HomeMy WebLinkAbout07 RESOLUTION ENCOURAGING NON-RESIDENTIAL LANDLORDS & UTILITIES TO ABIDE BY GOVERNOR'S ORDER 28-20 AGENDA REPORT Agenda Item
Reviewed:
City Manager MW
05 Finance Director N/A
MEETING DATE: APRIL 7, 2020
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: MATTHEW S. WEST, CITY MANAGER
SUBJECT: RESOLUTION ENCOURAGING NON-RESIDENTIAL LANDLORDS AND
UTILITIES TO ABIDE BY THE GOVERNOR'S MARCH 16, 2020 EXECUTIVE
ORDER N-28-20, AND TO OFFER VOLUNTARY RENT DEFERRAL
PROGRAMS TO THEIR TENANTS.
SUMMARY:
Consider adopting a Resolution encouraging the non-residential landlords to abide by the
Governor's Executive Order N-28-20 concerning evictions of commercial tenants, and to
offer voluntary rent deferral programs for non-commercial tenants in the City of Tustin.
RECOMMENDATION:
1 . That the City Council adopt Resolution 20-21 entitled: "A RESOLUTION OF THE CITY
COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, ENCOURAGING ALL NON-
RESIDENTIAL LANDLORDS AND UTILITIES TO ABIDE BY THE GOVERNOR'S
MARCH 16, 2020 EXECUTIVE ORDER N-28-20, AND ENCOURAGING NON-
RESIDENTIAL LANDLORDS TO OFFER RENT-DEFERRAL PROGRAMS TO
TENANTS" (see Attachment 1).
2. Authorize City staff to offer rent deferral and recovery options to non-residential tenants
on City-owned property for those tenants experiencing a significant reduction in business
income related to the COVID-19 pandemic.
BACKGROUND AND DISCUSSION:
In response to the worldwide COVID-19 pandemic, the Governor of California has adopted
a number of Executive Orders in an effort to protect public health and welfare, to slow the
spread of the disease, and to reduce the very substantial adverse economic impacts related
to the disease. On March 16, 2020, the Governor issued Executive Order N-28-20
authorizing local governments, including the City of Tustin, to create limitations on
residential and commercial evictions.
1482202.1
62
RESOLUTION RE NON-RESIDENTIAL LANDLORDS
April 7, 2020
Page 2
On March 27, 2020, the Governor issued Executive Order N-37-20 placing procedural
limitations on certain residential evictions when a residential tenant is unable to pay rent
due to reasons related to COVID-19. However, the eviction protections in Executive Order
N-37-20 do not apply to non-residential tenants like businesses.
Promoting stability among commercial tenancies, reducing evictions, and encouraging
landlords to offer their commercial tenants voluntary rent abatement programs can help
promote public health by allowing commercial establishments to make closure decisions
based on public health objectives, thus mitigating the spread and impacts of COVID-19,
rather than based upon economic pressures.
To these ends, City staff recommends that the City Council encourage its commercial
landlords and utility providers to comply with the intent of Executive Order N-28-20 for the
protection of both public health and the protection of businesses in the City during this time
of crisis, which has been the City's utmost priority.
Recently, Irvine Company Retail Properties, one of Tustin's largest commercial landowners
and landlords, voluntarily offered their business tenants an optional rent deferral program
for a period of ninety (90) days effective April 1, 2020, with deferred rent to be repaid over
a 12-month period commencing January 1, 2021. (See Attachment 2.). Similarly, many
public and private utility providers, covering electricity, gas, water, and sewer, have
voluntarily announced moratoriums on service disconnections and late fees for non-
payment. Additionally, many telecommunication companies, including internet and cell
service providers, have voluntarily announced moratoriums on service disconnections and
late fees for non-payment in response to COVID-19.
The City also owns property that is leased or licensed to non-residential businesses.
Consistent with the Resolution encouraging its landlord community to defer rent for
struggling tenants, and to demonstrate leadership in implementing the objectives of
Resolution 20-21, it is recommended that the City Council authorize City staff to offer rent
deferral and recovery options to non-residential tenants on City-owned property for those
tenants that are experiencing a significant reduction in business income related to the
COVID-19 pandemic.
