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HomeMy WebLinkAbout39A - DENSITY APP - 2034 AND 2038 N BUSH STREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JANUARY 4, 2011 TITLE: DENSITY BONUS APPLICATION NO. 2010-02 TO ALLOW A FIVE-UNIT RESIDENTIAL DEVELOPMENT AT 2034 AND 2038 NORTH BUSH STREET - ORANGE HOUSING DEVELOPMENT CORPORATION AND C & C DEVELOPMENT, APPLICANT C TY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 151 Reading ? Ordinance on 2"d Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER 1. Receive and file the staff report approving Density Bonus Application No. 2010-02. 2. Authorize the City Manager and Clerk of the Council to execute the attached Density Bonus agreement with Santa Ana WBBB, L.P., subject to nonsubstantive changes approved by the City Manager and City Attorney for the development of five affordable rental units. PLANNING COMMISSION ACTION On December 13, 2010, the Planning Commission adopted a resolution approving deviations from the Two-Family Residence (R2) development standards contained in Section 41-246 et seq. of the Santa Ana Municipal Code (SAMC) as allowed by SAMC Section 41-1606 and the State of California Government Code Section 65915-65918 as an incentive to affordable housing production by a vote of 4:2 (Acosta, Walters opposed; Turner absent) to allow a five-unit residential development at 2034 and 2038 North Bush located in the Two Family Residential (R2) zoning district. The Planning Commission made no changes to the recommended action outlined in the attached staff report (Exhibit A). DISCUSSION Density Bonus Agreement The State density bonus law was created to encourage the production of quality affordable housing by allowing cities to approve qualified projects that would have units, or densities, in excess of cities' statutory density caps established under General Plans and zoning. Under this article, developers wishing to construct projects that meet the requirement for a specified percentage of affordable housing units may request to enter into a Density Bonus Agreement with 39A-1 DBA No. 2010-02 January 4, 2011 Page 2 the City. Under the proposed density bonus agreement, its approval will produce five units that will be rented to very low income households (50 percent of Area Median Income). The rent will not exceed 30 percent of 50 percent of the area median income, as adjusted for household size. The term of the affordability is 55 years. The provisions of the agreement shall constitute covenants, conditions, and restrictions which shall run with the land, and shall inure to the benefit of and be binding upon the Developer, its successors and assigns in interests as successive owners of the project. Construction of these units will assist the Agency in meeting their replacement and inclusionary housing obligations and will assist the City in meeting the Regional Housing Needs Assessment (RHNA) goals identified in the Housing Element, Consolidated Plan and Implementation Plan (Exhibit 8 of Exhibit A). FISCAL IMPACT There is no fiscal impact associated with this action. 4WU-tive Trevino Director Planning & Building Agency LL:rb LL\reports\pc&za\dba10-02 bush st.cc Exhibit: A. Planning Commission Staff Report 39A-2 REQUEST FOR Planning Commission Action PLANNING COMMISSION MEETING DATE: DECEMBER 13, 2010 TITLE: PUBLIC HEARING - FILED BY ORANGE HOUSING DEVELOPMENT CORPORATION AND C & C DEVELOPMENT FOR DENSITY BONUS APPLICATION NO. 2010-02 TO ALLOW A FIVE-UNIT RESIDENTIAL DEVELOPMENT AT 2034 AND 2038 NORTH BUSH STREET Prepared by Lucy Linnaus PLANNING COMMISSION SECRETARY APPROVED ? As Recommended ? As Amended ? Set Public Hearing For DENIED ? Applicant's Request ? Staff Recommendation CONTINUED TO 04-1 4&kAt_ Executive Director Planning Mana r RECOMMENDED ACTION Adopt a resolution approving deviations from the Two-Family Residence (R2) development standards contained in Section 41-246 et seq. of the Santa Ana Municipal Code (SAMC) as allowed by SAMC Section 41-1606 and the State of California Government Code Section 65915- 65918 as an incentive to affordable housing production. DISCUSSION Request of the Applicant Todd Cottle with Orange Housing Development Corporation and C & C Development, DBA Santa Ana WBBB, L.P. (Developer) is requesting approval of a five-unit residential project located at 2034 and 2038 North Bush Street. In order to allow this project, the applicant is requesting deviations from the Two-Family Residence (R2) development standards contained in Section 41-246 et seq. of the Santa Ana Municipal Code (SAMC) as allowed by SAMC Section 41-1606 and the State of California Government Code Section 65915-65918 as an incentive to affordable housing production. Property Description The project site is located mid-block on a cul-de sac street immediately east of the museum district. The site is composed of two flat, rectangular shaped and paved parcels that total 14,000 square feet in size. The two parcels will be consolidated via a voluntary lot merger. The zoning designation for the parcels is Two-Family Residence (R2), with a General Plan land use designation of District Center (DC). Surrounding land uses include multi-family dwellings to the north, a mix of single and multi- family dwellings across the street to the east, single-family dwellings to the south and commercial uses facing Main Street to the west (Exhibits 1 and 2). 