HomeMy WebLinkAboutAGENDA REPORT 2016 0615 CCSA REG ITEM 09D ITEM 9.D.
city OP MOORPARK,CALIFORIf
City Council Meeting
MOORPARK CITY COU �_ - -'i44gdz
�
AGENDA REPORT
BY: L
TO: Honorable City Council
Pi1
FROM: Jessica Sandifer, Program Manag:
Ir
DATE: June 6, 2016 (City Council Meeting of 6/15/16)
SUBJECT: Consider First Amendment to Disposition and Development
Agreement and First Amendment to Affordable Housing Agreement
Between the City of Moorpark and the Area Housing Authority of the
County of Ventura for the Walnut Street Apartments Project
BACKGROUND
The former Redevelopment Agency of the City of Moorpark ("Agency") assembled a 1.2
acre site, located at 782 Moorpark Avenue, 798 Moorpark Avenue, 81 Charles Street,
and 765 Walnut Street ("Property"), at a cost of $1,518,777.00 (includes relocation and
demolition expenses). The Agency has demolished a portion of the improvements on
site; however, the buildings along Moorpark Avenue have remained for visual aesthetics
and interim uses.
With the elimination of redevelopment agencies in California, cities automatically
assumed the role as the housing successor agency to their redevelopment agency
unless they elected to not serve. The City of Moorpark ("City") assumed the housing
functions of the Agency and took control of the housing assets, excluding amounts in
the MRA Low/Mod Income Housing Fund, along with related rights, powers, liabilities,
duties and obligations thereby becoming a successor housing agency of the Agency.
On August 27, 2012, the Department of Finance approved the transfer of the housing
assets to the City, which started the five (5) year requirement to develop the properties
for affordable housing purposes (August 27, 2017). The City is approaching the end of
year number four (4) on this requirement. One five (5) year extention is allowed to
develop the housing properties of the former Agency (August 27, 2022).
On June 17, 2015, the City Council approved the Disposition and Development
Agreement (DDA) and Affordable Housing Agreement (AHA) with the Area Housing
Authority of the County of Ventura ("Authority") for the Walnut Street Apartments
Project. The DDA and AHA allow construction of a twenty-four (24) unit, 100%
affordable, for rent, residential project, having a mixture of two (2) and three (3)
9
Honorable City Council
June 15, 2016
Page 2
bedroom units ("Project"). The Project consists of nineteen (19) 2-bedroom units and
five (5) 3-bedroom units. Each unit includes one (1) bathroom and a private balcony,
patio, or small yard (townhome units).
All of the units will be affordable to and rented by very-low and low-income households.
Of the twenty-four (24) units, five (5) will be restricted to lease at an affordable housing
cost to low-income households and nineteen (19) units will be restricted to lease at an
affordable housing cost to very-low income households. One (1) of the low-income two
(2) bedroom units located above the community room, which is a low-income unit under
the current DDA, will be utilized by a low-income onsite manager.
The Project includes a number of common amenities, including a tot lot, community
garden, passive open space, community room, common laundry room for the
apartments, and in-house laundry facilities in the townhomes. An elevator provides
access to the second and third floors of Building A.
The DDA provides the Authority a purchase money loan of $1,830,000 and a permanent
loan of $2,000,000 dollars with expected loan terms of 32 years and 15 years,
respectively, however the Authority thought that both loans would have been paid off
much sooner than that.
Since the original approval of the DDA and the AHA, the Authority has submittedthe
project for approval in one tax credit financing round. They were not successful at
securing the tax credits.
DISCUSSION
After the unsuccessful tax credit round, the Authority had to brainstorm about how to
submit a successful application. Some of the changes they made are outlined below:
• Financing: Initially, the Authority was trying to construct the project without
any type of conventional financing, however, they were unable to make
the project work financially without it. The addition of the outside financing,
requires the City to subordinate its loans to the conventional financing for
slightly longer repayment terms.
• Project Based Section 8: The Authority converted the project to a "Project
Based Section 8" property. The Area Housing Authority's commitment of
100% Project-based Section 8 for 20 years will increase the permanent
conventional financing by almost $1.5 million. Since project-based section
8 is considered a public subsidy it will substantially increase the tiebreaker
score and thus competitiveness for 9% low-income housing tax credits.
10
Honorable City Council
June 15, 2016
Page 3
• Partnership: The Authority will be entering into a partnership with Many
Mansions. The addition of Many Mansions to the development team
provides the Authority with additional experienced staff to assist with the
application for the tax credits, as well as, the development and
management of the project after it's put in service. The DDA and the AHA
are proposed to be assigned to the partnership entity, Walnut24, LP.
