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HomeMy WebLinkAboutCC Resolution 12298 (BMR Agr.)CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLUTION NO. 12298 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE A BELOW MARKET RATE RENTAL HOUSING AGREEMENT FOR THE PROPERTY LOCATED AT 540 CANAL STREET BETWEEN THE CITY OF SAN RAFAEL AND SAN RAFAEL LAND COMPANY LLC (2350 KERNER BLVD) THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESOLVES as follows: The Mayor and the City Clerk are authorized to execute on behalf of the City of San Rafael, a Below Market Rate Rental Housing Agreement between the City of San Rafael and San Rafael Land Company, LLC for the property located at 540 Canal Street in San Rafael; a copy of the Agreement is hereby attached and by this reference made a part hereof, with such changes, deletions and insertions as may be approved by the City Attorney. I, JEANNE M. LEONCINI, City Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council held on the 2nd day of July 2007, by the following vote, to wit: AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips & Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None A. JE M. LEONCM, City Clerk RECORDING REQUESTED By and WHEN RECORDED MAIL TO: Jeanne M. Leoncini, City Clerk PO Box 151560 San Rafael, CA 94915-1560 No fee for recording pursuant to Government Code Section 27383 CITY OF SAN RAFAEL BELOW MARKET RATE RENTAL UNIT AGREEMENT PROJECT NAME: San Rafael Land Co -2350 Kerner Blvd Date: ADDRESS: 540 Canal Street OWNER: San Rafael Land Company, LLC THIS BELOW MARKET RATE RENTAL UNIT AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS is made and entered this date; JULY 2 , 2007, between the CITY OF SAN RAFAEL, a municipal corporation duly organized and existing under the Constitution and laws of the State of California (the "County"), and San Rafael Land Company, LLC (the "Owner"). PREAMBLE WHEREAS, the Owner has received the City's approval to construct a 116,427 square foot office building at 2350 Kerner Blvd. and; WHEREAS the City's approval of such office building is conditioned upon Owner's compliance with Section 14.16.030 1 of the San Rafael Zoning Ordinance; WHEREAS, the Owner proposes to fulfill the requirements Section 14.16.030 of the San Rafael Zoning Ordinance at a ten unit residential apartment complex located at 540 Canal Street ("Project"), located within the corporate limits of the City and more particularly described in Exhibit "A" attached and incorporated for reference herein and; WHEREAS, the Owner will be providing two very low and one low income unit as set forth in Exhibit "B" attached and incorporated herein; WHEREAS, the Owner has provided the City with an Inspection Report on the Project including information on compliance with local codes and regulations including the Uniform Housing Code; and the City has accepted such Report. Faskin Trust 2350 Kerner Blvd -540 Canal NOW, THEREFORE, in consideration for the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City and the Owner do hereby contract and agree as follows: AGREEMENT Section 1. DEFINITIONS AND INTERPRETATION. Unless otherwise expressly provided herein or unless the context clearly requires otherwise, the following terms shall have the respective meanings set forth below for all purposes of this Below Market Rate Rental Unit Agreement: The following Affordability Definitions shall apply: "Adjusted Income" means the total anticipated annual income of all persons in a household as calculated in accordance with 25 California Code of Regulations Section 6914 or pursuant to a successor state housing program that utilizes a reasonably similar method of calculation of adjusted income. If no such program exists, then the City shall provide the Owner with a method of calculation of adjusted income reasonably similar to that provided in Section 6914. Allowable Rent. The Rent charged the occupants of the Units shall not exceed one -twelfth (1/12th) of thirty percent (30%) of the tenant's actual annual income. "Low Income Household" shall mean the occupant (s) of a residential unit in the Project whose aggregate adjusted household income does not exceed 80% of the Median Gross Income for the Area, adjusted for household size. "Very Low/Low Income Unit" refers to the units described in Exhibit "B". "Median Income" the median income adjusted by actual household size for households in the County of Marin, California, as published from time to time by the State of California. If such income determinations are no longer published, or are no updated for a period of at least eighteen (18) months, then the city of San Rafael shall provide other income determinations which are reasonably similar with respect to methods of calculation to those previously published by the State. "Program Administrator" shall mean the administrator for compliance of the Project with the Below Market Rate Unit Rental Agreement, which shall initially be the City. Faskin Trust 2350 Kerner Blvd -540 Canal 2 "Project" shall mean the parcel of real property in the City of San Rafael as described in Exhibit "A" hereto, and all rights and appurtenances pertaining thereto, and the buildings, structures and other improvements constructed orto be constructed thereon, including all fixtures and other property owned, leased or licensed by the Owner and located on, or used in connection with, such buildings, structures or other