2005/09/27 City Council Resolution (3)RESOLUTION NO. 2005 -293
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK,
CALIFORNIA, APPROVNG AN AFFORDABLE HOUSING COVENANT BETWEEN
THE CITY OF ROHNERT PARK AND THE SPANOS CORPORATION FOR THE
REDWOOD CREEK APARTMENTS PROJECT
WHEREAS, the City's Inclusionary Housing Ordinance requires that all new rental
residential projects reserve a minimum of 15 percent of the units for low- and very low - income
tenants;
WHEREAS, "Redwood Creek Apartments" project was approved in 2003 to allow up to
232 units on property located at the northwest corner of Rohnert Park Expressway and Labath
Avenue (PL2002- 024UP /SR);
WHEREAS, Condition #4 of that project's approval requires that at least thirty-five (35)
of the units be rented to low- income households for a minimum period of 30 years, with the
developer to contribute an amount to the Housing Trust Fund to facilitate a future affordable
project(s) that includes 17 very low - income rental units;
WHEREAS, Condition #4 of the project's approval further states that an affordable
housing agreement shall be prepared to indicate the standards for maximum qualifying
household incomes and maximum rental rates for the affordable units, the party responsible for
verifying incomes, how vacancies will be marketed and filled, restrictions binding on the
property upon sale or transfer, maintenance provisions, and any other information required by
the City to comply with the conditions of approval for this project;.
WHEREAS, Staff has prepared an Affordable Housing Covenant between the City of
Rohnert Park and the Spanos Corporation for the Redwood Creek Apartments project;
WHEREAS, the City Council of the City of Rohnert Park has reviewed and considered
the information contained in the Staff Report and all relevant materials regarding the Affordable
Housing Covenant between the City of Rohnert Park and the Spanos Corporation for the
Redwood Creek Apartments project.
NOW THEREFORE BE IT RESOLVED, that the City Council does hereby approve
an Affordable Housing Covenant between the City of Rohnert Park and the Spanos Corporation
for the Redwood Creek Apartments project and the City Manager is authorized to execute this
Covenant on behalf of the City Council.
DULY AND REGULARLY ADOPTED on this 27th day ofS ep t emb e r , 2005, by
the City of Rohnert Park City Council by the following vote:
RO RT P4 *.t Ma r
ATTEST: s _
ig
City Clerk
�'q ®A�L�J FAO RD1 � N
BREEZE: ft FLORES: AYE SMITH: VIDAK- MARTINEZ: WA MACKENZIE:
AYES: (5) NOES: (0) ABSENT: (0) ABSTAIN: (0)
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Rohnert Park
Planning Department
6750 Commerce Boulevard
Rohnert Park, CA 94928 -2486
(Space Above This Line for Recorder's Use Only)
[Exempt from recording fee per Gov. Code § 27383]
AFFORDABLE HOUSING COVENANT INCLUDING DEED
AND PRE- COMPLETION TRANSFER RESTRICTIONS
This Affordable Housing Covenant ( "Covenant ") is entered into as of this 1A0 day of
S�Pr'Eim46E 12005, by and between the CITY OF ROHNERT PARK, a
municipal corporation ( "City ") and THE SPANOS CORPORATION, a California corporation
( "Developer ").
Recitals
A. Developer is the owner of that certain real property located at 600 Rohnert Park
Expressway, in the City of Rohnert Park, County of Sonoma, more particularly described in
Exhibit A attached hereto ( "Site "). Developer desires to construct a two hundred and thirty -two
(232) unit rental apartment development on the Site, which development was approved by City
as File No. PL 2002/024 UP /SR ( "Project ").
B. Rohnert Park Municipal Code section 17.07.020(N) sets forth certain inclusionary
requirements for residential developments. Pursuant to section 17.07.020(N)(4)(a)(1)(i), at least
fifteen percent (15 %) of all new dwelling units in a rental housing unit must be made affordable
to very low- and low - income households.
C. City issued the approval for the Project subject to certain conditions of approval.
Condition of Approval No. 4 requires that Developer comply with its inclusionary obligations
and make at least thirty -five (35) of the units in the Project affordable to low - income households.
