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File Number: 17-076 <br />Implementation of the programs to be funded by the Bond is expected to happen over an <br />eight-year period. Initial work by County HCD towards implementation has already begun. <br />The initial focus is on implementation work needed through June 2018, including development <br />of more detailed program policies, development and issuances of requests for proposals, <br />discussions with each city regarding focus and selection process for rental housing <br />developments to be financed from base city allocations of funds. <br />County HCD is currently preparing detailed Bond program policies and will seek input from <br />each city. County HCD plans to release a public draft of the proposed program policies in <br />Spring 2017 and then should begin to finalize the policies and begin operating the housing <br />programs in Summer/Fall 2017. San Leandro staff will update the City Council on all of the <br />Bond programs once the program policies are closer to finalization this summer. <br />Marea Alta Phase II <br />Marea Alta Phase II, is the final phase of the 200-unit Marea Alta affordable mixed-use <br />development, which will include 85 units of affordable senior rental housing. Marea Alta Phase <br />I contains 115 affordable rental housing units as well as a childcare center and underground <br />BART parking. The City provided $9.75 million in funding from former Redevelopment Agency <br />Housing Set-Aside funds to the $58 million Marea Alta Phase I development. <br />With the award of low income housing tax credits from TCAC in Fall 2016, BRIDGE had the <br />necessary financing for Marea Alta Phase II, which has a total estimated development cost of <br />$42 million. In Summary 2016, the City awarded BRIDGE $1 million (from HOME and former <br />Redevelopment Agency Housing loan repayments) in funding assistance Marea Alta Phase II. <br />Other notable funding sources that BRIDGE received include State Housing and Community <br />Development (State HCD) Proposition 1C grant funds, State Cap and Trade funds, Alameda <br />County HOME/Boomerang funds, Federal Home Loan Bank Affordable Housing Program, <br />and private permanent loans. See Attachment A for the Marea Alta Phase II pro forma. <br />Marea Alta Phase II is now facing a financing gap of over $2 million due to unexpected <br />disruptions to the recent low income housing tax credit market. <br />Analysis <br />Subsequent to the November 2016 Presidential election, the President-elect’s statements <br />regarding his intention to lower the corporate tax rate and a bill pending in Congress had an <br />immediate impact on the market for low-income housing tax credits nationally. LIHTC <br />corporate investors lowered the amount they are willing to pay for the credits, causing <br />significant funding gaps in local projects that are far along in the development process. This <br />impacts projects that 1) have received an allocation of tax credits (such as Marea Alta Phase <br />II) and 2) projects intending to apply in March 2017 for LIHTC allocations. <br />In Alameda County, the new funding gap created by this situation is approximately $25 million <br />spread out amongst Alameda, Berkeley, Emeryville, Fremont, Livermore, Oakland, <br />Pleasanton, and San Leandro (see Attachment B). All of the developments contain units <br />targeted to very low-income households and all have received city investments. <br />The Housing Bond presents an opportunity to close the unanticipated new funding gaps and <br />allows the impacted developments to move forward. County HCD staff is in conversation with <br />the cities (and affected developers such as BRIDGE) regarding this issue and the possibility <br />of cities using portions of their base city bond allocations to fill these gaps. <br />In the case of Marea Alta Phase II, BRIDGE issued an RFP for the project’s tax credits in <br />Page 3 City of San Leandro Printed on 2/28/2017 <br />248