improvements, all of which shall be constructed and operated by the Owner in accordance with the restrictions set forth in this Agreement. "Project Period" means a period of fifty-five (55) years commencing on the date of occupancy of the qualified units in the Project. Upon full occupancy of the qualified units, the Owner shall request the City to execute, and record, with the Marin County Recorders Office, Exhibit "E" to this Agreement specifying the commencement and expiration date of Project Period. The restrictions set forth herein shall be deemed covenants running with the land provided, however, that upon termination of this Agreement said covenants shall expire. "Qualifying Tenant" means resident households whose incomes do not exceed the household income limits for Very Low and Low Income Household. "Rent" means the total of monthly payments by the tenants of a Unit for the following: use and occupancy of the Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed bythe Ownerwhich are required of all tenants, other than security deposits; the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, and electricity, gas, other heating, cooking, and refrigeration fuel, but not telephone or cable television service; and any other interest, taxes, fees, or charges for use of the land or associated facilities and assessed by a public or private entity other than the Owner, and paid by the tenant. "Qualified Unit" means one of the three (3) dwelling units on the Property to be operated pursuant to this Agreement. "Very Low Income Household" shall mean the occupant (s) of a residential unit in the Project whose adjusted household income does not exceed 50% of the Median Gross Income for the Area, adjusted for household size. SECTION 2. ALLOWABLE RENT. The Rent charged the occupants of the Units shall not exceed one -twelfth (1/12') of thirty percent (30%) of the tenant's actual annual income the "Allowable Rent"). Occupants with Section 8 vouchers can occupy the Units but the rent paid by the occupant cannot exceed the Allowable Rent. Faskin Trust 2350 Kerner Blvd -540 Canal 3 In calculating the Allowable Rent for the Units, the following assumed household sizes shall be utilized only if there are no pertinent federal statutes applicable to the Property regarding assumed household size: Number of Bedrooms Assumed Household Size Studio 1 One 2 Two 3 Three 5 Rents for the Units may be increased no more than one (1) time per year unless otherwise permitted by the City. The maximum Rent levels following an increase, or upon a new occupancy, shall not exceed the Rent levels set forth in subsection (a) above, corresponding to the Median Income figures published for that year, or the market rate rent charged to similar units in the Project. Rents for the Units may not exceed rents charged for comparable units in the Project. SECTION 3. QUALIFYING TENANTS. (a) SELECTION. For the duration of the full Project Period, the Owner shall base Qualifying Tenant selection on income eligibility for Very Low and Low Income Households as defined in Section 1 and subject to final approval. (b) PROHIBITION ON DISCRIMINATION IN TENANT SELECTION. The Owner shall not discriminate against applicants on the basis of source of income or rent payment (for example, AFDC or Section 8), and the Owner shall consider a prospective tenant's satisfactory credit history and previous satisfactory rent history of at least one (1) year as sufficient evidence of the ability to pay the applicable Rent on a timely basis when due. (c) SECURITY DEPOSITS. The Owner shall not require security deposits on the Units in excess of one (1) month's Rent for such Units, and shall not require for such Units any other deposits, including (without limitation) key deposits, cleaning deposits, or final month rent deposits. Faskin Trust 2350 Kerner Blvd -540 Canal 4 (d) Tenant Income Certification. The Owner shall obtain, complete, and maintain on file income certifications from each Qualifying Tenant household dated no more than thirty (30) days prior to initial occupancy and annually thereafter. The Owner shall make a good faith effort to verify that the income reported by an applicant in an income certification is accurate by obtaining one (1) or more of the following as a part of the verification process: (1) a pay stub for the most recent pay period; (2) an income tax return for the most recent tax year; (3) an income verification form from the applicant's current employer; (4) an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; (5) income verification from the Marin County Housing Authority; or (6) if none of the previously mentioned forms of verification is possible, then another form of independent verification. If an occupant of a Unit refuses to provide information requested by the Owner for the annual certification, then the Owner shall immediately terminate such household's tenancy in a manner consistent with applicable laws. (e) Lease Provisions. The Owner shall utilize a form of lease or rental agreement approved by the City for all Units. The City shall not withhold approval from any form that: (1) authorizes the Owner to immediately terminate the tenancy of any household one (1) or more of whose members misrepresented any fact material to the household's qualification as a Very Low or Low Income Household; (2) provides that the tenant's income is subject to annual certification; provides that if