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REQUEST FOR <br />COUNCIL- ACTION <br />CITY COUNCIL MEETING DATE: <br />MARCH 1, 2016 <br />TITLE: <br />CITY LOAN MODIFICATION AGREEMENT <br />WITH DEPOT AT SANTIAGO, LP <br />(STRATEGIC PLAN NO. 5, 3) <br />,w <br />/z <br />'CITY CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />El <br />As Recommended <br />❑ <br />As Amended <br />❑ <br />Ordinance on 1e' Reading <br />El <br />Ordinance on 2nd Reading <br />Implementing Resolution <br />❑ <br />Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and the Clerk of the Council to execute the City Loan Modification <br />Agreement with Depot at Santiago, LP, to comply with new regulations and policies from the <br />Housing and Community Development Department and California Housing Finance Agency, <br />subject to non - substantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />On May 20, 2013, City Council approved a loan agreement with Depot at Santiago, LP in the <br />amount of $3,000,000 for a proposed mixed -use project located at 923 N. Santiago Street. This <br />project is a mixed -use development of 70 rental units (1, 2, and 3 bedrooms), 8,500 square feet <br />of retail space, and a 3,000 square foot community room. Sixty -nine units are at various levels of <br />affordability and one unit is for the onsite manager. <br />The funds committed to this project were $2,634,566 from the HOME Investment Partnerships <br />Program and $365,434 from the Community Development Block Grant program. Upon execution <br />of the loan agreement, funds were disbursed into the escrow account for the development of the <br />project. <br />Subsequently, on January 26, 2016, the City received Low - Income Housing Tax Credit investor <br />comments on the executed loan documents for the Depot at Santiago project. In addition, the <br />developer has leveraged additional funds for the project from the California Department of <br />Housing and Community Development ( "HCD ") and the California Housing Finance Agency <br />( "CaIHFA "). HCD and CaIHFA regulations and policies require that all residual receipt lenders <br />share 50% of the residual receipts for loan payments proportionately, based on the amount of <br />funds loaned by each lender. The City Loan Modification Agreement (Exhibit 1) includes revisions <br />to the Loan Agreement, City Affordability Restrictions, and City Deed of Trust to add language <br />allowing subordination of the City documents when required by other governmental agencies <br />providing financing to the project. The City Loan Modification Agreement also incorporates an <br />2513-1 <br />