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Home My WebLink AboutED RA BMR Ownership Program; Marin Housing 2009CITY OF AGENDA ITEM NO.: 3 SAN RAFAEL MEETING DATE: October 19, 2009 San Rafael Redevelopment Agency Agenda Report SUBJECT: A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN RAFAEL APPROVING THE EXECUTION OF A LOAN TO MARIN HOUSING IN AN AMOUNT NOT TO EXCEED TWO HUNDRED AND THIRTY FIVE THOUSAND DOLLARS ($235,000) FOR THE PURCHASE OF A BELOW MARKET RATE HOUSING UNIT (A.P.N 179-451-02) Department: Redevelopment Prepared by: (� li�Gl� �A t w Initials: ejj Nancy Mackle, Economic Development Director Ken Nordhoff, Executive Director RECOMMENDATION: Staff recommends that the Agency adopt the attached resolution authorizing a loan to Marin Housing in an amount not to exceed $235,000 for the purchase of a Below Market Rate unit and associated legal fees, and authorize the Economic Development Director to affect the Loan Agreement. BACKGROUND: The City has contracted with the Marin County Housing Authority ("Marin Housing") to administer the Below Market Rate ("BMR") Housing program for ownership units. The City's BMR Agreement provides that each contract conveying a BMR unit to a buyer include a resale restriction and an option to purchase constituting a right of first refusal to Marin Housing ("Resale Restriction"). In most cases Marin Housing qualifies a buyer to purchase the unit and the unit is transferred directly from the seller to the qualified buyer and Marin Housing does not provide any funding. Occasionally, a BMR unit must be purchased by a public agency to assure the unit remains in the BMR program. In these situations, San Rafael has utilized the Agency's Low and Moderate Income Housing Fund ("Housing Fund) for acquisition loans to Marin Housing or to directly purchase the BMR unit. In the past three years the Agency has authorized the purchase of several BMR units and actually purchased two units. One unit was resold to an eligible buyer and the funds were returned to the Agency. The Agency currently owns the second unit, which Marin Housing is actively marketing. The Agency paid $245,000 for this moderate income unit. The Agency has also provided "silent second" loans to reduce the initial sales price of BMR units. These silent second loans are repaid upon sale or refinance of the unit. The Agency paid $50,000 for two silent seconds and authorized up $35,000 for a silent second for the Agency owned unit that is currently being marketed. FOR AGENCY SECRETARY ONLY File No.: Agency Meeting: Disposition: _ ANALYSIS: The contract between the BMR owner and Marin Housing requires the owner to occupy the unit. Marin Housing has received information from the homeowners association that this owner is no longer living in the unit. Once the loan is approved, Marin Housing will contact the owner with an offer to purchase the unit for the contracted resale price of $207,000. If the owner refuses, Marin Housing will exercise the option and commence legal action. Staff is requesting an authorization of $235,000 to purchase the unit and fund the legal costs. FISCAL IMPACT: The loan shall not exceed $235,000 and would be charged to the Housing Fund. The funds will be repaid to the Agency's Housing Fund. The Agency currently owns one unit, which was purchased for $245,000 and has provided $50,000 in silent seconds. These funds will be returned to the Agency when the units are sold. With this authorization, the Agency will have authorized $610,000 of additional affordable housing funds to purchase units. If the units must be purchased, the funds will be returned when the unit is resold. OPTIONS: • Adopt the resolution authorizing a loan agreement in a form to be approved by the City Attorney and authorizing the Economic Development Director to effect the loan agreement. • Reject the loan request. Staff does not recommend this option, as the unit could be removed from the affordable ownership housing stock. ACTION REQUIRED: Adopt the attached resolution. SAN RAFAEL REDEVELOPMENT AGENCY RESOLUTION NO. 2009 - MOVED: MEMBER SECONDED: MEMBER A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN RAFAEL APPROVING THE EXECUTION OF A LOAN TO MARIN HOUSING IN AN AMOUNT NOT TO EXCEED TWO HUNDRED AND THIRTY FIVE THOUSAND DOLLARS ($235,000) FOR THE PURCHASE OF A BELOW MARKET RATE HOUSING UNIT (A.P.N 