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DOC ID: 4641
CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACTION
Agreement
From: Diane Cotto M/CC Meeting Date: 09/19/2016
Prepared by: Diane Cotto, (909) 384-
5052
Dept: City Manager Ward(s):
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino Approving
the Execution of HOME Loan Agreement with Housing Partners I for the Implementation
of the Infill Housing Development Program. (#4641)
Current Business Registration Certificate:
Financial Impact:
There is no fiscal impact to the General Fund. Home Investment Partnerships (HOME)
funds provided by the U.S. Department of
Motion: Adopt the Resolution.
Synopsis of Previous Council Action:
On April 6, 2015, the Mayor and Common Council approved the City's 5-year
Consolidated Plan (Consolidated Plan), which identifies the priority need of expanding
homeownership opportunities in the City. On May 2, 2016, the Mayor and Common
Council approved the City's Action Plan for Fiscal Year 2015-2016, which authorizes the
use of HOME funds for the implementation of the Infill Housing Development Program.
Background:
The City of San Bernardino (City) is an entitlement jurisdiction that receives HOME
funds from HUD to create affordable housing opportunities for low-income households.
The Federal regulations require that the City commit and spend their allocated funds
within certain time-frames or they lose the HOME funds. The target date requires the
City to enter into a written agreement with a housing provider to commit these funds
within 24 months from the date of the grant to an eligible activity. The second target
date requires the City to expend these funds within five years.
In addition, the HOME regulations dictate how we spend the funds we receive from
HUD. Another requirement states that a minimum of 15% of annual HOME funds must
be set aside for affordable housing developed, owned or managed by Community
Housing Development Organizations (CHDO), a non-profit housing developer.
The City is required to commit no less than $625,000 in HOME funds toward an eligible
CHDO activity by or before September 30, 2016 or risk losing these funds. Staff
recommends entering into an agreement with Housing Partners I (HPI), an experienced
regional developer and qualified CHDO to implement an infill housing development
project that would create up to three (3) affordable housing units.
The Developer
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HPI is an experienced developer founded in 1991. As an affiliate of the Housing
Authority of the County of San Bernardino, HPI is dedicated to developing,
rehabilitating, owning, and managing affordable housing, and provide housing
counseling services to low and moderate income people in the County of San
Bernardino. To date, HPI has acquired and/or built 1,135 housing units.
HP1 were also key partners in the successful completion of the City's Neighborhood
Stabilization Program 3 (NSP3) infill housing activities which resulted in the construction
of three (3) affordable housing units.
The Agreement
The City would provide HOME funds in the form of a loan, which would be repaid with
sale proceeds once the homes are sold to eligible first-time homebuyers.
Housing Element and Consolidated Plan
A major emphasis of the City's Housing Element and Consolidated Plan are to ensure
that persons of all walks of life have opportunities to find suitable and affordable housing
in San Bernardino. Support of this activity will assist the City in meeting the following
Housing Element and Consolidated Plan goals and objectives:
• Improving Neighborhood Conditions
• Preservation and Rehabilitation of Housing
• Expanding Home Ownership Opportunities
• Conserve and improve the existing affordable housing stock and revitalize
deteriorating neighborhoods
• Assist in the provision of housing affordable to lower and moderate income
households.
Construction and reconstruction of infill housing will increase the availability of
affordable homes for low and moderate income qualified households, while reducing the
blight of vacant, dilapidated and underutilized lots throughout the City.
Environmental Compliance
This project is subject to environmental review under Sections 15192 and 15194 of the
California Environmental Quality Act (CEQA) and 24 CFR 58.36 of the National
Environmental Protection Act.
Conclusion:
An adequate supply of affordable housing promotes homeownership. Homeownership
increases stability for families and communities, and can provide long-term benefits that
renting cannot. The approval of this proposed infill housing development project with
HP1 will have a impact in stabilizing our neighborhoods and expanding home ownership
opportunities for low and moderate income qualified homebuyers.
Respectfully submitted,
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MARK SCOTT
City Manager
City Attorney Review:
Supporting Documents:
Attachment 1 - HOME Agreement with Housing Partners I
Supporting Documents:
Infill Housing Project Resolution (DOC)
Packet Pg. 98
Updated: 9/14/2016 by Georgeann "Gigi" Hanna
5.G.a
1 RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO APPROVING THE EXECUTION OF A HOME LOAN
3 AGREEMENT WITH HOUSING PARTNERS I FOR THE IMPLEMENTATION OF a
4 THE INFILL HOUSING DEVELOPMENT PROGRAM. _
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6 WHEREAS, the City has received Home Investment Partnerships Act funds from the
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7 United States Department of Housing and Urban Development ("HUD") pursuant to the
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8 Cranston-Gonzales National Housing Act of 1990 ("HOME Funds"). The HOME Funds must �►
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9 be used by the City in accordance with 24 C.F.R. Part 92; and
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WHEREAS, the City seeks to engage nonprofit developers certified as Community
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12 Housing Development Organizations ("CHDO's") subject to the HOME Final Rule, for the =
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13 purposes of constructing or reconstructing infill housing on blighted or underutilized sites z
14 ("Eligible Properties") and selling these Eligible Properties to households whose income does c
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not exceed 80% of the Area Median Income ("Qualified Homebuyers"); and
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WHEREAS, HPI, the Developer, is an experienced developer and qualified CHDO =
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18 dedicated to developing, rehabilitating, owning, and managing affordable housing, and
19 provide housing counseling services to low and moderate income people in the County of San o
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20 Bernardino; and
21 WHEREAS, The Developer desires to borrow from the City the principal amount not
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22 to exceed SIX HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($625,000) of HOME a,
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Funds for the construction or reconstruction of up to three (3) eligible properties; and o
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25 WHEREAS, the Developer will deliver to the City, among other items, a "Site
26 Agreement", a "Deed of Trust", a "Promissory Note", and a "Housing Affordability
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5.G.a
1 Covenant", as defined the HOME Loan Agreement, each time that Developer requests HOME
2 financing to construct or reconstruct "Eligible Properties"; and L
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3 WHEREAS, the City desires to provide HOME Funds to Developer, on the terms and a
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4 conditions set forth in the HOME Loan Agreement; and
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WHEREAS, this project is subject to environmental review under Sections 15192 and
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15194 of the California Environmental Quality Act (CEQA) and 24 CFR 58.36 of the
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8 National Environmental Protection Act.
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NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON E
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COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: o
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12 SECTION 1. The Mayor and Common Council hereby authorizes the City Manager, E
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13 or his designee, to enter into a HOME Loan Agreement with Housing Partners I for the
14 implementation of the infill Housing Development Program once it has been reviewed and
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approved by the City Attorney.
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SECTION 2. If the Agreement is not reviewed and approved by the City Attorney o
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18 prior to September 30, 2016, this authorization shall be null and void.
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Packet Pg. 100
5.G.a
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO APPROVING THE EXECUTION OF HOME LOAN c
2 AGREEMENT WITH HOUSING PARTNERS I FOR THE IMPLEMENTATION OF
THE INFILL HOUSING DEVELOPMENT PROGRAM
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
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and Common Council of the City of San Bernardino at a meeting
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thereof, held on the day of , 2016, by the following vote,to wit:
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8 Council Members: AYES NAYS ABSTAIN ABSENT a
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MARQUEZ E
10 E.
BARRIOS y
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12 VALDIVIA
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13 SHORETT 0
14 NICKEL c
15 RICHARD to
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I MULVIHILL c
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19 Georgeann Hanna, City Clerk c
20 The foregoing resolution is hereby approved this day of , 2016.
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22 R. Carey Davis, Mayor a
City of San Bernardino a�
23 Approved as to form:
Gary D. Saenz, City Attorney o
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25 By:
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Packet Pg. 101