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HomeMy WebLinkAboutCC Resolution 14132 (BMR Agr. 1200 Irwin St)RESOLUTION NO. 14132 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE CITY MANAGER TO SIGN A BELOW MARKET RATE HOUSING AGREEMENT FOR 1200 IRWIN ST (APN 014-013-05) WHEREAS, on July 16, 2007 the San Rafael City Council certified a Final Environmental Impact Report (FEIR) and approved a Rezoning (ZC06-002) from Medium Density Residential (MR2.5) to Medium Density Residential (MR2) and an Environment al and Design Review Permit (ED06-24) and Tentative Map (TS00-001) to allow the demolition of 10 units and construction of a new 15 -unit housing development located at 524 Mission Ave (APN 014-013-05); and WHEREAS, the address for this site was recently changed from 524 Mission Ave, as originally recognized, to 1200 Irwin St, to reflect the new configuration of the site and orientation of the buildings; and WHEREAS, the base density for the site is 13 units and the project received a density bonus of 2 units pursuant to San Rafael Municipal Code 14.16.030 and California Government Code Section 65915 in exchange for providing two affordable units on site; and WHEREAS, the City and the developer desire to enter into a Below Market Rate Housing Agreement and establish the affordability levels for the two units; and WHEREAS, while the development is a rental project, the developer has agreed to provide one unit affordable to a very low income household (at 50% of County median income) and one unit affordable to a low income household (at 65% of County median income); and WHEREAS, if and when the units are sold as ownership units, the developer has agreed to provide two units as affordable to low income households (at 65% of County median income). NOW THEREFORE BE IT RESOLVED that the City Manager is hereby authorized to execute, on behalf of the City of San Rafael, a the Below Market Rate Housing Agreement for the property located at 1200 Irwin St in San Rafael in a final form to be approved by the City Attorney and a copy of which is attached as Exhibit 1. I, Esther C. Beirne, 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 20t' day of June 2016, by the following vote, to wit: AYES: COUNCILMEMBERS: Gamblin, McCullough and Vice -Mayor Colin NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Bushey and Mayor Phillips .g A-- .e&W ESTHER C. BEIRNE, City Clerk (�6 �(--( A(v 14�e,,Ve'✓ 4, C. 173 T3 When Recorded Return to: Assessor -Recorder -County Clerk County of Marin RICHARD N. BENSON Assessor -Recorder -County Clerk HOUSING AUTHORITY OF THE COUNTY OF MARIN 2016-0033359 07/26/2016 2:49PM HOMEOWNERSHIP PROGRAMS REC FEE 0.00 ------------------------ 4020 CIVIC CENTER DRIVE 07/26/2016 2:50PM 2016072600171 SAN RAFAEL, CA 94903 ARCG67HTW1 BELOW MARKET RATE HOUSING AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS Project Name: SAN RAFAEL CARRIAGE HOUSES Location: 1200 IRWIN STREET, SAN RAFAEL, CA 94901 Developer: 524 MISSION STREET, LLC This Below Market Rate Housing Agreement and Declaration of Restrictive Covenants (the "Agreement") is made and entered into thistVVzir1•ftet'liday of kal, , 2y(to , among the CITY OF SAN RAFAEL, a municipal corporation ("City"), the HOUSINLUTHORITY OF THE COUNTY OF MARIN, a public body, corporate and politic, created under the Housing Authority Law of the State of California ("Marin Housing Authority"), and 524 MISSION STREET, LLC, a California limited liability company, or any successor in interest ("Developer"), collectively the "Parties," with reference to the following: A. The Developer is the owner of that certain real property situated within the corporate limits of the City, which real property is more particularly described in Exhibit "A" attached hereto (the "Property"). B. The City has adopted Affordable Housing Requirements in accordance with the provisions of the Housing Element of its General Plan and Zoning Ordinance Section 14.16.030 of the San Rafael Municipal Code (the "Affordable Housing Requirements"). C. The Developer has received a discretionary approval from the City Council of the City (Resolution No. 123 15) to construct a total of fifteen (15) residential units on the Property (the "Development"). The Developer intends to meet the Affordable Housing Requirements by constructing or causing to be constructed as part of the Development two dwelling units to be sold or rented at prices that are affordable to low income households (the "Affordable Units"). The remaining units in the Development are "Market Rate Units." The Developer has not yet determined whether the Affordable Units will be sold or rented upon initial occupancy. D. Under Government Code Section 65915 ("Density Bonus Law"), as part of the Development, Developer applied for, and City granted, the following regulatory incentives in exchange for the Developer's provision of the Affordable Units: (1) a density bonus of two units; and (2) reduced parking requirements as allowed by Density Bonus Law. 885\01\1897334.2 1 1; 1,gL1 JL 2 7 �%A�� 5/15/2016 `(J E. Pursuant to the Affordable Housing Requirements, Density Bonus Law, and the conditions of approval for the Development, the Developer is required to enter into this Agreement on terms acceptable to the City and consistent with Density Bonus Law. This Agreement shall be executed and recorded against the Property prior to the recordation of any parcel map or final map or issuance of any building permit for the Development. The purpose of this Agreement is to set forth the terms and conditions for producing and marketing the Affordable Units in greater specificity and to ensure that the Affordable Units are built as part of the Development. F. Marin Housing Authority is authorized by law to participate in programs that provide housing for households of very low, low, and moderate income and is by experience qualified to screen and determine the eligibility of applicants for very low, low, and moderate income housing. G. The Parties hereto desire, by this Agreement, to cooperate in implementing the efforts of the Developer to comply with the Affordable Housing Requirements. NOW THEREFORE, it is hereby agreed by and between the Parties hereto as follows: AGREEMENT The foregoing recitals are hereby incorporated by reference and made part of this Agreement. Section 1. Definitions. In addition to those terms defined in the Recitals and elsewhere in this Agreement, the following terms are specially defined for the purposes of this Agreement: (a) "Affordable Ownership Price" means a sales price calculated by the Marin Housing Authority that includes a reasonable down payment and results in a Monthly Housing Payment during the first calendar year of a household's occupancy that, for Low Income Households, is equal to or less than