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0 <br />Loan Agreements with <br />Townsend & Raitt, LLC and <br />Authorization of Relocation Plan <br />817 and 821 S. Townsend Street and <br />834 S. Raitt Street <br />January 7, 2008 <br />Page 4 <br />The total cost to acquire and rehabilitate the five buildings is <br />$6,754,657. In addition to the City and Agency loans, funding sources <br />include below market rate community investment loans in a total amount <br />of $1,255,311 from Washington Mutual Bank. Exhibit 2 includes a summary <br />of the sources and uses. <br />Other funding sources were evaluated by CSG Advisors, the Agency's <br />financial advisor, to determine if the City and Agency resources could <br />be further leveraged. These sources included tax - exempt mortgage <br />revenue bonds and Low - Income Housing Tax Credits (LIHTC). The <br />difference between the interest rates available through tax exempt bonds <br />and the Washington Mutual loan offered through its Community Lending <br />Division was negligible due to the nominal amount of supportable first <br />trust deed and the high cost of issuance of tax exempt bonds. In regard <br />to the LIHTCs, there would be an exit tax liability of approximately $1 <br />million to the tax credit partners. This liability occurs because the <br />financial benefit received by the tax credit partners exceeds the <br />initial investment. As a result of the very low- income rents, it is not <br />possible for the project to generate the income necessary to meet this <br />additional obligation. <br />When a Redevelopment Agency enters into an agreement for the acquisition <br />or disposition and development of property, which agreement would lead <br />to the displacement of people from their homes, the legislative body <br />must adopt, by resolution, a relocation plan. The draft Relocation Plan <br />for 817 S. Townsend, 821 S. Townsend and 834 S. Raitt (Exhibit 3) have <br />been prepared in conformance with applicable provisions of California <br />Relocation Assistance Law and Relocation Guidelines as well as United <br />States Department of Housing and Urban Development (HUD) guidelines. <br />These plans are required due to the potential for temporary relocation <br />of households. The draft plan for 817 S. Townsend, 821 S. Townsend and <br />834 S. Raitt does not foresee a need for any permanent relocation of <br />households, and estimates the cost of temporary relocation at $45,000. <br />ENVIRONMENTAL IMPACT <br />In accordance with the California Environmental Quality Act and the <br />National Environmental Policy Act, the proposed project is exempt from <br />further review. Categorical Exemption No. ER 2007 -201 will be filed for <br />this project. <br />5 -32 <br />