179-451-02) WHEREAS, the City Council (the "City Council") of the City of San Rafael (the "City") has adopted and amended, from time to time, the Redevelopment Plan (the "Redevelopment Plan") for the Central San Rafael Redevelopment Project Area (the "Project Area"); and WHEREAS, the San Rafael Redevelopment Agency (the "Agency") is responsible for administering the Redevelopment Plan to cause redevelopment of the Project Area, including the provision of housing available at affordable housing cost to low and moderate income households; and WHEREAS, The City of San Rafael General Plan Policy H-19 requires a portion of the units in residential projects include units affordable to low and moderate income households; and WHEREAS, the City of San Rafael contracts with the Marin County Housing Authority ("Marin Housing") to manage the City's ownership Below Market Rate Housing; and WHEREAS, Marin Housing and the owner of the property identified as APN 179-451-02 entered into a resale restriction and an option to purchase constituting a right of first refusal to Marin Housing ("Resale Restriction") in 1992; and WHEREAS, Marin Housing desires to exercise its option to purchase a Below Market Rate unit pursuant to the Resale Restriction, but Marin Housing does not have the funds necessary to exercise the purchase option; and WHEREAS, the Agency desires to provide a loan to Marin Housing (the "Agency Loan") to finance acquisition of such unit by Marin Housing, so that the unit might remain in the City's Below Market Rate Housing program; and WHEREAS, it is proposed that the Agency fund the Agency Loan with Two Hundred and Thirty Five Thousand Dollars ($235,000) from the Agency's Low and Moderate Income Housing Fund (the "Housing Fund"); and WHEREAS, the loan repayment will be deposited into the Agency's Low and Moderate Income Housing Fund; and WHEREAS, the preservation of this affordable housing unit Development will benefit the Project Area and serve major Redevelopment Plan goals and objectives; and WHEREAS, The California Environmental Quality Act (Public Resources Code Sections 21000 et sM.) ("CEQA") imposes no conditions on the Agency's consideration and approval of this Agreement, because the project undertaken pursuant to this Agreement is an acquisition of existing improvements and such projects are exempt from CEQA requirements under the categorical exemption set forth in 14 CCR Section 15301; and WHEREAS, by staff report accompanying this Resolution and incorporated into this Resolution by this reference (the "Staff Report"), the Agency has been provided with additional information upon which the findings and actions set forth in this Resolution are based. NOW, THEREFORE, BE IT RESOLVED that the Agency hereby: 1) incorporates by reference the accompanying staff report; and 2) Finds and determines that the above recitals and the information contained in the accompanying staff report are true and correct and serve as the basis, in part, for the findings and actions of the Agency set forth below. BE IT FURTHER RESOLVED that, based on information and analysis set forth in the above Recitals and contained in the Staff Report accompanying this Resolution, the Agency hereby finds and determines pursuant to Health and Safety Code Section 33334.2(g) that the use of moneys from the Housing Fund to fund the acquisition of the Below Market Rate unit by Marin Housing will be of benefit to the Project Area and the program of redevelopment pursuant to the Redevelopment Plan. BE IT FURTHER RESOLVED that the Agency hereby approves the Agency Loan and allocates Two Hundred and Thirty -Five Thousand Dollars ($235,000) of Housing Fund monies to fund the Agency Loan. BE IT FURTHER RESOLVED that the Agency hereby authorizes the Economic Development Director to execute on behalf of the Agency the Loan Agreement, in a form to be approved by the Agency's Attorney, and to take all actions necessary to provide and implement the Agency Loan. BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon adoption. I, ESTHER BEIRNE, Agency Secretary of the San Rafael Redevelopment Agency, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the members of said Agency held on the 19`h day of October 2009, by the following vote, to wit: AYES: MEMBERS: NOES: MEMBERS: ABSENT: MEMBERS: ABSTAIN: MEMBERS: ESTHER BETRNE, Agency Secretary