the household refuses to provide information requested by the Owner for the annual recertification, then the household's tenancy shall be subject to immediate termination; and otherwise complies with this Agreement. (f) Occupancy. Throughout the Project Period, the required Very Low/ Low Income Units in the Project shall be occupied and at all times be rented to Qualifying Tenants at rental rates not to exceed the Affordable Housing Expense as set forth in Exhibit B. No Qualifying Tenant shall be denied continued occupancy, because this tenant exceeds the income limits. If, as of the most recent Tenant Income Certification, it is determined that the income of Qualifying Tenant exceeds one hundred -twenty percent (120%) of the Median Gross Income for the Area, then they shall no longer qualify as a Qualifying Tenant. The Owner shall provide the next available unit (s) of comparable or smaller size to a Qualified Tenant, as needed to achieve compliance. The Owner shall immediately notify, in writing, each tenant who is no longer a Qualified Tenant of such fact, and that such tenant(s) rent is subject to increase 30 days after receipt of such notice. The Owner shall be entitled to so increase any such tenant's rent only if Owner complies with any law applicable thereto and only after the Owner has rented the next available unit or units in the Project on an one-for-one basis to a Qualified Tenant, or holds units vacant and available for occupancy by Qualified Tenants. Faskin Trust 2350 Kerner Blvd -540 Canal 5 The Owner agrees to inform all prospective Qualifying Tenants of the requirements for annual certification of income and of the provisions of the preceding paragraphs. Section 3. REPORTING. (a) OCCUPANT CERTIFICATION. The Owner shall be obtain an OCCUPANT INCOME CERTIFICATION (Exhibit C), or a similarform as may be approved by the City, from the occupants of each Qualifying Unit and to maintain that form on file. (b) Annual Report to Agency. The annual report shall include the Rent, the income and household size of each household occupying a Qualified Unit. The report shall also state the date the tenancy commenced for each Qualified Unit and such other information as the City may be required by law to obtain. EXHIBIT "D" CERTIFICATION OF CONTINUING COMPLIANCE, or a similar form as may be approved by the City, may be used to meet this requirement. The annual report is to be submitted by the Owner to the Program Administrator quarterly until the qualifying units are occupied and annually thereafter for the Project Period. (c) Inspection of Records. The Owner shall permit the Program Administrator or their designee to inspect the Project records at the Owner's office upon 10 days notice. (d) Additional Information. The Owner shall provide any additional information reasonably requested by the City or its designee. (e) Records. The Owner shall maintain complete, accurate, and current records pertaining to the Units for five (5) years after creating such records, and shall permit any duly authorized representative of the City to inspect and copy such records, including the records pertaining to income and household size of Qualifying Tenant households. (f) Specific Enforcement of Affordability Restrictions. Specific enforcement of the Owner's agreement to comply with the rent and occupancy restrictions of this Section 3 is the only means by which the City may obtain the benefits of the Qualifying Units, and the Owner therefore agrees to the imposition of the remedy of specific performance against it in the case of any Owner non-compliance with the rent and occupancy restrictions of this Section 3. In addition to the remedies specified in this Section, the City shall have the right to pursue any of the remedies set forth in Section 8 below. Faskin Trust 2350 Kerner Blvd -540 Canal 6 Section 4. COMPLIANCE WITH APPLICABLE LAW. The Owner shall cause any construction work performed in connection with the Project to be performed in compliance with all applicable laws, ordinances, rules, and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental City having jurisdiction, and the Owner shall be responsible to the City for the procurement and maintenance thereof, as may be required of the Owner and all entities engaged in work on the Project. Section 5. RELOCATION OBLIGATIONS. Although the Parties do not anticipate the relocation of any tenants residing in the Project as of the date of this Agreement, if any such relocation is necessary or desirable, the Owner shall follow all applicable state and federal relocation laws and regulations in connection with such relocation and shall pay, at its sole expense, any and all costs associated with such relocation. The Developer shall indemnify, defend (with counsel reasonably chosen by the Agency), and hold harmless the City of San Rafael against all claims which arise out of Developer's relocation law obligations to tenants. Section 6. COVENANTS. It is intended and determined that the provisions of this Agreement shall constitute covenants which shall run with the land comprising the Project for the benefit thereof, and the burdens and benefits thereof shall bind and inure to the benefit of all successors in interest of the parties hereto; provided, however, that on the termination of this Agreement said covenants shall expire. Section 7. TERM. This Agreement shall become effective upon its execution and delivery. Except