HomeMy WebLinkAbout05 AN APPROPRIATION TO PURCHASE MODERATE INCOME UNIT AT 133 LIBERTY STDocuSign Envelope ID: 009D57E6-9ACB-4264-ADDC-CAF3F57A8588
AGENDA REPORT
FIF
s�
Agenda Item _ 5
DS
Reviewed:
City Manager DS
Finance Director
MEETING DATE: MAY 7, 2024
TO: NICOLE BERNARD, ACTING CITY MANAGER & ACTING HOUSING
AUTHORITY EXECUTIVE DIRECTOR
FROM: TUSTIN HOUSING AUTHORITY
SUBJECT: AN APPROPRIATION TO PURCHASE THE MODERATE INCOME
AFFORDABLE HOUSING UNIT AT 133 LIBERTY STREET
SUMMARY
The Tustin Housing Authority ("Authority") is seeking an appropriation to purchase the
moderate income affordable housing unit at 133 Liberty Street under the terms of a
Settlement Agreement with the homeowner.
RECOMMENDATION
It is recommended that the City Council appropriate $466,651 from unappropriated reserves
of the General Fund to purchase the moderate income affordable housing unit at 133
Liberty Street.
FISCAL IMPACT
The acquisition price of 133 Liberty Street is $466,651. These funds, drawn from the
unappropriated reserves of the General Fund, will be replenished upon the Authority's
sale of the moderate income affordable housing unit to an eligible moderate income
household.
CORRELATION TO THE STRATEGIC PLAN
Curing the homeowner default and preserving the Authority's affordable housing unit
contributes to Goal A of the City's Strategic Plan, enhancing the vibrancy and quality of
life in all neighborhoods and areas of the community.
BACKGROUND/DISCUSSION
On October 23, 2023, the City issued a "Notice of Default of the Affordable Housing
Covenant" to the homeowner at 133 Liberty Street (Tustin Field I development), a
moderate income unit in the City's Affordable Housing Program. The homeowner did not
cure the Default. On December 5, 2023, the City Council in Closed Session authorized
DocuSign Envelope ID: 009D57E6-9ACB-4264-ADDC-CAF3F57A8588
Agenda Report
May 7, 2024
Page 2
the initiation of litigation, resulting in the City issuing a written "Notice of Exercise of
Option" to purchase 133 Liberty Street at the maximum affordable housing cost. On
February 26, 2024, the City met with the homeowner and the homeowner confirmed their
breaches of the Affordability Covenant, and failed to provide any information regarding
any attempts to cure those breaches. As a result, the City issued a "Proceeding with
Option and Offer of Settlement" notice to purchase 133 Liberty Street for the maximum
affordable sales price of $466,651, less the remaining principal balance of the Affordable
Housing Note, the First Trust Deed, the City's attorneys' fees and costs associated with
enforcement of the Option, and all other associated escrow fees and costs necessary to
close the sale. The homeowner has agreed to the Settlement Offer and has executed
the Settlement documents.
Upon purchase of 133 Liberty Street, the City will prepare the Unit for sale and then list
the Unit at the maximum affordable sales price for a moderate income household. Staff
is recommending the City Council appropriate funds to complete the Settlement
Agreement, with the proceeds from the sale reimbursing the General Fund.
DocuSigned by:
*raNY65...
Deputy Director of Economic Development
Tustin Housing Authority