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Tax Exempt Bond Financing and Loan <br />Agreements with Lacy and Raitt, LP <br />(703 N. Lacy/702 S. Raitt) <br />January 5, 2009 <br />Page 6 <br /> <br />Project Costs 703 N. <br />Lacy 702 S. <br />Raitt Total <br />Amount <br />Acquisition $3,530,250 $1,250,000 $4,780,250 <br />Developer Fee $329,000 $329,000 $658,000 <br />Construction and Related Costs $1,361,351 $1,125,757 $2,487,108 <br />Total $5,220,601 $2,704,757 $7,925,358 <br />The loans will bear interest at .So and repayments will be based on <br />residual receipts (annual gross revenues less operating expenses). <br />These loans are contingent on approval of the tax exempt bonds and tax <br />credit allocations. <br />All code deficiencies will be addressed, and both properties will <br />receive extensive improvements both inside and out. Among many other <br />items, the Lacy property will receive new landscaping, exterior deck <br />repair, updates to the building fagade, new plumbing fixtures and <br />kitchen appliances. In addition to the unit reconfigurations, the many <br />repairs to be made to the Raitt property include a new roof, new water <br />heaters, new trash enclosures, new flooring, new windows, and new <br />kitchen cabinets. <br />In order for the Housing Authority to apply for a bond allocation from <br />CDLAC on behalf of the partnership, the Housing Authority must adopt an <br />Inducement Resolution. The Inducement Resolution confirms the Housing <br />Authority's intent to issue the bonds and identifies the time at which <br />costs expended on the project qualify for financing with the tax-exempt <br />bonds. The bonds are considered "conduit" obligations. This means that <br />although the Housing Authority will issue the bonds, the owner is <br />actually the borrower and has sole responsibility for repayment. The <br />bonds will be repaid strictly out of the project's cash flow. There is <br />no recourse to the Housing Authority, the City of Santa Ana or the <br />Community Redevelopment Agency. <br />Prior to bonds being sold, the City Council must hold a public hearing <br />as required by the Tax Equity and Financial Responsibility Act (TEFRA). <br />The public hearing is to solicit comments on the project and the <br />issuance of the bonds. The TEFRA hearing is also a precondition to <br />applying for the bond allocation. <br />4-66 <br />