HomeMy WebLinkAboutStaff Report 7125City of Palo Alto (ID # 7125)
City Council Staff Report
Report Type: Action Items Meeting Date: 6/27/2016
City of Palo Alto Page 1
Summary Title: Approval of MOU re Buena Vista Mobile Home
Title: Approval of Memorandum of Understanding (MOU) Between the Santa
Clara County Housing Authority, the County of Santa Clara and the City of
Palo Alto to Provide up to $14.5 Million in City Affordable Housing Funds in
Support of the Housing Authority’s Potential Acquisition of the Buena Vista
Mobile Home Park for Deed Restricted Affordable Housing, From June 28,
2016 Through June 28, 2018; Authorize the City Manager to Implement MOU
Subject to Council Conditions and Reporting
From: City Manager
Lead Department: City Attorney
Recommendation
Staff recommends that Council consider the following Motion:
1.Approve the attached Memorandum of Understanding (MOU) with the Housing
Authority of the County of Santa Clara and the County of Santa Clara relating to providing
funding for the Housing Authority's potential acquisition of the Buena Vista Mobile Home Park
in an amount not to exceed $14,500,000 for period June 28, 2016 through June 28, 2018, for
the purpose of affordable housing.
2.Authorize the City Manager or his designee to implement and administer the
Memorandum of Understanding, subject to conditions described in this report and as
determined by Council.
Background
The Buena Vista Mobilehome Park is a privately-held property containing 104 mobile homes, 12
studio apartments, and one single family residence on approximately 4.5 acres. The site is
within the Barron Park neighborhood of Palo Alto and is home to about 400 people, including
many families with children who attend local public schools.
In 2012, the Buena Vista Park owner filed an application with the City to close the Mobilehome
Park. State and local law gives mobilehome park owners the right to close those businesses,
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provided they mitigate the impact on displaced residents. In May 2015, the Council approved
the Park owner’s closure plan with mitigation measures and conditions.
The Residents’ Association filed a writ petition in Santa Clara County Superior Court seeking to
reverse the closure approval on the grounds that the mitigations are inadequate and fail to
comply with state mobilehome park residency law and the Palo Alto Municipal Code.
Subsequently, the owner filed a suit in U.S. District Court contending that the mitigations are
excessive and violate the federal Constitution. Both suits are pending.
Santa Clara County Supervisor Joe Simitian has initiated an effort to find ways to preserve
affordable housing at Buena Vista. In 2015, the County Board of Supervisors and the Palo Alto
City Council each voted to set aside $14.5 million in restricted affordable housing funds, to fund
acquisition of the Buena Vista site and preservation of the site as affordable housing. Working
with the County, a non-profit housing provider stepped forward to put together a market-rate
offer to acquire the Park, plan for needed improvements, and maintain it as a source of deed-
restricted affordable housing. Negotiations between the non-profit and the Park owner ended
when litigation over the closure began.
Discussion
The Santa Clara Valley Housing Authority is a public agency with a mission to “provide and
inspire affordable housing solutions to enable low-income people in Santa Clara County to
achieve financial stability and self-reliance.” The Housing Authority administers the federal
Section 8 rental assistance program, and develops, controls and manages affordable rental
housing properties throughout the County, assisting approximately 17,000 households to find
and maintain housing. The Authority has expressed an interest in acquiring and owning the
Buena Vista Mobilehome Park for the purpose of providing affordable housing. In support of
this effort, the City and the County are asked to confirm that each will provide the same level of
funding ($14.5 million) previously set aside for acquisition of the Park.
The Housing Authority would provide pre-development funding to assess feasibility and
acquisition cost. If the Housing Authority determined to move forward with acquisition, it
would contribute additional funds, if needed, and retain a non-profit with expertise in
operating mobilehome housing to improve, manage and operate Buena Vista as a mobilehome
park with spaces deed restricted for use by households qualifying for affordable housing.
The attached MOU documents the responsibilities of the County, City and Housing Authority.
