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TO: REDEVELOPMENT AGENCY
FROM: Phil Batchelor - ' County
Executive Director r ` ""
DATE: December 3, 1996
SUBJECT: Loan Agreement Guaranty-Parkway Estates Housing Project, North Richmond
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S)& BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
APPROVE and AUTHORIZE the Deputy Director-Redevelopment to execute a Guaranty for a Loan
Agreement between the Community Housing Development Corporation of North Richmond and the
Local Initiatives Support Corporation for an affordable housing project in the North Richmond
Redevelopment Project Area.
FISCAL IMPACT
No impact on the General Fund. The loan amount is $200,000, which was previously approved and
allocated. The loan guaranty would be made from the housing set-aside portion of tax increments.
BACKGROUND/REASONS FOR RECOMMENDATIONS
A major goal of the North Richmond Redevelopment Plan is to improve and expand the supply of
affordable housing in the Project Area. The Parkway Estates project is a first crucial step in achieving
this goal and revitalizing the residential area of the community. The North Richmond Municipal
Advisory Council has been a strong supporter of and has allocated redevelopment tax increment funds
to this project for the past four years.
CONTINUED ON ATTACHMENT: _YES SIGNATURE:,
_RECOMMENDATION OF EXECUTIVE DIRECTOR COMMEN ATION OF 1ENC'Y
COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF
AGENCY ON DECD_SM APPROVED AS RECOMMENDED OTHER—
VOTE OF COMMISSIONERS
I HEREBY CERTIFY THAT THIS IS A
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 DEC 0 3 19%
335-1256 ATTESTED
orig: Redevelopment Agency PHIL BATCHELOR,
cc: Community Development AGENCY SECRETARY
Redevelopment Agency
Auditor-Controller
via Redevelopment
OCHI ``
CHDC BYE I A PC.. 0_n,JJ,,, QEPUTY
V
C . � 03
Community Housing Development Corporation (CHDC) of North Richmond and Oakland
Community Housing Inc. (OCHI) are nonprofit housing development corporations interested in
constructing quality for-sale single family homes at 217 W. Gertrude Avenue in the North Richmond
Redevelopment Project Area. They will construct 87 for-sale single family homes on this 10-acre site.
CHDC and OCHI have leveraged funds from a variety of sources. They have applied for, and
received, funding from the County Redevelopment Agency, Community Development Block Grant
(CDBG)and HOME Investment Partnership programs. They have also received funding allocations
from the City of Richmond and the Local Initiatives Support Corporation(LISC). They are in the
process of securing construction financing and are working with several lenders to provide favorable
permanent financing under their Community Reinvestment Act programs.
CHDC and LISC entered into a Loan Agreement for $185,000 which was approved and allocated
on April 26, 1995. LISC had previously approved and allocated two additional recoverable grants
for this project, $5,000 on March 15, 1993, and $10,000 on June 15, 1993, which are also due and
payable. The total amount due is $200,000.
The LISC loan terms required the principal and interest be repaid on or before November 3, 1996.
It was anticipated that revenues from the project would be used to repay the debt prior to the
maturity date. The project, however, was significantly delayed during this time which resulted in no
additional revenues available to repay the loan. CHDC requested that LISC extend the maturity date
to coincide with the project development schedule.
LISC has agreed to extend the loan repayment date until February 1, 1998. This modification,
however, was acceptable only if the County Redevelopment Agency agreed to guaranty the loan in
the event the project is not completed by the due date. There is no allocation at this time, but the
guaranty provides a contingent obligation of up to $200,000. If the Agency must repay all or part of
the loan, the redevelopment funds would be structured as a loan, secured by a promissory note and
deed of trust against the land and planned improvements. The First Amended and Restated Developer
Loan Agreement, which was approved by the Redevelopment Agency on October 22, 1996, will
include the loan guarantee component.
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 and OCHI will also enter into an agreement to hire North Richmond residents
for new jobs created during construction.
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