HomeMy WebLinkAboutResolution 91-322 11/04/1991~•
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1 of the City of Petaluma, California
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4 RESOLUTION APPROVING A TRUST AGREEMENT WITH BURBANK
5 HOUSING DEVELOPMENT CORPORATION FOR HILLVIEW OAKS
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7 WHEREAS, the City Council accepted a dedication of land from Quaker Hill Blackburn
8 and B-T Land Development, Inc. for the purpose of developing affordable housing; and
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10 WHEREAS, Burbank Housing Development Corporation has received all planning
11 approvals and has arranged for construction and permanent financing for the project on
12 that site; and
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14 WHEREAS, the proposed 30 homes will be for sale at prices affordable to moderate
15 income families; and
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17 WHEREAS, Burbank has requested that upon project completion the City's interests be
18 released, converting to a secondary lien in favor of Burbank, as Trustee for the City, to be
19 secured against each housing unit; and
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21 WHEREAS, a Trust Agreement between Burbank, as Trustee, and the City of Petaluma
22 will establish mechanisms to ensure the continued affordability of the units, establish a
23 trust for the subsidies recaptured and provide for long-term affordability;
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25 NOW, THEREFORE, BE IT RESOLVED that the City of Petaluma approves the Trust
26 Agreement (Exhibit A), the terms of which will be carried out upon construction of the
27 units, and
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BE IT FURTHER RESOLVED that, upon review and approval by City Attorney, the City
Manager is hereby authorized to execute on behalf of the City Council the following
documents:
1. Trust Agreement
2. City Option
3. Release of City Option (upon completion. of project in conformance with
Trust Agreement and City Option)
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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 City of Petaluma at a (Regular) b3l~'IQI~X¢8fp~~ffi1) meeting form
on the ..-4x11 ............... day of ................1~IL1ueiTlbec............-......., 19.91_., by the ~ __.
following vote: .......•---- ••--------•-------------•-----
City Attorney
AYES: Read, Davis, Cavanagh, Nelson, Vice Mayor Woolsey, NIayor Hilligoss
NOES: None ~
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ABSENT: Sobel '
ATTEST: ---- -. -....... - ...... .... ...................... .:... ....... .:..:................ -...- --.... .....-• ----•- --`-=.-" ::..---------..
City Clerk Mayor
Gbuncil File ....................................
CA 10-85 ~ Res. No......9.1.-.3.2.2....... N.C.S.
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TROST AGREEMEPIT
This Trust A reement is made as of ~~~' Uc rY'. ~`~~~.J ? 7 1991
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between the Burbank Housing Development Corporation-, a nonprofit
corporation ("Burbank"), and the City of Petaluma, a municipal
corporation ("City"):
RECITALS
A. Burbank is -developing within the City a 30-unit
residential development to be known as Hillview Oaks ("Hillview
Oaks").
B. The homes in Hillview Oaks will be sold to eligible
moderate-income purchasers on a partially subsidized basis. This
is possible because. the City has provided land and cash subsidies,
and Burbank is providing in-.kind subsidies,, to Hillview Oaks.
C. In return for the subsidies provided to Hillview Oaks by
the City, the City has received, and presently holds, an option to
purchase the Hillview Oaks site (the "City Option").
D. Burbank and the City both wish, to the maximum extent
feasible, to recapture the subsidies provided to Hillview Oaks and
to ensure the continued affordability of the units in Hillview
Oaks.
E. The purposes of this Trust Agreement are.: (a) to
establish the mechanisms that will be used to recapture the
subsidies provided to Hillview Oaks and ensure the continued
affordability of the units in Hillview Oaks; (b) to establish a
HILLVIEW OAKS D-1 1
EXT~I~:T A
trust for the subsidies recaptured and rights held with respect to
Hillview Oaks, and (c) to provide for release of the City Option.
THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. SALE TO MODERATE-INCOME HOUSEHOLDS. Burbank shall sell
all. of the homes in Hillview Oaks to moderate-income households as
hereafter defined.
2. EXHIBIT A NOTE. Burbank shall require each purchaser of
a home in Hillview Oaks to execute and deliver a promissory note
in the form. attached hereto as Exhibit A (".Exhibit A Note"). The
principal amount of each Exhibit A Note will be the difference
between (a) the fair market value of the home at the time of the
original sale, and (b} the sum of the purchase money loan and the
purchaser's down payment applied to the home. Burbank shall ensure
that each Exhibit A Note is secured by a deed of trust to the home
being purchased.
