HomeMy WebLinkAbout05-02-2017 Item 07 Housing Authority Request to reassign lease for City owned property located at 1090 and 1092 Orcutt Rd, and 1105 Laurel Ln Meeting Date: 5/2/2017
FROM: Michael Codron, Community Development Director
Prepared By: Jenny Wiseman, Acting Housing Programs Manager
SUBJECT: HOUSING AUTHORITY REQUEST TO REASSIGN LEASE FOR CITY
OWNED PROPERTY LOCATED AT 1090 AND 1092 ORCUTT ROAD, AND
1105 LAUREL LANE
RECOMMENDATION
Approve and authorize the City Manager to execute a reassignment of the Lease Agreement for
City owned property located on Orcutt Road from the Housing Authority of the City of San Luis
Obispo to SLO 55 Limited Partnership.
DISCUSSION
Background
On April 29, 1991 the City executed a fifty-five year lease with the Housing Authority of the
City of San Luis Obispo to construct and operate rental housing, affordable to low income
seniors and the disabled residents, on City owned property located at 1090 and 1092 Orcutt
Road, and 1105 Laurel Lane. The City in turn, agreed to provide the property for $1 per year.
The Housing Authority then requested to assign their interest in the original Lease Agreement to
their affiliate, the San Luis Obispo Non-Profit Housing Corporation. The lease was transferred
on December 1, 1992; the Housing Authority then applied for, and successfully received, $1.2
million in low income housing tax credits to finance the project. In 1994, the Housing Authority
completed Marvin’s Gardens (now known as Laurel Creek Apartments), a twenty-four unit
housing development dedicated to low-income residents.
Shortly after completion, the Housing Authority finalized financing arrangements and reassigned
the lease for the property from the San Luis Obispo Non-Profit Housing Corporation to Laurel
Creek Apartments, a California Limited Partnership. This lease transfer was necessary so the
Housing Authority (via San Luis Obispo Non-Profit Housing Corporation) could collect the $1.2
million in tax credits and secure the mortgage.
On February 16, 2016, the Council approved the reassignment from Laurel Creek Apartments,
LP back to the Housing Authority of San Luis Obispo (Attachment B). That lease reassignment
allowed the Housing Authority to be successful in obtaining low-income housing tax credits to
acquire and rehabilitate Laurel Creek Apartments and gave approval to enter into an amended
and restated ground lease with a lease term of 75 years.
Lease Reassignment
The Housing Authority is now requesting the lease be reassigned from the Housing Authority to
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the newly formed SLO 55, LP, which is managed by the San Luis Obispo Non-Profit Housing
Corporation (Attachment A). This lease reassignment is necessary for SLO 55, LP to control the
property, perform the capital improvements, and then operate the property as affordable housing.
Staff has reviewed the Housing Authority’s request to assign the lease to SLO 55, LP and
concluded that the LP can fulfill the terms and conditions of the existing lease agreement.
Therefore, staff recommends approval of the assignment so the Housing Authority and SLO 55
can move forward with the capital improvements and operations of the project.
FISCAL IMPACT
Approval of the lease reassignment will not result in any additional costs to the City.
ALTERNATIVES
Do not reassign the lease to SLO 55, LP. This option is not recommended as the tax credits
awarded to address the substantial capital needs would be forfeited.
Attachments:
a - Assignment and Assumption of Lease
b - Existing Assignment and Assumption of Lease
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Ground Lease
Laurel Creek Apartments
RECORDING REQUESTED BY:
AND WHEN RECORDED RETURN TO:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, Ca. 93401
Attn: City Clerk
________________________________________________________________________
ASSIGNMENT AND ASSUMPTION OF LEASE
This Assignment and Assumption of Lease (the “Agreement”) is entered into as of
__________________, 2017, by and among the Housing Authority of San Luis Obispo, a public
body, corporate and politic (the “Assignor”), SLO 55, L.P., a California limited partnership (the
“Assignee”) and the City of San Luis Obispo (the “City”), with reference to the following facts:
A. Assignor, as “Lessee” and the City, as “Lessor”, entered into that certain Lease
Agreement (Agreement A-24-91-CC) for that certain real property situated at 1090 and 1092
Orcutt Road and 1105 Laurel Lane, City of San Luis Obispo, County of San Luis Obispo,
California, dated as of April 29, 1991, between the Assignor and City, a memorandum of which
lease was recorded in the Official Records of San Luis Obispo County, California (the “Official
Records”) on September 17, 1993 as Instrument No. 1993-056148 (the “Original Lease”).
