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HomeMy WebLinkAboutResolution 2019-018 N.C.S. 02/04/2019Resolution No. 2019-018 N.C.S. of the City of Petaluma, California RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA AUTHORIZING AMENDMENTS TO EXISTING AFFORDABLE HOUSING LOAN DOCUMENTS IN CONNECTION WITH THE REHABILITATION AND RESYNDICATION OF THE EXISTING OLD ELM VILLAGE AFFORDABLE HOUSING PROJECT, APPROVING A NEW LOAN TO A NEW LIMITED PARTNERSHIP THAT WILL BE AFFILIATED WITH AND CONTROLLED BY BURBANK HOUSING DEVELOPMENT CORPORATION, AND AUTHORIZING THE CITY MANAGER TO SIGN DOCUMENTS RELATED TO THE REHABILITATION AND FINANCING OF THE PROJECT WHEREAS, in 2001, the City provided a loan to Old Elm Partners, L.P., a California limited partnership affiliated with Burbank Housing Development Corporation, a California nonprofit public benefit corporation (`Burbank") to assist in the development of Old Elm Village (the "Project"), an affordable housing project consisting of 87 units of multifamily housing located at 2 Sandy Lane; and WHEREAS, Burbank will serve as the sole member/manager of the general partner of a limited partnership that intends to acquire, refinance and rehabilitate the Project; and WHEREAS, in connection with the refinancing of the Project, the term of affordability restrictions will be extended for a term of 55 years commencing upon completion of the rehabilitation to 2075; and WHEREAS, to ensure the financial feasibility of the Project, Burbank has requested that the City (i) amend the existing promissory notes payable to the City to provide for an extension of the maturity date and modification of the terms, a reduction of the interest rate, and assignment to the partnership, and (ii) provide an additional loan in the approximate amount of $1,120,000 (the "New City Loan"); and WHEREAS, the New City Loan will be funded with a portion of the sale proceeds and residual receipts received by the City from Park Lane Apartments, an affordable housing community in Petaluma, that was resyndicated in 2015; and WHEREAS, the rehabilitation of the Project will include but not be limited to replacement of boiler system and heating systems, replacement of tank water heaters, adding water conservation measures in bathrooms, full exterior re -paint, new appliances, replacement of forced air heating systems, and rehabbing the community room of the Project; and WHEREAS, in connection with the refinancing and rehabilitation of the Project, the City Attorney's office will review and prepare amendments to the existing City loan documents and documents for the New City Loan, including a loan agreement, promissory note, deed of trust, and affordable housing regulatory agreement; and WHEREAS, in connection with the rehabilitation, conventional lenders will provide construction and permanent financing, and may require the subordination of certain of the City loan documents. Resolution No. 2019-018 N.C.S. Page 1 hereby: REFERENCE: AYES: NOES: ABSENT: ABSTAIN: ATTEST: NOW THEREFORE BE IT RESOLVED that the City Council of the City of Petaluma 1. Finds that the modification of the existing City loan documents and the provision of the New City Loan as described in this Resolution and the accompanying Staff Report are necessary to accomplish the rehabilitation of the Project and make the Project financially feasible and affordable to lower income households. 2. Approves the modification of the existing City Loans and the provision of the New City Loan in accordance with the terms described in this Resolution and the accompanying Staff Report. 3. Authorizes the City Manager or his designee to execute and deliver amendments to the existing City loan documents, and documents related to the New City Loan consistent with the terms outlined in this Resolution and the accompanying Staff Report, in such form as approved by the City Manager in consultation with the City Attorney. 4. Agrees to subordinate the HOME Regulatory Agreement and City 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. I hereby certify the foregoing Resolution was introduced and adopted by the Council of the City of Petaluma at a Regular meeting on the 4'h day of February 2019, by the following vote: Mayor Barrett; Fischer; Healy; Kearney; King; Vice Mayor McDonnell; Miller None None None Deputy City Clerk to City Mayor Resolution No. 2019-018 N.C.S. Page 2