HomeMy WebLinkAboutC-9332-1 - Affordable Housing Agreement (2510 W. Coast Highway Mixed Use Project)AFFORDABLE HOUSING AGREEMENT
(2510 W. Coast Highway Mixed Use Project)
BY AND BETWEEN THE
City of Newport Beach,
a California municipal corporation
and
2510 W. Coast Hwy LLC, a Delaware limited liability company
and 2510 W. Coast Hwy Eat LLC, a Delaware limited liability company
AFFORDABLE HOUSING AGREEMENT
(2510 W. Coast Highway Mixed Use Project)
This AFFORDABLE HOUSING AGREEMENT ("Agreement") is dated as of
cLq A. ® , 2023 ("Effective Date"), and is entered into between the CITY
OF�NEWPORT BEACH, a California municipal corporation ("City"), and 2510 W. COAST
HWY LLC, a Delaware limited liability company and 2510 W. COAST HWY EAT LLC, a
Delaware limited liability company ("Developer"). City and Developer may be referred to
herein as "Party" or "Parties". City and Developer enter into this Agreement with reference
to the following recitals of fact (each, a "Recital"):
RECITALS
A. Developer is the owner of that certain real property consisting of approximately
42,821 square feet or 0.98 acres located in the Mariners' Mile area in the City of
Newport Beach, County of Orange, State of California, addressed as 2510 and
2530 West Coast Highway [APN 425-471-55 and 425-471-56], as more particularly
depicted in Exhibit "A" attached to this Agreement and incorporated herein
("Property").
B. On July 27, 2021, the City Council approved the 2510 W. Coast Highway Mixed
Use Project (PA2019-249) which includes developing the Property into a
residential project with thirty-six (36) dwelling units and 5,096 square feet of office
space, as depicted on Exhibit "B" attached to this Agreement and incorporated
herein ("Project").
C. Project approval included the adoption of an Affordable Housing Implementation
Plan No. AH2O21-001, dated July 14, 2021 ("AHIP"), which implements affordable
housing requirements for the Project by way of a density bonus and
incentives/concessions pursuant to Chapter 20.32 (Density Bonus) of the Newport
Beach Municipal Code ("NBMC") and California Government Code Section 65915
("State Density Bonus Law"). The AHIP is attached hereto and incorporated herein
by reference as Exhibit "C."
D. Pursuant to the State Density Bonus Law and the City's density bonus
requirements, the City granted a density bonus of thirty-five percent (35%) above
the maximum number of units allowed by the City's General Plan and Title 20
(Planning and Zoning) of the NBMC in exchange for construction of a minimum
number of affordable housing units. With the approved density bonus of thirty-five
percent (35%), the Project is eligible for ten (10) additional units above the twenty-
six (26) base units ("Base Units") for a total of thirty-six (36) dwelling units.
E. The Mixed -Use Mariners' Mile Zoning District Development Standards
("Development Standards") provide for a maximum residential density of twenty-
six -point -seven (26.7) dwelling units per acre. The Project is planned to consist of
twenty-six (26) total dwelling units based on the current maximum residential
density per the Development Standards ("Base Units") and ten (10) density bonus
2510 W. Coast Highway Affordable Housing Agreement Page 2 of 17
units. The Development Standards require that eleven percent (11 %) of the Base
Units within a residential development shall be affordable to Lower Income
Households. The affordable housing requirement for this Project is three (3) units
("Affordable Dwelling Units") (11% of 26 Base Units).
F. Of the required three (3) Affordable Dwelling Units, Developer will provide three
(3) units (11 % of Base Units) affordable to Very Low Income Households, which
complies with the provisions of California Government Code Section 65915 and
Chapter 20.32 of the NBMC applicable to a thirty-five percent (35%) density bonus.
Rents for the Affordable Dwelling Units will be computed in accordance with
California Health and Safety Code Section 50053, as required by California
Government Code Section 65915(c)(1) and Section 20.32.160 of the NBMC.
G. Developer intends to operate the Project in part as a rental community. The three
(3) Affordable Dwelling Units will remain rent restricted for a minimum of fifty-five
(55) years, per California Government Code Section 65915(c)(1).
H. Section 20.32.160 of the NBMC requires that an applicant who seeks a density
bonus enter into an affordable housing agreement with the City. The AHIP also
requires that the applicant enter into an affordable housing agreement in
recordable form prior to obtaining the first building permit for any residential unit
and which ensures that the maximum rents for the affordable units will be
calculated using the methodologies set forth in the AHIP. The Parties intend for
the Declaration of Affordable Housing Covenants, Conditions, and Restrictions,
substantially in the form as Exhibit "D" attached to this Agreement and incorporated
herein ("Declaration"), to satisfy the requirement for a recorded affordable housing
agreement.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION AND THE
PROMISES AND COVENANTS OF CITY AND DEVELOPER SET FORTH IN THIS
AGREEMENT, CITY AND DEVELOPER AGREE, AS FOLLOWS:
TERMS AND CONDITIONS
1. DEFINITIONS
Definitions. Unless terms are otherwise defined under different sections of this
Agreement, the following words, terms and phrases are used in this Agreement with the
following meanings:
1.1 Adjusted for Household Size Appropriate for the Unit. The number of
bedrooms in an Affordable Dwelling Unit appropriate to a household size used to
determine the maximum Affordable Rental Price for each unit size. The number of
persons appropriate to a unit size shall mean household of one (1) person in the case of
a studio unit, two (2) persons in the case of a one -bedroom unit, and three (3) persons in
the case of a two -bedroom unit.
2510 W. Coast Highway Affordable Housing Agreement Page 3 of 17
1.2 Affordability Period. The period of time under which the Affordable Dwelling
Units are subject to affordable housing restrictions, including an Affordable Rental Price.
This period of time will commence on the date the final certificate of occupancy is issued
for the last unit constructed in the applicable Phase providing such Affordable Dwelling
Units and shall be a minimum of fifty-five (55) years for the three (3) Affordable Dwelling
Units. Commencement of the Affordability Period shall be memorialized in writing
pursuant to the Notice of Affordability Restrictions as set forth in the Declaration.
1.3 Affordable Dwelling Unit(s). The three (3) units within the Project that are
required pursuant to density bonus laws, project entitlements and subject to affordable
housing restrictions.
1.4 Affordable Rental Price. The maximum rent that, when added to the utility
allowance, does not exceed thirty percent (30%) times fifty percent (50%) of the Orange
County area median income as determined annually by the California Department of
Housing and Community Development, Adjusted for Household Size Appropriate for the
Unit. Current rents can be found in Exhibit "E" attached hereto and incorporated herein.
1.5 Area Median Income. The area median income for Orange County as
published annually by the California Department of Housing and Community
Development and determined in accordance with the U.S. Department of Housing and
Urban Development ("HUD") criteria then in effect and published from time to time. For
purposes of this Agreement, the qualifying limits shall be those limits for the County, as
set forth in Title 25, California Code of Regulations, section 6932, as may be amended,
modified or recodified from time to time ("Qualifying Households").
1.6 Declaration of Affordable Housing Covenants, Conditions and Restrictions
("Declaration"). That certain Declaration of Affordable Housing Covenants, Conditions
and Restrictions to be entered into by and between City and Developer, referencing the
applicable Affordability Period and other affordability requirements for the Affordable
Dwelling Units, substantially in the form of Exhibit "D", attached hereto and incorporated
herein. The Declaration shall be recorded with the Orange County Clerk Recorder's Office
following issuance of the certificate of occupancy for the final Affordable Dwelling Unit of
each applicable Phase.
1.7 Very Low Income Households. As defined in California Health and Safety
Code Section 50105, households earning fifty percent (50%) or less of area median
income, adjusted for family size.
2. CONSTRUCTION OF AFFORDABLE DWELLING UNITS
2.1 Construction of Affordable Dwelling Units. The Project will be developed in
compliance with a construction schedule as approved in writing by City prior to any
commencement of construction of the Affordable Dwelling Units ("Construction
Schedule") which may include phases in a scope, development proportion and interval as
may be required by Developer to timely complete construction of the Project (hereinafter,
"Phase" or "Phases").
2510 W. Coast Highway Affordable Housing Agreement Page 4 of 17
2.2 Costs and Quality of Construction. All costs for acquiring the Property,
planning, designing and constructing the Project shall be borne exclusively by Developer.
Each Affordable Dwelling Unit shall meet HUD Section 8 Housing Quality Standards, local
and state housing and building codes, and shall be free and clear of lead -based paint
hazards. Developer shall maintain, at Developer's sole cost and expense, the Affordable
Dwelling Units in good condition, good repair and in decent, safe, sanitary and habitable
living conditions during the term of this Agreement.
