Loading...
HomeMy WebLinkAbout02 FIRST AMENDMENT TO REGULATORY AGREEMENTAgenda Item 2 ~lT~l\ ~A ~E~®~ 1 oversight Board of the Successor Agency of the 7['ustin Community Redevelopment Agency MEETING DATE: MARCH 27, 2012 SUBJECT/ACTION: FIRST AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS FOR THE TUSTIN LEGACY COVENTRY COURT PROJECT RECOMMENDATION /PROPOSED ACTION Authorize the Successor Agency to the Tustin Community Redevelopment Agency ("Successor Agency") to enter into the First Amendment to the Regulatory Agreement for the Tustin Coventry Court Project with Tustin Coventry Seniors, LLP, the City of Tustin and Tustin Housing Authority at Tustin Legacy (within the former MCAS Tustin Redevelopment Project Area}. (Note that the above actions by the Oversight Board (Board) shall not become effective for 3 business days, pending any request for review by the California Department of Finance (DoF). If DoF requests review of this Board action, it shall have 10 days from the date of the request to approve the Board action or return it to the Board for reconsideration of the action. If subject to review by DoF, action shall not be effective until approved by DoF). BACKGROUND On September 30, 2010, the City of Tustin, the Tustin Community Redevelopment Agency ("Agency") and Tustin Coventry Seniors, LP ("Developer") entered into a Regulatory Agreement and Declaration of Restrictive Covenants ("Regulatory Agreement") and a Supplemental Regulatory Agreement ("Supplemental Regulatory Agreement"} related to the anticipated issuance by California Statewide Communities Development Authority ("CSCDA") of multi-family revenue bonds for the development of one hundred fifty-three (153) very-low, low, and moderate income affordable units within the senior citizen Coventry Court project at Tustin Legacy. On December 1, 2010, the Developer entered into a Regulatory Agreement and Declaration of Restrictive Covenants ("State Regulatory Agreement") with CSCDA and Wells Fargo Bank, National Association as Trustee, relating to the issuance of 2009 Series A-8 Affordable Multi-Family Housing Revenue Bonds to construct Coventry Court. The Developer subsequently entered into a First Amendment to the State Regulatory Agreement on January 1, 2011. In reviewing requirements set forth in the agreements executed between the City, farmer Agency and the Developer, and the Developer and CSCDA, an issue has Agenda Report March 27, 2012 Page 2 arisen with conflicting requirements between the agreements and Internal Revenue Service guidance since tax credits are involved in the development. The issue is related to circumstances under which eviction of a tenant would be required or a requirement to increase rents that might be authorized after initial occupancy if a tenant's income eligibility changes over time. It has, therefore, become necessary to amend the Regulatory Agreement to clarify when an affordable household, who is no longer income eligible for the unit they are occupying, is required to move. Section 3.7 of the Regulatory Agreement is being amended to add language further defining the circumstances as to when an affordable household is required to move. The passage of Assembly Bill 1X 26 ("Dissolution Act") and AB 1X 27 and the State Supreme Court's December 29, 2011 decision to uphold the Dissolution Act and to invalidate AB 1X 27 resulted in the Agency becoming dissolved, effective February 1, 2012. On January 17, 2012, the City chase to become and serve as the Successor Agency to the dissolved Agency under the Dissolution Act. In addition, the City Council declined the assumption of housing assets and functions of the Agency and selected the Tustin Housing Authority to assume the assets and functions. The parties to the original Regulatory Agreement were the Gity, the Agency, and the Developer. As a result of the Dissolution Act, an amendment to the Regulatory Agreement ("First Amendment to Regulatory Agreement") is necessary to modify the parties to include the City of Tustin, the City of Tustin Acting as the Successor Agency to the Tustin Community Redevelopment Agency ("Successor Agency"), the Tustin Housing Authority and the Developer. Oversight Board review is necessary for an agreement between the City and Successor Agency. There are no direct fiscal impacts of the First Amendment to the Regulatory Agreement on the Successor Agency, other than the original document being an Enforceable Obligation under the Dissolution Act which will be carried forward on any future Recognized Obligation Payment Schedule ("ROPS"). The Successor Agency at its regular meeting on March 20, 2012, authorized the execution of the First Amendment to the Regulatory Agreement. Staff will be available to answer any questions the Oversight Board might have. Christine A. Shingleton Assistant Executive Dir or Attachments: 1. First