On September 21, 1998, the County issued Residential Rental Facility Revenue Bonds (the "Bonds") to Skyline Crest Enterprises LLC to provide financing for the construction of the 110 unit Cypress Meadows Assisted Living Facility in Antioch. In connection with the issuance of the Bonds, the County entered into an Amended and Restated Regulatory Agreement and Declaration of Restrictive Covenants, as amended, (the "Regulatory Agreement") that set forth certain affordability restrictions related to the Project, and annual fees associated with the monitoring of the Project.
In December 2004, Skyline Crest Enterprises LLC sold the project to Cypress Meadows Antioch LLC (the "New Owner"), repaid the loan in full, and the Bonds were fully redeemed. The Regulatory Agreement, which included County affordability requirements for twenty percent of the units, remained in place until the end of the Qualified Project Period (as defined in the Regulatory Agreement), which was August 31, 2015. The Regulatory Agreement also includes a state requirement that until 2029, rents are to remain affordable to any tenant currently residing in an affordable unit. However, all of the designated units are vacant.
The New Owner is now selling the project to TREG Antioch I Prop Co LP, a Delaware limited partnership (the "Buyer"). In connection with the sale of the property, the Owner has requested that the County terminate the Regulatory Agreement. In consideration of terminating the Regulatory Agreement, the County is requesting that the Buyer enter into a Project Agreement that sets out certain requirements related to the operation and rehabilitation of the project to ensure provision of adequate housing, including the state affordability requirements, and that the County is reimbursed for past due compliance monitoring fees.
The Buyer intends to expend at least $1.5 million on repairs such as upgrade of life safety components; repair and replacement of the roof, new common area fixtures, furniture and equipment; update and upgrade dining room; upgrade the existing courtyard; paint inside and outside; and install new kitchen equipment.
The Buyer does not intend to temporarily or permanently relocate any tenants as a consequence of the rehabilitation. However, if any resident does move after the Buyer takes possession of the project, the Owner will provide the vacating tenant with information on other appropriate facilities and contact information for the County's Area Agency on Aging.
If the County does not execute the Termination Agreement, the Buyer will not purchase the property and improvements will not be made.