RESOLUTION NO. 26-82
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN CLEMENTE, CALIFORNIA, RECEIVING AND CONSIDERING THE INFORMATIONAL REPORT REGARDING LOAN FORGIVENESS OF THE OUTSTANDING NO-INTEREST HOUSING LOANS ASSOCIATED WITH PROPERTIES LOCATED AT 133 & 135 W. CANADA AND 143 W. MARQUITA OWNED AND OPERATED BY MARY ERICKSON COMMUNITY HOUSING WHEREAS, Mary Erickson Community Housing (“MECH”) owns and operates the affordable housing units located at 133 & 135 W. Canada and 143 W. Marquita within the City of San Clemente; and WHEREAS, the properties located at 133 & 135 W. Canada were acquired on June 28, 1994 and consist of eight residential units, and the property located at 143 W. Marquita was acquired on November 6, 1996 and consists of four residential units; and WHEREAS, the City previously issued no-interest, 30-year deferred-payment loans secured by Deeds of Trust in the original principal amounts of $100,000 for the Canada properties and $145,000 for the Marquita property; and WHEREAS, the loan associated with 133 & 135 W. Canada matured on June 28, 2024 and remains outstanding in the amount of $100,000, with interest of $18,303 accrued, due to nonpayment, as of May 5, 2026 and continuing to accrue at a rate of ten percent (10%) per annum, and the loan associated with 143 W. Marquita matures on November 6, 2026 and remains outstanding in the amount of $145,000; and WHEREAS, each property is subject to affordability covenants with the County of Orange, with the Canada covenant remaining in effect until June 2034 and the Marquita covenant remaining in effect until 2051; and WHEREAS, on December 13, 2024, MECH submitted a request seeking forgiveness of the matured loan associated with the Canada properties, and subsequently discussed additional potential financial assistance related to rehabilitation and affordability preservation; and WHEREAS, MECH identified an estimated annual affordability gap of $35,280 to maintain six units at 50% Area Median Income (AMI) rather than 60% AMI, which over approximately nine remaining years of the County covenant would total approximately $317,520; and WHEREAS, the City Council directed staff at its February 17, 2026 meeting to return with an informational report outlining the loan history, financial considerations, and policy implications; and WHEREAS, loan forgiveness would result in the City foregoing approximately $245,000 in anticipated program income and may require consideration of public purpose and fiscal stewardship obligations; and WHEREAS, the affordable housing operated by MECH is consistent with the City’s Housing Element, including Section 4.03 (Partnership Resources), Program 16 (Preservation of Existing Affordable Housing), and Program 17 (Support of Affordable Housing Resources); and WHEREAS, the City has only previously forgiven housing-related loans under distinct redevelopment or original contractual circumstances, including certain low-income homeowner rehabilitation loans and a loan associated with the acquisition of transitional housing facility.
NOW THEREFORE, the City Council of the City of San Clemente, California, does hereby find, determine, and resolve as follows:
SECTION 1. That the foregoing recitations are true, correct, and incorporated fully herein.
SECTION 2. The City Council hereby receives and considers the informational staff report regarding the outstanding housing loans associated with the properties located at 133 & 135 W. Canada and 143 W. Marquita, and any public comment related thereto, and denies the request for forgiveness of the deferred-payment loans secured by Deeds of Trust recorded against these properties.
SECTION 3. The City Council further directs that repayment of the outstanding loan balances, including interest owed, shall be required in accordance with the terms of the applicable loan agreements, and authorizes and directs staff to take such administrative actions as necessary to implement this direction.
SECTION 4. The City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions. [Continued on next page]
PASSED AND ADOPTED this ______ day of __________, 2026.
ATTEST:
___________________________
City Clerk of the City of
San Clemente, California
_________________________
Rick Loeffler, Mayor of the City of
San Clemente, California
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) §
CITY OF SAN CLEMENTE )
I, LAURA CAMPAGNOLO, City Clerk of the City of San Clemente, California, do hereby certify that Resolution No. 26-82 was adopted at a regular meeting of the City Council of the City of San Clemente held on the _______ day of _______________________, _________, by the following vote:
AYES:
NOES:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Clemente, California, this _____ day of _________________, ________. __________________________
CITY CLERK of the City of
San Clemente, California
Approved as to form:
___________________________
Elizabeth A. Mitchell, City Attorney
Resolution No. 26-82 Page 2
Attachment 1