Assignor’s interest in the Original Lease was assigned to SLO Nonprofit Housing Corporation
(“SLO”) pursuant to an assignment agreement recorded in the Official Records on November 8,
1993, as Instrument No. 1993-069666. SLO’s interest in the Original Lease was subsequently
assigned to Laurel Creek Apartments, a California Limited Partnership (“Laurel”) pursuant to an
assignment agreement recorded in the Official Records on October 20, 1994, as Instrument No.
1994-061783.
B. Laurel’s interest in the Original Lease was thereafter assigned to Assignor
pursuant to an assignment agreement recorded in the Official Records on April 4, 2017, as
Instrument No. 2017015714.
C. On April 4, 2017, Assignor and the City entered into an Amended and Restated
Ground Lease (the “Lease”) which Lease superseded the terms of the Original Lease.
D. The Assignor desires to assign to the Assignee and the Assignee desires to accept
the assignment from Assignor of all of Assignor's obligations with respect to the Lease.
E The consent of the City to the assignment of Assignor's rights and obligations under
the Lease is required.
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the
parties hereto and for other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the parties mutually agree as follows:
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Ground Lease
Laurel Creek Apartments
1. Assignment by Assignor. Assignor hereby assigns to the Assignee all of Assignor's rights,
title and interest under the Lease.
2. Acceptance of Assignment. The Assignee hereby accepts the above assignment and hereby
assumes, agrees and undertakes to perform all of the obligations, covenants, and agreements of
Assignor under the Lease. Any reference to Assignor in the Lease shall be deemed a reference to
the Assignee.
3. Payment of Obligations. The Assignee agrees that all amounts due from Assignor pursuant
to the Lease from the date hereof shall be assumed by the Assignee.
4. Consent to Assignment. The City hereby consents to the assignment of the Lease from
Assignor to the Assignee and hereby releases Assignor from all obligations imposed under the
Lease.
5. Representations of Assignor. Assignor hereby represents and warrants that (i) it has not
previously assigned, pledged, hypothecated or otherwise transferred any of its rights under the
Lease, (ii) no event of default, or event that with notice or the passage of time or both could
constitute an event of default under the Lease, has occurred that remains uncured as of the date of
this Agreement, and (iii) Assignor has obtained all authorizations and approvals required by law,
under its organizational documents and under the Lease to assign its rights and obligations under
the Lease to the Assignee.
6. Representations of the Assignee. The Assignee hereby represents and warrants that (i) the
Assignee has obtained all authorizations and approvals required by law, under its organizational
documents and under the Lease to assume all of Assignor’s rights and obligations under the Lease,
and (ii) that the Assignee has the financial ability and development experience to carry out the
intent of the Lease and to own and operate the Project in compliance with all of the requirements
of the Lease.
7. Effective Date. The assignment set forth above shall be effective as of the date of this
Agreement.
8. Counterparts. This Agreement may be signed by different parties hereto in counterparts
with the same effect as if the signatures to each counterpart were upon a single instrument. All
counterparts shall be deemed an original of this Agreement.
9. Additional Documents. Assignor and the Assignee agree to execute such documents and
instruments, including escrow instructions, as may be necessary to effectuate the intent of this
Agreement.
10. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
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Ground Lease
Laurel Creek Apartments
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
Assignor:
Housing Authority of San Luis Obispo, a public body,
corporate and politic
By:
Scott Smith, Executive Director
Assignee:
SLO 55, L.P.,
a California limited partnership
By: San Luis Obispo Nonprofit Housing Corporation,
a California nonprofit public benefit corporation,
its managing general partner
By:
Name:
Its:
City:
City of San Luis Obispo
By:________________________________
Katie Lichtig, City Manager
ATTEST:
By:________________________________
Carrie Gallagher, City Clerk
[SIGNATURES MUST BE NOTARIZED]
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Ground Lease
Laurel Creek Apartments
A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate
is attached, and not the truthfulness, accuracy, or validity of that
document.
