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CITY COUNCIL AGENDA ITEM NO. 7

Meeting Date: September 13, 2005

Subject/Title: Adopt a Resolution approving an Affordable Housing Agreement between the City of Brentwood and Mark Taylor for Subdivision 8808

Prepared by: Kwame P. Reed, Senior Housing Analyst

Submitted by: Howard Sword, Community Development Director

RECOMMENDATION
Approve a Resolution approving an Affordable Housing Agreement between the City of Brentwood and Mark Taylor for Subdivision 8808.

PREVIOUS ACTION
Ordinance 790 was adopted by the City Council on January 11, 2005 amending the City of Brentwood Affordable Housing Program.

The City Council adopted Resolution No. 2005-201 on August 9, 2005 Approving the Deal Points and terms for an Affordable Housing Agreement between the City of Brentwood and Mark Taylor for Subdivision 8808.

BACKGROUND
At the August 9, 2005 City Council meeting, the City Council adopted a Resolution allowing the affordable housing obligation of in-lieu fee payment for Subdivision 8808 to be shared among the future purchasers of the seven (7) new parcels. The Resolution allowed the projects in-lieu fee payment to be calculated at the time of building permit issuance for the first home. The total in-lieu fee would be paid upon the issuance of building permits for each individual unit.

The calculation of the in-lieu fee is as follows:

• In-Lieu Fees for 1 VL unit ($238,995) x 30% = $71,699
• In-Lieu Fees for 1 L unit ($178,992) x 70% = $125,294
• Total Fees = $196,993

Therefore, each builder shall owe approximately $28,142 per lot in this subdivision. (This amount is calculated at the current fee. The fee in effect at the time of the issuance of the building permit may be different.)

This Resolution adopts the formal Affordable Housing Agreement that encompasses these terms and conditions.

RECOMMENDATION
Staff recommends the approval of the Resolution approving the Affordable Housing Agreement which contains the following conditions:

(1) An indemnity clause whereby the developer will indemnify the City in the event of a claim raised by a property owner challenging the requirement to pay his/her portion of the in-lieu fee; and

(2) A form of In-Lieu Fee Payment agreement that each property owner will be required to sign prior to the close of escrow and which will be recorded against each lot; and

(3) A disclosure statement that the developer must have each purchaser sign that describes in simple terms the requirement to pay such purchaser's portion of the in-lieu fee at building permit issuance

FISCAL IMPACT
Approval of this resolution will result in the delay of receiving $196,993 of Housing Trust Fund revenues due at this time to a future date.

Attachments
Resolution
Affordable Housing Agreement

RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD APPROVING AN AFFORDABLE HOUSING AGREEMENT BETWEEN THE CITY OF BRENTWOOD AND MARK TAYLOR FOR SUBDIVISION 8808

WHEREAS, on January 11, 2005, the City Council adopted Ordinance 790, an Ordinance of the City Council of the City of Brentwood approving an amendment to the Municipal Code adding Chapter 17.725 that establishes an Affordable Housing Program; and

WHEREAS, on August 9, 2005 the City Council adopted Resolution No.2005-201 Approving the Deal Points and terms for an Affordable Housing Agreement between the City of Brentwood and Mark Taylor for Subdivision 8808; and

WHEREAS, Mark Taylor had a Condition of Approval to the project to comply with the City of Brentwood Affordable Housing Program; and

WHEREAS, the Developer has agreed a requirement to pay in lieu fees in effect at the time of building permit based on the following formula:
Very-Low Unit In-Lieu Fee x 70%
Low Unit In-Lieu Fee x 30%

WHEREAS, the payment of these fees will be shared equally by the builders of the units on each of the seven lots.

NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Brentwood does hereby approve an Affordable Housing Agreement with Mark Taylor for Subdivision 8808 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 September, 2005 by the following vote

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of Brentwood
150 City Park Way
Brentwood, California 94513
Attn: City Clerk

(Space Above This Line for Recorder's Use Only)
[Exempt from recording fee per Gov. Code § 27383]

AFFORDABLE HOUSING AGREEMENT
THIS AFFORDABLE HOUSING AGREEMENT ("Agreement") is entered into as of the day of , 200 , by and between MARK TAYLOR ("Developer"), and the CITY OF BRENTWOOD (the "City"). Developer and City agree as follows, with reference to the following facts:
RECITALS
A. Developer owns that certain real property identified as Subdivision 8808 and described in Exhibit A, attached hereto and incorporated herein by reference (the "Site"). Developer proposed to subdivide the Site to create lots for seven (7) custom single-family detached residential units (the "Project") (each lot is referred to individually as a "Lot" and collectively as the "Lots"), which Lots shall be offered for sale and developed as custom homes by their purchasers.
B. City is acting to carry out its obligations under its General Plan, Ordinance No. 790 amending Brentwood Municipal Code Chapter 17.725 (the "Ordinance") and any implementing regulations (collectively, the "City Inclusionary Housing Requirements"), and Developer agrees to comply with the City Inclusionary Housing Requirements.
C. Since the Project obtained its Tentative Map approval and Residential Growth Management Program allocation prior to the approval of the Ordinance, the Project is subject to the phase-in exemption set forth in Section 5 of the Ordinance. The Developer has elected to comply with the City Inclusionary Housing Requirements by paying an in-lieu fee.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Developer and City agree as follows:
ARTICLE 1
IN-LIEU FEE
1.1 Payment. Pursuant to Section 5 of the Ordinance, Developer is obligated to pay City the in-lieu fee for one affordable unit, calculated at seventy (70) percent of the in-lieu fee for low income households in effect at building permit issuance for the first Lot to be developed and thirty (30) percent of the in lieu fee for very low income households in effect at building permit issuance for the first Lot to be developed (the "Total In-Lieu Fee"). The Total In-Lieu Fee shall be divided by seven (the number of Lots) (the "Lot In-Lieu Fee") and the purchaser of each Lot shall be responsible for the payment of the Lot In-Lieu Fee prior to building permit issuance for the development of such Lot.
1.2 Lot In-Lieu Fee Payment Agreement. Developer shall require each purchaser of a Lot to enter into and record at the close of escrow a Lot In-Lieu Fee Payment Agreement in a form substantially similar to Exhibit B attached hereto ("Payment Agreement"), which is approved and executed by City. Developer shall review the Payment Agreement and the Disclosure Statement attached to the Payment Agreement as Attachment 2 with each purchaser of a Lot. Each Disclosure Statement must be signed by both the purchaser and Developer and provided to the City's Housing Manager.
1.3 Determination of In-Lieu Fee. No earlier than thirty (30) days prior to building permit issuance for the development of any Lot, the owner of the Lot shall request City's Housing Manager in writing for a determination of the applicable Lot In-Lieu Fee. If the Total In-Lieu Fee and Lot In-Lieu Fee have not yet been determined, City's Housing Manager or designee shall calculate the Total In-Lieu Fee within ten (10) business days of written request and shall notify Developer and the owner in writing of both the Total In-Lieu Fee and the Lot In-Lieu Fee. If the Total In-Lieu Fee and Lot In-Lieu Fee have been determined, City's Housing Manager shall notify the owner of the Lot In-Lieu Fee and provide owner with a copy of his or her initial notification.
1.4 Developer's Indemnity. Developer shall indemnify, defend with counsel reasonably acceptable to City, protect and hold City, and its and their officers, employees, agents and representatives, harmless from and against, any and all claims, demands, damages, defense costs, suits or liability of any kind or nature relating to the subject matter of this Agreement or the implementation hereof, including any claims raised by purchasers or owners of Lots challenging the payment of the Lot In-Lieu Fee or implementation of this Agreement.
1.5 Compliance. Developer’s execution of this Agreement and compliance with the terms and conditions herein, shall be deemed full and final satisfaction of the City Inclusionary Housing Requirements applicable to the Project.
ARTICLE 2
GENERAL PROVISIONS
2.1 Conditions of Approval. This Agreement shall not supersede any conditions of approval for the Project imposed pursuant to the City Inclusionary Housing Requirements, but is intended to be consistent with the City Inclusionary Housing Requirements. In the event of any conflict between this Agreement and the City Inclusionary Housing Requirements, the City Inclusionary Housing Requirements shall prevail.
2.2 Notices. Notices required to be given to City or Developer shall be given by hand delivery, recognized overnight courier (such as UPS, DHL, or Fed Ex) 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. All notices so given shall be deemed received (a) on the date delivered if hand delivered or delivered by overnight courier, or (b) one day after postmark if sent postage prepaid by certified mail, return receipt requested.
To City:

