HomeMy WebLinkAboutMINUTES - 12011998 - C197 Contra
TO: BOARD OF SUPERVISORS ` ' .' Costa
FROM: Dennis M. Barry C oun Y
Community Development Director
DATE: December 1, 1998
SUBJECT: Parkway Estates Housing Project -North Richmond
SPECIFIC REQUEST(S)OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
APPROVE and AUTHORIZE the Deputy Director-Redevelopment to execute a Loan with the
Community Housing Development Corporation of North Richmond and Oakland Community Housing
Inc. for an affordable housing project in the North Richmond Redevelopment Project Area.
FISCAL,IWACT
No impact on the General Fund. The loan amount will not exceed $175,000 and would be made from
the Affordable Housing Fund#111300, sub-account 1596.
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 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.
Community Housing Development Corporation (CHDC) of North Richmond and Oakland Community
Housing Inc,(OCHI)are nonprofit housing development corporations interested in constructing quality
CONTINUED ON ATTACHMENT: �YES SIGNATURE: � 7
Ct'.tiv�f.
1 OIRECOMMENDATION OF EXECUTIVE DIRECTOR COM NDATION O AGENCY
MMITTEE i
( APPROVE OTHER
SIGNATURE(S): ',
ACTION OF
AGENCY ON & APPROVED AS RECOMMENDED
ti
VOTE OF COMMISSIONERS j
I HEREBY CERTIFY THAT THIS IS A
K 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
335-1256 ATTESTED
prig: Redevelopment Agency PHIL BATCHELOR;
cc: Community Development AGENCY SECRE'T'ARY
Redevelopment Agency
Auditor-Controller
via Redevelopment
OCHI y�
CHDC BrtLt rt rlyt�. DEPUTY
for-sale single family homes in the North Richmond Redevelopment Project Area. They have
identified a parcel at 217 W. Gertrude Avenue as an appropriate site. They will construct 87 for-sale
single family homes on the approximate 10 acre site.
CHDC and OCHI are leveraging the funds from a variety of sources. They have applied for, and
received, funding from the Community Development Block Grant (CDBG),;HOME Investment
Partnership programs in addition to Redevelopment funds. They have also secured funds from the
Federal Home Loan Bank Affordable Housing Program and have identified a financial institution for
the construction financing. They have also requested, and received, funds from the City of Richmond
to pay for project-related improvements(i.e., the sound wall and Gertrude Avenue) located within
the City's boundaries. They have also secured a construction loan from the Contra Costa County
Housing Authority. They are working with several lenders to provide favorable permanent financing
under their Community Reinvestment Act programs.
CHDC and OCHI are finalizing the plans for the development. Current project proforma indicate a
cash flow problem of around $350,000 in the early phases of construction. The financial analysis also
indicates repayment in full of the gap by the last phase of the development. Gap financing must be
secured in order for the project to enter into a construction contract, construction loan agreement,
and ultimately develop the project.
The CHDC and OCHI approached the County and the City of Richmond to assist in resolving the gap
financing problem in a timely manner. Both the County and the City of Richmond have stated their
desire to assist in the development of the Parkway Estates Project by providing the gap financing.
Both jurisdictions have agreed to provide up to a $175,000 gap financing loan to facilitate the
Parkway Estates project. The County loan will be repaid by the developers on a prorata basis as
individual homes are sold. The proforma shows the entire loan amount(plus accrued interest at 7.5%)
being repaid by the sale of the last home.
The County has asked the Agency to provide a loan guarantee to secure their financial interests. The
County loan terms would require repayment of the outstanding loan amount with accrued interest
in five(5) years. The interest rate will be four percent (4%). The Agency is accepting of the terms
and conditions being requested by the County.
Staff analyses indicate that the potential benefits to North Richmond 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 furtherstabilize 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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