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Home My WebLink AboutMINUTES - 12141993 - 1.108 Contra Costa TO: REDEVELOPMENT AGENCY J° fur- / FROM: Phil Batchelor, Executive Director DATE: December 14, 1993 SUBJECT: First Amendment to Development Loan Agreement-Parkway Estates Housing Project,North Richmond Redevelopment Project Area SPECIFIC REQUEST(S)OR RECOMMENDATIONS(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Approve and authorize the Deputy Director of Redevelopment to execute a First Amendment to the Development Loan Agreement to provide an interim loan of$50,000 from North Richmond Redevelopment funds to Community Housing Development Corporation of North Richmond for an affordable housing project land acquisition costs. FISCAL IMPACT None to the General Fund. ,This Interim Loan of$50,000 would be made from the housing set-aside portion of Bond Proceeds. This appropriation is provided for in the Agency's 1993-94 adopted budget. BACKGROUND/REASONS FOR RECOMMENDATIONS Community Housing Development Corporation.(CHDC) of North Richmond is a nonprofit housing development corporation interested in constructing quality for-sale single family homes in the North Richmond Redevelopment Project Area. It has identified a parcel. at. 217 W. Gertrude Avenue as an appropriate site. The site is approximately 10 acres and is currently undeveloped. CHDC will construct 95 units of single family style for-sale homes. CHDC has successfully negotiated a contract with Port Development to purchase the site contingent on its ability to secure funding. CONTINUED ON ATTACHMENT: YES SIGNATURE: _RECOMMENDATION OF EXECUTIVE DIRECTOR—RECOMMENDA 10 :OF AGE Y COMMITTEE APPROVE OTHER SIGNATURE(S): ON 12/14/93 APPROVED AS RECOMMENDED x OTHER ACTION OF AGENCY VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A x UNANIMOUS(ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT AGENCY ON THE DATE SHOWN. Contact: Beth Lee 646-4076 ATTESTED December 14 , 1993 cc: Community Development PHIL BATCHELOR, Redevelopment Agency AGENCY SECRETARY Auditor-Controller Via Redevelopment BY k,DEPUTY The former North Richmond Redevelopment Project Area Committee and current North Richmond Municipal Advisory Council have reviewed this project and voted unanimously to support the project. CHDC is leveraging the Redevelopment allocation with funds from a variety of sources. It has applied for, and received, funding from the Community Development Block Grant (CDBG) and HOME programs as well as from the Local Initiatives Support Corporation. CHDC is currently working with several lenders to provide favorable construction and permanent financing under their Community Reinvestment Act programs. LISC cannot release their portion of the funds until February 1994. Therefore, CHDC must obtain an interim loan of$100,000 to complete the financing for site acquisition. The Oakland Community Housing, Inc. (OCHI) will provide an interim loan of $50,000 to cover a portion of the LISC funds. CHDC has requested that the Redevelopment Agency provide the remaining $50,000 necessary to secure the land. The Redevelopment Agency and OCHI interims loans will be repaid upon release of the LISC funds. The RDA funds will be structured as an interim loan, secured by a promissory note and deed of trust against the land and planned improvements, with a 3%interest rate. The term of the loan will be two years. The loans may be forgiven at the sole discretion of the Agency Board if necessary to maintain the affordability of the units. Staff analyses indicate that the potential benefits to the Project Area from the project are significant: 1. The construction of new affordable housing will assist the Agency/County in meeting its affordable housing requirements; 2. Providing affordable for-sale single family homes will further stabilize the North Richmond community;and 3. CHDC will also sign an agreement to hire North Richmond residents for new jobs during construction. . �� Contra Costa TO: REDEVELOPMENT AGENCY J, Coin/ FROM: Phil Batchelor, Executive Director DATE: December 14, 1993 SUBJECT: Second Amendment of the Development Loan Agreement-Parkway Estates Housing Project,North Richmond Redevelopment Project Area SPECIFIC REQUEST(S)OR RECOMMENDATIONS(S) &BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Approve and authorize the Deputy Director Of Redevelopment to execute a Second Amendment to the Development Loan Agreement and loan agreements related thereto the Agency and Community Housing Development Corporation of North Richmond. Approve an additional loan allocation of $200,000, for a total loan of $500,000, from North Richmond Redevelopment Housing Set-Aside Fund and the Affordable Housing Special Revenue Fund to Community Housing Development Corporation of