REPORT TO THE CITY IN ITS CAPACITY AS HOUSING SUCCESSOR TO THE
REDEVELOPMENT AGENCY OF THE CITY OF FRESNO
AND FRESNO REVITALIZATION CORPORATION
DATE: April 25, 2019
FROM: MARLENE MURPHEY, Executive Director
SUBJECT
Title
Approve Assignment and Assumption of the Hotel Fresno Owner Participation Agreement
Body
RECOMMENDATIONS
It is recommended that Council approve Assignment and Assumption of the Hotel Fresno Owner Participation Agreement (OPA) and related documents by and between Hotel Fresno Apartments, LP, (Assignor) Broadway Plaza Family Apartments (Assignee) and the City of Fresno in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno (attached). Approval will satisfy new tax requirements that will enable investment participation in the project by Bank of West to go forward in, most likely, the first Opportunity Zone investment in Fresno.
EXECUTIVE SUMMARY
The Hotel Fresno project is located within a new Opportunity Zone made possible through the Tax Cuts and Jobs Act. Credit Capital, the tax credit syndicator for the Hotel Fresno project has secured Bank of the West as an Opportunity Zone investor. Opportunity Zone rules require that the investor identify and fund the investment within 180 days of realizing the capital gain. In addition, in order for the investment to qualify, the project must be transferred/sold to a new legal entity created after the effective date of the Opportunity Zone regulations. The Hotel Fresno project is owned by Hotel Fresno Apartments LP. To meet the Opportunity Zone ownership/transfer condition, Hotel Fresno Apartments LP is proposing that the project be transferred/sold to a new California limited partnership (LP) Broadway Plaza Family Apartments LP--concurrent with the closing. Approving the Assignment and Assumption is a technical change to facilitate the use of the Opportunity Zone credit and will not negatively impact project deadlines or the City's financial commit...
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