HomeMy WebLinkAbout09-28-2010 RDA Item No.6 CITY OF
LA K5 OLSINORE
DREAM EXTREME,,
REPORT TO REDEVELOPMENT AGENCY
TO: HONORABLE CHAIRMAN
AND MEMBERS OF THE REDEVELOPMENT AGENCY
FROM: ROBERT A. BRADY
EXECUTIVE DIRECTOR
DATE: SEPTEMBER 28, 2010
SUBJECT: AFFORDABLE HOUSING LOAN AGREEMENT (LAKEVIEW
APARTMENTS)
Background
Lakeview Apartments consists of two adjoining properties located at 32209 & 32211
Riverside Drive. The property is operated and managed as a single 152 unit rental
complex but technically consists of two phases known as Lakeview I and Lakeview II.
An experienced affordable housing developer, Bentall Residential, L.P., has proposed
to acquire both phases and rehabilitate the entire project. In connection with that
acquisition and rehabilitation, the developer has secured both tax credits and a
permanent loan from the California Housing Finance Agency. In order to fill the funding
gap, the developer requested financial assistance from the Agency earlier this year.
On July 13, 2010, the Agency Board directed staff to prepare the necessary agreements
and related documents evidencing a $1.1 million loan from the Agency's Low and
Moderate Income Housing Fund to assist in the acquisition and substantial rehabilitation
of the Lakeview II portion of the Lakeview Apartments. Although the Agency's financial
assistance is directed at Lakeview II, the Agency has required that both Lakeview I and
Lakeview II be subject to a 55 -year affordability covenant.
The developer anticipates that the funding from CaIHFA will occur on October 14, 2010
and construction will begin on December 1, 2010. The rehabilitation will be completed
in approximately six months.
Discussion
The Loan Agreement provides for a $1.1 million loan with 1% annual interest. The loan
terms provide for annual payment based on a calculation of an amortized schedule and
residual receipts (excess cash flow after payment of expenses and other debt service).
AGENDA ITEM NO. 6
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Lakeview Apartments Affordable Housing Project
September 28, 2010
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Any outstanding loan balance is due at the expiration of the 55 -year affordability period.
The loan will be secured by a deed of trust and is also conditioned upon the recordation
of a Regulatory Agreement with affordable housing covenants assuring that the rental
units are made available to qualified households at an affordable rent. The Loan
Agreement and the Regulatory Agreement require the project to be professionally
managed in accordance with an approved Management Plan including appropriate
tenant selection criteria, property maintenance and related matters.
Due to the volume of the documents comprising the Loan Agreement, the Agency
Board will be provided with a copy separately from the Agenda. A copy of the Loan
Agreement is also on file in the City Clerk's office and will also be available to any
member of the public upon request.
Fiscal Impact
$1,100,000 from the Agency's Low and Moderate Income Housing Fund for Fiscal Year
2010/11.
Recommendation
That the Agency Board take the following actions:
1. Approve the Affordable Housing Loan Agreement in substantially the form
provided and authorize the Executive Director to execute the final form of
the Loan Agreement subject to such minor modifications as approved by
Agency Counsel; and
2. Authorize the Executive Director to execute any other ancillary documents
necessary to effectuate the Agency loan and affordability covenants.
Prepared by: Barbara Leibold, Agency Counsel
Approved by: Robert A. Brady
Executive Director
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City of Lake Elsinore
Agenda Distributuion Checklist
Binders
el Mayor Melendez
iv 2 Mayor Pro Tem Bhutta
✓ 3 Councilmember Hickman
✓4Councilmember Magee
1.-
5 Robert Brady
s---6 Riley
!� 7 Ken Seumalo
-- 13 — Pat Kilroy •
• 14. E. - -= - - -. - . : - 1 • IP
- Park Dennis
cultural Center Copy
12
13
Enitre Agenda (Not in Binder)
�4 Councilmember Buckley
City Attorney (Mail FedEx)
kfg'City Clerk
✓17 Chief of Police
18
19
E -mail Complete Agenda
Justin Carlson
)(if t Cuui y
Robin Chipman
Agenda Only
City Treasurer
/Kris Herrington
4/ Fire Chief
Notes:
1==> First 7 copies for City Council, City Attorney, Counter Copy
i=> 25 copies of agenda packets to be made 3 hole punched, 2 sided
b Scan into City Clerk Laserfiche as TIFF file
cj Make 60 blue Agenda copies for meeting
b Mail City Attorney's Agenda Fed Ex
b Agenda books to be ready by 5pm on Thursday
c Post agenda outside 2 to a page
b Post on City web site