10C Action 2011 0207 - Laserfiche WebLink

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Las Palmas Apartments -3- February 7, 2011 Both Citizens Housing and Eden Housing are currently working with Wentwood Partners (Wentwood), the current tax credit limited partner for Las Palmas, for Wentwood to exit the partnership and for Eden Housing to step into the full ownership role for Las Palmas. Wentwood is amenable to an early exit from the tax credit partnership because all the tax credit benefits for it and its investors have been exhausted. The opportune time for Wentwood to exit the partnership is now when Citizens Housing is exiting and transferring its ownership to Eden Housing because Wentwood can avoid tax liabilities. Despite Wentwood's early exit, it still has the responsibility of assuring that Las Palmas complies with the tax credit affordability guidelines. Therefore, Wentwood has requested Eden Housing post a bond which provides them with additional insurance that Eden Housing will maintain Las Palmas in compliance with tax credit requirements. In the unlikely event that Eden Housing does not maintain the affordability restrictions at Las Palmas, the bond will provide Wentwood with an insurance policy to cover any unexpected financial consequences for non- compliance. The total cost of the bond and other transactional costs to complete the property transfer to Eden Housing is $50,000, which the Agency's $50,000 loan will support. Tax Credit Compliance Bond $28,000 Title & Closing and Taxes $ 7,000 Property Inspections $ 5,000 Legal Fees $ 5,000 Consulting Fees $ 5,000 Total: S50,000 The following are the ongoing benefits to the City and the Agency: • Eden Housing, an experienced, well - regarded, and dedicated affordable housing developer and property manager, will both manage and own Las Palmas. • The current 15 -year term of the 1999 City regulatory agreement, which is scheduled to expire in 2015, will be extended for an additional fifteen (15) years. The forty-five (45) units [34 units for low- income households (60% AMI) and 11 units for very low- income households (50% AMI)] will continue to be restricted until 2030. • With the provision of the $50,000 RDA loan, the City /Agency will restrict an additional five (5) units for very low- income households (50% AMI) for a 55 -year period until 2066. Area Median Income Current Unit Additional Unit Total New (A MI%) Restrictions Restrictions Unit Restrictions Very Low (5 50% AMI) 11 5 16 Low (5 60% AMI) 34 34 TOTAL UNITS 45* 5 ** 50 *These 45 units will be restricted until 2030. * *These 5 units will be restricted until 2066.