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HomeMy WebLinkAbout14-035 - Resolutions RESOLUTION NO. 14035 A RESOLUTION APPROVING AND AUTHORIZING EXECUTION OF MODIFICATION AGREEMENT TO EXTEND LOAN TERM AND AUTHORIZING SUBORDINATION OF INTERESTS TO DEEDS OF TRUST SECURING CONSTRUCTION AND PERMANENT LOANS FOR THE REFINANCE OF THE VILLA DEL NORTE DEVELOPMENT AND RELATED MATTERS WHEREAS, the Redevelopment Agency of the City of Rancho Cucamonga (the "Former Agency") entered into a Disposition and Development Agreement (the "DDA") with North Town Housing Development Corporation, a California nonprofit public benefit corporation ("NHDC"), dated as of January 19, 1994, which NHDC subsequently assigned to North Town Housing Partners, a California limited partnership ("NTHR) pursuant to the terms of the DDA; WHEREAS, pursuant to the DDA, NTHP has constructed an 88 unit low and moderate income housing development located at 9997 Feron Boulevard known as Villa del Norte Apartments (the "Development); WHEREAS, pursuant to a Loan Agreement, dated September 26, 1994, between the Former Agency and NTHP ("Loan Agreement'), the Former Agency made a loan of$5,900,000 (the "Loan") to the Developer for the construction and permanent financing of the Development, repayment of which is secured by a deed of trust on the Property (the "Deed of Trust'); WHEREAS, on March 22, 1996 the Loan Agreement was modified to reflect an increase in the Loan amount to $5,929,181.48; WHEREAS, the Former Agency recorded a regulatory agreement containing rent and occupancy restrictions on the Development (the 'Regulatory Agreement'), which includes rent and occupancy restrictions required to be imposed on the Development pursuant to Health and Safety Code Section 33334.3(f); WHEREAS, on February 1, 2012, the Former Agency was dissolved pursuant to California Health & Safety Code Section 34172; WHEREAS, the Rancho Cucamonga City Council approved Resolution No. 12-032 on February 15, 2012 electing to become the housing successor to the Former Agency and to retain the housing assets and functions performed by the Former Agency in accordance with Health and Safety Code Section 34176; WHEREAS, NHDC is planning to refinance and re-syndicate the Development which will need rehabilitation of the Development and accordingly NTHP will transfer the Development to a new limited partnership in which NHDC or its affiliate is the managing general partner and will apply for new low income housing tax credits and new commercial and other loans for the Development; Resolution No. 14-035 - Page 1 of 4 WHEREAS, the applications for new low income housing tax credits and loans for the Development will be more competitive if the City, as housing successor reaffirms the Loan assistance to the Development, confirms the transfer to the new partnership is a permitted transfer under the DDA and the Loan, confirms to extend the term of the Loan and Regulatory Agreement and commits to subordinate the liens of the Deed of Trust and Regulatory Agreement to the new financing for the Development; WHEREAS, given the current lending environment, the makers of the new loans ("Lenders") will require that the City as housing successor,subordinate its interests in the Development including the DDA, the Deed of Trust and the Regulatory Agreement to new loans to be provided by the Lenders; and WHEREAS, Section 33334.14 of the Health and Safety Code requires that certain findings be made prior to subordination of the Regulatory Agreement and the DDA. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, AS SUCCESSOR TO THE HOUSING ASSETS AND FUNCTIONS OF THE REDEVELOPMENT AGENCY OF THE CITY OF RANCHO CUCAMONGA ("HOUSING SUCCESSOR") RESOLVES AS FOLLOWS: 1. The City, as housing successor confirms that the transfer of the Development from NTHP to a new to-be-formed limited partnership, in which NHDC or an entity controlled by NHDC is a general partner, is a Permitted Transfer under Section 5.4.c of the DDA and Section 1.1.m of the Loan Agreement. 2. The City, as housing successor confirms and commits that any transfer pursuant to item 1 above will not cause an acceleration of the Loan. 3. The City, as housing successor commits to modify the Loan Agreement, related promissory note and Regulatory Agreement to extend the term of the Loan to the date 55 years from the date of the closing of the new financing with no other changes to the financing terms in the Loan documents. 4. The City Council, as housing successor finds that, given the current financial environment, there are no economically feasible alternative methods of refinancing the Development without subordination of the DDA, Loan, Deed of Trust and Regulatory Agreement that are reasonably available. 5. The City, as housing successor commits that the City will subordinate the Loan and the related Loan documents, including the DDA, Deed of Trust and Regulatory Agreement, to any new loans for the Development, provided the subordination agreements provide the City notice and cure rights, and the City, as housing successor further commits to provide estoppel certificates regarding the status of the Loan as new lenders and investors may reasonably request. Resolution No. 14-035 - Page 2 of 4 6. The City, as housing successor authorizes the Mayor or City Manager, acting alone, to execute subordination agreements on behalf of the City which will subordinate the Loan, the DDA, the Deed of Trust and the Regulatory Agreement, as modified pursuant to this Resolution, to the new loans to the Development to be provided by the Lenders, in the form approved by the City signatory and City Attorney, such approval to be evidenced by the execution of such agreements, provided such agreements give the City notice and time to cure any borrower defaults under the senior Lenders loan documents ("Subordination Agreements'). 7. The City, as housing successor authorizes the Mayor or the City Manager, acting alone, to execute modification agreements or amendments to modify the Loan documents to extend the term of the Loan and Regulatory Agreement, the Subordination Agreements, letters and other documents evidencing the City's commitments as set forth in this Resolution and all documents necessary and appropriate to effectuate the purposes set forth in this Resolution. 8. The Resolution shall become effective immediately upon its passage and adoption. Resolution No. 14-035 - Page 3 of 4 PASSED, APPROVED, AND ADOPTED this 191 day of February 2014. AYES: Alexander, Michael, Steinorth, Williams NOES: None ABSENT: Spagnolo ABSTAINED: None L. Dennis Michael, Mayor ATTEST: Lam. ," nice C. Reynolds, Qty Clerk 67 I, JANICE C. REYNOLDS, CITY CLERK of the City of Rancho Cucamonga, California, do hereby certify that the foregoing Resolution was duly passed, approved and adopted by the City Council of the City of Rancho Cucamonga, California, at a Regular Meeting of said City Council held on the 191h day of February 2014. Executed this 2011 day of February 2014, at Rancho Cucamonga, California. ,/,Janice C. Reynoldt, City Clerk Resolution No. 14-035 - Page 4 of 4