Amendment to Regulatory Agreement CITY OF TUSTIN OFFICIAL BUSINESS DOCUMENT EXEMPT FROM RECORDING FEES PER GOVERNMENT CODE SECTIONS 6103 AND 27383 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Tustin 300 Centennial Way Tustin, California 92780 Attention: City Clerk (Space above this line for Recorder's Office Use Only) FIRST AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS This FIRST AMENDMENT TO REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS ("First Amendment to Regulatory Agreement") is made and entered into as of March 20, 2012, by and among the CITY OF TUSTIN, a municipal corporation ("City"), and the CITY OF TUSTIN ACTING AS THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY ("Successor Agency"), and the TUSTIN HOUSING AUTHORITY, a public body corporate and politic ("Authority" or "Successor Housing Agency"), and TUSTIN COVENTRY SENIORS, LP, a California limited partnership ("Developer"). Unless the context otherwise requires, the capitalized terms used herein shall have the respective meanings assigned to them in the hereinafter defined Regulatory Agreement. RECITALS A. City, Developer and the Tustin Community Redevelopment Agency, a public body, corporate and politic ("Agency"), entered into that certain Regulatory Agreement and Declaration of Restrictive Covenants dated as of September 30, 2010 and recorded in the Official Records of Orange County on October 12, 2010 as Document No. 2010-000514068 ("Regulatory Agreement"). B. Further, City, Developer and Agency entered into that certain Supplemental Regulatory Agreement and Declaration of Restrictive Covenants dated as of September 30, 2010 and recorded in the Official Records of Orange County on October 12, 2010 as Document No. 2010-000514067 ("Supplemental Regulatory Agreement"). C. The Agency was established as a community redevelopment agency that was previously organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL"), and previously authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City. D. The Authority is a housing authority pursuant to the California Housing Authority Law, Health and Safety Code Section 34200, et seq. ("HAL"). DOCSOC/l 539560v4/200350-0003 E. Assembly Bill xl 26 added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code, which laws cause the dissolution and wind down of all redevelopment agencies ("Dissolution Act"). F. On December 29, 2011, in the petition California Redevelopment Association v. Matosantos, Case No. 5194861, the California Supreme Court upheld the Dissolution Act and thereby all redevelopment agencies in California are subject to the Dissolution Act and were dissolved as of and on February 1, 2012. G. The Agency is now a dissolved community redevelopment agency pursuant to the Dissolution Act. H. By a resolution considered and approved by the City Council at an open public meeting on January 17, 2012 the City chose to become and serve as the "successor agency" to the dissolved Agency under the Dissolution Act. 1. As of and on and after February 1, 2012, the City serves as the "Successor Agency" and will perform its functions as the successor agency under the Dissolution Act to administer the enforceable obligations of the Agency and otherwise unwind the Agency's affairs, all subject to the review and approval by aseven-member Oversight Board formed thereunder. J. By a resolution considered. and approved by the City Council at an open public meeting on January 17, 2012 pursuant to Section 34176 of the Dissolution Act, the City declined to assume the housing assets and functions of the Agency and selected the Authority to so assume such housing assets and functions, and on such date also pursuant to Section 34176 the Authority accepted and assumed the housing assets and functions of the Agency and as of February 1, 2012 became and serves as the "Successor l lousing Agency" of the former Agency pursuant to the Dissolution Act. K. The Regulatory Agreement is an asset of the former Agency transferred and assumed by the Authority, and the Authority will aet and perform the duties and obligations of the former Agency under the Regulatory Agreement and has all rights and benefits of the former Agency under the Regulatory Agreement subject to the provisions of the Dissolution Act, including Sections 34176 and 34181 thereof. L. The Regulatory Agreement provides that, in certain circumstances, apartment units in the Project must be rented at an Affordable Rent that is lower than the rent the Developer would otherwise be able to charge to tenants of such apartment units. M. City, Successor Agency, Authority, and Developer desire to enter into this First Amendment to Regulatory Agreement to limit the apartment units in the Project subject to such provisions, as more fully set forth herein. NOW THEREFORE, in consideration of the foregoing and the mutual covenants and