BusDev Highlights 2006 0309 - Laserfiche WebLink

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i • residual receipts repayment. The City Manager explained what the McKinney funds were and how they must be targeted to projects serving very low income households. AH will leverage the City's subsidy with Alameda County HOME funds, other public resources and loans from private and/or nonprofit lenders. Staff is working to bring AH's $1.1 million loan request to the City Council for consideration and approval on April 17, 2006. Mayor Young noted that the City likes mixed-income and mixed-use projects such as the existing Mission Bell Apartments and AH's intention to serve only very low and extremely low- income households seemed at odds with such projects. Tom Liao added that the current owners have been very good landlords and have kept their rents for affordable and non-affordable units below market rate. Mayor Young asked AH if it had along-term commitment to maintaining the Mission Bell Apartments and AH confirmed that it would. Councilmember Stephens asked AH what its mission as an organization was. AH described its purpose as creating affordable housing for those in need. AH noted it also serves special needs populations, but would not be specifically targeting this population for this project. While this proposed project would target the working poor, senior retirees would be eligible residents as well. Councihnember Stephens asked staff to explain why it recommended offering a deferred loan for 55 years at 3% interest. The City Manager explained that the deferred loan is a common public financing vehicle and 55 years is a standard affordability period. Hanson Hom commented that the 3% below market interest rate had been used in previous affordable housing projects receiving City assistance and after 55 years the loan terms could be re-negotiated. Councilmember Stephens inquired whether the City's loan was secured and Hanson Hom noted that it would be via proper legal documents such as a promissory note and deed of trust. The private conventional loan would take first position, but the City would negotiate with the County to take second position. Mayor Young asked AH if it would be putting its own money into this proposed project. AH responded no, but it would assume the existing forgivable residential rehabilitation loan which the Redevelopment Agency had approved for the current owner as a deferred loan. Mayor Young commended AH for taking an interest in such a nice and well-maintained property. 2. Discussion Regarding Proposed Disposition and Development Agreement with Mercy Housing, Inc. (2398 East 14t~ Street) Gerry Tierney from Kava Massih Architects began by showing a poster board that introduced the newest facade re-design concept for the Islander Motel which incorporated a centralized channel glass wall for the elevator shaft, a breakdown of the building into three distinct parts, a more prominent northwest building element from the street through a roof overhang and more interesting window patterns, landscaping, and metal basket weave fencing and railing. Councilmember Stephens noted that he liked the new glass feature because it made the building look more dramatic. Sheela Jivan of Mercy Housing California (MHC) welcomed any future color recommendations by the City Council. Tom Liao summarized details of the key deal points (see attached) for the proposed Disposition and Development Agreement (DDA) between MHC and the San Leandro Redevelopment