Agenda

Return

C. 80

To:	Board of Supervisors
From:	Catherine Kutsuris, Conservation & Development
Date:	December 4, 2012

Contra

Costa

County

Subject:

APPROVAL OF HOME INVESTMENT PARTNERSHIPS ACT AND COMMUNITY DEVELOPMENT BLOCK GRANT LEGAL DOCUMENTS FOR THE ORINDA SENIOR APARTMENTS IN ORINDA

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 12/04/2012

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Mary N. Piepho, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

Kara Douglas 674-7880

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: December 4, 2012
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

1. APPROVE and AUTHORIZE the Conservation and Development Director, or designee, to execute required legal documents to provide $2,040,000 in HOME Investment Partnership Act (HOME) and $2,050,000 in Community Development Block Grant (CDBG) funds to Irwin Way L.P., a California limited partnership, for the Orinda Senior Apartment project in Orinda.


2. FIND, as the responsible agency, that the Mitigated Negative Declaration prepared by the City of Orinda, as the lead agency, is adequate for purposes of compliance with the California Environmental Quality Act; and

RECOMMENDATION(S): (CONT'D)

3. DIRECT the Conservation and Development Director, or designee, to file a Notice of Determination for this project with the County Clerk; and

4. DIRECT the Conservation and Development Director, or designee, to arrange for payment of the $50 handling fee to the County Clerk for filing such Notice of Exemption.

FISCAL IMPACT:

No General Fund impact. HOME and CDBG funds are provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development (HUD).

BACKGROUND:

On April 29, 2009, the Board of Supervisors allocated $650,000 in CDBG funds to Eden Development, Inc. (Eden) for the Orinda Senior housing project. On April 28, 2010, the Board of Supervisors allocated $1,100,000 in HOME and an additional $400,000 in CDBG funds. On May 15, 2012, the Board awarded an additional $940,000 in HOME and an additional $1,000,000 in CDBG funds. Through these actions, the Board has awarded $2,040,000 of HOME and $2,050,000 of CDBG funds for a total loan amount of $4,090,000.

The purpose of the Orinda Senior Apartment project is to improve the supply of multi-family rental housing affordable to and occupied by lower income senior households in Central County through the construction of a 66 unit apartment building in Orinda.

Thirty-three of the units will be designated as County-assisted. Seven units will be affordable and available to households earning up to 30 percent of the area median income (AMI). Fourteen units will be affordable and available to households earning up to 40 percent of AMI. The remaining twelve County-assisted units will be affordable and available to households earning up to 50 percent AMI.

Eden has formed a limited partnership, Irwin Way L.P. to develop and own this project. Irwin Way L.P. will purchase the site using CDBG funds. HOME funds will be used for development costs including permits and fees, soft costs, and construction costs. HOME and CDBG funds will be provided to Irwin Way L.P. in the form of a 55-year, residual receipt loan a three percent interest rate. Affordability and use restrictions will be incorporated into the County loan documents.

National Environmental Policy Act (NEPA): All HOME and CDBG projects are subject to NEPA and 24 CFR Part 58 review. The NEPA review for this project has been completed. Required mitigations are included in the loan agreement.

Additional financing for the development includes a City of Orinda loan, low income housing tax credits, project-based Section 8 certificates, and a private bank loan. Eden may also apply for Federal Home Loan Bank Affordable Housing Program funds.

Due to the high construction costs and limited revenue from the restricted rents, the total amount of the financing provided to the project will likely exceed the value of the completed project. Even though the proposed equity investment from low income housing tax credits is substantial compared to the amount of long term debt, the partnership agreement will have numerous safe guards of the investors equity. These safe guards essentially subordinate the County’s debt to the investor’s equity. Therefore, the County funds (federal grant funds) may not be fully secured through the value of the property.

County Counsel has approved to form the following attached documents:
• HOME and CDBG Loan Agreement
• Promissory Note
• Deed of Trust with Assignment Of Rents, Security Agreement, And Fixture Filing
• Regulatory Agreement and Declaration Of Restrictive Covenants

CONSEQUENCE OF NEGATIVE ACTION:

Without the approval and execution of the HOME and CDBG legal documents, the project will not be constructed. Eden must close on all financing in December or will lose the nine percent low income housing tax credits.

CHILDREN'S IMPACT STATEMENT:

None.