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HomeMy WebLinkAboutC-9291-1 - Termination of Affordable Housing Agreement�J RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Attn: City Clerk's Office City of Newport Beach P.O. Box 1768 Newport Beach, CA 92658- 8915 Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder 111i 111I1Ili1111111111111111111111111111pill 11111111111110.00 2 2022000291225 9:09 am08/29/22 48 RW11A T02 18 0.00 0.00 0.00 0.00 0.00 0.00 0.000.000.00 0.00 APN 937-220-21 SPACE ABOVE THIS LINE FOR RECORDER'S USE EXEMPT FROM RECORDING FEE PURSUANT TO GOWT CODE §§ 6103 & 27383 EXCEPT GOYT CODE § 27361.3 TERMINATION OF AFFORDABLE HOUSING AGREEMENT WHEREAS, the CITY OF NEWPORT BEI- CH, a California municipal corporation and charter city ("City"), and VILLA SIENA, a California General Partnership, and THE SUN FAMILY TRUST (collectively "Owner"), entered into that certain Affordable Housing Agreement, dated June 26, 1990, and recorder in the ofificiai records of Orange County, California, on December 13, 1990, as document number 90-652952, a true and correct copse of which is attached hereto as Exhibit "A" and incorporated herein by this reference ("Agreement"); WHERE _C, pursuant to the Agreement, City approved Owner's request to develop a multi -family residential condominium project of fifteen (15) dwelling units, conditioned, among other thilIgs, that three (3) units, Units 7, 8, and 9, be "Affordable Units" as defined in the Agreement for a period of thirty (30) years, at 2.101 15t" Street, Newport Beach; California; WHEREAS, Unit 7 (APN 937-220-21), and as legally described in Exhibit attached hereto and incorporated herein by this reference ("Property") is one of the Affordable Units; WHEREAS, pursuant to the Agreement, Owner promised, covenanted, and agraPrl to maintain the Affordable Units as affordaNe to very love Income families for a period of thirty (30) years; WHEREAS, pursuant to the Agreement, the Agreement was made binding upon and inured to the benefit of the parties' respective successors and assigns; WHEREAS, Christian P. Heller and Rachel E. Heller, trustees of the Heller Family Trust dated November 3, 2004, is the successor in interest to Owner with respect to the Property and the legal owner of all rights, title, and interest' therein, and WHEREAS, the obligation under the Agreement to maintain the Property as affordable to very low income families for thirty years expired July 2, 2022. NOW; THEREFORE, the parries hereto agree tco terminate the Agreement with respect to the Property, and thereby terminate all promises, covenants, agreements, rights, duties, and obligations under the Agreement to maintain the Property as an affordable housing unit and remove the affordable housing unit obligation as a matter affecting title to the Property. IN WITNESS WHEREOF, this instrument is duly executed this 2-b day of August, 2022. APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaron C.r �ti City Attoco� ATTEST: By: < Leilani I. Brown City Clerk CITY OF NEWPORT BEACH, a California municipal corporation By: Gr K. Leung C' Manager OWNER: Christian P. Heller and Rachel E. Heller, trustees of the Heller Family Trust dated November 3, 2004 Signed in Counterpart �EWP� Christian P. Heller O� Trustee YT Signed in Counterpart �- U ? y Rachel E. Heller R Trustee [END OF SIGNATURES] Owners must sign in the presence of notary public ATTA(_:HMFNTi: Eyhihit A — Affnrrrlahle I ousing Agreement, doted June 2v, 1990 Exhibit B — Legal Description of Subject Property WHEREAS, Christian P. Heller and Rachel E. Heller, trustees of the Heller Family Trust dated November 3, 2004, is the successor in interest to Owner with respect to the Property and the legal owner of all rights, title, and interest therein; and WHEREAS, the obligation under the Agreement to maintain the Property as affordable to very low income families for thirty years expired July 2, 2022. NOW, THEREFORE, the parties hereto agree to terminate the Agreement with respect to the Property, and thereby terminate all promises, covenants, agreements, rights, duties, and obligations under the Agreement to maintain the Property as an affordable housing unit and remove the affordable housing unit obligation as a matter affecting title to the Property. IN WITNESS WHEREOF, this instrument is duly executed this day of August, 2022. APPROVED AS TO FORM: CITY ATTORNEYS OFFICE �'A - ISron / .