D. Developer has paid an in -lieu payment to City to satisfy the very -low income
affordability requirement of Rohnert Park Municipal Code section 17.07.020(N).
E. Developer and City desire to set forth in a recorded document Developer's
obligations to provide affordable housing.
Terms
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth
herein, City and Developer agree as follows:
825997v2 80078/0012
Use of the Site.
Developer hereby covenants and agrees that during the Term set forth in Section 6,
Developer shall use the Site in compliance with all of the following:
1.1. Development. Developer shall construct the Project on the Site. As described in
Section 1.2, at least thirty -five (35) units in the Project shall be restricted to households at the
income levels set forth herein (the "Affordable Units ").
1.2. Rent and Income Restrictions.
(a) The Affordable Units shall be rent restricted and occupied by a household
whose income does not exceed eighty percent (80 %) of Area Median Income. The
monthly rent, including a reasonable utility allowance, for each Affordable Unit ( "Rent ")
shall not exceed one - twelfth (1 /12th) of thirty percent (30 %) of the stated maximum
annual household income applicable to such Affordable Unit, adjusted for household size.
(b) Affordable Units shall be comparable in number of bedrooms, exterior
appearance and overall quality of construction to market rate units in the Project.
Affordable Units shall be dispersed throughout the Project.
(c) The maximum size of a household occupying an Affordable Unit shall be
the number of bedrooms in the Affordable Unit plus one.
(d) Developer shall not rent an Affordable Unit to a prospective tenant unless
and until Developer certifies the tenant for compliance with the requirements of this
section. Prior to initial rent -up and on a quarterly basis, for each tenant, Developer shall
provide to City the information used by Developer to make the required certification.
Such information shall include, at a minimum, the following: (i) the number of persons
proposing to occupy the Affordable Unit; (ii) gross income per year; (iii) sources of
income; (iv) method of verification of income; (v) current address; and (vi) place of
employment. City may require that Developer use a City form to provide such
information. Following initial rent -up, Developer shall submit annually the reports listed
in Section 1.4.
(e) Developer shall use good faith diligent efforts to effectively market the
Property in order to ensure that occupancy of the Affordable Units is continuous, subject
only to brief periods of vacancy as reasonable to maintain and affirmatively market the
Affordable Units between periods of tenancy.
1.3. Leasing Program. To the extent permitted by law, Developer shall design a
leasing program that gives preference in the rental of Affordable Units to persons and households
who meet the following criteria, which are listed in order of priority: (1) persons who live and
work in Rohnert Park; (2) persons who live in Rohnert Park; (3) persons who work in Rohnert
Park; and (4) all others. All prospective tenants must still meet the income restrictions described
above in Section 1.2. The leasing program shall be subject to the approval of City prior to rent -
up. However, the selection of tenants is the responsibility of Developer.
2
825997v2 80078/0012
1.4. Reporting_ Requirements. Annual reports must be submitted to City by July 31
each year, commencing after the first anniversary of the date of completion of construction of the
Project. The reports, at a minimum, shall include:
(a) The number of persons per Affordable Unit
(b) Tenant's name and Affordable Unit occupied
(c) Initial occupancy date
(d) Rent paid per month
(e) Gross income per year and income category
(f) Percent of rent paid in relation to income
(g) Sources of income
(h) Method of verification of income
(i) Address prior to moving into the Project
0) Tenant's place of employment
(k) Address of Affordable Unit and unit type
(1) Status of program including any problems experienced during the
reporting period
Upon request, annual reports shall be accompanied by copies of the documents used in
report preparation. City may from time to time during the Term request additional or different
information and Developer shall promptly supply such information in the reports required
hereunder. City, at its discretion, may designate the form in which the information shall be
supplied to City. Upon request for examination by City, Developer shall make available at any
time during normal business hours, at the Project or another location within City of Rohnert Park,
all of Developer's records with respect to all matters covered by this Covenant. Developer shall
permit City to audit, examine and make excerpts or transcripts from these records.
