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HomeMy WebLinkAboutRDA Reso 03-2007 RESOLUTION NO. 03-2007 REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO APPROVING AND AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH HIP HOUSING DEVELOPMENT CORPORATION REGARDING THE DEVELOPMENT OF PROPERTY LOCATED AT 317-321 COMMERCIAL AVENUE, APPROVING FINANCING FOR THE PROJECT TO BE REHABILITATED ON THE PROPERTY, AND AUTHORIZING EXECUTION OF DOCUMENTS IN CONNECTION WITH SUCH FINANCING WHEREAS, the City Council of the City of South San Francisco ("City Council") originally approved and adopted the Redevelopment Plan for the Downtown/Central Redevelopment Project Area ("Project Area") by Ordinance No. 1056-89 adopted on July 12, 1989 (as subsequently amended, the "Redevelopment Plan"); WHEREAS, the Agency seeks development of certain real property located at 317- 321 Commercial Avenue near the Project Area in the city of South San Francisco (the "City") and known as San Mateo County Assessor's Parcel Nos. 012-333-120 and 012- 333-110 (the "Property") in accordance with the Redevelopment Plan; WHEREAS, HIP Housing Development Corporation, a nonprofit public benefit corporation ("Developer") intends to purchase the Property and rehabilitate 15 units of rental housing affordable to low income households; WHEREAS, the Project, the Property, and the terms and conditions for rehabilitation and financing of the Project are more particularly described in a proposed Construction and Permanent Loan Agreement (the "Loan Agreement"), copies of which have been provided to the Agency; WHEREAS, the proposed Agency financing for the Project includes a construction/permanent loan in the amount of$I,800,000 (the "Loan"); WHEREAS, Developer and Agency staff have negotiated the terms and conditions of the Loan Agreement addressing use and disbursement of the Loan proceeds; a Secured Promissory Note (the "Note") that provides for repayment of the Loan on a residual receipts basis; a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the "Deed of Trust") pursuant to which the Agency will be provided a security interest in the Property and the Project to secure repayment of the Loan; and an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement") which restrict rents in the Project to levels affordable to very low-income households for a period of 55 years; WHEREAS, Developer has obtained a commitment for financing for the Project (the "Senior Loan"), and the lender providing such financing (the "Lender") has asked the Agency to subordinate certain Agency documents as more particularly set forth in the proposed subordination agreement (the "Subordination Agreement") a copy of which is on file with the Agency Secretary; WHEREAS, the Lender has indicated that it is unwilling to provide financing for the Project without execution and recordation of the Subordination Agreement, and the Developer has indicated that it has been unable to find alternate sources that would enable it to finance the Project without such subordination; WHEREAS, Health and Safety Code Section 33334.14 permits subordination of redevelopment agency affordability restrictions provided that: (i) the agency makes a finding that alternative financing is not reasonably available on economically feasible terms without subordination, and (ii) the agency obtains written commitments to protect its investment in the event of a default; WHEREAS, the proposed Subordination Agreement provides the Agency with rights to receive notice and an extended period within which the Agency may cure defaults arising under the Senior Loan documents; WHEREAS, Health and Safety Code Section 33334.2 permits the Agency to use low-and-moderate income set aside funds outside a project area if the Agency and the City Council make a finding that the use will benefit the redevelopment project; WHEREAS, the Project will be located near the Project Area, and the Project will benefit the Downtown/Central Redevelopment Project by improving and increasing the community's supply of affordable housing; WHEREAS, the City Council made a finding that the Project will benefit the Downtown/Central Redevelopment Project by improving and increasing the community's supply of affordable housing; and WHEREAS, the City Council approved the relocation plan for the Project. NOW, THEREFORE BE IT RESOLVED that the Redevelopment Agency of the City of South San Francisco hereby: Section 1. Finds, based upon the foregoing Recitals, that the expenditure of low- and-moderate income set aside funds to partially finance the Project will be of benefit to the Downtown/Central Redevelopment Project because the Project is located near the Project Area and the Project will improve and increase the community's supply of affordable housing. Section 2. Approves the Loan Agreement and authorizes the Executive Director, or his designee to execute and deliver the Loan Agreement substantially in the form on file with the Agency Secretary. Section 3. Approves the provision of the Loan to Developer pursuant to the terms and conditions set forth in the Loan Agreement. Section 4. Approves the Promissory Note, the Deed of Trust, and the Regulatory Agreement, and authorizes the Executive Director or his designee to execute and deliver each such document to which the Agency is a party substantially in the form on file with the Agency Secretary. Section 5. Finds that without execution of the Subordination Agreement, an economically feasible alternative for financing the Project is not reasonably available and that the terms of the Subordination Agreement provide the Agency with reasonable means of protecting the Agency's investment in the Project in the event of default. Section 6. Authorizes the Agency Executive Director or his designee to execute the Subordination Agreement substantially in the form on file with the Agency Secretary. Section 7. Authorizes the Executive Director to execute and deliver such other instruments and take such other actions as necessary to carry out the intent of this Resolution. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a regular meeting held on the 9th day of May, 2007 by the following vote: AYES: Boardmember Mark N. Addiego, Joseph A. Fernekes, Karvl Matsumoto Vice Chairman Pedro Gonzalez, Chairman Richard A. Garbarino NOES: None ABSTAIN: None ABSENT: None ATTEST: 0>nb(\(UCY1~ Deputy Clerk