BURBANK HOUSING
CORPORATION PARTNERSHIP –
STUDY SESSION
City Council Meeting
August 13, 2024
COMMUNITY
DEVELOPMENT
BHC’S MISSION
“Our mission is to preserve, upgrade, and develop
affordable housing opportunities in Burbank and to provide a safe, service-enriched environment for the residents in our communities.”
The Corporation
A nine-member volunteer Board of Directors operates BHC. In accordance with its By-laws and Articles of Incorporation, the directors are appointed by different segments representative of the Burbank community: the Chamber of Commerce, the Ministerial Association, the Board of Realtors, Wesley Housing (senior housing), and the Advisory Council on Disabilities. BHC is a 501(C)(3) nonprofit housing developer.
The City/Housing Authority Board, as the Successor to the former Burbank Redevelopment Agency, appoints two members and two members are tenants of the properties owned by BHC. The organization is a HUD-recognized Community- based Housing Development Organization (CHDO) and is therefore eligible to receive HUD’s’ 15% set-aside of HOME funds from the City of Burbank.
BURBANK AND
BHC PARTNERSHIP
COMMUNITY
DEVELOPMENT
A BRIEF HISTORY:
1996 - The Burbank Redevelopment Agency purchases and
rehabilitates 9 distressed, crime-impacted buildings on W. Elmwood Avenue
1996 - 1997 - The City improves the buildings and street, and drives out gangs. Puts together a volunteer Board of Directors for a new non-profit
October 1997- The Redevelopment Agency established BHC as a nonprofit corporation to improve and preserve the existing housing inventory to be affordable to low income and moderate income persons and to provide community assistance and property management services
October 2023 - BHC Celebrates 25 Years!
FORMER* FOCUS
NEIGHBORHOOD
PROGRAM
Total of 326 affordable housing units for
extremely-low, very-low, low and moderate-
income households in focused neighborhoods
of the city.
Total Elmwood Focus Area = 65
Total Peyton-Grismer Focus Area = 77
Total Lake / Alameda Focus Area = 15
Total Golden State Focus Area = 78
Total Verdugo / Lake Focus Area = 72
Total Special Projects = 19
(Veteran Bungalows, Jerry’s Promise and Puerta Nueva)*Ended with the end of Redevelopment funding. Program was aimed at revitalizing neighborhoods.
BHC still tracks finances by focus neighborhoods.
Golden State Focus Area
2331-2333 N. Fairview Street
2325-2327 N. Fairview Street
2335 N. Fairview Street
2321 N. Fairview Street
2406 Naomi Avenue
2615 Thornton Avenue
3000-3006 Thornton Avenue
3030 Thornton Avenue
2323 N. Catalina
2329 Niagara
2219 Niagara
2300 Niagara
2223 Catalina
2234 Catalina
2300 Fairview
Activity & Family Resource Center
(2323 Catalina)
Total = 78 Residential Units
BHC SUMMARY OF UNITS
Elmwood Focus Area
153, 158, 159, 164, 165, 171 W.
Elmwood Avenue
188 & 194 W. Elmwood Avenue
199 W. Elmwood Avenue
Achievement Center
(153 Elmwood)
Total = 65 Residential Units
Peyton-Grismer Focus Area
1731 Elliott Drive
1735 Elliott Drive
1733 Elliott Drive
1729 Elliott Drive
1721 Elliott Drive
1801-1815 Grismer Avenue
Activity & Family Resource Center
(1819 Grismer Avenue)
Total = 77 Residential Units
Lake / Alameda Focus Area
157 Linden Avenue
159 Linden Avenue
225 Linden Avenue
160 Elm Court
Total = 15 Residential Units
Special Projects/
Transitional Housing
313 Valencia Avenue
427 Valencia Avenue
1932 Ontario Street
1101 Verdugo & 1108 Angeleno
Total = 19 Residential Units
Verdugo / Lake Focus Area
237 W. Verdugo Avenue
257 W. Verdugo Avenue
220 W. Tujunga Avenue
243 W. Verdugo Avenue
261 W. Verdugo Avenue
275 W. Verdugo Avenue
Activity & Family Resource Center (241
Verdugo)
Total = 72 Residential Units
GRAND TOTAL = 326
Outside of a Focus Area
Mary Alice O’Connor Family Resource
Center (401 N. Buena Vista)
CITY MONITORING OF
HOUSING ASSETS
BHC Units = 326
Senior Housing = 987
Section 8 and Special Needs Vouchers = 1,027
(more applications in the pipeline)
Density Bonus and Inclusionary Housing = 31
(hundreds more in the pipeline)
Rehabilitation and Development Covenants= 29
Home Ownership (more in the pipeline) = 63
NEW ADUs IN 2024
161 W. Linden Ave. Burbank, CA 91502
2221 N. Niagara St. Burbank, CA 91504
ACTIVITY AND FAMILY
RESOURCE CENTERS
Elmwood Award-Winning Achievement Center –
Catalyst to Family Resource Center Program
(153 Elmwood)
Peyton Grismer Activity & Family Resource Center
(1819 Grismer Avenue)
Verdugo Activity & Family Resource Center (241 Verdugo)
Catalina Activity & Family Resource Center (2323 Catalina) MAO Family Resource Center – Separate from Childcare Center (401 N. Buena Vista)
BHC RESIDENT AND
COMMUNITY SERVICES
Child Care Centers
Pete McGrath Child Care Center (2300 Ontario)
Mary A. O'Connor Child Care Center (401 N. Buena Vista)
PMG Child Development Center Mary Alice O’Connor Center (MAO)
FINANCING THE
PARTNERSHIP WITH BHC
Funding Sources:
Former Redevelopment Housing Set-Aside Funds
Federal HOME Funds
Via Master Loan Agreement (with cross collateralization) Long Term Affordability on a project-by-project basis:
Affordability Agreements to keep units affordable for a minimum of 55 Years (subject to evergreen provision)
PROPOSED AMENDMENTS TO
MASTER LOAN AGREEMENT
BHC’s Proposal:
For Information Only. Future Discussions to follow.
