HomeMy WebLinkAboutSR - - LOW & MODERATE INCOME HOUSING ASSET FUNDS & HOME INVESTMENT PARTNERSHIPS FUNDSAGENDA ITEM
March 10, 2015
TO: Honorable Mayor and
Members of the City Council
THRU: John W. Sibley
City Manager
FROM: Anna Pehoushek KV
Acting Assistant Community
Development Director
ReviewedNerified By:
City Manager
Finance Director
To Be Presented By: Mary Ellen Laster
Cons Calendar _ City Mgr Rpts
Council Reports _ Legal Affairs
Boards /Cmtes _ Public Hrgs
X Admin Reports Plan/Environ
1. SUBJECT 7
Preliminary Award of Low and Moderate Income Housing Asset Funds (LMIHAF) and HOME
Investment Partnerships (HOME) funds for proposed Lemon Grove Apartments
2. SUMMARY
Lemon Grove, LP plans to develop the Lemon Grove Apartments, an 82 -unit affordable housing
project to be located at 1148 North Lemon Street. The total estimated development cost of the
project is $28,799,957. Proposed financing includes tax exempt bonds, private financing, two
City loans funded with LMIHAF and federal HOME funds, private financing, and tax credits.
Approval and execution of the attached Preliminary Award letter would enable the developer to
submit applications for bonds and tax credits by the March 20, 2015 deadline.
3. RECOMMENDATION
(1) Authorize the City Manager to execute the attached letter regarding the City's Preliminary
Award of $6,750,000 in Low and Moderate Income Housing Asset Funds and $1,300,000 in
HOME Funds for the Lemon Grove Apartments.
(2) Authorize the appropriation of $6,750,000 from LMIHAF (921) unreserved fund balance to
expenditure account number 921.9810.56571.20249 (LMIHAF Loan - Lemon Grove
Apartments).
(3) Authorize the transfer of $447,474 from account number 317.9660.56510.11250 (HOME
Developer Projects) and $852,526 from account number 317.9660.56571.20091 (Santa Ines
Project) for a total transfer of $1,300,000 to expenditure account number
317.9660.56571.20249 (HOME Loan - Lemon Grove Apartments).
ITEM �. a 1 3/10/15
O Printed on Recycled Paper
Lemon Grove Apartments
Preliminary Award of LMIHAF and HOME Funds
Page 2
4. FISCAL IMPACT
Upon appropriation and transfer, sufficient funds will be available to fund the City loans for the
proj ect.
5. STRATEGIC PLAN GOAL(S)
Goal 3: Enhance and promote quality of life in the community.
Strategy c.: Support and enhance attractive, diverse living environments.
6. GENERAL PLAN IMPLEMENTATION
Land Use Goal 1.0: Meet the present and future needs of all residential and business sectors with
a diverse and balanced mix of land uses.
Policy 1.3: Provide a range of housing densities and types to meet the diverse needs and
lifestyles of residents.
Housing Goal 2.0 Assist in the development of adequate housing to meet the needs of Low and
Moderate Income households.
7. DISCUSSION and BACKGROUND
Lemon Grove, LP, a partnership of Orange Housing Development Corporation and C &C
Development Co., LLC (the `Borrower ") plans to develop the Lemon Grove Apartments, an 82-
unit affordable housing project to be located at 1148 North Lemon Street. The project would
consist of 24 two - bedroom units including one manager's unit and 58 three- bedroom units, and
be in the same neighborhood as the 57 -unit Citrus Grove Apartments that were completed by the
same development team.
The total estimated development cost of the project is $28,799,957. Proposed financing includes
the following:
Permanent Funding Source
Amount
Tax Exempt Bond Financing
$ 9,909,980
LMIHAF — City Loan
6,750,000
HOME - City Loan
1,300,000
Bank of America Settlement Funds Loan
1,600,000
Deferred Developer Fee
1,427,489
General Partner Equity
100
Four Percent Tax Credit Equity Investment 1
7,812,388
Total 1
$ 28,799,957
ITEM 2 3/10/15
O Printed on Recycled Paper
Lemon Grove Apartments
Preliminary Award of LMIHAF and HOME Funds
Page 3
The funding sources for the two proposed City loans are LMIHAF and HOME funds. LMIHAF
are program income deposits held by the City in its capacity as the Housing Successor to the
former Orange Redevelopment Agency. HOME funds consist of uncommitted HOME
Investment Partnerships Program allocations from the U.S. Department of Housing and Urban
Development including funds for projects whose funding commitments have expired. Both
funding sources may be allocated for qualified affordable housing projects.
In return for financial assistance from the City, all of the units would remain affordable to Very
Low and Low Income families for a minimum of 55 years. The proposed project offers the City
an opportunity to address housing needs by providing quality, affordable apartments for families.
The Affordable Housing Loan Agreement, which would further set forth the terms and conditions
of the City's loans would be presented for Council consideration at a future meeting. Council
action is being requested at this time to enable the Borrower to apply for multifamily housing
revenue bonds and tax credits by the March 20, 2011 deadline.
The proposed entitlements and bond issuance for the project are discussed under separate staff
reports.
8. ATTACHMENTS
• City Letter Regarding the Preliminary Award of $6,750,000 in Low and Moderate Income
Housing Asset Funds and $1,300,000 in HOME Funds for the Lemon Grove Apartments.
N: /CDD1Hming1Pmjws/Lemon Gmve/Staff Repons/3 -10 -15 Prelim Award
ITEM 3 3/10/15
Q Printed on Recycled Paper