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HomeMy WebLinkAboutCDC Proposed AgreementCOOPERATION AGREEMENT FOR PAYMENT OF COSTS ASSOCIATED WITH CERTAIN REDEVELOPMENT COMMISSION FUNDED LOW AND MODERATE INCOME HOUSING PROJECTS THIS COOPERATION AGREEMENT (this "Agreement") is entered into this 15th day of February, 2011, by and between the CITY OF NATIONAL CITY, a public body, corporate and politic (the "City") and the COMMUNITY DEVELOPMENT COMISSION OF THE CITY OF NATIONAL CITY (the "Commission"), with reference to the following facts: A. The City Council of the City of National City (the "City Council") adopted the Redevelopment Plan for National City Redevelopment Project on July 17, 2007 by Ordinance No. 2007-2295 (the "Redevelopment Plan"), which results in the allocation of a portion of the property taxes generated from the National City Redevelopment Project (the "Project Area") to the Commission for purposes of redevelopment. B. The intent of the Redevelopment Plan is, in part, to increase, improve and preserve the community's supply of low and moderate income housing, and to expend tax increment to accomplish these goals and objectives. C. The Commission has adopted its Five -Year Implementation Plan for the Project Area, as amended from time to time (collectively, the "Implementation Plan") with established goals to support affordable housing, economic development, community revitalization, commercial revitalization, and institutional revitalization. To implement the programs and activities associated with each goal, the Commission has made redevelopment fund commitments and budget allocations based on estimated available tax increment revenue and debt financing structures. D. Sections 33334.2 and 33334.3 of California's Community Redevelopment Law [Health & Safety Code §§33000, et seq.] (the "CRL") require the Commission to use 20 percent of taxes allocated to the Commission pursuant to Section 33670 of the CRL and deposited in the Commission's Low and Moderate Income Housing Fund (the "Housing Fund") for the purpose of increasing, improving, and preserving the community's supply of low and moderate income housing. E. Pursuant to Sections 33220 and 33206 of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) (the "CRL"), the City may aid and cooperate in the planning, undertaking, construction, or operation of low and moderate income housing in the community. F. To carry out the Commission's low and moderate income housing program in accordance with the objectives and purposes of the redevelopment Plan for the Project Area and the Implementation Plan, the Commission desires assistance and cooperation in the implementation and completion of the low and moderate income housing projects and programs listed in the attached Exhibit 1, which are incorporated herein by this reference (the "Projects"). G. The activities associated with the Projects include but are not limited to acquisition and disposition of property, development of design criteria, design, planning, Cooperation Agreement Page 1 of 6 preparation of construction bid documents, financial analysis, financing, new construction or rehabilitation, mortgage assistance to qualifying households, subsidies to individuals and families, entering into and repayment of loans secured by the low and moderate income housing funds and ongoing monitoring of projects, asset management and administration of agreements. The City agrees to aid the Commission and cooperate with the Commission to expeditiously implement the Projects in accordance with the redevelopment Plan for the Project Area and the Implementation Plan and undertake and complete all actions necessary or appropriate to ensure that the low and moderate income housing objectives of the redevelopment Plan for the Project Area and the Implementation Plan are fulfilled within the time effectiveness of the Project Area. H. In considering the Commission's desire to ensure timely implementation and completion of the Projects, the Commission wishes to enter into this Agreement with the City for the pledge of net available housing funds and/or bond proceeds secured by a pledge of net available housing funds ("Bond Proceeds") to finance the Projects. The purpose of this Agreement is to facilitate the implementation of the Projects and to continue to provide funding necessary to effectuate the completion of the Projects with net available housing funds, and/or Bond Proceeds, in this current fiscal year and forthcoming fiscal years. I. "Net available housing funds" is defined as that portion of the tax increment allocated to the Commission or any lawful successor of the Commission and/or to any of the powers and rights of the Commission pursuant to any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, that is set aside by the Commission pursuant to Sections 33334.2 and 33334.3 or any other law or regulation that may be enacted in the future requiring a set aside of tax increment for the purpose of increasing, improving, and preserving the community's supply of low and moderate income housing, net of existing debt service payments and existing contractual obligations payable from such housing set aside. The pledge of net available housing funds will constitute obligations of the Commission to make payments authorized and incurred pursuant to Section 33334.2 and other applicable statutes. The obligations set forth in this Agreement will be contractual obligations that, if breached, will subject the Commission to damages and other liabilities or remedies. J. By approving and entering into this Agreement, the Commission has approved the