Global accounting and oversight changes to the Master Loan Agreement
Flexibility to apply to other funding sources such as state and federal tax credits, private funds and grants to finance projects Request to pull out an initial project to create more housing with new funding sources
No more evergreen provision. However, BHC will keep affordability for a minimum of 55 years.
PROPOSED AMENDMENTS
WHY NOW?
• The BHC Board and BHC Staff are ready for this transition now • Assist BHC as they continue to explore more affordable housing development in the community
• A future project requires properties to be removed from the Master Loan Agreement for a housing application
• The City’s housing funds have decreased since the end of Redevelopment
• There are limited, restricted housing funds to be utilized now • Allows a more streamlined administrative process
• Makes for a more sustainable BHC
PROPOSED AMENDMENTS TO
MASTER LOAN AGREEMENT
Staff’s Recommendation:
Have an on-going conversation with the Council
Make changes incrementally for existing properties
BHC has submitted an entitlement package for a new project on Fairview Street. The first incremental change may be proposed with development financing consideration for that development forecasted for later this year
PROPOSED AMENDMENTS TO
MASTER LOAN AGREEMENT
Financial
Amendments
Administrative
Amendments
Policy
Amendments
Categories of Proposed Changes
BHC’S PROPOSED TERMS –
EXISTING PROPERTIES/FINANCIAL TERMS
Current Master Loan Agreement
Terms
• Interest – 3% fixed
• Requires Residual Receipts
payments
• Term of Loans – 30 & 55 yrs
• Term of Affordability –
Perpetuity (“Evergreen”
provision; extended with each
new project), but no less than
55 years
Proposed Master Loan Agreement
Terms – PHASE I
1. Interest – Reset to Zero and
forego all accrued interest
2. Forego 1/55th of principal each
year; provided BHC is in
compliance
3. Term of Loans – Reset to an
additional 55 years after
approval of proposal
4. Term of Affordability – Reset to
greatest feasible time; no less
than 55 years
Current Master Loan Agreement
Terms
• Capital Replacement Deposits – Requires
a reserve study and requires those
recommended deposits
• Operating Reserves – Requires and caps
a six-month reserve account
• Developer Fee Account – Capped at
$600,000 total with use restrictions
• Residual Receipts due April 1st of each
year. Payments allocated on a pro-rata
basis.
• Budget due by November 1st of each year
5. Capital Replacement Deposits-Memorialize
practice. Make deposits as funds allow
(current amount of $904). Will continue
with fee studies
6. Operating Reserves – Deposit $200 per
unit per year up to the six-month reserve
requirement
7. Developer Fee Account – Remove the
Developer Fee Account cap of $600,000
and use restrictions (existing projects
account)
8. Residual Receipts Definition/Clarification
9. Annual financial compliance: Budget and
Residual Receipts submittal changes
Proposed Master Loan Agreement
Terms - PHASE I CONTINUED
BHC’S PROPOSED TERMS –
EXISTING PROPERTIES/ADMINISTRATIVE
Current Master Loan Agreement
Terms
• No asset management fee on city-
owned properties that BHC
manages
• Restricted housing funds allow
over-income tenants to remain
paying market rate rent
• Properties tied to one Master Loan
Agreement
Proposed Master Loan Agreement
Terms – PHASE II
1. BHC requesting an annual asset
management fee equal to 50% of
any remaining residual receipts
(new source of revenue)
2. Address over-income tenants
with a new (legal) policy
3. Flexibility to release projects from
cross-collateralizing and MLA
BHC’S PROPOSED TERMS –
EXISTING PROPERTIES/POLICY DECISIONS
PROPOSED AMENDMENTS TO
MASTER LOAN AGREEMENT
Study Session to start the conversation:
Time to evaluate the partnership and past practice
The City’s restricted housing funds are limited
Explore opportunities for a self-sustaining BHC
Proposed amendments for existing properties only
New projects will not be subject to the terms of the Master Loan Agreement
Flexibility to release projects from cross-collateralizing and the Master Loan Agreement
CONTINUING THE CONVERSATION-
THE CITY AND BHC PARTNERSHIP
Goals and Objectives:
What does the Council wish to accomplish?
• Provide an appropriate level of oversight and maintain proper controls?
• Facilitate more affordable housing and ensure more financial stability?
• Allow BHC to maintain and expand affordable housing units through outside funding sources (beyond City/Housing Authority funds)?
NEXT STEPS
Continue the conversation on the BHC Partnership. This is one of several upcoming discussions on the Master Loan Agreement. Future Discussion: New BHC Projects with New Financial Terms Early 2025 – Additional Study Session(s) on Master Loan Agreement and financing structure of BHC
CONTACT
Maribel Leyland
Housing Authority Manager
818-238-5180
[email protected]
COMMUNITY
DEVELOPMENT