1.5. Marketing Reports. Within ten (10) days of City's request, Developer shall
deliver to City marketing and leasing information, schedules, and reports for the Affordable
Units in form and substance reasonably acceptable to City.
1.6. Verification of Citizenship or Qualified Alien Status. Developer shall verify the
citizenship or qualified alien status of all adult tenants and all adult applicants for tenancy as
required under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996
(Public Law No. 104 -193, 8 U.S.C. §1621). On an annual basis, Developer shall verify the
citizenship or qualified alien status of tenants at the time of the annual income recertification.
Developer shall verify the citizenship or qualified alien status by causing the tenant or
applicants for tenancy to complete and sign under penalty of perjury the HCD Benefit Status
Form 1 (2/98) or such other form provided by HCD for this purpose. The signed forms shall be
retained by Developer and shall be disclosed to City upon request.
1.7. Restrictions on Rental. Developer shall not rent an Affordable Unit to any of the
following:
(a) Any officer, shareholder or employee of Developer or any Family
Member of any officer, shareholder or employee of Developer. Notwithstanding the
825997v2 80078/0012
foregoing, Developer may rent an Affordable Unit to an employee of Developer or a
Family Member of such employee provided that such person (a) is not an officer or
shareholder of Developer or a Family Member of an officer or shareholder of Developer,
(b) does not receive special preference in the rental of any Affordable Unit over other
prospective tenants, and (c) otherwise qualifies as a tenant under this Covenant. In this
subsection 1.7, "Family Member" shall mean the spouse or child of the individual at issue
or the individual's or his or her spouse's parent, grandparent, brother, sister, aunt, uncle,
niece or nephew.
(b) Any member of the Rohnert Park City Council or any member of any City
Board or Commission.
(c) Any City employee who exercises any function or responsibility in
connection with the Site or who has, or whose Family Member (defined above) has, an
economic interest in the Site pursuant to the provisions of the Political Reform Act,
Government Code section 87100 et seq. Developer may obtain and rely on a written
certification from prospective tenants (under penalty of perjury) to that effect.
2. Restrictions on Transfer.
2.1. Before Issuance of Certificate of Occupancy.
(a) Before issuance of the Certificate of Occupancy for the Project, no
voluntary or involuntary successor in interest of Developer shall acquire all or any
portion of Developer's interest in the Site except as expressly set forth herein, and
Developer shall not assign, sell, transfer or otherwise dispose of (whether voluntarily,
involuntarily, or by operation of law) ( "Transfer ") the Site, or any portion(s) thereof, or
interest(s) therein (individually and collectively, "Interest ") without the prior written
approval of the City Manager, or his or her designee, which approval shall not be
unreasonably withheld or delayed, and shall be granted upon City's receipt of evidence
acceptable to City that the conditions set forth below have been satisfied.
(1) Developer is not in default hereunder or the purchaser or assignee
agrees to cure any defaults of Developer to the reasonable
satisfaction of City;
(2) The continued operation of the Project shall comply with the
provisions of this Covenant;
(3) Either (i) the purchaser or assignee or its site manager has at least
three (3) years of experience in the ownership, operation and
management of similar size rental housing projects, and at least
one (1) year of experience in the ownership, operation and
management of rental housing projects containing below- market-
rate units, without any record of material violations of
discrimination restrictions or other state or federal laws or
regulations or local governmental requirements applicable to such
projects, or (ii) the purchaser or assignee agrees to retain a site
4
825997v2 80078/0012
management firm with the experience and record described in
subclause (i) above, or (iii) Developer or its management company
will continue to manage the Project for at least one (1) year
following such transfer and during such period will provide
training to the transferee and its manager in the responsibilities
relating to the Affordable Units;
(4) The person or entity which is to acquire the Project does not have
pending against it, and does not have a history of significant and
material building code violations or complaints concerning the
maintenance, upkeep, operation and regulatory agreement
compliance of any of its projects as identified by any local, state or
federal regulatory agencies; and
(5) The proposed purchaser or assignee enters into a written
assignment and assumption agreement in form and content
reasonably satisfactory to City's legal counsel, and, if requested by
City, an opinion of such purchaser or assignee's counsel to the
effect that this Covenant is a valid, binding and enforceable
obligations of such purchaser or assignee, subject to bankruptcy
and other standard limitations affecting creditor's rights.
