wall along the north property line and an existing retaining wall topped with a wooden fence along the west property line. The applicant is proposing to remove and replace the existing walls to the north and west(with property authorization) with a maximum four and one half-foot high retaining wall topped with a six-foot high block wall along the north property line and a maximum four foot high retaining wall topped with a six-foot high block wall along the west property line To maintain a consistent grade across the property, a maximum of two feet of fill will occur along portions of the north part of the subject site. Although the multiple family development abuts an arterial highway, includes units more than 150 feet from Newland Street, and has buildings at a height of 29 feet, attention to architectural detail, landscape and hardscape treatments are consistent throughout the site. The single ingress/egress point safely accommodates the 13 -condominium units, including emergency and trash pickup access, while not introducing excessive access points on the arterial Additionally, the proposed height of the project is consistent with the two and three story multiple family buildings immediately to the north of the site and nearby to the south of the site PC Staff Report—01/12/16 13 16sr02—Newland Condominiums Item 16. - 48 xs -418- The proposed project conforms to applicable code requirements and has been designed to be compatible with existing uses in the vicinity. The project's building scale, architecture, site layout and color palette will complement the surrounding developments Density Bonus Request and Parking Reduction Concession The proposed density bonus and parking concession for the project complies with both State Law and the BBZSO. The proposed density bonus would yield one additional unit above the allowed density(13 units instead of 12), resulting in a density of 15.68 dwelling units per acre The applicant's request for a parking concession (which requires the City to apply a reduced parking calculation to the entire project) would result w a parking requirement of 26 spaces for the project The applicant is proposing 37 spaces, only two spaces less than what would be required by Code (approximately a 5% reduction). Except for the density bonus and parking concession, the project complies with all provisions of the Code and is consistent with the intent of the General Plan The request includes a parking management plan that will be recorded on the property and enforced by the home owners' association to ensure the availability of on-site parking for residents and guests for the project. Given the minor nature of the reduction in parking and the parking management plan that will be implemented, staff believes the use will not be detrimental to the welfare of persons working or residing in the vicinity Additionally, the project, inclusive of the density bonus, can be adequately served by local utility systems (water, sewer, storm drain) and will not have a significant or adverse impact on traffic volume, school enrollment or recreational resources in the area As designed, the project is compatible with the physical character of the surrounding area. Architectural Design and Site Layout Staff believes the proposed development is well designed and appropriate for the subject site based on the applicable zoning, surrounding uses and the physical characteristics of the lot The project, as proposed, achieves substantial conformance with the City's Urban Design Guidelines for multi-family residential projects Visual interest is provided along the street frontage and access road around within the site with the incorporation of building projections in the facades, balconies with open railing, varied roof lines, accent colors and two-story massing elements. Decorative paving along the entry aisle creates an inviting experience for visitors and residents while creating visual interest on the site Buildings are arranged in clusters ranging from two to four units Adequate parking is provided within 11 open guest spaces and two-car garages per unit Furthermore, the project also provides usable open space and landscaping in substantial excess of the code required minimum The development features one common open space area on the property with sufficient access for all residents and designed to appeal to the sensory system The common open space consists of a seating area, tile-accented fountain, and colorful plantings Furthermore, each dwelling unit is provided with private open space areas consisting of either a private rear yard, balcony and/or deck The common open space is centrally located within the site for maximum access and the placement and arrangement of buildmgs provide for a functional and attractive design Staff supports the proposed project's site layout, design, and architecture because it results in a development that will be compatible with the physical character of the surrounding multi-family residential areas PC Staff Report—01/12/16 14 16sr02—Newland Condonumums xB -419- Item 16. - 49 SUMMARY: Staff recommends approval of Tentative Tract Map No 17930 and Conditional Use Permit No 15-030 based upon the following - Consistent with surrounding zoning and land use designations, - Does not result in the loss of an existing or planned recreational resource, - Provides for the creation of new housing units in the City, including affordable housing, - Consistent with the site's zoning and General Plan land use designations, - Complies with the Huntington Beach Zoning and Subdivision Ordinance(HBZSO), - Compatible with other residential uses surrounding the project site, - Meets the requirements of the Subdivision Map Act and has been reviewed by the Subdivision Committee for compliance. ATTACHMENTS- 1 Suggested Findings and Conditions of Approval for Tentative Tract Map No. 17930 and Conditional Use Permit No. 15-030 2. Site Plan,Floor Plans and Elevations dated and