4 39A-3 DBA 2010-02 December 13, 2010 Page 2 Project History In 1998 the City's Redevelopment Agency purchased the properties on Bush Street in furtherance of the Agency's requirement to provide new sources of affordable housing. Over the ensuing years the Agency issued a number of Requests for Proposals to develop the properties with single family dwellings, but due to various cycles in the residential development market, no project ever came to fruition. Late in 2009 the Agency issued a new Request for Proposals that encompassed three Agency-owned properties including the subject property, as well as property located at 217 and 219 South Birch Street and 435 and 437 South Birch Street. Projects also are proposed for these properties and they will be addressed in separate staff reports. The RFP resulted in the selection of the Developer for the construction of an affordable, multi-family housing project. On September 7, 2010 the Agency approved the Disposition and Development Agreement (DDA) with the Developer. The DDA requires that the 100% of the units be affordable to very low-income households (50% AMI). The beginning rents will be $989 per month for a two-bedroom unit and $1,125 for a three bedroom unit. These income and affordability requirements will be secured through a covenant that must remain in place for at least 55 years. In order to fund the construction, the Developer will apply for tax exempt bonds and tax credits. The DDA also specifies that, at this site, the Developer construct two 2-bedroom units and three 3-bedroom units for a total of five units. Given that the units will be restricted to very-low income families, the construction of these units will assist the City and Agency in meeting the Regional Housing Needs Assessment (RHNA) goals identified in the Housing Element, Consolidated Plan and the Implementation Plan. Project Description Santa Ana WBBB, L.P., is proposing to construct two 2-story buildings to create five apartments. The proposed project is in compliance with the number of units allowed by the general plan land use designation, but exceeds the maximum number of units allowed under the Two-Family Residence (R2) zoning. The buildings will be arranged around a central courtyard, which will provide the common open space for the project. The primary access to the two street level units will be directly from the street, while access to the three units located on the second level will be from the courtyard. The garages and guest parking will be accessed from an alley at the rear of the property. A direct pedestrian connection from the courtyard to the alley will be provided for the convenience of the tenants and guests. The two street level units will be 1,614 square feet in size each and will have three bedrooms, two full bathrooms and a two-car garage with two additional tandem parking spaces on the driveway. Two units will be located above these units. Unit 3 will be 1,684 square feet in size and also have three bedrooms and two full bathrooms. This unit will have access to a two-car garage and two 39A-4 DBA 2010-02 December 13, 2010 Page 3 tandem parking spaces on the driveway to serve as additional parking for that unit. Unit 4 will be 1,480 square feet in size and will have two bedrooms and two bathrooms. This unit will have direct access to a two-car tandem garage and one additional tandem parking space on the driveway. Unit 5 will be located above the garages and is located at the rear of the courtyard. It will be 1,108 square feet in size and have two bedrooms and two bathrooms. This unit will have access to a two-car tandem garage and one additional parking space on the driveway. Each unit will have private open space, which will exceed the minimum requirement, and private laundry facilities. Perimeter block walls are proposed for privacy (Exhibits 3, 4 and 5). The project has been designed in the Spanish Colonial Revival architectural style. In order to reduce the massing and to create architectural variety, each building will have slightly different detailing. The walls will be painted in an off-white tone and accented by cornices in contrasting color and decorative vents. The windows will be recessed, multi-pane with decorative cast concrete sills and wrought iron railing on the balconies. The primary entrance to four of the five units will be through covered porches, while the entrance to the carriage unit located above the garage will be via an open stair with wide sweeping curbed guardrails. The roof will be tile in a terra cotta color. To maintain architectural consistency, the residences will incorporate enhanced architectural elements, including complete architectural treatments on all sides of each building (Exhibits 6 and 7). Density Bonus Law Background The State density bonus law was created to encourage the production of quality affordable housing by allowing cities to approve qualified projects that would have units, or densities, in excess of cities' statutory density caps established under General Plans and zoning. The rationale here being that baseline density, in part, establishes a property's market value. By allowing more units to be constructed on the property than would otherwise be allowed under the existing zoning, it creates an economic advantage to the developer, which could then be used to subsidize any gap between market rents or sales prices and the price at which the unit would be affordable to those making less than the area median income. Under this law, California cities, including charter cities, were required to adopt implementing legislation, which Santa Ana did in 2001 with the adoption of SAMC Article XVI.I - Density Bonus for Affordable Housing. Under this article, developers wishing to construct projects that meet the requirement for a specified percentage of affordable housing units may request to enter into a Density Bonus