as provided in the immediately following paragraph, this Agreement shall remain in full force and effect for the Project Period. Faskin Trust 2350 Kerner Blvd -540 Canal 7 Section 8. DEFAULT AND ENFORCEMENT. In the event the Owner leases any unit at a rent in violation of this Agreement, the Owner shall immediately, upon notice from the City, rent the unit at the Affordable Housing Rent in accordance with Exhibit B of this Agreement and pay; (i) to the occupant or former occupant of a Qualifying Unit, an amount equal to the difference between the amount the Owner actually received for the Unit leased in violation of this Agreement and the amount the Owner would have received pursuant to Exhibit B of this Agreement for the term of the violation; and (ii) to the City, as liquidated damages, an amount equal to two times the difference between the amount the Owner actually received for the Unit leased in violation of this Agreement and the amount the Owner would have received pursuant to Exhibit B of this Agreement for the term of the violation. The parties agree that this formula for establishing liquidated damages is reasonable considering all the circumstances existing on the date of this Agreement, including (a) the range of harm that would result to the City and its housing program from violation of this Agreement by the Owner, and (b) the anticipation that proof of the actual damages would be costly and inconvenient. In the event the Tenant cannot be located within a reasonable time the Owner shall pay to the City the total amount due to the Tenant. Section 9. MONITORING FEE. The Owner agrees to pay to the City during the Project Period an annual monitoring fee payable on or before June 1 of each year and shall be calculated at the rate of $50.00 per each Very Low and Low Income Unit per year. Total annual fee $150.00. If the expenses of the City in monitoring compliance by the Owner, with provisions of this Agreement, are in excess of $150.00 in any annual period, the Owner upon written demand shall pay such actual excess costs in an amount not to exceed 5% increase per year. Section 10. UNIT MIX, LOCATION AND HOUSEHOLD SIZE. The Qualified Units shall be located on the parcel described in Exhibit A and shall consist of one studio and two one -bedroom units. The Owner will be responsible for choosing the qualifying units and the affordability levels for each of the qualifying units. Section 11. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. Section 12. AMENDMENTS. This Agreement shall be amended only by written instrument signed by all of the parties hereto. Section 13. ATTORNEY'S FEES. In the event that a party to this Agreement brings an action against any other party to this Agreement by reason of the breach of any condition or covenant, in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable attorney's fees to be fixed by the court which shall render a judgment, as well as the costs of suit. Faskin Trust 2350 Kerner Blvd -540 Canal 8 Section 14. SEVERABILITY. If any provision of this Agreement shall be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction because it conflicts with any other provision (s) or any constitution or statute or rule of public policy, or for any reason, such circumstance shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance or of rendering any other provision or provisions contained herein invalid, inoperative, or unenforceable to any extent whatsoever. The invalidity of any one or more phrases, sentences, clauses or sections contained in this Agreement shall not affect the remaining portions of this Agreement, or any part hereof. Section 15. RECORDING AND FILING. The Owner shall cause this Agreement and all amendments hereto to be recorded and filed in the real property records in the office of the County Recorder of Marin County within 5 working days of the City's execution of the Agreement and shall pay all fees and charges incurred in connection therewith and shall transmit a recorded copy to the City. Upon the expiration of the Project Period the City shall cooperate with the Owner, at the sole expense of the Owner, in the recording of such instruments or instruments of release or termination as the Owner may reasonably request. Section 16. NOTICE. All notices required or permitted under this Agreement shall be sent by certified United States mail, or an overnight courier service requiring a signed receipt, addressed as follows : TO THE CITY: City of San Rafael Attn : Economic Development Director P.O. Box 151560 San Rafael, CA 94915-1560 TO THE OWNER: Mr. Bruce Jones, Trustee San Rafael Land Company, LLC c/o Gate Capital 222 Sutter Street, Suite 400 San Francisco, Ca 94108 Notice shall be deemed served for purposes of the Agreement one day after deposit in the United States mail or acceptance by the overnight courier service. Any party may change its address for purpose of notice by giving notice pursuant to this section. Section 17. TERMINATION. This Agreement shall terminate and be of no further force or effect at the end of the Project Period. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first written above. (Signatures on next page) Faskin Trust 2350 Kerner Blvd -540 Canal 9 CITY OF SAN RAFAEL ATTEST: BY: Name ."4AL&ET . B0 R40 JeA�,A Title : Mayor el. C8 hci i City Clerk MarkEOwner . TM: By: inan Assistant City Attorney Its: Owner Faskin Trust 2350 Kerner Blvd -540 Canal 10 1 -2 7 .0a