pledge of net available housing funds from the Project Area to pay for the Projects. K. The obligations of the Commission under this Agreement shall constitute an indebtedness of the Commission for the purpose of carrying out the redevelopment Plan for the Project Area. NOW, THEREFORE, the parties hereto do mutually agree as follows: I. INTRODUCTORY PROVISIONS The recitals above are an integral part of this Agreement and set forth the intentions of the parties and the premises on which the parties have decided to enter into this Agreement. II. COMMISSION'S OBLIGATIONS 1. The Projects are those low and moderate income housing projects and programs which are listed on the attached Exhibit 1. The Commission shall, within thirty (30) days of Cooperation Agreement Page 2 of 6 execution of this Agreement, convey by grant deed in form mutually agreeable to both parties those certain real properties legally described in Exhibit 4 ("Commission Property") to City, and agrees to pay to the City an amount equal to the cost to the City to carry out the Projects not to exceed FORTY NIILLION DOLLARS ($40,000,000), including without limitation the City's administrative costs and all costs incurred by the City for the acquisition and disposition of property, development of design criteria, design, planning, preparation of construction bid documents, financial analysis, financing, new construction or rehabilitation, mortgage assistance to qualifying households, subsidies to individuals and families, entering into and repayment of loans secured by the low and moderate income housing fund account and ongoing monitoring, asset management and administration of agreements. The City's administrative costs shall include all reasonable amounts needed to pay for the City's overhead, payroll and benefits, insurance, supplies, telephone, copying, fixtures, furniture, equipment, legal accounting, and other professional fees and costs, and other reasonable customary, and lawful administrative expense of the City during any Fiscal Year in which the City services are provided. The City's annual administrative costs shall be in the amounts separately identified in the City's annual budget for each Fiscal Year until termination of this Agreement. 2. The Commission's obligations under this Agreement, including without limitation the Commission's obligation to make the payments to the City required by this Agreement, shall constitute an indebtedness of the Commission for the purpose of carrying out the redevelopment of the Project Area and are obligations to make payments authorized and incurred pursuant to Section 33334.2 of the CRL and other applicable statutes. The obligations of the Commission set forth in this Agreement are contractual obligations that, if breached, will subject the Commission to damages and other liabilities or remedies. 3. The obligations of Commission under this Agreement shall be payable out of net available housing funds and/or Bond Proceeds, as defined in the above recitals and/or as defined or provided for in any applicable constitutional provision, statute or other provision of law now existing or adopted in the future affecting tax increment allocated to the Commission and/or any lawful successor entity of the Commission and/or any entity established by law to carry out any of the redevelopment Plan for the Project Area and/or expend tax increment or pay indebtedness of the Commission to be repaid with tax increment, pursuant to Section 33670 of the CRL or any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, in amounts not less than those set forth in the Payment Schedule attached hereto as Exhibit 2 and incorporated herein by this reference. In the event that additional funds are required in order to make the Commission payments to the City required by this Agreement, the Commission shall make such payments from income received by the Commission from its. projects and programs or any other additional funds available to it. 4. The indebtedness of Commission under this Agreement shall be subordinate to the rights of the holder or holders of any existing bonds, notes or other instruments of indebtedness (all referred to herein as "indebtedness") of the Commission incurred or issued to finance the Project Area, including without limitation any pledge of tax increment revenues from the Project Area to pay any portion of the principal (and otherwise comply with the obligations and covenants) of any bond or bonds issued or sold by Commission with respect to the Project Area. 5. Except as set forth in the following section of this Agreement, all payments due to be made by the Commission to the City under this Agreement shall be made by the Commission in accordance with the schedule set forth in Exhibit 2 and as otherwise necessary to reimburse Cooperation Agreement Page 3 of 6 the City for the cost to the City of performing its obligations hereunder. The City shall provide the Commission with a quarterly report accompanied by evidence reasonably satisfactory to the Commission's Executive Director that the City has progressed in the implementation of the Project for which payment is made by the Commission commensurate with such payments and has incurred costs or obligations to make payments equal to or greater than such amount. III. CITY'S OBLIGATIONS 1. The City shall accept any funds offered by the Commission pursuant to this Agreement and shall devote those funds to completion of the Projects, in accordance with the requirements of the CRL for expenditure of Housing Funds by (i) reimbursing the City or using such funds to make City expenditures to perform the work required to carry out and complete the Projects; (ii) utilizing such funds to pay debt service on bonds or other indebtedness or obligations that the City has or will incur for such purposes; and/or (iii) holding and expending such funds only for the purpose of satisfying the obligations of the City hereunder. 