HomeMy WebLinkAboutResolution 92-046 02/18/1992~~ 1 of thf-~ C;ity of I'<~t~~lum~a, C~liforni~a
2 RESOLUTION APPROVING AN OPTION TO TRANSFER THE CORONA/ELY-
3 EDEN SITE FROM THE CITY OF PETALUMA TO EDEN HOUSING, INC. FOR
4 THE PURPOSE OF PROVIDING AFFORDABLE HOUSING
5
6 WHEREAS, the City of Petaluma has a General Plan goal of encouraging the
7 development of .homes affordable for low-income households; and
8
9 WHEREAS, the City accepted the dedication of a five-acre parcel of land from Sonoma
10 Parkway Company and Cherry Lane Associates on 2/18/92 in fulfillment of their
11 inclusionary housing requirement and, per development agreement, to be used for
12 affordable housing; and
13
14 WHEREAS, Eden Housing, Inc. has worked in cooperation with Sonoma Parkway
15 Company and Cherry Lane Associates and the City of Petaluma on a plan to develop and
16 construct, on that 5-acre parcel, rental apartments to serve households earning below 80%
17 of the median and for-sale homes for households earning up to 100% of the Petaluma
18 median income; and
19
20 WHEREAS, EDEN HOUSING, INC. has provided the City of Petaluma with an Option
21 Agreement, which includes very-low, low, and moderate income development
22 contingencies (Exhibit B);
23
24 NOW, THEREFORE, BE IT RESOLVED that the City of Petaluma hereby approves an
25 option to purchase the Corona/Ely-Eden affordable housing site (as described in Exhibit
26 A) by Eden Housing, Inc., and authorizes the Mayor or City Manager to sign the necessary
27 loan documents as reviewed and approved by the City Attorney.
28
29 resoeden/bg6
Under the power and authority conferred upon this Council by the Charter of said City.
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Approved as to
Council of the Cit of Petaluma at a Regular }K~S~ meetin "~-- fO~'
y ( g~ J - __.--~
on the ..-..18th--•-•--.... day of .........F~~I'.U~1:y ............................... 19.2_., by the .-.~ 1
following vote: ....... ~'..- • -- • • - -•---•-•--..-..--
C ty A~terney
AYES: Davis, Cavanagh, Sobel, Nelson, Vice Mayor Woolsey
Mayo ~
CA 10-85 Res. No.....J.~.-`k.lf............ N.C.S.
NOES: None
ABSENT: Re d, r Hilligos
____ /~
ATTEST : .. ..... . ........................... ..... ................... -"'""'
City Clerk
(bunch Filne ....................................
RECORDING REQUESTED BY &
WHEN RECORbED MAIL T0:
Eden Housing, Inc. ~
Attn: Executive .Director
22941 AtYierton Street, Suite D ~
Hayward, CA 94541
.r 3~~0
-~~, ~~ 7~
OPTION AGREEMENT (,~ G l
THIS OPTION AGREEMENT is made as of February ~?~ , 1992, by
and between_Eden Housing, Inc., a California nonprofit public
benefit corporation ("Eden") as the Optionee and the City of
Petaluma, a municipal corporation (the "City") as the Optionor.
A. Eden is a California nonprofit pub is benefit
corporation organized for the purpose of developing affordable
housing for very low, low and moderate income households.
B. The City has :acquired by dedication all that real
property in the City of Petaluma, County of Sonoma, more
particularly described in Exhibit "A" attached (the "Property").
C. Eden desires to obtain, and the City agrees to grant to
Eden, an option to acquire the Property~on the terms and
conditions set forth. below.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged,~the parties agree as
follows: '
1. GRANT OF OPTION.. The City hereby grants to Eden the
exclusive rght.and~option (the "Option") to acquire the
Property subject to the terms and conditions set forth herein.