received November 2, 2015 and Tentative Tract Map No. 17930 dated and received November 2, 2015 3. Narrative dated July 22, 2015 4. Draft Affordable Housing Agreement dated and received October 26,2015 5. Parking Management Plan dated and received December 29,2015 6. Affordability Housing Plan Letter dated and received December 11, 2015 7 Community Outreach Letter dated and received December 14, 2015 8 Zoning Conformance Table 9. Code Requirements Letter(for informational purposes only) dated October 19, 2015 10 Expanded Notice of Exemption SH JJ•JR PC Staff Report—01/12/16 15 16sr02—Newland Condominiums Item 16. - 50 HB -420- ATTACHMENT NO. 1 SUGGESTED FINDINGS AND CONDITIONS OF APPROVAL TENTATIVE TRACT MAP NO. 17930 CONDITIONAL USE PERMIT NO. 15-030 SUGGESTED FINDINGS FOR PROJECTS EXEMPT FROM CEOA: The Planning Commission finds that the project will not have any significant effect on the environment and is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15332, Class 32 of the California Environmental Quality Act, which exempts from environmental review projects characterized as in-fill development that are. a) consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations, b) the proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses; c) the project site has no value as habitat for endangered, rare or threatened species, d) approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality, and, e) the site can be adequately served by all required utilities and public services. Staff has prepared an expanded and detailed Notice of Exemption (Attachment No. 10) demonstrating the project is exempt from CEQA pursuant to Section 15332, Class 32 (In-Fill Development) since the project is meets the requirements set forth in a)through e) above. SUGGESTED FINDINGS FOR APPROVAL- TENTATIVE TRACT MAP NO. 17930: 1 Tentative Tract Map No. 17930 for a one lot condominium subdivision on approximately 0 829 acres for development of 13 attached townhome units is consistent with the intent of the General Plan Land Use Element designation of Residential Medium Density, and other applicable provisions of the HBZSO code. 2 The site is physically suitable for the type and density of development The size, depth, frontage, street width and other design features of the proposed subdivision are in compliance with the HBZSO code The project site is able to accommodate the type of development proposed. The proposed subdivision will result in a density of 15 68 units per acre, which is allowed in accordance with State Density Bonus Law and as part of the request for this property designated Residential Medium Density land use designation The proposed density would be compatible with surrounding multi- family developments. 3 The design of the subdivision or the proposed improvements will not cause serious health problems or substantial environmental damage or substantially and avoidably injure fish or wildlife or their habitat. The project site is surrounded by residential development, a religious assembly and paved roads. The site does not contain any natural open space or any significant biological resources. PC Staff Report—01/12/16 1 Attachment No 1.1 HB -421- Item 16. - 51 4 The design of the subdivision or the type of improvements will not conflict with easements, acquired by the public at large, for access through or use of, property within the proposed subdivision unless alternative easements, for access or for use, will be provided The subdivision will provide all necessary easements and will not affect any existing easements SUGGESTED FINDINGS FOR APPROVAL-CONDITIONAL USE PERMIT NO. 15-030: 1 Conditional Use Permit No 15-030 for the development of 13 attached for-sale residential units and associated infrastructure and site improvements, including a) a density bonus of one unit with one incentive for reduced parking; b) a multiple family development that abuts an arterial highway, c) a multiple family development that includes dwelling units more than 150 feet from a public street; and, d) a multiple family development that includes buildings exceeding 25 feet in height, will not be detrimental to the general welfare of persons working or residing in the vicinity or detrimental to the value of the property and improvements in the neighborhood. The project will improve the existing underutilized parcels of land with a development consistent with the underlying General Plan land use and zoning designations The proposed residential use is similar to those existing uses in the vicinity. The project will not result in any adverse or significant environmental impacts including traffic, noise, lighting, aesthetics, and hazardous materials. The project will have adequate setback buffers from adjacent residential uses and have two-story massing along the street edge to maintain proportion with the pedestrian scale. Proposed improvements include enhanced landscaping, decorative paving, and quality architectural design throughout the site. Furthermore, the layout of the site improves the visual surroundings by providing efficient drive aisles for vehicular access, safe pedestrian access with decorative paving, and minimizing the visibility of parking garages and parking spaces from the street. 2. The conditional use permit will be compatible with surrounding residential and religious assembly uses in terms of setbacks, onsite parking, lot coverage, and allowable building height Architectural design is composed of the traditional Spanish style consisting of stucco exterior, tile roof, varied offsets and rooflines, and decorative balcony railings Enhanced landscaping along the site perimeter and within the common open space courtyards will create visual interest and improve the visual image of the community The project includes two-story buildings that are compatible with surrounding developments and proportionally relate to the overall mass and scale of the neighborhood. The proposed project is in conformance with applicable code requirements and has been designed to be compatible with existing uses in the vicinity. The project's building scale, architecture, site layout and color palette will complement the surrounding developments. 