03 - Joint PH - Amend to DDA-Con Plan and Loan Agree for Vista Del Rio

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Substantial Amendment to Consolidated Plan and Loan Agreement for Vista Del Rio March 15, 2010 Page 2 Attorney; and recommend that the Community Redevelopment Agency direct the Agency Counsel to prepare and authorize the Executive Director and Agency Secretary to execute an Amendment to the Disposition and Development Agreement with Vista Del Rio Housing Partners, L.P. DISCUSSION On July 20, 2009, the Community Redevelopment Agency (Agency) authorized execution of a Disposition and Development Agreement (DDA) with Vista Del Rio Housing Partners, L.P. (developer) for the development of a 41 unit affordable housing project on a 3.2 acre vacant site owned by the Agency. At the time, the project budget anticipated that the majority of the project's costs would be met with federal low income housing tax credits, and that continues to be the case. However, the developer was unsuccessful in its initial application for tax credits and must apply again. The demand for tax credits is quite high, and the California Tax Credit Allocation Committee uses the amount of other public subsidies committed to a project as a means of choosing between projects that have otherwise identical scores. Additional public subsidies from other sources serve to reduce the size of the tax credit investment required for a given project and increase the number of projects that can be assisted. Increasing the amount of HOME funds committed to the project from $500,000 to $1.5 million will significantly improve the project's chances for success in the next tax credit application round. (Exhibit 1) The Consolidated Annual Action Plan (Plan) is a one-year comprehensive planning document that identifies federally funded projects the City anticipates implementing during the fiscal year. As approved by the U. S. Department of Housing and Urban Development, the City's Citizen Participation Plan requires that substantive changes to the Plan be approved by City Council after a thirty-day public comment period and public hearing. A substantial amendment is required because the current Plan did not identify new construction of rental property as a project and did not budget funds for it. The substantial amendment will create a new project entitled HOME New Construction and fund it with $1.5 million transferred from an existing program entitled HOME Acquisition/Rehabilitation. The effect will be to enable the City to spend $1.5 million in HOME Program funds on multifamily new construction activities (i.e., Vista Del Rio), while reducing HOME funds available for multifamily acquisition/rehabilitation activities by the same amount. The public comment period for the proposed substantial amendment (Exhibit 2) began on February 13 and will end on March 14. Similarly, it is also necessary to amend the financial portion of the DDA in order to incorporate the larger commitment of HOME funds. Additional modifications to the DDA will allow the manager's unit to not be income-restricted. This allows flexibility in filling this key position. The unit mix will now change to allow eleven HOME assisted units versus five and twenty-nine Agency assisted units. The unit mix and rent restrictions are as follows: 3-4