HomeMy WebLinkAboutAGENDA REPORT 2010 0317 CC REG ITEM 10F ITEM 10.F.
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City Council Meeting
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MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: David C. Moe 11, Redevelopment ManagerN-m
DATE: March 10, 2010 (CC Meeting of 3117/10)
Subject: Consider $600,000 Loan to the Redevelopment Agency of the City of
Moorpark to Assist with Construction Financing for the Charles
Street Rental Project and Transferring the Properties of 396, 406 and
436 Charles Street to the Redevelopment Agency of the City of
Moorpark for Affordable Housing Purposes
BACKGROUND AND DISCUSSION
On April 1, 2009, the Redevelopment Agency of the City of Moorpark Board of Directors
approved a Loan Agreement in the amount of $350,000.00 with the Area Housing
Authority of the County of Ventura ("AHA") to fund predevelopment expenses to entitle a
20 unit affordable housing project on Charles Street. The loan does not require any
payments and will be repaid with the first draw of the construction loan for the project.
Interest on the loan is accruing quarterly and the rate is based on the quarterly Local
Agency Investment Fund (LAIF) rate. As of the date of this staff report, the AHA has
utilized $290,211.00 of the predevelopment loan.
On September 2, 2009, the Agency approved a Disposition and Development
Agreement with the AHA to construct 20 units with a podium style building. The project
would be 100% affordable and have a mixture of one, two and three bedroom units,
ranging in size from 870 -1100 square feet ("Project").
The AHA submitted an application for tax credit financing to the Tax Credit Allocation
Committee in conjunction with the City of Moorpark for the sole 2009 funding cycle.
Unfortunately, the application was not funded due to a low Tie Breaker score.
Currently, the AHA and staff have been working on an application for the spring 2010
tax credit funding cycle. In an effort to boost the Tie Breaker score, staff is suggesting
the Agency contribute $600,000.00 or $30,000.00 per unit into the Project in the form of
a long term loan. The Agency contribution would increase the amount of local
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Honorable City Council
March 17, 2010
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contribution and provide greater leverage for the tax credits. As a result, the Project's
Tie Breaker score would increase and provide a better chance the Project would be
funded.
The Agency's commitment would be contingent upon the ability of the AHA to secure
the needed tax credits for the Project. The loan to the AHA would have a thirty (30)
year term and no interest. Payments would begin in year 11 and the AHA would not be
penalized for prepayment. It is possible the loan could be paid off before or during the
construction of the Project if the AHA is able to secure other financing such as HOME
money.
A loan made from the City Housing Fund is needed to provide the Agency with sufficient
funds to finance a loan to the AHA.
In accordance with Development Agreement dated August 30, 2007, Toll Land XX
Limited Partnership transferred the properties of 396, 406 and 436 Charles Street
("Properties") to satisfy a portion of their affordable housing requirement for Tract 5463
and 5464 to the City of Moorpark. The Properties need to be transferred to the Agency
to be disposed of to the Area Housing Authority of the County of Ventura through the
Disposition and Development process.
FISCAL IMPACT
Due to other pending projects, the Agency's Low/Moderate Housing Fund does not
currently have $600,000.00 to fund the loan to the AHA. If the AHA is successful in
securing tax credit financing in the calendar year 2010, then the City of Moorpark would
need to make a loan to the Agency with City Housing Funds to finance the AHA loan.
The loan would be repaid without interest to the City at the first opportunity when
property owned by the Agency is sold for affordable housing purposes. The
appropriation for the loan would occur after the tax credits are secured and the Project
is initiated.
STAFF RECOMMENDATION
1. Approve a loan to the Redevelopment Agency of the City of Moorpark for
$600,000.00 from the City Housing Fund to assist with the construction of
the Charles Street Rental Project and authorize Mayor to sign the loan
agreement; and
2. Authorize the City Manager to execute all documents necessary to transfer
the Properties to the Redevelopment Agency of the City of Moorpark.
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