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HomeMy WebLinkAboutMINUTES - 06041991 - 1.122 TO: BOARD OF SUPERVISORS FROM: Jim Kennedy Deputy Director-Redevelopment DATE: June 4, 1991 % = Costa SUBJECT: Green Valley Apartments, Brentwood (Rural California Housing Corporation) c Coulty 6ii SPECIFIC REQUEST(P) OR RECOMMENDATIONS (S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS AUTHORIZE a loan guaranty on behalf of Rural California Housing Corporation for its Green Valley.Apartments project in Brentwood; AUTHORIZE the Auditor-Controller to issue a warrant-in the amount of $200, 000 to the Bank of. Walnut Creek to secure a Certificate of Deposit as additional security for a construction loan for the above referenced project; and AUTHORIZE the Deputy Director-Redevelopment to execute loan guaranty agreements and other documentation required to effect said loan guaranty. FISCAL IMPACT No expenditure of general funds is involved. The deposit of funds for'.':the .loan guaranty will consist of housing bond trust funds. No expenditure o'f ,"hous,ing ., bond trust funds is anticipated. Sufficient funds exist for construction of''the project. Sufficient funds are committed for the take-out financing. The County's loan guaranty is anticipated to be returned in its entirety, including accrued interest. BACKGROUND/REASONS FOR RECOMMENDATIONS . The Green Valley Apartments is a 28 unit apartment project for low income families in the City of Brentwood. A private developer initiated construction of the project more than a year ago. The private developer defaulted on the -construction loan. The construction -lender, the Bank of Walnut Creek, secured Rural California Housing Corporation, a Sacramento based non profit housing development corporation with substantial experience in developing low in ome housing, to complete construction and to ultimately own the property. CONTINUED ON ATTACHMENT: _X YES SIGNATURE: y y RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION- O BOARDCOMMITT APPROVE OTHER SIGNATURE(S) : ACTION OF. BOARD ON JUN A 1991 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS 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 BOARD OF SUPERVISORS ON THE DATE SHOWN. cc: County Administrator County Counsel Auditor-Controller JUN 4 891 via Community Development ATTESTED Rural California Housing Corp. PHIL BATCHELOR, CLERK OF Bank of Walnut Creek THE BOARD OF SUPERVISORS California Housing AND COUNTY ADMINISTRATOR Partnership BY , DEPUTY ra53:rchc.bos W Rural California Housing Corporation has a commitment for a construction loan of $1.8 million from the Bank of Walnut Creek. In addition, the City of Brentwood, through its redevelopment agency, has authorized a loan of $300, 000. Rural California Housing Corporation will be funding $97, 000 of the construction with its own equity. All permanent financing for this project has been secured. A rental housing construction program from the State Department of Housing and Community Development in the amount of $884,000 has been secured. Tax credits sufficient to obtain $469, 000 in equity contributions have been secured. First Nationwide Bank will be providing a loan of $544, 000 to complete the permanent financing package. The Bank of Walnut Creek has been very conservative in underwriting the construction loan. They are not a highly experienced lender in the low income housing area; nor have they had much experience in the area of community lending. The Bank of Walnut Creek is requiring additional collateral from Rural California Housing Corporation in the form of a Junior Lien on other property owned by the Corporation and the additional collateral provided by the County guaranty. Rural California Housing Corporation is providing the necessary junior lien and this action of the Board will provide the County guaranty. The Bank of Walnut Creek will release the County's guaranty once a $400, 000 certificate of deposit with the bank has been posted by Rural California Housing Corporation. Rural California Housing Corporation will be in a position to provide such a deposit when it completes the financing of a subdivision in Brentwood. This is anticipated to occur on September 1, 1991.