The MOU is a preliminary step, to be followed by the Housing Authority completing the
feasibility analysis and other pre-development activities, and determining whether to move
forward with acquisition. The Housing Authority states that the feasibility analysis will be
completed later in the summer or early fall.
Staff recommends that Council delegate to the City Manager, or designee, authority to review
and evaluate the analysis and take subsequent actions to proceed with making funding
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available to the Housing Authority for the proposed acquisition, provided Council’s conditions
and directions are met, and with appropriate reporting as directed by Council.
The County approved the attached MOU on June 20, 2016. The Housing Authority Board is
scheduled to vote on the MOU on June 28, 2016.
Buena Vista Funding Conditions
Staff recommends that Council delegate authority to implement the MOU to the City Manager
provided that the following conditions are satisfied:
1. The Buena Vista Mobile Home Park shall be maintained as an affordable mobilehome
park or equivalent housing resource for up to 50 years. The Housing Authority or a
qualified non-profit entity shall maintain and operate the affordable housing.
2. The Housing Authority and the nonprofit operator shall avoid displacing current
residents to the maximum extent allowed by law.
3. The Housing Authority shall invest or cause to be invested at least $10 million in
upgrades to the Park to ensure appropriate site improvements are made.
4. City funds committed shall be affordable housing funds, and the Housing Authority shall
comply with the restrictions imposed on the use of those funds. Prior to the transfer of
City funds, the Housing Authority or its agents shall enter into a regulatory agreement in
a form acceptable to the City and the Authority that documents the affordability
restrictions and other requirements.
5. In order to protect the City’s general funds, the Housing Authority shall fully indemnify
the City for any liability exposure in connection with the Housing Authority’s acquisition,
site improvements, or tenant displacement.
6. In the event that the Park is sold or transferred at any time in the future, the Housing
Authority shall reinvest all proceeds in the City of Palo Alto to create additional
affordable housing.
Environmental Review
Approval of the MOU would provide funding to perpetuate an existing mobile home park and is
not a project subject to environmental review.
Policy Implications
The City’s adopted Housing Element (Program H3.1.8) recognizes the Buena Vista mobilehome
park as providing low-and moderate-income housing opportunities and states that to the
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extent feasible, the City will seek appropriate local, State and federal funding to assist in the
preservation and maintenance of the existing units.
The City’s Housing Element contains policies both supporting the preservation and
rehabilitation of existing units (Policy H1.1 and H1.2), and policies supporting actions to
increase the supply of affordable housing (Policy H2.1 and H2.2). The Housing Element also
documents at length some of the housing challenges facing Palo Alto and the region, and
articulates quantified objectives for the 2015-2023 planning period for rehabilitation (600
below market rate units), preservation (334 below market rate units), and new development
(1,401 below market rate units), indicating the need for investments in all of these activities.
Attachments:
Attachment A: BV MOU Signature Final (HACSC June 14 2016) (PDF)
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MEMORANDUM OF UNDERSTANDING
BY AND AMONG THE COUNTY OF SANTA CLARA,
THE CITY OF PALO ALTO AND
THE HOUSING AUTHORITY OF THE COUNTY OF SANTA CLARA
This Memorandum of Understanding (MOU) is entered into as of June 28, 2016
by and among the County of Santa Clara (County), the City of Palo Alto (City)
and the Housing Authority of the County of Santa Clara (HACSC) (each a “Party”
and collectively the “Parties”).
R E C I T A L S
WHEREAS, County and City and HACSC each acknowledge that there has been
and there continues to be an acute shortage of affordable housing for the
residents of the County and the City; and
WHEREAS, one of the few existing sites of moderate cost housing in the City is a
certain mobile home park known as Buena Vista Mobile Home Park (Park),
which consists of 104 mobile homes, 12 studio units and one single family home
and provides housing for approximately 400 people; and
WHEREAS, the owner of the Park has sought to terminate the tenancy of the
Park residents and close the Park for the development of market-rate housing;
and
WHEREAS, it is HACSC’s mission to provide and inspire affordable housing
solutions to enable low-income people in Santa Clara County to achieve financial
stability and self-reliance; and
WHEREAS, the parties recognize that the ongoing operation of the Park (or an
equivalent housing resource for the Park community) for a period of up to 50
years and the continuing use of the property for affordable housing will benefit
the residents of the County and the City because it will create a long term
affordable housing resource.
