HomeMy WebLinkAboutMINUTES - 01151985 - 1.45 TO: BOARD OF SUPERVISORS
FROM: Anthony A. Dehaesus z
- Contra
Director of Planning Costa
DATE: January 7, 1985 County
SUBJECT: Supplementary Loans of Community Development Block Grant Funds to Multifamily
Rental Projects
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION
1. Approve recommendation of the Housing and Community Development Advisory
Committee and the Director of Planning to loan 1984-85 Community Development Block
Grant Funds in the form of subordinate loans, subject to conditions as specified, to the
owners and projects as follows:
Not to Exceed
# of CDBG
Owner Development Location Units Loan Amount
1. Westwood Partners Westwood Apts, Antioch 60 $ 187,500*
2. Allied Investment Riviera Apts. Antioch 44 $ 75,000*
3. Eugene Grillo Grillo Gardens Danville 10 $ 17,500*
4. Biggs Realty Del Norte West El Cerrito 20 $ 12,500*
*Amount reflects 50% of subordinate loan amount; the remaining 50% is proposed to be provided
by the Housing Authority.
2. Authorize the Director of Planning, for and in the name and on behalf of the County, to
take actions necessary and to execute all documents necessary or desirable to effectuate
the,subordinate financing.
BACKGROUND
I. Multi-Family Revenue Bond "Pooled Development" Program
Per the Board's direction, the Planning Department has been preparing a revenue bond issue for a
grouping of multi-family rental housing projects. A sale of approximately $15 million in revenue
bonds for the eight projects listed on Exhibit A, is currently scheduled for the week of January
14th.
Under the program structure a lender-World Savings and Loan - originates and services loans
made through the bond program.. World Savings also establishes a maximum loan amount it will
originate given its underwriting standards. In some cases this loan amount is less than the
amount necessary to induce the development to proceed with.the project, i.e., a financial gap
exists. It is the policy of the Board of Supervisors to use Community Devel pment Block Grant
Funds, and Housing Authority' Reserve Funds to close, financial gaps in or er to facilitate the
production of affordable rental housing.
CONTIN D ON ATTACHMENT: YES SIGNATURE: f /'
RMMENDATION OF COUNTY ADMINISTRATOR REC�MME DATI A COMMITTEE
APPROVE OTHER
SIGNATURE(S)
ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER
I
VOTE OF SUPERVISORS
UNANIMOUS (ABSENT ) I HEREBY CERTIFY THAT THIS IS A TRUE
AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN
ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD
OF SUPERVISORS ON THE DATE SHOWN.
�C
CC: Planning ATTESTED v
Housing Authority PHIL ATCHELOR, CLE K OF THE OARD OF
World Savings & Loan SUPERVISORS AND COUNTY ADMINISTRATOR
M3e2/7-e3 if BY DEPUTY `
i
Board of Supervisors
page two
January 7, 1985
II. Projects With Subordinate Financing Needs
Four projects included in the revenue bond issue have a need for additional subordinate financing.
The projects are as shown on Exhibit B.
III. Terms of Subordinate Loans
1. Westwood Apartments: It is expected that this transaction will ultimately involve the
State Rental Housing Construction Program (RHCP) program; however, because RHCP is
premanent financing only, the loan package must initially be written without RHCP.
a) In the expected event that RHCP does come into play the terms of the loan would be:
Amount: $269,100 (est.); exact amount would be a function of final development
costs.
Interest Rate: 3 - 4%
Payment: Deferred until cash flow is sufficient to cover debt; interest accrues
during deferrment period.
Term: Amortized at 30 years with balloon in 12 years; may be extended for the term
of the regulatory agreement; loan due and payable upon sale and transfer of property.
Security: Third Deed of Trust -
Additional Requirements: a) Developer's equity must be at least 10%; b) developer's
return on equity is limited to 6%; and c) if project sells for more than the debt owed
the County will share in appreciation up to a fixed amount that would allow the
County to realize an effective 8% interest rate on its loan.
b) In the unlikely event that RHCP does not come into play the terms of the County
loan would be:
Amount: $375,000
Interest Rate: 10%
Payment: Deferred until cash flow is sufficient to cover debt; interest accrues
during the deferment period.
Security: Second Deed of Trust
Term: Maybe extended for up to 8 years if World loan is extended; amortized at 30
years with balloon in 12 years; may be extended for up to 8 years if World loan is
extended; loan due and payable upon sale and transfer of property.
2. Riviera Apartments
Loan Amount: $150,000
Interest Rate: 10%
Payment: Deferred until cash flow permits; interest accrues during deferrment period.
Amortized at 30 years, balloon in 12 years; may be extended for up to eight years if World
loan is extended.
Term: Loan due and payable upon sale and transfer of property.
Security: Second Deed of Trust
Additional Requirements: If project development costs are less than the projected
$2,976,838, the County and the owner shall share equally (dollar-for-dollar) in said
cost savings, with a maximum amount of $50,000 being subject to prepayment.
3. Grillo Gardens:
Amount: $35,000
Board of Supervisors
page three
January 7, 1985
3. Grillo Gardens:
Amount: $35,000
Interest Rate: 10%
Payment: Deferred if cash flows are insufficient to cover debt; interest accrues during
deferrment period (based on current information it is expected that repayment would start
immediately).
Term: Amortizing at 12 years; loan due and payable upon sales and transfer of property.
Security: Second Deed of Trust
4. Del Norte West:
Amount: $25,000
Interest Rate: 10%
Payment: Deferred until cash flow is sufficient to cover debt; interest accrues during
deferment period.
Term: Amortizing at 30 years with balloon in 12 years; may be extended for up to eight
years if World loan is extended; loan due and payable upon sale or transfer of property.
Security: Second Deed of Trust.
EXHIBIT A
1985A Project in Multi-Family Program
Number of
Owner/Project Name Location Number of Units Affordable Units
Allied Investment/ Claudia & L St., 44 9
Riviera Apartments Antioch
Biggs Realty/ Liberty & Hill St., 20 4
Del Norte West El Cerrito
Eugene Grillo/ 184 Eldorado Ave., 10 3*
Grillo Gardens Danville
Kentwood Investors/ Pine & Howe Rd., 62 10**
Pines Apartment Martinez
Lockwood/Muir Park Morello & Arnold, 96 15**
Martinez
Nebergall Construction/ 1030 Dainty, 13 3
Dainty Apartments Brentwood
Westwood Partners/ Buchanan & Somersville 60 18***
Wesxwood Apartments Antioch r'
Park Meadows/ Rohnert Park 61 13
Park Meadows Apts. (Sonoma County)
*Includes 2 units via bond issue requirements, and 1 additional unit per city density bonus requirements.
**Project in target area, therefore 15% are affordable.
.*.**With State RHCP 30% of units must be affordable.
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