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Agenda Item - 2022-09-20 - Number 5.1 - Resolution 22-31- Amendment 1 to IGA with Metro for the BFR Staging Property 5.1 tik 4� COUNCIL REPORT � r o ORE00t.4 Subject: Resolution 22-31, Extending Timeline for Sale of Boones Ferry Road Property Meeting Date: September 20, 2022 Staff Member: Scot Siegel, Director Report Date: September 7, 2022 Department: Community Development Action Required Advisory Board/Commission Recommendation ❑ Motion ❑ Approval ❑ Public Hearing ❑ Denial ❑ Ordinance ❑ None Forwarded ❑X Resolution ❑X Not Applicable ❑ Information Only Comments: ❑ Council Direction ❑X Consent Agenda Staff Recommendation: Adopt Resolution 22-31. Recommended Language for Motion: Move to adopt Resolution 22-31. Project/ Issue Relates To: Affordable housing Issue before Council (Highlight Policy Question): ❑X Council Goals/Priorities ❑Adopted Master Plan(s) ❑Not Applicable ISSUE BEFORE COUNCIL Whether to extend the timeline for closing on the sale of the City's former construction staging property on Boones Ferry Road (subject property) to Metro. EXECUTIVE SUMMARY On June 21, 2022,the City Council adopted Resolution 22-18 approving an Intergovernmental Agreement (IGA) ("property sale IGA")for the sale of subject property to Metro for development of multifamily affordable housing contingent upon the Council's approval of a development solicitation. Council also adopted Resolution 22-19 approving a "development solicitation IGA" Respect. Excellence. Trust. Service. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY Page 2 between Metro,the City, and the Housing Authority of Clackamas County(HACC)for preparation of the development solicitation. Closing is to occur within 150 days from execution of the sales agreement on June 28, 2022, or not later than November 25, 2022. Metro has commenced a stakeholder engagement process in coordination with the City and HACC for the purpose of drafting the solicitation, which is expected to conclude by November 2022. The parties will need additional time to finalize the development solicitation for presentation to their respective governing bodies, necessitating additional time for closing on the property sale. Metro has also committed additional funds to HACC for development of the project, requiring a minor amendment to the development solicitation IGA. Resolution 22-31 authorizes the City Manager to execute amendments to both agreements: • Amend the property sale IGA to extend the latest closing date to January 20, 2023. (Exhibit 1) • Amend the development solicitation IGA to reflect Metro's updated financial contribution to HACC(Exhibit 2) BACKGROUND The proposed amendments are part of the City's ongoing work toward developing affordable workforce housing on the subject property, consistent with the Comprehensive Plan and City Council goals. ATTACHMENTS 1. Resolution 22-31, with Exhibit 1 and 2 Respect. Excellence. Trust. Service. 503-635-0215 380 A AVENUE PO BOX 369 LAKE OSWEGO,OR 97034 WWW.LAKEOSWEGO.CITY ATTACHMENT 1 RESOLUTION 22-31 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE OSWEGO AMENDING INTERGOVERNMENTAL AGREEMENTS BETWEEN THE CITY OF LAKE OSWEGO AND METRO (AMENDMENT 1) FOR THE SALE OF THE BOONES FERRY ROAD STAGING PROPERTY FOR DEVELOPMENT OF AFFORDABLE HOUSING WHEREAS, the City of Lake Oswego supports the creation of new multi-family affordable housing options within the City, consistent with the Lake Oswego Comprehensive Plan; WHEREAS, the voters of the Metro region approved Ballot Measure 26-199 (2018), providing $652.8 million dollars in funding to build new affordable housing in the region (the "Metro Housing Bond"), of which the Housing Authority of Clackamas County (HACC) has been allocated $116,188,094 to build new affordable housing in Clackamas County, via an Intergovernmental Agreement between HACC and Metro; WHEREAS, HACC has created a Local Implementation Strategy (LIS) outlining approaches for achieving its share of affordable housing unit production targets required by the Metro Housing Bond, and the LIS supports the creation of affordable housing opportunities in Lake Oswego; and WHEREAS, the City owns approximately 1.4 acres at the intersection of Boones Ferry Road and West Sunset Drive ("subject property") that was purchased in 2018 for use as a construction staging area for the Boones Ferry Road Improvement Project; and WHEREAS, on June 21, 2022, the City Council adopted Resolution 22-18 approving an intergovernmental agreement for the sale of subject property to Metro for development of