Form Rev 3/6/2023
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE EXTENSION OF THE TERM
OF THE LOAN AND RESTRICTIVE COVENANTS WITH A
NEW 55-YEAR TERM FOR THE SENIORS ON BROAD WAY
DEVELOPMENT LOCATED AT 845 BROADWAY
WHEREAS, in 2005, the City Council approved a loan of $3,511,195 in HOME Investment Partnership Program (“HOME”) funds pursuant to Resolution Nos. 2005 -061 and 2005-315, to assist with the construction of the Seniors on Broadway affordable housing development (the “Project”), developed by an affiliate of Metropolitan Area Advisory Committee on Anti-Poverty of San Diego County, Inc. (“MAAC”); and
WHEREAS, the loan was structured as a 55-year residual receipts loan, with payments due annually from surplus cash flow generated by the Project , and any remaining balance due in full at the end of the 55-year term; and
WHEREAS, the Project is now preparing to undertake a substantial rehabilitation, and has received an allocation of low income housing tax credits from the California Tax Credit Allocation Committee (TCAC) to finance the rehabilitation; and
WHEREAS, TCAC will impose a new 55 -year regulatory agreement in connection with the tax credit award, and TCAC’s underwriting standards require that the Project demonstrate financial feasibility throughout the 55-year term; and
WHEREAS, the City of Chula Vista (“City”) loan is currently due and payable in full in the year 2062, which would result in an infeasible balloon payment in the middle of TCAC’s new 55-year term; and
WHEREAS, the Borrower has requested to extend the term of the City loan by initiating a new 55-year term in order to meet TCAC’s underwriting standards and align it with the term of the pending TCAC agreement; and
WHEREAS, the loan extension would enable the rehabilitation to proceed and promote the long-term stability of the Project; and
WHEREAS, the City would also extend the affordability restrictions to be commensurate with the loan extension, thus ensuring long-term City oversight over the Project; and
WHEREAS, the City Council has duly considered all terms and conditions of the proposed Amendment to the Loan Agreement and Affordable Housing Agreement and believes that the Amendment is in the best interest of the City and the health, safety, and welfare of the residents of the City, and in accord with the public purposes and provisions of applicable Federal, State and local law requirements.
Resolution No.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it approves an extension of the term of the loan and restrictive covenants with a new 55-year term; and
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vis ta, that it authorizes the City Manager or designee to revise the loan documents consistent with this resolution and its basic purpose, and which do not materially or substantially increase the obligations of the City thereunder.
Presented by Approved as to form by
Stacey Kurz Marco A. Verdugo
Director of Housing and Homeless Services City Attorney