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Home My WebLink AboutMINUTES - 05132008 - SD.4H HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA TO: BOARD OF COMMISSIONERS FROM: Joseph Villarreal, Executive Director DATE: May 13, 2008 SUBJECT: REPORT ON REDUCTION OF INTEREST RATE IN TERMS OF AGREEMENT FOR PURCHASE of 2870 HOWE STREET, MARTINEZ, CA SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION I. RECOMMENDED ACTION: ACCEPT a report from the Executive Director regarding the change in terms with WestAmerica Bank for the purchase of the Housing Choice Voucher office located at 2870 Howe Road, Martinez, CA 94553. II. FINANCIAL IMPACT: The change in terms has resulted in an annual savings of$10,419.24 from the original debt service payment. As before, the Authority will use earned administrative fees from the U.S. Department of Housing and Urban Development to fund the monthly payments of $19,905.54. This is a reduction from the original monthly payments of.$20,773.81. There will be no impact to the County General Fund. III. REASONS FOR RECOMMENDATION/BACKGROUND On December 12, 2006 the Board authorized the Executive Director to execute all documents pertaining to the purchase of the Howe Road property for$3,375,000 and a purchase agreement was executed on December 15, 2006. In response to a reduction in the prime lending rate, staff contacted WestAmerica Bank seeking to lower the interest rate for the loan used to purchase the Howe Road property. After negotiations, the interest rate of the original purchase agreement has been reduced from a fixed rate of 7.25% to a fixed rate of 6.75% per annum effective April 28, 2008. All other terms of the Purchase Agreement with WestAmerica Bank remain the same. The annual savings of$10,419.24 will be utilized to offset costs in the Section 8 Housing Choice Voucher program or will be applied to reduce the remaining principal of the loan. A copy of the Change in Terms of Agreement is attached. IV. CONSEQUENCES OF NEGATIVE ACTION None. Information item only. CONTINUED ON ATTACHMENT: YES SIGNATUR J se r 'llarreal,Executive Director RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON_ ��/o APPROVED AS RECOMMENDED '� OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS (ABSENT TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND EN'T'ERED ON ]'HE ABSENT: ABSTAIN: MINU'T'ES OF THE BOARD OF COMMISSIONERS ON THE DATE SHOWN. ATTESTED .Q JOSEP VIL ARREAL, SECRETARY OF THE BOARD OF COMMISSIONERS AND EXECUTIVE DIRECTOR BY EPUTY I I:Uudyl-laves\MSOFFICE\WINWORD\BOAItD\BO-Interest Rate Reduction Howe Rd Purchase.doc CHANGE IN TERMS AGREEMENT ........................ .............. ... . ........ ... .. ............. . ............ .......... ........... .. ........... �1,1.40 L' N .... ................ ..... . ....................... . ... .. .. ... .......... .......................... ..... ........ ............0............................................................... . . .. ........ .::a0......�� 503 .... . ....... . ........... .............. 2 ....... ............. 14 T 1.2 ........ W.. .%. ;........... .... 14 042 .4 :..%% %... ...%.......%........................ %........... . ..........8 ... .............................................. ................. ...... 95.. . 0" � 7: 1 1 va .............. QN4; ... .. ......... .. .. ....... . ... .... ............. References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item above containing*has been omitted due to text length limitations. Borrower: HOUSING AUTHORITY OF THE COUNTY OF Lender: WESTAMERICA BANK CONTRA COSTA FAIRFIELD CREDIT ADMINISTRATION P.O. BOX 2759 4550 MANGELS BOULEVARD MARTINEZ,CA 94553 PO BOX 1200 MAC A-1113 SUISUN,CA 94585 Principal Amount: $2,795,146.46 Interest Rate: 6.750% Date of Agreement: April 28, 2008 DESCRIPTION OF EXISTING INDEBTEDNESS. THAT CERTAIN PROMISSORY NOTE DATED DECEMBER 15, 2006 IN THE ORIGINAL AMOUNT OF $2,847,500.00 CURRENTLY MATURING ON JANUARY 1,2017 WITH AN OUTSTANDING PRINCIPAL BALANCE AS OF THIS DATE OF$2,795,146.46. DESCRIPTION OF COLLATERAL. THIS NOTE IS SECURED BY THAT CERTAIN DEED OF TRUST DATED DECEMBER 15,2006. DESCRIPTION OF CHANGE IN TERMS. EFFECTIVE THE DATE OF THIS AGREEMENT THE FACE AMOUNT OF THE NOTE IS DECREASED FROM$2,847,500.00 TO$2,795,146.46. EFFECTIVE THE DATE OF THIS AGREEMENT THE INTEREST RATE IS CHANGED FROM A FIXED RATE OF 7.25%TO A FIXED RATE OF 6.75%PER ANNUM. EFFECTIVE THE DATE OF THIS AGREEMENT THAT CERTAIN GOVERNMENTAL CERTIFICATE DATED DECEMBER 15, 2006 IN THE AMOUNT OF $4,217,592.00 EXECUTED BY THE BORROWER IS REPLACED BY THAT CERTAIN GOVERNMENTAL CERTIFICATE DATED APRIL 28, 2008 IN THE AMOUNT OF$4,217,592.00 WHICH SHALL BE EXECUTED BY THE BORROWER. PAYMENT. Borrower Will pay this loan In 104 regular payments of$19,387.99 each and one Irregular last payment estimated at$2,297,150.98. Borrower's first payment is due May 1,2008,and all subsequent payments are due on the same day of each month after that. Borrower's final payment will be due on January 1,2017,and will be for all principal and all accrued interest not yet paid. CONTINUING VALIDITY. Except as expressly changed by this Agreement,the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender's right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below,then all persons signing below acknowledge that this Agreement is given conditionally,based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release,but also to all such subsequent actions. PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER: HOUSING AUT ORI PIOF THE C OF CONTRA COSTA By: J HI VILLARREAL, EXECUTIVE DIRECTOR of OUOUsING AUTHORITY OF THE COUNTY OF SING COSTA LASER PRO U—IiN,V—5.39M IMI Cap,HerIaM Finanaml Sal,11—Inc.1997,2M. All R.9hI,Res—a,I -CA E1.1nI,.pAeppsWFALPL%D20C.FC TFWN I PR,29