Housing Manager
The City of Brentwood
City Hall
150 City Park Way
Brentwood, CA 94513

To Developer:

Attn: Mark Taylor

2.3 No Third Party Beneficiaries. Notwithstanding anything in this Agreement to the contrary, there are no third party beneficiaries of this Agreement.
2.4 Default.
a. Any failure by Developer to perform any term or provision of this Agreement shall constitute an "Event of Default" if Developer does not cure such failure within thirty (30) days following written notice of default from City.
b. Any notice of default given hereunder shall specify in detail the nature of the failure in performance alleged by City and the manner in which such failure of performance may be satisfactorily cured in accordance with the terms and conditions of this Agreement. During the time periods herein specified for cure of a failure to perform, Developer shall not be considered to be in default of this Agreement for any purposes.
c. Any failure or delay by City in asserting any of its rights or remedies as to any Event of Default shall not operate as a waiver of any Event of Default or of any such rights or remedies or deprive City of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies.
d. In the event of an Event of Default under this Agreement, City 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 remedy proceedings to cure, correct or remedy such Event of Default.

e. Notwithstanding the foregoing, in the event that Developer fails to comply with the terms of this Agreement, City may suspend issuance of building permits for Lots, or pursue any other remedy available to it.
2.5 Duration. The agreements set forth herein shall be covenants running with the land and shall inure to the benefit of the City and its successors and assigns from the Effective Date (as defined in Section 2.11) until the Total In-Lieu Fee is paid in full (the "Term"). The parties agree that for the Term, all future deeds or transfers of interest shall show or reference the applicable restrictions of this Agreement. Upon recordation of a Payment Agreement, this Agreement shall have no further force or effect as an encumbrance against the Lot to which such Payment Agreement pertains. However, Developer shall continue to be bound by the terms and provisions of this Agreement, including the indemnity set forth in Section 1.4 above.
2.6 Transfer; Successors and Assigns.
a. Transfer by Developer of Site. Except as expressly permitted by this Section 2.6(a), Developer shall not sell, transfer, convey, assign or ground lease the Site or any part thereof or interest therein (a "Transfer") during the Term without prior written approval of the City, which shall not be unreasonably withheld or delayed. This restriction shall not apply to (i) any Transfer of a Lot to an individual purchaser who executes a form of Payment Agreement, or (ii) any Transfer of Developer's interest in the Site to any trust, partnership, corporation, limited liability company or other entity that is managed and controlled by Developer whether through any trust, partnership, corporation, limited liability company or other entity. This restriction on Transfer shall not be deemed to limit or restrict the making of dedications or granting of easements or permits to facilitate the development of the Site. This restriction on Transfer shall also not be deemed to prohibit, limit or restrict the assignment or granting of any security interests in the Site for the purpose of securing loans or funds to be used for financing the construction of the improvements on the Site, or the exercise by any lenders of their rights and remedies, including without limitation foreclosure, under the agreements and instruments evidencing or securing any such financing.
b. Binding Effect. Subject to the restrictions on transfer set forth in Section 2.6(a) above and the release set forth in Section 2.5 above, the covenants contained in this Agreement shall be binding upon Developer and any successor in interest as owner of fee title to the Site, or any part thereof. Upon the transfer by Developer of all of its interest in the Site, all references in this Agreement to Developer thereafter shall mean and refer to such successor in interest of Developer as may then be the owner of the Site. In the event that Developer transfers the Site to more than one successor in interest, all successors in interest shall be collectively required to comply with the provisions of this Agreement and shall be jointly and severally liable for any breach or failure to comply, unless each successor and City enter into an agreement outlining the specific obligations of each successor for compliance with this Agreement.
2.7 California Law. This Agreement shall be construed in accordance with and be governed by the laws of the State of California without reference to its choice of laws principles.
2.8 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 remain in force to the maximum extent possible.
2.9 Entire Agreement. This Agreement contains the entire understanding between the parties relating to the transaction contemplated herein, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. No provision of this Agreement may be amended, waived, or added except by an instrument in writing signed by the parties hereto.
2.10 Incorporation of Exhibits. All exhibits referred in this Agreement are incorporated herein by reference.
2.11 Effective Date. The "Effective Date" of this Agreement shall be the date it is executed by both parties.
2.12 Attorney’s Fees. In the event any party to this Agreement commences litigation for specific performance or damages for the breach of this Agreement, the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorneys’ fees and court costs incurred.
[Signature page follows]

