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HomeMy WebLinkAboutStaff Report 3.C 10/02/2017DATE TO: FROM: Agenda Item #3.0 October 2, 2017 Honorable Mayor and Members of the City Council through City Manager Sue Castellucci, Housing Administrator SUBJECT: Adoption (Second Reading) of an Ordinance Authorizing the City Manager to Execute all Documents Relating to the Assignment and Exercise of Repurchase Option for 1008 Madison Street (A.P.N. 007 - 650 -002) and Transfer of the Land to the Housing Land Trust of Sonoma County and Sale of the Improvements to a Qualified Buyer Subject to Affordability Restrictions and an Affordability Agreement with the Housing Land Trust to Maintain the Property in Petaluma's First Time Homebuyer Program. RECOMMENDATION It is recommended that the City Council adopt the attached Ordinance Authorizing the City Manager To Execute all Documents Relating to the Assignment and Exercise of Repurchase Option for 1008 Madison Street (A.P.N. 007 - 650 -002) and Transfer and Sale of the Property to a Qualified Buyer Subject to Affordability Restrictions and an Affordability Agreement with the Housing Land Trust of Sonoma County to Maintain the Property in Petaluma's First Time Homebuyer Program. BACKGROUND On September 18, 2017, the City Council unanimously approved the first reading with no changes of an ordinance authorizing the City Manager to execute all documents to accomplish the repurchase of 1008 Madison Street to maintain affordability of the property as part of the City's First Time Homebuyer program. The recommended action provides for a second reading and adoption of the ordinance. FINANCIAL IMPACTS With the ground lease in place, there should be no future funding needed for the resale of this property. The funding for administration of the First Time Homebuyer program in partnership with the Housing Land Trust will be ongoing as funds allow. ATTACHMENTS 1. Ordinance. ORDINANCE NO. N.C.S. Introduced by ATTACHMENT #1 Seconded by AN ORDINANCE OF THE COUNCIL OF THE CITY OF PETALUMA AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS RELATING TO THE ASSIGNMENT AND EXERCISE OF REPURCHASE OPTION FOR 1008 MADISON STREET (A.P.N. 007 -650- 002), TRANSFER OF THE LAND TO THE HOUSING LAND TRUST OF SONOMA COUNTY AND SALE OF THE IMPROVEMENTS TO A QUALIFIED BUYER SUBJECT TO AFFORDABILITY RESTRICTIONS AND AN AFFORDABILITY AGREEMENT WITH THE HOUSING LAND TRUST TO MAINTAIN THE PROPERTY IN PETALUMA'S FIRST TIME HOMEBUYER PROGRAM WHEREAS, since 1985 the City Council has developed housing goals to address the broad range of housing needs within the community, including the City's initial General Plan Housing Element; and WHEREAS, the City Council adopted the 2015 -2023 General Plan ,Housing Element on December 1, 2014 pursuant to Resolution No. 2014 -190, including several programs to promote the development of affordable housing; and WHEREAS, the City's First Time Homebuyer program was established as a silent second mortgage program under which the City would subsidize approximately 30 -40% of the sale of the unit without re -sale restrictions on the property; and WHEREAS, since 1988, the City, in partnership with nonprofit developers, has helped build 169 units of for -sale housing for first time homebuyers, and has provided homeownership to 287 families, including initial sales and re- sales; and 2 WHEREAS, in 2008, with the downturn of the real estate market, the City lost over 20 First Time Homebuyer properties to foreclosure, and currently lacks funds to maintain the First Time Homebuyer Program in its current form; and WHEREAS, Policy 4.3 of the Housing Element in the City's General Plan calls for helping facilitate the entry of low and moderate income households into the housing market by partnering with the Housing Land Trust; and WHEREAS, the City's previous First Time Home Buyer subdivision; Frates Square, was built in partnership with Housing Land Trust of Sonoma County, which uses ground leases to keep homes affordable in perpetuity, subject to resale restrictions on the price of the home through donation of land to the Housing Land Trust as an inclusionary requirement of the developer; and WHEREAS, where appropriate market conditions exist, through coordination with Burbank Housing, which holds repurchase options for the City's First Time Homebuyer properties, and the Housing Land Trust, it is possible to maintain properties affordable within the First Time Homebuyers program through assignment of repurchase and mortgagor rights to the City, repurchase of the property by the City through application of the mortgage value, grant of the land to the Housing Land Trust and sale of the home to a qualified buyer subject to affordability restrictions and an affordability agreement between the City and the Housing Land Trust; and WHEREAS, Section 46 of the Petaluma City Charter provides that certain City Council actions must be taken by ordinance, including certain actions for acquisition, sale or lease of real property; NOW, THEREFORE, be it ordained by the council of the City of Petaluma as follows: SECTION 1: The City Manager is hereby authorized and directed to execute all documents relating to the assignment and exercise of repurchase option for 1008 Madison Street, (A.P.N. 007 - 650 -002) ( "Property ") and transfer of the land to the Housing Land Trust of Sonoma County and sale of the improvements to a qualified buyer subject to affordability restrictions and an affordability agreement with the Housing Land Trust to maintain the Property in Petaluma's First Time Homebuyer Program. SECTION 2: The City Manager is hereby authorized and directed to execute on behalf of the City documents substantially in accordance with those attached as Exhibit A 3 to this ordinance, and /or revised versions of such documents and /or additional documents as may be recommended and approved by the City Attorney to accomplish the repurchase of 1008 Madison Street to maintain affordability of the property as part of the City's First Time Homebuyer program consistent with the purposes of the City's General Plan Housing Element, the First Time Homebuyer Program and this ordinance. SECTION 3: If any part of this Ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of competent jurisdiction, such decision will not affect the validity of the remaining parts of this Ordinance. The City Council of the City of Petaluma hereby declares that it would have passed and adopted this Ordinance and each of its provisions irrespective of any part being held invalid. SECTION 4: The City Council finds that this Ordinance is not subject to the California Environmental Quality Act ( "CEQA ") pursuant to Section 15060(c)(2) of the CEQA Guidelines because the activity has no potential for resulting in a direct or reasonably foreseeable indirect physical change in the environment, and pursuant to Section 15060(c)(3) of the CEQA Guidelines because the activity is not a project as defined in Section 15378) of the CEQA Guidelines. SECTION 5: This Ordinance will become effective thirty days after the date of its adoption by the Petaluma City Council. SECTION 6: The City Clerk is hereby directed to post and /or publish this Ordinance or a synopsis for the period and in the manner required by the City Charter. INTRODUCED and ordered posted /published this day of )2017. ADOPTED this day of , 2017 by the following vote: AYES: NOES: ABSENT:. F. ATTEST: David Glass, Mayor APPROVED AS TO FORM: Claire Cooper, City Clerk Eric Danly, City Attorney