Presented By: RSG
BURBANK HOUSING
CORPORATION
MASTER LOAN AGREEMENT
AMENDMENT – PHASE I
November 26, 2024
BHC GOALS, MISSION &
PURPOSE
Providing Quality Housing
Neighborhood Revitalization
Protect Community Investment
Financial Stabilization and Growth
11/26/24 2Presented By: RSG
WHY ARE WE HERE?
Address Debt
Service
Negative
Balance Sheet
Diversify funding
resources
Position BHC for
Growth
11/26/24 3Presented By: RSG
FOCUS NEIGHBORHOOD CASHFLOW PROJECTIONS
MLA Terms
Residual Receipts
Interest
55-YearAffordability
Cross Collateralization
Cross Default
Capital and Operating Reserve
Requirements
Activity Centers
2025 Proposed Operating
Budget: $263,000
• Elmwood AchievementCenter
• Peyton Grismer Activity Center
• Cataline Activity Center
• Verdugo Activity Center
Insurance Market Place
2023-24 Insurance: $275,000
2024-25 Insurance:$1,119,460
11/26/24 4Presented By: RSG
ELMWOOD FOCUS AREA
• Cashflow based on
MLA Terms, Activity
Center, & Increased
Insurance Premiums
11/26/24 5Presented By: RSG
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
$1,084,135 $1,023,500 $1,064,440 $1,107,018 $1,151,299 $1,197,351 $1,245,245 $1,295,055 $1,346,857 $1,400,731 $1,029,228 $1,088,118 $1,127,799 $1,168,723 $1,211,356 $1,252,661 $4,113,797 $1,738,996 $1,385,857 $1,434,443 Cross Default
$2.8 Million Balloon Payment
$0
Effective Gross
Income
Expenses
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
Elmwood
Pre-MLA Amendment
Revenue & Expense
with
Debt Service & Activity Center
11/26/24 6Presented By: RSG
SUMMARY
Cross Default Triggered by 2031
Negative Net Operating
Income - 2026
Insurance Premium Increase
BHC infused 2025
Operating Reserves
Insufficient revenue
generated to fund Activity
Center Programs
11/26/24 7Presented By: RSG
ELMWOOD FOCUS AREA
• Cashflow based on BHCMLA Phase I Amendment
• Reset Interest to 0%
• Forego all accrued interest
• Forego 1/55th of principal
per year based oncompliance
• Reset loan term to 55 years
• Reset affordability term to
55 years or greatest feasible
period
• Activity Center Transition
• Increased InsurancePr e m iu m s
11/26/24 8Presented By: RSG
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Effective Gross Income $1,084,135 $1,023,500 $1,064,440 $1,107,018 $1,151,299 $1,197,351 $1,245,245 $1,295,055 $1,346,857 $1,400,731 Expenses
11/26/24 9Presented By: RSG
$1,017,241 $1,014,721 $1,051,946 $1,090,315 $1,130,291 $1,168,833 $1,208,361 $1,249,740 $1,293,059 $1,338,412 $0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
$1,600,000
Elmwood
Revenue & Expense
with
Post MLA Amendment
&
Activity Center Transition
Presented By: RSG
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Expenses
$1 , 084 ,1 35
$1 , 017 ,2 41
$1 , 023 ,5 00
$1 , 014 ,7 21
$1 , 064 ,4 40
$1 , 051 ,9 46
$1 , 107 ,0 18
$1 , 090 ,3 15
$1 , 151 ,2 99
$1 , 130 ,2 91
$1 , 197 ,3 51
$1 , 168 ,8 33
$1 , 245 ,2 45
$1 , 208 ,3 61
$1 , 295 ,0 55
$1 , 249 ,7 40
$1 , 346 ,8 57
$1 , 293 ,0 59 $1 , 338 ,4 12
$0
$1, 2 0 0 ,000
$1, 0 0 0 ,000
$800 ,000
$600 ,000
$400 ,000
$200 ,000
$1,400,000
$1,600,000
Effective11/G2r6o/s2s4Income 10 $1,400,731
Post - MLA Amendment
Pre-MLA Amendment