Attachments:
1. Resolution 20-21
2. Irvine Company Retail Properties Memo to its Tenants
1482202.1
63
RESOLUTION NO. 20-21
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN,
CALIFORNIA, ENCOURAGING ALL NON-RESIDENTIAL LANDLORDS
AND UTILITIES TO ABIDE BY THE GOVERNOR'S MARCH 16, 2020
EXECUTIVE ORDER N-28-20, AND ENCOURAGING NON-RESIDENTIAL
LANDLORDS TO OFFER RENT-DEFERRAL PROGRAMS TO TENANTS
WHEREAS, as of April 2, 2020, a novel coronavirus (COVID-19) had spread
globally, infecting more than 1 ,000,000 persons and killing more than 51 ,000 individuals
worldwide. As of April 3, 2020, thirteen (13) Tustin residents, 711 Orange County
residents, over 10,000 Californians, and over 238,000 Americans have been confirmed
COVID-positive.
WHEREAS, the World Health Organization, the President of the United States, the
Governor of the State of California, the County of Orange, and the City of Tustin have all
declared states of emergency as a result of COVID-19; and
WHEREAS, despite sustained efforts, the virus remains a threat, and further efforts
to control the spread of the virus to reduce and minimize the risk of infection and otherwise
mitigate the effects of COVID-19 are needed; and
WHEREAS, the City has determined, based on its particular needs, that promoting
stability amongst commercial tenancies is conducive to public health, such as by allowing
commercial establishments to decide whether and how to close based on public health
concerns and to mitigate the spread and impacts of COVID-19 rather than economic
pressures; and
WHEREAS The Irvine Company, one of Tustin's largest commercial landowners
and landlords, has voluntarily offered their business tenants an optional rent deferral
program for a period of ninety (90) days effective April 1 , 2020, with deferred rent to be
repaid over a 12-month period commencing January 1, 2021;
WHEREAS many utility providers, public and private, covering electricity, gas,
water, and sewer, have voluntarily announced moratoriums on service disconnections
and late fees for non-payment in response to COVID-19; and
WHEREAS many telecommunication companies, including internet and cell phone
providers, have voluntarily announced moratoriums on service disconnections and late
fees for non-payment in response to COVID-19; and
WHEREAS, on March 16, 2020, for many of the reasons listed above, the
Governor issued Executive Order N-28-20 that authorized local governments, including
the City of Tustin, to create limitations on residential and commercial evictions; and
Resolution No. 20-21
64
WHEREAS, on March 27, 2020, the Governor issued Executive Order N-37-20
placing procedural limitations on certain residential evictions when a residential tenant is
unable to pay rent due to reasons related to COVID-19. The eviction limitations in
Executive Order N-37-20 do not apply to non-residential tenants such as businesses;
WHEREAS, the stated purpose of the Governor's Executive Order N-28-20 is to
minimize the impact on California tenants during this time of crisis, and therefore made
the certain "Orders," such as:
"Any provision of state law that would preempt or otherwise restrict a local
government's exercise of its police power to impose substantive limitations on
residential or commercial evictions as described in subparagraphs (i) and (ii)
below— including, but not limited to, any such provision of Civil Code sections
1940 et seq. or 1954.25 et seq. — is hereby suspended to the extent that it
would preempt or otherwise restrict such exercise. This paragraph 2 shall
only apply to the imposition of limitations on evictions when.
i. The basis for the eviction is nonpayment of rent, or a foreclosure,
arising out of a substantial decrease in household or business income
(including, but not limited to, a substantial decrease in household
income caused by layoffs or a reduction in the number of compensable
hours of work, or a substantial decrease in business income caused by
a reduction in opening hours or consumer demand), or substantial out-
of-pocket medical expenses, and
ii. The decrease in household or business income or the out-of-pocket
medical expenses described in subparagraph (i) was caused by the
COVID-19 pandemic, or by any local, state, or federal government
response to COVID-19, and is documented.
"Financial institutions holding home or commercial mortgages, including banks,
credit unions, government-sponsored enterprises, and institutional investors,
are requested to implement an immediate moratorium on foreclosures and
related evictions when the foreclosure or foreclosure-related eviction arises out
of a substantial decrease in household or business income, or substantial out-
of-pocket medical expenses, which were caused by the COVID-19 pandemic,
or by any local, state, or federal government response to COVID-19.
"The California Public Utilities Commission is requested to monitor measures
undertaken by public and private utility providers to implement customer
service protections for critical utilities, including, but not limited to, electric, gas,
water, internet, landline telephone, and cell phone service, in response to
COVID-19, and on a weekly basis publicly report these measures.