Agreement with the City and, pending approval of such an agreement, may also request deviations from the City's existing density caps and development standards that would be necessary to facilitate the development of the project. Under the State Density Bonus Law cities must grant the request of the applicant, unless it adopts written findings, based upon substantial evidence, that the request is not necessary in order to provide affordable housing, or that there would be a specific adverse impact upon public health 39A-5 DBA 2010-02 December 13, 2010 Page 4 and safety, or the physical environment, or on specified historic properties, and for which there is no feasible way of mitigating or avoiding the impact without rendering the project unaffordable to low and moderate income households. The City further supported the provisions of the State Density Bonus Law through the adoption of policies contained within the 2006-2014 Housing Element. In particular, Housing Program No. 25 of the Housing Implementation Summary states that the City will implement the density bonus ordinance to assist in the development of extremely low, very low, and low income rental units, and moderate income condos, and senior housing. Density Bonus Implementation of the Proposed Proiect Pursuant to SAMC 14-1600 et seq., developers wishing to pursue deviations from the City's established densities and development standards must enter into a Density Bonus Agreement with the City. The code also states that, if the proposed Density Bonus Agreement includes requests for deviations from zoning and development standards, that those deviations must first be approved by the Planning Commission prior to consideration of the Agreement by the City Council. The project applicant is requesting deviations from the City's zoning and development standards, as further detailed in this staff report. The Density Bonus Agreement (Exhibit 8) details the requested deviations. This Agreement, along with the Planning Commission's recommendation regarding the requested deviations, will be considered by the City Council. The Developer is seeking a density bonus from the maximum density permitted by the R2 zone and deviations from the minimum lot size and the front yard setback. Density Bonus From Maximum Density Both the State Density Bonus Law and the SAMC state that the law only applies to projects of five or more units. The proposed project meets this standard. There is a difference between the State law and the SAMC regarding the total number of units which may be constructed in excess of adopted densities. In the case of the SAMC, the development shall be permitted a density bonus of the amount of units requested by the applicant, up to a total project dwelling unit count of 125 percent. Under State law, the minimum bonus for projects providing 20 percent of the units to lower income households is 35 percent. Because the City's existing Density Bonus Law has not been amended to comply with the most current State Density Bonus Law and because the SAMC states that it shall be in compliance with the State law "as it may be amended from time to time," the provisions of the State law will take precedence in this case. The State law and the SAMC state that "density bonus" means a density increase over the otherwise maximum allowable residential density under the applicable zoning ordinance and land use element of the general plan. The maximum density allowed by the City's zoning and General Plan land use designations for this property is inconsistent. The following table details number of dwellings allowed and the percentage increases as they pertain to this project. 39A-6 DBA 2010-02 December 13, 2010 Page 5 Comparison of Maximum Allowable Units General Plan' =-.DC R2 Zonin District Pro osed .Pro'ect 28.9 units 3.67 units 5 units 'The subject property has a General Plan land use designation of District Center that allows a density up to 90 dwelling units per acre. The applicant proposes to develop a project at a density of 15.5 DU, which is below the maximum allowed by the General Plan. This constitutes a 36% increase in the number of units permitted by the R2 zoning and a 0% increase in units permitted by the General Plan land use designation. These increases are consistent with the density bonus law. The project is located in a block developed with a variety of densities. The property immediately adjacent to the north is developed at a density of 99 DU per acre, while the development to the south is at 7 DU per acre. Across Bush Street, the densities are also varied, from 7 to 77 DU per acre. The applicant is requesting an increase from 11.43 DU per acre to 15.43 DU per acre. As such, staff finds that the proposed density increase from the provision of the zoning will not cause an adverse impact to the neighborhood. Under State Law, in order to be eligible for this density increase, the applicant must provide a minimum of 10 percent of the units to lower income households. In this case, the applicant will be providing all units or 100 percent of the proposed development to very low income households, which is in excess of the minimum requirement. Deviation From Minimum Lot Size The applicant is also requesting two deviations from the development standards to facilitate the construction of the affordable units. The first deviation pertains to the minimum lot size. The R2 zoning district establishes a minimum lot area for lots containing two or more dwellings. It requires 6,000 square feet for the first unit, and 3,000 square feet for each additional unit. Since the lot is 14,000 square feet, a total of 3.67 