(b) It is hereby expressly stipulated and agreed that Transfer of any Interest in
violation of this Section 2.1 shall be null, void and without effect and shall be ineffective
to relieve Developer of its obligations under this Covenant.
2.2. Notwithstanding any other provision of this Covenant to the contrary, City
approval of an assignment, sale or transfer of Developer's interest in the Site shall not be required
in connection with any of the following
(a) The granting of permits to facilitate development of the Project; and
(b) The rental, in the ordinary course of business, of the Affordable Units
within the Project, provided such rental shall be in accordance with the terms of this
Covenant.
2.3. With Compliance or After Issuance of Certificate of Occupancy. Upon any
Transfer of an Interest that complies with the requirements of this Section 2, or which occurs
after the Certificate of Occupancy for the Project has been issued, Developer shall be fully
released from its obligations hereunder to the extent such obligations have been fully assumed in
writing by the transferee of Developer's interest in the Site pursuant to an assignment and
assumption agreement in a form reasonably acceptable to City's legal counsel and evidence that
the transferee or transferee's property manager meets the qualifications set forth in Section 2.1(3).
No later than the date the assignment becomes effective, Developer shall deliver to City a fully
executed counterpart of the assignment and assumption agreement. Developer shall request
approval by written notice at least sixty (60) days prior to any proposed Transfer of any Interest.
825997v2 80078/0012
No Discrimination.
Developer covenants by and for itself and any successors in interest that there shall be no
discrimination against or segregation of any person or group of persons on account of race, color,
creed, religion, sex, marital status, sexual orientation, age, pregnancy, disability, family
composition, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the Site or in the participation or benefits resulting from any program or
activity related to the Project, nor shall Developer itself or any person claiming under or through
it establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees or vendees in
the Site or the Project.
4. Maintenance and Mana ement.
Developer shall maintain in accordance with the Maintenance Standards (as hereinafter
defined) the Project together with any and all private improvements and public improvements
and landscaping (collectively, "Improvements ") to the property line of the Site. The
Improvements shall include, but not be limited to, buildings, sidewalks, pedestrian lighting,
landscaping, irrigation of landscaping, architectural elements identifying the Project and any and
all other improvements on the Site and in the public right -of -way to the property line of the Site.
To accomplish the maintenance, Developer shall either staff or contract with and hire licensed
and qualified personnel to perform the maintenance work, including the provision of labor,
equipment, materials, support facilities, and any and all other items necessary to comply with the
requirements of this Covenant. The maintenance covenants and obligations set forth in this
Section 4 shall remain in effect for the period of time specified in Section 6 below.
4.1
Developer and its maintenance staff, contractors and subcontractors shall comply
with the following standards (collectively, "Maintenance Standards ")
(a) Landscape maintenance shall include: watering /irrigation; fertilization;
mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of
trees and shrubs to maintain a healthy, natural appearance, safe road conditions and
visibility, and irrigation coverage; replacement, as needed, of all plant materials; control
of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking
for support of trees.
(b) Clean -up maintenance shall include: maintenance of all sidewalks, paths
and other paved areas in clean and weed -free condition; maintenance of all such areas
clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of
all trash, litter and other debris from improvements and landscaping prior to mowing;
clearance and cleaning of all areas maintained prior to the end of the day on which the
maintenance operations are performed to ensure that all cuttings, weeds, leaves and other
debris are properly disposed of by maintenance workers.
(c) All maintenance work shall conform to all applicable federal and state
Occupation Safety and Health Act standards and regulations for the performance of
maintenance.
6
825997v2 80078/0012
(d) Any and all chemicals, unhealthful substances, and pesticides used in and
during maintenance shall be applied in strict accordance with all governmental
requirements. Precautionary measures shall be employed recognizing that all areas are
open to public access.
