HomeMy WebLinkAboutResolution 2015-091 N.C.S. 06/15/2015Resolution No. 2015 -091 N.C.S.
of the City of Petaluma, California
APPROVING A LOAN AGREEMENT WITH AN AFFILIATE OF
BURBANK HOUSING CORPORATION IN CONNECTION WITH
THE ACQUISITION AND REHABILITATION OF MADRONE VILLAGE,
AND AUTHORIZING THE CITY MANAGER TO EXECUTE
ALL DOCUMENTS RELATED TO THE REHABILITATION
AND FINANCING OF THE PROJECT
WHEREAS, the City previously provided financing to Burbank Housing Development
Corporation, a California nonprofit public benefit corporation ( "Burbank ") to assist in the
d €:. elopment of Madrone Village, an affordable housing project consisting of 23 units of
multifamily housing (the "Project ") located at 712 Sycamore Lane; and
WHEREAS, Burbank or an affiliate of Burbank will serve as the general partner in
Madrone Village 2,. L.P., a California limited partnership ( "Developer ") that intends to acquire,
refinance and rehabilitate the Project; and
WHEREAS, in connection with the refinancing of the Project, the term of affordability
will be extended for a term of 55 years commencing upon completion of the rehabilitation; and
WHEREAS, to ensure the financial feasibility of the Project, Burbank has requested that
the City (i) amend the existing note payable to the City to provide for an extension of the term, a
reduction of the interest rate, and an assignment to the Developer, and (ii) provide an additional
loan in the approximate amount of $800,000 (the "New City Loan "); and
WHEREAS, the New City Loan will be funded with a portion of the sale proceeds of
the Park Lane Apartments that will be assigned to the City by an affiliate of Burbank; and
WHEREAS, proposed forms of the following documents (collectively, the "Loan
Documents ") have been provided to the City Council: a loan agreement; an amended version of
the existing City note; an amendment to the existing City deed of trust; a promissory note that
will evidence the Developer's obligation to repay the New City Loan; a Deed of Trust securing
repayment of the New City Loan; and an Affordable Housing Regulatory Agreement and
Declaration of Restrictive Covenants ( "Regulatory Agreement ") that will restrict the Project for
occupancy at affordable rents; and
WHEREAS, in connection with the rehabilitation of the Project, conventional lenders
will provide construction and permanent financing, and may require the subordination of certain
of the Loan Documents.
hereby:
NOW THEREFORE BE IT RESOLVED that the City Council of the City of Petaluma
1. Finds that the modification of the existing City loan and the provision of the New
City Loan are necessary to make the Project financially feasible and affordable to
lower income households.
Resolution No. 2015 -091 N.C.S. Page I
2. Approves the modification of the existing City Loan and the provision of the New
City Loan,
3. Approves the Loan Documents, and authorizes the City Manager or his designee to
execute and deliver each Loan Document to which the City is a party substantially in
the form provided for City Council review, with such modifications as may be
approved by the City Manager in consultation with the City Attorney, provided that
such modifications are consistent with the intent of this Resolution and do not
substantially increase the obligations or impair the rights of the City.
4. Agrees to subordinate the Regulatory Agreement and the deeds of trust executed or to
be executed in connection with the financing of the Project to the deeds of trust and
the regulatory agreements to be executed by Developer for the benefit of the Project
construction and permanent lenders, provided that the City is provided reasonable
protections including reasonable notice and cure rights in the event of a default under
the senior documents.
5. Authorizes and directs the City Manager and his designees to execute all documents
and to take all actions reasonably necessary to implement this Resolution and the
transactions described herein.
Under the power and authority conferred upon this Council by the Charter of said City.
Resolution No. 2015 -091 N.C.S.
Page 2