units are allowed. A lot size of 18,000 square feet would be required to construct five units. The applicant is requesting a deviation from the minimum lot size of 18,000 square feet for five units, to 14,000 square feet - a reduction of 4,000 square feet. Deviation From Front Yard Setback The second deviation is to reduce the front yard setback. The R2 zone requires a front yard setback of 20 feet. The applicant is requesting a deviation from the minimum front yard of 20 feet to 17.5 feet. The applicant could develop this project with the required setback, but instead is proposing eight additional parking stalls off the alley. The front yard setback for the adjacent property to the north is 15 feet, while that to the south is approximately 24 feet. 39A-7 DBA 2010-02 December 13, 2010 Page 6 With the approval of the two deviations requested by the applicant, the project will comply with all applicable development standards established in the R2 zoning district and the Citywide Design Guidelines. Additionally the project will be consistent with the purpose of the General Plan Land Use and the Housing Element, as it will further the goals and policies of the plan and not obstruct their attainment. Specifically, it would further the following General Plan goals and policies: Land Use Goal3 Preserve and improve the character and integrity of Element existing neighborhoods Policy 3.1 Support development which provides a positive contribution to neighborhood character and identity. Policy 3.5 Encourage new development and/or additions to existing development that is compatible in scale, and consistent with the architectural style and character of the neighborhood. Policy 5.5 Encourage development which is compatible with, and supportive of surrounding land uses. Housing Goal 2 Provide a diversity of quality housing, affordability levels, Element and living experiences that accommodate Santa Ana's residents and workforce of all household types, income levels, and age groups to foster an inclusive community. Policy Rental Housing. Encourage the construction of rental HE-2.3 housing for Santa Ana's residents and workforce, including a commitment to very low, low, and moderate income residents and moderate income Santa Ana workers. Policy Agency-Owned Sites. Maximize affordable housing on HE-2.8 Agency-owned properties that is of high quality, sustainable, and available to various income levels. In summary, the density bonus deviations requested will allow for the construction of two additional affordable units than would have otherwise been allowed, increasing the total supply of affordable rental units available in the community. Staff recommends that the Planning Commission adopt a resolution approving the requested deviations from Chapter 41 of the Santa Ana Municipal Code, to allow Density Bonus Application No. 2010-02. 39A-8 DBA 2010-02 December 13, 2010 Page 7 CEQA Compliance In accordance with the California Environmental Quality Act, the proposed project is categorically exempt from CEQA review per Section 15303, Class 3 and Section 15332, Class 32. The Class 3 exemption allows new construction multi-family residential structures in urbanized areas designed for not more than six dwelling units. The Class 32 exemption allows for construction of in-fill development projects of less than five acres in urbanized areas. 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Parking w Lot S Q H z O .n w F 22ND ST. LL z w '9 < N _ a a Project z Site DUPLEX w z a s N LL ? DUPLEX DUPLEX z SFR Q ? < DUPLEX 00 APARTMENTS < a SIN LE FAM. v SFR SFR < RES. 20TH STREET DBA No. 2010-2 BUSH STREET COURTYARDS r 2034 AND 2038 NORTH BUSH STREET P L A N N I N G A N D 6 U I L D I N G A G E N C Y LAND USE MAP EXHIBIT 2 39A-11 ALLEY ow.M' BUSH STREET 9< x I 2 I 2034/2038 N. BUSH STREET BANTA ANA, CALIFORNIA sraR ..w,,. r... n.N¦{rf ?.rY?NNwn Iu ?owa¦oa?uos.w. cow,+¦nNS?4a¦¦ew. ¦?iG¦iAw?1L +w?wrn ¦¦¦?n mw no¦?.u?qq¦?CCaffu NIF¦M,NW ¦WUHW 111¦ KADM i SO=. i s14 &F. GARAGE XMF. OOVaIDW". MILE Toro wtu. KAnM+c z ° u. T o 346 v. TOTAL, IM 6.F. TOTAL COVIRAM 6.470 ". TOTAL ME ASHI Moos $I. -M&-.40 OOVMACE ARM 441r?n JJ 17 4 ass-ioa?a 39A-12 ALLEY 2034/2038 N. BUSH STREET SANTA ANA, CALIFORNIA M NO-1 GC4D 11.01-10 39A-13 BUSH STREET 5U5H STREET C 10 ?D? &RATPHIG SGhE ..-W f?y.`':i . Mw.1... an wwo. • r ? Y ' a.r.. r.e....,.. rr.. sw w ?r+ ?r ".•?.. ?? ti ?w..w+l•-u.v w. ..Iw:?f?w ?r.a.n.. •.w.. 4...++Y ?Y.x -fc.?..w w.. IrYrr..... Mamie' ?....lu..•. N:al ara. ? . vc {r-?} r ? - l j r?e? ?`L w . I ,. *•`r Or 'Y.fHV Cw .e.. r.YS•.?Frr ..w.'1ri.w..w? ,_.? + m?. ,.?.•.. c us.. r w:.?7...`""?Iti.•wrc..+.? f .e Ma r=Z.' .......,.., va.•. s..a+r.wl..ww.....,.a.w '."?.,,r:,;",w.v`•w'f.•.w+.l.. d.?. eMw'fYsr'W 14•an ' ?'i'.I yy 'MY.?+tt2w •s eb?r I . 'We ' ? W `r'•""`J""'e.lariYflv^1`ti. Y ' " r.l . w r fMy I•._ _•IYI ?v 6..q N:lJ.w.Mr,.. ?. ywf rain,u•0. R...w_ Mr,W be.'•vx' MI I 2034/2038 NORTH ®USH STREET SANTA ANA, CALIFORNIA w •• ?I + 0[OS SMALL "AVE Y LAM Or ;AtR[DI WLCM . MM LRILCn OA AO[XO AMR. PtANTN1f• . •.• » • • • . • •••. • VMNIAGE SHALL NOT flOW /CWM PEDMULAN WA49 WAIS L95-10FJ?0 • Alb"IM S lem SNALL W LOW "I" USE AND HAVE ET d4C COKma. SYSTEM 11-11-10 • PLANT MATH AL5 TO Be DROUG"T TOURW AND ER '.f WIC0 AND LOCATED A PROPER 50LAR WCOUR AHD PLANTMG HYDIOO70NCl -- - -? __ -max ars -x?I mac- ----- K" tLNATON i ------ JAL .aessx --aa S? :ter r? 3F- r I aoe 2034/22038 N. BUSH STREET BANTA ANA. CALIFORNIA M ?rK J raw- I m'?'I0 ...r.•... sen cLSVAroN - ?- srz .....v.,r LID? navAIWN aer? .an X= a- w mm an a:raz-- s-- 0 .....t- ev =MMIVMp N.cvM71DM MAN 2034/2038 N. BUSH STREET SANTA ANA, CALIFORNIA yYrw .coop a... r X0-16 ••••? •? • ?