RES-ORA-0311 Affordable Housing Agreement with Plaza Garden Apartments LLCRESOLUTION NO. ORA-
0311
A RESOLUTION OF THE ORANGE REDEVELOPMENT AGENCY
APPROVING AN AFFORDABLE HOUSING AGREEMENT WITH PLAZA
GARDEN APARTMENTS LLC, A CALIFORNIA LIMITED LIABILITY
COMPANY, AND MAKING CERTAIN FINDINGS
pLAZA GARDEN APARTMENTS)
WHEREAS, the Orange Redevelopment Agency (hereinafter referred to as the "Agency")
under the provision of the California Community Redevelopment Law, is engaged in activities
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 "Project Areas", respectively); and
WHEREAS, on March 26, 1996, by Resolution No. ORA-0306, the Agency authorized
the execution of an Agreement (the "Prior Draft") with Barry A. Cottle, Kenneth H. Crume,
and Richard Sciuto (the "Prior Proponents") concerning the acquisition and redevelopment by the
Prior Proponents of a 56-unit apartment project located on a site situated outside the Project
Areas (the
Site"); and WHEREAS, the Agency has received written notification from the Prior
Proponents that they will not be proceeding to execute, and desire to relinquish any rights granted pursuant
to the Prior
Draft; and WHEREAS, Plaza Garden Apartments LLC, a California limited liability
company ("PGA "),has proposed to acquire, renovate, and maintain as affordable housing the 56-
unit apartment project located on the Site, and upon such renovation of such fifty-six apartment units,
to maintain such units at affordable housing cost for a period of
fifty-five (55) years; and WHEREAS, PGA 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 outside of the Project Areas of the Projects is beneficial to each of
those
Projects and Project Areas;and WHEREAS, the Agreement provides for the
imposition of long-term affordability covenants,and contemplates the use
WHEREAS, while PGA has attempted to obtain private financing on favorable terms which
would not 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 be superior to
any long-term affordability covenants in favor of the
Agency; and 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 subsumtially 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 eventof
default..."; and WHEREAS, based upon material presented to the Agency, there is not
an economically feasible alternative 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 HEREAS, those natural persons holding interests as Members of PGA (
namely, Mark L. Conze:lman, William G. Sommerville, Barry A. Cottle and Kenneth H.
Crume, hereinafter referred to as the "Principals") additionally propose to renovate twenty-four (24)
apartment units on adjacent real property (the "HOME Property") pursuant to an agreement (
the "HOME Agreement")between 2l separate limited liability company in which all Members are Principals (
and which other limited liability company is Orange Garden Apartments LLC, a California
limited liability company)and the City
of Orange; and W'HEREAS, 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
that such activities promote the affordable housing objectives of the Community Redevelopment Law as
well as the Redevelopment Plans for
the Redevelopment Projects;NOW, THEREFORE, BE IT RESOLVED by the Orange
Redevelopment
Agency as follows:Section 1. The Agency finds and determines 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 reasonably available, and
the Agency shall obtain written commitments reasonably designed to protect the Agency's investment in
the
event of default.Reso. No. ORA-0311 2
Section 2. The Agency acknowledges receipt of written notification from the Prior
Proponents that they will not be proceeding to execute, and desire to relinquish any rights granted
pursuant toO the Prior Draft. The Agency has not executed the Prior Draft, and based upon the
written notification as received from the Prior Proponents, the Agency rescinds the approval of
Resolution No. ORA-0306 and the Prior
Draft.
Section 3. 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 4. The Agency approves the Agreement, and authorizes and directs the Executive
Director toO execute the Agreement and to take all steps and sign all documents and instruments
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 or the Agency that such subordination is not necessary.
AI)()PTED this 16thday of May , 1996.
ORANGE REDEVELOPMENT AGENCY,
a public body, corporate and politic
f ''
t..., .,,1 t..
t /? .-Ch~{rinan,
Orange Redevelopme Agency 1/ATTEST::
Reso.
No.
ORA-
0311 3 PUBL:38794_II094122359.0108
I hereby certify that the foregoing Resolution was introduced and adopted by the Orange
Redevelopment Agency at a regular meeting theroofheld on the 14thday of May , 1996,
by the following vote:
AYES:DIRECTORS: MURPHY, BARRERA, COONTZ, SPURGEON
NOES:DIRECTORS: SLATER
ABSENT:DIRECTORS: NONE
ABSTAIN:DIRECTORS: NONE
Reso. No. ORA~311 4 PUBL:38794_11094i22359.0108