2. It is the responsibility of City to pay its costs in connection with the Projects from funds paid to the City by the Commission under this Agreement. 3. The City shall perform its obligations hereunder in accordance with the applicable provisions of federal, state and local laws, including the obligation to comply with environmental laws such as CEQA before undertaking any of the Projects, and shall timely complete the work required for each Project in accordance with the Schedule of Performance attached hereto as Exhibit 3 and incorporated herein by this reference. IV. LIABILITY AND INDEMNIFICATION In contemplation of the provisions of California Government Code section 895.2 imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defined by Government Code section 895, the parties hereto, as between themselves, pursuant to the authorization contained in Government Code sections 895.4 and 895.6, shall each assume the full liability imposed upon it, or any of its officers, agents or employees, by law for injury caused by negligent or wrongful acts or omissions occurring in the performance of this Agreement to the same extent that such liability would be imposed in the absence of Government Code section 895.2. To achieve the above -stated purpose, each party indemnifies, defends and holds harmless the other party for any liability, losses, cost or expenses that may be incurred by such other party solely by reason of Government Code section 895.2. V. ENTIRE AGREEMENT; WAIVERS; AND AMENDMENTS 1. This Agreement shall be executed in triplicate originals, each of which is deemed to be an original. This Agreement consists of six (6) pages and four (4) Exhibits, which constitute the entire understanding and agreement of the parties. 2. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter of this Agreement. Cooperation Agreement Page 4 of 6 3. This Agreement is intended solely for the benefit of the City and the Commission. Notwithstanding any reference in this Agreement to persons or entities other than the City and the Commission, there shall be no third party beneficiaries under this Agreement. 4. All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representatives of the parties. VI. SEVERABILITY If any term, provisions, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the parties have been materially altered or abridged by such invalidation, voiding or unenforceability. VII. DEFAULT If either party fails to perform or adequately perform an obligation required by this Agreement within thirty (30) calendar days of receiving written notice from the non -defaulting party, the party failing to perform shall be in default hereunder. In the event of default, the non - defaulting party will have all the rights and remedies available to it at law or in equity to enforce the provisions of this contract, including without limitation the right to sue for damages for breach of contract. The rights and remedies of the non -defaulting party enumerated in this paragraph are cumulative and shall not limit the non -defaulting party's rights under any other provision of this Agreement, or otherwise waive or deny any right or remedy, at law or in equity, existing as of the date of the Agreement or hereinafter enacted or established, that may be available to the non -defaulting party against the defaulting party. All notices of defaults shall clearly indicate a notice of default under this Agreement. VIII. BINDING ON SUCCESSORS This Agreement shall be binding on and shall inure to the benefit of all successors and assigns of the parties, whether by agreement or operation of law. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. IN WITNESS WHEREOF, City and Commission have signed this Agreement as of the dates set opposite their signatures. THE CITY OF NATIONAL CITY Attest: By: By: City Clerk City Manager Cooperation Agreement Page 5 of 6 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF NATIONAL CITY Attest: By: By: Secretary Commission Chair APPROVED AS TO FORM: By: City Attorney APPROVED AS TO FORM: Kane Ballmer & Berkman By: Commission Special Counsel Cooperation Agreement Page 6 of 6 EXHIBIT 1 SCHEDULE OF PROJECTS 1. Construction of at least 201 units of affordable rental housing for low income households (as defined by Health and Safety Code section 50079.5(a)) and very low income households (as defined by Health and Safety Code section 50105(a)), which shall be offered at affordable rent (as defined by Health and Safety Code section 50053(b)). Estimated Cost: $80,694,501 EXHIBIT 2 PAYMENT SCHEDULE Payment to the Housing City will be made as follows: The reserves of the existing Low -Moderate Housing Funds will be transferred to the City upon execution of this Agreement. The Balance of Funds will be transferred annually from the full balance of Low Mod Housing Fund receipts until the full obligation is paid or may be pre -paid if bonds are issued for the project. EXHIBIT 3 SCHEDULE OF PERFORMANCE Completion of Draft Development and Disposition Agreement June 30, 2011 Completion of Project Due Diligence June 30, 2012 Commence construction June 30, 2013 Completion of Phase I June 30, 2016 Completion of Phase II June 30, 2020 EXHIBIT 4 LEGAL DESCRIPTION APNs: 559-104-10, 559-124-05, 559-125-15, 560-206-03, 560-391-05, 08, 560-396-06