• oow+rrwo easvw„a« LQT .,.a r.= .9= mar ? sec aae -sss .::? 12-2-10 RECORDING REQUESTED BY: CITY OF SANTA ANA AND WHEN RECORDED MAIL TO: City of Santa Ana - Housing Division 20 Civic Center Plaza, M-37 Santa Ana, CA 92702 DENSITY BONUS AGREEMENT WITH AFFORDABLE HOUSING REQUIREMENT (2034-2038 N. Bush Street, Santa Ana, CA) THIS DENSITY BONUS AGREEMENT WITH AFFORDABLE HOUSING REQUIREMENT, is made and entered into this day of , 2010, by and between the City of Santa Ana, a charter city and municipal corporation of the State of California ("City"), and Santa Ana WBBB, L.P. ("Developer"). Recitals: 1. Section 41-1600 et seq. of the Santa Ana Municipal Code and section 65915 et seq. of the California Government Code set forth the process to provide increased residential densities to property owners who guarantee that a portion of their residential development will be available to low income, very low-income, or senior (also known as "qualified") households. These regulations are intended to materially assist the housing industry in providing adequate and affordable shelter for all economic segments of the community and to provide a balance of housing opportunities for very low income, low income, and senior households throughout the City. 2. Developer is proposing to the City to develop five (5) residential rental units (the "Project") on the Property located at 2034-2038 N. Bush Street in the City of Santa Ana (the "Property") legally described as set forth in Exhibit A, attached hereto and incorporated herein. The Project is more particularly set forth in Density Bonus Application No. 2010-02, Environmental Review No. 2010-101, and Development Plan Review No. 2010-27. 3. The Project is currently being negotiated through a Disposition and Development Agreement with the Community Redevelopment Agency of the City of Santa Ana ("Agency") and close of escrow shall occur when the Developer obtains the entitlement, private activity bond financing, tax credits and a residual receipts loan from the City and the Agency necessary to develop five (5) multi-family rental units on the Property (the "Close of Escrow"). 4. The maximum number of dwelling units which may be developed on the Property under applicable provisions of the City's general plan is 28, and 3 under the provision of the zoning ordinance, without a density bonus. EXHIBIT 8 39A-17 5. City desires to increase the number of affordable rental units and the degree to which they are affordable in the City of Santa Ana. 6. In order to promote this goal, and the express provisions of Sections 65915 - 65918 of the Government Code of the State of California ("Density Bonus Law"), the City has determined to grant Developer's application for a density bonus and related concessions and waivers to Developer. 7. As a condition of approval of the Project with the density bonus by City, Developer will provide and maintain a portion of the dwelling units in said Project offering Affordable Rents (as defined in Paragraph I of this Agreement) (the "Affordable Rental Unit(s)") for the Tenant Rental Period. 8. In addition to the density bonus granted to Developer, the Project has been granted concessions or deviations from City development standards including: (i) reduction of minimum lot size for five (5) units from 18,000 square feet to 14,000 square feet, and (ii) reduction of front yard setback from 20 feet to 17.5 feet. WHEREFORE, for and in consideration of the mutual promises, covenants and conditions and conditions herein contained, the parties hereto do hereby agree as follows: 1. DEFINITIONS The following words and phrases shall mean and be defined and used for the purposes of this Agreement as follows: A. "Affordable Rent" means the monthly rents which do not exceed the maximum amount applicable to Very Low Income households, as promulgated by the U.S. Department of Housing and Urban Development (HUD). B. "Affordable Rental Unit" means the units that will be rented at affordable rent to very low income qualified households. C. "Affordable Rent Schedule" means a rent schedule established as of the date of issuance of an occupancy permit (exclusive of tenant utility payments or security deposits) for the required number/percentage of the total number of units in the Project which are to be rented or available for rent to very low income tenants. Said Affordable Rent Schedule shall be established at the time of the issuance of the occupancy permit ("Initial Rent Schedule") and shall be created in accordance with the terms and conditions of the Disposition and Development Agreement entered into by and between the Developer and the Community Redevelopment Agency for the City of Santa Ana and the recorded Affordability Restrictions on Transfer of Property. 2 39A-18 D. "Agency" means the Community Redevelopment Agency of the City of Santa Ana, a public body, corporate and politic, exercising governmental functions and powers and organized and existing under Chapter 2 of the Community Redevelopment Law of the State of California, and any assignee of or successor to its rights, powers and responsibilities. E. "Agreement" means this Density Housing Bonus Agreement with Affordable Housing Restriction, entered into by and between the City and the Developer. F. "Area Median Income" means the median income figures for Orange County adopted by the State of California pursuant to Health and Safety Code section 50093, as amended from time to time. G. "City" means the City of Santa Ana, a charter city and municipal corporation. H. "Completion of the Project" shall mean the date on which the certificate of occupancy is issued by City for occupancy in the Project. 