HomeMy WebLinkAboutRDA 02 LOAN AGMNT W/TUSTIN HERITAGE PL 03-20-07
AGENDA REPORT
Agenda Item
Reviewed:
City Manager
Finance Director 1<'7"
RDA2
MEETING DATE: MARCH 20,2007
TO: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR
FROM: REDEVELOPMENT AGENCY STAFF
SUBJECT: AUTHORIZATION TO EXECUTE A LOAN AGREEMENT WITH TUSTIN
HERITAGE PLACE, L.P. IN THE AMOUNT OF $350,000 FOR THE 54 UNIT
SENIOR CITIZEN COMPLEX LOCATED AT 1101 SYCAMORE AVENUE
KNOWN AS HERITAGE PLACE
SUMMARY
The Agency is requesting authorization for the execution of a Loan Agreement between
the Tustin Community Redevelopment Agency and Tustin Heritage Place, L. P. in the
amount of $350,000 for the 54 unit senior citizen complex located at 1101 Sycamore
Avenue known as Heritage Place.
RECOMMENDATION
It is recommended that Agency:
1. Authorize the execution by the Executive Director of a Loan Agreement between the
Agency and Tustin Heritage Place, L. P. in the amount of $350,000, subject to
approval of the City Attorney, and authorize staff to take all actions necessary to
implement the Agreement.
2. Appropriate funds in the amount of $350,000 from the low and moderate income
housing set-aside funds for the South Central Redevelopment Project Area in the
amount of $175,000 and $175,000 for the Town Center Redevelopment Project areas.
FISCAL IMPACT
Agency assistance in the amount of $350,000 from the housing set-aside funds for the
South Central and Town Center Redevelopment Project areas.
BACKGROUND/DISCUSSION
In April of 2002, the Agency entered into a Disposition and Development Agreement with
Tustin Heritage Place, L. P. for the development of a three story 54 unit senior citizen
apartment complex located at 1101 Sycamore Avenue. The Agreement required the
William A. Huston
Tustin Heritage Place Loan Agreement
March 20,2007
Page 2
Developer to construct 54 independent living units, record affordable covenants for a
period of fifty-five years, and provide 53 units to low- and very-low income senior citizens
(one unit is designated as a manager's unit). In return, the Agency would provide financial
assistance not to exceed $600,000. This assistance program was broken into two
segments: (1) a $250,000 short-term Bridge Loan funded by California Housing Financing
Agency Housing Enabled Local Partnerships "CHFA HELP" Program provided to the
Agency to assist the Developer with the predevelopment costs of the site, and: (2) a
$350,000 permanent loan upon completion of construction of the improvements evidenced
by the issuance of a Certificate of Occupancy for the units.
The construction of the apartment complex was completed in 2003 and is currently
occupied by qualified senior citizens at the low and very-low income levels. The Developer
is required to submit a Certificate of Continuing Program Compliance to the Agency on a
quarterly basis and must receive approval from the Agency for any increases to the
affordable rental amount.
The $250,000 original Bridge Loan has accrued interest at a rate of three percent (30/0) per
year and is to be paid off.during the escrow of the $350,000 permanent loan. The principal
balance and interest will be returned to CHFA. The new loan in the amount of $350,000
will accrue interest at a rate of three percent (30/0) per year simple interest; repaid over the
term of the loan from the Project's residual receipts as defined in the DDA (with such
residual receipts split between the County and City).
This project was consistent with the goals of the Agency's Second Five-Year
Implementation Plan for the Town Center and South Central Redevelopment Project areas
for fiscal years 2000-2001 through 2004-2005 by alleviating blight in the South Central
Project Area and by securing low and very-low affordability restrictions on the units for a
period of 55 years. Previous resolutions of benefit have been adopted which allow Agency
funds to be expended outside of both the South Central and Town Center Projects to
benefit the provision of affordable housing.
Execution of the Loan Agreement will complete the Agency's financial obligation to Tustin
Heritage Place, L.P. and provide the funds to repay the $250,000 Bridge Loan from the
CHFA HELP Program.
The transaction will require the following:
. Execution and recordation of a Substitution of Trustee and Full Reconveyance to
remove the Deed of Trust with Assignment of Rents for the $250,000 Bridge Loan
. Execution and recordation of a Subordination Agreement between the Agency,
Tustin Heritage Place L.P. and the Orange County Housing Authority
. Execution and recordation of a Deed of Trust with Assignm~nt of Rents securing
the new loan in the amount of $350,000
. Execution of a Promissory Note by the Developer in the amount of $350,000.
The anticipated completion date for this transaction is April 2, 2007.
Staff will be available at the Agency meeting to answer any questions.
William A. Huston
Tustin Heritage Place Loan Agreement
March 20, 2007
Page 3
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Christine Shingleton
Assistant City Mana er
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Kimberly cAllen
Redevelopment Project Manager