RES-ORA-0281 Approving Owner Participation AgreementRESOLUTION NO. ORA-
0281 A RESOLUTION OF THE ORANGE REDEVELOPMENT
AGENCY APPROVING AN OWNER PARTICIPATION AGREEMENT
WITH FAIRWAY MANOR, L.P., AND THE ORANGE
HOUSING DEVELOPMENT CORPORATION 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 Tustin
Street Redevelopment Project Area (hereinafter referred to as the "Project Area");
and WHEREAS, Fairway Manor, L.P., a California limited partnership ("Manor") and
the Orange Housing Development Corporation, a California corporation ("OHDC") propose
to develop a multifamily housing project consisting of fifty (50) units, all of which shall
be maintained at affordable housing cost, and not less than forty-nine (49) of which
shall be available for senior
housing; and WHEREAS, Manor and OHDC have requested that the Agency approve and
execute an Owner Participation Agreement in the form submitted herewith (the .OPA"), which sets
forth the times and conditions for the development and operation of the housing project at a
site located outside but within the vicinity of the Tustin Street Redevelopment
Project; and WHEREAS, pursuant to the OPA, at least twenty-four (24) of the dwelling
units to be developed would be kept available for use by senior households having Very Low
Income(s), as definedby Section 50052.5 to mean income(s) of not greater than fifty percent (
50%) of the areawide
median income; 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 Tustin Street,
Southwest, and Northwest Redevelopment Projects (collectively, the "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 OPA provides for the imposition of
long-term affordability covenants,and contemplates the use of varied sources of financing such as a construction
loan by a private,institutional lender , a permanent loan by a private, institutional lender , a grant
by the Agency, a loan by the Agency, and proceeds from the sale of tax credits to be
marketed in connection with the development of the housing project as proposed by
Manor and OHDC; and pU8L,
WHEREAS, it is coritemplated that, in connection with the sale of tax credits, the Tax
Credit Allocation Committee ("TCAC") will require the imposition of long-term
affordability covenants and that those covenants shall have priority over such covenants as the Agency
may impose;
and WHEREAS, while Manor and OHDC have 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, 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 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 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 governing board of the Agency has duly considered
all terms and conditions of the OP A and believes that the activities described in the OP A 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 Plan for the Tustin Street Redevelopment Project, as well
as the other Redevelopment Plans as adopted by the
City of Orange;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, 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 2. The Agency approves the OPA, and authorizes and
directs the Executive Director to ellecute the OP A and to take all steps and sign all
documents and instruments pU8L,18792_
including, but not limited to, agreements and escrow instructions to carry out the OPA 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.
PASSED,
APPROVED AND AOOPI'EDthis .2liKlay of R"'r~ , 1994.ORANGE
REDEVELOPMENT AGENCY,a
ic body, corporate and politic ATI'
EST:IhAAA~:
9 ?#A?/'At/Ag
CleJk 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 ..zzujay of September,
1994, by the following vote:AYES:
SPURGEON, BARRERA, COONTZ, MURPHY NOES:
NONE ABSENT:
MAYOR BEYER ABSTAIN:
NONE d/~/
CJ?~~AgencyIt (/ .PUBL:
18792 11941 B23S9 9S 3