1. "Density bonus" means the number of dwelling units approved by City for development on the Property which exceeds the number specified in Recital 2 of this Agreement. J. "Developer" means Santa Ana WBBB, LP, a limited partnership consisting of Orange Housing Development Corporation (OHDC) and C & C Development. K. "Development" means construction or rehabilitation or a combination thereof. L. "Household Size Appropriate for Unit" for the purpose of determining Affordable Housing Cost only, means three persons for a two bedroom Affordable Unit and four persons for a three bedroom Affordable Unit. Household Size Appropriate for Unit is not intended to constitute a limitation on the number of persons who may live in the Unit. M. "Income Certification" means an income certification for very low income tenants in a form set forth in "Exhibit B," attached hereto and incorporated herein by this reference as if set forth in full. N. "Project" means the construction of five (5) rental units, of which, all five will be Affordable Units. 0. "Tenant Rental Period" means with respect to the Project, the period commencing on the date of issuance of the occupancy permit and ending at the expiration of thirty (30) years thereafter, pursuant to Density Bonus Law. P. "Very Low Income Household/Tenants" means persons and families whose income does not exceed fifty (50%) of the median income for the area, as computed by the 3 39A-19 method described in the income certificate and for whom an income certification has been obtained or prepared in accordance with the provisions of this Agreement, as adjusted by HUD from time to time. II. CONDITIONS TO AGREEMENT A. This Agreement is conditional upon City approval of development plans for the Project which provide for not less than five (5) total dwelling units in the Project consisting of two 2-bedroom and three 3-bedroom units, and upon completion of the Project in accordance with such approved plans by Developer. Nothing in this Agreement obligates City to grant such approval or Developer to develop the Project. B. The density bonus provided by this Agreement is conditional upon Developer and any successor-in-interest of Developer in the Property being subject to the covenants set forth in this Agreement as running with the Property. If Developer conveys the Property prior to recordation of this Agreement in the official Records of Orange County, no building permit or certificate of occupancy for the Project which would allow for development or occupancy of more dwelling units than specified in Recital No. 2 of the Agreement shall be issued, unless the successor-in-interest of Developer of the Property executes a document suitable for recordation in the Official Records of Orange County binding such successor-in-interest to the terms and conditions of this Agreement. C. Except as set forth expressly herein, Developer shall carry out the design and construction of the Project in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City of Santa Ana Municipal Code, all applicable disabled and handicapped access requirements, including the Americans With Disabilities Act (42 U.S.C. Section 12101, et seq.) and Government Code Section 4450, et seq. III. AFFORDABLE RENTAL UNIT COVENANT A. Developer covenants that no less than five (5) dwelling unit(s) in the Project, or at least 100% of the units in the Project shall at all times during the Tenant Rental Period be rented to, or held vacant and available for immediate occupancy by very low income households, as defined in California Health & Safety Code section 50105, at a rent that does not exceed 30 percent of 50 percent of the area median income, as adjusted for household size. B. Developer agrees to make a good faith effort to verify that the income and asset statement provided by an applicant in an income certification is accurate by taking at least one of the following steps as a part of the verification process: (1) obtain a pay stub for the most recent pay period, (2) obtain an income tax return for the most recent tax year, (3) conduct a TRW or similar credit check, (4) obtain an income verification form from the applicant's current employer, (5) obtain an income verification form from the Social Security Administration and/or 4 39A-20 the California Department of Social Services if the applicant receives assistance from either of such agencies, or (6) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. C. Upon written request by Developer, City agrees to determine promptly the Initial Rental Schedule based upon the terms of this Agreement and advise Developer of the Initial Rental Schedule within five (5) days of the issuance of the occupancy permit. D. Developer agrees to accept as tenants on the same basis as all other prospective tenants, very low income tenants who are recipients of federal certificates for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937 or its successor, and shall not apply selective criteria to Section 8 certificate holders that are more burdensome than the criteria applied to all other prospective tenants. IV. MISCELLANEOUS A. Covenants Run with the Land. The provisions of this Agreement shall constitute covenants, conditions, and restrictions which shall run with the land, and shall inure to the benefit of and be binding upon the Developer, its successors and assigns in interest as successive owners of the Project, as provided herein. Any sale, transfer, or lease of the Project shall be deemed to be made and accepted upon and subject to the covenants, conditions and restrictions and provisions hereof whether or not referred to in the instrument of sale, transfer or lease. B. Independent Contractor. Developer is, and shall be deemed to be, an independent contractor and not an employee of City and shall not become an agent of City. The City is not a partner, joint venturer, alter-ego, manager, or business associate in this Project. The City is not deemed responsible or liable for any acts, omissions or decisions of Developer, nor is City responsible for any loss or injury of any kind to any person or property arising from any construction or development of the Project. C. Non-Discrimination. 