2. CONSIDERATION FOR GRANT OF OPTION. The Option is
granted in consideration of the agreement: .by Eden that Eden or an
entity controlled by Eden and approved by the City shall
construct on the Eroperty~approximately ninety (90) units of
affordable housing, of which approximately 74 units will be
rented to families and approximately 16 townhouse units will be'
sold to owner-occupants. ~.
3. hOT SPLIT. The parties contemplate that the Property
will be divided into two legal parcels, one for the development
of rental housing units and the other for the development of
owner-occupied townhouses. Upon the completion of the lot split,
this Option Agreement shall be applicable to both parcels. The
Option :may be exercised for each parcel separately or together.
4. TERM OF OPTION AND MANNER OF EXERCISE. Eden may
exercise the~Option at any time between the date of this Option
Agreement and December 31, 1992. To exercise the Option, Eden
shall deliver to-the City a five-day written notice that it
intends to exercise the Option. Upon the City's receipt of
20g:EdenPet.OPT 1 (2/25/92)
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Eden's notice to exercise the Option, the City shall deliver into
escrow an executed and notarized Grant Deed in the form attached
hereto as Exhibit "'B".
5. TERMS OF TRANSFER. Upon exercise of the Option by
5.1 Condition of Closing and Purchase Price.. As a
condition of the transfer of the Property from the City to Eden,
Eden shall execute, deliver and, if applicable record, all of the
following documents:
Eden:
a. An Option Agreement in favor of the City. The
Option Agreement shall be in the form attached hereto as
Exhibit "C".
b. A Promissory Note in the amount of One Million
and No/100th Dollars ($1,000,000.00) for the purchase price of
the parcel upon which the rental units will be developed. The
indebtedness evidenced by the Promissory Note shall be nonrecourse,
and shall bear interest on the outstanding principal balance at a
rate not less than the applicable federal rate. Principal and
interest shall be payable annually only from, and to the extent
that the development generates, surplus cash. All payments not
paid from surplus cash shall be deferred until the maturity date
which shall be forty (40) years from-the .close of escrow..
c. A Deed of Trust which shall secure the above
Note and include a nonrecourse provision,, and shall be subordinated
to the deeds of trust securing any pr.edeve'lopment, constuction~
and/or permanent loans for the Property,, if, and only if, the
following conditions are satisfied in their entirety: (i) the
proceeds of the loans shall be used only: for costs and expenses
related to the Property; (ii) the loans bear interest at a rate
not greater than the prevailing rate for similar loans for
similar types of developments; and (iii) all interest and
principal are payable in full at the maturity of the loans.
d. A'Promissory Note in the amount of Two Hundred
Thousand and No/100th Dollars ($200,OOO.OD) for the purchase
price of the parcel upon which the townhouse units will be
developed. ^The indebtedness. evidenced by the Promissory Note
shall be nonrecourse, and shall bear no interest. Partial
payments of .principal shall be due and payable when each .
townhouse unit is sold. The amount of principal. to be repaid
upon the sale of each townhouse unit shall be computed by
dividing the total loan by the number of townhouse units built.
In order to ,keep the purchase price of the townhouse units
affordable,-the City may take a "silent11 second note and a
subordinate deed. of trust from the purchaser of each townhouse
unit in lieu of. being repaid at the time of initial sale of each
unit.
e. A Deed of Trust which shall secure the above
Note and include a nonrecourse provision, and shall be
20g:EdenPet.OPT
(2/26/92)
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subordinated to the deeds of trust securing any predevelopment
and constucton loans for the Property, if,~and only if, the
following conditions are satisfied in their entirety: (i,) the
proceeds of the owns shall be used only for costs and expenses
related to the Property,; (ii) the loans bear interest at a rate
not greater than the prevailing rate for similar loans for
similar types of developments; and (iii) all interest and
principal are payable in full at the maturity of the loans.
Partial. reconveyances of this Deed of Trust shall be recorded
upon the sale of each townhouse unit to the owner-occupant.