3 The proposed project will comply with the provisions of the base district and other applicable provisions in Titles 20-25 of the Huntington Beach Zoning and Subdivision Ordinance The project complies with the development standards in terms of minimum onsite parking, height, setbacks, and lot coverage. Adequate vehicular and pedestrian circulation is provided for convenient access throughout the project 4 The proposed project, which includes a density bonus and a request for a parking concession, complies with all provisions of the Code. Given the minimal nature of the density bonus and reduction in parking being requested, the project will not be detrimental the welfare of persons working or residing in the vicinity. Additionally, the project, inclusive of the density bonus, can be adequately served by local utility systems (water, sewer, storm drain) and will not have a significant PC Staff Report—01/l2/16 2 Attachment No 12 Item 16. - 52 HB -422- or adverse impact on traffic volume, school enrollment or recreational resources in the area As designed, the project is compatible with the physical character of the surrounding area and the intent of the General Plan 5 The granting of the conditional use permit will not adversely affect the General Plan It is consistent with the intent of General-Plan Land Use Element designation of Residential-Medium Density. In addition, it is consistent with the following goals, objectives, and policies of the General Plan. A Land Use Element Objective LU 1 1: Provide for the timing of residential, commercial, and industrial development coincident with the availability of adequate market demand to ensure economic vitality. Ohlective L U 8 1 Maintain the pattern of existing land uses while providing opportunities for the evolution, including intensification and re-use, of selected subareas in order to improve their character and identity. Goal LU9 Achieve the development of a range of housing units that provides for the diverse economic,physical, and social needs of existing and future residents of Huntington Beach Objective L U 9 3 Provide for the development of new residential subdivisions and projects that incorporate a diversity of uses and are configured to establish a distinct sense of neighborhood and identity Policy LU9 2 1 Require that all new residential development within existing residential neighborhoods(i.e, infill)be compatible with existing structures The proposed project will improve an underutilized and partially vacant property by allowing the development of residential uses within close proximity to compatible uses The residential project will implement the residential land use category appropriate for the site's General Plan land use designation and establish a development consistent with the size, scale, mass and pattern of existing development in the area The introduction of newly constructed three-bedroom ownership units into the area provides for home ownership opportunities in an area that contains primarily multiple family rental units The surrounding residential uses will benefit with the introduction of newly constructed housing in the neighborhood as the existing aging structures on site will be removed. The development will provide new housing stock in the area and will potentially attract first-time homebuyers by providing an expanded opportunity for ownership in the area. B Urban Design Element Goal UD I- Enhance the visual image of the City of Huntington Beach. Ohiective UD I I Identify and reinforce a distinctive architectural and environmental image for each district in Huntington Beach. PC Staff Report—01/12/16 3 Attachment No 13 HB -423- Item 16. - 53 The project will enhance the character of the neighborhood and improve property values. The proposed buildings will be compatible with existing development at similar heights and massing and incorporate a Spanish-themed architectural palette into the area, providing interest and high-quality design to the streetscape. Common open space central and to the rear of the project combined with — enhanced landscaping will create visual interest from the frontage along Newland Street. Garages and open parking spaces are primarily located facing away from the street frontages. A decorative paving treatment frames the drive aisle entry to the site and creates visual interest while also serving as pedestrian access into the site. C Housiniz Element Policy 3 1 Encourage the production of housing that meets all economic segments of the community, including lower, moderate, and upper income households, to maintain a balanced community Policy 3 2. Utilize the City's Inclusionary Housing Ordinance as a tool to integrate affordable units within market rate developments Continue to prioritize the construction of affordable units on-site, with provision of units off- site or payment of an in-lieu housing fee as a less preferred alternative. Policy 3 3• Facilitate the development of affordable housing through regulatory incentives and concessions, and/or financial assistance, with funding priority to projects that include extiemely low income units Proactively seek out new models and approaches in the provision of affordable housing. Policy 4 1 Support the use of density bonuses and other incentives, such as fee deferrals/waivers and parking reductions, to offset or reduce the costs of developing affordable housing while ensuring that potential impacts are addressed Policy 6 1 Implement the City's Green Building Program to ensure new development is energy and water efficient. The project consists of 13 residential units, which contributes to the City's housing stock. The project includes a request for a density bonus for one additional unit and