multifamily affordable housing contingent upon the Council's approval of a development solicitation prepared by Metro; and WHEREAS, on June 21, 2022, the City Council adopted Resolution 22-19 approving an intergovernmental agreement between the City of Lake Oswego, Metro, and the Housing Authority of Clackamas County (HACC) for preparation of a development solicitation for the subject property; and WHEREAS, Metro has commenced a stakeholder engagement process for the purpose of drafting a development solicitation, which is expected to conclude by November 2022, requiring additional time for closing on the property sale; and WHEREAS, Metro has committed additional funds to HACC for development of housing on the subject property; NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Lake Oswego that: Section 1. The City Manager is authorized to execute Amendment 1 to the Intergovernmental Agreement with Metro, extending the property sale closing date and updating Resolution 22-31 Page 1 of 2 other facts not related to the property sale, in substantially the form attached as Exhibit 1. Section 2. The City Manager is authorized to execute Amendment 1 to the Intergovernmental Agreement with Metro and the HACC, updating Metro's contribution to the project, in substantially the form attached as Exhibit 2. Section 3. Effective Date. This Resolution shall take effect upon passage. Considered and enacted at the regular meeting of the City Council of the City of Lake Oswego on the 20th day of September 2022. AYES: NOES: EXCUSED: ABSTAIN: Joseph M. Buck, Mayor ATTEST: Kari Linder, City Recorder APPROVED AS TO FORM: Evan Boone, City Attorney Pro Tern Resolution 22-31 Page 2 of 2 DocuSign Envelope ID:58187FFB-3BC2-4848-BB01-7907AA1 E321 E EXHIBIT 1 Metro Contract 938070A FIRST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT OF PURCHASE AND SALE THIS FIRST AMENDMENT(the "Amendment") is made and entered into as of the last date of signature below (the "Effective Date"), by and between the City of Lake Oswego ("Seller"), and Metro, an Oregon municipal corporation ("Metro"). RECITALS A. Seller and Metro are parties to an Intergovernmental Agreement of Purchase and Sale, effective June 28, 2022 (the "Agreement")for real property located at the intersection of Boones Ferry Road and West Sunset Drive, in the City of Lake Oswego, Clackamas County, Oregon, as legally described in Exhibit A of the Agreement. B. The Agreement provides that Closing occur no later than 150 days after the effective date of the Agreement. By the terms of the Agreement, Closing is currently scheduled for November 25, 2022. Seller and Metro (the "parties") concur that additional time is needed for public engagement, developer solicitation and City Council approval of the sale of the Property, pursuant to Section 7 of the Agreement.The parties wish to extend Closing and Metro's Property Inspection Period on the terms and conditions set forth in this Amendment. C. Capitalized terms which are used in this Amendment shall have the meanings given to them in the Agreement except as amended by this Amendment. In consideration of the foregoing and the mutual covenants of the parties set forth in this Amendment, the receipt and adequacy of which are acknowledged,the parties agree as follows: TERMS 1. Section 3, Closing Date,will be replaced with the following provision: "This transaction shall close no later than January 20, 2023, unless otherwise extended as set forth herein (the "Closing Date" or"Closing"). If the Inspection Period is extended, the Closing Date will be extended by an equal number of days. Closing will occur at the office of the Title Company." 2. Section 5, Metro's Due Diligence and Inspections,will be replaced with the following provision: "Metro will have until December 22, 2022 (the "Inspection Period")to examine the title to the Property and address or accept the Unacceptable Exceptions, perform its environmental and other due diligence, determine if Metro's Conditions Precedent to Closing are satisfied and otherwise determine that the Property is satisfactory for Metro's use.This period shall be automatically extended if the City fails to timely deliver the Due Diligence Documents, as set forth below." 