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DDA and Loan Agreements - Bush and Birch Street Properties <br />September 7, 2010 <br />Page 3 <br />beginning rents will be $989 for two-bedrooms and $1,125 for three bedrooms. Site plans and <br />elevations for the three sites are attached as Exhibit 4. <br />The fourth multi-family site is a freeway widening remnant parcel at the corner of 22nd and <br />Spurgeon. The developer is still exploring options for this site. Once the development is <br />determined, staff will bring it before the Agency for approval. <br />In accordance with redevelopment law, a Summary of Sale has been prepared by Keyser Marston <br />Associates, which outlines in detail the financial terms of the proposed transaction. A summary of <br />the terms and conditions contained in the proposed Disposition and Development Agreement are <br />as follows: <br />The Agreement requires the Developer to construct a total of 15 apartment units, as follows: <br />• 2034-2038 North Bush Street: The Developer must construct two 2-bedroom units and three <br />3-bedroom units for a total of five units; <br />• 217-219 South Birch Street: The Developer must construct two 2-bedroom units and three <br />3-bedroom units for a total of five units; and <br />• 435-437 South Birch Street: The Developer must construct two 2-bedroom units and three <br />3-bedroom units for a total of five units. <br />The income and affordability restrictions are defined as follows: <br />• All 15 units must be reserved for very low income (50% Area Median Income) households; <br />and <br />• The income and affordability covenants must remain in place for at least 55 years. <br />Terms of Loans: <br />• Two loans per property ( Agency Loan and City Loan); <br />• Repayable from the cash flow (Residual Receipts) generated by the Project; <br />• Each Agency Loan will accrue .5% (one half percent) simple interest annually; and <br />• Loans are 55 years. <br />In order to fund the construction, the partnership will apply for tax exempt bonds and tax credits. <br />The Mortgage Revenue Bond Inducement is on the agenda as a separate item for approval. The <br />bond application will combine these projects with the proposed development on 605-611 East <br />Washington. In addition to these funds, the project will require both City and Redevelopment <br />Agency funds. Below is a summary of the sources and uses of the project funds. <br />8OA-3