RESOLUTION R2022-__
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NAPA, STATE OF CALIFORNIA, AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE LOAN DOCUMENTS WITH BURBANK HOUSING DEVELOPMENT CORPORATION FOR A 55-YEAR RESIDUAL RECEIPTS LOAN OF UP TO $3,300,000 WITH 0% INTEREST, FROM THE CITY OF NAPA AFFORDABLE HOUSING IMPACT FEE FUND FOR THE VALLEY LODGE APARTMENTS PROJECT, WHICH INCLUDES 55 REHABILITATED AND REPURPOSED UNITS OF PERMANENT SUPPORTIVE HOUSING, LOCATED AT 200 SOUTH COOMBS STREET; APPROVING AN INCREASED APPROPRIATION FOR THE AFFORDABLE HOUSING IMPACT FEE FUND BUDGET FOR FY 2023 IN THE AMOUNT OF $300,000 AS DOCUMENTED IN BUDGET ADJUSTMENT NO. 286; AND DETERMING THAT THE ACTIONS AUTHORIZED BY THIS RESOLUTION ARE EXEMPT FROM CEQA WHEREAS, there is a significant need for both affordable housing and permanent supportive housing in Napa; and WHEREAS, Burbank Housing Development Corporation (“Developer”), plans to develop the Valley Lodge Apartments Project, a 55-unit affordable rental project, which would be located on APN 005-171-015 at 200 South Coombs Street (the “Project”); and WHEREAS, the Project would include 54 rehabilitated and repurposed units as permanent supportive housing for recently homeless residents targeting 30% area median income and below households plus one unrestricted manager’s unit; and WHEREAS, on October 19, 2021, by Resolution R2021-101, the City Council reserved $3,000,000 from the City’s Affordable Housing Impact Fee Fund to assist in the development of the Project; and WHEREAS, on December 31, 2021, by Resolution R2021-122, the City Council authorized a reservation of Community Development Block Grant Disaster Recovery (CDBG-DR) multifamily housing program funds in the amount of $387,385 for the Project; and WHEREAS, on December 31, 2021, by Resolution R2022-033, the City Council authorized the City Manager to negotiate and execute loan documents with Developer for a 55-year residual receipts loan of up to $3,000,000, with 3 % interest, from the City of Napa Affordable Housing Impact Fee Fund for development of the Project; and WHEREAS, the City of Napa’s Underwriting Guidelines allow for a zero percent (0%) interest loan from the City of Napa Affordable Housing Impact Fee Fund when the proposed use/operation has no income source for repayment and provides that special needs developments may be offered the possibility of debt forgiveness tied to years of service provision; and WHEREAS, this project has received a Project Homekey Grant from the State of California for the purposes of providing affordable housing with supportive services for a period of 55 years to special populations including: chronically homeless, transitional aged-youth, and extremely low income households exiting homeless or at risk for homelessness; and WHEREAS, the Developer’s negotiations with the property owner for the purchase of this property have extended longer than originally anticipated resulting in an increased purchased price, necessitating the increase of the City’s loan amount by $300,000; and WHEREAS, the City Council has considered all information related to this matter, as presented at the public meetings of the City Council identified herein, including any supporting reports by City Staff, and any information provided during public meetings.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Napa, as follows:
The City Council hereby finds that the facts set forth in the recitals to this Resolution are true and correct and establish the factual basis for the City Council’s adoption of this Resolution.
This resolution supersedes and replaces R2022-033 in its entirety.
The City Council hereby determines that action authorized by this Resolution is exempt from CEQA pursuant to CEQA Guidelines Section 15301 (minor alterations to existing structures involving negligible expansion of use) and Section 15303 (conversion of small structures from one use to another where exterior modifications are minimal); and is statutorily exempt under Public Resources Code Section 21080.50, which exempts conversion of motels/hotels to transitional supportive housing.
The City Council hereby authorizes the City Manager to negotiate and execute loan documents with the Developer in the amount of up to $3,300,000 from the City of Napa Affordable Housing Impact Fee Fund to assist with the acquisition and construction of the Project, subject to approval of the form of loan documents by the City Attorney, which incorporate the following terms and conditions:
The City’s funds shall be structured as a non-recourse zero percent (0%) interest, residual receipts loan with a term of 55 years.
The loan shall be evidenced by a Promissory Note and secured by a Deed of Trust and by a 55-year Regulatory Agreement recorded against the property.
The Developer shall pay the City a loan origination fee of 1% in the amount of $33,000.
Developer shall secure all financing for the Project prior to disbursement of the loan, Developer shall close escrow on its acquisition of the property by August 31, 2022, and construction shall begin no later than November 30, 2022.
The City Manager shall have the authority to forgive the outstanding balance of the loan at the end of the 55-year regulatory period if the following conditions have been met:
The Developer has complied with all terms of the Affordable Housing Impact Fee Loan Documents and the documents executed in connection with the City CDBG-DR Loan; The Developer has timely submitted all required reports and made all required payments of Residual Receipts in accordance with the Affordable Housing Impact Fee Loan Documents and documents executed in connection with the City CDBG-DR Loan; and The Developer has demonstrated to the reasonable satisfaction of the City Manager that it lacks a source of funds to repay the remaining outstanding balance.
The City Council hereby approves a budget adjustment of $300,000 to the Affordable Housing Impact Fee Fund as documented in Budget Adjustment No. 286.
This resolution shall take effect immediately upon its adoption.
I HEREBY CERTIFY that this resolution was PASSED AND ADOPTED at a special meeting of the City Council of the City of Napa held on August 23, 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST: ________________________
Tiffany Carranza
City Clerk
Date: __________
Approved as to form:
Michael W. Barrett
City Attorney
ATTACHMENT 1
R2022-__ Page PAGE 3 of NUMPAGES 3 August 23, 2022
ATTACHMENT __
R2017-__ Page PAGE 1 of NUMPAGES 4 Type approved date of resolution here