Permanent Loan Amount Change and Fee Waivers
When the Authority approached staff about the changes to the project, staff realized that
the balance of the City's Affordable Housing Fund could no longer support a $2,000,000
permanent loan to the project, especially with a longer repayment term. The offer of the
$2,000,000 loan was predicated on the sale of certain other housing properties that
have not happened. The City has had to reduce its permanent loan to $1,250,000. The
loss of $750,000 in subsidy, would negatively impact the Authority's tiebreaker score for
the tax credit application. To mitigate this negative impact on the tax credit application,
staff is recommending a corresponding amount of development impact fee waivers for
the project. The development impact fees that the City is assessing the project, total
$1,155,167.20. The Authority is requesting waiver of $750,000 of the fees with the
remaining fee amounts to be paid at the completion of the project, rather than before, as
is customary:
Parks $266,616.00
Library $14,325.84
Police $24,648.00
TSM $29,520.00
Citywide $394,545.36
LAAOC $212,712.00
Art in Public Places $120,000.00
Crossing Guard $92,800.00
TOTAL: $1,155,167.20
Other Requested Changes
• Restricted Manager's Unit: The current version of the document provides for a
manager's unit that is restricted to a person who qualifies as low income. The
Authority has requested that the manager's unit be un-restricted, which allows
them to hire, and pay for a qualified, on-site manager for the project. Staff has
no objection to this change, as quality on-site management is important to the
operation of the project.
• Changes to live/work preference and City placement option: Under the current
DDA, the City has asked that the authority provide preferences to placement of
11
Honorable City Council
June 15, 2016
Page 4
Moorpark residents for the first 30-days. Under current law, preferences must be
extended to not only those residents that live in the City, but those that work
here. Language has been added to reflect current law. There is also an option for
the City to place residents that have been displaced by City activities or from
other affordable housing properties to be placed in the project. However, due to
the change to a Section 8 project based voucher, the Authority cannot offer this
option as they cannot put other people ahead of the those already on the Section
8 waiting list. Language regarding the placement option has been removed from
the Agreement.
• Request to waive annual administrative fees and compliance monitoring fees:
The Authority has asked the City to waive the annual administrative and
compliance monitoring fees. The initial cost of these fees is $22,000. Staff
concurs with the request to waive these fees due to the fact that Section 8
programs are heavily audited and monitored by the federal Deparment of
Housing and Urban Development (HUD). However, language has been inserted
into the amendments that allows the City to charge applicable staff time, plus an
administrative fee, if a complaint or HUD audit requires the City to spend staff
time to resolve or assist with the issue.
• There are other minor language clean-ups and updates on the schedule of
performance to reflect the longer than expected time period to move the project
forward.
The attached amendments to the DDA and the AHA, incorporate the requested
changes to the DDA which are summarized as follows:
• Assignment of the DDA and AHA to the partnership entity, Walnut24, LP.
• Change of the permanent loan amount from $2,000,000 to $1,250,000 and
increase of loan term from 15 years to 17 years.
• Increase of loan term on the $1,830,000 purchase loan from 30 years to 32 years
• Waiver of $750,000 in development impact fees, with deferral of the remaining
amount owed to project completion.
• Agreement to subordinate the DDA and the AHA to conventional loan financing,
if required
• Changing the on-site manager's unit from restricted to un-restricted.
It should also be noted that there will only be two more opportunities for the Authority to
obtain tax credits for this project. The Tax Credit Allocation Committee will be making
changes to the application and tiebreaker process that will put greater emphasis on
creating projects with a higher number of units. Projects with 77 units or more will
receive higher points than those projects with less than 77 units. While beneficial to the
production of affordable housing generally, these changes to the tax credit scoring will
12
Honorable City Council
June 15, 2016
Page 5
impact projects that the Authority does in Moorpark, which are typically small family
projects under 30 units per project.
FISCAL IMPACT
The City will make a Purchase Loan to the Developer in the amount of $1,830,000.00
and a $1,250,000.00 Permanent Loan. The interest on the loans is 2.25% and 3.75%,
respectively. Payments will be made out of residual receipts, if available. However,
payment on the Purchase Loan will begin after the Permanent Loan has been retired.
Under the Amendment, the Developer anticipates minimal repayment out of residual
receipts with a balloon repayment of the Permanent Loan, plus interest at year 17. The
City will earn approximately $436,000 in interest on the permanent loan during the loan
term. No money will exchange hands for the Purchase Loan. The Purchase Loan, plus
interest will be repaid in 32 years in a balloon payment. The City will earn approximately
$756,000 in interest over the loan term. Funds needed for the Permanent Loan will
come from the City Affordable Housing Fund (2201), which is funded by in-lieu fees paid
by developers. The projected balance for the City Affordable Housing Fund at June 30,
2016 is $2,681,287. Disbursement of the funds for the permanent loan to the Authority,
will take approximately 45% of our City affordable housing funding. The funds do not
have to be available until after the tax credits have been approved. Staff will return to
City Council with a budget amendment at that time.
Staff is currently working on a Disposition and Development Agreement (DDA) for
several properties owned by the City to be developed for affordable housing purposes.
If an agreement is reached, the City expects to receive over $2,300,000.00 for the
purchase of City owned property. These funds would be used to replenish the City
Affordable Housing Fund (2201).
STAFF RECOMMENDATION (ROLL CALL VOTE)
1. Approve Amendment No.1 to the Disposition and Development Agreement with
the Area Housing Authority of the County of Ventura and the City of Moorpark, subject
to final language approval of the City Manager and City Attorney; and
2. Approve Amendment No. 1 to the Affordable Housing Agreement with the Area
Housing Authority of the County of Ventura and the City of Moorpark, subject to final
language approval fo the City Manager and City Attorney.
