No General Fund impact: 100 percent federal funds were used. HOME and CDBG funds are provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development.
On December 20,1994, the County loaned $285,000 in Community Development Block Grant (CDBG) funds and $325,000 in HOME Investment Partnerships Act (HOME) funds to Golden Oak L.P. (Golden Oak) to support the development of Golden Oak Manor, a 50-unit senior apartment complex in Oakley. The loans have a 60-year term, a four percent interest rate, and are evidenced by a loan agreement and a regulatory agreement.
Golden Oak is controlled by EAH, Inc. (EAH), a non-profit affordable housing developer. EAH was established in 1968 and has developed 92 properties throughout California and Hawaii, including five in Contra Costa County. EAH is starting the process of refinancing the property with low income housing tax credits and tax exempt bonds. The County will be the bond issuer (see the related Board action: Inducement Action for Multifamily Residential Rental Housing Development - Golden Oak Manor).
As part of the refinance, the property will be acquired by a new limited partnership. The new limited partnership will include EAH, or an EAH affiliate as the managing general partner and a tax credit investor as the limited partner.
The refinance will allow EAH to rehabilitate the property including site work, new roof, new exterior paint, upgrades to common areas, energy efficiency upgrades, and unit interior improvements as needed. These improvements will allow Golden Oak to continue to provide decent affordable housing to low income seniors in East County.
In order to accomplish the refinancing, the County must subordinate its existing deed of trust and regulatory agreement to the new lender. In addition, in order to have the new property owner, the to-be-formed limited partnership, obligated to repay the funds due to the County, the County must consent to the assignment of the loan documents to the new owner.
Staff recommends that the Board approve the transfer of ownership from Golden Oak to the new limited partnership. In addition, staff recommends that the Board authorize the Director of the Department of Conservation and Development, or designee, to execute on behalf of the County an assignment and assumption agreement in a form to be approved by County Counsel that will assign the County various legal obligations to the new owner; and to execute a subordination agreement, in a form to be approved by County Counsel, which includes a period of at least 60 days for the County to cure any default prior to the senior lender foreclosing on its loan.
The City of Oakley supports the proposed refinance and rehabilitation plans. The Oakley City Council adopted Resolution #37-15 on March 24, 2015, which authorizes the City Manager to execute similar documents pursuant to the City loan to Golden Oak.
If the County does not undertake the actions described above, Golden Oak will not be able to refinance and rehabilitate the existing development.