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RDA Reso 2006-003
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RDA Reso 2006-003
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Last modified
5/10/2007 12:59:54 PM
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5/10/2007 12:59:51 PM
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CM City Clerk-City Council
CM City Clerk-City Council - Document Type
Resolution
Document Date (6)
6/19/2006
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PERM
Document Relationships
Agmt 2006 Mercy Housing California XXXIII (4)
(Approved)
Path:
\City Clerk\City Council\Agreements\2006
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<br />Project Description <br /> <br />Under the DDA, the Developer or its affiliate will lease the Property from the Agency and <br />will renovate and convert the Property into a 68-unit apartment complex with all units <br />affordable to Very Low Income households. There will be 65 studios, two one-bedroom <br />units, and one two-bedroom unit. The affordability of the housing units will be governed <br />by a regulatory agreement between the Developer and the Agency and will be restricted <br />for 55 years. The rents for the affordable units will be based on the area median income <br />for Alameda County (adjusted for household size), as follows: 7 units based on 30% of <br />area median income (AMI), 6 units based on 35% of AMI, 34 units based on 40% of <br />AMI, and 20 units based on 45% of AMI. There will be one unrestricted resident <br />manager's unit. All units will contain a kitchen and bathroom. On-site parking will be <br />provided in a secured ground level parking garage and exterior surface parking <br />(collectively the "Project"). <br /> <br />B. Agency Responsibilities <br /> <br />The Agency's responsibilities are as follows: <br /> <br />Since acquiring the Property in September 2005, the Agency has incurred <br />approximately $165,000 in tenant relocation costs and $139,000 in <br />planning costs including architectural services, financial consulting, legal, <br />structural engineer and contractor cost estimates. The Agency will not <br />receive any repayment of these costs. <br /> <br />The Agency will lease the Property to the Developer for a term of 75 years. The <br />rent for years 1-55 of the lease will be the lesser of $100,000 per year <br />(increasing by $2,500 per year) or 75% of Net Cash Flow. Net Cash Flow <br />is defined as Net Operating Income less partnership management and <br />asset management fees. If the Developer agrees to extend the <br />Regulatory Agreement for the remainder of the lease term (years 56-75) <br />the lease rent will continue as described above. If the Regulatory <br />Agreement is not extended, the rent will be 10% of the appraised fair <br />market value of the Property. This report assumes that Mercy Housing, as <br />a nonprofit whose purpose is to provide affordable housing, will extend <br />the Regulatory Agreement and continue to operate the project with the <br />rent restrictions. <br /> <br />The Agency will provide a Predevelopment Loan to the Developer in the amount <br />of $727,000 for architectural fees, planning fees, and various other soft <br />costs for predevelopment activities. This loan will be repaid without <br />interest when the Project's construction loan is funded. <br /> <br />In order to assist with capital funding required to renovate and convert the <br />Property to the proposed apartment complex, the Agency will provide the <br />Developer a loan in the amount of $584,000. If there are eligible cost <br />overruns, the Agency loan can be increased by up to $300,000. <br />Therefore, the maximum Agency loan would be $884,000. The loan will <br />not accrue interest. Repayment of the principal amount of the loan will be <br />due at the end of the 55-year term. <br />
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