• City Attorr My ��. CITY OF NEWPORT BEACH, a California municipal corporation By. Grace K. Leung City Manager ATTEST: OWNER: Christian P. Heller and Rachel E. Heller, trustees of the Heller Family Trust dated November 3, 2004 By: Leilani 1. Brown f City Clerk' By: Christian P. Heller fl&L,-2- aach ��IL . Heller Trusfjee [END OF SIGNATURES] Owners must sign in the presence of notary public ATTACHMENTS: Exhibit A — Affordable Housinq Agreement, dated June 26. 1990 Exhibit B — Legal Description of Subject Property ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of Califo is Count of Ve-v'\A-V l� } ss. On v 20��tefore me, Notary Public, personally appeared ' who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY paragraph is true and correct. WITNESS my hand and official seal. Signature under the laws of the State of California that the foregoing 4yE. o.'F CYNTHIAHOFF Notary Public - California z z ?. Ventura County n ' Commission # 230053. My Comm. Expires Sep 2, 2023 (seal) ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of } ss. On 20 before � �e, , Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (seal) EXHIBIT "A" AFFORDABLE HOUSING AGREEMiENT Instrument No. 90-652952 itEMPT REC ,RDING REQUEST PE, [!MGDEPARTMENT 90—V �52 GOVERNMENT CODE 6103 PLEASE RECORD AND RETUMTYff. NEWPORT REACH RECORDED 1N OFFICIAL RECORDS T® JAN 1 OF ORANGE COUNTY, CALIFORNIA P'pease ROfllt�3 1991. C'ty Gark Awl PM -100o AM DEC13'90 Of N. Oi f G� i'18`g114Ii1i12i1i2i3141516 -- 3300 Newpo-t C1 V(I. C4 Q• `7� RECORDER NOWPOrt Beach, CA 92633,M Space Above for Recorder's Use Only AFFORDABLE HOUSING AGREEMENT FOR VILLA SIENA THIS AGREEMENT, effective as of J ✓n e �g t - , 1990, is between VILLA SIENA, a California General Partnership, and THE SUN FAMILY TRUST ("Owner"), and THE CITY OF NEWPORT BEACH, a California municipal corporation ("City"), and is made on the basis of the following facts, intentions, and understandings: A. Owner owns real property located at 2101 15th Street in N California and legally described as: JAN l i 1�91 Lot 1, Tract No. 14186, located at 2101 15th Street, on e C" �r x southeasterly comer of .15th Street and Irvine Avenue, Cliff Haven. s T (the "Property") upon which Owner intends to develop a multi -family residential condominium project of fifteen (15) dwelling units (the "Project"). B. On February 12, 1990, the City Council of the City approved Owner's application to approve General Plan Amendment No. 89-2(F) (the "GPX), the Zoning Fh Amendment No. 700 being Ordinance No. 90-2 (the "Amendment"); Site Plan Review No. 54 (the "Site Plan Review"), Tentative Map of Tract No. 14186 (the "Tentative Map"), and Traffic Study No. 62 (the "Traffic Study"), for development of the Project. The City's approval of the Project was conditioned, among other things, on Owner entering into an agreement with City to provide three (3) units on -site as "Affordable Units". Owner has agreed to provide the on -site Affordable Units to satisfy that requirement, and to enter into this Agreement with the City for that purpose. C. This Agreement shall encumber title to the Property and all rights, duties and obligations of this Agreement shall be binding on all successors in interest and assigns for the term of this Agreement. NOW, THEREFORE, in full satisfaction of all conditions to the approval of the GPA, the Amendment, the Site Plan Review, the Tentative Map, and the Traffic Study (the "Approvals") relating to the provision of Affordable Units, it is agreed as follows: 1. Pursuant to, and in satisfaction of the conditions of the Approvals for the Project, Owner hereby commits units 7, 8, and 9 of the Project as the "Affordable Units" required by the Approvals. Units 7, 8, and 9 are legally described on Exhibit "A", attached hereto and incorporated herein by reference. The term "Affordable Units" shall at all times hereinafter refer to Units 7, 8, and 9 of the Project. Owner represents that units 7, 8, and 9 will be two (2) bedroom and one and one-half (1 1 /2) bath units. PA 2. Owner and all subsequent owners of the Affordable Units shall be subject to the affordability and eligibility criteria and all other terms of this Agreement for the term of thirty (30) years from the date each unit is first sold or rentedt The term "Owner" shall hereinafter include all subsequent owners, successors and assigns. 3. The Affordable Units shall be sold or rented concurrently with the initi sale or rental of the market rate units. 