HomeMy WebLinkAboutMINUTES - 10191993 - 1.67 1 . 67
HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
TO: BOARD OF COMMISSIONERS DATE: October 19, 1993
FROM: Richard J. Martinez, Executive Director cc:
SUBJECT: CASA DEL RIO SENIOR HOUSING DEVELOPMENT:
AGREEMENT FOR CONSULTING SERVICES WITH COMMUNITY ECONOMICS, INC.
I. RECOMMENDED ACTION
APPROVE Agreement for Consulting Services with Community Economics, Inc. and AUTHORIZE the
Executive Director to execute the Agreement, on behalf of the Housing Authority of the County of Contra Costa, to
provide assistance in obtaining Federal Low Income Housing Tax Credits (LIHTC) for Casa del Rio Senior Housing
Development and in restructuring the project to receive syndication proceeds from the tax credits.
H. FINANCIAL IMPACT:
No General Funds required. Payment under this contract are charged to the project budget.
III. REASONS FOR RECOMMENDATION/BACKGROUND
The existing funding for the construction of Casa del Rio comes from the California Housing Finance Agency
(CHFA),State Rental Housing Construction Program (RHCP),Antioch Development Agency(ADA),Bank of America
Community Development Bank(BACDB),and Housing Authority sources as well as several smaller loans such as from
the County of Contra Costa Housing Bond Trust Funds. Each of these has its own set of requirements for use and
repayment. These multiple sources barely provide sufficient funds to complete the project. Should any substantial
unforseen costs be incurred prior to completion, the Authority would have to seek additional funding once again. In
light of this potential,the Authority applied for the Federal Low Income Housing Tax Credit (LIHTC) program which
provides substantial syndication proceeds as additional financial resources for the project. Through the LIHTC
program, we would be able to restructure the existing financing to make the project more feasible over its life. It is
anticipated that we could receive approximately$3 Million in equity from syndicating tax credits for the project. This
would allow us to:
a. Recapture all the Authority's investments in the project;
b. Eliminate the need for the Authority's $144,670 Letter of Credit held by Bank of America;
C. Repay the County's $195,000 loan under an accelerated schedule with no adverse impact on the
Authority's financial picture;
d. Reduce the CHFA loan by half,or approximately$1 million,and substantially reduce the debt service;
e. Reduce the RHCP loan by approximately a half million; and
CONTINUED ON ATTAcw-,mv1:--L- SIGNATURE I !r l
RRCOM[ME VDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMM'=
APPROVE OTHER
SIGNATURE(S) nn\\
ACTION OF BOARD ON Cv 0 4 `Z APPROVED AS RECOMMENDED �_ OTHER
VOT�E/OF COMMISSIONERS
UNANIMOUS(ABSENT I HEREBY CERTIFY THAT TI-US IS A TRUE AND CORRECT
AYES: NOES: COPY OF AN ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF COMMISSIONERS ON THE
DATE SHOWN.
ATTESTED
Phil Batchelor,Clerk of the Board of 6mmissioncls
BY f��l p� n f Q Q�o ,DEPUTY
f. Potentially generate additional funding for the Housing Authority, as the developer.
The Authority has submitted its application to the California Tax Credit Allocation Committee (ICAC) and
should hear in late November if it will be awarded a tax credit allocation. Should the project be awarded an allocation,
it will be necessary to package the project financing, to develop a non-profit affiliate of the Authority to act as the
managing general partner of a limited partnership,and to establish the limited partnership. The limited partnership
would be composed of the Authority's non-profit affiliate and a for-profit investor and would buy the project from the
Authority. As part of the new ownership entity,the for-profit limited partner would be able to take advantage of the
tax credits in exchange for providing the $3 Million in equity discussed above. Through an agreement between the
Authority and the limited partnership, the partnership would own the project for first 15 years and then transfer the
project back to the Authority at the end of those 15 years.
Due to the complex regulations and policies of the LIHTC and the other funding sources, the Housing
Authority requires the assistance of special experts in preparing the necessary documentation and in negotiating with
investors required to access the tax credits. Staff is informed that Community Economics, Inc. has had extensive
successful experience negotiating with the lenders and numerous syndicators/investors regarding the use of tax credits
on many similar projects.
At its regular meeting on October 18, 1993, the Advisory Housing Commission recommended that the Board
of Commissioners approve the Agreement and authorize the Executive Director to execute the Agreement on behalf of
the Housing Authority.
IV. CONSEQUENCE OF NEGATIVE ACTION:
A decision by the Board of Commissioners not to approve, and authorize execution of, the Agreement, may
make it more difficult for the Housing Authority to restructure the project financing to consolidate the loans, reduce
the debt service, and make the project more financially sound.
mlg:c\bo-cei-2.ash
SHORT FORM SERVICE CONTRACT
Number CDR-CEI-2
Fund/Org. #
Account #
Other#
1. Contract Identification.
Subject: Consultant Services for setting up Casa del Rio under the
Low Income Housing Tax Credit Program
2. Parties. The Housing Authority of the County of Contra Costa, California
(Authority) , and the following named Contractor mutually agree and promise
as follows:
Contractor: Community Economics, Inc. Taxpayer ID # 94-2473882
Capacity: Consulting - LIHTC, Housing Development
Address: 1700 Broadway, 7th Floor
Oakland, CA 94612-2116
3. Term. The effective date of this Contract is October 20, 1993
and it terminates October 20. 1994 unless sooner terminated as
provided herein.
4. Termination. This Contract may be terminated by the Authority, at its
sole discretion, upon five-day advance written notice thereof to the
Contractor, or cancelled immediately by written mutual consent.
5. Payment Limit. Authority's total payments to Contractor under this
Contract shall not exceed $21,000.00
6. Authority's Obligations. In consideration of Contractor's provision of
services as described below, and subject to the payment limit expressed
herein, Authority shall pay Contractor, upon Contractor's submission of
a properly documented demand for payment which shall be submitted not later
than 30 days from the end of the month in which the contract services
were rendered, and upon approval of such demand by the Executive Director
of the Authority or his designee, as follows:
(Check one alternative only)
ED a. FEE RATE: $ per service unit: hour; or
session, as defined below; or
calendar (day, week or month)
NOT TO EXCEED a total of service unit(s) .
F-1 b. Payment in full after approval by the Executive Director.
DO c. As set forth in the attached Payment Provisions.
7. Contractor's Obligations. Contractor shall provide the following described
services: See attached Letter Agreement, dated September 07, 1993
Housing Authority of the
County of Contra Costa SHORT FORM SERVICE CONTRACT Number CDR-CEI-2
(Cont'd.)
8. Compliance with Law. Contractor shall be subject to and comply with all
Federal , State and local laws and regulations applicable with respect to
its performance under this Contract, including but not limited to, licensing,
employment and purchasing practices; and wages, hours and conditions of
employment, including nondiscrimination.
9. Nondiscriminatory Services. Contractor agrees that all goods and services
under this Contract shall be available to all qualified persons regardless
of age, sex, race, religion, color, national origin, or ethnic background,
or handicap, and-that none shall be used, in whole or in part, for religious
worship or instruction.
10. Independent Contractor Status. This Contract is by and between two
independent contractors and is not intended to and shall not be construed
to create the relationship between the parties of agent, servant, employee,
partnership, joint venture, or association.
11. Disputes. Disagreements between the Authority and Contractor concerning the
meaning, requirements, or .performance of this Contract shall be subject to
final determination in writing by the Executive Director of the Authority,
or his designee, or in accordance with the applicable procedures (if any)
required by the State or Federal Government.
12. Access to Books and Records of Contractor. Subcontractor. Pursuant to Section
1861(v) (1) of the Social Security Act, and any regulations promulgated there-
under, Contractor, shall , upon written request and until the expiration of four
years after the furnishing of services pursuant to this Contract, make available
to the Secretary of Health and Human Services, the Comptroller General , the
Authority, or any of their duly authorized representatives, this Contract and
books, documents, and records of Contractor that. are necessary to certify the
nature and extent of all costs and charges hereunder. Further, if Contractor
carries out any of the duties of this Contract through a subcontract, with a
value or cost of $10,000 or more over a twelve-month period, such subcontract
shall contain a clause to the effect that upon written request and until the
expiration of four years after the furnishing of services pursuant to such
subcontract, the subcontractor shall make available, to the Secretary, the
Comptroller General , the Authority, or any of their duly authorized representa-
tives, the subcontract and books, documents, and records of the subcontractor
that are necessary to verify the nature and extent of all costs and charges
hereunder. This special condition is in addition to any and all other terms
regarding the maintenance or retention of records under this Contract and is
binding on the heirs, successors, assigns and representatives of Contractor.
