05 - JT PH DDA-Loan Agreements Bush and Birch

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