one incentive for reduction in parking standards in exchange for affordable housing as allowed by State Law and the HBZSO As part of the request for a density bonus and associated incentive, the applicant is entering into an Affordable Housing Agreement with the City to establish two of the 13 units as affordable units for persons/families of moderate income for a period of 45 years. The development request as proposed is consistent with the intent of the policies identified above As such, the project will contribute to the City's overall housing goals Additionally, sustainable features and construction_practices will be incorporated in the project including energy-efficient lighting, water efficient plumbing fixtures, recycling of construction waste, and tankless water heaters. PC Staff Report—01/12/16 4 Attachment No. 14 Item 16. - 54 HB -424- SUGGESTED CONDITIONS OF APPROVAL—TENTATIVE TRACT MAP NO. 17930: 1 The Tentative Tract Map No 17930 for consolidation of two existing parcels and the subdivision of the resultant parcel into a 13 unit airspace subdivision for a multiple family residential development received and dated September 18, 2015, with the following modifications, shall be the approved layout- a) Each utility easement shall be recorded per a separate instrument from the Final Map and referenced as such on the Final Map b) Remove Note"C"on Sheet Cl 0 from the Final Map. c) A dedication, in fee, for the full width of Newland Street shall be reflected on the Final Map 2 The Final Map for Tentative Tract Map No. 17930 shall not be approved by the City Council until Conditional Use Permit No. 15-030 is approved and in effect. 3. Prior to issuance of a grading permit and at least 14 days prior to any grading activity, the applicant/developer shall provide notice in writing to property owners of record and tenants of properties within a 500-foot radius of the project site as noticed for the public hearing The notice shall include a general description of planned grading activities and an estimated timeline for commencement and completion of work and a contact person name with phone number Prior to issuance of the grading permit, a copy of the notice and list of recipients shall be submitted to the Commumty Development Department. 4 The draft Affordable Agreement received and dated October 26, 2015, identifying two on-site units for-sale as affordable for persons and families of moderate income, which includes a density bonus of one unit pursuant to Section 230.14 of the ZSO; and one incentive which includes a request for a reduction in parking spaces serving the project shall be the conceptually approved agreement. The Affordable Housing Agreement shall be reviewed and approved by the City Council and shall be recorded with the Orange County Recorder's Office prior to issuance of the first building permit for the tract The Agreement shall comply with HBZSO Sections 230 14 and 230 26 and include• i A detailed description of the type, size and location of the two affordable housing for-sale units on-site. There shall be two unit(s) with three bedrooms each and dispersed throughout the project. ii. There shall be two units affordable to persons and families of moderate income(up to 120% of the Orange County median income) The Orange County median income is adjusted for appropriate household size in Continuous affordability provisions for a period of 45 years Any required for-sale affordable units shall be owner-occupied(not rented or leased). PC Staff Report-01/12/16 5 Attachment No 15 HB -425- Item 16. - 5 5 The affordable units shall be constructed prior to or concurrent with the primary project. Final approval (occupancy) of the first market rate residential unit(s) shall be contingent upon the completion and public availability, or evidence of the applicant's reasonable progress towards attainment of completion of the affordable units. 5 Prior to submittal of the final tract and at least 90 days before City Council action on the final map, CC&Rs shall be submitted to the Community Development Department and approved by the City Attorney The CC&Rs shall identify the common driveway access easements, and maintenance of all walls, common landscape areas by the Homeowners' Association, as well as a parking management plan described in the December 29, 2015 letter from the Olson Company, to ensure the ongoing control and availability of on-site parking. The CC&Rs must be in recordable form prior to recordation of the map (HBZSO Section 253.12.H) 6. The proposed hammer head turn around does not comply with the HBFD's approved turn around details. The hammerhead lane proposed is only 25 feet wide and the specification requires a 28 foot width Prior to issuance of the grading permit, the developer shall obtain approval from the HBFD of an Alternative Means and Methods request (AM&M) to enhance access in lieu of providing the three extra feet for the access lane. 7 Tentative Tract Map No 17930 and Conditional Use Permit No. 15-030 shall not be deemed approved until the Affordability Housing Agreement referenced in Condition No. 4 has been approved by the City Council 8 Comply with all applicable Conditional Use Permit No 15-030 conditions of approval. 9. Incorporation of sustainable or "green" building practices into the design of the proposed structures and associated site improvements is highly encouraged. Sustainable building practices may include (but are not limited to) those recommended by the U S Green Building Council's Leadership in Energy and Environmental Design (LEED) Program certification (http-//www usgbc.org/Disp1gXPage aspx?Categor lD=19) or Build It Green's Green Building Guidelines and Rating Systems(http.//www builditgreen org/mdex.cfin?fuseaction=guidelines). 