RES-ORA-0279 Subordination Agreement with Orange Housing Development CorporationRESOLUTION NO. ORA-
0279 A RESOLUTION OF THE ORANGE REDEVELOPMENT
AGENCY AUTHORIZING AND APPROVlNG THE EXECUTION OF
AN AGREEMENT SUBORDINATING AFFORDABILITY COVENANTS TO
A DEED OF TRUST SECURING PERMANENT FINANCING
IN CONNECTION WITH HOUSING DEVELOPED PURSUANT TO
A DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED,WITH THE ORANGE HOUSING DEVELOPMENT CORPORATION (
Pixley and Almond; 1515 East
Walnut)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 (hereinafter referred to as the "Project Area");
and WHEREAS, the Orange Housing Development Corporation (the "Developer") and
the Agency previously entered into a Disposition and Development Agreement (the "DDA"),
as approved by Agency Resolution No. ORA-0260 on December 8, 1992, pursuant to
which the Developer was to purchase and develop for use as affordable housing two
non-contiguous parcels Parcel A" consisting of certain real property at the northeast corner of
Pixley and Almond;Parcel B" consisting of 1515 East Walnut) located within the Project
Area, which parcels collectively constitute
the Site; and WHEREAS, the Developer has contemplated and the DDA reflected
that the Developer would develop the Site in conjunction with Walnut-Pixley,
Inc., a California corporation WPC") and Walnut-Pixley, L.P., a
California Limited Partnership ("WPL"); and WHEREAS, pursuant to Resolution No.ORA-0269
of the Agency, the Agency approved a First Amendment to Disposition and Development
Agreement By and Among the Orange Redevelopment Agency, the Orange
Housing Development Corporation, Walnut-Pixley, L.P.,and
Walnut-Pixley, Inc. (herein, the "First Amendment"); and WHEREAS, the Developer has
obtained a commitment for permanent financing from
the Savings Associations Mortgage Company, Inc. ("SAMCO"); and WHEREAS, the interest rate and
other terms of the SAMCO commitment are favorable to the Developer and will facilitate the
ability of the Developer to provide affordable housing pursuant to the terms of the DDA
as amended by
the First Amendment (collectively, the Amended
WHEREAS, SAMCO requires as a condition of its funding that the Agency subordinate
its affordability covenants to the lien of SAMCO's permanent financing; 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 in that the
rate offered by SAMCO is substantially lower than would be available from an alternative source
of credit, and the approval and funding of a loan would be materially delayed, resulting in
additional costs to the project; and
WHEREAS, the Agency has obtained certain rights to notice and cure in the event of
default under the SAMCO loan to the Developer; and
WHEREAS, SAMCO has submitted to the Agency a form of subordination agreement;
and
WHEREAS, the Agency has duly considered all terms and conditions of the requested
subordination and has determined that such subordination is 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;
NOW, THEREFORE, the Orange Redevelopment Agency does hereby find, determine,
order and resolve as follows:
Section 1. The Agency finds and determines that an economically feasible alternative
method of financing the units on substantially comparable terms and conditions to those offered
by SAMCO is not available. The Agency approves and authorizes the subordination of the
affordability covenants imposed pursuant to the Amended DDA to the lien of the SAMCO
permanent financing, and authorizes and approves the execution by the Executive Director on
behalf of the Agency of a subordination agreement in form mutually acceptable to SAMCO and
the Executive Director. Any requirements under the Amended DDA that SAMCO execute an
inter-creditor agreement will be deemed to be implemented by the execution and
implementation of the subordination agreement as described
herein.PUBL,17818_11941B2359.76
PASSED, APPROVED AND ADOPTED this 9th day of Auaust, 1994.
ORANGE REDEVELOPMENT AGENCY, a
public body, corporate and politic
ATfEST:
By: GENE BEYER
Chairman
By8<~ ti--?A/-/<2 >leeChau"
il JAl"~ 9)'}
e<<~~~Agenc ler~' v"I
hereby
certify that the foregoing Resolution was duly and regularly adopted by the Orange Redevelopment
Agency at a regular meeting thereof held on the .9.tb day of Auqust , 1994,
by the following vote:AYES: SPURGEON,
BARRERA, COONTZ, MURPHY NOES: NONE
ABSENT: BEYER
ABSTAIN: NONE
7?V/
f/~.,Qi]g~/Clerk, Orangeev~me Agency PU8L:17818_
1194I81359.76 3