Item 05 - Crossroads at Washington Affordable Housing Project at 1126, 1136, & 1146 East Washington Ave.

Home Browse Search

Crossroads at Washington Affordable Housing Project at 1126, 1136, & 1146 East Washington Avenue June 21, 2022 Page 6 2 8 1 5 Agreement for the City’s loans in order to complete their underwriting and commit their financing. The Subordination Agreement is attached as Exhibit 8. Regarding the future Subordination Agreements, if needed, with the State of California Department of Housing and Community Development (“HCD”), the California Community Reinvestment Corporation (“CCRC”), and/or the Orange County Housing Finance Trust, these other lenders may request or require the City to subordinate our loans to their loans after the Project is complete and the construction loan is replaced by a permanent loan. For example, HCD requires the City as a subordinate local government lender to enter into a Subordination Agreement. HCD’s loan will be disbursed at the permanent loan conversion through the Orange County Housing Finance Trust. Therefore, HCD and/or the Orange County Housing Finance Trust may require a Subordination Agreement with the City after the Project is complete. Regarding the future Subordination Agreement with CCRC, CCRC is the permanent lender and will be purchasing the construction loan from U.S. Bank. At that point, CCRC will be requesting the City to enter into a Subordination Agreement to subordinate the City’s two loans to CCRC’s permanent loan. Any future Subordination Agreement will be approved as to form by the City Attorney’s Office prior to execution by the City Manager. Development Impact Fee Deferral Agreement The Development Impact Fee Deferral Agreement will defer the collection of the Project’s development impact fees until prior to issuance of the certificate of occupancy instead of requiring payment of the fees at the time of building permit issuance. The Agreement is attached as Exhibit 9. The Developer is entitled by State law to deferred payment of fees intended for public facilities or improvements because the deferral of such development impact fees will help facilitate the financing, development and construction of the project. Specifically, California Government Code Section 66007 states that “any local agency that imposes any fees or charges on residential development for the construction of public improvements or facilities shall not require the payment of those fees or charges, notwithstanding any other provision of law, until the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first.” The specific development impact fees that are part of this deferral request includes the following: Fee Description Factor Factor Total Transit Zoning Code Traffic Impact Mitigation Fair Share $1,333.54 per unit 86 Units $114,685 Drainage Area Assessment Fee $7,748.21 per acre 2.286 Acres $17,712