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HomeMy WebLinkAbout2021-31 CC Resolution C RESOLUTION NO.2021-31 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA, ACTING IN ITS CAPACITY AS THE HOUSING SUCCESSOR, APPROVING THE FIRST AMENDMENT TO THE GROUND LEASE AND REGULATORY AGREEMENT RELATING TO THE MISSION VILLAGE APARTMENTS PROJECT THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Recitals. The City Council of the City of Temecula (the "City") hereby finds,determines and declares that: (a) The Redevelopment Agency of the City of Temecula(the"Former Agency")was a duly constituted redevelopment agency pursuant to provisions of the Community Redevelopment Law(the"Redevelopment Law")set forth in Section 33000 et seq.of the Health and Safety Code ("HSC")of the State of California(the"State"). (b) Under the Redevelopment Law, the Former Agency was authorized, among other things,to provide assistance to the development of affordable housing projects. (c) Pursuant to AB XI 26 (which became effective in June 2011), and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 41h 231 (2011), the Former Agency was dissolved as of February 1, 2012, and the Successor Agency to the Temecula Redevelopment Agency (the "Successor Agency') was constituted as the successor entity to the Former Agency. (d) Pursuant to HSC Section 34175(b), all assets of the Former Agency transferred to the Successor Agency by operation of law; provided, that pursuant to HSC Section 34176 and Resolution No. 12-11,adopted by the City Council on January 24,2012,the City elected to assume the housing functions of the Former Agency (in such capacity, the "Housing Successor") and, consequently, housing assets approved on the Housing Asset List (defined below) are transferred to the Housing Successor. (e) Temecula Gardens, L.P. ("Temecula Gardens I"), an affiliate of Affirmed Housing Group, Inc. ("Affirmed"), is the owner of a 76-unit multifamily apartment complex located at 28493 Pujol Street in the City,known as Mission Village Apartments(the"Project"). (t) The Project is located on Land (the "Land") leased by the Former Agency to Temecula Gardens I pursuant to a Ground Lease, dated as of July 1, 1998 (the"Ground Lease"). The Former Agency also provided other assistance for the 1998 financing of the acquisition and construction of the Project. C (g) In consideration for the Former Agency's assistance, Temecula Gardens I entered into a Regulatory Agreement, dated as of July 1, 1998 (the "Agency Regulatory Agreement'), C which requires that, among other matters related to the Project, until July 17, 2048, units in the Project must be rented to low or very low income persons and families at affordable rent. (h) Temecula Gardens I also issued a promissory note dated July 1, 1998, in the principal amount of$305,000(the"Residual Receipts Note"),in favor of the Former Agency,the principal and interest on which are payable no later than June 30, 2028. (i) Pursuant to HSC Section 34176(a)(2), the City prepared a housing asset list (the "Housing Asset List'), listing all of the Former Agency's housing assets to be transferred to the Housing Successor and submitted it to the State Department of Finance(the"DOF")for approval. The DOF issued a letter dated July 3, 2013, approving the Housing Asset List, with certain modifications. O Among the items on the Housing Asset List approved to be transferred to the Housing Successor are the Fortner Agency's title to and interest in the Land(and,accordingly,the Former's Agency's rights, obligations and interest under the Ground Lease) and the Former Agency's rights and interests under the Agency Regulatory Agreement and the Residual Receipts Note. (k) Affirmed is undertaking a rehabilitation project of the Project (the `Rehabilitation"). (1) In that connection, Affirmed is seeking an allocation of low-income housing tax C credits from the California Tax Credit Allocation Committee (the "Tax Credits") and is contemplating a financing transaction (the `Rehabilitation Financing') to fund the Rehabilitation. (m) To obtain the Tax Credits and the Rehabilitation Financing,Affirmed has indicated that it is necessary to have the Project transferred from Temecula Gardens I to a new California limited partnership, Temecula Gardens II L.P. ("Temecula Gardens II") (in which a Tax Credit investor will have a significant ownership interest). (n) On August 13, 2019, the City Council, acting in its capacity as the Housing Successor, approved modifications (City Council Resolution No. 19-51) to the Ground Lease, Regulatory Agreement and a Residual Receipts note, relating to the Mission Village Apartments as well as other related actions. (o) Now, the City Council, Temecula Gardens, L.P., and Temecula Gardens II, L.P. desire to correct a scrivener's error, to further clarify the Landlord Note upon mutually agreeable terms. Section 2. Approval of Amendment. The First Amendment Assignment, Assumption, and Modification of the Ground Lease and Regulatory Agreement, in the form set forth in Attachment A, is hereby approved. Each of the Mayor (or in the Mayor's absence, the Mayor Pro Tem) and the City Manager (each, an "Authorized Officer"), acting individually, is hereby authorized to execute and deliver,for and in the name of the City as the Housing Successor, the First Amendment, in substantially such form, with changes therein as the Authorized Officer 2 C executing the same may approve (such approval to be conclusively evidenced by the execution and delivery thereof). Section 3. Other Acts. The Authorized Officers and all other officers of the Successor Agency are hereby authorized,jointly and severally, to do all things, including the execution and delivery of documents and instruments, which they may deem necessary or proper to effectuate the purposes of this Resolution. The City Clerk is authorized to attest to the City officers' signatures to any such document or instrument. Section 4. No Further NEPA or CEOA Review Required. On February 19, 2019, the United States Department of Housing and Urban Development approved a Determination of Categorical Exclusion(subject to 58.5)pursuant to 24 CFR 58.5 for the"rehabilitation and rental of a 76-unit apartment to benefit qualified low-income households upon completion" at 28493 Pujol Street in Temecula, California. No further environmental review is required under the National Environmental Protection Act or the California Environmental Quality Act. Section 5. Certification. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 8`^day of June, 2021. C 4aryann Edwards, Mayor ATT Rah&JDW City Clerk [SEAL] 3 C STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) as CITY OF TEMECULA ) I, Randi Johl, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 2021-31 was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 8th day of June, 2021,by the following vote: AYES: 5 COUNCIL MEMBERS: Alexander, Edwards, Rahn, Schwank, Stewart NOES: 0 COUNCIL MEMBERS: None ABSTAIN: 0 COUNCIL MEMBERS: None ABSENT: 0 COUNCIL MEMBERS: None Randi Johl, City Clerk C C a ATTACHMENT A CFIRST AMENDMENT ASSIGNMENT,ASSUMPTION AND MODIFICATION OF GROUND LEASE AND REGULATORY AGREEMENT (see attached)