one -twelfth (1/12) of thirty-three percent (33%) of sixty five percent (65%) of Area Median Income, as adjusted for Assumed Household Size. An example of the calculations and methodology to be used to determine the Affordable Ownership Price is illustrated in Exhibit "C" attached hereto. (b) "Affordable Rent" means total monthly housing expenses as calculated by the Marin Housing Authority for use and occupancy of an Affordable Unit and for land and associated facilities, including parking; any separately charged fees or service charges assessed which are required of all tenants, other than security deposits; and including any charges assessed by a public or private entity and paid by the tenant; and a reasonable allowance for utilities (pursuant to a schedule provided by the Marin Housing Authority), including garbage collection, sewer, water, electricity, gas, other heating, cooking and refrigeration fuel, but not telephone or cable television service, that, (i) for Very Low Income Households, is equal to or less than one - twelfth (1/12) of thirty percent (30%) of fifty percent (50%) of Area Median Income, as adjusted for Assumed Household Size; and (ii) for Low Income Households, is equal to or less than one - twelfth (1/12) of thirty percent (30%) of sixty percent (60%) of Area Median Income, as adjusted for Assumed Household Size. An example of the calculations and methodology to be used to determine the Affordable Rent is illustrated in Exhibit "D" attached hereto. (c) "Affordable Unit Property" means the legal parcel(s) of land on which the Affordable Units will be constructed, together with any Affordable Unit and appurtenant improvements constructed on such land. 885\01\1897334.2 2 5/15/2016 N (d) "Area Median Income" means median yearly income in Marin County as published pursuant to California Code of Regulations, Title 25, Section 6932, or successor provision. (e) "Assumed Household Size" shall be based on presumed maximum occupancy levels of one person in a studio apartment, two (2) persons in a one -bedroom unit, three (3) persons in a two-bedroom unit, and one additional person for each additional bedroom thereafter. (f) "BMR Rental Agreement" means that Below Market Rate Rental Unit Agreement and Declaration of Restrictive Covenants between the Developer and the City, to be recorded against the Property if the Developer chooses to initially rent the Affordable Units. (g) "Deed of Trust" means the deed of trust, in the form provided by the Marin Housing Authority, executed by each buyer of an Affordable Unit, securing the buyer's performance under the Resale Agreement. (h) "Eligible Household" means a household that has been determined by the Marin Housing Authority to be eligible to purchase or rent an Affordable Unit pursuant to the requirements for eligibility adopted by the City and specified in Exhibit `B" attached hereto. (i) "Low Income Household" means a household whose income does not exceed the lower income limits applicable to Marin County, adjusted for household size, as published annually by the California Department of Housing and Community Development. 0) "Low Income Affordable Unit" means an Affordable Unit reserved for occupancy by Low Income Households at an Affordable Ownership Price or Affordable Rent. (k) "Moderate Income Household" means a household whose income does not exceed the moderate income limits applicable to Marin County, adjusted for household size, as published annually by the California Department of Housing and Community Development. (1) "Monthly Housing Payment" is determined by the Marin Housing Authority and includes monthly payment of mortgage interest and principal, property taxes, mortgage insurance, homeowner's insurance and homeowners' association dues. (m) "Resale Agreement" means the Resale and Refinancing Restriction Agreement and Option to Purchase, in the form provided by the Marin Housing Authority, executed by each buyer of an Affordable Unit, the City, and Marin Housing Authority. (n) "Very Low -Income Household" means a household whose income does not exceed the very low income limits applicable to Marin County, adjusted for household size, as published annually by the California Department of Housing and Community Development. (o) "Very Low -Income Affordable Unit" means an Affordable Unit reserved for rent by Very Low -Income Households at an Affordable Rent. Section 2. Satisfaction of Affordable Housina Requirement. The Affordable Housing Requirements and Density Bonus Law shall be satisfied with respect to the Property if: (a) the Developer constructs or causes to be constructed the Affordable Units meeting the requirements of Sections 3 through 5 below, in compliance with the schedule set forth in Section 6 below; and (b) Developer either: (i) offers all dwelling units in the Development for sale and sells all Affordable Units to Eligible Households in compliance with Sections 7 through 9 below, or, (ii) offers all dwelling units in the 885\01\18973341 3 5/15/2016 Development for rent, and rents all Affordable Units to Eligible Households in compliance with Section 10 below. Section 3. Number of Affordable Units. Developer shall construct, or cause to be constructed, at least two (2) Affordable Units. If the Affordable Units are initially sold, two (2) units shall be Low Income Affordable Units. If the Affordable Units are initially rented, one (1) unit shall be a Very Low Income Affordable Unit and one (1) unit shall be a Low Income Affordable Unit. Section 4. Location of Affordable Units. The Affordable Units shall be constructed on the Property in the location(s) shown or described in Exhibit "E" attached hereto. Section 5. Annearance. Size, Bedroom Count and Tenure,. The Affordable Units shall be of the same general design and exterior appearance as the Market Rate Units, of comparable quality of construction, and with the same number of average bedrooms as the Market Rate Units. Interior features of the Affordable Units shall be durable and of good quality. The Affordable Units shall include the number of bedrooms, square footage, and tenure indicated in Exhibit `B" attached hereto. Section 6. Schedule for Develooina Affordable Units: Decision Reeardine Tenure. Developer shall provide the Affordable Units pursuant to the following schedule: (a) Prior to recordation of any final or parcel map or issuance of any building permit for the Development, this Agreement shall be duly executed by the City, Marin Housing Authority, and the Developer and recorded against the Property. (b) Building permits for the Affordable Units shall be issued concurrently with building permits for the Market Rate Units, such that at least one building permit for an Affordable Unit shall be issued for each six building permits for Market Rate