2.3 Affordable Dwelling Unit Number, Size and Location.
2.3.1 Unit Location. The Affordable Dwelling Units shall be dispersed
throughout the Project.
2.3.2 Unit Bedrooms and Size. Developer proposes to include the
following unit types and quantities within the Project:
Unit Type
Total Units
Total Affordable Units
Studio
8
1
1 Bedroom
22
2
2 Bedroom
6
0
Total
36
3
Notwithstanding the foregoing, Developer may make minor changes to unit size and
bedroom breakdown.
2.4 No Joint Venture. City and Developer are not entering into a joint venture.
Nothing in this Agreement shall be deemed to constitute approval for Developer or any of
Developer's employees or agents, to be the agents or employees of City.
3. TAXES AND ASSESSMENTS
Developer, and any approved successor, shall pay prior to delinquency all real
estate taxes and assessments on the Property so long as Developer or its approved
successor retains any ownership interest therein. Developer shall remove or have
removed any levy or attachment made on the Property or any part thereof, or assure the
satisfaction thereof within a reasonable time but in any event prior to any sale or transfer
of all or any portions thereof. Notwithstanding the above, Developer shall have the right
to contest the validity or amounts of any tax, assessment, or encumbrance available to
Developer in respect thereto, and nothing herein shall limit the remedies available to
Developer in respect thereto.
4. COVENANTS
4.1 Income Restriction. The Affordable Dwelling Units shall be restricted to
occupancy by Very Low Income Households at an Affordable Rental Price, as further set
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forth in the AHIP. Notwithstanding the foregoing, households with less income than the
Very Low Income Households may also occupy the Affordable Dwelling Units.
4.2 Residential Use. Without the City's prior written consent, which consent may
be given or withheld in its sole and absolute discretion, none of the Affordable Dwelling
Units in the Project will at any time be utilized on a transient basis or will ever be used as
a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home,
hospital, sanitarium, or trailer court or park, nor shall the Affordable Dwelling Units be
used as a place of business except as may otherwise be allowed by applicable law.
4.3 Term. The applicable parcel(s) of the Property with Affordable Dwelling
Units shall be bound for a minimum of fifty-five (55) years for the three (3) Affordable
Dwelling Units, commencing upon the issuance of the certificate of occupancy for the last
unit constructed in the applicable Phase providing such Affordable Dwelling Units. For
illustration purposes only, if one (1) Phase contains two (2) Affordable Dwelling Units, the
term for the two (2) Affordable Dwelling Units will commence upon issuance of the
certificate of occupancy for the second unit, and the term for Affordable Dwelling Units
constructed on a separate Phase may be subject to a different term, based upon issuance
of the certificate of occupancy for such separate Phase.
4.4 No Subordination. Developer agrees that any encumbrance to the
Property, or part of the Property, or any improvements on the Property which contains the
Affordable Dwelling Units, with any conventional mortgage, construction, bond financing
or security interest to secure financing with respect to the construction, development, use,
or operation of the Project, shall be subordinate to this Agreement and the Declaration.
4.5 Covenants Recorded Against The Property.
4.5.1 All of the covenants and restrictions set forth herein shall be
equitable servitudes and covenants running with the land pursuant to applicable law,
including, without limitation, California Civil Code Section 1468. Each covenant to do or
refrain from doing some act on or affecting the Project is for the benefit of the Property.
Each covenant shall run with the Project, and any portion thereof, as applicable, and shall
benefit or be binding upon each successive owner during its ownership of the Property.
The covenants herein contained shall, subject to the provisions as to assignment, apply
to and bind the heirs, successors, executors, administrators and assigns of all the parties
hereto; and all of the parties hereto shall be jointly and severally liable hereunder.
4.5.2 Recordation. The Declaration shall only be recorded on parcels
containing Affordable Dwelling Units.
4.6 Termination. Upon expiration of the final Affordability Period, Developer and
City shall execute and record necessary document(s) to terminate this Agreement and
remove the effect of the recorded Declaration from the Property. The document(s) shall
be provided by Developer and subject to verification and approval by the City Attorney.
2510 W. Coast Highway Affordable Housing Agreement Page 6 of 17
5. QUALIFYING PROSPECTIVE HOUSEHOLDS
5.1 Notice. At least thirty (30) days prior to offering the Affordable Dwelling
Units for lease or rent to the general public, Developer shall provide City with notice of its
intent to lease the Affordable Dwelling Units, specifying the proposed Affordable Rental
Price and proposed location of such Affordable Dwelling Unit.
5.2 Initial Qualification. Developer shall determine if prospective occupants of
the Affordable Dwelling Units qualify as Qualifying Households under this Agreement.
Developer shall require each prospective occupant of an Affordable Dwelling Unit provide
documentation supporting and certifying that the income of the occupants does not
exceed the qualifying income limits ("Tenant Income Documentation"), and Developer
may rely upon such certification and supporting documentation in qualifying the
prospective occupant. A list of required Tenant Income Documentation supporting
income qualification is set forth in Exhibit "F" attached hereto and incorporated herein.
5.3 Recertification of Qualification. Developer shall annually determine if
occupants of the Affordable Dwelling Units continue to qualify as Qualifying Households
under this Agreement. Developer shall require each occupant of an Affordable Dwelling
Unit provide Tenant Income Documentation supporting and recertifying that the income
of the occupants does not exceed the qualifying income limits, and Developer may rely
upon such certification and supporting documentation supporting in qualifying the
occupant.
5.4 Records. Developer shall make available at Developer's office copies of
documents and information, including Tenant Income Documentation (collectively,
"Records") upon which Developer relied upon to certify or recertify each occupant within
a reasonable time after so qualifying or requalifying that occupant. Such Records shall
be made available to City during Developer's normal business hours Monday through
Friday, excluding Federal and State recognized holidays, between the hours of 9:00 a.m.
and 5:00 p.m. Pacific Time.
5.5 Reliance on Tenant Representations. Each tenant lease shall contain a
provision to the effect that Developer has relied on the income certification and supporting
information supplied by the tenant in determining qualification for occupancy of the
Affordable Dwelling Unit, and that any material misstatement in such certification (whether
or not intentional) will be cause for immediate termination of such lease.
5.6 Annual Report. Developer shall provide to City such information as is
reasonably requested by City or its agents in connection with City's annual monitoring of
the Affordable Dwelling Units within ten (10) calendar days of the request and the
information shall be verified in writing by Developer under penalty of perjury. For each
Affordable Dwelling Unit, such information shall include, at a minimum, the documents
listed in Exhibit "G" ("Annual Report") as attached hereto and incorporated herein by
reference.
2510 W. Coast Highway Affordable Housing Agreement Page 7 of 17
6. ASSIGNMENT
6.1 Change in Ownership, Management and Control of Developer and Transfer
of the Project. Developer shall have the right to assign this Agreement, including all
benefits, covenants, duties and obligations contained herein, upon the City's prior written
approval, which shall not be unreasonably withheld. A voluntary or involuntary sale or
transfer of a controlling interest in the Developer or the Property during the term of this
Agreement shall be deemed to constitute an assignment or transfer for the purposes of
this Section 6.1, and the written approval by City shall be required prior to effecting such
an assignment or transfer. Developer shall provide City with evidence reasonably
satisfactory to City that the: (a) proposed transferee has financial strength and experience
comparable to Developer; (b) the use of the Property by the proposed transferee is
consistent with the terms of the Agreement; and (c) Developer is not then in default of this
Agreement. Any purported transfer, voluntarily or by operation of law, except with the prior
written consent by City, shall render this Agreement absolutely null and void and shall
confer no rights whatsoever upon any purported assignee or transferee. During the term
of this Agreement, Developer shall not, except as permitted by this Agreement, assign or
attempt to assign this Agreement or any rights or duties herein, nor make any total or
partial sale, transfer, conveyance, or assignment of the whole or any part of the Property
or any of the improvements thereon, without the prior written approval by City.
6.2 Notwithstanding any other provision of this Agreement to the contrary, City
approval of an assignment of this Agreement or transfer of the Project, or any interest
therein, shall not be required in connection with: (a) the conveyance or dedication of any
portion of the Property to City, or other appropriate governmental agency, including public
utilities, where the granting of such conveyance or easement permits or facilitates the
development of the Project on the Property; or (b) the transfer of all or any part of the
Project or Property to an entity owned and controlled by Developer or the principals of
Developer, including, without limitation, transfer to a limited partnership in which
Developer, or an affiliate of Developer, is a general partner; (c) any mortgage, deed of
trust, sale and leaseback, or other form of conveyance required for any reasonable
method of financing or refinancing the development of the Project on the Property,
including all direct and indirect costs related thereto; (d) transfers resulting from the death
or mental or physical incapacity of an individual; (e) transfers in trust for the benefit of a
spouse, children, grandchildren, or other family member, or for charitable purposes; or (f)
transfers of less than controlling interest shares of stock in a publicly -held corporation or
of the beneficial interest in any publicly -held partnership or real estate investment trust.