5.2 Title. Eden shall take title to the Property
subject to all liens and encumbrances then encumbering the
Property. During the term of the Option, the City shall not
record or permit any lien. or encumbrances to be recorded on the
Property without the prior written approval of Eden.
,5.3 Escrow. The sale. of the Property shall be
consummated through an escrow established with a title company
chosen by Eden. The closing date for the escrow shall be no
later than thirty (30) days after Eden delivers its notice to
exercise the Option.
5.4 Closing Costs. Eden shall pay all closing costs
and fees incurred in connection with the sale and transfer of the
Property.
6. NOTICES. All notices required by this Option. Agreement
shall be either hand-delivered or sent by United States mail
addressed to the other. party as follows:
If to Eden:
Eden. Housing, Inc.
Attn: Executive Director
22941 Atherton St., Ste. D
Hayward, CA 94.541
If to the City:
City of Petaluma
Attn: Community Development
& Planning Director
11 English Street
Post Office Box 61
Petaluma, CA 94953
Notices shall be deemed delivered when either hand-delivered
or three (3) days after the postmark.
7. ASSIGNMENT. Eden shall not assign its rights under
this Option Agreement without the prior written approval. of the
City. Notwithstanding the preceding sentence, Eden may assign
its rights under th=is Option Agreement to (i) a limited
partnership iri which Eden or a nonprofit corporation wholly-owned
or controlled by Eden•is-the general partner, and/or (ii) a
nonprofit corporation wholly-owned or controlled by Eden.
8: ATTORNEYS' FEES. If it becomes necessary for either
party to take legal action to enforce any of the terms of this
Option Agreement, the prevailing party shall be ent-itled to
reasonable attorneys' fees and costs.
20g:EdenPet.OPT
(2/26/92)
qa- ~~ ~~s
This Agreement is executed as of the date first wri
above. ~
I
Approve as to form:
ney
I+®91 Yr®Q'YP4Y I~ Y+®V tlO Hit®~`~.Di900Y~~
Eden using, Inc., a Ca
nonprit„publig ~~nefit
By:
Cathern.~~,! °Mersche
Executive Director
City of Petaluma, a
corporation
By:
City ianager
,I State of ~ry ~ ~ f ~(~~~~'/` r On this the ~~'~day of ~~ ~ u ~~ f~-19~, before me,
County of ~' ~-,.-,.`~;• i ~
the undersigned Notary Public, personally appeared
•,, '` OFFICIAL NOTARY~SEAL
' 6EVERLY J;STOVER
eF ~ Notary Public- California
ALAMEDA,COUNTY
" ~ My'Comm:'Ezpii;es SEP,.03,1994
personally known to me
^ proved to me on the basis;of satisfactory evidence
to be the person(,s~ who executed the within instrument as
c XC GL! TP (/c D i P = erc is or on behalf of the corporation therein
named, and acknowledged to me that the corporation executed it.
WITNESS my hand and official seal.
Notary's Signature
N0.202
ATTENTION NOTARY: Although4the information requested below is OPTIONAL, it could prevent fraudulenfattachment of this certificate to another document.
Title or Type of Document Gf'% %GN f''~~~'r'~~T
THIS CERTIFICATE ~ ~lr ~ ~ Z
MUST BE ATTACHED Number of Pages Date ofiDocument d' " \
TO THE DOCUMENT ~ ~l~f.Z,,_.« ,•~-,*_;
DESCRIBED AT RIGHT: Signer(s) Other Than Named Above (' ~~~J ~-~~.~G~~~itc.>~a~-~ 1-
J _____
icipal
is
ration
-- -- ~ ~ _ ~ I ^~ p NATIONAL'NOTARY,ASSOCIATION •8236 Remmet Ave. •P.O. Box 71&i • Canoga Park. CA 91304`7184.
