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CITY COUNCIL AGENDA ITEM NO. 6

Meeting Date: July 13, 2004

Subject/Title: Approve a Resolution Approving An Affordable Housing Agreement between the City of Brentwood, Brentwood Redevelopment Agency and Brentwood Arbor Ridge

Prepared by: Gina Rozenski, Redevelopment Manager

Submitted by: Howard Sword, Economic Development Director

RECOMMENDATION
Approve a Resolution Approving An Affordable Housing Agreement between the City of Brentwood, Brentwood Redevelopment Agency and Brentwood Arbor Ridge.

PREVIOUS ACTION
On August 19, 2003, the Planning Commission held a public hearing to reconsider a modification to the conditions of approval for Arbor Ridge Apartment Project, located on Shady Willow Road, in regard to affordability restrictions. The Planning Commission unanimously approved the modification as follows (highlighted section denotes modification):

“53. In the event the applicant’s application for tax exempt bond financing is approved, at least twenty percent (20%) of all new residential units developed within Arbor Ridge shall be available at affordable housing costs to very low income households. Therefore, thirty-six (36) of the 178 proposed units must have very low income affordability restrictions. In the event the applicant’s application for tax exempt bond financing is not approved, at least ten percent (10%) of all new residential units developed within Arbor Ridge shall be available at affordable housing costs, 5% to very low income households and 5% to low income households. Therefore, nine (9) of the 178 proposed units must have very low income affordability restrictions and nine (9) units must have low income affordability restrictions. Income eligibility and affordability definitions shall be in compliance with Health & Safety Code Section 50000, et. seq. Developer shall enter into a Regulatory Agreement to be recorded against the property for a term of 55 years for restricted rental units. The Regulatory Agreement must be executed by Developer and delivered to the City of Brentwood for recordation prior to issuance of the first building permit for Arbor Ridge. The Regulatory Agreement shall insure that the affordable units are distributed evenly among all unit types.”

In the third round of the 2003 funding approvals, the California Debt Limit Allocation Committee awarded Arbor Ridge an allocation of tax exempt bond financing.

BACKGROUND
With the approval of tax exempt bond financing by CDLAC, the 20% condition is triggered. The attached Affordable Housing Agreement represents compliance with the Planning Commission’s condition of approval for the Arbor Ridge project.

FISCAL IMPACT
None.

Attachments:
Resolution
Agreement

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AN AFFORDABLE HOUSING AGREEMENT WITH BRENTWOOD ARBOR RIDGE, L.P., AND THE BRENTWOOD REDEVELOPMENT AGENCY, AUTHORIZING THE MAYOR OR CITY MANAGER AND CITY CLERK OR ANY OF THEIR DESIGNEES TO EXECUTE THE AGREEMENT AND SUCH OTHER DOCUMENTS AS MAY BE NEEDED TO COMPLETE THE TRANSACTION

WHEREAS, on March 7, 2003, the Planning Commission of the City of Brentwood approved Rezone 02-02 changing the zoning from a mix of R-1 and R-3 to PD-63 and approved Design Review 02-11 for the Brentwood Arbor Ridge 178-unit apartment complex, located south of Lone Tree Way and east of Shady Willow Lane; and

WHEREAS, on April 8, 2003, the City Council approved the Rezone 02-02; and

WHEREAS, on August 19, 2003, the Planning Commission approved a modification to Condition of Approval No. 53, by its Resolution 03-10, relating to the provision of affordable housing whereby in the event Brentwood Arbor Ridge’s application for tax exempt bond financing is approved, at least twenty percent (20%) of all new residential units developed within Arbor Ridge shall be available at affordable housing costs to very low income households; and

WHEREAS, the California Debt Limit Allocation Committee awarded Brentwood Arbor Ridge an allocation of tax exempt bond financing in September 2003; and

WHEREAS, Brentwood Arbor Ridge, L.P., has delivered to the City an executed Affordable Housing Agreement, in compliance with Condition of Approval No. 53.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby approve an Affordable Housing Agreement with Brentwood Arbor Ridge, L.P., and the Brentwood Redevelopment Agency, and the Mayor or the City Manager and City Clerk or any of their designees are authorized to execute the agreement and such other documents as may be needed to complete the transaction.

