04/15/1980 - Laserfiche WebLink

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. . . . :) Mr. Whipple addressed the Agency and stated that the reason the special meeting had been requested was because the interest rates were fluctuating greatly. In the past, interest rates did not change as rapidly as they presently are. The special meeting was also called in order to have the documents presented to the Agency and Council and have some sort of action taken by the Agency approving those documents to determine whether or not the transaction could be completed. He also stated that if the transactions are approved, there are numerous commitments to be made. Mr. Whipple stated that the action requested today is to approve the documents in concept and form, and then staff would like to come back on April 21 and ask for formal adoption of the three resolutions (one, authorizing the issuance of the bonds; two, spells out in greater detail as to the terms of the bonds, and; three, approves the rules and regulations.) Included in the text are the approval of the contracts and documents as well as some other agreements to be approved by the Agency (such as Western Center, etc.) Mr. Whipple stated that by the time the bonds are issued, there will be an additional $268,000 received by the Agency. The Chairman asked the Executive Director what the intended use of this money would be. The Executive Director stated that approximately $60,000 would be used to recoup some of the costs that the Agency has incurred, and would be placed back into the Agency's funds. He further stated that $200,000 would be set aside in a special interest bearing account for a period of approximately 18 months until staff can see what is going to happen to the private mortgage market in the future. If the market drops, staff would like to have funds to be able to protect the bonds. He stated that staff is selling the entire issue and, at the present time, are only building 159 units. The remainder of the units are to start construction within the next few months, and no one knows what the market rate will be in 18 months. The Executive Director stated that the Agency members have before them suggested agreements between the Agency and developer, the Agency, City and Western Center, and bond documentation. He stated that item 12 on the Agency's agenda pertainst to the Agency and the developer requesting that staff be directed to prepare an amendment to the Disposition Development Agreement. The actual proposed agreement between the Agency and the developer is 70-80 percent complete. Staff is requesting information to prepare the amendment and bring it back to the Agency. The amendment would eliminate the requirement of the developer to produce the 58 units as rentals. Mr. Cooper stated that the amendment will also include other items the Council has previously acted on, such as the bonus being paid because of the condominium conversion; the added cost for the land; and points to be paid by the developer to the Agency. The Executive Director stated that item lIon the agenda, regarding the agreement with Western Center, etc., would agree to eliminate the 58 units, and all of the provisions of the existing contract with the exception of the $55,000 the Agency originally set aside for relocation purposes, and Section VIII of the original agreement which states "The City agrees that after one year of successful operation of the CDBG program designated as the Housing Rehabilitation Program, to expand that program into rental housing, so long as the benefit to any absentee owner is not in violation of HUD's rules and regulations." The Executive Director pointed out that a sample agreement of the necessary amendment was contained in the agenda packet. -2-