HomeMy WebLinkAboutStaff Report 3.G 01/06/2020DATE:
TO:
FROM:
SUBJECT
Agenda Item #3.G
January 6, 2020
Honorable Mayor and Members of the City Council through City Manager "-
Jim Carney, Interim Housing Administrator
Adoption (Second Reading) of an Ordinance Amending the Term and Rent
Provisions of the Lease Between the City of Petaluma and Petaluma Ecumenical
Properties Inc., Regarding the property at 951 Petaluma Blvd. South
RECOMMENDATION
It is recommended that the City Council adopt an Ordinance Amending the Term and Rent
Provisions of the Lease dated February 2, 2015 between the City of Petaluma and Petaluma
Ecumenical Properties Inc., regarding property at 951 Petaluma Boulevard South
DISCUSSION
On December 16, 2019 the City Council unanimously approved the first reading of an ordinance
amending the term and rent provisions of the Lease dated February 2, 2015 between the City of
Petaluma and Petaluma Ecumenical Properties Inc., regarding property at 951 Petaluma
Boulevard South.
FINANCIAL IMPACTS
There would not be any financial impact to the City by waiving the lease payments on the
property, because the lease proceeds are currently being used to reimburse PEP predevelopment
costs pursuant to Section 4.10 of the DDLA.
ATTACHMENTS
Ordinance Amending the Term and Rent Provisions of the Lease
ATTACHMENT #1
ORDINANCE AMENDING THE TERM AND RENT PROVISIONS OF THE LEASE
ENTERED FEBRUARY 2, 2015 BETWEEN THE CITY OF PETALUMA AND
PETALUMA ECUMENICAL PROPERTIES, INC., REGARDING REAL PROPERTY
LOCATED AT 951 PETALUMA BOULEVARD SOUTH, PETALUMA, CALIFORNIA,
APN: 019-210-012
WHEREAS, On January 26, 2015, the City Council adopted Ordinance No. 2526,
authorizing the lease of real property located at 951 Petaluma Blvd, So., Petaluma, CA (APN:
019-210-012) ("Property") to Petaluma Ecumenical Properties, Inc. ("PEP") and authorizing and
directing the City Manager to execute the lease on behalf of the City; and
WHEREAS, the City and PEP have executed a lease effective February 2, 2015 for the
Property ("Lease"), in which Section 2 of the Lease set the term of the Lease from March 1,
2015 through February 28, 2020; and
WHEREAS, Section 3 of the Lease sets the monthly rent for the Property at $2,000 per
month; and
WHEREAS, in August, 2018 the City and PEP entered a Disposition, Development and
Loan Agreement ("DDLA") for development of affordable senior housing referred to as the
River City Senior Apartments ("Project') on the Property, setting the terms of the Project
development and financing, with a deadline of December 31, 2020 to commence construction of
the Project; and
WHEREAS, the Project, which will provide 54 affordable senior/veteran units on the
Property has been approved and PEP has applied for building pennits, with a planned
construction commencement by May, 2020; and
WHEREAS, PEP has been informed its application for 4% state tax credits will not be
funded, and as a result PEP plans to apply for Veterans Housing and Homeless Prevention
funding from the California Housing and Community Development Department, which delay in
obtaining needed funding for the Project will delay the estimated commencement of construction
for the Project to September, 2020; and
WHEREAS, PEP has requested a waiver of the monthly rent due under the Lease as a
result of the unforeseen delays in obtaining the funding needed to develop the Project on the
Property; and
WHEREAS, under the Lease, rent payments of $2,000 are due at the beginning of each
month; and
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WHEREAS, the current Lease term would need to be extended through September 30,
2020 to permit PEP to retain its offices on the Property while seeking needed Project funding
until the start of demolition and construction of the Project; and
WHEREAS, City of Petaluma has historically acted in partnership with nonprofit
developers, including PEP, to address the City Council's goal of providing safe, decent,
affordable housing for the community's low-income population; and
WHEREAS, the City of Petaluma will benefit from the development of the Project on
the Property by addressing our Regional Housing Needs Assessment (RHNA) allocation for very
low and extremely low affordable housing units; and
WHEREAS, Section 46 of the Petaluma City Charter requires that certain actions
involving acquisition or disposition of City property, including leases, with a value of $3,000 or
more, must be taken by ordinance; and
WHEREAS, changes to the Lease are categorically exempt from the requirements of the
California Environmental Quality Act (CEQA), Title 14, Chapter 3 of the California Code of
Regulations (CEQA Guidelines), sections 15061, 15301, to the extent they involve operation,
repair, maintenance, permitting, leasing, licensing and minor alteration of an existing facility
involving negligible or no expansion of use beyond that existing at the time of the City's
determination;
NOW, THEREFORE, be it ordained by the Council of the City of Petaluma as follows:
Section 1. Recitals Made Findings. The above recitals are hereby declared to be true and
correct and incorporated into this ordinance as findings of the City Council.
Section 2. Amendment to Lease Term. Section 2 of the Lease between the City and
Petaluma Ecumenical Properties, Inc., effective February 2, 2015, is hereby amended to
extend the expiration of the Lease term from February 28, 2020, until September 30,
2020.
Section 3. Amendment to Rent. Section 3 of the Lease is hereby amended to read as
follows:
Rent. Tenant shall pay rent during the Term of this Agreement in the amount
of $1 per year for the use and occupancy of the premises, due as of January 1,
or such later time as the City may permit, during each year of the Agreement
Term _
Section 4. Implementation. The City Manager and her designees are authorized and
directed to execute all documents and to take all actions reasonably necessary to
implement this Resolution and the transactions described herein.
Section 5. Severability. If any section, sentence, clause or phrase of this ordinance or the
application thereof to any entity, person or circumstance is held for any reason to be
invalid or unconstitutional, such invalidity or unconstitutionality shall not affect other
provisions or applications of this ordinance which can be given effect without the invalid
provision or application, and to this end the provisions of this ordinance are
severable. The City Council hereby declares that it would have adopted this ordinance
and each section, sentence, clause or phrase thereof, irrespective of the fact that any one
or more section, subsections, sentences, clauses or phrases be declared invalid or
unconstitutional.
Section 6. Effective Date. This ordinance shall become effective thirty (30) days after its
adoption by the City Council.
Section 7. Publication. The City Clerk is hereby directed to post and/or publish this
ordinance or a synopsis for the period and in the manner provided by the City Charter and
any other applicable law. The City Clerk is also hereby directed to file a Notice of
Exemption concerning this ordinance with the Office of the Sonoma County Clerk in
accordance with Section 15062 of the CEQA Guidelines.
INTRODUCED, and ordered pubs /posted this day of 20
ADOPTED this day of 20, by the following vote:
Ayes:
Noes: None
Abstain: None
Absent:
Teresa Barrett, Mayor
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ATTEST:
APPROVED AS TO FORM:
Claire Cooper, City Clerk Eric W. Danly, City Attorney