2 0 25 2 0 26 2 0 27 2 0 28 2 0 29 2 0 30 2 0 31 2 0 32 2 0 33 2 0 34 Effective Gross Income $ 1 ,0 8 4 ,1 3 5 $ 1 ,0 2 3 ,5 0 0 $ 1 ,0 6 4 ,4 4 0 $ 1 ,1 0 7 ,0 1 8 $ 1 ,1 5 1 ,2 9 9 $ 1 ,1 9 7 ,3 5 1 $ 1 ,2 4 5 ,2 4 5 $ 1 ,2 9 5 ,0 5 5 $ 1 ,3 4 6 ,8 5 7 $ 1 ,4 0 0 ,7 3 1 Expenses $ 1 ,0 1 7 ,2 4 1 $ 1 ,0 7 6 ,1 3 1 $ 1 ,1 1 5 ,8 1 2 $ 1 ,1 5 6 ,7 3 6 $ 1 ,1 9 9 ,3 6 9 $ 1 ,2 4 0 ,6 7 4 $ 1 ,2 8 3 ,0 7 5 $ 1 ,3 2 7 ,4 4 3 $ 1 ,3 7 3 ,8 7 0 $ 1 ,4 2 2 ,4 5 6 $1, 000 ,0 00
$800, 000
$600, 000
$400, 000
$200, 000
$0
$1, 200 ,0 00
$1, 400 ,0 00
$1, 600 ,0 00
Revenue & Expense
Pre - MLA Amendment
w/o Debt Service
MLA PHASE I AMENDMENT
CITY & BHC PROPOSAL COMPARISON
Agreed Upon Terms
• Reset Interest to0
• Approximately $20M as of December 31, 2024
• Forego 1/55th of outstanding loan based on
compliance
• $59M Portfolio Principal Balance
• Reset loan term to 55 years
• Reset affordability term to 55 years or greatest
feasible period
11/26/24 11Presented By: RSG
MLA PHASE I AMENDMENT
CITY & BHC PROPOSAL : INTEREST
Interest
BHC
Interest
City
BHC August
proposal included
foregoing all
accrued interestof
$20 million
City proposal
• Reset interest to 0
effective December 31,
2024
• Non-forgiveness of
interest
• 1/55th of outstanding
principal and interest
to be forgiven based on
compliance
• $79 Million of P&I
11/26/24 12Presented By: RSG
CITY’S PROPOSAL IMPLICATIONS
Negative Equity on Balance Sheet
• Liabilities exceeds assets
Prevents leveraging of resources
Prevents future growth opportunities
11/26/24 13Presented By: RSG
MLA PHASE I AMENDMENT
BHC PROPOSAL
FINANCIAL STABILITY AND GROWTH
POSITIVE BALANCE
SHEET
POSITIVE CASH FLOW
ONGOING
AFFORDABILITY
WELL MAINTAINED
PROPERTIES
POSITION BHC FOR
GROWTH AND
DIVERSIFICATION
11/26/24 14Presented By: RSG
FUTURE CONSIDERATIONS
Increase NetCashflow
Address Insurance
Costs
Determine Activity
Centers Role and
Funding
Capital Needs
Assessment
11/26/24 15Presented By: RSG
QUESTIONS
11/26/24 16Presented By: RSG
MLA DEFINITIONS
•Income less the sum of the Operating Expenses and Reserve DepositsApproved Project Residual Receipts •Cost incurred by Borrower as Non-Profit not directly attributable to specific project, but related to preserving affordable housingApproved General AdministrativeCosts •(Approved Project Residual Receipts) –(Approved General Administrative Costs)Residual Receipts •(Principal) X (Interest Rate)Simple Interest
•Length of time a borrower agrees to repay a loanTerm
•Length of time borrower agrees to set rents at affordable rental ratesAffordabilityTerm •Multiple assets securing multiple loansCross Collateralization •Failure to meet terms of one loan causes default of all loans crosscollateralizedCross Default 11/26/24 17Presented By: RSG
$0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Mandatory Debt Service $11,987 $11,987 $11,987 $11,987 $11,987 $11,987 $2,830,722 $411,553 $11,987 $11,987 Activity Center Expense $50,850 $61,410 $63,866 $66,421 $69,078 $71,841 $74,715 $77,703 $80,811 $84,044 Approved Gen. Admin. Costs $167,305 $184,230 $191,599 $199,263 $207,234 $215,523 $224,144 $233,110 $242,434 $252,132 Reserves $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 Property Operating Expenses $753,326 $784,731 $814,587 $845,291 $877,297 $907,550 $938,457 $970,870 $1,004,865 $1,040,520 $4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$4,500,000
Elmwood Expense
with
Debt Service & Activity Center