State of California )
County of ____________________)
On_____________ before me, _____________________________, Notary Public, a Notary
Public in and for said State, personally appeared,
_______________________________________________________________________, proved
to me 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.
I certify under penalty of perjury under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature_____________________________
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Ground Lease
Laurel Creek Apartments
EXHIBIT A
LEGAL DESCRIPTION
THE LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF SAN LUIS
OBISPO, CITY OF SAN LUIS OBISPO, DESCRIBED AS FOLLOWS:
LEASEHOLD IN AND TO THAT PORTION OF LOT 3 IN SECTION 1 IN TOWNSHIP 31 SOUTH,
RANGE 12 EAST, MOUNT DIABLO BASE AND MERIDIAN, IN THE CITY OF SAN LUIS OBISPO,
IN THE COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA, ACCORDING TO THE
OFFICIAL PLAT OF SAID LAND FILED IN THE DISTRICT LAND OFFICE DECEMBER 3, 1875,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF ORCUTT ROAD, 40 FEET WIDE,
WITH THE CENTERLINE OR LAUREL LANE, 40 FEET WISE; THENCE ALONG THE
CENTERLINE OF SAID LAUREL LANE NORTH 30°40’ EAST, 303.74 FEET; THENCE SOUTH
59°20’ EAST, 38.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH
59°20’ EAST, 100.00 FEET; THENCE SOUTH 30°40’ WEST, 39.89 FEET TO THE NORTHERLY
LINE OF THE LAND DESCRIBED IN THE DEED TO HENRY A. BERNARD, ET UX. RECORDED
MAY 22, 1953 IN BOOK 711 PAGE 62 OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY; THENCE ALONG SAID NORTHERLY LINE SOUTH 82°17’ EAST,
182.52 FEET TO THE NORTHEASTERLY CORNER OF SAID LAND OF BERNARD AS FOLLOWS:
FROM A TANGENT LINE BEARING SOUTH 19°56’ WEST, SOUTHERLY ALONG A CURVE
CONCAVE EASTERLY HAVING A RADIUS OF 175 FEET, THROUGH A CENTRAL ANGLE OF
20°18’ AN ARC DISTANCE OF 62 FEET; TANGENT TO SAID CONCAVE NORTHWESTERLY
HAVING A RADIUS OF 20 FEET, THROUGH A CENT RAL ANGLE OF 90°, AND ARC DISTANCE
OF 31.42 FEET TO THE NORTHERLY LINE OF ORCUTT ROAD 40 FEET WIDE; THENCE ALONG
SAID ORCUTT ROAD NORTH 89°38’ EAST, 90 FEET TO THE WESTERLY TERMINUS OF THE
COURSE RECITED AS HAVING A BEARING AND LENGTH OF SOUTH 89°38’ WEST, 197.00
FEET IN THE DEED TO CHARLES E. FREEMAN AND WIFE RECORDED MAY 1,1957 IN BOOK
890, RECORDER; THENCE ALONG THE WESTERLY BOUNDARY OF THE LAND DESCRIBED
IN SAID DEED TO FREEMAN AS FOLLOWS: NORTHWESTERLY ALONG A CURVE CONCAVE
90°, AN ARC DISTANCE OF 31.42 FEET THROUGH A CENTRAL ANGLE OF 31°, AN ARC
DISTANCE OF 67.63 FEET; THENCE NORTHEASTERLY ALONG A TANGENT CURVE
CONCAVE SOUTHEASTERLY HAVING A RADIUS OF 175 FEET THROUGH A CENTRAL ANGLE
OF 31°, AN ARC DISTANCE OF 67.63 FEET; THENCE NORTHEASTERLY IN A DIRECT LINE TO
THE MOST SOUTHERLY CORNER OF LOT 7 IN BLOCK A OF TRACT NO. 208, AS SHOWN ON
MAP RECORDED IN BOOK 6, PAGE 49 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID BLOCK A NORTH
59°20’ WEST, 312.70 FEET TO THE MOST WESTERLY CORNER OF LOT 43 IN SAID BLOCK A;
THENCE SOUTH 30°40’ WEST, 90.69 FEET TO THE TRUE POINT OF BEGINNING.
APN: 004-961-047
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