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HomeMy WebLinkAboutMINUTES - 12011998 - C202 �. CKtXX. Contra TO: REDEVELOPMENT AGENCY Costa FROM: Phil Batchelor Cou'rR Executive Director DATE: December 1, 1998 SUBJECT: Parkway Estates Housing Project -North Richmond SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIt E APPROVE and AUTHORIZE the Deputy Director-Redevelopment to execute a Loan Guarantee with Contra Costa County for an affordable housing project in the North Richmond iRedevelopment Project Area. FIS SACT No impact on the General Fund. The loan guarantee amount is a maximum of$175,000, plus accrued interest of 4%, and would be secured by the housing set-aside portion of tax increments and, if necessary, the Affordable Housing Trust Fund. This appropriation will he provided for in a future adopted budget of the Agency should payment be deemed necessary. BACKGROJINDIREASONS FQR RECOhMNDAT ONS 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. CONTINUED ON ATTACHMENT: _X Y.Eg SIGNATURE: CLQ XRE+C©MMENDATION OF EXECUTIVE DIRECTOR COMM N ATION OF A NCY COMMITTEE APPROVE —OTHER / SIGNATURE(S): 01 ACTION OF AGENCY ON y �� ��APPROVED AS RECOMMENDED OTh 4 VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS(ABSENT ) TRUE AND CORRECT COPY OF AN AVES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT AGENCY ON THE DATE SHOWN. Contact: Beth Lee 335-1256 A'TTEST'ED prig: Redevelopment Agency PHIL BATCHEL R, cc: Community Development AGENCY SECRETARY Redevelopment Agency Auditor-Controller via Redevelopment OCHI CHDC BY -�- ,DEPUTY 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 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 the North Richmond Redevelopment Project Area from the project are significant: I. 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. C:bl 17parktcccl«an.bos