1. Leasing. Developer hereby covenants by and for itself, its successors and assigns, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926. 1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land. 5 39A-21 2. Employment. In performing its obligations under this Agreement, Developer shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other related activities. Developer affirms that it is an equal opportunity employer and shall comply with all applicable state and local laws and regulations. D. Notice. Any notices, requests or approvals given under this Agreement from one party to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested, to the address of the other party as stated in this paragraph, and shall be deemed given at the time of personal delivery or at the time of deposit for mailing. Either party may change its address for notice by giving written notice thereof to the other party. CITY: City of Santa Ana Community Development Agency 20 Civic Center Plaza - M-37 Santa Ana, CA 92702 DEVELOPER: Santa Ana WBBB, L.P. c/o Orange Housing Development Corporation 414 E. Chapman Avenue Orange, CA 92866 Attention: Chief Executive Officer COPY TO: C&C Development 14211 Yorba Street, Ste. 200 Tustin, CA 92781 E. Attorney Fees. In the event legal action is brought to enforce any provisions hereof, the prevailing party shall be entitled to reasonable attorney's fees, together with other legally allowed costs. F. Recordation of Agreement. Upon issuance of building permits for the Project, this Agreement shall be recorded in the official records of Orange County, California. City and Developer agree to execute and deliver for recordation such additional documents or instruments as the other may reasonably request to further confirm or acknowledge the provisions hereof, including the expiration of very low income tenant rental period. G. Amendments. This Agreement may be amended, modified, or changed by the parties hereto, City and Developer, provided that said amendment, modification, or change is in writing and approved by both parties. H. Default. Developer shall be in default hereunder if it shall fail to observe or perform any covenants, conditions, restriction, or provision contained herein on its part to be 6 39A-22 observed or performed which continues after notice to Developer and failure to cure as provided herein. If any such default shall have occurred, then and in such event, City shall be entitled in addition to all other remedies provided by law or in equity: To compel specific performance by Developer of its obligations under this Agreement, it being recognized that the beneficiaries of Developer's obligations hereunder cannot be adequately compensated for by monetary damages in the event of Developer's default. 2. In the event the actual rent collected by Developer for any unit required under this Agreement to be rented to lower income households and very low income tenants is in excess of the maximum affordable rent allowed for such unit in violation of the requirements of Paragraph III of this Agreement, the amount by which any actual rent collected for such unit exceeds the maximum affordable rent for such unit shall be deemed damages payable to City by Developer. Such damages shall be in addition to any other remedy at law or in equity to City. 1. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. J. No Conflict of Interest. No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is, directly or indirectly, interested. K. Nonliability of City Officials and Employees. No member, official or employee of the City of Santa Ana shall be personally liable to the Developer, or any successor-in-interest, in the event of any default or breach by the City on any obligation under the terms of this Agreement. L. Effective Date of Agreement. This Agreement shall be dated and effective as of the date of the action by the City on which it approves this Agreement. M. Entirety of Agreement. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the matters contained herein. 7 39A-23 N. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of Developer and Santa Ana and their respective successors and assigns. 0. Governing Law. This Agreement has been entered into, is to be performed entirely within, and shall be governed by and construed in accordance with the laws of the State of California, with venue in Orange County. 