4. The Affordable Units shall be subject to the following affordability and eligibility criteria and requirements, if they are an ownership affordable unit: 4.1 During the term of this Agreement, the Affordable Units shall be sold only to persons or families whose total gross income for the preceding twelve (1�) I month period does not exceed the Orange County Moderate Income for a family of four (4) (the "Permitted Income") as established by the State of California Income Limits Table specified in Health and Safety Code Section 50093, as the same may be adjusted from time to time. If the State no longer publishes the data referred to above, an equivalent source shall be designated by City. 4.2 During the term of this Agreement, the Affordable Units shall be sold for no more than three (3) times the Permitted Income of the persons or families b—Anbo the units. Owner (Seller) shall procnde the City with a certified copy of the closing escrow statement. 3 4.3 The term of this Agreement is thirty (30) years from the date that each Affordable Units is first sold. 4.4 At least thirty (30) days before offering the Affordable Units for sale to the general public, Owner shall provide the City with written notice of its intent to sell the Affordable Units and the maximum selling price. 4.5 Owner shall be responsible for ensuring that persons or families who buy the Affordable Units properly qualify to own the units under the terms of this Agreement. Selection of the buyers of the Affordable Unit shall be made on the basis of criteria that are neutral as to age, race, religion, sex, creed and ethnic origin or any other constitutionally impermissible standard. Owner shall discharge its responsibility under this paragraph 7 as follows: 4.6 When the Affordable Units become available for sale, Owner shall advertise the availability of the Affordable Units on at least two (2) separate occasions in a newspaper of general circulation within the County, each advertisement being for a period of one (1) week. Newspapers such as the Los Angeles Times, Orange County edition and the Orange County Register are acceptable. 4.7 Owner shall accept potential buyers' names for a period of not less than ten (10) uays aficr the last date on which the availability of the Affordable Units is advertised. Buyers shall be qualified from a list. The list of potential buyers shall 4 be established by random selection. Potential buyers shall be qualifidd from the list in the order selected. Owner must establish a reasonable uniform period over which each potential buyer can perform on the offer to purchase. 4.8 Owner shall require each potential buyer of an Affordable Unit to certify that the total annual gross income of the intended occupants of the Affordable Unit does not exceed the Permitted Income specified in paragraph 3.1 above. Owner may rely upon such certification in qualifying the potential buyer. The Permitted Income shall be determined by the sworn statement(s) of the potential buyer(s), federal tax returns for the two (2) preceding years and verification of employment. Prior to close of escrow, Owner shall provide the City with documents that Owner relied upon to qualify the buyer's income and a copy of the closing escrow statement. 5. The Affordable Units shall be subject to the following affordability and eligibility criteria and requirements if they are rented. 5.1 The Affordable Units shall be rented to persons or families earning eighty percent (80%) or less of the County .annualized median family income as then currently published by the United States Department of Housing and Urban Development ("HUD") for the County based on family size using the HUD Section 8 income table, as the same may be adjusted from time to time ("Lower Income Units"). If HUD no longer publishes the data referred to above, then an equivalent source calculated by the City s hall ve substitated. 5 5.2 The annualized rents for the Units shall not, exceed the then currently published HUD Section 8 fair market rents for two -bedroom units. 5.3 Each Affordable Unit shall be maintained as an "affordable unit" for 30 years from the date that unit was first occupied. 5.4 At least 30 days before offering the Affordable Units for lease to the general public, Owner shall provide the City and the Orange county Housing Authority ("OCHA") with written notice of its intent to lease the Affordable Units, together with a proposed form of lease or rental agreement ("a lease"). 