3. EXHIBIT B OPTION. Burbank also shall require each
purchaser of a home in Hillview Oaks to execute and deliver an
option agreement and grant of right of first refusal in the form
attached hereto as Exhibit B ("Exhibit B Option"). Burbank shall
ensure that a memorandum of each Exhibit B Option is recorded.
4. PROCEEDS FROM REPAYMENT OF EXHIBIT A PTOTE. Burbank shall
use the proceeds from any repayment of any Exhibit A Note ("Exhibit
A Note Proceeds"') solely for:
4.1 The purpose of making additional loans to enable
qualified moderate-income households to purchase homes, or
4.2 Any other purpose approved in writing by the City.
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In .making any loan to enable a qualified moderate-income household
to purchase a home, Burbank may charge a loan origination fee of
not more than three percent (3%) of the. loan value to defray its
actual and necessary administrative costs in making the loan.
5. EXERCISE OF EXHIBIT B OPTION.
5.1 Burbank shall exercise any Exhibit B Option solely
for the purpose of facilitating the sale of the home in question
to a qualified moderate-income household.
5.2 In the event Burbank does not intend to exercise a
particular Exhibit B Option when it has the opportunity to do so,
Burbank shall notify the City of its intent not to exercise (a) in
the case of an opportunity to exercise the option to purchase set
forth in Article One of the Exhibit B Option, no later than 30 days
before the opportunity to exercise expires, and (b) in the case of
an opportunity to exercise the right of first refusal set forth in
Article Two of the Exhibit B Option, not later than 15 days before
the opportunity to exercise expires. Thereafter, upon written
request from the City, Burbank shall immediately assign all of its
rights under the Exhibit B Option in question to the City.
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5.3 If an Exhibit B Option is not exercised by any
party, and the unit in question is sold on the. open market,. the
Exhibit A Note Proceeds arising out of the sale shall be paid over
to the City, provided that the City shall have the right to waive
such payment and allow Burbank to use the Exhibit A Note Proceeds
for any eligible purpose.
5.4 Under no circumstances shall Burbank be liable to
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the City for any failure.to exercise any Exhibit B Option. The
.parties acknowledge and. agree that exercise of any given Exhibit
B Option may not always be possible.
6. OTHER NOTIFICATION REQIIIREFgENTB. Burbank shall notify
the City in writing, within ten (10) days after the event in
question:
6.1 Each time it receives any Exhibit A Note Proceeds,
6.2 Each time it uses any .Exhibit A Note Proceeds for
any purpose, and
6.3 Each time it exercises any Exhibit B Option.
7. RELEASE OF CITY OPTION.
7.1 Upon request by Burbank, the City shall release the
Hillview Oaks common area. from the encumbrance of the City Option.
7.2 Upon request by Burbank, the City shall release any
individual residential lot within Hillview Oaks from the
encumbrance of the City Option, provided that Burbank is complying
with sections 1, 2, and 3 of this Trust Agreement.
7..3 As used in this section 7, the term "release" means
to execute all legal .documents required by Burbank's title company
to verify that the encumbrance ~of the Ci y Option is no longer
applicable to the portion of Hillview Oaks in question.
$. DEFINITION OF '°MODERATE-INCOME." For all purposes related
to this Trust Agreement, a household shall be deemed "moderate-
income" if its income is equal to or less. than 100 percent of the
median income of households of the same size residing in the Santa
Rosa-Petaluma PMSA according to the income schedule most recently
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published by the United States Department of Housing and Urban
Development.
9. ASSIGATMENT LIMITED. Burbank may not assign any of its
rights under this agreement or under any Exhibit A Note or Exhibit
B Option without the express written consent of the City.
10. DISSOLUTIOYd OF BURBAPiR. In the event Burbank dissolves
or otherwise ceases to exist:
10.1 Burbank's interest in and rights under all
outstanding Exhibit A Notes and Exhibit B Options shall be deemed
automatically assigned to the City, and
10.2 Any Exhibit A Note Proceeds in Burbank's possession
shall be paid over to the City.
BURBANK HOUSING. DEVELOPMENT CORPORATION,
a nonprofit co~porati,An, by
Name:
Title:
CITY OF PETALUMA, a municipal corporation., by
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Name:: John L. Scharer City Clerk
Title City Manager
ppro as to form
HILLVIEW OAKS D-1 5
EX~€IEIT A