Units. (c) Certificates of occupancy or final inspections for the Affordable Units shall be issued concurrently with certificates of occupancy or final inspections for the Market Rate Units, such that at least one certificate of occupancy or final inspection for an Affordable Unit shall be issued for each six certificates of occupancy or final inspections for Market Rate Units. (d) At least one hundred twenty (120) days before issuance of any certificate of occupancy or approval of a final inspection for any dwelling unit in the Development, Developer shall inform Marin Housing Authority and City whether all dwelling units in the Development will be offered for sale or whether all dwelling units in the Development will be offered for rent. If Developer chooses to offer all dwelling units in the Development for sale, then the Affordable Units shall be offered for sale to Eligible Households. The Developer reserves the right to change the development from ownership to rental up until the time a minimum of one unit has been sold. For the purposes of this Section, a unit will not be considered sold until the close of escrow to a third party. If Developer chooses to offer all the dwelling units in the Development for rent, then the Affordable Units shall be rented to Eligible Households. If Developer chooses to sell the Affordable Units, Developer shall follow the procedures in Sections 7 — 9 of this Agreement. If Developer chooses to rent the Affordable Units, Developer shall follow the procedures in Section 10 of this Agreement. Section 7. Sale of Affordable Units to Elieible Households. Following completion of construction, if the Developer has determined that all dwelling units in the Development shall be initially offered for sale, the Developer shall sell all Affordable Units to Eligible Households at the Affordable Ownership Price established by the Marin Housing Authority as described in this Section. Developer shall make a good faith effort to market the Affordable Units to Eligible Households. 885\01\1897334.2 4 5/15/2016 (a) The Developer shall provide the Marin Housing Authority with written notice at least one hundred twenty (120) days before issuance of any certificate of occupancy or approval of a final inspection for any dwelling unit in the Development or approval of any final inspection for an Affordable Unit. The notice shall include the number of bedrooms and required income level of the unit. (b) The Developer agrees that the Affordable Ownership Price for the Affordable Units shall not exceed the prices set forth in Exhibit "C" attached hereto, unless modified by the Marin Housing Authority as described in subsections (c) and (d) below. Developer acknowledges and agrees that the Affordable Ownership Prices as shown in Exhibit "C" shall be calculated by Marin Housing Authority in its reasonable discretion in interpreting the requirements of this Agreement, and that Marin Housing Authority's calculation of the Affordable Ownership Prices shall be consistent with the methodology illustrated in Exhibit "C", shall be adjusted annually consistent with the Area Median Income determinations and shall be binding on the Developer. The Affordable Ownership Price shall be the absolute maximum price that the Developer or any other seller may receive as compensation for the sale of an Affordable Unit. The Affordable Ownership Price does not include proration of taxes, utilities, and homeowner's association fees, nor does it include such closing costs as insurance premiums, escrow costs, transfer taxes, recording fees, document preparation cost or similar items. (c) Recalculation of the Affordable Ownership Price shall be permitted at the time that the Developer provides written notice to Marin Housing Authority one hundred twenty (120) days prior to the issuance of any certificate of occupancy or approval of any final inspection for an Affordable Unit if: (i) the mortgage interest rate shown in Exhibit "C" is substantially different from the then -current market interest rate; (ii) the Area Median Income has changed from that set forth in Exhibit "C"; or (iii) the final approved homeowners association dues are different from the estimate shown in Exhibit "C." (d) Upon receipt of the Developer's 120 -day notice, the Affordable Ownership Price shall be recalculated by Marin Housing Authority using: (i) the most affordable available mortgage rate for a thirty (30) -year, fixed-rate mortgage as determined by Marin Housing Authority; (ii) the current Area Median Income; and (iii) the final approved homeowners association dues. Such an adjustment to the Affordable Ownership Price shall be allowed more than one time only if mutually agreed by all Parties to this Agreement. (e) Developer agrees to offer the Affordable Units for sale only to Eligible Households. Marin Housing Authority agrees to process applications and certify the eligibility of applicants as Low Income Households. In certifying eligibility of applicants, Marin Housing Authority shall adhere to the requirements for eligibility adopted by the City and specified in Exhibit "B". Selection of Eligible Households falling within any of the priorities established in Exhibit "B" shall be determined by a drawing or other equitable method mutually agreed upon by the City and Marin Housing Authority and administered by the Marin Housing Authority. Developer shall not unreasonably delay its review and acceptance or rejection of any purchase offer submitted by an applicant supplied by Marin Housing Authority. (f) During the 120 day notice period (Selling Period) the Marin Housing Authority shall provide timely written verification of the sales status of each Affordable Unit to the Developer and the Developer shall verbally report any confidential sales status information to the Marin Housing Authority. 