Agenda

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C. 47

To:	Board of Supervisors
From:	Catherine Kutsuris, Conservation and Development Director
Date:	February 25, 2014

Contra

Costa

County

Subject:

APPROVAL OF HOME INVESTMENT PARTNERSHIPS ACT AND HOUSING OPPORTUNITIES FOR PERSONS WITH HIV/AIDS LEGAL DOCUMENTS FOR THE OHLONE GARDENS APARTMENTS

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 02/25/2014

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

ABSENT:

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: February 25, 2014
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

1. APPROVE and AUTHORIZE the Conservation and Development Director, or designee, to execute required legal documents to provide $1,440,000 in HOME Investment Partnership Act (HOME) and $750,000 in Housing Opportunities for Persons with HIV/AIDs (HOPWA) funds to Ohlone Gardens, L.P., a California limited partnership, for the Ohlone Gardens Apartment project in El Cerrito.



2. FIND, as the responsible agency, that the Notice of Exemption prepared by the City of El Cerrito, as the lead agency, is adequate for purposes of compliance with the California Environmental Quality Act;

RECOMMENDATION(S): (CONT'D)

3. DIRECT the Conservation and Development Director, or designee, to file a Notice of Exemption 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 Determination.

FISCAL IMPACT:

No General Fund impact. HOME funds are provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development (HUD). HOME CFDA# 14.256. HOPWA funds are provided to the County on a formula allocation basis through the City of Oakland CFDA# 14.241.

BACKGROUND:

On May 13, 2013, the Board of Supervisors allocated $1,440,000 in HOME funds and $750,000 in HOPWA funds to Resources for Community Development (RCD) for the Ohlone Gardens Apartment development.

The purpose of the Ohlone Gardens Apartment development is to improve the supply of multi-family rental housing affordable to and occupied by lower income senior households in West County through the construction of a 57 unit apartment building in El Cerrito.

Fourteen of the units will be designated as County-assisted, including five HOPWA units. All of the County-assisted units will be affordable to households earning 30 percent of the area median income.

RCD has formed a limited partnership, Ohlone Gardens L.P. to develop and own this project. HOME and HOPWA funds will be used to support pre-development and construction of the development. HOME funds will be provided in the form of a 55-year, residual receipt loan with a three percent interest rate. HOPWA funds will be provided as a fully deferred loan with no interest. Affordability and use restrictions are incorporated into the County loan documents.

National Environmental Policy Act (NEPA): HOME 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 $6,360,000 in City of El Cerrito funds (former redevelopment agency and State infrastructure grant), $16.6 million in nine percent low income housing tax credits, $562,000 in Mental Health Services Act funds, and a $1 million Union Bank loan.

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 may not be fully secured through the value of the property.

County Counsel has approved to form the following attached documents:

HOME and HOPWA Loan Agreement
Promissory Note
Deed of Trust with Assignment Of Rents, Security Agreement, And Fixture Filing
Regulatory Agreement and Declaration Of Restrictive Covenants
Intercreditor Agreement between the County, Ohlone Gardens L.P., and the City of El Cerrito

CONSEQUENCE OF NEGATIVE ACTION:

Without the approval and execution of the HOME and HOPWA legal documents, the project will not be constructed. RCD must close on all financing by March 20, 2014 or its $16.6 million in tax credit financing will be lost.

CHILDREN'S IMPACT STATEMENT:

N/A