North Richmond for affordable housing land acquisition, silent second mortgage, and downpayment assistance costs. FISCAL IMPACT None to the General Fund. This Development Loan Agreement provides$199,000 in the housing set-aside portion Bond Proceeds, $203,040 in the housing set-aside and capital portions of the redevelopment tax increments, and $97,960 in the Affordable Housing and Special Revenue Fund No. 111300. This appropriation is provided for in the Agency's 1993-94 adopted budget. BACKGROUND/REASONS FOR RECOMMENDATIONS Community Housing Development Corporation (CHDC) of North Richmond is a nonprofit housing development corporation interested in constructing quality for-sale single family homes in the North Richmond Redevelopment Project Area. It has identified a parcel at 217 W. Gertrude Avenue as an appropriate site. The site is approximately 10 acres and is currently undeveloped. CHDC will construct 95 units of single family style for-sale homes. CHDC has successfully negotiated a contract with Port Development to purchase con ' gent on its ability to secure funding. CONTINUED ON ATTACHMENT: YES SIGNATURE: � �/Z _RECOMMENDATION OF EXECUTIVE DIRECTOR_RECOMN ATION OFA ENCY COMMITT>E APPROVE OTHER SIGNATURE(S): ACTION OF AGENCY ON 12/14/93 APPROVED AS RECOMMENDED x OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A x UNANIMOUS(ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT AGENCY ON THE DATE SHOWN. Contact: Beth Lee 646-4076 ATTESTED December 14 , 1993 cc: Community Development PHIL BATCHELOR, Redevelopment Agency AGENCY SECRETARY Auditor-Controller Via Redevelopment BY CL OJ 6 ,DEPUTY The North Richmond Municipal Advisory Council have reviewed this project and voted unanimously to support the project. CHDC is leveraging the Redevelopment allocation with funds from a variety of sources. It has applied for, and received, funding from the Community Development Block Grant (CDBG) and HOME programs as well as from the Local Initiatives Support Corporation. CHDC is currently working with several lenders to provide favorable construction and permanent financing under their Community Reinvestment Act programs. In June,HUD informed the County that, due to the use of CDBG funds to acquire a portion of the site, all units in the proposed project must be affordable to low and moderate income households. On July 21, 1993, the County requested that this requirement be waived as there is insufficient public subsidy in the project to permit all units to be affordable at this level. Further, to impose this requirement on this project would render it infeasible and the County will lose the opportunity to provide 18 units of additional affordable housing in Contra Costa. The HUD Region IX Community Planning and Development (CPD) staff have reviewed the County's waiver request and forwarded it to the Washington office with a recommendation for approval. The Washington CPD staff have also recommended approval and have forwarded the issue to the Office of the HUD Legal Cousel. HUD Legal Counsel has not yet rendered an opinion on the waiver request. In addition, recent events have created an urgent need to find alternative funding sources if HUD does not provide a waiver prior to the expiration of the current option to acquire the proposed site. The project sponsor has been in negotiations to acquire the North Richmond site for over a year. The current option expired on November 15, 1993. While the owner has agreed to extend the option to December 15th, due to financial pressures imposed by secondary creditors, he will not be able to extend the option beyond this point and the sponsor will lose site control, placing the entire project at risk. The additional$200,000 in loans from the Redevelopment Agency Bond Proceeds and Affordable Housing and Special Revenue Fund would be repaid in the event that HUD eventually provides the waiver request. The funds will be structured as a loan, secured by a promissory note and deed of trust against the land and planned improvements,with a 3%interest rate. The term of the loan will be two years,with provisions to utilize the funds as silent second mortgages and downpayment assistance for qualified lower-income households. The loans may be forgiven at the sole discretion of the Agency Board if necessary to maintain the affordability of the units. Staff analyses indicate that the potential benefits to the Project Area from the project are significant: 1. The construction of new affordable housing will assist the Agency/County in meeting its affordable housing requirements; 2. Providing affordable for-sale single family homes will further stabilize the North Richmond community;and 3. CHDC will also sign an agreement to hire North Richmond residents for new jobs during construction. s