Attachments:
1. Amendment #1 to Disposition and Development Agreement
2. Amendment #1 to Affordable Housing Agreement
13
ATTACHMENT 1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Moorpark
799 Moorpark Avenue
Moorpark, CA 93021
No fee for recording pursuant to
Government Code Section 27383
AMENDMENT NO. 1 AND ASSIGNMENT OF
DISPOSITION AND DEVELOPMENT AGREEMENT
This AMENDMENT AND ASSIGNMENT OF DISPOSITION AND
DEVELOPMENT AGREEMENT (this "Amendment') is dated as of
2016 and is entered into by and among the CITY OF MOORPARK, a California
municipal corporation (the "City"), AREA HOUSING AUTHORITY OF THE COUNTY
OF VENTURA, a public body, corporate and politic (the "Developer") and WALNUT24
LP, a California limited partnership (the "Partnership"). The City, the Partnership and
the Developer shall collectively be referred to herein as the "Parties".
RECITALS
A. The City and Developer entered into that certain Disposition and
Development Agreement dated as of June 25, 2015 (the "DDA") and recorded on July
17, 2015 as Instrument No. 20150717-00109257 in the Official Records of Ventura
County (the "Official Records") in connection with the acquisition and development of
the land more particularly described on Exhibit A attached hereto (the "Property"). All
capitalized terms used but not defined in this Amendment have the meanings set forth
in the DDA.
B.. Concurrently with the City's approval of the DDA, the City agreed to
provide a Purchase Loan and a Permanent Loan (hereinafter collectively referred to as
the "Loans") to the Developer pursuant to the terms and conditions of the DDA.
C. Per the DDA, Developer has agreed to acquire the Property and develop
the Property as a residential apartment complex containing twenty-four (24) units for
"Low" or "Lower Income Households", plus one restricted manager's Unit (the
"Development'). Developer has further arranged for construction financing that shall
be senior to the Loans per the terms of the DDA.
D. On May 04, 2016, Developer and Many Mansions, a California nonprofit
public benefit corporation, entered into a Joint Development Agreement and agreed to
form Walnut24 LP, a California limited partnership, that will assume the role of
Developer of the- Development. The Developer and Many Mansions intend to admit
1
14
1650A0131897921 3
Many Mansions or its affiliate as an administrative general partner of the Partnership.
The City has agreed to the assignment of the DDA and the AHA to the Partnership and
to the transfer of a general partner interest in the Partnership to Many Mansions or its
affiliate.
E. In connection with the additional financing of the Property and the
assignment of the development obligations to the Partnership, the Parties desire to
modify and assign the DDA to the Partnership, to extend the terms of the Loans, to
subordinate the Loans to senior construction and permanent financing, and to make
additional modifications to the document.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements hereinafter set forth, and other consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Assignment of DDA to Partnership.
a) Developer hereby assigns and delegates to the Partnership and the
Partnership hereby accepts from Developer all of Developer's right, title
and interest in and obligations under the DDA. The Partnership hereby
accepts the above assignment and hereby assumes, agrees, and
undertakes to perform all of the obligations, covenants, and agreements of
Developer pursuant to the DDA. Any reference to Developer in the DDA
shall be deemed a reference to the Partnership.
b) The following sentence is hereby appended to Section 2.3 of the DDA :
"City has agreed to the assignment of the DDA to the Partnership and
hereby approves a transfer of any general partner interest in the
Partnership to Developer, Many Mansions, any affiliate of Developer or
Many Mansions, or any entity jointly controlled by the Developer and Many
Mansions."
c) Consent. City consents to the assignment of the DDA from Developer to
the Partnership and per Section 2.3 of the DDA releases Developer from
all obligations imposed on Developer under the DDA.
2. Notice. The following addresses are hereby added to Section 9.1 of the DDA for
notification to the Developer:
"If to Developer: Many Mansions
1259 E. Thousand Oaks Blvd.
Thousand Oaks, CA 91362
Email: rick@manymansions.org
With a copy to: Goldfarb & Lipman LLP
Attn: Amy DeVaudreuil
1300 Clay Street, 11th Floor
2 15
1650\O1\1897921.3
Oakland, CA 94612
Email: adevaudreuil@goldfarblipman.com
Phone: (510) 836-6336
3. Manager's Unit. The last two sentences of Recital A of the DDA are hereby
replaced with the following:
"One (1) of the units will be utilized by an onsite manager. The manager's
unit will be an unrestricted unit."
4. Closing Date. The definition of "Closing Date" under Section 1.2 of the DDA is
hereby amended to delete "December 31, 2016" and replace it with "March 31,
2018."
5. Residual Receipts. The definition of"Residual Receipts" under Section 1.2 of the
DDA is hereby amended to add a new subsection (a)(iv):
"All investor-approved and required fees."
6. Transfers. Section 2.3 of the DDA is hereby amended to add the following
paragraph:
"The City hereby approves the future transfer of the limited partner
interest of the Partnership to a tax credit investor and any transfers
pursuant to the Partnership's Amended and Restated Limited
Partnership Agreement."
7. Purchase Price. Section 3.2 of the DDA is hereby replaced in its entirety with the
following sentence:
"The purchase price which City agrees to accept and Developer agrees to
pay for the Site is One Million Eight Hundred Thirty Thousand and No/100
Dollars ($1,830,000.00) or the fair market value based on a City approved
appraisal, if greater ("Purchase Price")."
8. Timeline to Secure Financing. Replace Section 5.1.1 of the DDA in its entirety
with the following paragraph:
"Developer shall have four (4) Tax Credit Allocation Committee funding
rounds to secure tax credit financing for the Project from the date of the
first amendment to this Agreement. If tax credits have not been secured
within four (4) funding rounds or December 31, 2017, whichever occurs
first, the City may, at its sole discretion, terminate this Agreement."
9. Title Company. The Parties hereby agree that the Title Company and Escrow
Agent shall be Chicago Title Company.
3 1 6
1650A01A1897921.3
10. City Assistance.
a) The following subsections are hereby added to Section 6.4 of the DDA:
"6.4.3 Subordination. The City shall agree to subordinate the Purchase
Loan and the Permanent Loan to deeds of trust and any other documents
necessary to secure a lien, encumbrance or regulatory agreement to a
conventional lender (bank) or federal or state program (including tax-
exempt bonds and Tranche B financing) (collectively the "Senior
Financing") that is providing financing for the Project where such
•
subordination is required by the conventional lender or by federal or state
programs in order to obtain the financing needed for the Project. Any
such subordination shall be pursuant to the terms of the subordination
agreements and/or other intercreditor agreements that may be entered
into by the City. The City shall have the right to review and approve the
terms of any such Senior Financing, which approval shall not be
unreasonably withheld. The City shall have the right to record a request
that the City receive notice of any default by the Developer under the
Senior Financing, and any other alternative financing that may be obtained
by the Developer with respect to the Development. To implement any
such subordination authorized under this paragraph, the City agrees to
cooperate with the Developer, and the City Manager of the City shall have
the authority to execute such subordination agreements and/or
intercreditor agreements that may be reasonably required, in the form and
content approved by City's counsel."
"6.4.4 Impact Fees. The City agrees to waive at least $750,000 in
development impact fees (e.g. Community Development Fees, Public
Facilities, LA Ave AOC Fee, etc.) for the Development. Payment of any
remaining development impact fees will be deferred until a certificate of
occupancy is issued for the Development."
b) Purchase Loan Term.
i) The first sentence of Section 6.4.1 of the DDA is hereby replaced
with the following:
"Concurrently with the approval of this Agreement, the City
approves a purchase loan to Developer in the amount of the
Purchase Price to be used to purchase the Site from the City
("Purchase Loan")."
ii) The following sentence is hereby appended to Section 6.4.1 of the
DDA:
"The term of the Purchase Loan under Section 6.4.1 is thirty-two
(32) years."
4 17
1650A01A1897921.3
c) Permanent Loan Term.
i) The first sentence of Section 6.4.2 of the DDA is hereby replaced
with the following:
"Concurrently with the approval of this Agreement, the City
approves a One Million Two Hundred Fifty Thousand Dollar
($1,250,000) permanent loan to be used to retire a portion of the
construction loan and serve as permanent financing ("Permanent
Loan")."
ii) The term of the Permanent Loan in Section 6.4.2 of the DDA is
hereby amended to be seventeen (17) years.
11. Live/Work Preference.
a) Section 7.5 of the DDA is hereby replaced in its entirety with the following
paragraph:
"Moorpark Live/Work Priority. The Developer, to the fullest extent
allowed by law, agrees to give priority to eligible City residents and
individuals employed or hired by businesses located in the City to
occupy the Units during the initial occupancy of the Project. Said
priority shall include, at a minimum, a thirty (30) day initial lease
period exclusive to City residents and individuals employed or hired
by businesses located in the City."
b) The last sentence of Section 2.3 of the AHA is hereby replaced in its
entirety with the following sentence:
"Owner agrees to the extent permitted by applicable state and
federal law, that priority shall be granted to eligible City residents
and individuals employed or hired by businesses located in the City
exclusively for the first thirty (30) days of project lease up."
c) Section 2.2.2 of the Affordable Housing Implementation and Rental
Restriction Plan that is Exhibit 2 to the AHA is hereby replaced in its
entirety with the following paragraph:
"Preference Policies. No preference or priority of rental of the
Affordable Units shall be given to otherwise eligible Very Low or
Low Income employees of Owner, or the management company, or
any other Affiliates thereof, including, but not limited to agents,
contractors, subcontractors or subsidiaries, with the exception of
the first thirty (30) days of the initial rental period when City
residents and individuals employed or hired by businesses located
in the City are given priority status. To the extent permitted by
applicable state and federal law, priority shall be granted to eligible
5 18
1650\01\1897921.3
City residents and individuals employed or hired by businesses
located in the City for the Term of the Agreement. A waiting list for
the Affordable Units shall be maintained from which vacancies shall
be filled. The waiting list shall be established through a fair process
for the selection of the next eligible households to fill the vacancies
allowing for priority of City residents and individuals employed or
hired by businesses located in the City. Details of this process
shall be submitted in writing to the City for review and approval
prior to the issuance of the first building permit for this Project."
12. Schedule of Performance (Attachment No. 3 to the DDA)
a) Opening of Escrow for Site. The date for opening of escrow in Paragraph
8 of Attachment No. 3 to the DDA is hereby amended to
b) Close of Escrow. The date for close of escrow in Paragraph 10 of
Attachment No. 3 to the DDA is hereby extended to March 31, 2018.
c) Completion of Construction of Improvements. The term for completion of
construction of Improvements in Paragraph 12 of Attachment No. 3 to the
DDA is hereby extended to 14 months.
