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HomeMy WebLinkAboutMINUTES - 03142006 - C.51 1 . Contra FROM: O, TO: BOARD OF SUPERVISORS — Contra FROM: Dennis M. Barry, AICP, Costat.Sbl Director of Community Development . r'4COL7>y DATE: March 14, 2006 County SUBJECT: Allocation of $834,000 in FY 2006/07 HOME Investment Partnerships Act Funds for the West Rivertown II Apartment Project in Antioch SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: APPROVE an allocation of $834,000 in FY 2006/07 HOME Investment Partnership Act (HOME) to Eden Housing, Inc. for the development of the West Rivertown II Apartment Project in Antioch. 0 FINANCIAL IMPACT: No General Fund impact. HOME funds are provided to the County on a formula basis through the U.S. Department of Housing and Urban Development. BACKGROUND: On March 1, 2006, the Affordable Housing Finance Committee (AHFC) voted to recommend that the Board approve $834,000 in FY 2006/07 HOME funds to Eden Housing, Inc. for this project. The AHFC considered an additional six projects for HOME funds. The recommendations for these projects will be brought to the Board for consideration on May 9, 2006 as part of the Community Development Block Grant and HOME Annual Action Plan. CONTINUED ON ATTACHMENT: ❑ YES SIGNATURE,,,' MIRECOMMENDATION OF COUNTY ADMINISTRATOR ❑ RECO ME ATION OF B ARD COMMITTEE [APPROVE ❑ OTHER SIGNATURE(S): ACTION OF BOA DON ���� �4, �� APPROVED AS RECOMMENDED VOTER ❑ VOTE OF SUPERVISORS: I HEREBY CERTIFY THAT THIS IS A TRUE AND �7 CORRECT COPY OF AN ACTION TAKEN AND V/ UNANIMOUS(ABSENT / J ) ENTERED ON THE MINUTES OF THE BOARD OF AYES: NOES: SUPERVISORS ON THE DATE SHOWN. ABSENT: ABSTAIN: ATTESTEDLM rn,��2L Contact: Kara Douglas,335-7223 JOHN CULLEN,CLERK OF HE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR cc: County Administrator County Counsel o Auditor-Controller Y• � (�[ Community Development B L �- -Deputy Eden Housing Inc via CDD i f West Rivertown II is being considered now so that, if awarded funds, it can apply to the California Tax Credit Allocation Committee on March 23, 2006 for nine percent Low Income Housing Tax Credits (Tax Credits). The project will not be competitive for tax credits if it has not secured all of its gap financing. The purpose of West Rivertown II project is to increase the supply of multi-family rental housing affordable to and occupied by lower income households in East County through the development of an 40-unit apartment building located at the corner of 7th and I Streets in Antioch. The development includes one, two, and three-bedroom apartments. The project will have 4 units affordable to and occupied by households with incomes at or below 30 percent of the area median income (AMI), and 35 units will be affordable to/occupied by households with incomes at/below 50 percent AMI. One unit will remain available for an on- site manager. Nineteen units will be designated as HOME-assisted units. All units designated as affordable will remain affordable to lower income households for a minimum of 55 years. The total cost of this project is $12,254,966. The proposed development budget and sources of funds for this project are: Source Amount HOME FUNDS RECOMMEND $834,000 City of Antioch Development Agency 1,458,400 City of Antioch CDBG 225,590 Tax Credit Equity 8,246,139 Private Bank Loan 943,784 Sponsor Equity/Deferred Developer Fee 547,053 TOTAL $12,254,966 As proposed, HOME funds would be provided with a three percent interest rate for 55 years. Antioch and County funds would be in a co-equal lien position. The County will be in subordinate lien position to the private lender in both the construction and permanent financing phases. Due to the high construction costs and limited revenue from the restricted rents, the total amount of the financing provided to the project will likely exceed the value of the completed project. Even though the equity investment is substantial compared to the amount of long term debt, the partnership agreement has numerous safe guards of the investors equity. These safe guards essentially subordinate the County's debt to the investor's equity. Therefore, the County funds may not be fully secured through the value of the property. HOME funds may be used for construction, soft costs, and permits and fees. Affordability and use restrictions will be incorporated into the County loan documents. Legal documents for the project will include a loan agreement, a promissory note, a deed of trust and security agreement, a regulatory agreement, an intercreditor agreement, and a subordination agreement. Other documents that may be required include an assignment and assumption agreement and one or more estoppel agreements. The loan documents will be submitted to the Board of Supervisors for approval prior to execution. The City of Antioch has completed its CEQA review and prepared a Negative Declaration, dated February 7, 2006. The initial study included funding from Contra Costa County.