Exhibit "A"
.Legal Description
The land herein referred to is situated in the State of California,
County of Sonoma, City of Petaluma and is described as follows:
Parcel ,"D", as shown and designated upon the map entitled "Final
Map of Sonoma Glen Unit I-A", filed in the Office of the County
Recorder of Sonoma County on. February..15, 1991 in Book 469 of Maps
at pages 37 through .45, and as corrected~by Certificates recorded
May 9, 1991, July 5~, 1991 and January , 15, 1.992 under Recorder 's
Series No. 1991 004264.3, 1.991 00645'89 and 19.92 0004383,
respectively, Sonoma County Records.
~a - ~c~ ~!
RECORDING _REQUESTED BY
& WHEN RECORbED MAIL TO:
Eden Housing, Inc.
22941 Atherton Street, Suite D
Hayward, California 9455.0
Attn: Executive Director
MAIL TAX STATEMENTS TO:
(See above)
EXHIBIT B
CORPORATION GRANT DEED
The undersigned grantor(s) declare(s):
~a-~~
Documentary transfer tax is $ NONE (no consideration paidL
( ) computed on full value of property conveyed, or
( ) computed on full value less value of liens and
encumbrances remaining at time of sale.
( ) Unincorporated area, ( X ) City of Petaluma,, and
FOR A VALUABLE CONS'IDE'RATION, receipt of which is hereby
acknowledged, `
the City of Petaluma, a municipal corporation
hereby GRANTS to
Eden Housing, Inc., a California nonprofit public
benefit corporation
the property in the City of Petaluma, County of Sonoma, State of
California, described in Exhibit "A," incorporated by this
reference herein.
Dated: March ~_ 1992
City of Petal
corporation
By
municipal
CI71' ;~~~.~~!; DER
72a:GrantDed.EHI(2)
~ a: - '~ (~ nlCy-S
RECORDING REQUESTED BY &
WHEN RECORDED MAIL TO:
EXHIBIT C
City of Petaluma,
Attn: Warren Salmons
Community Development and
Planning Department
Post Office Box 61
Petaluma, CA 94953
OPTION AGREEMENT
THIS OPTION AGREEMENT is made as of F~~3,ttlal2. U ~6~-fi. , 1992,
by and .between Eden Housing, Inc., a California n nproft public
benefit corporation ("Eden") as the Optionor and the City of
Petaluma, a municipal corporation (the "City") as the Opt"ionee.
A. Eden is a California nonprofit public benefit
corporation organized for the purpose of development of housing
affordable for very low, low and moderate income households.
B. The City has acquired by dedication and is now conveying
to Eden, all that real"prop`erty in the City of Petaluma, County
of Sonoma, more particularly described in Exhibit "A" attached
hereto (the "Property").
C. The City is conveying the land to Eden based on the
understanding that, within four years from the date of transfer
of title to the Property to Eden, Eden will have obtained local
permits., approvals and sufficient financing such that Eden can
begin construction of affordable housing on the Property.
D. If Eden fails to meet the conditions specified in this
agreement, the City requires the right, at its discretion, to
acquire title to the: Property and bring in another developer to
develop the affordable housing on the Property.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. DEFINITIONS. The following terms shall have the
following meanings whenever used in this Option Agreement:
1,l Begin Construction. Construction shall be deemed
to have begun upon the commencement of grading or excavation
necessary for the construction of the building foundation(s).
1.2 Unimproved. The Property shall be deemed
unimproved. until the first deed of trust securing a construction
loan for the first phase of the approximately ninety (90)
residential units to be built on the Property has been recorded
and Eden begins construction.
2. GRANT OF OPTION. Eden hereby grants to the City the
exclusive right and option (the "Option") to purchase the
Property on the terms and subject to the conditions set forth
herein.
20d:CoronaY.OPT 1 (2/6/92)
3. .CONSIDERATION FOR .OPTION. The Option is granted in
consideration. of the City conveying the Property to Eden.