6.3 Notwithstanding anything in this Section 6 to the contrary, any transfer or
assignment by Developer or any successor in interest to Developer not requiring the
approval by City shall be effective when made but shall not be deemed to relieve
Developer or any successor party from its obligations under this Agreement unless and
until the transferor and transferee execute and deliver to City an assignment and
assumption agreement. Any transfer or assignment by Developer or any successor in
interest to Developer requiring the approval by City pursuant to this Section 6 shall be
effective and shall be deemed to relieve Developer or any successor party from its
obligations under this Agreement only upon execution and delivery to City by the
2510 W. Coast Highway Affordable Housing Agreement Page 8 of 17
transferor and transferee of an assignment and assumption agreement in a form and with
content reasonably acceptable to City, and upon execution of an acknowledgment of
same by City.
6.4 Developer, in exchange for the City entering into this Agreement, hereby
agrees to hold, sell, and convey the Property subject to the terms of this Agreement.
Developer also grants to the City the right and power to enforce the terms of this
Agreement against the Developer and all persons having any right, title or interest in the
Property or any part thereof, their heirs, successive owners and assigns.
6.5 This Section 6 shall not be applicable to the leasing of individual Affordable
Dwelling Units to eligible tenants in accordance with this Agreement, and no assignment
and assumption agreement shall be required in connection therewith.
6.6 Each covenant of this Agreement shall run with the Property, and any
portion thereof, as applicable, and shall benefit or be binding upon each successive owner
during its ownership of the Property. The covenants herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all the parties hereto; and all of the parties hereto shall be
jointly and severally liable hereunder.
7. COMPLIANCE WITH LAWS; INDEMNITY; ENVIRONMENTAL MATTERS
7.1 Compliance With Laws. Developer shall comply with (i) all ordinances,
regulations and standards of the City, any regional governmental entity, the State of
California, and the federal government applicable to the Project; (ii) all rules and
regulations of any assessment district of the City with jurisdiction over the Project; and
(iii) all applicable labor standards of California law and federal law; and (iv) the
requirements of California law and federal law with respect to the employment of
undocumented workers or illegal aliens.
7.2 Indemnity. Developer shall save, protect, defend, indemnify and hold
harmless City and the City, in its own capacity, and all of the City's officers, officials,
members, employees, agents, and representatives (collectively, the "Indemnified
Parties") from and against any and all liabilities, suits, actions, claims, demands,
penalties, damages (including, without limitation, penalties, fines and monetary
sanctions), losses, costs or expenses (including, without limitation, consultants' fees,
investigation and laboratory fees, reasonable attorneys' fees and remedial and response
costs) (the foregoing are hereinafter collectively referred to as "Liabilities") which may
now or in the future be incurred or suffered by any of the Indemnified Parties by reason
of, resulting from, in connection with, or existing in any manner whatsoever as a direct or
indirect result of (i) Developer's placement on or under the Project of any Hazardous
Materials or Hazardous Materials Contamination, (ii) the escape, seepage, leakage,
spillage, discharge, emission or release from the Project occurring on or after the Effective
Date of any Hazardous Materials or Hazardous Materials Contamination, or (iii) any
Liabilities incurred under any Governmental Requirements relating to the acts described
in the foregoing clauses (i) and (ii).
2510 W. Coast Highway Affordable Housing Agreement Page 9 of 17
For the purposes of this Agreement, unless the context otherwise specifies or
requires, the following terms shall have the meanings herein specified:
The term "Hazardous Materials" shall mean any substance, material, or waste
which is or becomes regulated by any local governmental authority, the City of Newport
Beach, the County of Orange, the State of California, a regional governmental authority,
or the United States Government, including, but not limited to, any material or
substance which is (i) defined as a "hazardous waste," "extremely hazardous waste,"
or "restricted hazardous waste" under Sections 25115, 25117 or 25122.7, or listed
pursuant to Section 25140 of the California Health and Safety Code, Division 20,
Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a "hazardous substance"
under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a
"hazardous material," "hazardous substance," or "hazardous waste" under Section
25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous
Materials Release Response Plans and Inventory), (iv) defined as a "hazardous
substance" under Section 25281 of the California Health and Safety Code, Division 20,
Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi)
friable asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as
"hazardous" or "extremely hazardous" pursuant to Article 11 of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (ix) designated as "hazardous
substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C. § 1317), (x)
defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation
and Recovery Act, 42 U.S.C. § 6901 et seq. (42 U.S.C. § 6903) or (xi) defined as
"hazardous substances" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.
The term "Hazardous Materials Contamination" shall mean the contamination
(whether presently existing or hereafter occurring) of the improvements, facilities, soil,
groundwater, air or other elements on, in or of the Project by Hazardous Materials, or
the contamination of the buildings, facilities, soil, groundwater, air or other elements on,
in or of any other property as a result of Hazardous Materials at any time emanating
from the Project.
The term "Governmental Requirements" shall mean all past, present and future
laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United
States, the State of California, the County of Orange, the City of Newport Beach, or any
other political subdivision in which the Project is located, and any other state, county,
city, political subdivision, agency, instrumentality or other entity exercising jurisdiction
over the Project.
7.3 Duty to Prevent Hazardous Material Contamination. Developer shall take
commercially reasonable action to prevent the release of any Hazardous Materials into
the environment. Such precautions shall include compliance with all Governmental
Requirements with respect to Hazardous Materials. In addition, Developer shall install
2510 W. Coast Highway Affordable Housing Agreement Page 10 of 17
and utilize such equipment and implement and adhere to such procedures as are
consistent with the standards generally applied by apartment complexes in Orange
County, California as respects the disclosure, storage, use, removal, and disposal of
Hazardous Materials.
7.4 Obligation of Developer to Remediate Premises. Notwithstanding the
obligation of Developer to indemnify the Indemnified Parties pursuant to Section 7.2,
Developer shall, at its sole cost and expense, promptly take (i) all actions required by any
federal, state, regional, or local governmental agency or political subdivision or any
Governmental Requirements and (ii) all actions necessary to make full economic use of
the Project for the purposes contemplated by this Agreement, which requirements or
necessity arise from the presence upon, about or beneath the Project of any Hazardous
Materials or Hazardous Materials Contamination. Such actions shall include, but not be
limited to, the investigation of the environmental condition of the Project, the preparation
of any feasibility studies or reports and the performance of any cleanup, remedial,
removal or restoration work.
7.5 Environmental Inquiries. Developer, when it has received any notices of
violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease
and desist orders related to Hazardous Materials or Hazardous Materials Contamination,
or when Developer is required to report to any governmental agency any violation or
potential violation of any Governmental Requirement pertaining to Hazardous Materials
or Hazardous Materials Contamination, shall concurrently notify the City Manager and
provide to him/her a copy or copies, of the environmental permits, disclosures,
applications, entitlements or inquiries relating to the Project, the notices of violation,
notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist
orders, reports filed pursuant to self -reporting requirements, and reports filed or
applications made pursuant to any Governmental Requirement relating to Hazardous
Materials and underground tanks, and Developer shall report to the City Manager, as
soon as possible after each incident, any unusual, potentially important incidents.
7.6 In the event of a responsible release of any Hazardous Materials into the
environment, Developer shall, as soon as possible after it becomes aware of the release,
furnish to the City Manager a copy of any and all reports relating thereto and copies of all
correspondence with governmental agencies relating to the release. Upon request of the
City Manager, Developer shall furnish to the City Manager a copy or copies of any and
all other environmental entitlements or inquiries relating to or affecting the Project
including, but not limited to, all permit applications, permits and reports including, without
limitation, those reports and other matters which may be characterized as confidential.
8. DEFAULTS AND REMEDIES
8.1 Termination for Cause. In the event the City determines that there has been
any fraud or deceit by Developer including, but not limited to, any material
misrepresentation by Developer, the City may, in its sole discretion, immediately
terminate this Agreement. In the event that either party fails or refuses to perform any of
the provisions of this Agreement at the time and in the manner required, that party shall
2510 W. Coast Highway Affordable Housing Agreement Page 11 of 17
be deemed in default in the performance of this Agreement. If such default is not cured
within a period of five (5) calendar days, or if more than five (5) calendar days are
reasonably required to cure the default and the defaulting party fails to give adequate
assurance of due performance within five (5) calendar days after receipt of written notice
of default, specifying the nature of such default and the steps necessary to cure such
default, and thereafter diligently take steps to cure the default, the non -defaulting party
may terminate the Agreement forthwith by giving to the defaulting party written notice
thereof.