885\01\1897334.2 5/15/2016 (g) In the event that any Affordable Unit does not close escrow on the date which is the later of the following to occur: (i) 90 days after the expiration of the 120 -day notice period, or (ii) 90 days after the certificate of occupancy has been issued, the Developer shall, in writing, offer the Affordable Unit for sale to the Marin Housing Authority or assignee at the Affordable Ownership Price. Within ten (10) working days after receipt of such written notice, Marin Housing Authority shall notify the Developer in writing whether or not it will purchase the Affordable Unit at the Affordable Ownership Price or whether it has assigned the offer to the City, another public agency, a non-profit organization, or an Eligible Purchaser. If Marin Housing Authority notifies the Developer that it or its assignee will purchase the Affordable Unit, the Developer shall execute a purchase and sale agreement and other documents described in Sections 8 and 9 below, as applicable, to sell the Affordable Unit to Marin Housing Authority or its assignee at the Affordable Ownership Price. Close of escrow shall take place on the date which is the later of the following to occur; (i) sixty (60) days after the date that the purchase and sale agreement is executed, or (ii) ten (10) days after Developer has done all acts and executed all documents required for close of escrow. The Developer shall convey title to the Affordable Unit at the close of escrow free and clear of any mortgage, lien, or other encumbrance, unless approved in advance in writing by the Marin Housing Authority or assignee. (h) In the event that Marin Housing Authority declines to purchase the Affordable Unit or to assign the offer provided pursuant to subsection (g) of this Section within ten (10) working days after receipt of such written notice, or does not close escrow on the unit within 60 days, the Affordable Unit may be sold by the Developer without restrictions as to price, and Sections 8 and 9 below will not apply to the sale of the Affordable Unit. In such event, the Developer shall pay to the City at close of escrow seventy-five percent (75%) of the difference between the sales price (less any real estate commissions not to exceed six percent (6%) of the sales price and the Affordable Ownership Price. The City shall pay to Marin Housing Authority ten percent (10%) of this sum for administrative costs related to administration of the City's Affordable Housing Requirements and shall utilize the remaining amount to provide housing affordable to Very Low, Low, and Moderate Income Households. Following payment of all sums due to the City, City shall release the property from this Agreement as specified in Section 13. Section 8. Marin Housing Authority Avvroval of Homebuver Documents. Approval of the following documents by the Marin Housing Authority shall be required prior to the offering for sale of the Affordable Units. (a) Form of Purchase and Sale Agreements for the Affordable Units (to be prepared by Developer and submitted to the Marin Housing Authority). Purchase and sale agreements between Developer and Eligible Households shall include requirements that: (i) Eligible Households shall execute documents for the benefit of the City and Marin Housing Authority as described in Section 9 below; and (ii) Marin Housing Authority shall be paid a transaction fee of 2% of the Affordable Ownership Price at close of escrow, split evenly between the Eligible Household (Buyer) and the Developer (Seller). A copy of the ratified Purchase and Sale Agreement shall be forwarded to the Marin Housing Authority upon execution. Except for terms required to effectuate this Agreement, the Affordable Units shall be offered to Eligible Purchasers on the same terms as the Market Rate Units are offered to purchasers. (b) Form of Resale Agreement, Deed of Trust, Request for Notice of Default and Sale, and Borrower's Disclosure (to be prepared by the Marin Housing Authority, following Developer's 120 -day notice to Marin Housing Authority). 885\01\1897334,2 6 5/15/2016 (c) The preliminary Department of Real Estate public report for the Development, including the Affordable Units (to be obtained by the Developer and submitted to the Marin Housing Authority). (d) Developer's form escrow instructions (to be prepared by the Developer and submitted to the Marin Housing Authority). Section 9. Homebuver Documents and Security Instruments. Prior to the sale of each Affordable Unit, Developer shall ensure that: (a) The Eligible Household and the Marin Housing Authority execute the Resale Agreement in the form provided by the Marin Housing Authority. The escrow instructions shall stipulate that the Resale Agreement shall be recorded against the Affordable Unit at close of escrow on the sale to the Eligible Household; and that the Resale Agreement shall be recorded junior only to the lien of the deed of trust securing the Eligible Household's first mortgage loan, or to a second mortgage loan only if such loan is provided by a public agency which requires such subordination, or as otherwise approved in writing by the Marin Housing Authority. (b) The Eligible Household signs the Deed of Trust to secure performance of the Eligible Household's covenants under the Resale Agreement. The Deed of Trust shall be recorded against the Affordable Unit, subordinate only to the Resale Agreement and the lien of the deed of trust securing the Eligible Household's first mortgage loan or to a second mortgage loan only if such loan is provided by a public agency which requires such subordination, or as otherwise approved in writing by the Marin Housing Authority. (c) A Request for Notice of Default and Sale is recorded for each deed of trust recorded at close of escrow. (d) The Eligible Household signs the Borrower's Disclosure in the form provided by the Marin Housing Authority. (e) Within five (5) days following closing of the sale of any Affordable Unit, Developer shall forward to the Marin Housing Authority copies of the buyer's and seller's settlement statements and all closing documents. Developer shall retain all records related to compliance with obligations under this Agreement and the Affordable Housing Requirements for a period not less than two (2) years from the date of sale of all units in the Development and make them available on five (5) business days' written notice to Marin Housing Authority or City employees or others designated by the Marin Housing Authority or City for the purposes of inspection and copying. Section 10. Rental Affordable Units. If the Developer elects to initially rent the Affordable Units following completion of construction, the Developer shall rent any Affordable Units to Eligible Households at Affordable Rents in compliance with this Agreement. Prior to issuance of any certificate of occupancy or approval of a final inspection for any dwelling unit in the Development, Developer shall enter into and record a BMR Rental Agreement with the City with a term of fifty-five (55) years, which BMR Rental Agreement shall include, but not be limited to, provisions regarding allowable rent, procedures for qualifying tenants, reporting, marketing procedures, and the like. Pursuant to Section 6, the Developer reserves the right to change the development from ownership to rental up until the time a minimum of one unit in the Development has been sold. If the Developer chooses to change the property from ownership to rental, the City shall prepare and the Developer shall enter into and record a BMR Rental Agreement, as shown above. In the event the Developer elects to initially rent the Affordable 885\01\1897334.2 5/15/2016 Units, Developer shall pay Marin Housing Authority an administrative fee equal to I% of the