HomeMy WebLinkAboutRES NO 037-2020RESOLUTION NO. 0 3 7- 2 0 2 0
RESOLUTION TO CONDITIONALLY COMMIT AND LEND
$1.7 MILLION DOLLARS IN PUBLIC SAFETY AND VITAL
SERVICES (PSVS) FUNDS THE HOUSING AUTHORITY OF
THE COUNTY OF KERN FOR THE CONSTRUCTION OF
SEVEN FOURPLEXES OF AFFORADBLE HOUSING AT
MULTIPLE SITES IN BAKERSFIELD, CA.
WHEREAS, On November 61h, 2018 Measure N was passed by the voters,
increasing the sales and use tax within the City of Bakersfield from 7.25 to 8.25
percent; and
WHEREAS, the funding from Measure N is required to go directly to the
City to address top community priorities, including enhancing public safety,
reducing homelessness and bolstering economic development activities; and
WHEREAS, as part of Measure N, it is the intent of the City to assist in the
development of affordable housing to increase economic vitality and providing
suitable living environments for extremely low, very low, low and moderate -
income households; and
WHEREAS, on March 11, 2019 the Citizens Oversight Committee voted to
validate allocating up to $5 million to the support of affordable housing
development within the City of Bakersfield; and
WHEREAS, on October 18th, 2019 the CITY advertised the availability of
affordable housing funding available through the Public Safety Vital Services
(PSVS) funding to developers and interested parties; and
WHEREAS, on November 22nd, 2019 the Request for Proposals (RFP) period
was closed; and
WHEREAS, staff evaluated 12 applications from interested parties
requesting funds; and
WHEREAS, the Affordable Housing Infill Program submitted by the Housing
Authority of the County of Kern (HACK) was rated the top application by staff
for development.
NOW, THEREFORE, incorporating the foregoing recitals herein, CITY and
DEVELOPER mutually agree as follows: -
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The above recitals are true and correct and incorporated herein.
2. The City Council finds and declares that it is necessary and in the
best interests of the City to provide One Million Seven Hundred Thousand Dollars
($1,700,000.00) of PSVS funds to assist HACK in the development of 28
affordable housing units in the form of a three percent (3%) per annum simple
interest residual receipts loan, over a 55 -year term. No interest shall accrue
during the construction of the project; and
3. This funding commitment is made with the following conditions:
3.1. HACK shall successfully obtain private investment in the
amount of $1,100,000 and contributes $344,232 in equity contributions to the
project.
3.2. This commitment is based on the project pro -forma dated
March l lrh, 2020, including a minimum total unit count of 28 units, sixteen of
which are restricted to very -low and low-income households while the
remaining twelve units which will be restricted to moderate income households.
3.3. Key components of the project pro -forma (affordability,
developer fee, sources and uses, etc.) shall not change without the CITY's
administrative approval.
3.4. All PSVS assisted units shall remain affordable for a minimum
of 20 years.
3.5. HACK shall sign and record an affordability covenant on the
Project Properties that secures the affordability and monitoring rights of the City
of Bakersfield for the duration of the affordability period.
3.6. Construction of the project shall not commence until HACK
can demonstrate that all funding is committed for the project's construction
and permanent financing; however, construction shall commence within six
months of an official funding commitment of PSVS funds, which shall be the
date an agreement is entered into between the CITY and HACK to provide
financial assistance for the projects development.
3.7. HACK shall secure site control of all properties proposed for
development within the proposed project by June 301h, 2020. If adequate
space to develop seven fourplexes is not secured by this date, the City of
Bakersfield reserves the right to renegotiate this commitment to extend HACK's
time to secure additional properties or reduce the funding commitment to a
level consistent with the amount of units HACK is able to develop with land
currently own. gAK K
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3.8. CITY expects HACK to take all necessary steps, including the
reduction of the project developer fee, to avoid returning to CITY for additional
subsidies if project costs exceed budget.
3.9. To the extent required by law, HACK agrees to comply with
all local, state, and federal laws, including any obligations deemed necessary
under the California Environmental Quality Act (CEQA).
3.10. A final subsidy -underwriting review is completed by the City
of Bakersfield to confirm the projects viability and full compliance with PSVS
regulations. This underwriting review will occur prior to issuing an official funding
commitment to the project, which will occur on the day an agreement
assigned by both parties committing funding to the projects development.
Failure to fix any compliance issues identified with the Public Safety and Vital
Services (PSVS) program or the City of Bakersfield's underwriting and subsidy -
layering review during this review will result in the denial of PSVS funding for this
undertaking.
3.11. The City Council gives authority to the City Manager or his
designee to carry out the direction of this resolution upon the conditions and
terms provided herein.
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HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the
Council of the City of Bakersfield at a regular meeting thereof held on APR 0 B 711911
by the following vote:
✓ ✓ ✓ ✓ ✓ ✓ ✓
AY COUNCILMEMBER: RIVERA, GONZALES, WEIR, SMITH, SULLIVAN. EARLIER, FREEMAN
OES: COUNCILMEMBER:
ABSTAIN: COUNCILMEMBER: NOl'�4-
ABSENT: COUNCILMEMBER: Np.
NIIA1
JULIE DRIMAKIS, CMC
CITY CLERK and Ex Officio Clerk of the Council of
the City of Bakersfield
APPROVED APR 0 0 2020
By: G
KAREN GOH
MAYOR
APPROVED AS TO FORM:
VIRGINIA GENNARO
CITY ATTORNEY
SH UA H. RUDNICK
Deputy City Attorney
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