PASSED, APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 13th day of July, 2004 by the following vote:

AYES:
NOES:
ABSENT:
ABSTAIN :

_______________________ Brian Swisher
Mayor
ATTEST:

__________________________________
Karen Diaz, CMC
City Clerk/Director of Administrative Services
RECORDING REQUESTED BY AND
AFTER RECORDATION, MAIL TO:
The City of Brentwood
150 City Park Way
Brentwood, CA 94533


(Space Above This Line for Recorder's Use)

AFFORDABLE HOUSING AGREEMENT
THIS AGREEMENT is entered into as of the ___day of ___________, 2004 by and between BRENTWOOD ARBOR RIDGE, L.P., a California limited partnership ("Owner"), and the CITY OF BRENTWOOD and the REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD (collectively referred to herein as "City"). The Owner and City agree with reference to the following facts:
RECITALS
A. Owner owns that certain real property located at 2400 Shady Willow Lane and identified as Assessor Parcel Numbers 019-040-036, 019-040-037 and 019-040-038 ("Site"), as described in the Legal Description of the Site attached hereto as Exhibit “A” and incorporated herein by reference. Owner proposes to construct on the Site a multifamily residential development consisting of approximately one hundred seventy eight (178) residential units (each unit, together with all improvements thereon and other rights appurtenant thereto, being referred to singly as a "Unit" and collectively as the "Units"), which Units shall be offered for rent.

B. City is acting to carry out its obligations under its Ordinance No. 756 (Brentwood Municipal Code Chapter 17.725) (the "Ordinance"), the City's General Plan, and Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.) (collectively, the "City Inclusionary Housing Requirements") by establishing an affordable housing program for the City of Brentwood.
C. Owner was awarded tax-exempt bond financing from the California Debt Limit Allocation Committee in September 2003 for the Project as a mixed-income, multi-family residential rental project.

D. Owner and City agree that thirty-six (36) Units on the Site shall be subject to the conditions and restrictions, and the rights of Agency, as specified below ("Affordable Units").
E. The parties acknowledge that the subject real property, and its development, operation and use, is subject to that certain Regulatory Agreement and Declaration of Restrictive Covenants (“Regulatory Agreement”) dated as of October 1, 2003, by and among California Statewide Communities Development Authority, Wells Fargo Bank, National Association, as Trustee, and Brentwood Arbor Ridge, L.P., a California limited partnership, and recorded November 6, 2003, at Document No. 2003-549020, Contra Costa County Official Records.

NOW, THEREFORE, City and Owner, for itself and its successors in interest, agree as follows:

