Loading...
HomeMy WebLinkAbout4.09 Second Amend Arroyo Vista Redevelop1o�31Ii� OFDp�lf� o,,,mael2sl' 1982 STAFF REPORT CITY CLERK 04LIFOR�� DUBLIN CITY COUNCIL File # 1:11(90194A DATE: June 7, 2011 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJEC . Assignment and Assumption of and Second Amendment to Disposition and Development Agreement for the Arroyo Vista Redevelopment Project Prepared By: John Bakker, City Attorney EXECUTIVE SUMMARY: The City is a party to the Arroyo Vista Disposition and Development Agreement (DDA) with various parties, including Eden Housing. The DDA provided for the replacement of the Arroyo Vista public housing project with a new mixed -income housing development. The Arroyo Vista property has now been transferred to the market -rate and below -market -rate developers. The below -market rate developer, Eden Housing, is presently engaged in financing the development of its component of the Project and has requested certain minor, non -substantive changes to the DDA at the behest of its financiers. FINANCIAL IMPACT: None. RECOMMENDATION: Staff recommends that the City Council adopt the Resolution approving the Assignment and Assumption of, and Second Amendment to, the Disposition and Develop ent Agreement for the Arroyo Vista ct. Submitted By: Revi ed y: City Attorney Assistant City Manager DESCRIPTION: As background, Arroyo Vista was, until very recently, a public housing development on approximately 22.9 acres of land located at 6700 Dougherty Road and owned by the Housing Authority of the City of Dublin. On July 25, 2007, the City of Dublin, the Dublin Housing Authority (DHA), the Alameda County Housing Authority (HACA), Eden Housing and Citation Homes entered into a Disposition and Development Agreement (DDA) for the purpose of creating a new mixed income development on the site. In October of that same year the parties were sued by four Arroyo Vista tenants to set aside the DDA. On May 22, 2009, the Page 1 of 2 ITEM NO. �• -I �% Department of Housing and Urban Development (HUD) approved the Dublin Housing Authority's Disposition Application, and fhe plaintiffs' counsel proposed negotiations to settle the lawsuit. Negotiations were conducted over several months and approved by all parties to the DDA and ultimately HUD. On December 17, 2009, the settlement was approved by the court and the case was dismissed. In January, 2010, the DDA was amended by the City of Dublin and the other parties to the Agreement to comply with HUD-approval conditions. On March 1, 2011, pursuant to the terms of the DDA, Eden Housing and Citation took title to their respective portions of the Arroyo Vista property. Subsequently, Citation assigned its interests in the property to KB Home. At the point that the property was transferred, many of the obligations that the DDA imposes on the parties were satisfied, but a number of terms remain in effect. KB Home and Citation are now pursuing the development of the mixed-income development. Eden Housing is in the midst of financing the development of its portion of the project. In conjunction with its efforts to finance the development, Eden Housing and one of its financiers are requesting minor, non-substantive amendments to the DDA and Settlement Agreement. ~ Proposed Second Amendment to DDA. Eden has formed a limited partnership to finance, develop, own and operate the affordable housing component of the project. An affiliate of Eden is the general partner in the partnership. Eden and the investor limited partner have requested certain minor modifications to the DDA. In response, the parties to the agreement have negotiated the attached Assignment and Amendment Agreement. It reflects the following: 1) Eden Housing, Inc. assigns its rights and obligations under the DDA and the Settlement Agreement to the limited partnership. ~ 2) The affordable housing developer and the market-rate housing developer each agree to provide indemnities relating to its own component of the project. In other words, each developer will be responsible solely for its own defaults, and not for defaults caused by the other developer. 