undertakings set forth in the Regulatory Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Developer hereby agree as follows: 2 DOC SOC/ 1539560v4/2003 50-0003 2. Amendment to Section 3.7 of the Regulatory Agreement. (a) Section 3,7.1 of the Regulatory Agreement is hereby amended to add the following sentence at the end of Section 3.7.1: "I~totwithstanding the foregoing, the Developer's obligations pursuant to the preceding sentence shall apply only with respect to those Low Income Units (from among the 61 Low Income Units in Project) and Moderate Income Units (from among the 56 Moderate Income Units in Project) that contain the same number of bedrooms as the apartment unit occupied by the household no longer qualifying as a Very Low Income Household." (b) Section 3.7.2 of the Regulatory Agreement is hereby amended to add the following sentence at the end of Section 3.7.2: ``Notwithstanding the foregoing, the Developer's obligations pursuant to the preceding sentence shall apply only with respect to those Moderate Income Units (from among the 56 Moderate Income Units in Project) that contain the same number of bedrooms as the apartment unit occupied by the household no longer qualifying as a Very Low Income Household." (c) Section 3.7.3 of the Regulatory Agreement is hereby amended to add the following sentence at the end of Section 3,7.3: "Notwithstanding the foregoing, the Developer's obligations pursuant to the preceding sentence shall apply only with respect to those Moderate Income Units (from among the 56 Moderate Income Units in Project) that contain the same number of bedrooms as the apartment unit occupied by the household no longer qualifying as a Low Income Household." (d) Section 3.7.4 of the Regulatory Agreement is hereby amended to add the following sentence at the end of Section 3.7.4: "Notwithstanding the foregoing, the Developer's obligations pursuant to this Section 3.7.4 shall apply only with respect to those apartment units in the Project that contain the same number of bedrooms as the apartment unit occupied by the household no longer qualifying as a Very Low Income Household, L,ow Income Household or Moderate Income Household, as applicable." 3. Miscellaneous. (a) No Other Modifications. Except as amended by this First Amendment to Regulatory Agreement, the Regulatory Agreement shall remain in full force and effect. (b} Defined Terms. Capitalized terms not defined in this First Amendment to Regulatory Agreement shall have the meanings given to them in the Regulatory Agreement (or as applicable the Supplemental Regulatory Agreement.) (c) Recording and Filing. City, Successor Agency, Authority, and Developer shall cause this First Amendment to Regulatory Agreement to be recorded against the Property in the Official DOCSOCI l 539560v41200350-0003 Records of Orange County in conformity with Section 12 of the Regulatory Agreement and in accordance therewith Developer shall pay all fees and charges incurred in connection with such recording. (d) Governing; Law. This First Amendment to Regulatory Agreement shall be governed by the laws of the State of California, (e) Interpretation. In the event there is a conflict between the terms of the Regulatory Agreement andlor the Supplemental Regulatory Agreement and this First Amendment to Regulatory Agreement, the terms of this First Amendment to Regulatory Agreement shall control. References to "Regulatory Agreement" from and after the date that this First Amendment to Regulatory Agreement is recorded in the Official Records of Orange County shall mean and. include the Regulatory Agreement as amended by this First Amendment to Regulatory Agreement. (f) Severability. if any provision of this First Amendment to Regulatory Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this First Amendment to Regulatory Agreement shall not in any way be affected or impaired thereby. (g} Counterparts. This First Amendment to Regulatory Agreement may be executed in any number of counterparts, each of which shall constitute one original and ail of which shall be one and. the same instrument. (h) Cost Reimbursement. Pursuant to City Council Resolution No. 0$-60 that establishes the City's Comprehensive Schedule of Fees and as a condition precedent to execution and recordation of this First Amendment to Regulatory Agreement, Developer shall reimburse and pay to the City the actual costs and fees incurred by the City, Successor Agency, andlor Authority in connection with negotiation, preparation and completion of this First Amendment to Regulatory Agreement and any and all related documents for services provided by the City Attorney, Special Counsel, City, Successor Agency, and/or Authority staff, and outside consultant costs, jremainder^ of page left intentionally blank; signature page follows) 4 DOCSOC/l 539560v4I200350-0003 IN WITNESS WHEREOF, City, Successor