13. Reporting Requirements. Pursuant to Government Code Section 7550, Contractor
shall include in all documents or written reports completed and submitted to
Authority in accordance with this Contract, a separate section listing the
numbers and dollar amounts of all contracts and subcontracts relating to the
preparation of each such document or written report. This section shall apply
only if the payment limit under this Contract exceeds $5,000.
-2-
Housing Authority of the
County of Contra Costa SHORT FORM SERVICE CONTRACT Number CDR-CEI-2
(Cont'd.)
14. Indemnification. The Contractor shall defend, indemnify, save, 'and hold harm-
less the Authority and its officers and employees from any and all claims, costs
and liability for any damages, sickness, death, or injury to persons(s) or
property, including without limitation all consequential damages, from any cause
whatsoever arising directly or indirectly from or connected with the operations
or services of the Contractor or its agents, servants, employees or sub-
contractors hereunder, save and except claims or litigation arising through
the sole negligence or sole willful misconduct of the Authority or its officers
or employees. Contractor will reimburse the Authority for any expenditures,
including reasonable attorney's fees, the Authority may make by reason of the
matters that are the subject of this indemnification, and if requested by the
Authority will defend any claims or litigation to which this indemnification
provision applies at the sole cost and expense of the Contractor.
15. Signatures. These signatures attest the parties' agreement hereto:
HOUSING AUTHORITY OF THE COUNTY CONTRACTOR
OF CONTRA COSTA
COMMUNITY ECONOMICS, INC.
By Designee By
RICHARD J. MARTINEZ
Approved: Acting Executive Director
(Designate official capacity)
Date Date
By Designee
[Form approved by County Counsel]
-3-
Note to Contractor: For corporations (profit or nonprofit) , the contract must
be signed by two officers. Signature A must be that of the president or vice-
president and Signature B must be that of the secretary or assistant secretary
(Civil Code Section 1190.1 and Corporation Code Section 313) .
Richard Martinez
September 7, 1993
Page 2
5. Complete the proposed structuring of the transaction. The first
approach of the Sponsor and CEI will be to place the investment
directly with corporate or individual investors in order to
maximize the amount which can be raised through the use of
tax credits. If a corporation or individuals are identified directly
who make a commitment to the Project, CEI will work with and
the investors to complete the structuring. If no direct investor is
identified and it is necessary to bring in investment advisors
and/or broker dealers, CEI will work with these intermediaries
to complete the structuring of the transaction.
6. Advise the Sponsor in choosing the investor or the investor
representative.
7. Assist in negotiating the letter agreement between the Sponsor
(or the affiliate of who will be the general partner of the
partnership which will own the Project) and the investor which
will outline the terms of the transaction.
8. Prepare the projections necessary for presentation to potential
investors and for inclusion in a private placement
memorandum, if one is required.
9. Coordinate with the lav firm who will be preparing the
partnership documents, the tax opinion, and the private
placement memorandum.
10. Monitor the performance of the investment advisor/broker
dealer, should one be involved.
1.1. Advise in other aspects of the syndication including the
responsibilities of each party over tune.
12. Assist in closing the sale of the limited partnership interests.
CEI will perform these services for a fixed fee of $21,000.
CEI will invoice monthly for the work completed during the previous
month, with payment due in 30 days. Our billing rates are $95 per hour for
senior staff and $60 per hour for associate staff.
Richard Martinez
September 7, 1993
Page 3
The full fee less the amount paid to date will be due within 5 days of the close
of the sale of the limited partnership interests.
Extraordinary expenses such as out-of-town travel will be reimbursable in
addition to the fee amount.
This agreement may be terminated without cause by either party with three
days written notice. Any work completed to that date will be the property of
the Sponsor. CEI will be due any amounts earned on an hourly basis, but not
yet paid.
If these terms are satisfactory to you, please sign both copies and return one
executed copy to CEI.
Please do not hesitate to call if you have questions about any of the terms of
this proposal. We look forward to working with you on this project.
Sincerely,
Janet Falk
ACCEPTED:
HOUSING AUTHORITY OF CONTRA COSTA COUNTY
DATE:
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