BusDev Highlights 2006 0309 - Laserfiche WebLink

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C~ Proposed Disposition and Development Agreement (DDA) with Mercy Housing California (MHC) for Islander Motel Proiect I. Key Deal Points in DDA a. Acquisition/rehabilitation of 68 affordable rental units (67 studios and 1 manager's unit) • 7 units @ 30% AMI (extremely low income) • 60 units @ 35% to50% AMI (very low income) b. Total Redevelopment Agency Subsidy/Loan -approx. $5 million • Long-term loan • $4.5 million for acquisition, $265K for development, $300K contingency (e.g., cost overruns only if needed) • Loan terms: deferred for 55 years at 3% annual interest with residual receipts repayment Annual Operating Subsidy • Annual Cap for 30 years -Year 1 ($62K) through Year 30 ($359K) to cover 1% annual inflation rate gap between rental income and operating expenses II. Predevelopment Loan Agreement (separate from DDA) • Short-term loan MHC is requesting to bonow $554,787 from Redevelopment Agency for necessary predevelopment soft costs until the construction loan is approved (i.e., architecture/engineering, fees/assessments, legal, tax credit application fee) To be repaid to Agency at 3% interest from construction loan when it is approved prior to the start of construction in Fall/Winter 2006 III. Request for Committee Approval a. Allow City Manager to authorize up to $25,000 for architectural services related to preparing planning/entitlement submittal to City for approval prior to applying for low income housing tax credits in July 2006 • This architectural work must begin ASAP because MHC must have all its planning/entitlement approval prior to submitting a low income housing tax credit application to State Reimburses architect for work done from now until when City Council approves the Predevelopment Loan Agreement and DDA in April 2006 This $25,000 is part of the $554,787 in predevelopment costs and will be repaid by MHC under the Predevelopment Loan Agreement Bi~si~zess Develop~neiit Co~nhiittee (March 9, 2006)