ADMINISTRATIVE REPORT
MEETING DATE: March 26, 2025 AGENDA CATEGORY: Consent - PSVS TO: Honorable Mayor and City Council
FROM: Jennifer M. Byers, Economic and Community Development Director DATE: March 26, 2025
SUBJECT: Letzring RAD, LP Letzring Gardens Affordable Housing:
1. Amendment No. 1 to Loan Agreement No. 2024-317 (to include language stating that City loan payments will be repaid first to the PSVS portion of the loan [$400,000] until said PSVS loan is paid in full) with Letzring RAD, LP, for construction of affordable housing; and
2. Modification No. 1 to Regulatory Agreement 2024-317(R) (to assign Bank of America, N.A., and Banc of America CDC Special Holding Company, Inc. as Limited Partners to provide tax credit equity on $35M bank construction loan) with Letzring RAD, LP. (Ward 1)
RECOMMENDATION:
Staff recommends approval of this amendment.
BACKGROUND:
On November 20, 2024, the City of Bakersfield and developer Letzring RAD, LP (“Letzring”) entered into Agreement No. 2024 -317, loaning to the developer no more than $3,997,528.29 to be applied toward construction costs associated w ith the development of one hundred fifty (150) new affordable housing units within the Letzring Gardens multifamily housing development at 4215 Letzring Lane, Bakersfield, California 93304. Of these 150 new units, the City loan is to be applied toward the construction of 36 affordable housing units for qualifying low-income seniors.
As a condition of Agreement No. 2024 -317, Letzring has agreed to pay simple interest at a rate of three percent (3%) per year, and shall begin making annual payments of princip al and interest from Residual Receipts in the year following Project Completion, as defined in the Agreement. The City of Bakersfield desires to amend Agreement No. 2024 -317 to include language stating that City loan payments shall be made from the City’s share of 50% of Residual Receipts, and shall apply such payments first to the Public Safety Vital Services (PSVS) portion of the loan until said PSVS loan is paid in full.
Additionally, Bank of America, N.A., a national banking association, and Banc of Am erica CDC Special Holding Company, Inc., a North Carolina corporation (together with their successors and assigns, the “Limited Partners” and each a “Limited Partner”) are providing equity as tax credit investors and an additional $30,500,000 construction loan to Letzring RAD, LP for the remaining constructions costs associated with the Letzring Gardens Project development. Therefore, the above Agreement must be amended to include language acknowledging the above changes.
FISCAL IMPACT:
No fiscal impact
COUNCIL GOAL:
Safety and Resilience
ATTACHMENTS:
1. Amendment No. 1 to Loan Agreement No. 2024-317
2. Modification No. 1 of Regulatory Agreement 2024-317(R)
3. Exhibit “M” – Investor Rider