8.2 Acceptance of Service of Process. In the event that any legal action is
commenced by the Developer against the City, service of process on the City shall be
made by personal service upon the City Clerk, or in such other manner as may be
provided by law. In the event that any legal action is commenced by City against
Developer, service of process on Developer shall be made in such manner as may be
provided by law, whether made within or outside the State of California.
9. NONDISCRIMINATION
9.1 Developer covenants by and for itself and any successors in interest that
there shall be no discrimination against or segregation of any person, or group of persons
on any basis listed in subdivision (a) or (d) of Section 12955 of the California Government
Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California
Government Code, in the sale, rental, lease, sublease, transfer, use, occupancy, tenure
or enjoyment of the Project, or any part thereof, nor shall Developer, or any person
claiming under or through him or her, establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees of the Project, or any
part thereof. The foregoing covenants shall run with the land. All such deeds, leases or
contracts shall contain or be subject to substantially the following nondiscrimination or
nonsegregation clauses:
9.1.1 In deeds: "The grantee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming
under or through them, that there shall be no discrimination against or segregation of, any
person or group of persons on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the California Government Code, as those bases are defined in Sections
12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the California Government Code, in the sale, lease, sublease,
transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall
the grantee or any person claiming under or through him or her, establish or permit any
practice or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or
vendees in the premises herein conveyed. Notwithstanding the forgoing, with respect to
familial status, the forgoing shall not be construed to apply to housing for older persons,
as defined in Section 12955.9 of the California Government Code. The foregoing
covenants shall run with the land."
2510 W. Coast Highway Affordable Housing Agreement Page 12 of 17
9.1.2 In leases: "The lessee herein covenants by and for himself or
herself, his or her heirs, executors, administrators, and assigns, and all persons claiming
under or through him or her, and this lease is made and accepted upon and subject to
the following conditions: "That there shall be no discrimination against or segregation of
any person or group of persons, on account of any basis listed in subdivision (a) or (d) of
Section 12955 of the California Government Code, as those bases are defined in Sections
12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the California Government Code, in the leasing, subleasing,
transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall
the lessee himself or herself, or any person claiming under or through him or her, establish
or permit any such practice or practices of discrimination or segregation with reference to
the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased. Notwithstanding the forgoing, with
respect to familial status, the forgoing shall not be construed to apply to housing for older
persons, as defined in Section 12955.9 of the California Government Code.
9.1.3 In contracts pertaining to the Project: "There shall be no
discrimination against or segregation of, any person or group of persons on account of
any basis listed in subdivision (a) or (d) of Section 12955 of the California Government
Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California
Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or
enjoyment of the premises which are the subject of this agreement, nor shall the grantee
or any person claiming under or through him or her, establish or permit any practice or
practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in
the premises herein conveyed. Notwithstanding the forgoing, with respect to familial
status, the forgoing shall not be construed to apply to housing for older persons, as
defined in Section 12955.9 of the California Government Code. The foregoing covenants
shall run with the land."
9.2 The covenants established in this Agreement shall, without regard to
technical classification and designation, be binding for the benefit and in favor of the City
and City's successors and assigns, and any successor in interest to the Project, together
with any property acquired by the Developer pursuant to this Agreement, or any part
thereof. The covenants against discrimination shall remain in effect in perpetuity.
10. EFFECT OF VIOLATION OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT
The City is deemed the beneficiary of the terms and provisions of this
Agreement and of the covenants running with the land, for and in its own rights and for
the purposes of protecting the interests of the community and other parties, public or
private, in whose favor and for whose benefit this Agreement and the covenants
running with the land have been provided. This Agreement and the covenants shall run
in favor of the City, without regard to whether the City has been, remains or is an owner
of any land or interest therein in the Project. The City shall have the right, if this
2510 W. Coast Highway Affordable Housing Agreement Page 13 of 17
Agreement or covenants are breached, to exercise all rights and remedies, and to
maintain any actions or suits at law or in equity or other property proceedings to enforce
the curing of such breaches to which it or any other beneficiaries of this Agreement
and covenants may be entitled.
11. NOTICES
11.1 All notices, demands, requests or approvals to be given under the terms of
this Agreement shall be given in writing, to City by Developer and conclusively shall be
deemed served when delivered personally, or on the third business day after the deposit
thereof in the United States mail, postage prepaid, first-class mail, addressed as
hereinafter provided.
11.2 All notices, demands, requests or approvals from Developer to City shall be
addressed to City at:
To Developer: Mark Moshayedi
2600 E. Coast Hwy, Ste. 240
Corona Del Mar, CA 92625
and
Sean Matsler
Cox, Castle & Nicholson LLP
3121 Michelson Drive, Ste. 200
Irvine, CA 92612
To City: City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Manager
12. STANDARD PROVISIONS
12.1 Recitals. City and Developer acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
12.2 Compliance with all Laws. Developer shall at its own cost and expense
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, the Project shall conform to applicable City, county, state and federal
laws, rules, regulations and permit requirements and be subject to approval of City.
12.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
2510 W. Coast Highway Affordable Housing Agreement Page 14 of 17
12.4 Integrated Agreement. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
12.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and any other attachments attached hereto, the
terms of this Agreement shall govern.
12.6 Interpretation. The terms of this Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or
against either party by reason of the authorship of the Agreement or any other rule of
construction which might otherwise apply.
12.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Developer and City and approved as to form by the
City Attorney.
12.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
12.9 Confidentiality. All documents, including drafts, notes and communications
that result from this Agreement, shall be kept confidential unless City authorizes in writing
the release of information.
12.10 Cooperation. Developer agrees to work closely and cooperate fully with City
and any other agencies that may have jurisdiction or interest in this Agreement. City
agrees to cooperate with the Developer in the implementation of this Agreement.
12.11 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
12.12 Equal Opportunity Employment. Developer represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because of race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
12.13 No Attorney's Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
12.14 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
2510 W. Coast Highway Affordable Housing Agreement Page 15 of 17
12.15 No Third -Party Beneficiaries. Nothing in this Agreement, express or implied,
is intended to confer any rights or remedies under or by reason of this Agreement on any
person or entity other than the City on the one hand and Developer on the other and their
respective permitted successors and assigns, nor is anything in this Agreement intended
to relieve or discharge any obligation of any third person to any Party or give any third
person any right of subrogation or action over or against any Party.
12.16 No Damages. Developer acknowledges that City would not enter into this
Agreement if it were to be liable for damages (including, but not limited to, actual
damages, economic damages, consequential damages, lost profits, loss of rents or other
revenues, loss of business opportunity, loss of goodwill or loss of use) under, or relating
to, this Agreement or any of the matters referred to in this Agreement, including, without
limitation, any and all plans, permits, licenses or regulatory approvals, and CEQA
documents related to the Property or Project. Accordingly, Developer covenants and
agrees on behalf of itself and its successors and assigns, not to sue City (either in its
capacity as a Party to this Agreement or in its capacity as the City of Newport Beach) for
damages (including, but not limited to, actual damages, economic damages,
consequential damages, lost profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use) or monetary relief for any breach of this
Agreement by City or for any dispute, controversy, or issue between City and Developer
arising out of or connected with this Agreement or any of the matters referred to in this
Agreement, including, without limitation, any and all plans, permits, licenses or regulatory
approvals, CEQA documents, or any future amendments or enactments thereto, the
parties agreeing that declaratory relief, injunctive relief, mandate and specific
performance shall be Developer's sole and exclusive judicial remedies. Notwithstanding
the foregoing, nothing in this Section 12.16 shall limit Developer's remedies as expressly
set forth in this Agreement.
12.17 Time Declared to be of the Essence. As to the performance of any obligation
under this Agreement of which time is a component, the performance of such obligation
within the time specified is of the essence.
12.18 Survival of Agreement. All of the provisions of this Agreement shall be
applicable to any dispute between the Parties arising from this Agreement, whether prior
to or following expiration or termination of this Agreement, until any such dispute is finally
and completely resolved between the Parties, either by written settlement, entry of a non -
appealable judgment or expiration of all applicable statutory limitations periods, and all
terms and conditions of this Agreement relating to dispute resolution and limitations on
damages or remedies shall survive any expiration or termination of this Agreement.
12.19 Binding Authority. By executing this Agreement, each person signing on
behalf of the Developer warrants and represents to the City that Developer has the full
power and authority to enter into this Agreement, that all authorizations required to make
this Agreement binding upon the Developer have been obtained, and that the person or
persons executing this Agreement on behalf of the Developer are fully authorized to do
so.