ARTICLE 1
CONDITIONS AND RESTRICTIONS OF PROJECT
1.1 USE OF SITE. The Owner hereby covenants and agrees, for itself, its lessees, successors and assigns, as follows:
A. Development. The Site has been or will be developed with approximately one hundred seventy eight (178) residential Units, and appurtenant recreational, parking and landscaping improvements (the "Project").
B. Rent and Income Restrictions. The Affordable Units to be developed on the Site shall be rented to Eligible Households at Affordable Rents (as defined below in Paragraphs 1.2.A.-D.), including a utility allowance.
1.2. DEFINED TERMS. The following terms used in this Article 1 shall have the meanings set forth in this Paragraph 1.2:
A. "Affordable Rent" shall be as defined in Health and Safety Code Section 50053 or any successor statute thereto. If the statute is no longer in effect and no successor statute is enacted, the City shall establish the Affordable Rent for purposes of this Agreement. For purposes of determining the Affordable Rent: (i) the monthly rental rate for a two (2) bedroom Affordable Unit shall be established using the assumption that the Eligible Household renting the Affordable Unit is comprised of three (3) persons; (ii) the monthly rental rate for a three (3) bedroom Affordable Unit shall be established using the assumption that the Eligible Household renting the Unit is comprised of four (4) persons; and (iii) the monthly rental rate for a four (4) bedroom Affordable Unit shall be established using the assumption that the Eligible Household renting the Unit is comprised of five (5) persons. In the event this Paragraph 1.2.A is in conflict with the Affordable Rent and the allowed number of persons per bedroom as permitted by the Regulatory Agreement, then the Regulatory Agreement shall prevail.
B. "Eligible Households" shall mean and include persons and families meeting the definition of Very Low Income Households under this Paragraph 1.2.
C. "Very Low Income Household" shall mean a person or household whose annual gross income does not exceed 50% (which percentage shall be adjusted as provided in Title 25, Section 6932 of California Code of Regulations) of the Median Income (as defined below) and who otherwise meets Owner's standard criteria for determining eligibility for occupancy. These occupancy criteria may include an evaluation of the applicant's ability to pay rent, housing history, employment status and credit history. These specific standards may vary from time to time, but must be uniformly applied at all times.

D. "Median Income" is the area-wide median gross yearly income in Contra Costa County, adjusted for household size, as established from time to time by the U.S. Department of Housing and Urban Development ("HUD"). In the event that such income determinations are no longer published or are not updated for a period of at least eighteen (18) months by HUD, Median Income shall mean the area-wide median gross income for households in Contra Costa County, adjusted for family size, as published from time to time by the California Department of Housing and Community Development ("HCD"). In the event that such income determinations are no longer published, or not updated for a period of at least eighteen (18)months, the City shall provide Owner with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD or HCD.

1.3 AFFORDABILITY AND RENT RESTRICTIONS
A. Not less than thirty-six (36) of the Units, or twenty percent (20%) of one hundred seventy-eight (178) Units, developed by the Owner on the Site shall be rent-restricted at Affordable Rents and be occupied by Eligible Households ("Affordable Units"). If there is a total of more than one hundred seventy-eight (178) Units developed on the Site, there shall be required additional Affordable Units as necessary to satisfy said twenty percent (20%) requirement.
B. The income of all persons residing in an Affordable Unit shall be considered for purposes of calculating the applicable income of the Eligible Household. In the event this Paragraph 1.3.B is in conflict with the income calculations permitted by the Regulatory Agreement, then the Regulatory Agreement shall prevail. No tenant qualifying as a Very Low Income Household upon initial occupancy shall be denied continued occupancy of a unit in the Project because, after admission, such household’s adjusted income increases to an extent that exceeds the qualifying limit for Very Low Income Households. However, should a Very Low Income Household’s adjusted income, as of the most recent certification thereof, exceed one hundred forty percent (140%) of the applicable income limit for a Very Low Income Household of the same family-size, the next available unit of comparable or smaller size must be rented to (or held vacant and available for immediate occupancy by) a Very Low Income Household. Until such next available unit is rented, the former Very Low Income Household who has ceased to qualify as such shall be deemed to continue to be a Very Low Income Household for purposes of the twenty percent (20%) requirement of Paragraph 1.3.A hereof.
C. Owner shall use its best efforts to verify the income levels of all applicants for Affordable Units. This process may include obtaining a copy of each applicant's most recent income tax return, verifying the applicant's employment or income source, and conducting a credit search. Owner shall have the right to rely on the authenticity, truth and accuracy of all information and materials provided by or on behalf of an applicant.
D. There shall be no physical concentration of the Affordable Units. The Affordable Units shall be dispersed throughout the Site. The Affordable Units shall not be identifiable from the exterior or the interior. All Units in the Project, including the Affordable Units, shall be, at the time of initial construction, consistent as to their quality, design and materials therein used.
1.4. REPORTING REQUIREMENTS. With respect to the Affordable Units, annual reports and annual income recertifications must be submitted to the City. The reports, at a minimum, shall include:
(1) The number of persons per Affordable Unit, and relationship to tenant.
(2) The bedroom count per Affordable Unit.
(3) Tenant name and address of each Affordable Unit.
(4) Initial occupancy date of the Affordable Units.
(5) Total rent received per Affordable Unit.
(6) Rent paid per month by tenant for each Affordable Unit.
(7) Rent paid per month for each Affordable Unit by outside subsidy (federal, state, local, etc.).
(8) Gross income per year of tenant's household for each Affordable Unit.
(9) Percent of rent paid in relation to income for each Affordable Unit.
Annual income recertifications also shall contain those documents used to certify eligibility. City, from time to time during the term of this Agreement, reasonably may request additional or different information and Owner shall promptly supply such information in the reports required hereunder. Owner shall maintain all necessary books and records, including property, personal and financial records, in accordance with requirements prescribed by City with respect to all matters covered by this Agreement as to the Affordable Units. Owner, at such time and in such forms as City reasonably may require, shall furnish to Agency statements, records, reports, data and information pertaining to matters covered by this Agreement. Upon issuance of a reasonable prior written request of not less than seventy-two (72) hours for examination by City, Owner, at any reasonable time during normal business hours, shall make available all of its records with respect to all matters covered by this Agreement. Owner shall permit Agency to audit, examine and make excerpts or transcripts as to the Affordable Units from these records.