13. Grant Deed (Attachment No. 4 to the DDA). Paragraph 3 of Attachment No. 4 to
the DDA is hereby replaced in its entirety with the following:
" 3. The Site is conveyed in accordance with and subject to the
Disposition and Development Agreement entered into between City and
Developer dated June 25, 2015 (the "DDA"), a copy of which is on file with
the City at its offices as a public record and which is incorporated herein
by reference. The DDA generally requires the Developer to construct a
24-unit, for rent, residential apartment complex ("Project"). The Project
will consist of one 1-bedroom unit, fifteen 2-bedroom units and eight 3-
bedroom units. Each unit will include one bathroom and a private balcony,
patio, or yard.
With the exception of the manager's unit, the units shall be affordable to
and rented by very-low and low-income households. Of the 24 units, four
(4) will be restricted to lease at an affordable housing cost to low income
households, nineteen (19) will be restricted to lease at an affordable
housing cost to very low income households. One (1) of the twenty-four
(24) Units will be unrestricted and utilized by an onsite manager.
The Project includes a number of common on-site amenities, including a
tot lot, community garden, passive open space, community room, and
common laundry room for the apartments. An elevator provides access to
the second and third floors of the apartment building.
6 19
1650A01A1899921.3
Developer will maintain 100% ownership of the Property and continue to
utilize the Property for affordable housing purposes pursuant to the
approved Planned Development Permit No. 2015-01.
All terms used herein shall have the same meaning as those used in the
DDA."
14. Scope of Development (Attachment No. 5 to the DDA). Attachment No. 5 to the
DDA is hereby replaced in its entirety with the following:
"The Developer shall construct a 24 unit, for rent, residential project
having a mixture of one, two and three bedroom units ("Project"). The
Project will consist of one (1) 1-bedroom unit, fifteen (15) 2-bedroom units
and eight (8) 3-bedroom units. Each unit will include one bathroom and a
private balcony, patio, or small yard (townhome units).
All of the units shall be affordable to and rented by very-low and low-
income households. Of the twenty-four (24) units, four (4) will be restricted
to lease at an affordable housing cost to low income households, nineteen
(19) will be restricted to lease at an affordable housing cost to very low
income households, and one (1) of the twenty-four (24) Units will be
unrestricted and utilized by an onsite manager.
The Project includes a number of common amenities, including a tot lot,
community garden, passive open space, community room, and common
laundry room for the apartments. An elevator provides access to the
second and third floors of building A.
All development of the Project shall be in accordance with approved City
of Moorpark Planned Development Permit No. 2015-01 and all permits
and fees required by the City, County of Ventura and other governmental
agencies with jurisdiction over the Improvements, including the State
General Construction Storm Water Permit's Storm Water Pollution
Prevention Plan requirements and any other requirements therein."
15. Income Limits (Attachment No. 8). The Income Limits chart shall be amended to
include a column for 2-person households and shall be updated with the relevant
income limits.
16. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of California. If any court of competent
jurisdiction determines any provision of this Amendment or the DDA to be invalid,
illegal or unenforceable, then that provision shall be deemed severed from the
rest, which shall remain in full force and effect as though the invalid, illegal or
unenforceable provision had never been a part hereof or of the DDA.
•
7 20
1650\01\18979213
17. Binding Effect. The DDA, as amended herein, shall be binding upon, and inure
to the benefit of the Developer and the City and their respective successors and
assigns.
18. Severability. If any term of this Amendment is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the provisions
will continue in full force and effect unless the rights and obligations of the parties
have been materially altered or abridged by such invalidation, voiding or
unenforceability.
19. Counterparts. This Amendment may be executed in any number of counterparts,
each of which when executed and delivered to the City shall be deemed to be an
original, and all of which, taken together, will be deemed to be one and the same
instrument.
20. Conflict. To the extent that the terms of this Amendment conflict with those of the
DDA, this Amendment shall prevail.
21. Successors and Assigns. This Amendment shall be binding on and inure to the
benefit of the legal representatives, heirs, successors and assigns of the Parties.
22. Effective Date. This Amendment shall be effective as of the date first set forth
above.
23. Full Force and Effect. Except as set forth in this Amendment, the DDA has not
been amended and is in full force and effect.
8 21
1650A01A1897921.3
IN WITNESS WHEREOF, the Parties have duly executed this Amendment as of
the day and year first above written.
CITY: DEVELOPER:
CITY OF MOORPARK AREA HOUSING AUTHORITY OF THE
COUNTY OF VENTURA,
a public body, corporate and politic
By: By:
Steven Kueny, City Manager Michael Nigh, Executive Director
ATTEST:
By:
Maureen Benson, City Clerk
PARTNERSHIP:
WALNUT24 LP,
a California limited partnership
By:
Name:
Title:
[ALL SIGNATURES MUST BE NOTARIZED]
9 22
1650\01\1897921.3
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, , 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/their
signature(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: (Seal)
23
1650\01\I897921.3
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, , 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/their
signature(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: (Seal)
2 4
1650\01\1897921.3
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
Address APN
765 Walnut Street 512-0-062-110
782 Moorpark Avenue 512-0-062-020
798 Moorpark Avenue 512-0-062-120
81 Charles Street 512-0-062-070
A-1 25
1650101\1897921.4
ATTACHMENT 2
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Moorpark
799 Moorpark Avenue
Moorpark, CA 93021
No fee for recording pursuant to
Government Code Section 27383
•
AMENDMENT NO. 1 AND ASSIGNMENT OF
AFFORDABLE HOUSING AGREEMENT
This AMENDMENT NO. 1 AND ASSIGNMENT OF AFFORDABLE HOUSING
AGREEMENT (this "Amendment') is dated as of , 2016 and is
entered into by and among the CITY OF MOORPARK, a California municipal •
corporation (the "City'), AREA HOUSING AUTHORITY OF THE COUNTY OF
VENTURA, a public body, corporate and politic (the "Developer") and WALNUT24 LP,
a California limited partnership (the "Partnership"). The City, the Partnership and the
Developer shall collectively be referred to herein as the "Parties".
