CITY OF PALMDALE. REPORT to the Mayor and Members of the City Council from the City Manager

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1 CITY OF PALMDALE REPORT to the Mayor and Members of the City Council from the City Manager DATE: March SUBJECT: Approval to enter into the Revival of and First Amendment to Memorandum of Understanding, Agreement A-4846, with Habitat for Humanity of San Fernando/Santa Clarita Valleys, Inc. C'Habitaf') for the purpose of negotiating terms and conditions of the conveyance of property to Habitat for the development of affordable housing for veterans and any financial assistance to be provided by the City of Palmdale (City) and reviving and extending the term of the agreement. ISSUING DEPARTMENT: Neighborhood Services SUMMARY Issues: Should the City Council: 1) Approve the Revival of and First Amendment to Memorandum of Understanding, Agreement A-4846, with Habitat for Humanity of San Fernando/Santa Clarita Valleys, Inc. ("Habitaf') for the purpose of negotiating terms and conditions of the conveyance of property to Habitat for the development of affordable housing for veterans and any financial assistance to be provided by the City and reviving and extending the term of the agreement; and 2) Authorize the City Manager or his designee to execute all necessary documents? Recommendation: Staff recommends the City Council: 1) Approve the Revival of and First Amendment to Memorandum of Understanding 1 Agreement, A-4846, with Habitat for Humanity of San Fernando/Santa Clarita Valleys, Inc. ("Habitat") for the purpose of negotiating terms and conditions of the conveyance of property to Habitat for the development of affordable housing for veterans and any financial assistance to be provided by the City and reviving and extending the term of the agreement; and 2) Authorize the City Manager or his designee to execute all necessary documents.

2 Report to Mayor and Council Re: Revival and First Amendment Agreement A-4846 Habitat for Humanity March 2, 2016 Page 2 Fiscal Impact: Funds for project pre-development costs are budgeted in for staff time, attorney fees, tentative tract map, legal. advertising and housing studies. Predevelopment costs in the current year are estimated at $50,000. BACKGROUND Habitat for Humanity of San Fernando/Santa Clarita Valleys, Inc. (Habitat) proposes to develop 50 units of single-family housing (Project) to be sold at affordable housing cost to income-qualified military veterans. Habitat proposes to utilize funding from the California Department of Veterans Affairs (Cal-Vet) to provide purchase money loans on favorable terms to qualified buyers of the units. Developer also proposes to utilize financial assistance from the Housing Authority of the City of Palmdale (Housing Authority) and/or the City of Palmdale (City). The Housing Authority's assistance to the Habitat Project is proposed to include acquiring from the City a nine acre portion of the City-owned parcel located at the northeast corner of Division Street and East Avenue R, APN (Property) at fair market value, and paying certain project development fees charged by the City. The City could also determine that funds from its HOME Investment Partnership Program will be needed to make the Project financially feasible. The City and the Housing Authority entered into a Cooperation Agreement in September 3, 2014, setting forth the terms of the City's conveyance of the property to the Housing Authority, without cost to the City, providing Habitat access to the property through a License Agreement to conduct its due diligence, deferring payment by the Housing Authority of the cost of the property and collection of certain City Project fees, and providing the City a security interest in the Housing Authority's Low and Moderate Income Housing Asset Funds. Habitat is proposing to revive and amend the Memorandum of Understanding (MOU) with the City and the Housing Authority extending the term to negotiate to reach agreement on the terms and conditions of the conveyance of the Property to Habitat, the financial assistance to be provided by the Housing Authority and/or the City, the design, financing, and construction of the Project, and the sale of the units. If the negotiations are successful, staff will bring the Affordable Housing Agreement to the Housing Authority Board for its approval. If Habitat participates in the HOME Program, the City and Habitat will negotiate the terms of a HOME Loan Agreement, which would be presented to City Council for its approval. The term of the amended MOU is through September 15, 2016 and may be extended, if needed. Staff recommends that the City Council: 1) Approve the Revival and First Amendment to Agreement A-4846, a Memorandum of Understanding with Habitat for Humanity of San Fernando/Santa Clarita Valleys, Inc. reviving and extending the agreement term for the

