CCMIN071701 - Laserfiche WebLink

Ms. Dennis asked what the Promenade is? Mr. Bocian said Promenade is 55 years, which is the same as Ridgeview Commons. The Nolan Farms project that was just approved happens to be 30 years, because there was a Fannie Mae restriction on this. It varies from project to project. Ms. Dennis asked if Archstone is "in perpetuity," and does it not include very low income? Mr. Bocian said that is correct. Ms. Micheiotti said in the future, if we are looking at financing a golf course, doing improvements to the Bernal Property and the City taking on debt, is there any conllideration as far as future needs. Ms. Rossi said that this essentially does not count as the City's debt. Ms. McKeehan said there are a variety of agreements in effect. Some are in perpetuity; some 55 years; and some for 30 years. City staffhas talked about bringing to Council a summary of all of the projects. Mr. Pico asked if the development agreement was silent. He thought when Council talked about this issue they were talking about affordability "in perpetuity." Affordability with a sunset is not really affordability. Ms. McKeehan said this was her understanding as well. Mr. Pico asked if this item was modified to provide affordability "in perpetuity," is going to eliminate the bond financing potential or is it going to delay it? Mr. Melikian said there are two issues; legally he knows of certain lawyers who work in this area who have never gotten comfortable with affordability "in perpetuity" unless the City owns the land and can control the leaseholder. The reason is a ver3t obson'e rule called the Rule Against Perpetuities, which doesn't allow for transfers of estates for more than a certain period of time. We have always avoided putting things "in perpetuity" for that reason, and would rather have them in stated terms, whether they be 55 years, 70 years, 90 years, or whatever other number is chosen. That is the legal issue. The underwriting issue he really could not speak to very well. The loan has been unch~'written with a 55-year affordability resffiction. Clearly this is going to be about a 34-year bond issue, so Fannie Mae is expecting to be out of the picture before this expires. He did not think it will effect the underwriting, but he cannot say whether it is going to cause a problem for the transaction. He mentioned at the end of 55 years, the people that are in the project that are very low income are protected. There is a provision in the California Government Code that applies to this project and as long as they qualify as very low income under the standards that are then in effect at the time, they cannot be evicted from their units and their rents cannot be bumped up to market rents. It is 55 Plea~anton City Council 39 07/17/01 Minutes