Agency, Authority, and Developer have executed this First Amendment to Regulatory Agreement by duly authorized representatives, all on the date first written above. ATTEST: CITY CLERK Pamela Stoker APPROVED AS TO FORM: WOODRUFF SPRADLIN & SMART David E. Kendig, Esq,, City Attorney ATTEST: AUTHORITY SECRETARY Pamela Stoker APPROVED AS TO FORM: WOODRUFF SPRADLIN & SMART David E. Kendig, Esq., Authority Legal Counsel CITY: CITY OF TUSTIN, a California municipal; corporation By: Jeffrey C. Parker, City Manager or Authorized Designee AUTHORITY: TUSTIN HOUSING AUTHORITY, a public body, corporate and politic By: Jeffrey C. Parker, Executive Director or Authorized Designee 5 DOCSOC/ 1539560v4I200350-0003 [Signatures for continue on next page] SUCCESSOR AGENCY: CITY OF TUSTIN ACTING AS SUCCESSOR AGENCY TO TUSTIN COMMUNITY REDEVELOPMENT AGENCY By: Jeffrey C. Parker, Executive Director or Authorized Designee ATTEST: CITY CLERK TO SUCCESSOR AGENCY Pamela Stoker APPROVED AS TO FORM: Stradling Yocca Carlson & Rauth, Special Counsel DEVELOPF,R: TUSTIN COVENTRY SENIORS, LP, a California limited partnership By: Western Community Housing, Inc., a California nonprofit public benefit corporation, its Managing General Partner By: Graham Espley-Jones, President By: Tustin Coventry Seniors, LLC, a California limited liability company, its Administrative General Partner By: Kasey Burke, Manager 6 DOC SOC(1539560v4/2003 50-0003 STATE OF CALIFORNIA COUNTY OF ss On 2012, before me, Notary Public, personally appeared ,who proved to me on the basis of satisfactory evidence to be the person(s) whose names} is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hislherltheir authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) Notary Public DOCSOC! 1539560v4/200350-0003 STATE OF CALIFORNIA COUNTY OF ss On 2012, before me, Notary Public, personally appeared ,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that helshe/they executed the same in his/herltheir authorized capacity(ies), and that by his/her/their signatures} on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) Notary Public DOCSOC/l 539560v4/200350-0003 STATE OF CALIFORNIA COUNTY OF ss On 2012, before me, Notary Public, personally appeared ,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hislher/their authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) Notary Public DOCSOC! 1539560v4/200350-0003 STATE OF CALIFORNIA COUNTY OF ss On 2012, before me, Notary Public, personally appeared ,who proved to me on the basis of satisfactory evidence to be the person(s) whose names} is/are subscribed to the within instrument and acknowledged to me that he/shelthey executed the same in hislher/their authorized capacity(ies), and that by hislher/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Califarnia that the foregoing paragraph is true and correct. WITNESS my hand and official seal. (Seal) Notary Public DOCSOCI1539560~~4/200350-0003 STATE OF CALIFORNIA COUNTY OF ss On 2012, before me, Notary Public, personally appeared ,who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hislher/their authorized capacity(ies), and that by his/herltheir signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal, (Seal) Notary Public DOCSOC11539560v4/200350-0003 EXHIBIT A LEGAL DESCRIPTION That certain real property located in the City of Tustin, County of Orange, State of California, and legally described as follows: Lot 265 of Tract No. 16581, in the City of Tustin, County of Orange, State of California, as shown on the map recorded in Book 877 Pages 33 through 50 inclusive Miscellaneous Maps, in the Office of the County Recorder of Orange County. Excepting therefrom all oil, oil rights, mineral rights, natural gas rights, and other hydrocarbons by whatsoever name known, geothermal steam and all products derived from any of the foregoing, that may be within or under the parcel of land hereinabove described, together with the perpetual right of drilling, mining or exploring and operating therefore and storing in and removing same from said land or any other land, including the right to whipstock or directionally drill or mine from lands other than those hereinafter described, oil or gas wells, tunnels and shafts into, through ar across the subsurface of the land hereinabove described, and to bottom such whipstocked or directionally drilled wells, tunnels and shafts under and beneath or beyond the exterior limits thereof, and to redrill, retunnel, equip, maintain, repair, deepen and operate any such wells or mines without, however, the right to drill, mine, store, explore or operate through the surface or the upper 500 feet of the subsurface of the land, as reserved by Moffett Meadows Partners, LLC, by deed recorded July 25, 2005 as Instrument Nos. 2005000590846, 2005000591024 and 2005000591381, all of Official Records. A-1 DOCSOC/1539~60v4/20o350-0003