HomeMy WebLinkAboutMINUTES - 07152003 - U.2 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
TO, BOARD OF COMMISSIONERS
FROM: Robert McEwen, Executive Director
DATE: July 15, 2003
SUBJECT: APPROVE A $2,650,000 GUARANTY TO BOSTON CAPITAL PARTNERS FOR
DEVELOPMENT OF THE DEANZA GARDENS APARTMENTS
IN BAY POINT
SPEMPl EMMMUMMM 309TIrMATInn
I. RECOMMENDED ACTION:
APPROVE a Guaranty of up to $2,650,000 from the Authority to Boston Capital Partners to allow
release of escrowed funds to the DeAnza Gardens L.P. to pay startup expenses to develop 180
new affordable apartments (the "Project") to replace the 86 unit obsolete and deteriorated Los
Medanos Pueblo public housing in Bay Point, and, AUTHORIZE the Executive Director to execute
the Guaranty and all related documents to effect this action,
11. FINANCIAL IMPACT:
Payments on the Guaranty will be made from Authority reserves, if needed. The Authority has
adequate remaining reserves to meet operating needs.
Ill. REASONS FOR RECOMMENDATION/BACKGROUND
DeAnza Gardens L.P. must satisfy a 10% spending requirement by July 21, 2003 in order to
obtain tax credits under section 42 of the Internal Revenue Code of 1986, as amended. Boston
Capital Partners has deposited funds into escrow sufficient to meet this spending requirement, but
conditioned the release of the escrowed funds on the delivery of payment and performance bonds
by the General Contractor. Due to a delay in the issuance of a performance bond, it is unlikely
that DeAnza Gardens L.P. will be able to satisfy this condition and obtain release of the escrowed
funds in time to meet the July 21, 2003 deadline. The Guaranty (which will provide for the
repayment of the escrowed funds if the bonds are not delivered by a future date)will accomplish
the release of funds by Boston Capital Partners that in turn will allow DeAnza Gardens L.P. to
obtain Building Permits and pay for Contractor's liability insurance (and thereby meet the 10%
spending requirement).
CONTINUED ON ATTACHMENT: X SIGNATURE
RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD
COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON- July 15, 2(X73 APPROVED AS RECOMMENDED X OTHER__
VOTE OF COMMISSIONERS
I HEREBY CERTIFY THAT THIS IS A
XUNANIMOUS (ABSENT TV TRUE AND CORRECT COPY OF AN
AYES: NOES: ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
*District Ill Seat VACANr*' COMMISSIONERS ON THE DATE SHOWN.
ATTESTED July 15, 2003
JOHN SWEETEN,CLERK OF
THE BOARD OF COMMISSIONERS
Contact: Jay Daley,Dir.of Development
Cc: CAO,County Counsel,Housing Authority
o.
BY . . ....... 6EPUTY
H:\RobertMcEwariNSOFFICE\WINWORD\Board Orders\DeAnza DO M Guaranty 071503 r mdacH:\RobaftaES FFICE\ 0I#?tBaarii Ord s DO$2M
Guaranty 071503 rjm.doc
The discovery of the delay in issuance of a performance bond to DeAnza Gardens L.P. by the
General Contractor was made subsequent to the development of the Board Agenda, resulting in
the need for this emergency action.
The Board has approved prior actions to authorize disposition of the existing project and financing
for the creation of the new mixed-income affordable housing development.
IV. CONSEQUENCES OF NEGATIVE ACTION:
Should the Board of Commissioners elect not to approve the Guaranty, Boston Capital Partners
will not authorize the release of the escrowed funds in time to obtain the tax credits, and the
Housing Authority will not be able to continue the process toward replacement of obsolete and
deteriorating housing at the Los Medanos Pueblo site in Bay Point.