(e) The Improvements shall be maintained in conformance with the custom
and practice generally applicable to comparable apartment rental projects located within
Sonoma County, California. The public right -of -way improvements to the property line
of the Site shall be maintained as required by this Section 4.1 in good condition and in
accordance with the custom and practice generally applicable to public rights -of -way
within City of Rohnert Park.
Such Maintenance Standards shall not be construed to require extraordinary expenditures
or reconstruction after condemnation or the occurrence of a substantial casualty event.
4.2. If Developer does not maintain the Improvements on the Site to the property line
of the Site in the manner set forth herein and in accordance with the Maintenance Standards, City
shall have the right to maintain such private and /or public improvements, or to contract for the
correction of such deficiencies, after written notice to Developer. However, prior to taking any
such action, City agrees to notify Developer in writing if the condition of said Improvements
does not conform to the Maintenance Standards and to specify the deficiencies and the actions
required to be taken by Developer to cure the deficiencies. Upon notification of any
maintenance deficiency, Developer shall have thirty (30) days within which to correct, remedy or
cure the deficiency. If the written notification states that the problem is urgent and relates to the
public health and safety, then Developer shall have twenty -four (24) hours to rectify the problem.
In the event Developer fails to correct, remedy, or cure, or has not commenced correcting,
remedying or curing, such maintenance deficiency after notification and after expiration of any
applicable cure period, then City shall have the right to maintain such Improvements. Developer
agrees to pay City upon demand all charges and costs incurred by City for such maintenance.
Developer acknowledges and agrees that City may pursue any and all remedies available at law
or in equity in the event of a breach of the maintenance obligations and covenants set forth
herein.
5. No Impairment of Lien.
No violation or breach of the covenants, conditions, restrictions, provisions or limitations
contained in this Covenant shall defeat or render invalid or in any way impair the lien or charge
of any mortgage, deed of trust or other financing or security instrument; provided, however, that
any successor of Developer to the Site shall be bound by such covenants, conditions, restrictions,
limitations and provisions, whether such successor's title was acquired by foreclosure, deed in
lieu of foreclosure, trustee's sale or otherwise.
6. Duration.
The covenants set forth herein shall remain in effect for thirty (30) years from the later of
(a) issuance of the Certificate of Occupancy for the Project, or (b) at least twenty -seven (27) of
the Affordable Units have been leased to qualifying tenants in accordance with the terms of this
7
825997v2 80078/0012
Covenant ( "Term "). Developer and City shall confirm the commencement and expiration dates
of the Term in a written, recordable instrument.
7. Successors and Assigns.
The covenants contained in this Covenant shall inure to the benefit of City and its
successors and assigns and shall be binding upon Developer and any successor in interest to
Developer's interest in the Site or the Project or any part thereof. The covenants shall run in
favor of City and its successors and assigns for the entire period during which such covenants
shall be in force and effect, without regard to whether City is or remains an owner of any land or
interest therein to which such covenants relate. City and its successors and assigns, in the event
of any breach of any such covenants, shall have the right to exercise all of the rights and
remedies, and to maintain any actions at law or suits in equity or other proper proceedings to
enforce the curing of such breach.
8. Default.
8.1. Any failure by Developer to perform any term or provision of this Covenant shall
constitute an "Event of Default" if Developer does not cure such failure within thirty (30) days
following written notice of default from City or, if such failure is not of a nature which can be
cured within such thirty (30) day period, Developer does not within such thirty (30) day period
commence substantial efforts to cure such failure, or thereafter does not within a reasonable time
prosecute to completion with diligence and continuity the curing of such failure. Upon the
occurrence of an Event of Default, City shall be entitled to the following, in addition to all other
remedies provided at law or in equity:
(a) To compel specific performance by Developer of its obligations under this
Covenant, it being recognized that the beneficiaries of Developer's obligations hereunder
cannot be adequately compensated by monetary damages in the event of Developer's
default.