Notwithstanding anything herein contained, compliance by Owner with the terms, provisions and requirements of the Regulatory Agreement is deemed full compliance with this Affordable Housing Agreement. Any annual report prepared by Owner pursuant to the requirements of the Regulatory Agreement, with copies thereof given to the City at the time of issuance thereof by compliance with the reporting requirements of this Affordable Housing Agreement. In the event of any conflict by and between the terms and provisions of this Affordable Housing Agreement and the terms and provisions of the Regulatory Agreement, the terms and provisions of the Regulatory Agreement shall prevail.

ARTICLE 2
NO DISCRIMINATION
2.1. NO DISCRIMINATION. The Owner covenants by and for itself and any successors in interest that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, sexual preference, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Units, nor shall the Owner itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Units.
ARTICLE 3
MAINTENANCE AND MANAGEMENT
3.1. MAINTENANCE. The Owner, by and for itself and all successors in interest, agrees to maintain the improvements and landscaping on the Site in a clean and orderly condition and in good condition and repair and keep the Site free from accumulation of debris and waste materials for a period of fifty five (55) years from the date of recordation of this Agreement.

3.2. MANAGEMENT. During the term of this Agreement, Owner shall promptly notify the City in the event there is any change in the property management company managing the Project. Owner shall submit a copy of such management agreement to the City; provided, however, the City shall not have the right to approve or disapprove such management agreement except to ensure compliance of such management agreement with the provisions of this Paragraph 3.2.
ARTICLE 4 GENERAL PROVISIONS
4.1 NOTICES. Notices required to be given to the City or to Owner shall be given by hand delivery, recognized overnight courier (such as UPS, DHL or FedEx) or certified mail, return receipt requested, to the following addresses, or to such other address(es) as a party may designate from time to time by written notice to the other:
To City:
Housing Manager
City of Brentwood
150 City Park Way Brentwood, CA 94513

To Owner:
Brentwood Arbor Ridge, L.P.
c/o A.H.D.C., Inc.
3128 Willow, Suite 101
Clovis, CA 93612

4.2. NO IMPAIRMENT OF LIEN. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Agreement shall defeat or render invalid or in any way impair the lien or charge of any mortgage, deed of trust or other financing or security instrument. In the event any future lender requires the subordination of this Agreement to the lender’s Deed of Trust or other security instrument, City shall forthwith enter into such subordination with the Owner and such lender(s).
4.3 DURATION. The covenants contained in this Agreement shall be deemed to run with the land and shall remain in effect for a period of fifty-five (55) years from the date of recordation of this Agreement (the "Term"). The covenants against discrimination contained in Paragraph 2.1 of this Agreement shall be deemed to run with the land in accordance with Section 33438 of the Health and Safety Code or any successor statute and shall remain in effect in perpetuity.