Property Operating Expenses Reserves Approved Gen. Admin. Costs Activity Center Expense Mandatory Debt Service 11/26/24 18Presented By: RSG
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Activity Center Expense $50,850 $- $- $- $- $- $- $- $- $- Approved Gen. Adim. Costs $167,305 $184,230 $191,599 $199,263 $207,234 $215,523 $224,144 $233,110 $242,434 $252,132 Reserves $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 $45,760 Property Operating Expenses $753,326 $784,731 $814,587 $845,291 $877,297 $907,550 $1,004,865 $1,040,520 $0
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
Elmwood
with
MLA Amendment
&
Activity Center Transition
Property Operating Expenses Reserves Approved Gen. Adim. Costs $938,457 $970,870
Activity Center Expense
11/26/24 19Presented By: RSG
11/26/24 Pres en ted B y: R S G 20
Golden State Pre-MLA
With Debt Service and Activity Center
2,025 2,026 2,027 2,028 2,029 2,030 2,031 2,032 2,033 2,034 Effective Gross Income 1,296,880 1,234,355 1,283,729 1,335,079 1,388,482 1,444,021 1,501,782 1,561,853 1,624,327 1,689,300 Expenses
11/26/2024 21Presented By: RSG
1,240,620 1,315,221 1,365,136 1,416,656 1,470,348 1,521,636 1,574,372 1,630,542 1,689,330 1,750,861 -
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
1,800,000
2,000,000
Golden State
Pre-MLA without Debt Service
Effective Gross Income
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
$1,296,880 $1,234,355 $1,283,729 $1,335,079 $1,388,482 $1,444,021 $1,501,782 $1,561,853 $1,624,327 $1,689,300 Exp enses $1,240,620 $1,241,160 $1,288,112 $1,336,551 $1,387,039 $1,434,995 $1,484,265 $1,536,831 $1,591,871 $1,649,503 $0
$1 ,200 ,000
$1 ,000 ,000
$800 ,0 00
$600 ,0 00
$400 ,0 00
$200 ,0 00
$1,400,000
$1,600,000
$1,800,000
Golden State
Post MLA Amendment
11/26/2024 22Presented By: RSG
Revenues & Expenses
With Activity Center
Transition
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Effective GrossIncome $1,221,795 $1,156,267 $1,202,517 $1,250,618 $1,300,643 $1,352,669 $1,406,775 $1,463,046 $1,521,568 $1,582,431 Expenses $1,418,012$1,634,465$1,523,151$1,572,129$1,623,144$1,672,595$1,719,357$1,776,459$1,832,013$1,890,135 $1,000,000
$800,000
$600,000
$400,000
$200,000
$0
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$2,000,000
Peyton Grismer Pre-MLA Amendment
With Debt Service & Activity Center
11/26/2024 23Presented By: RSG
11/26/2024 Pres en ted B y: R S G 24
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
EffectiveGrossIncome$1,221,795$1,156,267$1,202,517$1,250,618$1,300,643$1,352,669$1,406,775$1,463,046$1,521,568$1,582,431 Expenses $1,186,981$1,243,690$1,290,223$1,338,210$1,388,203$1,436,603$1,486,282$1,538,268$1,592,672$1,649,610 $1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
$1,600,000
$1,800,000
Peyton Grismer Pre-MLA Amendment
Without Debt Service
11/26/2024 Pres en ted B y: R S G 25
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
$1,221,795 $1,156,267 $1,202,517 $1,250,618 $1,300,643 $1,352,669 $1,406,775 $1,463,046 $1,521,568$1,582,431Effective Gross Income Expenses $1,401,87$1,450,48$1,501,37$1,554,66
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0 1800000
$1,186,98$1,174,31$1,218,07$1,263,17$1,310,16$1,355,44
Peyton Grismer Post MLA Amendment
Activity Center Transition