2021.04.13 CC Minutes - Laserfiche WebLink

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April 13,2021 Page 5 of 7 2. Consider Resolution of Summary Publication for Ordinance 880:Short Term Rentals. 2.ConsiderResolu ation of SummaryPublication for Ordinance 880:Short Tema City Manager Massopust indicated Assistant Director of Community Assets and Development Gozola would Rentals. be presenting this item to the Council. Assistant Director of Community Assets and Development Gozola stated in approving this summary publication resolution, Council finds that the summary penned by staff will adequately inform the public about the content of Ordinance 880. Motion by Councilmember Allen,seconded by Councilmember Axberg to adopt a Resolution of Summary Publication. A roll call vote was taken. 4 Ayes,0 Nays-Motion Carried theWavier oertait th Respect n Interest wit to a Loan on a u Consider a Resolutionv 3. Consider a Resolution Authorizing of f Canthorizing the Wavier of the Gold Pond Property. Certain Interest With Respect to aoanan on the City Manager Massopust indicated City Attorney Somalia would be presenting this item to the Council. Gold Pond Property. City Attorney Sonsalla stated back in 1988, the City and Golden Pond entered into a contract for private development that provided for Golden Pond removing existing housing structures on City-owned property and constructing a senior housing complex on the property that included a certain amount of affordable housing units. As part of the project, the City provided Golden Pond with a loan in the amount of$125,000 that was secured by a note and a mortgage on the property. The loan beard simple, non-compounded interest at a rate of eight percent per annum. The principal and interest on the loan was to be payable upon any arms' length sale of the property by Golden Pond, or upon failure by Golden Pond to maintain the project in accordance with certain restrictions related to low and moderate income persons. The loan, note, and mortgage did not have a term or expiration date. City Attorney Sonsalla explained the Golden Pond housing complex has been maintained by Golden Pond(the original developer) in conformance with the affordability restrictions for over 30 years. Golden Pond is now selling the property to Brighton Pond Apartments, LLC, who has agreed to enter into an affordable housing agreement with the City to maintain a certain amount of affordable housing on the property. That affordable housing agreement was approved by the City Council on March 23, 2021. At the closing, the loan will be paid off in full, however, Golden Pond has requested that the City waive $100,000 of the accrued interest. City staff is recommending that the City Council agree to waive the requested amount of interest for the following reasons: a) The loan was made to support affordable housing. The property was held and operated by the same owner for over 30 years as affordable housing and has served the public purpose of providing affordable housing to the City. b) The terms of the mortgage and note provide for repayment of the loan with interest at eight percent at any time that the property is sold with no stated end date to that requirement. Typically, City loans either have a stated maturity date so that the amount of accrued interest is known and can be planned for, or are forgiven after a certain period of time which justifies the use of public funds. c) Because the loan has an unlimited due-on-sale provision, the longer the property is held by the same owner, the larger the amount of accrued interest will be. There is a general principle under the law that it is not in the public interest to unduly burden the transfer of real property. By requiring Golden Pond to pay all of the accrued interest, this will make it very difficult for it to sell the property at any time.