NOW, THEREFORE, County, City and HACSC agree as follows:
1. PURPOSE
It is the goal of this MOU to preserve the Park as an affordable housing resource,
by operating the Park as a mobile home park, or equivalent, for up to 50 years
and using the property continuously as an affordable housing resource, and to
avoid displacement of the current Park tenants. The parties intend to accomplish
this goal by jointly funding HACSC’s acquisition and improvement of the Park, as
needed to preserve the Park as an affordable housing resource while avoiding
permanent displacement of the current Park tenants.
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2. TERM
This MOU shall be in effect from the date of its execution by all parties until the
date of Acquisition Determination and thereafter until terminated in accordance
with Section 6 below.
3. PRE-DEVELOPMENT ACTIVITIES
HACSC hereby commits an amount not to exceed $250,000 for Pre-development
Activities, which may include securing an appraisal, and retaining consultants
and vendors to assist in due diligence and determining feasibility of various
preservation and improvement alternatives.
4. ACQUISITION AND FUNDING OBLIGATIONS
After concluding its due diligence and feasibility analysis, HACSC will make a
determination about whether to proceed with the acquisition of the Park
(Acquisition Determination), subject to the Affordability Restrictions referenced in
Section 5. If HACSC decides to acquire the property subject to the Affordability
Restrictions, the County and City shall each contribute such amounts as the
parties determine are necessary for the acquisition of the Park, but not to exceed
$14.5 million each (Maximum Financial Commitment). The parties will deposit
the funds with the HACSC. HACSC will establish its Maximum Financial
Commitment after consideration of the appraisal amount, and completion of its
due diligence and feasibility activities.
In approving this MOU the City Council and County Board of Supervisors shall
designate their respective Authorized Representatives who shall be authorized to
take all actions necessary and reasonable for the City and the County to
accomplish the purposes of this MOU, up to their respective Maximum Financial
Commitments, and within the authority granted by their respective legislative
bodies.
5. IMPROVEMENT AND MANAGEMENT
In the event HACSC acquires the Park, HACSC will own, operate and maintain
the Park, subject to reasonable County and City recorded restrictions on use of
the land (Affordability Restrictions), including, but not limited to, a restriction to
operate the Park for up to 50 years and to use the property continuously for
affordable housing.
The Parties agree that they have a common interest in establishing the potential
financial viability of the Park as a housing resource. Prior to the final Acquisition
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Determination the Parties will confer in accordance with their common interest
and define the Affordability Restrictions to be recorded immediately after HACSC
takes title to the Park. To the maximum extent allowed by law, HACSC will give
housing priority to the tenants of the Park as of the date of the approval of this
MOU, subject to compliance with reasonable and necessary rental rules, and
income eligibility under applicable affordable housing financing.
6. TERMINATION
This MOU will automatically terminate on June 28, 2018 unless one of the
termination events specified herein occurs first. Prior to June 28, 2018, this MOU
may be terminated by any of the parties by written notice to each of the other
parties following the occurrence of any of the following events:
6.1 Decision by HACSC not to acquire the Park;
6.2 Decision by any party not to agree to the Affordability Restrictions;
6.3 The Recording of Affordability Restrictions approved by each of the parties
to the MOU.
Within 90 days of termination of this MOU for any reason, the HACSC will return
any contribution amounts, as determined by Section 4, not used for the
acquisition of the Park to the parties.
