HomeMy WebLinkAboutReso 14-2009RESOLUTION NO. 14-2009
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION AUTHORIZING EXECUTION OF A
SUBORDINATION AGREEMENT WITH UNION BANK, N.A.
FOR THE WILLOW GARDENS AFFORDABLE HOUSING
PROJECT
WHEREAS, the City of South San Francisco ("City") provided a HOME program loan to
Willow Gardens Housing Associates, a California limited partnership affiliated with Mid-Peninsula
Housing Corporation (the "Developer") in the amount of $619,055 ("First Loan") to acquire and
rehabilitate housing units in the Willow Gardens planned unit development (the "Project")pursuant
to a City of South San Francisco Home Investment Partnership Program Loan Agreement dated
January 4, 1999;
WHEREAS, in connection with the First Loan, the Developer executed a Deed of Trust with
Assignment of Rents dated January 4, 1999 securing repayment of the First Loan ("First Deed of
Trust"), and the Developer and City executed a Home Investment Partnerships Program Regulatory
Agreement dated January 4, 1.999 pursuant to which the Developer agreed to restrict the rents for 1 i
of the units in the Project to affordable levels ("First Regulatory Agreement");
WHEREAS, the City subsequently provided a second loan to Developer in the amount of
$500,000 ("Second Loan") for the Project, and Developer executed a Deed of Trust with
Assignment of Rents dated November 19, 2002 securing repayment of the Second Loan ("Second
Deed of Trust");
WHEREAS, in connection with the Project, City and Developer also executed a Rent
Restriction and Right of First Refusal Agreement for Below Market Rate Property dated October 17,
2005 and a Rent Restriction and Right of First Refusal Agreement for Below Market Rate Property
dated June 16, 2005 (collectively, "Rent Restriction Agreements"). The First Deed of Trust, First
Regulatory Agreement, Second Deed of Trust and Rent Restriction Agreements are hereinafter
collectively referred to as the "City Documents;"
WHEREAS, Developer used a line of credit to finance a portion of the Project;
WHEREAS, Developer now seeks to refinance its line of credit into a lower cost permanent
loan from Union Bank, N.A. ("Lender") in the amount of Two Million Dollars ($2,000,000) for the
Project (the "Lender Loan");
WHEREAS, Lender has indicated that it would be unwilling to provide the Lender Loan for
the Project without subordination of the City Documents; and
WHEREAS, the proposed Subordination Agreements provide the City with rights to receive
notice and to cure defaults arising under the Lender Loan documents.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San
Francisco that the City Council hereby authorizes the City Manager or his designee to execute the
Subordination Agreements substantially in the form on file with the City Clerk and to take such other
actions reasonably necessary to carry out the intent of this Resolution.
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I hereby certify that the foregoing Resolution was regularly introduced and adopted by the
City Council of the City of South San Francisco at a regular meeting held on the l lr" day of
February, 2009 by the following vote:
AYES: Councilmembers Pedro Gonzalez, Richard A. Garbarino, and Kevin Mullin,
Vice Mayor Mark Addie~o and Ma oy r Karyl Matsumoto
NOES: None
ABSTAIN: None
ABSENT: None
ATTEST: ~' ~--
~~ ity Clerk