JOINT MEETING OF THE CITY COUNCIL, FRESNO REVITALIZATION CORPORATION, THE CITY OF FRESNO IN ITS CAPACITY AS HOUSING SUCCESSOR TO THE REDEVELOPMENT AGENCY OF THE CITY OF FRESNO, AND THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF FRESNO
FROM: MARLENE MURPHEY, Executive Director
Housing Successor Agency to the Redevelopment Agency
SUBJECT
Title
Actions pertaining to the affordable residential housing project at 1241-1263 Broadway Plaza, Fresno, California commonly known as Hotel Fresno:
1. Approve a Fifth Amendment to the Amended and Restated Owner Participation Agreement with Broadway Plaza Family Apartments, LP and the City of Fresno, in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno (District 3).
Body
RECOMMENDATION
It is recommended that Council in its capacity as Housing Successor approve the Fifth Amendment to the Amended and Restated Owner Participation Agreement (OPA) between Broadway Plaza Family Apartments, LP (Owner) and APEC International, LLC a California limited liability company and APEC Development, LLC a California limited liability company (Developer) and the City of Fresno, in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno. This amendment reflects a modification to the residual receipts percentage for loan repayment to align with the California Department of Housing and Community Development’s (HCD) Affordable Housing and Sustainable Communities (AHSC) Program regulations. Further, the Regulatory Agreement and Declaration of Covenants and Restrictions is updated to reflect the project’s current number of affordable units.
EXECUTIVE SUMMARY
Staff recommends approval of the Fifth Amendment to the OPA, to modify the terms of the residual receipts percentage for repayment of the Agency’s $1.9 million loan to the Hotel Fresno Project. This change is required to comply with the California Department of Housing and Community Development’s (HCD) Affordable Housing and Sustainable Communities (AHSC) Program regulations that require residential receipts to be distributed between lenders in direct proportion to the funding assistance provided. The change was triggered by the Developer’s receipt of additional funds from the AHSC and Permanent Local Housing Allocation Programs of $4.8 and $1.5 million respectively. The proposed amendment reduces the Housing Successor Agency’s residual receipts percentage from the original 25% to 11.58%, which is necessary for the Developer to remain eligible for AHSC funding and ensure the financial feasibility of the project. Further, the initial project of forty (40) affordable units was increased to eighty (80) affordable units to serve Extremely Low, Very Low and Low Income households. The Regulatory Agreement and Declaration of Covenants and Restrictions Revised Exhibit “F” has been updated to reflect this change.
This amendment will allow the Broadway Plaza Family Apartments project to continue in compliance with state regulations, while also maintaining the City’s commitment to affordable housing development. The 80 unit project is a key component of the City’s ongoing efforts to address housing needs in Fresno.
BACKGROUND
On November 20, 2014, the City Council approved the Amended and Restated Owner Participation Agreement for the Hotel Fresno project, to support the construction of Low-Income housing units at the historic Hotel Fresno building. The City in its capacity as Housing Successor to the Redevelopment Agency (Agency) agreed to provide a $1,900,000.00 loan at 1% interest to cover eligible rehabilitation and construction costs.
Per HCD’s Uniform Multifamily Regulations Section 8314(a)(2), 50% of Residual Receipts are to be distributed between HCD and the other contributing public agencies. Additionally, the amounts to be paid to the public agencies will be in direct proportion to each agencies’ total project assistance amount.
The three residual receipt lenders and their respective contributions are: HCD contributing $4.8 million through the AHSC program; the City of Fresno contributing $1.5 million through the Public Land Housing Assistance Program and the Housing Successor Agency contributing $1.9 through Housing Set Aside Funds. Under the original agreement, the residual receipts percentage to be paid to the Agency was set at 25% (as outlined in Exhibit “G” of the OPA). However, additional funds contributed to the project from HCD and the City of Fresno triggered a recalculation and reduction in the Agency’s residual receipt’s percentage from 25% to 11.58%. This amendment ensures the Developer’s continued compliance with HCD’s program requirements for the Permanent Financing obtained by Developer.
ENVIRONMENTAL FINDINGS
This action is not considered a “project” as defined by the California Environmental Quality Act (CEQA) Guidelines, Section 15378.
LOCAL PREFERENCE
Local preference is not applicable, as this action does not involve a bid or award for construction or services contracts.
FISCAL IMPACT
N/A
Attachment:
- Fifth Amendment to the Amended and Restated OPA