7. NOTICES
All notices and other communications required or permitted to be given under this
Agreement shall be in writing and shall be personally served, mailed (or
electronic mail), postage prepaid and return receipt requested, addressed to the
respective parties as follows:
To County:
Megan Doyle
Clerk of the Board of Supervisors
County of Santa Clara
70 W. Hedding Street
East Wing, 10th Floor
San Jose, CA 95110
Email: megan.doyle@ceo.sccgov.org
Phone: 408-299-5060
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Jeff Smith
County Executive
County of Santa Clara
70 W. Hedding Street
East Wing, 11th Floor
San Jose, CA 95110
Email: jeff.smith@ceo.sccgov.org
Phone: 408-299-5102
To City:
James Keene
City Manager
City of Palo Alto
250 Hamilton Avenue
Palo Alto, CA 94301
Email: james.keene@cityofpaloalto.org
Phone: 650-329-2105
To HACSC:
Katherine Harasz
Executive Director
Housing Authority of the County of
Santa Clara
505 W. Julian St.
San Jose, CA 95110
Email: katherine.harasz@hacsc.org
Phone: (408) 993-2903
8. PRIOR AGREEMENTS
This Agreement, including all Attachments, represents the entire understanding
of the parties. This Agreement may only be modified by a written amendment
duly executed by the parties to this Agreement.
9. INDEMNIFICATION
In lieu of and notwithstanding the pro rata risk allocation, which might otherwise
be imposed between the Parties pursuant to Government Code Section 895.6,
the Parties agree that all losses or liabilities incurred by a Party shall not be
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shared pro rata but, instead, HACSC, County and City agree that, pursuant to
Government Code Section 895.4, each of the Parties hereto shall fully indemnify
and hold each of the other Parties, their officers, board members, employees,
and agents, harmless from any claim, expense or cost, damage or liability
imposed for injury (as defined in Government Code Section 810.8) occurring by
reason of the negligent acts or omissions or willful misconduct of the
indemnifying party, its officers, employees or agents, under or in connection with
or arising out of any work, authority or jurisdiction delegated to such party under
this Agreement. No party, nor any officer, board member or agent thereof shall
be responsible for any damage or liability occurring by reason of the negligent
acts or omissions or willful misconduct of the other Parties hereto, their officers,
board members, employees, or agents, under or in connection with or arising out
of any work authority or jurisdiction delegated to such other Parties under this
MOU.
Notwithstanding the foregoing, HACSC shall indemnify, defend, and hold
harmless the County and City, its officers, agents and employees from any claim,
liability, loss, injury or damage arising out of, or in connection with, the acquisition
of the Park and/or the relocation of Park tenants, excepting only loss, injury or
damage caused by the negligence or willful misconduct of the County and City.
HACSC shall reimburse the County and City for all costs, attorneys’ fees,
expenses and liabilities incurred with respect to any litigation in which HACSC is
obligated to indemnify, defend and hold harmless the County and City under this
MOU.
Each Party agrees that all obligations under this Section 9, Indemnification, shall
survive the termination of this Agreement and shall remain binding on all Parties
notwithstanding the Agreement’s termination.
10. AMENDMENT
This MOU may not be amended except in a writing signed by all Parties. This
MOU shall be binding on all successors and assigns of the Parties.
11. EXECUTION
This MOU may be executed and delivered in any number of counterparts, each
of which when executed and delivered shall be deemed to be an original, but
such counterparts together shall constitute one and the same document.
Signatures may be transmitted electronically.
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WITNESS THE EXECUTION HEREOF the parties hereto have executed this
Agreement on the day and year indicated below.
HOUSING AUTHORITY OF THE
COUNTY OF SANTA CLARA
__________________________
Kathy Espinoza-Howard, Chair
Board of Commissioners
Date:
APPROVED AS TO FORM
Brian Doyle
General Counsel
COUNTY OF SANTA CLARA
Dave Cortese, President
Board of Supervisors
Date:
ATTEST:
Megan Doyle
Clerk of the Board of Supervisors
APPROVED AS TO FORM AND LEGALITY:
Elizabeth G. Pianca
Lead Deputy County Counsel
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City of Palo Alto
By:_________________________________
James Keene
City Manager
Date:_______________
ATTEST:
____________________________________
City Clerk
APPROVED AS TO FORM:
____________________________________
City Attorney