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B. Agency Responsibilities <br />The Agency will acquire the site at its appraised value of $1,000,000 and convey it to ABHOW for <br />development of the Project. The Agency intends to fund the site's acquisition with Section 108 Loan <br />Guarantee funds. The Section 108 Loan will be repaid from the Agency's 20% Housing Set-Aside fund <br />over a 20-year period. The Loan will carry aninterest-rate equal to the LIBOR rate (currently <br />approximately 5.36%). Annual interest only payments of approximately $53,600 will be due for the first <br />three years. The loan will amortize over the last 17 years with annual payments of approximately <br />$91,100. The first interest only payment will be due on January 1, 2001. The Loan will be fully <br />amortized by December 31, 2020. <br />ABHOW will purchase the site from the Agency through a promissory note for $1 million. The note will <br />provide fora 3% interest rate and carry a term of 55 years. Principal and interest payments will be <br />deferred for 55 years. The promissory note will be secured by a second deed of trust. The note will be <br />forgiven at the end of 55 years provided that the project continues to comply with the terms of the DDA <br />and the affordability covenants. Escrow will close no later than May 31, 2003 and not earlier than sixty <br />days prior to the commencement of construction. <br />The site will be conveyed to the Developer in "as is" condition. The Agency will not be responsible for <br />funding any demolition costs or any other site work on the Site at any time. <br />C. Developer Responsibilities <br />The Developer is responsible for developing the Project in accordance with the terms of the Disposition <br />and Development Agreement, as follows: <br />^ Submit evidence of financing plans to the Agency for approval; <br />^ Secure all approvals for the Project; <br />^ Pay a $10,000 option payment to the Agency to secure site control. The payment shall be <br />made within 45 days from the date that the DDA is executed. The option period will <br />provide the Developer until May 30, 2002 to secure financing. <br />^ Secure all financing for the Project, excluding the acquisition of the site, and provide <br />evidence of financing by May 30,_2002; <br />^ .Fund and undertake demolition, site clearance, and site preparation; <br />^ Fund all development costs, including the cost of the appraisal of the property; <br />001-001.doc Keyser Marston Associates, Inc. <br />19096.023 Page 4 <br />