[Signatures on Following Page]
2510 W. Coast Highway Affordable Housing Agreement Page 16 of 17
SIGNATURE PAGE
TO
AFFORDABLE HOUSING AGREEMENT
(2510 W. Coast Highway Mixed Use Project)
IN WITNESS WHEREOF, the Parties have signed this Agreement by and
through the signatures of their respective authorized representative(s) as follows:
CITY OF NEWPORT BEACH, 2510 W. COAST HWY LLC,
a California municipal corporation a Delaware limited liability company
By: ;��By:
Gr . Leung
Mark Moshayedi
Ci Manager
Manager
APPROVED AS TO FORM:
2510 W. COAST HWY EAT LLC,
CITY ATTORNEY'S OFFICE
a Delaware limited liability company
By:
By:
Aaron
Harp
I 1 I» -w,
Mehrdad Moshayedi, Co -Trustee
City At
rney
M. and S. Moshayedi Revocable Trust,
dated September 25, 1998
ATTEST:
SEW PORT B
By:
e S r/losha� i, Co -Trustee
Leilani I. row
t=
n and S. Moshayedi Revocable Trust,
City Clerk
`'
z dated September 25, 1998
�qti Fo VL
Exhibits:
Exhibit "A" —
Property
Exhibit "B" —
Project
Exhibit "C"
— Affordable Housing Implementation Plan No. AH2021-
001
Exhibit "D"
— Declaration of Affordable Housing Covenants,
Conditions and Restrictions
Exhibit "E"
— Affordable Rental Price
Exhibit "F" —
Tenant Income Documentation
Exhibit "G"
— Annual Report
2510 W. Coast Highway Affordable Housing Agreement Page 17 of 17
EXHIBIT "A"
PROPERTY
2510 W. Coast Highway Affordable Housing Agreement Exhibit A-1
EXHIBIT "B"
PROJECT
2510 W. Coast Highway Affordable Housing Agreement Exhibit B-1
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EXHIBIT "C"
AFFORDABLE HOUSING IMPLEMENTATION PLAN NO. AH2O21-001
2510 W. Coast Highway Affordable Housing Agreement Exhibit C-1
2510 W. COAST HIGHWAY12530 W. COAST HIGHWAY
AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLICATION
RESUBMITTED JULY 14, 2021
Prepared by
Springbrook , I,j]'
Realty Advisors, Inc.
080335\12939763v2
2510 W. COAST HIGHWAY12530 W. COAST HIGHWAY
AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLI CATION
RESUBMITTED JULY 14, 2021
Project Description & Affordability Level
The developer, 2510 W. Coast Hwy LLC and 2510 W. Coast Hwy Eat LLC (collectively
"Developer") is proposing the 2510 W. Coast Highway/2530 W. Coast Highway mixed -use
development (described herein as "2510 W. Coast Highway" or "project") on a .98 net acre site
located in the Mariner's Mile area. The site is located South of the intersection of Tustin Avenue
and West Coast Highway. The Newport Beach General Plan designates the project site as Mixed -
Use Horizontal and the zoning is Mixed -Use HI-MM. The project site was recently used as a
boat sales facility and today is used as an office for an automobile auction company. The
proposed project will consist of 36 residential units and approximately 5,096 square feet of
commercial space to be used as an office. No office tenant has been identified yet.
The Mixed -Use Hl-MM Zoning requires a minimum lot area of 1,631 square feet per residential
unit. This results in a maximum of 26 residential units (before applying density bonus)
Eligibility for Density Bonus
The 2510 W. Coast Highway development will provide 3 units affordable to Very Low Income
households, I I% of the Base Units as described in Table 1 on the next page. This will comply
with the provisions of Government Code Section 65915 applicable to a 35% density bonus. Rents
for the Very Low Income units will be computed in accordance with Health and Safety Code Sec.
50053, as required by Government Code Section 65915(c)(1).
Density Bonus Computation and Term of Affordability
The density bonus computation for the project per Government Code Section 65915 is shown
in Table 1 on the next page:
080335\12939763v2
2510 West Coast High\hray
Affordable HoL SiuL Plan
July 14.2021
Table 1
Density Bonus Computation
Project Area
42,821 s.f.
Minimum Lot Area Per Unit
1,631 s.f.
Allowable Residential Units Before Density Bonus
(Base Units)
26
Eligible Density Bonus (35%)
10
Density Bonus Utilized
10
Total Units
36
The Developer intends to operate the apartment project as a rental community. The 3 Very
Low Income units will remain rent restricted for a minimum of 55 years, per Government Code
Section 65915(c)(1).
Reduction in Parking
The 2510 W. Coast Highway development meets the criteria of subdivision (b) of Government
Code Sec. 65915 and Section 20.32.030 of the City's Zoning Code by providing more than five
percent (5%) of the total units of a housing development (excluding any units permitted by the
density bonus awarded pursuant to that section) for Very Low Income households. Government
Code Section 65915(p) and Section 20.32.040 of the City's Zoning Code provides the following:
(1) Upon the request of the developer, no city, county, or city and county shall
require a vehicular parking ratio, inclusive of handicapped and guest parking, of a
development meeting the criteria of subdivision (b), that exceeds the following
ratios:
a. Zero to one bedrooms: one onsite parking space.
b. Two to three bedrooms: 1.5 onsite parking spaces.
(2) If the total number of parking spaces required for a development is other than a
whole number, the number shall be rounded up to the next whole number. For
purposes of this subdivision, a development may provide "onsite parking" through
tandem parking or uncovered parking, but not through street parking.
Table 2 on the next page is a summary of Government Code Sec. 65915 parking requirements
vs. spaces to be provided. The Developer requests that parking requirements for the residential
units be calculated in accordance with Government Code Sec. 65915(p). As shown in Table
2, the project proposes five surplus parking spaces.
080335\12939763v2
2510 West Coast HIgIm,a.
Affordable HoWAMU 1h111
,iuly 14. 2021
Table 2
Parking Requirements
Unit Type
Number
of Units
Stalls/Unit
Per Gov.
Code
Total Stalls
Per Gov.
Code
Studio
8
1.0
8
1 BR
22
1.0
22
2 BR
6
1.5
9
Total Parking Stalls Required -
r
Residential Units
36
1.1
39
Parking Provided for Office
21
Total Parking Stalls Required
60
Total Parking Stalls Provided
65
Affordable Unit Mix
The mix of the three affordable units to be provided will be in proportion to the overall unit mix
as follows in Table 3:
Table 3
Affordable Unit Mix
Total Affordable
Unit Type
Total Units
Units
Studio
8
1
1 Bedroom
22
2
2 Bedroom
6
0
Total
36
3
Development Incentive Requests
Pursuant to Government Code Section 65915(d)(1) and Section 20.32 of the City's Zoning Code,
the Developer is entitled to two concessions or incentives as a result of providing at least eleven
percent (11%) of the units as affordable for Very Low Income households. The Developer
requests the following development incentives:
1. The Developer requests a waiver of the MU-MM zone's minimum 0.25 floor area ratio
(FAR) for nonresidential development. The approximately 5,096 s.f. of commercial
(office) space will result in a FAR of approximately 0.12. The proposed FAR waiver will
reduce the cost of the nonresidential development, thus improving the economic viability
of the overall project and helping to fund the cost of providing the affordable housing. It
3
080335\12939763v2
2510 West Coast Higli\vay,
AttOrdable 1-10USi1111 Plan July 14, 20211
will also allow for the addition of various residential amenities (e.g., fitness rooms,
outdoor open space areas, surplus parking spaces) which enhance the ability of the
project's market rate residential units to support the affordable units.
2. The Developer requests a waiver of the 100 foot setback for residential units from Pacific
Coast Highway. This waiver will permit additional parking to be provided on the site as
well as result in articulation in the building mass, including setbacks on the East and West
sides of the building, substantially improving the overall appearance of the development.
This waiver will also enable the building to include windows on all sides of the project
and will result in a more pleasing building mass. Finally, this waiver will provide view
opportunities for the residential units, enhancing their value and thus helping to fund the
cost of providing the affordable housing.
Approval of these incentive requests will also enable the project to meet the goal of "Five Sided
Architecture" as set forth in the Mariner's Mile Strategic Vision & Design Framework. The
incentive requests are consistent with the City of Newport Beach Local Coastal Program
Implementation Plan which provides that density bonuses, as set forth in Government Code
Sections 65915 through 65917 (which includes the sections pertaining to incentive requests),
may be granted for projects that offer units affordable to lower, low, and moderate -income
households. As set forth in Government Code Section 659150)(1) the granting of a concession
or incentive shall not require a local coastal plan amendment, zoning change study or other
discretionary approval.
