25J - AGMT ARTS COLLECTIVE GRANT

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B. Cost Reasonableness The Developer provided an executed contract with Westport Construction, Inc, the general contractor for the Project. The contract describes the costs associated with the scope of work for the Project. In addition, the Developer provided requested and approved change orders to revise the scope of work and associated costs. Together the construction contract and approved change orders represent the current Project budget. The costs included in the Project budget appear reasonable for the scope of work proposed for the Project. C. Written Agreement The City must execute a written agreement before committing HOME funds to the Project. The written agreement must capture the Project and financing terms that result from the underwriting process. The City and Developer entered into an initial HOME Loan Agreement in July 2017 and propose to amend that Agreement in August 2018. The following summarizes the financial deal points memorialized in the written agreements: 1. The term of the HOME Loan is 55 years. 2. The term of the HOME affordability restrictions is 20 years. 3. A total of 11 units in the Project are restricted as fixed HOME units as follows: Three (3) one -bedroom units will be restricted as Low HOME units; b. Four (4) three-bedroom units will be restricted as Low HOME units; and C. Four (4) three-bedroom units will be restricted as High HOME units. 4. The HOME Loan terms are as follows: a. A total of $2,627,631 will be disbursed to the Developer for eligible costs related to the construction of the 11 HOME assisted units. b. A 3.0% simple interest rate. C. The outstanding loan balance will be due and payable at the end of the 55 -year term. d. The loan is secured by a subordinated deed of trust. e. Annual payments will be made to the City based on 10.23% of total annual residual receipts. City of Santa Ana HOME Subsidy Layering Review: Santa Ana Arts Collective Page 1 18 25J-40