IN WITNESS WHEREOF, City and Developer have caused this Agreement to be executed on their behalf by their respective officers thereunto duly authorized.

Date:__________________________

ATTEST:
By:
Margaret Wimberly, City Clerk

APPROVED AS TO FORM:
By:
Damien Brower, City Attorney CITY:
THE CITY OF BRENTWOOD
By:

Name: Donna Landeros City Manager

Date: _________________________ DEVELOPER:
By:

Name:


By:

Name:

SIGNATURES MUST BE NOTARIZED

STATE OF CALIFORNIA )
)
) ss
)
COUNTY OF CONTRA COSTA )

On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) 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 executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature
~~~~~~
STATE OF CALIFORNIA )
)
) ss
)
COUNTY OF CONTRA COSTA )

On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) 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 executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature
EXHIBIT A
Legal Description of the Site
[To be inserted]

EXHIBIT B
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of Brentwood
150 City Park Way
Brentwood, California 94513
Attn: City Clerk

(Space Above This Line for Recorder's Use Only)
[Exempt from recording fee per Gov. Code § 27383]

LOT IN-LIEU FEE PAYMENT AGREEMENT
For valuable consideration, the receipt of which is hereby acknowledged, (individually or collectively, "Owner"), and THE CITY OF BRENTWOOD (the "City") agree as follows, with reference to the following facts:
RECITALS
A. Owner owns that certain real property located at , Brentwood, California and more particularly described in Attachment 1 attached hereto and incorporated herein (the "Lot"). The Lot is part of a seven unit custom home subdivision referred to herein as the "Project."
B. City has acted to enforce the inclusionary housing requirements set forth in Chapter 17.725 of the Brentwood Municipal Code and any implementing regulations ("City Inclusionary Housing Requirements") by establishing an affordable housing program for the City of Brentwood. In order to satisfy the City Inclusionary Housing Requirements, the previous owner of the Lot agreed that he would sell the Lot subject to the requirement that the subsequent owner pay an in-lieu fee prior to issuance of a building permit to develop the Lot.
C. Owner has agreed to pay the Lot In-Lieu Fee (as defined herein) on the terms and conditions set forth herein.
NOW, THEREFORE, in this factual context, for good and valuable consideration, Owner and City agree as follows:
1. Lot In-Lieu Fee
1.1 Payment. Owner shall pay the Lot In-Lieu Fee (as defined below) prior to developing the Lot. The "Lot In-Lieu Fee" shall be one-seventh of the in-lieu fee for one affordable Unit, calculated at seventy (70) percent of the in-lieu fee for low income households in effect at building permit issuance for the first lot in the Project to be developed and thirty (30) percent of the in lieu fee for very low income households in effect at building permit issuance for the first lot in the Project to be developed (the "Total In-Lieu Fee"). The Lot In-Lieu Fee shall be due and payable to the City prior to building permit issuance for the development of the Lot.
1.2 Disclosure. Concurrently with execution of this Agreement, Owner shall execute a Disclosure Statement in the form of Attachment 2, attached hereto.
1.3 Determination of In-Lieu Fee. No earlier than thirty (30) days prior to building permit issuance for the Lot, Owner shall request City's Housing Manager in writing for a determination of the Lot In-Lieu Fee. If the Total In-Lieu Fee and Lot In-Lieu Fee have not yet been determined, City's Housing Manager or designee shall calculate the Total In-Lieu Fee within ten (10) business days of such written request and shall notify Owner in writing of both the Total In-Lieu Fee and the Lot In-Lieu Fee. If the Total In-Lieu Fee and Lot In-Lieu Fee have been determined, City's Housing Manager shall notify Owner of the Lot In-Lieu Fee and provide Owner with a copy of his or her initial notification.
2. Defaults and Remedies.
2.1 Default. Failure or delay by Owner to perform any term, provision or covenant of this Agreement which is not cured within thirty (30) days after receipt of notice from City constitutes a default under this Agreement.
2.2 Remedies. City, in the event of any breach of any terms, provisions or covenants contained herein, shall have the right to exercise all of its rights and remedies allowed by this Agreement and by law, including the right to suspend issuance of a building permit for the Lot, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach.
3. 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 by 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:

At the address set forth in Recital A.

4. Duration. The agreements set forth herein shall be covenants running with the land and shall inure to the benefit of the City and its successors and assigns until the Lot In-Lieu Fee is paid in full (the "Term"). The parties agree that for the Term, all future deeds or transfers of interest shall show or reference the applicable restrictions of this Agreement. Upon payment of the Lot In-Lieu Fee, City shall provide Owner with a quitclaim, release or other instrument, in recordable form, sufficient to confirm the release of the Lot from the effect of this Agreement.
5. Amendment. This Agreement may be amended only in a writing signed by City and Owner.
6. 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.
7. Successors and Assigns. The covenants contained in this Agreement shall inure to the benefit of the City and its successors and assigns and shall be binding upon Owner and any successor in interest to the Lot.
8. No Third Party Beneficiaries. Notwithstanding anything in this Agreement to the contrary, there are no third party beneficiaries of this Agreement.
9. California Law. This Agreement shall be construed in accordance with and be governed by the laws of the State of California without reference to its choice of laws principles.
10. 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 remain in force to the maximum extent possible.
[Signature page follows]

IN WITNESS WHEREOF, City and Owner have caused this Agreement to be executed on their behalf by their respective officers thereunto duly authorized.
Dated for reference purposes only as of , 20__.

Date:__________________________

ATTEST:
By:
Margaret Wimberly, City Clerk

APPROVED AS TO FORM:
By:
Damien Brower, City Attorney CITY:
THE CITY OF BRENTWOOD
By:

Name: Donna Landeros
City Manager

Date: _________________________ OWNER:
By:

Name:

By:

Name:

SIGNATURES MUST BE NOTARIZED

STATE OF CALIFORNIA )
)
) ss
)
COUNTY OF CONTRA COSTA )

On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) 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 executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature
~~~~~~
STATE OF CALIFORNIA )
)
) ss
)
COUNTY OF CONTRA COSTA )