Affordable Ownership Price for all Affordable Units. (a) The Developer agrees that the initial Affordable Rent for the Affordable Units shall not exceed the prices set forth in Exhibit "D" attached hereto, unless modified by the Marin Housing Authority as described in subsections (b) and (c) below. Developer acknowledges and agrees that the Affordable Rents as shown in Exhibit "D" shall be calculated by Marin Housing Authority in its reasonable discretion in interpreting the requirements of this Agreement, and that Marin Housing Authority's calculation of the Affordable Rents shall be consistent with the methodology illustrated in Exhibit "D" and shall be binding on the Developer. Annual Affordable Rent increases shall be based on the increases in the Area Median Income and shall not be less that the baseline rents established in this agreement. The Affordable Rent shall be the absolute maximum price that the Developer or any other seller may receive as compensation for the rental of an Affordable Unit, including all fees for housing services, parking, and other services. The Developer or successor may not charge or receive any additional compensation for an Affordable Unit. (b) Recalculation of the Affordable Rents shall be permitted at the time that the Developer provides written notice to the City one hundred twenty (120) days prior to the issuance of any certificate of occupancy or approval of any final inspection for an Affordable Unit if: (i) Area Median Income has changed from that set forth in Exhibit "D"; (ii) utilities included in the contract rent have changed from that set forth in Exhibit "D"; (iii) Marin Housing Authority has prepared a new schedule of assumed utility costs; or (iv) other fees charged to tenants are different from that shown in Exhibit "D." (c) Upon receipt of the Developer's 120 -day notice, the Affordable Rents shall be recalculated by Marin Housing Authority using: (i) the current Area Median Income;; (ii) utilities included in contract rent; (iii) Marin Housing Authority schedule of assumed utility costs; and (iv) any changes in other fees charged to tenants. Such an adjustment to the Affordable Rents shall be allowed more than one time only if mutually agreed by all the Parties to this Agreement. (d) Procedures for qualifying tenants, reporting, marketing procedures, and the like shall be as provided in the BMR Rental Agreement entered into between the Developer and the City. The City or Marin Housing Authority may impose a reasonable fee for annual monitoring of the Affordable Units. Section 11. Affordable Rental Units Not Subiect to Costa -Hawkins Act., If Developer elects to initially rent the Affordable Units, Developer hereby acknowledges that the density bonus and parking reductions received by the Developer under Density Bonus Law are forms of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code. The Developer further covenants that it has agreed to limit rents under Civil Code Sections 1954.52(b) and 1954.53(a)(2), as required by this Agreement, in consideration for the City's approval of the density bonus and parking reductions as proposed by the Developer. Civil Code Sections 1954.52(b) and 1954.53(a)(2) provide that, where a developer has received such incentives, certain provisions of Civil Code Section 1954.51 et sea. (the "Costa -Hawkins Act") do not apply if a developer has so agreed by contract. The Developer hereby agrees that any rental Affordable Units provided pursuant to this Agreement are not subject to Civil Code Section 1954.52(a) or any other provision of the Costa -Hawkins Act inconsistent with controls on rents, and further agrees that any limitations on rents imposed on the Affordable Units by subsequent agreements are in conformance with the Costa -Hawkins Act. Section 12. Sale of Affordable Units Offered for Rent. If Affordable Units initially offered for rent are located on a separate legal parcel due to recordation of a final or parcel map at any time, then 885\01\1897334.2 5/15/2016 Developer or a future owner of the Affordable Units may sell the Affordable Units pursuant to the terms of this Section 12. The Affordable Units shall be sold to Eligible Purchasers at an Affordable Ownership Price to Low Income Households, as established by this agreement, except that each Affordable Unit shall fust be offered for sale to the existing tenant at the Affordable Ownership Price as adjusted for the current year's Area Median Income. At least one hundred twenty (120) days before offering a rental Affordable Unit for sale, the Developer or current owner shall provide the City and the Marin Housing Authority with written notice of the proposed sale of the Affordable Unit, including the number of bedrooms and required income level of the unit, and shall comply with the procedures specified in Sections 7 through 9 of this Agreement in the sale of the Affordable Unit. Additional requirements for sale of Affordable Units initially rented may be established in the BMR Rental Agreement, including but not limited to provisions for notice to tenants, rights of first refusal, limitations on rents, and extended lease provisions. Section 13. Release of Properly From Aareement. (a) Covenant RunninE with the Land. The covenants and conditions herein contained shall apply to and bind, during their respective periods of fee ownership, Developer and its heirs, executors, administrators, successors, transferees, and assignees having or acquiring any right, title or interest in or to any part of the Property and shall run with and burden the Property until terminated in accordance with this Section 13. Until the Property is released from the burdens of this Agreement pursuant to this Section 13, the owners of fee title to the Property shall expressly make the conditions and covenants contained in this Agreement a part of any deed or other instrument conveying any interest in the Property. (b) Affordable Units Offered for Rent. If the Affordable Units are initially offered for rent, all parts of the Property shall be released from the burdens of this Agreement upon recordation of the BMR Rental Agreement against the Property. (c) Affordable Units Offered for Sale. If the Affordable Units are initially offered for sale, all parts of the Property except for the Affordable Unit Property shall be released from the burdens of this Agreement upon recordation of the final map and the City's final inspection of the Affordable Units. Each Affordable Unit offered for sale shall be released from the burdens of this Agreement when it is: (i) sold to an Eligible Household in compliance with this Agreement; and (ii) a Resale Agreement, Deed of Trust and Request for Notice of Default are recorded against the Affordable Unit. Upon sale of all of the Affordable Units to Eligible