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HomeMy Public PortalAbout15. 2012.01.09 Staff ReportLivFRJo CITY COUNCIL AGENDA REPORT TO Honorable Mayor and City Council FROM Eric Uranga Interim Community Development Directofa r SUBJECT Appropriate 500000 in Housing Trust Funds F611 for Partial Repayment of the Residential Development Loan Program RDLP Loan and Authorization to Extend of the Loan Repayment Term RECOMMEN ACTION Staff recommends the City Council adopt a resolution appropriating 500000 in Housing Trust Funds F611 for partial repayment and extending the repayment term of the Residential Development Loan Program RDLP Loan from the California Housing Finance Agency CaIHFA through January 22 2014 S In November 2006 and July 2007 the City vas awarded two allocations totaling 5000000 in California Housing Finance Agency CaIHFA Residential Development Loan Program RDLP funds to be used in the development of the 55 acre Livermore Village housing site Under the terms of the existing agreement with CaIHFA repayment of the loan would be due in full in January 2012 Due to the housing market slowdown development of the Livermore Village site has extended beyond the term of what was contemplated in the loan agreement Acknowledging current development conditions CaIHFA has granted an extension of the loan term through January 22 2014 conditional upon an initial 500000 payment towards interest due on the loan Staff recommends City Council adopt a resolution appropriating 500000 in Housing Trust Funds 611 towards the initial loan payment and approving an extension of the loan term DISCUSSION In November 2006 the City was awarded 4000000 in California Housing Finance Agency CaIHFA Residential Development Loan Program RDLP funds to be used for the redevelopment of a blighted 55 acre commercial shopping center site formerly Luckys into 280 units of residential ownership housing known as Livermore Village MEETING DATE f AGENDA ITEM 01 09 2012 1 405 37 Under the requirements of the RDLP funds 10 of the units were to be designated as affordable to low and moderate income households In July 2007 the City was awarded an additional 1000000 in CalHFA RDLP funds to be used for the Livermore Village development The total loan amount of 5000000 carries a three percent 3 interest rate that is due to be paid in full in January 2012 Repayment of the loan was anticipated through a combination of Redevelopment Agency Housing Setaside funds City of Livermore Housing In Lieu funds and proceeds from the sale of the site The Livermore Village project was approved and entitled in 2008 however due to the concurrent collapse of the housing market the developer was unable to secure financing for the project Subsequent Request for Proposals RFP followed to find anew developer for the site however due to unfavorable market conditions for high density ownership housing proposals for the site have not produced a project that could immediately develop without significant additional City subsidy Staff is currently evaluating qualifications from developers that could propose a plan to meet the short and long term development goals for the site through a combination of rental and future ownership phases In 2010 the City received a 2500000 infrastructure grant from the Metropolitan Transportation Council that will be used to construct portions of the projects roads sewer connections open space and infrastructure improvements This grant will help reduce overall project costs and help speed development of the site Over the last three years Housing Set Aside funds that would have been eligible to pay off the loan have been diverted to meet mandatory pass through payments to the State of California The subsequent elimination of Redevelopment Agencies and the Housing Set Aside revenue source creates a greater need to extend repayment of the RDLP loan Understanding development and city budgetary conditions CalHFA has offered an extension in the repayment of the loan with the condition that an initial 500000 payment is made in January 2012 to be applied to interest due on the loan Staff recommends the City Council adopt a resolution appropriating 500000 in Housing Trust Funds F611 for this payment and approving an extension of the repayment term through January 22 2014 Based on the current amount of housing funds available in Fund 611 and on the projected amount of funds to be received under various housing agreements already entered into by the City there will be sufficient funds available to repay the RDLP loan when it comes due on January 22 2014 FISCAL AND ADMINISTRATIVE IMPACTS If approved the RDLP tern of repayment would be extended through January 22 2014 The 500000 payment as well as the repayment of the remaining loan balance will come from the Citvs Housing Trust fund F61 1 The 500000 initial payment will be made to the State and credited towards interest due on the loan Interest would continue to accrue on the unpaid prinicipal balance on the loan until repaid in full RE ATTACHMENTS 1 Second Amendment to the RDLP Loan Agreement Prepared by Eric Uranga ti Interim Community Development Director Approved by r Marc Roberts City Manager RAch by r Doug Alessio Interim uninlsuave Services Diactor 39 x T i January 4 20 112 City of Livermore Marc Roberts City Manager 1052 South Livermore Avenue Livermore CA 94550 RE Amendment to Loan Agreement CaIHFA Lean No RDLP06050602 Dear Borrower This is to inform you that the following amendments have been inane to the above referenced ban agreement The loan term provision on Exhibit A is hereby amended to read as follows Term subject to the provisions of Section 20 of the Contract the term of the contract is extended to January 22 2014 Section 5 n of the loan agreement Is hereby amended to read as follows Repayment of Loan Any balance owed pursuant to this Agreement whether principal Interest or othenrdse if not sooner due and payable as provided herein shall be due and payabe on January 22 2014 Other terms As a condition of the extension a partial payment must be received by CaIHFA on or before January 17 2912 in the sum of Five Hundred Thousand and 00100 Dollars 50000000 which the Agency Will apply first toward accrued Interest and than to the outstanding principal amount Except as expressly provided herein all terms and provisions of the Loan Agreement will remain in full force and effect Please acknowledge the acceptance of this amendment to the Loan Agreement below and return this copy with an original signature to Maria Jimenez Loan Administration Special Programs by January 17 2012 Should you have any questions in the above regard please feel free to contact Mara Jimenez at 916 320 8050 or Denise Clark at 916 326 8038 Sincerely Claudia Cappio Executive Director cc Eric Oranga 40 Acknowledgement and Acceptance CITY OF LIVERMORE Bye Marc Roberts Clry Manager 11 ATTACHMENT 1 IN THE CITY COUNCIL OF THE CITY OF LIVERMORE CALIFORNIA A RESOLUTION APPROVING AN APPROPRIATION OF 500000 IN HOUSING TRUST FUNDS FUND 611 TOWARDS REPAYMENT OF THE RESIDENTIAL DEVELOPMENT LOAN PROGRAM RDLP LOAN WITH CALIFORNIA HOUSING FINANCE AGENCY AND AN EXTENSION OF THE RDLP LOAN TERM THROUGH JANUARY 15 2014 BE IT RESOLVED by the City Council of the City of Livermore thaf 1 The City was awarded 5000000 In Residential Development Loan Program RDLP funds from the California Housing Finance Agency RDLP 060506 02 for the purpose of developing housing units on the Livermore Village Project site 2 The loan term under the Amendment to Loan Agreement dated August 23 2007 states that the loan is due five years from the date of the Loan Agreement The City and CalHFA now wish to extend the term of the loan through January 15 2014 3 In acceptance of the forms of the amendment to the loan agreement the City shall appropriate 500000 in Housing Trust Funds F611 towards an initial payment on the loan to be paid upon acknowledgement and acceptance of the amended loan agreement 4 The City Manager is authorized to execute all documents related to the extension of the RDLP Loan and repayment Or the motion of Councilmember seconded by Councilmember foregoing resolution was passed and adopted on January 9 by the following vote AYES COUNCILMEMBERS NOES COUNCILMEMBERS ABSENT COUNCILMEMBERS ABSTAIN COUNCILMEMBERS ATTEST APPROVED AS 10 FORM r Susan Nee 14ason fZ Atcala City Clerk Senior Assistant City Attorney RESOLUTION NO 41 THIS PAGE INTENTTONALLY LEFT BLANK N