Resolution No. 20-21
65
"The statutory cause of action for judicial foreclosure, Code of Civil Procedure
section 725a et seq.; the statutory cause of action for unlawful detainer, Code
of Civil Procedure section 1161 et seq., and any other statutory cause of
action that could be used to evict or otherwise eject a residential or
commercial tenant or occupant of residential real property after foreclosure is
suspended only as applied to any tenancy, or residential real property and
any occupation thereof, to which a local government has imposed a limitation
on eviction pursuant to this paragraph 2, and only to the extent of the
limitation imposed by the local government.
"Nothing in this Order shall relieve a tenant of the obligation to pay rent, nor
restrict a landlord's ability to recover rent due.
"The protections in this paragraph shall be in effect through May 31, 2020,
unless extended."
WHEREAS, Executive Order N-28-20 explicitly states, "Nothing in this Order shall
in any way restrict state or local authority to order any quarantine, isolation, or other public
health measure that may compel an individual to remain physically present in a particular
residential real property";
WHEREAS, the City seeks to uphold the provisions of the Executive Order N-28-
20, and to honor its intent and spirit as applied to all commercial landlords in the City of
Tustin, for the protection of its businesses during this time of crisis, which has been, and
will always be, the City's utmost priority;
NOW, THEREFORE, the City Council of the City of Tustin DOES HEREBY
RESOLVE as follows:
SECTION 1 . To strongly encourage all commercial landlords and all utility
providers in the City of Tustin to abide by the provisions of the Governor's Executive Order
N-28-20, and to specifically refrain from evictions, foreclosures, rent increases, or service
or utility disconnections due to commercial tenants' significant reduction in business
income related to the COVID-19 pandemic, for the duration of the COVID-19 emergency;
and
SECTION 2. To strongly encourage commercial landlords to extend to their
commercial tenants optional rent deferral programs for tenants experiencing a significant
reduction in business income related to the COVID-19 pandemic; and
SECTION 3. The City has, at this time, refrained from exercising the full regulatory
authority established by Executive Order N-28-20 based its long history working together
with its business community, and based upon the statements and representations of key
members of that community indicating an intent to abide by the spirit and intent of
Executive Order N-28-20.
Resolution No. 20-21
66
SECTION 4. This Resolution shall go into effect immediately upon its adoption.
The City Clerk shall certify to the adoption of this Resolution and shall deliver a copy of
this Resolution to the Director of the California Governor's Office of Emergency Services
and the Orange County Health Office, and any other federal, state, or regional agency as
may be directed by the City Manager.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Tustin held on the 7th day of April, 2020.
Dr. ALLAN BERNSTEIN,
Mayor
ATTEST:
ERICA N. YASUDA,
City Clerk
Resolution No. 20-21
67
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Erica N. Yasuda, City Clerk and ex-officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council is five;
that the above and foregoing Resolution No. 20-21 was duly and regularly passed and
adopted at a special meeting of the City Council held on the 7th day of April, 2020 by the
following vote:
COUNCILPERSONS AYES:
COUNCILPERSONS NOES:
COUNCILPERSONS ABSTAINED:
COUNCILPERSONS ABSENT:
ERICA N. YASUDA,
City Clerk
Resolution No. 20-21
68
We are extending an optional rent deferral program.
View this messagLin your .LQwser.
Orok IRVINE COMPANY
%11V19 RETAIL PROPERTIFS
Dear Valued Business Partner,
All of us at Irvine Company Retail Properties hope you and your loved ones are
safe and healthy. We understand these are unprecedented times for our country
and the world_ Working together,we will move forward and emerge stronger than
ever.
Your business is an important part of the Irvine Company community, and we are
extending an optional rent deferral program,as outlined below,to provide some
financial relief during this difficult time.
Beginning April 1, 2020, Irvine Company Retail Properties will defer all rent
charges for 90 days.
The deferred rent will be paid back over a 12-month period with no interest
commencing January 1, 2021.
To streamline the process,we are preparing a simple one-page agreement.
In addition, we have attached a list of various programs and resources for
businesses affected by COVID-19. We have a team tracking these opportunities
and will share updates with you as they become available.
A representative from Irvine Company Retail Properties will be contacting you in
the next few days to discuss.
Sincerely,
T)ct" Kneln
Butch Knerr
President, Irvine Company Retail Properties
VieS.v Resources
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