4.. ~ TERM .AND CONDITIONS OF EXERCISE. The City may exercise
the Option at any time between March 1, 1996 and March `1, 1997,
if and only if Eden `ha's not by March 1, 1996, obtained `local
permits, approvals and sufficient financing such that Eden can
begin construction of the first ,phase of the residential housing
within a reasonable period .after March 1, 19.96. This Option
shall terminate on the date Eden begins construction on the
Property, and upon request by Eden, the City shall execute and
record such documents~to evidence the termination of this Option.
5. MANNER OF .EXERCISE. To exercise the Option, the City
-shall deliver to Eden a written notice that the City has decided
to exerci a its Option... The notice must be .delivered before the
option period expires and before Eden begins construction on-the
Property.
6. TERMS OF SALE. •Upon exercise of the Option by the City:
6.1 Purchase Pr=ice. The purchase price to be ,paid by
the City for the Property shall be One Dollar ($1.00). In
addition, any and all obligations of 'Eden owing to, in favor or
for the benefit of the City shall~be forgiven, cancelled and/or
terminated.
6.2 Title.. The the City shall take title to the Property
subject to all liens and encumbrances then.encumber,ing the
Property. During the term of the Option:, Eden shall not. record
any lien or emcumbrances without the prior written approval of
the City.
6.3 Escrow. The sale of the~Property shall be
consummated through an escrow established with a title. .company
selected by the City. -The closing-.date for the escrow will be no
later than 60 days after the City delivers its notice of exercise
of the Option.
6.4 Cios nct Co-sts.. The Cityshall pay all closing
costs and fees incurred in connection with the sale and transfer
of the Property.
7. ~ RIGHT'OF~FIRST REFUSAL. If Eden decdes'to~sell the
Property~whle it is unimproved as defined above, Eden shal'1 give
notice to the City and the City shall have the first right to
purchase Property on the same terms of Sale as specified in
paragraph 6.• The City shall have ninety (90) days from the date
of notification by Eden to purchase Property. If th'e.Cty does
not exercise thi right within the ninety (90) day period, Eden
shall be entitled to sell the Property at the fair market value.
8. NOTICES. All notices required
shall be either hand-delivered or sent by
addressed to the other party as follows.:
20d:COronaY.OPT 2
qa - ~~ NC s
by this Option Agreement
United States mail,
(2/6/92)
a
,,
If to Eden: Eden Housing, Inc.
Attn: Executive Director
22941 Atherton Street, Suite D
Hayward, CA 94541
If To the City: City of Petaluma
Attn: Community Development and
Planning Director
11 English Street
Post Office Box 61
Petaluma, CA 94953
Notices shall be deemed delivered when either .hand delivered
or three (3) days after the .postmark.
9. ASSIGNMENT. The City shall not assign its rights under
this Option Agreement.
10. SUBORDINATION:" Upon the written request by Eden, the
City hereby agrees to'execu"te;.~acknowledge and record such
documents as may reasonablyu~be required. to subordinate this
Option Agreement to the hens:.of the deed's of trust to be given
by Eden to the lendrers.to secure any predeve opment or
constucton loans for `the"Prgperty, if, and only if, the.
following cond~itioris are satisfied in their entirety.: (i) the.
proceeds of -the loans''shall be used only for costs and expenses
related to the Property; (ii) the loans bear interest at a rate
not greater than the prevailing rate for similar loans for
similar types of developments; 'and (iii) all interest and
principal are payable in°°~full at the maturity of the loans.
11. ATTORNEYS° FEES. If it becomes necessary for either
party to take legal action to enforce any of the terms of this
Option Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and costs.
In witness whereof, the parties have executed this Agreement
as of the date first written above. ~~
Eden Housing, Inc., a Cali r is
nonpro it ublic ben fit
corpo ati
By:
Catherine Mersc
Executive Director
City of Petaluma, a municipal
corpo
By:
3
`~ °~ - `M'CP /1~-G.S
20d:CoronaY.OPT