Development Standards Waiver Request
Government Code Sec. 65915(e)(1) provides that a city or county may not apply any
development standard (including height limits) that will have the effect of physically precluding
the construction of a density bonus project at the density permitted under the density bonus
statute. The Mixed -Use HI-MM zoning specifies a maximum height of 26 ft. from the
established grade for a roof with less than a 3/12 roof pitch which may be increased to as much
as 35 ft. for properties in the Shoreline Height Limitation Zone through the approval of a coastal
development permit application. The maximum height for the 2510 W. Coast Highway
development is 35 ft.
In accordance with Government Code Sec. 65915(e)(1) and as permitted pursuant to Section
21.30.060 of the Local Coastal Program Implementation Plan, the Developer requests that a
waiver be granted for the 2510 W. Coast Highway development to permit a 35 ft. maximum
height. Without this waiver, the project will not be able to accommodate the additional units
permitted by the Zoning Code and Government Code Sec. 65915.
Income Limits and Examples of Eligible Tenants for Affordable Homes
Very Low Income Households are defined as households whose gross income does not exceed
80% of area median income, adjusted for household size. Table 4 below shows the maximum
income limits for 2021 (effective through Spring 2022) as determined by the U.S. Department
4
080335\12939763v2
2510 West Coitst Higlmrzty
Affordable Plan
July 14.2021
of Housing and Urban Development and the California Department of Housing and Community
Development ("HCD") for Very Low Income households with household sizes appropriate for
the 2510 W. Coast Highway development:
Table 4
Maximum Income Limits
Very Low Income Units
Maximum Annual
Household Size
Income - 2021/22
1 Person
$47,100
2 Person
53,800
3 Person
60,550
Higher income limits apply to larger families; those families however are not considered to be a
target market for 2510 W. Coast Highway, where the unit mix for the affordable homes is
anticipated to consist of studios and one -bedroom apartment homes.
The 3 affordable homes that Developer will provide will be rented to eligible Very Low Income
Households. As shown in Table 4, Very Low Income Households includes incomes ranging
from $47,100 per year for a one -person household to $60,550 per year for a three -person
household. As such this could include retail and food service industry employees, certain City
employees, school district employees, health care professionals, and other occupations which
provide needed services to our community.
In order to provide opportunities to workers to live in one of the affordable homes, the City could
provide guidelines providing for acceptance of applications on a priority basis from classes of
individuals who qualify under the income limits in effect. The guidelines could provide for
priority treatment for local residents, City employees, employees of the local school district, and
other categories identified by the City for priority treatment.
Rental Rate Limits for Affordable Homes
The 3 Very Low Income units shall be rented at an affordable rent calculated in accordance with
the provisions of Section 50053 of the Health and Safety Code. Section 50053 of the Health and
Safety Code limits affordable rent to 30% of total income for a Very Low Income household, as
calculated in Table 5 below. That section also requires that the rent for a studio unit assumes a
one -person household for rent calculation purposes and a one -bedroom unit assumes a two -person
household. The rents calculated are then adjusted by a utility allowance as determined annually
by the County of Orange Housing & Community Services Department. As of October 1, 2020,
the reduction for the utility allowance is $141.00 per month for a studio unit and $155.00 per
month for a one -bedroom unit. The utility allowance utilized assumes gas cooking, space heating,
080335\12939763v2
2510 Wesi Coast Hi Iiv,N,ay
All'ordable Hous1111 Play
Juty 14, 2021
and water heating, as well as electricity, water, and sewer, and trash fees which will be paid by
the tenant. The maximum rent levels for 2021 are shown in Table 5 below:
Table 5
Maximum Rents by Bedroom Count
Maximum
Maximum
Utility
Affordable
Bedrooms
Annual Rent
Monthly Rent
Allowance
Rent
Studio
$11,205
$934
$141
$793
1 Bedroom
12,803
1,067
155
912
The Developer will enter into an affordable housing agreement, in recordable form, with the City
prior to obtaining the first building permit for any residential unit. That agreement will ensure
that the maximum rents for the affordable apartment homes will be calculated using the
methodologies as utilized in Table 5. The rental rates shown will be updated prior to the
commencement of rental activities and on an ongoing basis to reflect then current income limits,
utility allowances, and any changes in applicable regulations and statutes.
Unit Mix, Design, and Location of Affordable Homes
While the exact location of each of the affordable homes within the 2510 W. Coast Highway
development has not yet been determined, the affordable homes will be spread throughout the
development to avoid concentration of affordable homes in any area. As required by Section
20.32.070 of the City's Zoning Code, the affordable homes shall be comparable in the facilities
provided and in the quality of construction and exterior design to the market rate homes.
Requested City of Newport Beach Assistance
Financial Assistance
The Developer is not requesting any direct financial assistance from the City of Newport Beach
for this project.
11
080335\12939763v2
EXHIBIT "D"
DECLARATION OF AFFORDABLE HOUSING COVENANTS, CONDITIONS AND
RESTRICTIONS
[Attached Behind This Page]
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-1
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Clerk
Exempt from Recording Fees pursuant to Govt. Code §§ 6103, 27383 Space above line for Recorder's use only
APN: 425-471-55 AND 425-471-56
DECLARATION OF AFFORDABLE HOUSING COVENANTS, CONDITIONS AND
RESTRICTIONS
(2510 W. Coast Highway Mixed Use Project)
THIS DECLARATION OF AFFORDABLE HOUSING COVENANTS,
CONDITIONS AND RESTRICTIONS (this "Declaration") is dated as of
, 20_ ("Effective Date"), and is made by and between the CITY OF
NEWPORT BEACH, a California municipal corporation and charter city, as covenantee
("City"), and 2510 W. COAST HWY LLC, a Delaware limited liability company and 2510
W. COAST HWY EAT LLC, a Delaware limited liability company, as covenantor
("Owner"), with reference to the following recited facts (each, a "Recital").
RECITALS
A. Owner is the owner of that certain real property consisting of approximately 42,821
square feet or .098 acres situated in the Mariners' Mile area in the City of Newport
Beach, County of Orange, State of California, addressed as 2510 and 2530 West
Coast Highway [APN 425-471-55 and 425-471-561, as more particularly depicted
in Attachment 1" attached to this Declaration and incorporated herein (the
"Property").
B. On July 27, 2021, the City Council approved the 2510 W. Coast Highway Mixed
Use Project (PA2019-249) project which includes developing the Property into a
residential project with up to thirty-six (36) residential units, of which three (3) shall
be restricted for affordable housing ("Affordable Dwelling Units"), 5,096 square feet
of office space ("Project").
C. Project approval included the adoption of Affordable Housing Implementation Plan
No. AH2O21-001, dated July 14, 2021 (the "AHIP"), which implements affordable
housing requirements for the Project pursuant to a density bonus and
incentives/concessions pursuant to Chapter 20.32 (Density Bonus) of the Newport
Beach Municipal Code and California Government Code Section 65915 ("State
Density Bonus Law").
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-2
D. Owner and City have entered into an Affordable Housing Agreement, dated
("Affordable Housing Agreement") with respect to the Project.
E. This Declaration shall be recorded upon the execution of that certain Affordable
Housing Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES, COVENANTS
AND UNDERTAKINGS SET FORTH IN THIS DECLARATION AND FOR OTHER GOOD
AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH IS
HEREBY ACKNOWLEDGED, OWNER AND CITY COVENANT, DECLARE AND
AGREE FOR THEMSELVES, THEIR SUCCESSORS AND ASSIGNS, AS FOLLOWS:
1. COVENANTS
1.1 Affordability Period. Owner agrees for itself and its successors and assigns,
and every successor to Owner's interest in the Property, or any part thereof, that the
Affordable Dwelling Units, comprising Development Standards, within the Property shall
be designated as affordable and shall be held subject to this Declaration for an
Affordability Period as follows:
1.1.1 Affordable Dwelling Units consisting of three (3) units will remain
rent restricted for a minimum of fifty-five (55) years commencing upon the date the
final certificate of occupancy is issued for the last Affordable Dwelling Unit
constructed in the applicable Phase providing such Affordable Dwelling Unit.
1.2 Occupancy. The Affordable Dwelling Units shall only be rented and
occupied by Very Low Income Households. Notwithstanding the foregoing, households
with less income may also occupy the Affordable Dwelling Units. "Very Low Income
Households" means an individual or family with an income fifty percent (50%) or less of
the Orange County median income, adjusted for household size.
1.3 Rent. The Affordable Dwelling Units shall only be rented at an Affordable
Rental Price to Very Low Income Households.