3 Report to Mayor and Council Re: Revival and First Amendment Agreement A-4846 Habitat for Humanity March 2, 2016 Page 3 purpose of negotiating terms and conditions of the conveyance of property to Habitat and any financial assistance to be provided by the City; and 2) Authorize the City Manager or his designee to execute the Agreement and all necessary documents to negotiate with Habitat for City assistance to the Project. Reviewed by: M ; 'ael P. Miller Director of Neighborhood Services Attachment: 1) Revival and First Amendment to Agreement A-4846

4 REVIVAL OF AND FIRST AMENDMENT TO MEMORANDUM OF UNDERSTANDING RELATING TO AN AFFORDABLE HOUSING AGREEMENT AND PURCHASE AND SALE AGREEMENT WITH HABITAT FOR HUMANITY OF SAN FERNANDO/SANTA CLARITA VALLEYS, INC. Agreement No. A-4846 This Revival of and First Amendment to Memorandum of Understanding (this "Revival and Amendment"), dated as of March 2, 2016, is entered into by and among THE HOUSING AUTHORITY OF THE CITY OF PALMDALE, a public body, corporate and politic (the "Authority"), THE CITY OF PALMDALE, a charter city of the State of California (the "City"), and HABITAT FOR HUMANITY OF SAN FERNANDO/SANT A CLARITA VALLEYS, INC., a California nonprofit public benefit corporation (the "Developer"), (collectively the "Parties"). RECITALS A. The Parties entered into that certain Memorandum of Understanding, dated as of September 3, 2014, Agreement No. A-4846 (the "MOU"). B. All of the terms and provisions ofthe MOU are fully incorporated herein by this reference as though fully set forth herein. The "MOU" as used herein shall mean, refer to and include the MOU, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto or other documents expressly incorporated by reference in the MOU. Any capitalized term not herein defined shall have the same meaning ascribed to such term in the MOU. C. The MOU expired pursuant to its terms on or about September 15, 2015, and the Parties desire to revive the MOU and amend its terms as set forth below. Now, therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: AGREEMENT 1. Revival. As of the date hereof, the MOU is hereby revived, and the MOU is amended as set forth below. 2. Amendment. Section B.1. of the MOU is hereby deleted in its entirety and is replaced with the following: "The initial term of this MOU shall expire on September 15, 2016 (the "Term"). Subjecttothe approval of the Authority Executive Director or designee and the City Manager or designee, the Term may be extended upon Developer's request, for a period not to exceed an additional one hundred eighty (180) calendar days. Any such extension shall be granted, if at all, in the sole and absolute discretion of the Authority Executive Director or designee and the City Manager or designee and upon such terms and conditions as they deem appropriate." [Remainder of page intentionally left blank]

5 Revival of and First Amendment to Memorandum of Understanding Habitat for Humanity Agreement No. A-4846 Page2 3. No Other Amendments. Except as expressly modified by the terms of this Revival and Amendment, the MOU, as revived, remains unchanged and in full force and effect. IN WITNESS WHEREOF, the Parties have executed this Revival and Amendment as of the date first written above. "AUTHORITY" THE HOUSING AUTHORITY OF THE CITY OF PALMDALE By: James Purtee Dated Executive Director ATTEST: By: ~ Rebecca J. Smith Authority Secretary APP~]? AS TO FORM: By~?...&.-- Wm. Matthew Ditzhazy ~ Authority Counsel KANE, BALLMER & BERKMAN By:-:sc& C. ~ ~ Deborah L. RhOadS Authority Special Counsel "CITY" THE CITY OF PALMDALE, CALIFORNIA ATTEST: James Purtee City Manager Dated By: Rebecca J. Smith City Clerk APPR~y AS TO FORM: By: ~.L )2.? ~ Wm. Matthew Ditzhazy ~City Attorney - t1fll: "DEVELOPER" HABITAT FOR HUMANITY OF SAN FERNANDO/SANTA CLARITA VALLEYS, INC., corporation ATTEST Donna E. Deutchman, Chief Executive Officer By: Q}ulfl'--- Name: j u.rfd=k A-. m.,t_lt?th) Title: h1,f'e Lfor of (u11 sfrµc4,(114_ Dp< rd-ioo f