HomeMy WebLinkAboutMINUTES - 04061999 - C146 •. Contra
TO: REDEVELOPMENT AGENCY �` '� Coda
FROM: Phil Batchelor Count
Executive Director a
DATE: April 6, 1999
SUBJECT: Amendment of the Local Initiatives Support Corporation Loan Guaranty - North Richmond
Redevelopment Area
SPECIFIC REQUEST(S) OR RECOMMENDATIONS(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS
APPROVE and AUTHORIZE the Deputy Director-Redevelopment to execute an amended Guaranty
for a Loan Agreement between Parkway Housing, Inc.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 seven years.
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CONTINUED ON ATTACHMENT: YES SIGNATURE: I
RECOMMENDATION OF EXECUTIVE DIRECTOR COMMEe ATION OFA NCY
COMMITTEE ! j
APPROVE OTHER
SIGNATURE(S):
ACTION OF
AGENCY ON _A*_r z l A - 19-99 APPROVED AS RECOMMENDED xx OTHER
VOTE OF COMMISSIONERS 4
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT -. _ _ ) TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TARN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT
AGENCY ON THE DATE SHOWN.
Contact: Beth Lee
335-1256 ATTESTED April 6 ; 1999
orig: Redevelopment Agency PHIL BATCHELOR,
cc: Community Development AGENCY SECRETARY
Redevelopment Agency
Auditor-Controller
via Redevelopment "
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CHDCB'�'' '�'Fz�-sf xh .
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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.
C14DC 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 additionalrecoverable 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 February 1, 1998. 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 extended the loan repayment date until December 15, 2000. 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, included the
loan guaranty component.
The original LISC loan and recoverable grant were made by and between LISC and the Community
Housing Development Corporation of Forth Richmond (CHDC). In the interim time, Parkway
Housing, Inc. was established as a California public benefit corporation jointly owned and controlled
by CHDC and Oakland Community Housing Incorporated. CHDC has requested an assignment of
the LISC loan and recoverable grant to Parkway Housing, Inc. LISC has agreed to the assignment
with their consent conditioned on the Agency amending the loan guaranty to reflect Parkway
Housing, Inc.
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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