RECITALS
A. The City and Developer entered into that certain Disposition and
Development Agreement dated as of June 25, 2015 (the "DDA") and recorded on July
17, 2015 as Instrument No. 20150717-00109257 in the Official Records of Ventura
County (the "Official Records") in connection with the acquisition and development of
the land more particularly described on Exhibit A attached hereto (the "Property"). All
capitalized terms used but not defined in this Amendment have the meanings set forth
in the DDA.
B. The City and Developer entered into that certain Affordable Housing
Agreement dated as of June 25, 2015 (the "AHA") and recorded July 17, 2015 as
Instrument No. 20150717-00109256 in the Official Records in connection with the DDA.
C. Per the DDA, Developer has agreed to acquire the Property and develop
the Property as a residential apartment complex containing twenty-four (24) units for
"Low" or "Lower Income Households", plus one restricted manager's Unit (the
"Development'). Developer has further arranged for construction financing that shall
be senior to the Loans per the terms of the DDA.
D. On May 04, 2016, Developer and Many Mansions, a California nonprofit
public benefit corporation, entered into a Joint Development Agreement and agreed to
1
1650\01\1897921 3 26
form Walnut24 LP, a California limited partnership, that will assume the role of
Developer of the Development. The Developer and Many Mansions intend to admit
Many Mansions or its affiliate as an administrative general partner of the Partnership.
The City has agreed to the assignment of the DDA and the AHA to the Partnership and
to the transfer of a general partner interest in the Partnership to Many Mansions or its
affiliate.
E. In connection with the additional financing of the Property and the
assignment of the development obligations to the Partnership, the Parties desire to
modify and assign the AHA to the Partnership, and to make additional modifications to
the documents.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements hereinafter set forth, and other consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
1. Assignment of AHA to Partnership.
a) Developer hereby assigns and delegates to the Partnership and the
Partnership hereby accepts from Developer all of Developer's right, title
and interest in and obligations under the AHA. The Partnership hereby
accepts the above assignment and hereby assumes, agrees, and
undertakes to perform all of the obligations, covenants, and agreements of
Developer pursuant to the AHA. Any reference to Developer in the DDA
and the AHA shall be deemed a reference to the Partnership.
b) The following sentence is hereby appended to Section 5.15 of the AHA:
"City has agreed to the assignment of the AHA to the Partnership and
hereby approves a transfer of any general partner interest in the
Partnership to Developer, Many Mansions, any affiliate of Developer or
Many Mansions, or any entity jointly controlled by the Developer and Many
Mansions."
c) Consent. City consents to the assignment of the AHA from Developer to
the Partnership and releases Developer from all obligations imposed on
Developer under the AHA.
2. Notice. The following addresses are hereby added to Section 5.1 of the AHA for
notification to the Developer:
"If to Developer Many Mansions
1259 E. Thousand Oaks Blvd.
Thousand Oaks, California 91362
Email: rick@manymansions.org
2
1650AO1A1897921.3 2 7
With a copy to: Goldfarb & Lipman LLP
Attn: Amy DeVaudreuil
1300 Clay Street, 11th Floor
Oakland, California 94612
Email: adevaudreuil@goldfarblipman.com
Phone: (510) 836-6336
3. Live/Work Preference.
a) The last sentence of Section 2.3 of the AHA is hereby replaced in its
entirety with the following sentence:
"Owner agrees to the extent permitted by applicable state and federal law,
that priority shall be granted to eligible City residents and individuals
employed or hired by businesses located in the City exclusively for the first
thirty (30) days of project lease up."
b) Section 2.2.2 of the Affordable Housing Implementation and Rental
Restriction Plan that is Exhibit 2 to the AHA is hereby replaced in its
entirety with the following paragraph:
"Preference Policies. No preference or priority of rental of the Affordable
Units shall be given to otherwise eligible Very Low or Low Income
employees of Owner, or the management company, or any other Affiliates
thereof, including, but not limited to agents, contractors, subcontractors or
subsidiaries, with the exception of the first thirty (30) days of the initial
rental period when City residents and individuals employed or hired by
businesses located in the City are given priority status. To the extent
permitted by applicable state and federal law, priority shall be granted to
eligible City residents and individuals employed or hired by businesses
located in the City for the Term of the Agreement. A waiting list for the
Affordable Units shall be maintained from which vacancies shall be filled.