Households as prescribed in this Agreement or offered for sale to the Housing Authority pursuant to Section 7(g), the entire Property shall be released from this Agreement, and the Agreement shall be released from record against all portions of the Property. (d) Recordation of Release. If the Developer believes that any portion of the Property may be released from the burdens of this Agreement, the Developer shall specify the parcels to be released and shall request the City to execute and record the release in the Official Records of Marin County in substantially the form attached as Exhibit "E" to this Agreement. Section 14. Default and Remedies. Failure of the Developer to cure any default in the Developer's obligations under the terms of this Agreement within thirty (30) days after the delivery of a written notice of default from the Marin Housing Authority or the City (or such longer period of time up to an additional one hundred twenty (120) days as may be necessary to remedy such default, provided that the Developer has commenced action during the thirty (30) days necessary to remedy such default, and the Developer is proceeding with reasonable diligence to remedy such default) will constitute a default under this Agreement, Density Bonus Law, and the Affordable Housing Requirements, and, in addition to any other remedy authorized by law or equity for breach of this Agreement, Marin Housing 885\01\1897334.2 9 5/15/2016 Authority and/or the City may exercise any and all remedies available to it with respect to the Developer's failure to satisfy the terms of this Agreement, Density Bonus Law, and the Affordable Housing Requirements, including but not limited to: (a) withholding, conditioning, suspending, or revoking any permit, license, subdivision approval or map, or other entitlement for the Development, including without limitation final inspections for occupancy and/or certificates of occupancy; (b) exercising any remedies available under the Subdivision Map Act, the Affordable Housing Requirements, Density Bonus Law, the City's Municipal Code, or otherwise, with respect to the Developer's failure to satisfy the terms of this Agreement, Density Bonus Law, and the Affordable Housing Requirements; (c) instituting against the Developer, or other parties, a civil action for declaratory relief, injunction or any other equitable relief, or relief at law, including without limitation an action to rescind a transaction and/or to require repayment of any funds received in connection with such a violation; (d) where one or more persons have received a financial benefit as a result of violation of this Agreement or of any requirement imposed under the Affordable Housing Requirements or Density Bonus Law, assessing, and instituting legal action to recover as necessary, a penalty in any amount up to and including the amount of financial benefit received, in addition to recovery of the benefit received. Section 15. Remedies Cumulative. No right, power, or remedy given to the Marin Housing Authority or to the City by the terms of this Agreement or the Affordable Housing Requirements is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the Marin Housing Authority and the City by the terms of any such document, the Affordable Housing Requirements, or any statute or otherwise against Developer and any other person. Neither the failure nor any delay on the part of the Marin Housing Authority or the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the Marin Housing Authority or the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy. Section 16. Attorneys Fees and Costs. If the Marin Housing Authority, the City, or the Developer is required to initiate legal proceedings to enforce its rights under this Agreement, the prevailing party in such action shall be entitled to an award of reasonable attorneys' fees and costs in addition to any other recovery under this Agreement. Section 17. Hold Harmless and Indemnification. Except for an award of attorneys fee to Developer pursuant to Section 16, Developer will indemnify and hold harmless Marin Housing Authority and City and their elected officials, officers, employees, and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating in any manner to the Development, the Affordable Units, or Developer's performance or non-performance under this Agreement, including without limitation the construction or sale of any unit in the Development, and shall protect and defend Indemnitees, and any of them with respect thereto, except to the extent arising from the gross negligence or willful misconduct of the Marin Housing Authority or the City. The provisions of this Section 17 shall survive expiration or other termination of this Agreement or any 885\01\1897334.2 10 5/15/2016 release of part or all of the Property from the burdens of this Agreement, and the provisions of this Section 17 shall remain in full force and effect. Section 18. Hold Harmless — City. The City shall indemnify and hold harmless Marin Housing Authority, its officers, officials, employees and agents, from and against all claims, damages, loses and expenses including attorneys fees arising out of the performance of this Agreement, caused in whole or part by any negligent act or omission of the City, except where caused by the active negligence, sole negligence, or willful misconduct of the Marin Housing Authority. Section 19. Notices. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, or by express courier service, to the Party to receive such notice at the addresses set forth below: To the City: City of San Rafael Attention: Economic Development Department P.O. Box 151560 San Rafael, CA 94915-1560 To Marin Housing Authority: Marin Housing Authority Executive Director 4020 Civic Center Drive San Rafael, CA 94903-4173 To the Developer: 524 Mission Street, LLC Thompson Development Inc. 250 Bel Marin Keys Blvd., Bldg. A Novato, CA 94949 Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. Section 20. Integrated Agreement. This Agreement constitutes the entire Agreement between the parties and no modification shall be binding unless reduced to writing and signed by the Parties. Section 21. Amendment of Agreement. This Agreement shall remain in effect for so long as the Property is subject to inclusionary housing obligations pursuant to the Affordable Housing Requirements, unless released pursuant to Section 13. This Agreement, and any section, subsection, or covenant contained herein, may be amended only upon the written consent of the City, Marin Housing Authority, and Developer. Section 22. No Joint Venture or Partnership. Nothing contained in this Agreement or any document executed pursuant to this Agreement shall be construed as creating a joint venture or partnership between Marin Housing Authority, City, and Developer. Nothing contained in this Agreement shall create or justify any claim against the Marin Housing Authority or City by any person that Developer may have employed or with whom Developer may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the Property or the construction of the Development. Section 23. Applicable Law and Venue. This Agreement shall be governed by California law. Venue for any dispute arising out of this Agreement shall be Marin County. 