RES-8424 Approval of Affordable Housing AgreementRESOLUTION NO. 8424
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ORANGE
CONSENTING TO THE APPROVAL OF AN AFFORDABLE HOUSING
AGREEMENT WITH ORANGE HOUSING DEVELOPMENT
CORPORATION REGARDING 161 NORTH PARKER STREET AND
MAKING CERTAIN FINDINGS
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 Northwest
Redevelopment Project Area (hereinafter referred to as the "Project Area"); and
WHEREAS, Orange Housing Oevelopment Corporation, a California corporation
OHOC") has entered into an agreement for the acquisition of certain improved real property
located at 161 North Parker Street (the "Site") outside but within the vicinity of the Project Area;
and
WHEREAS, the Site is improved with three dwelling units, which units OHOC has
inspected and believes to be suitable for the provision and maintenance of affordable housing; and
WHEREAS, the dwelling units on the Site are currently not available at affordable rent
to households having Very Low Income(s) as defined pursuant to Section 50053 of the California
Health and Safety Code; and
WHEREAS, OHOC proposes to complete the acquisition of the Site and to cause not less
than two of the three dwelling units at the Site to be maintained available at affordable rent to
Very Low Income households for a period of fifty-five (55) years. as more fully set forth in
an Affordable Housing Agreement (the "AHA") in the form submitted herewith;
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, the AHA provides for the imposition of long-term
affordability covenants.and contemplates the use of varied sources of private financing in connection with
the acquisition of the Site by
OHOC; and WHEREAS, while OHOC 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 acquisition 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 PUBL:21340_1194182359.
WHEREAS, based upon the foregoing, as well as the past experience of OHDC in
connection with obtaining permanent financing, it is anticipated that it will be necessary as a
condition to obtaining private funding for the acquisition of the Site by OHDC 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 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
WHEREAS, the City Council and the governing board of the Agency have duly
considered all terms and conditions of the AHA and believes that the activities described in the
AHA are in the best interests of the City and health, safety, morals and welfare of its residents,
and 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 Plan for the Northwest
Redevelopment Project, as well as the other Redevelopment Plans as adopted by the City of
Orange;
NOW, THEREFORE, the City Council of the City of Orange does hereby find,
determine. order and resolve as follows:
Section 1. The City Council finds and determines that the provision of affordable housing
pursuant to the AHA is of benefit to each of the following redevelopment projects and their
project areas: the Tustin Street Redevelopment Project; the Southwest Redevelopment Project:
and the Northwest Redevelopment Project,
Section 2. The City Council finds and determines 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 the Agency shall
obtain written commitments reasonably designed to protect the Agency's investment in the event
of default.
Section 3. The City Council consents and approves that the Executive Director of the
Agency is hereby authorized and directed to execute the AHA on behalf of the Agency and to
take all steps and sign all documents and instruments including, but not limited to, agreements
and escrow instructions to carry out the AHA on behalf of the Agency, and agreements or other
instruments as may be necessary or convenient to effectuate the subordination of affordability
pU8Lo21340_1194182359.13 2 D~cemher 7. 1994
convenants unless it is hereafter determined by the Executive Director or the Agency
that such subordination is not necessary.
PASSED, APPROVED AND ADOPI'ED this lihh of January, 1995.
CITY OF ORANGE, a municipal corporation
J
yor of the City of Orange
v
ATTFST:
A./:J;tn~ ~~Cilert?I
hereby certify that the foregoing Resolution was duly and regularly adopted by the
City Council of the City of Orange at their regular meeting thereof held on the lihh day
of January, 1995, by the following vote:AYES:
MURPHY, BARRERA, MAYOR COONTZ, SPURGEON NOFS:
NONE ABSENT:
NONE ABSTAIN:
SLATER JJ~
City
Clerk of e citY of 66mge 3