The waiting list shall be established through a fair process for the selection
of the next eligible households to fill the vacancies allowing for priority of
City residents and individuals employed or hired by businesses located in
the City. Details of this process shall be submitted in writing to the City for
review and approval prior to the issuance of the first building permit for this
Project."
c) Section 2.10 of the Affordable Housing Implementation and Rental
Restriction Plan that is Exhibit 2 to the AHA is hereby replaced in its
entirety with the following paragraph:
"2.10 Live/Work Priority. To the extent permitted by applicable state and
federal law, priority shall be granted to eligible City residents and
individuals employed or hired by businesses located in the City exclusively
3
1650\01\1897921.3 2 8
for the first thirty (30) days of Project lease-up and should be a general
rule for the Term of the Agreement."
4. Additional Amendments to AHA.
a) Recording Information. The recording information for the DDA in the first
paragraph of the AHA Recitals, in the Introduction to the Affordable
Housing Implementation and Rental Restriction Plan that is Exhibit 2 to
the AHA and in the definition of"Disposition and Development Agreement"
under Section 1.1 of the AHA are hereby amended to include that the
DDA was recorded on July 17, 2015 as Instrument No. 20150717-
00109257-0.
b) Definitions. The definition of "Affordable Units" under Section 1.1 of the
AHA and Section 1.1 of the Affordable Housing Implementation and
Rental Restriction Plan that is Exhibit 2 to the AHA is hereby amended to
include twenty-three (23) rent-restricted units.
c) Affordability Restrictions.
i) The quantity of "Low Income" units under Section 2.1 of the AHA
and under Section 2.3.2 of the Affordable Housing Implementation
and Rental Restriction Plan that is Exhibit 2 to the AHA is hereby
amended to include four (4) Low Income units.
ii) The "Unit Allocation" under Section 2.3.4 of the Affordable Housing
Implementation and Rental Restriction Plan that is Exhibit 2 to the
AHA is hereby amended to include twenty-three (23) Units.
iii) Section 2.1 of the Affordable Housing Implementation and Rental
Restriction Plan that is Exhibit 2 to the AHA is hereby replaced in its
entirety with the following:
"2.1 Purpose of Restrictions. The City is required
pursuant to the Project Approvals and California Health and Safety
Code Section 33413(b) to impose certain income and affordability
restrictions on a specified number of Units in the Project. The
provisions of this Plan are intended to carry out those requirements.
Specifically, this Plan provides for the availability of twenty-three
(23) affordable units, all at affordable rent and occupancy as
follows: nineteen (19) that are affordable to Very Low Income
households; and four (4) that are affordable to Low Income
households. One (1) of the Units will be occupied by an onsite
management employee of the Owner as required by Tax Credit
regulations."
4
1650\01\1897921.3 2 9
iv) Section 2.2.1 of the Affordable Housing Implementation and Rental
Restriction Plan that is Exhibit 2 to the AHA is hereby replaced in its
entirety with the following:
"2.2.1 Allocation of Affordable Units. During the Term of the
Agreement, twenty-three (23) Units shall be leased at an Affordable
Rent. At least seven (7) three-bedroom units and eleven (11) two-
bedroom units and one (1) one-bedroom unit are to be occupied by
Very Low Income households at an Affordable Rent, as provided
herein. The remainder of the Units (three (3) two bedroom units
and one three bedroom unit) shall be occupied by or held available
for Low Income households at an Affordable Rent. The "Unit
Allocation" is also described on Attachment "4". One (1) two-
bedroom Unit will be utilized by an onsite manager. The manager's
unit will be an unrestricted unit."
v) Section 2.4 of the Affordable Housing Implementation and Rental
Restriction Plan that is Exhibit 2 to the AHA is hereby replaced in its
entirety with the following:
"2.4 Affordable Rent. Monthly rent shall be calculated in
accordance with California Health and Safety Code Section 50053.
"Family size appropriate to the Unit" as shown on Attachment D is
defined in Section 50052.5(h) of the California Health and Safety
Code to be two (2) persons for a one-bedroom Unit, three (3)
persons for a two-bedroom Unit and four (4) persons for a three-
bedroom Unit. Current monthly rent is calculated as:..."
d) Subordination.
i) Section 4.2.1 of the AHA is hereby replaced in its entirety with the
following:
"The City shall agree to subordinate this Agreement to deeds of
trust and any other documents necessary to secure a lien,
encumbrance or regulatory agreement to a conventional lender
(bank) or federal or state program (including tax-exempt bonds and
Tranche B financing) (collectively the "Senior Financing") that is
providing financing for the Project where such subordination is
required by the conventional lender or by federal or state programs
in order to obtain the financing needed for the Project. Any such
subordination shall be pursuant to the terms of the subordination
agreements and/or other intercreditor agreements that may be
entered into by the City. The City shall have the right to review and
approve the terms of any such Senior Financing, which approval
shall not be unreasonably withheld. The City shall have the right to
record a request that the City receive notice of any default by the
5
1650\01\1897921.3 30
Owner under the Senior Financing, and any other alternative
financing that may be obtained by the Owner with respect to the
Project. To implement any such subordination authorized under
this paragraph, the City agrees to cooperate with the Owner, and
the City Manager of the City shall have the authority to execute
such subordination agreements and/or intercreditor agreements
that may be reasonably required, in the form and content approved
by City's counsel."