885\01\1897334.2 1 i 5/15/2016 Section 24. Waivers. Any waiver by Marin Housing Authority or the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by Marin Housing Authority or the City to take action on any breach or default of Developer or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Developer to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by Marin Housing Authority or the City to any act or omission by Developer shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for Marin Housing Authority's or the City's written consent to future waivers. Section 25. Title of Parts and Sections. Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions. Section 26. Multiple Orieinals: Counterpart. This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts. Section 27. Severabilitv. In the event any limitation, condition, restriction, covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, or if any provision of this Agreement is rendered invalid or unenforceable pursuant to any California statute which became effective after the effective date of this Agreement, the remaining portions of this Agreement shall nevertheless remain in full force and effect. Section 28. Exhibits. The following exhibits are attached to this Agreement: Exhibit A Legal Description of the Property Exhibit B Eligibility Requirements and Priorities Exhibit C Sample Calculation of Affordable Ownership Price Exhibit D Sample Calculation of Affordable Rent Exhibit E Location of Affordable Units Exhibit F Form of Release 885\01\1897334.2 12 5/15/2016 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. DEVELOPER: 524 Mission Street LLC, a California limited liability com�y By: l FalrZ.4 G �1.CLI wve5L- NAawLV-r- MA_RIN HOUSING AUTHORITY: Housing Authority of the County of Marin, a public body, corporate and politic, created under the Housing Authority Law of the State of California :Z By: Executive Director 885\01\1897334.2 13 5/15/2016 CITY: City of San Rafael, a municipal corporation By:\1' ` kCiManager APPROVED AS TO FORM: By: 2,14 4 City Attorney A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF tY% t On before e, , Notary Public, personally Jppeaifed ;a,01-1 _ , who proved to me on the basis of satisfactory evidence to be the personKwhose nameK subscribed-to't e within instrument and acknowledged to me t t e /they executed the same in i r/ eir authorized capacity(i�, and that by is teir signature(rs�j�on the instrument the person , or the entity upon behalf of which the person 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. ZaDALIA NIETO Commission # 2041836 Notary Public - California iZ Marin County 9y --vYV' My Comm. Expires Noy 3, 2017 f vf-.•'v'.' W -V''., "0""V 'vF V"Yi"V'vi' 885\O1\1897334.2 5/15/2016 Name: 1% _ Notary Public A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF Xo JSP/nJ On �vivG -Zy , -2,0r6, before me, E-- • E&I JPA, L , Notary Public, personally appeared 'ry ScF/ U 7z , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s&re subscribed to the within instrument and acknowledged to me that(i she/they executed the same irlff)s/her/their authorized capacity(ies), and that by ii 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. e-45— • Beue.. Name: .�'c6►�'�` Notary Publi E. BEIRNE o COMM. #2112433 z z NOLV Public • Califomia m Marin Counly MN Comm. ExDkes AN 10, 2019 885\0111897334.2 SECT JUN 2 7 2016 5/15/2016 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA COUNTY OF On , 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 his/her/their 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. Name: Notary Publi 885\01\1897334.2 5/15/2016 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY The land referred to is situated in the County of Marin, City of San Rafael, State of California, and is described as follows: Commencing at the corner formed by the intersection of the Northerly line of Mission Street with the Easterly line of Irwin Street; running thence Northerly along the Easterly line of Irwin Street 160 feet; running thence Easterly and parallel with Mission Street 165 feet to the Westerly line of Park Avenue thence Southerly along said Line of Park Avenue 160 feet, more or less, to the Northerly line of Mission Street, and thence Westerly along said last mentioned line of Mission Street, 165 feet to the point of commencement. APN: 014-013-05 885\01\1897334.2 A-1 5/15/2016 EXHIBIT B ELIGIBILITY REOUIREMENTS AND PRIORITIES Eligibility Reauirements In determining and certifying eligibility of applicants for the Development, Marin Housing Authority shall adhere to the following criteria: 1. Applicants shall be Very Low Income Households or Low Income Households, as applicable, as defined in this Agreement. 2. For ownership Affordable Units, the applicant must qualify as a first time homebuyer defined as not having owned a primary residential property within a three-year period preceding purchase of an Affordable Unit. 3. The applicant must have at least two persons in his/her household to purchase or rent a two- bedroom unit, three persons to purchase or rent a three-bedroom unit, and one additional person for each additional bedroom, unless a reasonable accommodation is required for a caretaker for a disabled person. 4. Eligible households for ownership Affordable Units must provide Marin Housing Authority with a mortgage loan pre -approval or commitment to lend and supporting documentation from an acceptable lender demonstrating financial capacity to purchase the Affordable Unit at the Affordable Ownership Price. Selection of Homebuvers or Renters In selecting prospective purchasers or renters from among all eligible applicants, a drawing shall be conducted. The City of San Rafael has determined that the following priorities shall be employed in conducting the drawing to select prospective purchasers or renters. All names shall be drawn from the group of applicants falling within the first priority before names are drawn from the second and subsequent priority groups. 1. First priority in the drawing shall go to applicants living or working in Marin County. 2. Second priority in the drawing shall go to all other applicants. 