05 JTPH LACY & RAITT - Laserfiche WebLink

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Tax Exempt Bond Financing and T~oan Agreements with Lacy and Raitt, LP {703 N. Lacy/702 S. Raitt) January 5, 2009 Page 6 Project Costs 703 N. ~aay 702 S . Raitt Total. Amount Acquisition $3,530,250 $1,250,000 $4,780,250 Developer Fee $329,000 $329,000 $658,000 Construction and Related Costs $1,361,351 $1,125,757 $2,487,108 `T'otal $5,220,601 $2,704,757 $7,925,358 The loans will bear interest at .5o and repayments wi11 be based on residual receipts {annual gross revenues less operating expenses). These loans are contingent on approval of the tax exempt bands and tax credit allocations. All code deficiencies will be addressed, and both properties will receive extensive improvements both inside and out. Among many other items, the Lacy property will receive new landscaping, exterior deck repair, updates to the building fagade, new plumbing fixtures and kitchen appliances. In addition to the unit reconfigurations, the many repairs to be made to the Raitt property include a new roof, new water heaters, new trash enclosures, new flooring, new windows, and new kitchen cabinets. In order for the Housing Authority to apply for a bond allocation from CDLAC on behalf of the partnership, the Housing Authority must adopt an Inducement Resolution. The Inducement Resolution confirms the Housing Authority's intent to issue the bonds and identifies the time at which costs expended on the project qualify for financing with the tax-exempt bonds. The bonds are considered "conduit" obligations. This means that although the Housing Authority will issue the bonds, the owner is actually the borrower and has sole responsibility for repayment. The bonds will be repaid strictly out of the project's cash flow. There is no recourse to the Housing Authority, the City of Santa Ana or the Community Redevelopment Agency. ~'rior to bonds being sold, the City Council must hold a public hearing as required by the Tax Equity and Financial Responsibility Act (TEFRA). The public hearing is to solicit comments on the project and the issuance of the bands. The TEFRA hearing is also a precondition to applying for the bond allocation.