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HomeMy WebLinkAboutRES CC 2021 4034 2021 0901RESOLUTION NO. 2021-4034 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MOORPARK, CALIFORNIA, APPROVING: (A) A CONDITIONAL LOAN COMMITMENT LETTER FOR A LOAN CONSISTING OF DEFERRAL OF DEVELOPMENT FEES TO DANCO COMMUNITIES OR AFFILIATE FOR AN AFFORDABLE MULTIFAMILY HOUSING DEVELOPMENT; (B) A RIGHT OF ENTRY AGREEMENT WITH ESSEX MOORPARK OWNER, L.P. FOR CITY DUE DILIGENCE ON LAND TO BE CONVEYED TO CITY; AND MAKING A FINDING OF EXEMPTION UNDER CEQA WHEREAS, the City of Moorpark ("CITY") is party to a Development Agreement dated July 17, 2017 ("DA") with Essex Moorpark Owner, L.P. ("Essex"); and WHEREAS, the DA contemplates that certain property (the "City Site") will be conveyed by Essex to the City, and that the City will have an opportunity to inspect the City Site before the conveyance; and WHEREAS, Danco Communities ("Danco") desires to purchase the property that is subject to the DA from Essex, and Essex desires to sell such property to Danco (and have Danco then convey the City Site to the City), if the DA is amended to reflect, among other things, that the project required by the DA will no longer have market rate units but only affordable units ("Project"); however, completion of the DA amendment process will not occur until after the September application deadline for federal tax credits necessary for the Danco Project; and WHEREAS, Danco desires and intends to apply in September for an award of federal tax credits for the Project, and create a tax credit limited partnership to own and develop the Project (for the purpose of obtaining equity funds from limited partner investors in such partnership in exchange for tax credit benefits for such investors); and WHEREAS, Danco has determined that in order to finance the Project, Danco requires, in addition to a construction loan and at least one subordinate loan from another public financing source, a $3,890,500.00 loan from the CITY consisting of deferred DA development fees; and WHEREAS, such CITY loan would be secured by a junior deed of trust on the Project, accrue interest at a rate of 3% per annum, have annual payments consisting of a portion of the residual receipts (net cash flow) from the Project, and a maturity date that is 55 years after completion of the Project; and WHEREAS, in order to: (i) provide assurance to Danco that the CITY will make such a loan (assuming Danco purchases the land, and the DA is amended); and (ii) assist Danco in obtaining an award of federal tax credits necessary to help finance the Development, Danco has requested that the CITY issue a conditional loan commitment Resolution No. 2021-4034 Page 2 letter in the form attached hereto as Exhibit A (which Danco will submit with its application for federal tax credits); and WHEREAS, in order to facilitate the City's inspection of the City Site prior to the conveyance of the City Site by Danco to City (which may occur soon after the sale of the DA property to Danco), City desires to obtain from Essex a Right of Entry and Access Agreement ("ROE") in the form attached hereto as Exhibit B; and WHEREAS, CITY Staff has determined that the CITY's approval of the conditional loan commitment letter and ROE are exempt from the California Environmental Quality Act ("CEQA") pursuant to CEQA Guidelines Section 15061 (b)(3), as the execution of that letter and the deferral of specific development impact fees would not have a significant adverse effect on the environment. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council hereby finds and determines that the adoption of this Resolution approving the conditional loan commitment letter and ROE is exempt from CEQA pursuant to CEQA Guidelines Section 15601 (b)(3) as the execution of that letter and the deferral of specific development impact fees would not have a significant adverse effect on the environment. SECTION 2 . Based on the findings contained herein, the City Council approves the conditional loan commitment letter attached hereto as Exhibit A, and the ROE in the form attached as Exhibit B, authorizes the City Manager to sign and deliver the commitment letter and ROE. SECTION 3. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions. PASSED AND ADOPTED this 1st day of September, 2021 . g®JeS_ Parvin, Mayor ATTEST: KySp l~~ Resolution No. 2021-4034 Page 3 EXHIBIT A Form of Conditional Loan Commitment Letter -------' 2021 Chris Dart, President Danco Communities 5251 Ericson Way Arcata, CA 95521 RE: Vendra Gardens Affordable Housing Project -Moorpark, California ("Project") -Conditional Loan Commitment Dear Mr. Dart, The City of Moorpark is pleased to participate in Vendra Gardens, an affordable housing project, and we are writing to confirm the terms on which the City is willing to make a loan to help finance the project. The City has committed to loan (the "Loan") to Danco Communities or an affiliate (hereinafter referred to as "Danco"), funds for the payment of City development fees in the amount of $3,890,500.00, subject to the conditions described below. The loan is to accrue simple interest at 3%; mature 55 years after completion of the project; require payments from 50% of residual receipts (shared pro rata with any other subordinate lenders); and be secured by a second deed of trust on the property. The conditions to the City making the Loan are: (i) the closing of the contemplated primary construction loan, any additional subordinate loan necessary to finance the Project, and commitment of tax credit equity to Danco; (ii) the execution and recording of both the contemplated amendment of the existing recorded Development Agreement ("DA Amendment") and the Amended and Restated Affordable Housing Agreement (described in such DA Amendment); and (iii) delivery of the promissory note and recording of the deed of trust for the Loan, in the forms attached to the DA Amendment. The City of