Fremont City Council Meeting: 06/11/24 07:00 PM
3300 Capitol Avenue Div/Dept: Housing
Fremont, CA 94538 Category: Affordable Housing
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5177) DOC ID: 5177
Updated: 6/5/2024 4:37 PM by Dina Lewis Page 1
RELEASE OF LAND USE COVENANT - Approve Release of Covenant Relating to Use of Lots 2 & 3 of Parcel Map 3503 for Property Owned by Good Shepherd Residences, Inc., and Making Findings of CEQA Exemption Contact Persons:
Name: Sharon Jones Dan Schoenholz
Title: Special Assistant Community Development Director Div/Dept: Housing Community Development
Phone: 510-494-4536 510-494-4438
E-Mail: [email protected] [email protected]
Executive Summary: Good Shepherd Residences, Inc. (Good Shepherd) requested the City Council to release a restrictive land covenant related to Parcel Map 3503, dated April 6 and 7, 1982, in order to obtain a loan from the United States Department of Housing and Urban Development (HUD) to transfer the property to an affiliated entity, refinance the housing development and complete improvements to the property. Staff recommends that Council approve Good Shepherd’s request and authorize staff to execute a release of the covenant substantially in the form attached as the attachment to this Report.
BACKGROUND: In April 1982, in consideration for approving Parcel Map 3503, which defined separate parcels and allowed for the sale of the parcels by Christ the King Evangelical Lutheran Church to Good Shepherd Residences, Inc. for the purpose of constructing and operating housing for developmentally disabled persons, including persons with physical or mental disability, the City Council approved a restrictive land covenant which provided that the property would be used “in perpetuity” for this purpose. The residences have been in use for forty years and the original HUD loan has been repaid. The City has no financial interest in the property and is not a party to a regulatory agreement.
DISCUSSION/ANALYSIS: Good Shepherd Residences, Inc. wishes to refinance the property with a new loan from HUD to complete improvements to the property, but the land covenant has been flagged by HUD because the restriction could make it difficult or impossible for HUD to sell the property in the event of a loan default resulting in foreclosure.
Staff has not been able to determine why the restriction was required at the time City Council approved Parcel Map 3503 in 1982, but City staff believes it is neither necessary nor appropriate for it to continue in perpetuity. Releasing the restriction will facilitate the owner’s financing of improvements to the facility.
The current and future intended use of the property is for residences for developmentally disabled persons. The intent of the covenant has been satisfied. Good Shepherd Residences, Inc. requests that the City release the land use restriction, as permitted in the covenant which states, “the warranties and covenants shall be and remain in effect until all or any thereof are expressly released by the City Council of the City of Fremont.” Staff recommends that the City Council approve the release of the land use restriction, Council Staff Report (ID # 5177) Meeting of June 11, 2024 Updated: 6/5/2024 4:37 PM by Dina Lewis Page 2
substantially in the form attached, and authorize staff to take all steps necessary and proper to implement the release.
FISCAL IMPACT: No fiscal impact
ENVIRONMENTAL REVIEW: The release of a covenant is categorically exempt from the California Environmental Quality Act (CEQA) under Guideline 15301, Existing Facilities, as the action makes no physical changes to an existing structure, and Guideline 15061(b)(3), as it can be seen with certainty that release of a covenant that is not associated with a change to an existing structure, within a zoning district that will continue to allow the same range of uses, will not have an adverse effect on the environment.
ATTACHMENTS:
• Release of Restrictive Covenant form Good Shepherd
RECOMMENDATION: Find that the release of the restrictive covenant is exempt from CEQA, review and approve the Release of Covenant related to Parcel Map 3503 for property owned by Good Shepherd Residences, Inc., and authorize the City Manager or her designee to sign a Release of Covenant substantially in the form as the attachment to this Report, and to take all steps necessary and appropriate to implement the same.