5.5 Owner shall be responsible for ensuring that persons or families who rent the Affordable Units properly qualify to occupy the units under the terms of this Agreement. Selection of the tenants of the Affordable Unit shall be made on the basis of criteria that are neutral as to age, race, religion, sex, creed and ethnic origin or any other Constitutionally impermissible standard. Preference shall be given to HUD Section 8 Certificate and Voucher holder in the rental of the Affordable Units. Owner shall discharge its responsibility under this paragraph as follows: a. As Affordable Units initially become available for rent, unless there are qualified prospective tenants (under paragraph 5.1 above) who have previously submitted their names to owner and which names shall be set forth on a waiting list (the "Waiting List"), Owner shall advertise the availability of the Affordable Units on a least two separate occasions in a newspaper of general circa; lation within the County. The Waiting List shall also show the date the qualified prospective tenant's name was placed on the Waiting List. 0 b. Owner shall accept applications for occupancy for a period of not less than 10 days after the last date on which the availability of the Affordable Units is advertised, unless there is an established Waiting List. C. Owner shall require each applicant for occupancy of an Affordable Unit ("Applicant") to certify by sworn statement that the gross income of the occupants of the Affordable Unit does not exceed the qualifying income limits specified in paragraph 5 above, and Owner may rely upon such certification in qualifying that Applicant. Federal tax returns for the two (2) preceding years and verification of employment may be used to support the income statement. d. As the Affordable Units become available for lease from time to time after initial occupancy, Owner shall make those Affordable Units available for lease to qualified prospective tenants. Preference shall be given to HUD Section 8 Certificate and Voucher holders in the rental of the Affordable Units. OCHA shall be notified as Affordable Units become available for rent. 6. Owner shall reserve the right under the lease for each Affordable Unit to terminate the tenancy for the Affordable Unit upon 30-days' written notice upon the occurrence of any or all of the following: (i) the discovery of any misrepresentation as to income available to the tenant, (ii) the discovery by Owner that a material change in a tenant's income results in tenant no longer qualifying for occupancy of the Affordable Unit (material shall mean an actual income exceeding the qualifying limits by 10%), or (iii) the tenant is otherwise in default under the terms of the lease. 7 On each anniversary date of this Agreement (or such other date as agreed upon by City and Owner) (the "Qualification Date"), Owner shall provide to City at its offices, copies of documents and information upon which Owner relied to qualify each tenant renting an Affordable Unit within a reasonable time after so qualifying that tenant. Once a tenant is qualified for occupancy of an Affordable Unit as provided above, that tenant shall be deemed to have qualified for occupancy until the next Qualification Date. Thereafter, each tenant must be requalified on each Qualification Date by having to recertify as to their income(s) as provided above, and information regarding recertification shall be provided to the City as soon as practicable following recertification. 7. Owner shall provide City with a schedule of the rents for each Affordable Unit once every 12 months. 8. Upon termination of this Agreement and within ten (10) days after written notice from Owner, City shall deliver to Owner an instrument in recordable form sufficient to remove this Agreement as a matter affecting title to the Project. The obligations of Owner described in this paragraph and in this Agreement are subordinate to the rights of bona fide secured lenders providing construction or permanent financing for the Project in the ordinary course of business, and City agrees to execute any agreement or document that may be reasonably required by such lender to evidence such subordination. 