4.4. SUCCESSORS AND ASSIGNS. The covenants and agreements contained in this Agreement shall be binding for the benefit of the City and its respective successors and assigns and any successor in interest to the Site or any part thereof, and such covenants shall run in favor of the City and such aforementioned parties for the entire period during which such covenants shall be in force and effect, without regard to whether the City has any interest in the Site to which such covenants relate. The City, and such aforementioned parties, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Agreement shall be for the benefit of and shall be enforceable only by the City, and its respective successors and such aforementioned parties.

Subject to Paragraph 4.2 above, the covenants contained in this Agreement shall be binding upon Owner and any successor in interest as owner of fee title to the Site, or any part thereof. Upon transfer by Owner of all of its interest in the Site, all references in this Agreement to Owner thereafter shall mean and refer to such successor in interest of Owner as may then be the owner of the Site.
4.5 NO TRANSFER. The Owner shall not sell, transfer, convey, encumber, assign or lease the whole or any part of the Site, or interest therein, without the prior written notification to the City at least ninety (90) days prior to any proposed transfer. This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Site or to prohibit or restrict the leasing or renting of Units when the Project is completed.

4.6 AMENDMENT. This Agreement may be amended only in writing by City and the Owner, and (if and as applicable) any lender(s) or other party(ies) holding a security interest in the Project.

4.7 CALIFORNIA LAW. This Agreement shall be construed in accordance with and be governed by the laws of the State of California.

4.8 SEVERABILITY. Should any provision of this Agreement be found invalid or unenforceable by a court or other body of competent jurisdiction, said invalidity, unenforceability or ineffectiveness shall not affect the validity of the remaining provisions which shall remaining force to the maximum extent possible.

IN WITNESS WHEREOF, the City and Owner have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized, as of ______________________, 2004.
CITY:
CITY OF BRENTWOOD

By:
John Stevenson, City Manager

AGENCY:
REDEVELOPMENT AGENCY OF THE CITY OF BRENTWOOD

By:
John Stevenson, Executive Director

OWNER:
Brentwood Arbor Ridge, L.P., a California limited partnership
By: Brentwood Arbor Ridge, LLC
Its: Administrative General Partner

By: A.H.D.C., Inc., a California corporation
Its: Member/Manager

By:
Peter G. Herzog
Its: President

By: Central Valley Coalition for Affordable Housing
Its: Managing General Partner

By:
Christina Alley
Its: CEO

SIGNATURES MUST BE NOTARIZED

STATE OF CALIFORNIA )
) ss.
COUNTY OF ________ )

On __________________, 2004, before me, _________________________, the undersigned, a Notary Public in and for said State, personally appeared _______________________ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.


___________________________________
Notary Public (Seal)

STATE OF CALIFORNIA )
) ss.
COUNTY OF ________ )

On __________________, 2004, before me, _________________________, the undersigned, a Notary Public in and for said State, personally appeared _______________________ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

___________________________________
Notary Public
(Seal)

STATE OF CALIFORNIA )
) ss.
COUNTY OF ________ )

On __________________, 2004, before me, _________________________, the undersigned, a Notary Public in and for said State, personally appeared _______________________ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.
___________________________________
Notary Public

(Seal)

LEGAL DESCRIPTION OF THE SITE

Assessor Parcel Numbers 019-040-036 (5.0612 acres), 019-040-037 (4.7291 acres) and 019-040-038 (4.9048 acres), consisting of approximately 14.7 acres (±) on Shady Willow Lane, Brentwood, Contra Costa County, California.

EXHIBIT “A”
 

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov