REPORT TO THE CITY COUNCIL JOINT MEETING OF THE CITY COUNCIL, THE CITY OF FRESNO IN ITS CAPACITY AS HOUSING SUCCESSOR TO THE REDEVELOPMENT AGENCY OF THE CITY OF FRESNO, AND FRESNO REVITALIZATION CORPORATION
FROM: MARLENE MURPHEY, Executive Director
SUBJECT
Title
Approve First Amendment to the First Amended and Restated Disposition and Development Agreement between the City of Fresno in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno and Self-Help Enterprises regarding the affordable single family home development at the Southwest corner of Florence and Walnut and the Northwest corner of Florence and Plumas Avenues.
Body
RECOMMENDATION
It is recommended that the City of Fresno in its capacity as Housing Successor to the Redevelopment Agency (FHS) approve the First Amendment to the First Amended and Restated Disposition and Development Agreement with Self-Help Enterprises.
EXECUTIVE SUMMARY
Self Help Enterprises (Developer) requests a First Amendment to the Amended and Restated Disposition Agreement. The current Agreement provides downpayment assistance to the majority of individual homebuyers from a combination of both FHS and HOME Program funds with different loan terms. The Amendment revises FHS loan terms to better align with HOME terms to provide more consistency between lending sources and improve project marketability. In addition, for clarification purposes the Amendment makes minor adjustments to four exhibits
BACKGROUND
The current Agreement provides for a two-phase development. Phase 1, the “Walnut Project” consists of six homes at the southwest corner of Walnut and Florence Avenues. The homes are nearing completion and expected to be fully occupied by the end of March. Phase 2, the “Plumas Project” consists of 11 homes at the northwest corner of Florence and Plumas scheduled for completion in June of 2025. A potential temporary ponding basin that would have occupied four lots in Phase 2 became unnecessary due to the development of storm drain infrastructure allowing the project to yield 17 affordable homes for sale to first time eligible homebuyers.
The First Amendment to the Amended and Restated Agreement provides the following changes:
Declaration of Restrictions (Exhibit G)
The current Agreement provides downpayment assistance to the majority of project homebuyers from a combination of both FHS and HOME Program funds with different loan terms. In order to provide homebuyers with more consistent terms between lending sources, and to improve marketability and project management the Agreement is revised to better align with HOME agreement loan terms. Specifically, in Exhibit G, Declaration of Restrictions under Section 3, the Agency’s “Right to Repurchase” is replaced with “Recapture Agreement” consistent with the HOME agreement that requires funds be recaptured if the home does not continue to be the borrower’s principal residence or if the property is sold or transferred during the affordability period. The FHS Recapture provision is not triggered so long as the income requirements are maintained at transfer to specified individuals such as spouse, issue, adopted children and co-declarant or joint tenant at death of declarant. In addition, Section 2 D specifies the average median Income (AMI) requirement being met by the Declarant (i.e. 60% or 80% of AMI).
Agency and Homebuyer Promissory Notes, Deed of Trust, Sources and Uses Budget
Adjustments in language to four Exhibits, the Agency and Homebuyer Promissory Notes, Developer Deed of Trust and Sources and Uses Budget are for purposes of clarification and do not change the terms of the Agreement. The Agency Promissory Note (Exhibit H) clarifies the Developer’s AMI requirement: 40% of units shall be sold to households at or below 60% of AMI and 60% of units will be sold to households at or below 80% of AMI. The Homebuyer’s Promissory Note (Exhibit I) specifies the Agency’s third lien position. The Developer Deed of Trust (Exhibit J) clarifies the Agency’s loan is up to $410,000. Lastly, the Sources and Uses Budget (Exhibit D) clarifies that from the $320,000 provided for down payment assistance, the amount per unit will be determined based on income and need for up to 17 units. This revision recognizes the elimination of a ponding basin increasing the number of units from 13 to 17.
ENVIRONMENTAL FINDINGS
On October 22, 2020, the project was determined to be categorically exempt pursuant to CEQA Guidelines Section 15332 as Infill Development. Staff have determined that none of the exceptions to Categorial Exemptions set forth in CEQA Guidelines Section 15300.2 apply to this project.
LOCAL PREFERENCE
FISCAL IMPACT
The First Amendment to the Amended and Restated Agreement does not impact the Fresno Housing Successor’s LMIHA fund budget
Attachment: First Amendment to First Amended Restated Disposition and Development Agreement