9. Owner acknowledges and agrees that it has received, and all subsequent Owners will receive full and adequate consideration for the assumption of the obligation to provide affordable housing required by City as a condition to the Approvals. Owner acknowledges that the Approvals could not have been granted without an affordable housing requirement. Owner specifically waives and gives up any right to contend, for any reason, including, but not limited to, its lack of any property interest in the parcel covered by the Tentative Map or the lack of any relationship between Owner and the approval of the Tentative Map or Final Tract Map No. 14186 that: 9.1 Owner is not legally required to comply with the provisions of this Agreement; or 9.2 That the remedy contemplated by this Agreement, such as specific performance, or interim or injunctive relief, should not be made applicable to Owner and/or property other than that depicted in the Tentative and Final Maps. 10. The parties agree that any breach of this Agreement by Owner will irreparably injure the City and that monetary damages, or any other legal remedy, would be inadequate to remedy such a breach. The parties further agree that the City, in the event of a breach of this Agreement by Owner, may obtain an Order of the Superior Court, requiring Owner to specifically perform in accordance with this Agreement, and that the City may seek interim injunctive relief pending the issuance of such an Order. The City has the right to specifically enforce this Agreement as to all terms, conditions E and provisions of this Agreement in Orange County's court system and any such action by the City shall include the awarding of attorneys' fees as set forth in 12 below. 11. If either party is required to initiate litigation to enforce the terms and conditions of this Agreement or to seek damages by reason of the breach of the terms and conditions of this Agreement, the prevailing party in that litigation shall be entitled to recover reasonable attorneys' fees and costs incurred in conjunction with such litigation. 12. Notices required or permitted under this Agreement shall be sufficiently given if made in writing and delivered either personally or by registered or certified mail, postage prepaid, to the following addresses, or to such other address as may be designated for formal notice: city City of Newport Beach City Manager 3300 Newport Boulevard P.O. Box 1768 Newport Beach, CA 92659-1768 Owner Villa Siena and The Sun Family Trust c/o Mesa Development Company, Inc. 2925 College Avenue, A-3 Costa Mesa, CA 92626 Either party may designate a different mode or address for notice to it by written direction to the other. 10 CITY OF NEWPORT BEACH BY: its: Y / I ) v Villa Siena, a California General Partnership BY: wrence Campeau General Partner LM Sun Family Trust dated September 23, 1988 BY: Y. Sun, Co -Trustee BY: Lilla S. Sun, Co -Trustee 12 APPROVED AS TO FORM: 40& City Attorney ATTEST: City Clerk Date: �a /a — 9,-) STATE OF CALIFORNIA COUNTY OF vMtvz OFFICIAL SEAL DEN! L. FI�OD Notary Pubic—c2ll;ornia ORANGE C'OUNI TY %f My Comm. Exp. Aug. 30, 1g91 } AC K NOWLEOG MENT —General or Unniled Partnership—Walcotts Form 236CA—Rev. 5-82 -01982 WOLCOTTS. INC. WICe Class 8-2) On this 2b4,I) .'.kf day of Jc,�,« in the year 19A—O, personally known to me o be the person who executed the within instrument on bel;Iqlf of the QXJA. jL Partnership named therein, and acknow- ledged to me that the Partnership executed it. WITNESS my hand and official seal. Lq') Notary Public in and foQ'."' 11 13 EXHIBIT "B" Property Legal Description LAND SITUATED IN THE CITY OF NEWPORT BEACH IN THE COUNTY OF ORANGE IN THE STATE OF CA A CONDOMINIUM COMPRISED OF: PARCEL 1: AN UNDIVIDED 1I15TH INTEREST IN AND TO LOT 1 OF TRACT NO, 14186, IN THE CITY OF NiEWPORT BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN 1300K 661, RAGES 48 TO So OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPTING THEREFROM ALL OF THE UNITS AS SHOWN ON THE CONDOMINIUM PLAN RECORDED JANUARY 7, 1991, AS INSTRUMENT NO.91-©07160 OF OFFICIAL RECORDS OF SAID COUNTY, FURTHER EXCEPTING THEREFROM, FOR THE BENEFIT" OF THE OWNER OF THE CONDOMINIUM, EXCLUSIVE EASEMENTS OVER THOSE PORTIONS OF SAID LOT 1 FOR GARAGE AND YARD PURPOSES, AS SHOWN AND ASSIGNED IN THE CONDOMINIUM, PLAN REFERRED TO ABOVE. PARCEL 2: UNIT 7, AS SHOWN AND DEFINED IN THE CONDOMINIUM PLAN REFERRED TO ABOVE. PARCEL 3: EXCLUSIVE EASEMENTS APPURTENANT TO PARCELS 1 AND 2 DESCRIBED ABOVE, FOR USE FOR GARAfiE AND YARD PURPOSES, OVER THE PORTIONS OF LOT 1 OF TRACT NO.. 14186, AS SHOWN ANC? DEFINEi) IN THE CONDOMINIUM PLAN REFERRED TO ABOVE. PARCEL 4: AN EXCLUSIVE EASEMENT APPURTENANT TO PARCELS 1 AND 2 ABOVE, FOR USE FOR DECK PURPOSES, OVER THE PORTIONS OF LOT 1 OF TRACT NO. 14186, AS SHOWN AND DESCRIBED IN THP CONDOM)NIUM FLAN REFERRED TO ABOVE.