HomeMy WebLinkAboutRDA Reso 02-2009RESOLUTION NO. 02-2009
REDEVELOPMENT AGENCY, 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 PROJECT
WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency")
provided a $3,500,000 loan ("Loan") to Willow Garden Housing Associates, a California limited
partnership affiliated with Mid-Peninsula Housing Corporation (the "Developer") to acquire and
rehabilitate housing units in the Willow Gardens planned unit development ("Project") pursuant to a
Loan Agreement dated January 4, 1999 ("Loan Agreement");
WHEREAS, in connection with the Loan, the Developer executed a Deed of Trust with
Assignment of Rents dated January 4, 1999 securing repayment of the Loan ("Deed of Trust"), and
the Developer and the Agency executed a Regulatory Agreement and Declaration of Restrictive
Covenants dated August 19, 1999 and a Regulatory Agreement and Declaration of Restrictive
Covenants dated January 4, 1.999 (collectively, "Regulatory Agreements") pursuant to which the
Developer agreed to restrict the rents for 29 of the units in the Project to affordable levels. The Deed
of Trust and Regulatory Agreements are hereinafter collected referred to as the "Agency
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, Health and Safety Code Section 33334.14 permits subordination. of
redevelopment agency affordability restrictions to a lien, encumbrance or regulatory agreement of a
lender other than the agency providing financing or refinancing of rental units where the agency (i)
makes a finding that an economically feasible alternative method of financing or refinancing on
substantially comparable terms and conditions is not reasonably available without subordination; and
(ii) the subordination agreement contains provisions reasonably designed to protect the agency's
investment in an event of default;
WHEREAS, Lender has indicated that it would be unwilling to provide the Lender Loan for
the Project without subordination of the Agency Documents; and
WHEREAS, the proposed Subordination Agreement provides the Agency with rights to
receive notice and to cure defaults arising under the Lender Loan documents.
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of
South San Francisco that the Agency hereby:
1. Finds that an economically feasible alternative method of refinancing on substantially
comparable terms and conditions is not reasonably available without subordination; and
2. Authorizes the Executive Director or his designee to execute a Subordination Agreement
substantially in the form on file with the Agency Secretary and to take such other actions reasonably
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 special meeting held on the 11th day
of February, 2009 by the following vote:
AYES: Boardmembers Pedro Gonzalez Richard A. Garbarino and Kevin Mullin
Vice Chair Mark Addie~o and Chair Karyl Matsumoto
NOES: None
ABSTAIN: N
ABSENT: None
_ /~
ATTEST:
C' y Clerk