Alves Lane Apartments (Development), located on two parcels on Alves Lane and Canal Road, east of Virginia Drive and west of Chadwick Lane in Bay Point, is a development of 100 residential rental units, including 18 one-bedroom units, 36 two-bedroom units, 36 three-bedroom units, and 10 four-bedroom units, all located in one building. The Development was subject to the County’s Inclusionary Housing Ordinance, and the approval of the Development included conditions requiring the construction and rental of 13 inclusionary units on site. The developer, Alves Lane L.P., submitted and County staff approved an inclusionary housing plan and request for a density bonus on March 31, 2022. As required by the County's inclusionary housing ordinance and density bonus ordinance, an inclusionary housing developer agreement between the developer and the County was then developed. The inclusionary housing developer agreement between the developer and the County was approved by the Board on December 13, 2022 and recorded against the Development property on February 7, 2023.
The inclusionary housing developer agreement requires Alves Lane L.P., to construct and rent 13 affordable units as part of the Development. The inclusionary housing developer agreement also covers the ongoing obligations of the developer and the County over the 55-year term, under which the 13 units will be provided as affordable housing units.
The California Housing Finance Agency (CalHFA) is providing the permanent financing for the Development. CalHFA and the developer provided a draft standstill agreement and an estoppel certificate to County staff for their review as part of the process in securing the permanent financing. The estoppel certificate is to state and certify that County staff has determined that the developer is in compliance with the County's inclusionary housing developer agreement, and that, to staff's knowledge, the developer has not triggered an event of default. After determining the developer is in compliance, staff executed an estoppel certificate on March 7, 2023.
A form standstill agreement between the County, the developer, and CalHFA is required to be approved by the County in order for the developer to secure the permanent financing for the Development. The two provisions of the form standstill agreement that primarily affect the County's interest indicate the following:
- The County will not exercise certain remedies and rights under its affordability restrictions during the standstill term where the standstill term is defined as the time when CalHFA becomes owner of the Development due to judicial foreclosure sale, non-judicial foreclosure, deed-in-lieu of foreclosure, or otherwise, and until such time that CalHFA is no longer the owner.
- During the standstill term, the eligible household income for the affordable units shall be no more than 60 percent of Area Median Income (AMI) and that the maximum rent that may be charged for the affordable units to no more than 1/12th of 30 percent of 60 percent of AMI.
The final standstill agreement is expected to be executed at permanent loan closing which is anticipated to take place in 2025. This Board action is to approve the form standstill agreement, in substantially same form as attached. In the case the form standstill agreement requires substantive changes prior to execution, staff will return to the Board for approval of those substantive changes.
Failure to approve the form standstill agreement would prevent the permanent financing of the Alves Lane Development, which includes 13 affordable housing units.