HomeMy WebLinkAboutMINUTES - 12072010 - C.34RECOMMENDATION(S):
APPROVE and AUTHORIZE the Conservation and Development Director, or designee, to
execute legal documents that terminate the original borrower’s obligations under a
Community Development Block Grant (CDBG) loan and enter into a new loan with the
same principal balance ($452,550), secured by the same property at 1579 N. Mitchell
Canyon Road, Clayton, with Future Colours Corp. ($452,550).
FISCAL IMPACT:
No General Fund impact. Community Development Block Grant (CDBG) funds are
provided to the County on a formula allocation basis through the U.S. Department of
Housing and Urban Development (HUD). CFDA# 14.218
BACKGROUND:
In 1986, the County loaned Harmony Home $119,600 in Community Development Block
Grant (CDBG) funds for the purchase of 1579
APPROVE OTHER
RECOMMENDATION OF CNTY
ADMINISTRATOR
RECOMMENDATION OF BOARD
COMMITTEE
Action of Board On: 12/07/2010 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
Contact: Kara
Douglas 335-7223
I hereby certify that this is a true and correct copy of an action taken and entered on the
minutes of the Board of Supervisors on the date shown.
ATTESTED: December 7, 2010
David J. Twa, County Administrator and Clerk of the Board of
Supervisors
By: , Deputy
cc:
C.34
To:Board of Supervisors
From:Catherine Kutsuris, Conservation & Development Director
Date:December 7, 2010
Contra
Costa
County
Subject:Approval of Community Development Block Grant Legal Documents for Future Colours Group Home,
Clayton
BACKGROUND: (CONT'D)
N. Mitchell Canyon Road, Clayton. At that time, Harmony Home executed a Note
through which they promised to pay the County upon sale of the property 64.65 percent
of the sales price of the property.
A Deed of Development Rights was recorded through which Harmony Homes granted to
the County the right to all sales proceeds or other income from disposition or sale of the
property.
The Note and Deed of Development Rights are inconsistent. The County has been
renegotiating Deed of Development Rights as properties are being sold or transferred.
The County has been accepting payments based on a shared appreciation model. The
Note is consistent with this current policy.
The Deed of Development Rights states that Harmony Home is to use the property to
provide living arrangements for six adults and conduct a program that provides
independent living skills, job development skills, essential care, and public transportation
skills. Harmony Home confirms that this is the current use of the property.
Harmony Home now wishes to sell the property to Future Colours. Future Colours
wishes to purchase the home and continue to operate it as an adult residential facility.
Future Colours is an approved vendor with the Regional Center of the East Bay.
Harmony Home and Future Colours have entered into a purchase agreement. The agreed
sales price is $700,000 and is supported by an appraisal. The purchase agreement
assumes that the County will transfer the CDBG obligation to Future Colours. This is
calculated to be 64.65 percent of $700,000, or $452,550. The remaining $247,450 will be
loaned to Future Colours by Harmony Home. The Harmony Home deed of trust will be
recorded behind the County.
County staff has prepared new loan documents, which are in conformance with our
current policies and programs. The new loan terms include the following:
• New loan amount of $452,550, which is the original principal amount and 64.65 percent
of the appreciation
• Payments are deferred until sale or transfer of the property
• The loan repayment will be original principal amount plus 64.65 percent of the
appreciated value of the property
• The loan is due November 1, 2030.
County Counsel has approved the attached legal documents as to form.
The legal documents include the following:
CDBG Loan Agreement
CDBG Promissory Note
CDBG Regulatory Agreement
CDBG Deed of Trust and Security Agreement
CONSEQUENCE OF NEGATIVE ACTION:
Harmony Homes would be forced to repay the CDBG loan and Future Colours would not
be able to purchase and continue operation of this home.
CHILDREN'S IMPACT STATEMENT:
N/A. Children are not served by this project.
CLERK'S ADDENDUM
RELISTED to December 14, 2010.
ATTACHMENTS
CDBG Loan
CDBG Promissory Note
CDBG Regulatory Agreement
CDBG Deed of Trust