RES-ORA-0306 Approving Affordable Housing AgreementRESOLUTION NO. ORA-
0306 A RESOLUTION OF THE ORANGE REDEVELOPMENT
AGENCY APPROVING AN AFFORDABLE HOUSING AGREEMENT
WITH BARRY A. COTTLE, KENNETH H. CRUME, AND RICHARD
SCIUTO AND MAKING CERTAIN
FINDINGS pLAZA
GARDENS)WHEREAS, the Orange Redevelopment Agency (hereinafter referred to as
the Agency") under the provision of the California Community Redevelopment Law, is engaged
in activitie:s necessary for the execution of the Redevelopment Plan for the
Southwest Redevelopment Project Area and the Northwest Redevelopment Project Area (
hereinafter referred to as the "Redevelopment Projects" and the IIPrq,ject Areas", respectively);
and WHEREAS, Barry A. Cottle, Kenneth H. Crume and Richard Sciuto (collectively,
the Owner") have entered into an agreement to acquire a 56-unit apartment project located on
a site situated, outside the Project Areas (the "Site"), and propose to renovate and rehabilitate
all fifty-six apartment units, and to maintain such units at affordable housing cost for a
period offifty-five
55) years; and WHEREAS, Owner has requested that the Agency approve and
execute an Affordable Housing Agreement in the form submitted herewith (the "Agreement"), which sets
forth the times and conditions for the renovation and operation of the housing project on
the Site; and WHEREAS, as provided pursuant to Section 33334.2 of the Health &
Safety Code, the provision of affordable housing outside of a redevelopment project area but
within the corporate limits of the city is of benefit to redevelopment projects and redevelopment
projects areas located within
the city; and WHEREAS, in connection with the Redevelopment Projects, each of the
Agency and the City Council of the City of Orange have found and determined that the
provision of affordable housing outside of the Project Areas is beneficial to each of the Projects and
Project Areas; and WHEREAS, the Agreement provides for the imposition
of long-term affordability covenants, and contemplates theuse of varied sourc:
es of financing; and WHEREAS, while the Owner has attempted to obtain
private financing on favorable terms which would require the subordination of long-term
affordability covenants, all of those lenders who have expressed an interest in providing
financing for the proposed housing development have indicated that they will require that the lien
securing repayment of their loan must bt: superior to any long-term affordability covenants
WHEREAS, based upon the foregoing, it is anticipated that it will be necessary as a
condition to obtaining private funding for the housing project that the Agency subordinate its
affordability covenants; and
WHEREAS, Section 33334.14 of the Community Redevelopment Law provides, in part,
that affordability covenants of an Agency may be subordinated "where the agency makes a finding
that an economically feasible alternative method of financing, refinancing, or assisting the units or
parcels on substantially comparable terms and conditions, but without subordination, is not
reasonably available, and where the agency obtains written commitments reasonably designed to
protect the agency's investment in the event of default... "; and
WHEREAS, based upon material presented to the Agency, there is not an economically
feasible i!llternative method of financing available on substantially comparable terms; and
WHEREAS, in the event the Agency subordinates its affordability covenants, the Agency
shall have certain rights to notice and cure in the event of default under such loan as to which the
Agency subordinates its affordability covenants; and
WHEREAS, the Owner additionally proposes to renovate twenty-four (24)
apartment units on adjacent real property (the "HOME Property") pursuant to an agreement between
the Owner i1llld the City of Orange (the "HOME Agreement")~
and WHEREAS, the governing board of the Agency has duly considered all terms
and conditions of the Agreement and believes that the activities described in the Agreement are
in accord ,with the public purposes and provisions of applicable State and local law
requirements,and thut such activities promote the affordable housing objectives of the
Community Redevelopment Law as well as Redevelopment Plans for the Redevelopment
Projects;NOW, THEREFORE, BE IT RESOLVED by the Orange Redevelopment Agency
as
follows:Section 1. The Agency finds and determined that an economically feasible
alternative method of financing, refinancing, or assisting the units or parcels on the Site on
substantially comparable terms and conditions, but without subordination, is not reasonable available, and
the Agency shall obtain written commitments reasonably designed to protect the Agency's
investment in the event of
default.Section 2. The Agency finds and determines that the provision of affordable
housing pursuant to the Agreement and the HOME Agreement is of benefit to the
Redevelopment Projects and the Project
Areas.Section 3. The Agency approves the Agreement, and authorizes and directs the
Executive Director to execute the Agreement and to take all steps and sign all documents and
instruments JU:&o. No. ORA-0306
including, but not limited to, agreements and escrow instructions to carry out the Agreement on
behalf of the Agency, and agreements or other instruments as may be necessary or convenient to
effectuate the subordination of affordability covenants unless it is hereafter determined by the
Executive Director of the Agency or the Agency that such subordination is not necessary.
ADOPTED
this ~day of March 1996.ORANGE
REDEVELOPMENT AGENCY a
public body, corporate and politic i
I!I
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Orange Reaevelop~ni Agency L/C
ATTEST:I I /t-hereby
certify
that
the
foregoing
Resolution
was
introduced and adopted by the Orange Redevelopment Agency at a regular meeting thereof
held on the 26th day of March 1996, by the following vote:AYES:DIRECTORS:
MURPHY I BARRERA I CHAIRMAN
COONTZ I SPURGEON I SLATER NOES:DIRECTORS: NONE ABSENT:DIRECTORS: NONE ABSTAIN:
DIRECTORS: NONE Reso.
No. ORA-0306
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