Agda Pkt 2025.06.09 Joint SA PFA

Browse Search

Page 2 of 4 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org This project is subject to California Government Code Section 65913.4, the City’s Affordable Housing Ordinance (AHO) (Article 29 of the Zoning Code), and the City’s Density Bonus Ordinance (Article 32 of the Zoning Code) and State Density Bonus Law (Government Code Section 65915-65918)(collectively Density Bonus Law). This project complies with these requirements by providing 176 affordable units plus two unrestricted manager units. On April 14, 2025, the City Council approved several agreements associated with the project including a Regulatory Agreement and Declaration of Restrictive Covenants (Regulatory Agreement), restricting nine units for very low-income households, 152 units for low-income households, and 15 units for moderate income households for a period of 55 years. The City Council also approved a standstill agreement with the Banc of California, one of the project’s lenders, which restricts the City from exercising any of its remedies under the Regulatory Agreement against the Developer for 90 days in the event the City issues a notice of default to the Developer. ANALYSIS In addition to the Banc of California loan, the project is receiving financing from CalHFA. CalHFA is requiring that the City sign two documents as a condition of providing financing for the development: (1) CalHFA Standstill Agreement and (2) an estoppel certificate. The purpose of the CalHFA Standstill Agreement is to address CalHFA’s rights in terms of operation of this project, in the event that CalHFA forecloses on this project and takes title to the property. In that instance, CalHFA will continue to operate the property as affordable housing in accordance with the terms of the Regulatory Agreement but CalHFA would not be subject to certain requirements of the Regulatory Agreement. Additionally, in the event of a foreclosure, CalHFA would have the right to increase rents charged for very low income units (affordable to households with incomes at or below 50% of area median income) to a maximum of 30% of 60% of area median income (typically the rent for units affordable to low income households) to make the project financially feasible, provided such rents do not exceed the rent allowed under the Density Bonus law. Nine very low income units could be affected by this change if CalHFA were to foreclose. This change to affordability levels would not impact the project’s compliance with Government Code Section 65913.4, AHO or Density Bonus Law. While the City’s AHO requires 5% very low-income, 5% low-income and 10% moderate-income units, it also allows for alternative percentages and levels of affordability as long as the project provides more affordable units at the same or lower income levels or will otherwise provide greater public benefit than the standard requirement. Importantly, given the project is 100% affordable, it far exceeds the City’s standard requirement. The CalHFA Standstill Agreement will be signed and recorded on the property after construction of the project is complete and the construction financing converts to permanent financing. Because the CalHFA Standstill Agreement does not record until a later date, CalHFA is requesting an estoppel certificate prior to starting construction that documents the City’s approval of the CalHFA Standstill Agreement so that approval of the Standstill Agreement is not subject to a later discretionary approval at time of conversion of the construction financing to permanent. Additionally, the City is being asked to represent as of the date of the estoppel certificate that the Developer is in compliance with the terms of the Regulatory Agreement. 6.K. - Page 2 of 15 84