Moorpark is looking forward to working with Danco in connection with this important addition to quality workforce affordable housing in our community. Sincerely, Troy Brown City Manager City of Moorpark Resolution No. 2021-4034 Page4 EXHIBIT B [Form of Right of Entry and Access Agreement] (Attached) Resolution No. 2021-4034 Page 5 RIGHT OF ENTRY AND ACCESS AGREEMENT THIS RIGHT OF ENTRY AND ACCESS AGREEMENT ("Agreement") is dated _______ , 2021 for reference purposes, and is entered into by and between the CITY OF MOORPARK (the "City") and ESSEX MOORPARK OWNER, L.P., a California limited partnership (the "Owner"). RECITALS Owner owns the land described on Exhibit "A" (the "Site") and has agreed to convey the Site to City pursuant to that certain Development Agreement dated April 17, 2017, and Owner and City contemplate that such DA will be amended by a First Amendment to Development Agreement which will permit the Site to be conveyed by Owner to Danco Communities or an affiliate ("Danco) and, substantially concurrently, by Danco to City. City desires to perform due diligence with respect to the Site, including environmental inspections, soils inspections, and possibly a survey, prior to acquiring the Site. Consequently, City and Owner desire to enter into this Agreement to provide access to the Site to City for purposes of such due diligence (the "Inspections"). NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements contained herein, and other consideration, the sufficiency of which are hereby acknowledged, City and Owner hereby agree as follows: 1. Term. This Agreement shall be effective upon execution and shall expire upon the earlier of the acquisition of the Site by City, or the termination of the DA. 2. Access. During the term, the City and its consultants shall have the right to enter upon the Site for the purpose of performing the Inspections. 3. Indemnity. City shall indemnify, defend and hold Owner harmless from and against any and all claims, liabilities, damages, losses, costs and expenses of any kind or nature whatsoever, including, without limitation, attorneys' fees and expenses and court costs suffered, incurred or sustained by Owner as a result of the Inspections or the entry by Developer or Developer's Designees onto the Site; however, the foregoing shall not include matters revealed by the Inspections. The indemnification and defense obligations of City contained herein shall survive the expiration of this Agreement. 4. Insurance. City shall procure and maintain from and after the date on which City or its consultants enters the Site for any purpose, commercially reasonable liability insurance naming Owner as additional insured, and shall provide evidence thereof (such as Certificate(s) of Insurance) to Owner prior to entering the Site. 6. Limitations. Owner does not hereby convey to City any right, title or interest in or to the Site, but merely grants the specific and limited contractual rights and privileges hereinabove set forth. This Agreement shall not be recorded. 7. Notices. Any notice, demand, request, consent, approval or communication that either party desires or is required to give to the other party shall be in writing and shall be addressed Resolution No. 2021-4034 Page 6 as follows and given by United States certified mail, postage prepaid, return receipt requested or by nationally recognized overnight mail service (such as FedEx). To City: City of Moorpark 799 Moorpark A venue Moorpark, CA 93021 Attn: City Manager To Owner: Essex Moorpark Owner, L.P., 8. Assignment. This Agreement may not be assigned by City. 9. Governing Law. This Agreement shall be construed, enforced and interpreted in accordance with the laws of the State of California. 10. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of such counterparts together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above. CITY: CITY OF MOORPARK By:-------------- Troy Brown, City Manager Attest: _________ , City Clerk OWNER: ESSEX MOORPARK OWNER, L.P., a California limited partnership By: Essex Moorpark GP, L.P a California limited partnership, Its general partner By:Essex Management Corporation, a California corporation, its general partner By:----------- Print Name: -------- Title: ---------- Resolution No. 2021-4034 Page 7 EXHIBIT "A" DESCRIPTION OF SITE All of Parcel 1A of in that certain Lot Line Adjustment No. 2005-03 in the City of Moorpark, County of Ventura, State of California, recorded May 3, 2005 as Document No. 20050503- 0108315 or official records in the Office of the County Recorder of said County, being a portion of Lot "T", Tract No. "L", Rancho Simi as per map filed in Book 5 Page 5 of Miscellaneous Records (Maps) in the Office of said County Recorder. EXCEPT THEREFROM that portion conveyed to the City of Moorpark by deed April 30, 2009 as Instrument No. 20090430-00069389 of Official Records of said County. ALSO EXCEPT THEREFROM that portion lying northerly of the following described line; BEGINNING at a point in east line of Parcel 1A of said Lot Line Adjustment No. 2005-03, distant thereon North 292.97 feet from the southeasterly corner thereof; 1st Thence, departing said east line South 89°38'32"West 752.05 feet; 2 nd Thence, South 27°20'34West 36. 75 feet; 3 rd Thence, South 89°03'54"West293.78 feet to a point in the west line of said Parcel 1A. Resolution No . 2021-4034 Page 8 STATE OF CALIFORNIA COUNTY OF VENTURA CITY OF MOORPARK ss . I, Ky Spangler, City Clerk of the City of Moorpark, California, do hereby certify under penalty of perjury that the foregoing Resolution No. 2021-4034 was adopted by the City Council of the City of Moorpark at a regular meeting held on the 1st day of September, 2021, and that the same was adopted by the following vote: AYES: NOES : ABSENT: ABSTAIN: Councilmembers Castro, Enegren, Groff, Pollock, and Mayor Parvin None None None WITNESS my hand and the official seal of said City this 1st day of September, 2021. (seal)