3) The investor limited partner for the affordable housing project will have the right to receive notice of defaults and to cure such defaults, the right to transfer limited partnership interests, and the right to replace the property manager and the general partner in the event of default. The City Council is being asked to adopt the proposed resolution approving .the assignment and assumption of the second amendment to the DDA (Attachment 1). NOTICING REQUIREMENTS / PUBLIC OUTREACH: Not applicable. ATTACHMENTS: 1) Resolution approving Assignment and Assumption of, and Second Amendment to, the Disposition and Development Agreement for the Arroyo Vista Project [with Agreement attached as Exhibit A] Page 2 of 2 ~ / 7 RESOLUTION NO. -11 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ~~*~~*~*~*:~*~:~~~*~*~~~~~~~~~~~~~~~~~~~~*:~~~*~ APPROVING THE ASSIGNMENT AND ASSUMPTION OF, AND SECOND AMENDMENT TO, THE DISPOSITION AND DEVELOPMENT AGREEMENT FOR THE ARROYO VISTA REDEVELOPMENT PROJECT WHEREAS, the Housing Authority of the City of Dublin (the "Authority") formerly owned Arroyo Vista, a public housing development located in the City of Dublin (the "City") at 6700 Dougherty Road (the "Property"); ~ WHEREAS, the Property was developed with 150 public housing units and a children's day care center, all of which were in need of substantial rehabilitation; WHEREAS, on July 25, 2006, the Authority determined that rehabilitation was economically infeasible and decided to seek redevelopment of the Property; WHEREAS, the City is a party to that certain Disposition and Development Agreement, dated July 25, 2007, by and among the Authority, the Housing Authority of the County of Alameda ("HACA"), Eden Housing, Inc., a California nonprofit public benefit corporation ("Eden"), and SCS Development Company, a California corporation, dba Citation Homes Central ("Citation") to facilitate the redevelopment of the Property; WHEREAS, pursuant to the DDA, Citation and Eden (collectively, the "Developer") proposed to redevelop the Property as a mixed-income development of approximately 405 units, consisting of affordable multi-family and senior rental units, affordable and market rate for-sale units, open space, a community center and a childcare facility (the "Project"); WHEREAS, pursuant to the terms of the DDA, Eden and Citation took title to the Arroyo Vista property, and, subsequently, Citation transferred its interests in the property to KB Home, which along with Eden is now pursuing the development of the property; WHEREAS, Eden is now in the midst of financing the project, and in conjunction therewith has requested certain minor amendments to the terms of the DDA, to which the City is agreeable. NOW, THEREFORE, BE IT RESOLVED THAT THE City Council hereby approves the Assignment and Assumption of, and Second Amendment to, the DDA and authorizes the City Manager to execute and deliver the Assignment and Assumption of, and Second Amendment to, the DDA substantially in the form on file with the City Clerk. PASSED, APPROVED AND ADOPTED this 7th day of June 2011. AYES: NOES: 2 ~,9 ~-~-II ATTACHMENT 1 a ~~ ~ ASSIGNMENT AND ASSUMPTION OF, AND SECOND AMENDMENT TO, DISPOSITION AND DEVELOPMENT AGREEMENT (Arroyo Vista) This Assignment and Assumption of, and Second Amendment to, Disposition And Development Agreement (this "Amendment") is entered into as of the _ day of , 2011, by and among the City of Dublin, a municipal corporation (the "C~"), the Housing Authority of the County of Alameda, a public body, corporate and politic, ("HACA"), Eden Housing, Inc., a California nonprofit public benefit corporation ("Eden"), Eden Dougherty, L.P., a California limited partnership (the "Partnership") and KB HOME Arroyo Vista LLC, a Delaware limited liability company ("KB") (Eden and KB being referred to collectively as the "Developer"): Eden, KB, the City, the Partnership, and HACA being hereafter referred to as the "Parties"), with reference to the following facts: RECITALS A. Certain of the Parties axe parties to that certain Disposition and Development Agreement dated as of July 25, 2007, as amended by (i) that certain First Amendment to Disposition and Development Agreement dated as of January 26, 2010 by and among the parties, (ii) that certain Assignment and Assumption of Disposition and Development Agreement, and Settlement Agreement dated as of March 22, 2011 by and between SCS Development Company as Assignor and KB HOME Arroyo Vista LLC as Assignee, and (iii) those certain letter agreements dated (as so amended, tlie "DDA"). B. Certain