HomeMy WebLinkAboutMINUTES - 10142003 - C85 Contra
TO REDEVELOPMENT AGENCY
FROM: JOHN SWEETEN Costa
EXECUTIVE DIRECTOR
DCountATE:DATE: October 14, 2003 }�.
SUBJECT: Subordination of Disposition and Development Agreement,
Park Regency Apartments
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND.JUSTIFICATION
RECOMMENDATION:
ADOPT Resolution approving and authorizing the Redevelopment Director to execute a Subordination
Agreement with Fannie Mae, U,S. Bank National Association, and Park Regency, LLC related to the
Agency's Disposition and Development Agreement for the Park Regency Apartments, Pleasant Hill BART.
FINANCIAL IMPACT:
No General funds are involved. The Disposition and Development Agreement, which was previously
approved bythe Agency, commits Housing Set-Aside funds from the Pleasant Hill BART project
BACKGROUND:
The Park Regency project is an 692-unit multifamily development at Pleasant Hill BART. On September 16,
2003 the Board of Supervisors sitting as the Governing Board of the Redevelopment Agency approved a
Fourth Amendment to Disposition and Development Agreement for the Park Regency project; and sitting as
the legislative body of the County approved the issuance of $60 million of Multifamily Housing Refunding
Bonds for the Park Regency project. As part of the refunding the Federal National Mortgage A ociation, or
Fannie Mae,will be stepping in to the transaction as the credit enhancer of the bonds. r'Y
ATTACHMENT: X
CONTINUED ON A YES SIGNATURE:�
F-1RECOMMENDATION OF EXECUTIVE DIRECTOR ❑ RECO ME DATION OF AGENCY
COMMITTEE ' 1
❑APPROVE ❑ OTHER
SIGNATURE(S):
ACTION OF AGENCY ON October 14, 2003
APPROVED AS RECOMMENDED (N OTHER ❑
VOTE OF SUPERVISORS: I HEREBY CERTIFY THAT THIS IS A -TRUE AND
CORRECT COPY OF AN ACTION TAKEN AND
X UNANIMOUS(ABSENT None ) ENTERED ON THE MINUTES OF THE
REDEVELOPMENT AGENCY ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN:
ATTESTED October 14, 2003
Contact: Jim Kennedy, 5-1255
{prig: Redevelopment Agency
cc: CACI JOHN SWEETEN,AGENCY SECRETARY
County Counsel
Community Development
via: Redevelopment B e ut
Goldfarb&Lipman y - # y
Orrick Herrington
Public Financial Management
\Ifs-cd\users$\Inoble\Personal\Board Orders and Greenies\BOARD.RDA.subord,parkregency.10.03.doe
BACKGROUND:
Fannie Mae requires that the Redevelopment Agency's Disposition and Development Agreement be
Subordinated to the Mortgage and Note that(together with the FNMA guarantee)secure the bonds.
The Agency has subordinated its DDA interests in other similar situations. Pursuant to Health and Safety
Code Section 33334.14 (a)(4)the Agency must make a finding that alternative financing is either not available, or
is available only at significantly higher casts. The form of financing being employed—variable rate tax exempt
housing bonds credit enhanced by a AAA rated institution—is the least costly form of debt available in the
marketplace. All other forms of debt including lower rated tax-exempt debt, and conventional taxable forms of
debt carry a significantly higher cost to the borrower, and would, in turn, could result in a higher Redevelopment
Agency annual financial payment obligation with respect to the affordable units. The Agency has on file a letter
from the Park Regency owner setting forth the terms and conditions related to alternative forms of financing.