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File Number: 16-030 <br />Low Income Investment Fund (LIIF) in 2009. <br />In 2009, federal, state and regional funds were envisioned as the primary funding sources for <br />the tenant improvements for the Childcare Center. Unfortunately, these public funding <br />sources are no longer available or have been substantially diminished for capital costs. This <br />has left a shortfall for the development of a long planned and anticipated facility for child care <br />services. <br />Analysis <br />Phase 1 of Marea Alta is nearing completion and full occupancy is scheduled for the end of <br />January 2017. The project includes 115 affordable rental units that are primarily 2- and <br />3-bedroom units, an over 400 parking garage for tenants and BART replacement parking. <br />The childcare center will be located on the ground floor. <br />The child care center will total approximately 7,200 square feet. It will be comprised of 4,850 <br />square feet of child care center indoor space and an adjacent 2,400 square foot outdoor play <br />area. The center will be licensed to serve up to 60 children (2 years to kindergarten age) and <br />create 7 new jobs (1 site supervisor and 6 full time employees). Annual operating revenues <br />for the childcare center are expected to come primarily from subsidized slots, but it will also <br />include some private pay slots. The center will be open to the general public, including San <br />Leandro residents, and will not be exclusive to Marea Alta tenants. <br />The total estimated construction and improvements cost for the childcare center is <br />approximately $975,000. See Exhibit A “Development Budget” of the Child Care Center Loan <br />Agreement attached to the resolution. The construction costs are subject to change as the <br />design is finalized. The source of funding for the childcare center to date is a $50,000 grant <br />from the San Francisco Foundation to BRIDGE. BRIDGE and Davis Street entered into a <br />Memorandum of Understanding in 2015. They are currently negotiating a lease agreement. I <br />n the MOU, Davis Street committed to raise funds to close the gap between the loan and the <br />total development costs of the improvements. This amount is currently estimated to be <br />$125,000, but it is subject to change. <br />On June 6, 2016, the City Council amended the FY 2016-17 Budget and set aside $800,000 <br />in funding in anticipation of this loan agreement. Funding was available from the $2.1 million <br />former Redevelopment Agency General Fund loan repayment that the City received. <br /> <br />Key terms of the loan agreement between the City and BRIDGE are: <br />·$800,000, 1% annual interest, 20 year loan term - the outstanding loan principal will be <br />reduced and forgiven annually by $40,000 as long as BRIDGE is not in breach of the <br />lease. <br />·All interest and principal will be forgiven if BRIDGE complies with all loan terms and <br />conditions. <br />·No more than $50,000 of the loan may be used for predevelopment costs (i.e., <br />architecture, engineering, etc.), while the remaining $750,000 must be used for <br />construction costs related to the building of the child care center. <br />·BRIDGE cannot commence construction of the child care center improvements until it <br />has confirmed that Davis Street, or another organization if Davis Street and BRIDGE <br />Page 2 City of San Leandro Printed on 1/31/2017 <br />121