of the Parties are parties to that certain Settlement Agreement dated as of December 1, 2009 made by and among Andres Arroyo, Darlene Brown, Rhenae Keyes, Elise Veal, the Arroyo Vista Tenants Association, the City of Dublin, the Dublin Housing Authority, Eden Housing Inc., the Housing Authority of the County of Alameda, and SCS Development Company, with respect to the lawsuit titled Arroyo Vista Tenants Association et al v. City of Dublin et al, United States District Court Case No. 3:07-cv-05794-MHP, (the "Settlement A~reement"). C. KB has succeeded to the rights and obligations of SCS Development Company under the DDA and the Settlement Agreement. D. Eden desires to assign its rights and obligations under the DDA and the Settlement Agreement to the Partnership and the Partnership desires to assume such rights and obligations. AGREEMENT NOW, Therefore, in consideration of the recitals hereof and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows 1. Eden hereby assigns all of its right, title and interest under the DDA and the Settlement Agreement to the Partnership. The Partnership hereby accepts such assignment and assumes all duties and obligations of Eden pursuant to the DDA and the Settlement Agreement. CHl 5830113v3 EXHIBIT A 'CO ~c~bLUTIU~ 3 ~ ~ Eden shall execute and deliver to the Partnership a deed in form acceptable to HACA and the Partnership transferring to the Partnership a fee interest in the Property previously transferred by HACA to Eden pursuant to the Grant Deed, as defined below. All Parties hereby consent to and acknowledge such assignment, assumption and transfer. 2. Those Parties that are also parties to the Settlement Agreement shall provide copies to the other Parties and the Project Financiers of all default notices, pleadings, and similar items received by them with respect to the Settlement Agreement. 3. The definitions set forth below are hereby added to Section 1.1 of the DDA: "AHAP Contracts" means those certain Agreements to Enter Into Housing Assistance Payments Contracts entered into or to be entered into between the Partnership and HACA with respect to the Development. "Authority" means the Dublin Housing Authority. "Bondowner Representative" means Wells Fargo Bank, National Association. "Partnership" means Eden Dougherty, L.P., a California limited partnership. "Grant Deed" means that Grant Deed from HACA to Eden recorded in the Official Records of Alameda County on March 4, 2011 as Document No. 2011- 072584, as amended by that certain [corrective deed dated as of from HACA to Eden]. "HAP Contracts" means that certain Housing Assistance Payments Contract to be entered into between Partnership and HACA with respect to the Development. "HUD Documents" means the AHAP Contracts, the HAP Contracts, the Grant Deed, the Use Agreement, any declaration recorded by HiJD or HACA against the Development, that certain letter dated May 22, 2009 from the HUD to the Authority and HACA, along with that certain Memorandum prepared by HLTD dated May 22, 2009, as amended by that certain letter dated May 29, 2009 from HUD to the Authority and HACA, and as further amended by that certain letter dated March 1, 2010 from HUD to the Authority, and any other document executed in connection with such documents. "Investor Limited Partner" means Wachovia Affordable Housing Community Development Corporation. "Partnership" means Eden Dougherty, L.P., a California limited partnership. "Project Financier" means each entity whose address is set forth on Eghibit A to this Amendment, together with their successors and assigns. "Public Entity Party" means the City and HACA. "Use Agreement" means that Use Agreement between HACA and Eden dated as of March 1, 2011 and recorded in the Official Records of Alameda County on March 4, 2011 as Document No. 2011-072585. 2 ~~ 4: A new subsection (c) is hereby added to the end of Section 3.1(k) of the DDA, to read as follows: "Notwithstanding anything to the contrary set forth in this Section 3.1(k) or elsewhere in this Agreement, it is understood and agreed that each Developer is providing the indemnities describe in this Section 3.1(k) as to its respective Development Component only." 5. A new subsection (c) is hereby added to the end of Section 8.12 of the DDA, to read as follows: "Notwithstanding anything to the contrary set forth in this Section 8.12 or elsewhere in this Agreement, it is understood and agreed that each Developer is providing the indemnities describe in this Section 8.12 as to its respective Development Component only." 6. A new sentence is hereby added to the end of Section 9.3 of the DDA, to read as follows: "Further notwithstanding the foregoing, Investor Limited Partner may cause Borrower to terminate the management agent in accordance with the Partnership's agreement of limited partnership." 