On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) 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 executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature

STATE OF CALIFORNIA )
)
) ss
)
COUNTY OF CONTRA COSTA )

On , before me, the undersigned, a notary public, personally appeared ,
( ) personally known to me, or
( ) 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 executed the same in authorized capacity(ies), and that by signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

Signature

ATTACHMENT 1
Legal Description of Lot
[to be inserted]

ATTACHMENT 2
DISCLOSURE STATEMENT
THERE IS A REQUIREMENT TO PAY AN IN-LIEU FEE FOR AFFORDABLE HOUSING PRIOR TO THE DEVELOPMENT OF THE PROPERTY YOU ARE BUYING. YOU MAY NOT DEVELOP THE PROPERTY OR OBTAIN A BUILDING PERMIT BEFORE PAYING THE FEE. THE FEE [INSERT AS APPLICABLE, "WILL BE DETERMINED AT THE TIME OF BUILDING PERMIT ISSUANCE FOR THE FIRST LOT IN THE SEVEN-LOT SUBDIVISION IN WHICH YOUR PROPERTY IS LOCATED." OR "IS $ ."]
I HAVE READ THIS DISCLOSURE STATEMENT AND THE LOT IN-LIEU FEE PAYMENT AGREEMENT AND I UNDERSTAND WHAT THEY MEAN.

Purchaser
Purchaser

I HAVE REVIEWED THE ABOVE DISCLOSURE STATEMENT AND THE LOT IN-LIEU FEE PAYMENT AGREEMENT WITH THE PURCHASER.

Developer

SUBMITTED TO CITY'S HOUSING MANAGER ON .

City Housing Manager

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