1.4 Notice. Commencement of the Affordability Period shall be memorialized in
a Notice of Commencement of Affordability Restrictions ("Notice") or other instrument of
similar format to Attachment "2" attached hereto and incorporated herein by reference
and shall be recorded.
2. RENTERS
2.1 Qualification. Owner shall qualify prospective renters as set forth in the
Affordable Housing Agreement. Furthermore, the Owner shall, on renewal of the annual
lease for the particular Affordable Dwelling Unit, re -qualify the renter and obtain income
certification from the renter. If, at the time of the annual lease renewal, the Owner learns
that the renter's income increases above the income level permitted for that Affordable
Dwelling Unit, the renter may continue to be permitted to reside in such Affordable
Dwelling Unit for no more than one year. Notwithstanding the foregoing, the Owner, at
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-3
the City's discretion, which shall not be unreasonably withheld or delayed, shall have the
option to designate another dwelling unit as an Affordable Dwelling Unit during that one-
year period so that the renter may continue to occupy a unit in the Project.
2.2 Affordable Rental Price. "Affordable Rental Price" shall refer to (i) thirty
percent (30%) times fifty percent (50%) of the Orange County area median income as
determined annually by the California Department of Housing and Community
Development, Adjusted for Household Size Appropriate for the Unit for the Affordable
Dwelling Unit.
OWNER AND EACH SUCCESSOR, HEIR, OR ASSIGN OF OWNER
UNDERSTANDS THAT THE MAXIMUM RENTAL PAYMENTS TO BE
ESTABLISHED BY THIS FORMULA ARE NOT NECESSARILY EQUAL
TO THE FAIR MARKET RENT FOR THE AFFORDABLE DWELLING
UNITS AND MAY BE ESTABLISHED AT A LEVEL SUBSTANTIALLY
BELOW THE FAIR MARKET RENT LEVELS.
Owner's Initials
2.2 Restrictions. During the Affordability Period, Owner shall take all
reasonable steps necessary to ensure that each household renting an Affordable
Dwelling Unit has knowledge of all terms and conditions of this Declaration by including
in each and every lease and rental agreement a clause which incorporates this
Declaration by reference and makes this Declaration a part of an attachment to such
lease or rental agreement. In addition, during the Affordability Period, each lease or rental
agreement for any of the Affordable Dwelling Units shall contain provisions that failure to
comply with this Declaration shall be a default under the renter's lease or rental
agreement.
3. GENERAL PROVISIONS
3.1 Binding. The Property shall be subject to the covenants, conditions, and
restrictions set forth herein, which shall run with the land, and shall apply to and bind the
heirs, successors, executors, administrators and assigns of all the parties hereto; and all
of the parties hereto shall be jointly and severally liable hereunder.
3.2 Covenants Do Not Impair Liens. No violation or breach of the covenants,
conditions, restrictions, provisions or limitations contained in this Declaration shall defeat
or render invalid or in any way impair the lien or charge of any mortgage or deed of trust
or security interest.
3.3 Covenants for Benefit of City. This Declaration shall be binding for the
benefit of City and such covenants shall run in favor of City for the entire period during
which time such covenants shall be in force and effect, without regard to whether City is
or remains an owner of any land or interest therein to which such covenants relate. City,
in the event of any breach of any such covenants, shall have the right to exercise all the
rights and remedies and to maintain any such action at law or suits in equity or other
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-4
proper legal proceedings to enforce and to cure such breach to which it or any other
beneficiaries of these covenants may be entitled during the term specified for such
covenants.
3.4 Counterparts. This Declaration may be executed in a number of
counterparts, each of which shall be an original, but all of which shall constitute one and
the same document.
3.5 Applicable Law. If any provision of this Declaration or portion thereof, or the
application of any provision to any person or circumstances, shall to any extent be held
invalid, inoperative, or unenforceable, the remainder of this Declaration, or the application
of such provision or portion thereof to any other persons or circumstances, shall not be
affected thereby and it shall not be deemed that any such invalid provision affects the
consideration for this Declaration; and each provision of this Declaration shall be valid
and enforceable to the fullest extent permitted by law. This Declaration shall be construed
in accordance with the laws of the State of California.
3.6 No Subordination. The Parties agree and acknowledge that any
encumbrance to the Property, or part of the Property, or any improvements on the
Property containing Affordable Dwelling Units with any conventional mortgage,
construction bond financing or security interest to secure financing with respect to the
construction, development, use, or operation of the Project shall be subordinate to this
Declaration.
3.7 Recording. This Declaration shall be recorded upon the execution of the
Affordable Housing Agreement.
3.8 Termination. Upon expiration of the Affordability Period for each category
of Affordable Housing Units, Owner and City shall sign documents in recordable form
(provided by Owner giving notice and subject to approval by the City Attorney) to remove
the effect of the recorded Declaration from the Property.
(Signatures on following page)
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-5
IN WITNESS WHEREOF, City and Owner have caused this Declaration to be
signed by themselves or on their behalf by their duly authorized representatives, as set
forth below:
CITY OF NEWPORT BEACH,
a California municipal corporation
Grace K. Leung
City Manager
APPROVED AS TO FORM:
CITY ATTORNEYS OFFICE
Aaron C. Harp
City Attorney
ATTEST:
By:
Leilani I. Brown
City Clerk
2510 W. COAST HWY LLC,
a Delaware limited liability company
Mark Moshayedi
Manager
2510 W. COAST HWY EAT LLC,
a Delaware limited liability company
By:
Mehrdad Moshayedi, Co -Trustee
M. and S. Moshayedi Revocable Trust,
dated September 25, 1998
MM
Semira Moshayedi, Co -Trustee
M. and S. Moshayedi Revocable Trust,
dated September 25, 1998
[SIGNATURES MUST BE NOTARY ACKNOWLEDGED FOR RECORDING]
Attachments: Attachment 1 — Property
Attachment 2 — Notice of Commencement of Affordability Restrictions
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-6
ATTACHMENT "1"
PROPERTY
[Attached Behind this Page]
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-7
ATTACHMENT "2"
NOTICE OF COMMENCEMENT OF AFFORDABILITY RESTRICTIONS
[Attached Behind this Page]
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-8
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Newport Beach
100 Civic Center Drive
Newport Beach, California 92660
Attn: City Clerk
Exempt from Recording Fees pursuant to Govt. Code §§ 6103, 27383 Space above line for Recorder's use only
APN: 425-471-55 AND 425-471-56
NOTICE OF COMMENCEMENT OF AFFORDABILITY RESTRICTIONS
Important notice to owners, purchasers, tenants, lenders, brokers, escrow
and title companies, and other persons regarding affordable housing restrictions
on the real property described in this Notice: Affordable housing restrictions have
been [or are being recorded] with respect to the property described below (referred to in
this Notice as the "Property") which require that certain units of the Property be developed
as Affordable Dwelling Units and be rented to and occupied by persons and households
of limited income at affordable rents.
2510 W. COAST HWY LLC, a Delaware limited liability company and 2510 W.
COAST HWY EAT LLC, a Delaware limited liability company, hereby provides notice that
the Property is subject to certain affordable housing requirements:
Location of Property: 2510 and 2530 West Coast Highway in the City of Newport
Beach, California.
2. Assessor's Parcel Number(s) of Property: 425-471-55 and 425-471-56
3. Legal Description of Property: see Exhibit 1" attached hereto and incorporated
herein by reference.
4. Title of Document(s) Containing the Affordable Housing Requirements:
4.1. Affordable Housing Agreement by and between City of Newport Beach, a
California municipal corporation and charter city and 2510 W. COAST HWY
LLC, a Delaware limited liability company and 2510 W. COAST HWY EAT
LLC, a Delaware limited liability company, dated
("Agreement").
4.2. Declaration of Affordable Housing Covenants, Conditions and Restrictions,
as recorded with the Official Records of Orange County, California, on
20_ as Instrument No.
("Declaration").
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-9
5. Summary of Affordable Housing Restrictions:
5.1. Affordability Period. Three of the Property's Affordable Dwelling Units shall
be subject to the affordable housing requirements for a minimum of fifty-five
(55) years from the Commencement Date.
5.2. The Commencement Date is ,
which is the date City issued the final Certificate of Occupancy ("CofO") for
the Affordable Dwelling Units.
6. This Notice does not contain a full description of the details of all the terms and
conditions of the Agreement or the Declaration. You will need to obtain and read
the Agreement and Declaration to fully understand the restrictions and
requirements which apply to the Property.