7. A new subsection (~ is hereby added to Section 19.7 of the DDA, to read as follows: "(~ Any transfer of limited partnership interests in the Partnership, and any transfer of membership or partnership inferests of any limited partner in the Partnership." 8. A new subsection (g) is hereby added to Section 19.7 of the DDA, to read as follows: "(g) Any transfer of general partner interests in the Partnership resulting from the removal of the general partner pursuant to the terms of the Partnership's agreement of limited partnership." 9. A new Section 14.5 is hereby added to the DDA, to read as set forth below. Section 14.5 Notice and Cure Ri~hts. The Parties agree as follows: (a) the Public Entity Parties shall give each Project Financier a copy of any written notice it gives to Eden or the Partnership under any HUD Document; (b) each Project Financier shall have one hundred twenty (120) days after its receipt of such notice to cure a default under any HUD Document; (c) if a default is incapable of being cured within one hundred twenty (120) days, each Project Financier shall have such additional time as is reasonably necessary to cure such default provided it has commenced to cure such default within such 120-day period and is diligently proceeding to cure such default; (d) if a Project Financier attempting to effectuate a cure cannot do so without obtaining ownership ar control of the respective Development Component, it shall have a reasonable time after foreclosing its lien or, in the case of Investor Limited Partner, removing the general partner of the Partnership, to cure a default, but shall not be obligated to cure a default it is legally incapable of curing; and (e) if a Project Financier cures default, the Public Entity Parties will accept such action as curing the respective default under the respective HLTD Document. 10. Capitalized terms not defined in this Amendment shall have the meanings ascribed to such terms in the DDA. ~/(~ ~ U IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the date first written. City of Dublin, a municipal corporation By: _ Name: Title: Housing Authority of the County of Alameda, a public body, corporate and politic By: _ Name: Title: Eden Housing, Inc., a California nonprofit public benefit corporation By: _ Name: Title: Eden Dougherty, L.P., a California limited partnership By Eden Dougherty LLC, a California limited liability company, its general partner By Eden Investments, Inc., a California nonprofit public benefit corporation, its sole member/manager By:_ Name: Title: KB HOME Arroyo Vista. LLC, a Delaware limited liability company By: Name: Title: CHl 5830113v.3 ~1 ~ ? EXHIBIT A Notice Parties HACA: Housing Authority of the County of Alameda 22941 Atherton Street Hayward, California 94541 Partnership: Eden Dougherty, L.P. c/o Eden Investments, Inc. 22645 Grand Street Haywaxd, California 94541-5031 Attention: Executive Director With a copy to: Wachovia Affordable Housing Community Development Corporation One Wachovia Center 301 South College Street MAC D1053-170 Charlotte, North Carolina 28288 Bondowner Representative: Wells Fargo Bank, National Association Community Lending and Investment 45 Fremont Street, 9~" Floor MAC# A0194-090 San Francisco, California 94105 Attention: Loan Administration Officer With a copy to: California Community Reinvestment Corporation 225 West Broadway, Suite 120 Glendale, California 91204 Attention: President Investor Limited Partner: Wachovia Affordable Housing Community Development Corporation One Wachovia Center 301 South College Street MAC D1053-170 Charlotte, North Carolina 28288 CHI 5830113v3 ~~ 7 The City: City of Dublin 100 Civic Plaza Dublin, California 94568 Attention: City Manager AHP Lender: Silicon Valley Bank 185 Berry Street, Suite 3000, Lobby 1 San Francisco, California 94107 Attention: Christine B. Carr 6