ii) The first sentence of Section 4.2.2 of the AHA is hereby amended
in its entirety with the following sentence:
"Owner shall pay and promptly discharge when due, at Owner's
cost and expense, all liens, encumbrances and charges upon the
Project or the Property, or any part thereof or interest therein
(except the lien of any mortgage, deed of trust or other recorded
instrument securing any construction or permanent financing of the
Project), provided that the existence of any mechanic's, laborer's,
materialman's, supplier's, or vendor's lien or right thereto shall not
constitute a violation of this Section if payment is not yet due under
the contract which is the foundation thereof and if such contract
does not postpone payment for more than forty-five (45) days after
the performance thereof."
e) City Fees. Section 5.27 of the AHA is hereby deleted in its entirety and
replaced with:
"Owner agrees to pay City's direct costs, plus a 15% administrative fee, if
City staff needs to assist Owner with HUD compliance or other auditing
relative to the affordability of the project."
City Naming Rights. Section 5.28 of the AHA is hereby replaced in its
entirety with the following:
"Owner acknowledges the council of the City ("City Council") shall have
sole discretion for naming the Project. Owner also agrees not to change
the name of the Project without written approval from the City Council.
The City Council has approved renaming the Project to 'Walnut Street
Apartments"."
g) City Development Fees. The following sentence is hereby appended to
Section 5.32 of the AHA:
"The City agrees to waive at least $750,000 in development impact fees
(e.g. Community Development Fees, Public Facilities, LA Ave AOC Fee,
etc.) for the Development. Payment of any remaining development impact
fees will be deferred until a certificate of occupancy is issued for the
Development."
6
1650A01A1897921.3 31
h) Affordable Housing Implementation and Rental Restriction Plan (Exhibit
2l. The following Sections are hereby deleted in their entirety from the
Affordable Housing Implementation and Rental Restriction Plan that is
Exhibit 2 to the AHA:
i) Section 2.7.2 (Eviction of Over-Income Tenants). Section 2.7.2 is
hereby deleted in its entirety.
ii) Section 2.9 (City's Option to Place Tenants). Section 2.9 is hereby
deleted in its entirety.
iii) Unit Mix (Exhibit 2, Attachment No. 4). The chart outlining the
affordable unit mix, household size adjustment and utility allowance
in Attachment No. 4 to the Affordable Housing Implementation and
Rental Restriction Plan that is Exhibit 2 to the AHA is hereby
replaced in its entirety with the following chart:
Very-Low Income Number of Units Household Size Utility Allowance
Adjustment
Type of Unit 1
1-br 11
2 persons
2-br 7
3 persons
3-br 19
4 persons
Total
Low Income Number of Units Household Size Utility Allowance
Adiustment
Type of Unit 0
1-br 3
2 persons
2-br 1 $-
3 persons
3-br 4
4 persons
Total
5. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Califomia. If any court of competent
jurisdiction determines any provision of this Amendment or the AHA to be invalid,
illegal or unenforceable, then that provision shall be deemed severed from the
rest, which shall remain in full force and effect as though the invalid, illegal or
unenforceable provision had never been a part hereof or of the AHA.
7
1650\01\1897921.3 3 2
6. Binding Effect. The AHA, as amended herein, shall be binding upon, and inure
to the benefit of the Developer and the City and their respective successors and
assigns.
7. Severability. If any term of this Amendment is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the provisions
will continue in full force and effect unless the rights and obligations of the parties
have been materially altered or abridged by such invalidation, voiding or
unenforceability.
8. Counterparts. This Amendment may be executed in any number of counterparts,
each of which when executed and delivered to the City shall be deemed to be an
original, and all of which, taken together, will be deemed to be one and the same
instrument.
9. Conflict. To the extent that the terms of this Amendment conflict with those of the
AHA, this Amendment shall prevail.
10. Successors and Assigns. This Amendment shall be binding on and inure to the
benefit of the legal representatives, heirs, successors and assigns of the Parties.
11. Effective Date. This Amendment shall be effective as of the date first set forth
above.
12. Full Force and Effect. Except as set forth in this Amendment, the AHA has not
been amended and is in full force and effect.
IN WITNESS WHEREOF, the Parties have duly executed this Amendment as of
the day and year first above written.
CITY: DEVELOPER:
CITY OF MOORPARK AREA HOUSING AUTHORITY OF THE
COUNTY OF VENTURA,
a public body, corporate and politic
By: By:
Steven Kueny, City Manager Michael Nigh, Executive Director
ATTEST:
By:
Maureen Benson, City Clerk
8
1650A01A18979213 33
PARTNERSHIP:
WALNUT24 LP,
a California limited partnership
By:
Name:
Title:
[ALL SIGNATURES MUST BE NOTARIZED]
9
1650\01\1897921.3 3 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, , 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/their
signature(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: (Seal)
1650101\1897921.3 3 5
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, 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/their
signature(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: (Seal)
1650101A18979213 3 6
LE 6 IZ6L681\IO\0591
1-y
OLO-Z90-0-ZL9 4aaJ;g selieqa LS
OZ vZ90-0-Z 19 anuany)jJedhooN 96L
OZO-Z90-0-Z1S anuany NJedJoOIN Z9L
O11-390-O-Z19 #aags 3nuleM 99L
NdV ssaippd
Ala3dOHd 30 NOIldIUDSJO 1V931
V II9IHX3