(b) To the extent permissible under laws and regulations protecting individual
confidentiality, to have access to, to inspect, and to make copies and to audit all books
and records of Developer pertaining to the Affordable Housing aspects of the Project,
including but not limited to the Affordable Units, the in -lieu payment identified in Recital
D, and the leasing program.
(c) To conduct an evaluation of, and direct Developer with respect to, the
management and operation of the Project. The expenses of City, including for any
consultants associated with such evaluation and direction shall be reimbursed by
Developer.
8.2. Any notice of default given hereunder shall specify in detail the nature of the
failure in performance which City claims constitutes the Event of Default and the manner in
which such Event of Default may be satisfactorily cured in accordance with the terms and
conditions of this Covenant. During the time periods herein specified for cure of a failure to
perform, Developer shall not be considered to be in default of this Covenant for any purposes.
8
825997v2 80078/0012
8.3. Any failure or delay by City in asserting any of its rights or remedies as to any
Event of Default shall not operate as a waiver of any Event of Default or of any such rights or
remedies, or deprive City of its right to institute and maintain any actions or proceedings which it
may deem necessary to protect, assert or enforce any such rights or remedies.
9. Notices.
All notices required herein shall be sent by certified mail, return receipt requested and
shall be effective as of the date received or the date delivery was refused as indicated on the
return receipt as follows:
To Developer:
Nick Faklis
The Spanos Corporation
10100 Trinity Parkway
Stockton, CA 95219
To City:
City of Rohnert Park
Planning Department
6750 Commerce Boulevard
Rohnert Park, CA 94928
10. Severability.
In the event that any limitation, condition, restriction, covenant or provision in this
Covenant is held to be invalid, void or unenforceable by any court of competent jurisdiction, the
remaining portions of this Covenant shall, nevertheless, be and remain in full force and effect.
11. Entire Agreement.
This Covenant constitutes the entire agreement between the parties and no modification
hereof shall be binding unless reduced to writing and signed by the parties hereto.
12. Applicable Law. This Covenant shall be governed by the laws of the State of California.
Signatures follow on next page
9
825997v2 80078/0012
IN WITNESS WHEREOF, City and Developer have caused this Covenant to be executed
on their behalf by their respective officers thereunto duly authorized.,
"City"
CITY OF ROHNERT PARK,
a municipal corporation
By:
Name: Steve Donley
Its: City Manager
Date:
Attest:
City Clerk
Approved as to form:
� r a
City` f ttorney
"Developer"
THE SPANOS CORPORATION,
a Ca ifornia corporation
r
By:
Name:_wtt..�1141'1 t. �AAB001�
Its: Ot t.L f Ik &%t hi N T
Date: qb,f� Sr
By:_
Name:
Its:
Date:
10
825997v2 80078/0012
EXHIBIT A
Legal Description of the Site
[To be inserted]
Exhibit A
825997v2 80078/0012
STATE OF CALIFORNIA )
�(' ) ss.
COUNTY OF �S4A) �rgA&J)JA) 1
On ,SePTEm oek IA , 2 before me, P66 �� /� S6�i I1flTR>Z UG the
undersigned, personally appeared I LL/A m A agvg—,
(�) personally known to me
( ) proved to me on the basis of satisfactory evidence
to be the person(s) whose name(4 (is /aa-6) subscribed to the within instrument and acknowledged
to me that (he /44a/tVy) executed the same in (his /ham /tlir) authorized capacity(i4, and that by
(his /her /tli,eir) signatureW on the instrument the person(s), or the entity upon behalf of which the
person(,-,�acted, executed the instrument.
v J. nreisC
WITNESS my hand and official seal: cownusion # 1403690
Sm ca�itomia
Signature njftP*nMo
N�rCo 2007
STATE OF CALIFORNIA )
ss.
COUNTY OF
On , 20, before me, , the
undersigned, personally appeared
( ) personally known to me
( ) 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) signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal:
Signature
825997v2 80078/0012
STATE OF CALIFORNIA )
) ss.
COUNTY OF 1
On , 20_, before me, , the
undersigned, personally appeared ,
( ) personally known to me
( ) 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) signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal:
Signature
825997v2 80078/0012