885\01\1897334.2 $-j 5/15/2016 RECT JUN 2 7 2016 5/15/2 EXHIBIT C SAMPLE CALCULATION OF AFFORDABLE OWNERSHIP PRICES LOW INCOME UNITS (a. 65% CA HCD AMI Number of bedrooms Household size (for calculation purposes) Median income for household size (see chart below) Median income reduced to affordability target shown above Monthly income (annual income divided by 12) 33% Housing -expense -to income ratio Breakdown of monthly housing expense Property Tax (estimated @ 1.25% of sales price) Homeowners Association Dues (estimated) Mortgage Insurance (estimated at .85 basis points) Debt Service on home purchase financing (P & 1) Total Housing Expense Financing -- assuming 30 -year, fixed-rate mortgage Rate (current prevailing rate / to be updated at completion) Term (months) Loan amount Loan -to -value ratio Purchase price Downpayment @ 5% Estimated closing costs (@ 4%) Estimated cash required for downpayment plus closing costs 885\01\1897334 2 5/15/2016 3BR 2BR 4 persons 3 persons 103,000 92,700 66,950 60,255 5,580 5,020 1,840 1,660 245 231 220 204 350 350 180 166 145 132 1,065 945 1,840 1,660 4.50% 4.50% 360 360 210,200 186,500 95% 95% 1 221,3001 1 196,3001 11,100 9,800 8,900 7.900 20,000 17,700 FY 2015 Marin County HCD Income Limits effective 4/15/2015 HH Size Median 65% 1 person $72,100 $46,865 2 persons $82,400 $53,560 3 persons $92,700 $60,255 4 persons $103,000 $66,950 EXHIBIT D SAMPLE CALCULATION OF AFFORDABLE RENT TOTAL NUMBER UNITS: 2 (1 Very Low Income and 1 Low Income) ALLOWABLE RENT CALCULATION: Housing expense includes utility allowance per schedule below (allowances from Marin Housing). Very Low Income is 50% of CA HCD Area Median Income and Low Income is 60% of CA HCD Area Median Income. The applicable household and unit sizes are listed below. Actual households can exceed the household size indicated but the rental calculation will not change. The One Bedroom Housing Expense shall not exceed 1/12 of 30% of 50% (very low income) or 60% (low income) of the CA HCD Area Median Income for a 2 -person household. The Two Bedroom Housing Expense shall not exceed 1/12 of 30% of 50% (very low income) or 60% (low income) of the CA HCD Area Median Income for a 3 -person household. The maximum qualifying tenant income is 50% of Area Median Income for very low and 60% of Area Median Income for low income. Area Median Income based on 2015 CA HCD figures. Household Size 4 Persons Unit Type 3 BRM Median Income 103,000 50% - Very Low 51,500 Monthly Income 4,292 30% of Income 1,288 Monthly Utility Allowance (78) Allowable Rent 1,210 60% - Low 61,800 Monthly Income 5,150 30% of Income 1,545 Monthly Utility Allowance (78) Allowable Rent 1,467 885\01\1897334.2 5/15/2016 RECDD JUN 2 7 4016 t w Iw _Z 3 EXHIBIT E LOCATION OF AFFORDABLE UNITS Each Below Market Rate unit is comprised of 1,298 SF of livable area containing three (3) bedrooms and three (3) bathrooms. Each unit also has a 574 SF garage on the entry floor which accommodates two tandem parking spaces. IEXISTING BUILD NG 1Z 1 lElb .tnm .r kaK' � � uva 1 u I all l I I wi I � �• - QLLJI I m FO FO '`-O x-00 z 1 W „ I ' fI " 1 E ._ 1 TWO AFFORDAB UNITS I_ � Unit Surnrl7arY Floor Size I Garage 574 SF Gp III 4 1� MISSION AVEN E 1220\07\619702.5 F-1 3/19/2009 Second 629 SF Third 669SF V 1 SITE PLAN SCALE: I"- W -o" EXHIBIT F RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of San Rafael P.O. Box 151560 San Rafael, CA 94915-1560 Attn: Esther C. Beime, City Clerk No fee for recording pursuant to Government Code Section 27383 (SPACE ABOVE THIS LINE FOR RECORDER'S USE) RELEASE OF BELOW MARKET RATE HOUSING AGREEMENT This Release of Below Market Rate Housing Agreement (the "Release") is made as of the _ day of 9200 —9 by the CITY OF SAN RAFAEL, a municipal corporation ("City"), the HOUSING AUTHORITY OF THE COUNTY OF MARIN, a public body, corporate and politic, created under the Housing Authority Law of the State of California ("Marin Housing Authority"), and and a ("Developer"). 1. This Release relates to that certain Below Market Rate Housing Agreement and Declaration of Restrictive Covenants by and between the City, the Marin Housing Authority, and the Developer dated , and recorded in the Official Records of the County of Marin (the "Official Records") on as Document No. (the "Housing Agreement"). 2. The obligations contained in the Housing Agreement have been performed as of the date entered above. Therefore, the City, the Marin Housing Authority, and the Developer hereby release the real property described in Exhibit A attached hereto and incorporated herein from the encumbrance of the Housing Agreement. 3. This Release may be signed in multiple counterparts, which, when signed by all parties, shall constitute a binding agreement. 885101\1897334.2 G-1 5/15/2016 IN WITNESS WHEREOF, the City, the Marin Housing Authority, and the Developer have executed this Release as of the day first above written. DEVELOPER: CITY: LIN City of San Rafael, a municipal corporation 0 City Manager MARIN HOUSING AUTHORITY: APPROVED AS TO FORM: Housing Authority of the County of Marin, a By: public body, corporate and politic, created under City Attorney the Housing Authority Law of the State of California LN Executive Director SIGNATURES MUST BE NOTARIZED 885\01\1897334.2 G-2 5/15/2016 PROFESSIONAL SERVICES AGREEMENT/CONTRACT COMPLETION CHECKLIST AND ROUTING SLIP Below is the process for getting your professional services agreements/contracts finalized and executed. Please attach this "Completion Checklist and Routing Slip" to the front of your contract as you circulate it for review and signatures. Please use this form for all professional services aereements/contracts (not just those requiring City Council approval). This process should occur in the order presented below. Step Responsible Description Completion Department Date 1 City Attorney Review, revise, and comment on draft agreement. 2 Contracting Department Forward final agreement to contractor for their signature. Obtain at least two signed originals from contractor. 3 Contracting Department Agendize contractor -signed agreement for Council approval, if Council approval f h U necessary (as defined by City Attorney/City (7 Ordinance*). 4 City Attorney Review- and approve form of agreement; bonds, and insurance certificates and endorsements. 5 City Manager / Mayor / or Agreement executed by Council authorized Department Head official. 6 City Clerk City Clerk attests signatures, retains original A agreement and forwards copies to the contracting department. To be completed by Contracting Department: Project Manager: Raffi Bolovan Project Name: BMR Housing Agreement San Rafael Carriap-e (buses at 1200 Irwin Street - 524 Mission Street, LLC Agendized for City Council Meeting of (if necessary): FPPC: ❑ , check if required If you have questions on this process, please contact the City Attorney's Office at 485-3080. * Council approval is required if contract is over $20,000 on a cumulative basis.