3. Counterparts; Delivery. This Amendment may be executed in counterparts. Delivery of this executed Amendment by e-mail or facsimile shall be sufficient to form a binding agreement. Page 1—First Amendment to Intergovernmental Agreement of Purchase and Sale DocuSign Envelope ID:58187FFB-3BC2-4848-BB01-7907AA1 E321 E 4. Effect of Amendment. The parties ratify and confirm the Agreement. Except as amended by this Amendment,the Agreement is unmodified and in full force and effect. IN WITNESS WHEREOF, Seller and Metro have executed this Amendment as of the Effective Date. METRO, SELLER: an Oregon municipal corporation: By: By: Marissa Madrigal Martha J. Bennett Chief Operating Officer City Manager Date: Date: Page 2—First Amendment to Intergovernmental Agreement of Purchase and Sale DocuSign Envelope ID:AOOEFD4A-35DB-4EA8-BC9B-F944C603CEDC EXHIBIT 2 Metro Contract No. 938070 and 938070A 1ST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT FOR DEVELOPER SOLICITATION AND SELECTION THIS 1ST AMENDMENT TO INTERGOVERNMENTAL AGREEMENT FOR DEVELOPER SOLICITATION AND SELECTION ("Amendment") is entered into by and between Metro, a municipal corporation established pursuant to ORS Chapter 268 and the Metro Charter ("Metro"), the Housing Authority of Clackamas County ("HACC"), and the City of Lake Oswego (the "City"), an Oregon municipal corporation (each a "Party"; collectively, "the Parties"). This Agreement is effective as of , 2022 (the "Effective Date") RECITALS A. The Parties entered into an Intergovernmental Agreement for Developer Solicitation and Selection, effective August 15, 2022, Metro Contracts #938070 and #938070A, (the "IGA"), providing the terms and conditions under which the Parties are to cooperate with each other in a developer solicitation and selection process for the redevelopment of the "Boones Ferry Property" hereafter defined, and establishing the amount of Clackamas County's Metro Affordable Housing Bond Measure Site Acquisition Program ("SAP") funds ($7,150,000) that were to be committed to the acquisition, site preparation and development of the Boones Ferry Property. B. On, June 28, 2022, Metro and the City of Lake Oswego entered into an Intergovernmental Agreement for Purchase and Sale (Metro Contract#937973), governing the sale to Metro of the "Boones Ferry Property" - six undeveloped tax lots at the intersection of Boone's Ferry Road and West Sunset Drive owned by the City of Lake Oswego - for redevelopment into affordable housing using Metro Affordable Housing Bond Measure ("Metro Measure") funds. C. HAAC has requested that, instead of committing $7,150,000 of the $12.9 million of SAP funds allocated to HAAC under the Metro Measure to the Boones Ferry Property and reserving the balance for a future acquisition, HAAC opts to commit the full $12,909,788 to the acquisition, site preparation and development of the Boones Ferry Property. Page 1 — First Amendment to Intergovernmental Agreement for Developer Solicitation and Selection DocuSign Envelope ID:AOOEFD4A-35DB-4EA8-BC9B-F944C603CEDC AGREEMENT 1. Adjusted HAAC Contribution. HAAC agrees to allocate the full $12,909,788 of its Metro Affordable Housing Bond Measure Site Acquisition account to the Boones Ferry Property. Section 6.4.3 of the IGA is thus modified as follows: 6.4.3 An all-in contribution of seven million one hundred fifty thousand and 00/100 twelve million nine hundred nine thousand seven hundred eighty eight dollars ($7,150,000.00). ($12,909,788). This contribution will be inclusive of Metro's acquisition, due diligence, and other expenses incurred by Metro in preparing the site for disposition, including but not limited to any environmental investigation, mitigation and administrative compliance costsfor the site. 2. Metro Contact for Notices. Metro's point of contact has changed. Section 14 of the IGA is modified as follows: Metro Elissa Ge tlerAndy Shaw, Planning Director 600 N.E. Grand Avenue Portland, OR 97232-2736 Email: Elissa.Gertler@oregonmetro.govAndy.Shaw@oregonmetro.gov Phone:503 797 1752 503-797-1763 3. Metro and LIP hereby ratify and confirm this addition and modification to the terms of the IGA. All other terms and conditions set forth in the IGA are hereby confirmed and remain in full force and effect. Page 2— First Amendment to Intergovernmental Agreement for Developer Solicitation and Selection DocuSign Envelope ID:AOOEFD4A-35DB-4EA8-BC9B-F944C603CEDC 4. Counterparts. This Amendment may be executed in any number of counterparts, each of which will be an original, but all of which will constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the Effective Date. Metro Housing Authority of Clackamas County By: By: Name: Marissa Madrigal Name: Tootie Smith Title: Chief Operating Officer Title: Chair Date: Date: City of Lake Oswego By: Martha Bennett Title: City Manager Date: Page 3— First Amendment to Intergovernmental Agreement for Developer Solicitation and Selection