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oevciavrenNrrorznaxarinw <br />Impreviuq the Quality of life <br />August 21, 2018 <br />Mr. Judson Brown <br />City of Santa Ana <br />20 Civic Center Plaza, M-26 <br />Santa Ana, CA 92702 <br />EXHIBIT 1 <br />Development <br />Re: Depot at Santiago- 923 N. Santiago Street- Increase to the Permanent Loan <br />Hi Judson, <br />As a follow-up to our recent discussions, we are writing to ask for the City's consent to increase <br />the permanent loan at Depot at Santiago by an amount not to exceed $993,500. Accordingly, the <br />California Community Reinvestment Corporation's (CCRC's) permanent loan would increase <br />from $5,426,500 (approved at the construction closing) to no more than $6,420,000 at <br />conversion. <br />As required by both TCAC and CCRC, the project is being re -underwritten prior to conversion to <br />determine if can still support the loan amount previously approved, or if the loan amount can, or <br />must, be adjusted to satisfy their respective criteria. In this case, because Orange County's Area <br />Median Income (AMI) increased since the construction closing in 2015, the project is able to <br />support a larger loan. <br />Increasing the permanent loan would help to address the following: <br />• Cover additional financing costs incurred for extending the construction loan for six <br />months due to the extensive rain and flooding in Orange County during the winter <br />months of December 2016, January 2017 and February 2017. <br />• Absorb the potential reduction of the limited partner's equity contribution ("Downward <br />Timing Adjuster"), which could be as high as $300,000, due to the construction delay. <br />• Reduce the deferred developer fee by approximately $240,210, which would permit the <br />project to begin making residual receipts payments to the City sooner than originally <br />projected. <br />This request does not result in additional risk or liability to the City. In fact, it will enable <br />residual receipt payments to flow to the City earlier in the life of the project. For your reference, <br />we've attached the most recent conversion pro forma, which reflects the near -final draft cost <br />certification. We have also included a comparison of the anticipated residual receipt cash flow <br />schedules based upon the closing and pre -conversion pro formas. <br />If you have questions, or require additional information, please don't hesitate to contacting us. <br />25C-5 <br />