8 39A-24 IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: JOSEPH W.FLETCHER City Attorney By: Lisa E. Storck Assistant City Attorney CITY OF SANTA ANA: DAVID N. REAM City Manager DEVELOPER: SANTA ANA WBBB LP, a California Limited Partnership By: ORANGE HOUSING DEVELOPMENT CORPORATION a California nonprofit corporation, its managing general partner By: Eunice Bobert Chief Executive Officer By: C&C Development, LLC, a California limited liability company, its developer general partner By: Todd R. Cottle, its member By: The Cottle Family Trust Dated 3/8/1987, its member By: Barry A. Cottle, Trustee 9 39A-25 EXHIBIT A LEGAL DESCRIPTION 39A-26 ROH - 12/13/10 RESOLUTION NO. 2010-21 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA ANA APPROVING DENSITY BONUS APPLICATION NO. 2010-02 TO ALLOW A FIVE-UNIT RESIDENTIAL DEVELOPMENT AT 2034 AND 2038 NORTH BUSH STREET BE IT RESOLVED BY THE PLANNING COMMISSION OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The Planning Commission of the City of Santa Ana hereby finds, determines and declares as follows: A. Applicant is requesting approval of Density Bonus Application 2010-02 approving deviations from the Two-Family Residence (R2) development standards pursuant to Government Code Sections 65915, et seq. B. The Planning Commission of the City of Santa Ana held a duly noticed public hearing on December 13, 2010. Section 2. The Planning Commission of the City of Santa Ana hereby finds, determines and declares as to Density Bonus Application 2010-02 as follows: A. The proposed development will materially assist in accomplishing the goal of providing affordable housing opportunities in economically balanced communities throughout the city. The proposed five-unit residential development will materially assist in accomplishing the goal of providing affordable housing opportunities in an economically balanced community. The applicant will construct, rent and maintain five units, representing 100 percent of the proposed development, to Very Low Income Households, thus increasing the total supply of affordable units available for that level of affordability. B. The development will not be inconsistent with the purpose of the underlying zone or applicable designation in the general plan land use element. As proposed, the project will be consistent with the purpose of the R2 zoning district. With the approval of the two deviations requested by the applicant, the project will comply with all applicable development standards established in the R2 zoning district and the guidelines within Citywide design standards. Additionally, the project will be consistent with purpose of the Resolution No. 2010-21 Page 1 of 3 39A-27 General Plan Land Use Element and Housing Element, as it will further the goals and policies of the plan and not obstruct their attainment. Specifically, it will further the Land Use Element Goal 3, preserve and improve the character and integrity of existing neighborhood; Policy 3.1, support development which provides a positive contribution to neighborhood character and identity; Policy 3.5, encourage new development and/or additions to existing development that is compatible in scale, and consistent with the architectural style and character of the neighborhood and Policy 5.5, encourage development which is compatible with, and supportive of surrounding land uses. Additionally, it will further the Housing Element, Goal 2, provide a diversity of quality housing, affordability levels, and living experiences that accommodate Santa Ana's residents and workforce of all household types, income levels, and age groups to foster an inclusive community; Policy HE- 2.3, Rental Housing. Encourage the construction of rental housing for Santa Ana's residents and workforce, including a commitment to very low, low, and moderate income residents and moderate income Santa Ana workers; and Policy HE-2.8, Agency-Owned Sites. Maximize affordable housing on Agency-owned properties that is of high quality, sustainable, and available to various income levels. C. The deviation is necessary to make it economically feasible for the applicant to utilize a density bonus authorized for the development pursuant to section 41-1604 The deviations of the development standards requested, reduction of minimum lot size for five (5) units from 18,000 square feet to 14,000 square feet and reduction of front yard setback from 20 feet to 17.5 feet, are necessary to make the project economically feasible. Section 3. In accordance with the California Environmental Quality Act, the proposed project is categorically exempt from CEQA review per Section 15303, class 3 and Section 15332, Class 32. The Class 3 exemption allows new construction multi-family residential structures in urbanized areas designed for not more than six dwelling units. The Class 32 exemption allows for construction of in-fill development projects of less than five acres in urbanized areas. A Notice of Exemption for Environmental Review No. 2010- 101 will be filed for this project. Section 4. The Planning Commission of the City of Santa Ana after conducting the public hearing hereby approves Density Bonus Application No. 2010-02. This decision is based upon the evidence submitted at the abovesaid hearing, which includes but is not limited to: the Request for Planning Commission Action dated December 13, 2010 and exhibits attached thereto; and the public testimony, all of which are incorporated herein by this reference. Resolution No. 2010-21 Page 2 of 3 39A-28 ADOPTED this 13th day of December, 2010 by the following vote: AYES: Commissioners: Alderete, Betancourt, Gartner, Yrarrazaval (4) NOES: Commissioners: Acosta, Walters (2) ABSENT: Commissioners: Turner (1) ABSTENTIONS: Commissioners: None (0) Eric Alderete Chairman APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney By: Ryan O. Hodge Assistant City Attorney CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARTHA RAMIREZ, Secretary of the Planning Commission, do hereby attest to and certify the attached Resolution No. 2010-21 to be the original resolution adopted by the Planning Commission of the City of Santa Ana on December 13, 2010. Date: Secretary of the Planning Commission City of Santa Ana Resolution No. 2010-21 Page 3 of 3 39A-29 39A-30