[Signatures on the following page]
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-10
CITY OF NEWPORT BEACH,
a California municipal corporation
By:
Grace K. Leung
City Manager
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
By:
Aaron C. Harp
City Attorney
ATTEST:
By:
Leilani I. Brown
City Clerk
2510 W. COAST HWY LLC,
a Delaware limited liability company
Mark Moshayedi
Manager
2510 W. COAST HWY EAT LLC,
a Delaware limited liability company
By:
Mehrdad Moshayedi, Co -Trustee
M. and S. Moshayedi Revocable Trust,
dated September 25, 1998
In
Semira Moshayedi, Co -Trustee
M. and S. Moshayedi Revocable Trust,
dated September 25, 1998
[SIGNATURES MUST BE NOTARY ACKNOWLEDGED FOR RECORDING]
Exhibit(s): Exhibit 1 — Legal Description of Property
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-11
LEGAL DESCRIPTION OF PROPERTY
All that certain real property situated in the County of Orange, State of California,
described as follows:
PARCEL A:
PARCELS 1, 2 AND 3, IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE,
STATE OF CALIFORNIA, AS SHOWN ON A PARCEL MAP FILED IN BOOK 85,
PAGES 30 AND 31 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
PARCEL B:
THAT PORTION OF LOT A OF TRACT NO.919, IN THE CITY OF NEWPORT BEACH,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON MAP RECORDED
IN BOOK 29, PAGES 31 TO 34 INCLUSIVE OF MISCELLANEOUS MAPS, RECORDS
OF SAID COUNTY, DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE SOUTHEASTERLY LINE OF TRACT
NO. 1133, SEAVIEW HEIGHTS, AS SHOWN ON MAP RECORDED IN BOOK 36,
PAGES 13 AND 14 OF MISCELLANEOUS MAPS IN SAID OFFICE, WITH THE
NORTHEASTERLY LINE OF LOT 19 OF LAST SAID TRACT; THENCE ALONG THE
SOUTHEASTERLY PROLONGATION OF SAID NORTHEASTERLY LINE SOUTH
61000' 30" EAST 57.10 FEET TO A POINT IN THE SOUTHWESTERLY
PROLONGATION OF THE NORTHWESTERLY LINE OF THAT CERTAIN LAND
DESCRIBED IN DEED RECORDED IN BOOK 1396, PAGE 168 OF OFFICIAL
RECORDS IN SAID OFFICE;
THENCE ALONG SAID SOUTHWESTERLY PROLONGATION SOUTH 39° WEST,
35.65 FEET TO THE NORTHWESTERLY LINE OF THE LAND DESCRIBED IN DEED
RECORDED IN BOOK 975, PAGE 361 OF OFFICIAL RECORDS IN SAID OFFICE;
THENCE ALONG SAID NORTHEASTERLY LINE NORTH 610 00' 30" WEST 57.10
FEET TO SAID SOUTHEASTERLY LINE; THENCE ALONG SAID SOUTHEASTERLY
LINE NORTH 390 43' 30" EAST, 35.65 FEET TO THE POINT OF BEGINNING.
PARCEL C:
PARCEL 1 OF PARCEL MAP NO. 90-173, IN THE CITY OF NEWPORT BEACH,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 256,
PAGES 25 AND 26 OF PARCEL MAPS, RECORDS OF ORANGE COUNTY,
CALIFORNIA.
Assessor's Parcel Number: 425-471-55 & 425-471-56
2510 W. Coast Highway Affordable Housing Agreement Exhibit D-12
EXHIBIT "E"
AFFORDABLE RENTAL PRICE
[Attached Behind this Page]
2510 W. Coast Highway Affordable Housing Agreement Exhibit E-1
EXHIBIT "E"
AFFORDABLE RENTAL PRICE
(Current Affordable Rent Price & Income Limits for Very Low -Income Households)
2023 MAXIMUM AFFORDABE RENTAL COST FOR VERY LOW INCOME
(0-50% of Orange County Median Income)
Calculator
0-Bedroom
1-Bedroom
2-Bedroom
3-Bedroom
4-Bedroom
Base Rent
$2,132
$2,324
$2,792
$3,792
$4,435
Utility Cost
(Enter utility cost based
on chart below)
- $
- $
- $
- $
- $
Maximum Rent
(After utilities are
subtracted)
$
$
$
$
$
2023 VERY LOW-INCOME LIMITS
0-50% of Orange CountyMedian Income
Persons in
1
2
3
4
5
6
7
8
Household
Maximum
Gross
Household
$50,250
$57,400
$64,600
$71,750
$77,500
$83,250
$89,000
$94,750
Income
2510 W. Coast Highway Housing Agreement Exhibit E-1
Community Resources
2023 Utility Allowance Schedule
The following utility allowances will be used by the Orange County Housing Authority for administration
of the Housing Choice Voucher Program effective October 1, 2022.
Bedroom 0
Gas
Cooking
4
4
7
9
12
13
Heating
16
18
21
22
25
27
Water
Heating
9
10
14
20
26
31
Natural Gas
Base
Charge
4
Electric
Basic
30
35
49
65
82
100
Cooking
10
11
17
21
27
32
Heating
19
22
25
28
30
35
Water
Heating
21
25
31
37
44
51
Other
Air
Conditioning
11
13
19
23
30
38
Water
45
49
71
104
138
171
Sewer
7
7
7
7
7
7
Trash
23
Refrigerator
12
Stove
11
CURRENT UTILITY ALLOWANCE PUBLISHED FOR THE COUNTY OF
ORANGE SECTION 8 PROGRAM CAN BE FOUND AT:
https://www. ochousinq orp/documents-forms
2510 W. Coast Highway Housing Agreement Exhibit E-2
EXHIBIT "F"
TENANT INCOME DOCUMENTATION
[Attached Behind this Page]
2510 W. Coast Highway Affordable Housing Agreement Exhibit F-1
Exhibit "F"
TENANT FILE - INCOME DOCUMENTATION
The tenant file must document the income of the persons occupying an assisted unit.
At a minimum, the file must contain the following:
Application/Certification
A. Name, age and social security number of persons occupying the unit
B. Source and amount of monthly income of persons 18 years of age and
older
C. Students over age of 18 — evidence of full-time status — 12 or more units
D. Date and signature of each person 18 years of age and older
II. Income support documents for each person occupying the unit
A. Current copy of Section 8 certificate/voucher, if applicable
B. Most recent federal income tax return
C. Birth certificate of minors not showing on federal income tax return
D. Social security award statement
E. Retirement benefits statement
F. Two months' most recent, consecutive paystubs
G. Unemployment compensation statement
H. Third -party verifications from employers, banks, or others with first-hand
information about the applicant's finances. These verifications should be in
writing and can include documented telephone interviews.
I. Self-employed
1. Most recent Federal business tax return
2. 12 months business bank statements (12 months personal bank
statements, if used for the business such as for a sole proprietor)
3. Profit and loss statement
III. Asset support documents for each person occupying the unit
A. Three months most recent checking and savings account statements
B. Most recent asset statements such as CDs, 401 K, IRAs, investment
portfolios (stocks, bonds, cryptocurrency, etc.)
IV. Income Recertification support documents
A. Recertification statement completed and signed by all adult persons
occupying the unit certifying:
1. Name, age and social security number of persons occupying the unit
2510 W. Coast Highway Affordable Housing Agreement Exhibit F-1
2. Source and amount of monthly income of persons 18 years of age
and older
3. Students over age of 18 — evidence of full-time status — 12 or more
units
4. Date and signature of each person 18 years of age and older
B. All documents listed in 2, above.
2510 W. Coast Highway Affordable Housing Agreement Exhibit F-2
OMMIU MIS
ANNUAL REPORT
[Attached Behind this Page]
2510 W. Coast Highway Affordable Housing Agreement Exhibit G-1
Exhibit "G"
ANNUAL REPORT
The following information will need to be retained and made available to the City of
Newport Beach on an annual basis.
I. Tenant (Qualifying Household) Roster
A list of all current tenants (Qualifying Households) occupying an Affordable
Dwelling Unit including but not limited to:
• Property Name
• Property Address
• Unit number
• Unit Size
• Number persons in unit
• Tenant Name
• Move -In Date/Initial occupancy date
• Monthly Rent Rate
• Utility Allowance
• Household Income (Refer to Exhibit F)
II. Tenant (Qualifying Household) File
At a minimum, the tenant (Qualifying Household) file must contain the following
information.
• Original and subsequent executed lease agreements;
• Initial occupancy date of current tenant;
• Rental rate;
• Name of current tenant;
• Household size of current tenant;
• Household income of current tenant, and information upon which Developer
relied to qualify current tenant;
• Utility allowance schedule
III. Interest and/or Waiting List
A list of all persons that have expressed an interest in occupying an Affordable
Housing Unit.
2510 W. Coast Highway Affordable Housing Agreement Exhibit G-1