10 The development services departments (Building& Safety, Fire, Planning and Public Works) shall be responsible for ensuring compliance with all applicable code requirements and conditions of approval The Director of Community Development may approve minor amendments to plans and/or conditions of approval as appropriate based on changed circumstances, new information or other relevant factors Any proposed plan/project revisions shall be called out on the plan sets submitted for building permits Permits shall not be issued until the Development Services Departments have reviewed and approved the proposed changes for conformance with the intent of the Planning Commission's action If the proposed changes are of a substantial nature, an amendment to the original entitlement reviewed by the Planning Commission may be required pursuant to the provisions of HBZSO Section 241.18 PC Staff Report—01/12/16 6 Attachment No 16 Item 16. - 56 HB -426- SUGGESTED CONDITIONS OF APPROVAL-CONDITIONAL USE PERMIT NO. 15-030: 1 The site plans, floor plans, and elevations received and dated November 2, 2015, shall be the conceptually approved design with the following modifications. a. The site plan shall be updated to reflect the four code-required bicycle parking spaces b. Utilities and above ground backflow devices shall be setback five feet or greater from the right-of-way and fully screened with landscaping. c The addition of three, 36-inch box trees planted within the common open space areas of the site. 2. Prior to submittal for building permits,the following shall be completed- a. Zoning entitlement conditions of approval shall be printed verbatim on one of the first three pages of all the working drawing sets used for issuance of building permits (architectural, structural, electrical, mechanical and plumbing) and shall be referenced in the sheet index. The minimum font size utilized for printed text shall be 12 point. b Submit three (3) copies of the approved site plan and the processing fee to the Community Development Department for addressing of the new buildings/units. 3 Prior to issuance of building permits,the following shall be completed: a. Blockwall/fencing plans (including a site plan, section drawings, and elevations depicting the height and material of all retaining walls, walls, and fences) consistent with the grading plan shall be submitted to and approved by the Community Development Department. Double walls shall be avoided to the greatest extent feasible. Applicant shall coordinate with adjacent property owners and make reasonable attempts to construct one common property line wall. If coordination between property owners cannot be accomplished, the applicant shall construct up to an eight (8') foot tall wall located entirely within the subject property and with a two (2) inch maximum separation from the property line Prior to the construction of any new walls, a plan must be submitted identifying the removal of any existing walls located on the subject property. Any removal of walls on private residential property and construction of new common walls shall include approval by property owners of adjacent properties. The plans shall identify materials, seep holes and drainage. b Contact the United States Postal Service for approval of mailbox location(s). c Submit a copy of the revised site plan, floor plans and elevations pursuant to Condition No 1 for review and approval and inclusion in the entitlement file to the Community Development Department; and submit 8 inch by 10 inch colored photographs of all colored renderings, elevations, materials sample board to the Community Development Department for inclusion in the entitlement file. d An interim parking and building materials storage plan shall be submitted to the Community Development Department to assure adequate parking and restroom facilities are available for employees, customers and contractors during the project's construction phase and that adjacent properties will not be impacted by their location The plan shall also be reviewed and approved by the Fire Department and Public Works Department. The applicant shall obtain any necessary encroachment permits from the Department of Public Works PC Staff Report—01/12/16 7 Attachment No 1 7 xB -427- Item 16. - 57 4 The structure(s) cannot be occupied, the final building permit(s) cannot be approved, and utilities cannot be released for the first residential unit until the following has been completed a The applicant shall obtain the necessary permits from the South Coast Air Quality Management District and submit a copy to Community Development Department b. Compliance with all conditions of approval specified herein shall be accomplished and verified by the Community Development Department. c All buildmg spoils, such as unusable lumber, wire, pipe, and other surplus or unusable material, shall be disposed of at an off-site facility equipped to handle them d. Parkland dedication in-lieu fees (Quimby Fees) shall be paid to the Community Development Department. 5. Signage shall be reviewed under separate permits and applicable processing 6. The applicant and/or applicant's representative shall be responsible for ensuring the accuracy of all plans and information submitted to the City for review and approval INDEMNIFICATION AND HOLD HARMLESS CONDITION: The owner of the property which is the subject of this project and the project applicant if different from the property owner, and each of their heirs, successors and assigns, shall defend, indemnify and hold harmless the City of Huntington Beach and its agents, officers, and employees from any claim, action or proceedings, liability cost, including attorney's fees and costs against the City or its agents, officers or employees, to attack, set aside, void or annul any approval of the City, including but not limrted'to any approval granted by the City Council, Planning Commission, or Design Review Board concerning this project The City shall promptly notify the applicant of any claim, action or proceeding and should cooperate fully in the defense thereof PC Staff Report—0 1/12/16 8 Attachment No 18 Item 16. - 58 HB -428-