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July 22, 2025
ITEM TITLE
Affordable Housing: Extension of Existing City of Chula Vista Loan Terms and Restrictive Covenants for the Seniors on Broadway Development
Report Number: 25-0164
Location: 845 Broadway
Department: Housing and Homeless Services
G.C. § 84308: Yes
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines. Therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution approving the extension of the existing loan and restrictive covenants for the Seniors on Broadway affordable housing development, initiating a new 55-year term, in connection with the planned rehabilitation of the property located at 845 Broadway, Chula Vista, CA 91911.
SUMMARY
The Seniors on Broadway Development, located at 845 Broadway, provides 41 housing units for very low- income seniors (the “Project”). Developed by the Metropolitan Area Advisory Committee on Anti-Poverty of San Diego County, Inc., a mission -driven nonprofit organization (“MAAC”), in 2005 the Project received partial financing from the City of C hula Vista (“City”) in the amount of $3,511,195. The financing was structured as a residual receipts loan (“Loan”) with a 55-year repayment term.
MAAC is now preparing to rehabilitate the Project with accessibility upgrades, roof repairs, and other improvements. To meet the underwriting requirements of the California Tax Credit Allocation Committee, which will provide financing for the rehabilitation, an extension of the Loan term is being requested. The City is not providing any new funding at this time.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California P a g e | 2
Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment.
Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA.
Thus, no environmental review is required.
BOARD/COMMISS ION/COMMITTEE RECOMMENDATION
On Wednesday, July 16, 2025, the Housing and Homelessness Advisory Commission held a special meeting, during which the Commission voted 6-0 to issue an advisory recommendation to the City Council in support of extending the loan terms for the Seniors on Broadway Project.
DISCUSSION
Background
On October 14, 2003, the City of Chula Vista (“City”) approved the Seniors on Broadway Affordable Housing Development (the “Project”), a 41 -unit affordable housing community for very low-income seniors, developed by the Metropolitan Area Advisory Committee on Anti -Poverty of San Diego County, Inc. (“MAAC”). The Project is located at 845 Broadway, between Sierra Way and K Street. (Attachment 1: Locator Map). The Project consists of 41 housing units designated for very low-income seniors, along with one unit reserved for on-site management.
The real property (“Land”) on which the Project is located is owned by the Chula Vista Elementary School District and is adjacent to the recreational field of the Chula Vista Charter School. The Land has been leased to MAAC for a 75-year period.
MAAC is now preparing to undertake the rehabilitation of the Project, including accessibility upgrades, roof repairs, and other physical improvements.
The Project is subject to City -imposed affordability restrictions limiting occupancy to households at the following percentages of Area Median Income (“AMI”):
Table 1: Seniors on Broadway Income and Rent Restrictions Unit Size Number of Units AMI Limit 2025 Income Limit* 2025 Rent Limit 1 Bedroom 5 30% of AMI $34,740 - $39,690 $930
1 Bedroom 16 45% of AMI $52,110 - $59,535 $1,395
1 Bedroom 20 50% of AMI $57,900 - $66,150 $1,550
Total 41
*Income limit depends on actual size of tenant household.
City Financial Assistance
On February 22, 2005, the Chula Vista City Council approved a loan of $1,043,850 for construction of the Project, pursuant to Resolution No. 2005-061. Subsequently, on September 13, 2005, City Council approved an additional $2,467,345 through Resolution No. 2005-315, bringing the City’s total financial contribution to $3,511,195 (the “Loan”). These funds were drawn from the City’s HOME Investment Partnerships Program P a g e | 3
(“HOME”) allocation, provided by the U.S. Department of Housing and Ur ban Development (“HUD”) to support the development of affordable housing.
The Loan was structured as a residual receipts loan, evidenced by a promissory note and secured by a deed of trust. The outstanding principal and interest were to be paid down through surplus cash flow over 55 years from the completion of the Project in 2007. The Loan was structured as a residual receipts loan, evidenced by a promissory note and secured by a deed of trust. Repayment of the principal and accrued interest was to occur over a 55-year period, beginning in 2007 upon completion of the Project, and was to be made from surplus project cash flow. Interest on the Loan accrues at 3% per annum, with annual payments equal to 50% of the Project’s net cash flow after expenses. Any remaining balance is due in full at the end of the 55-year Loan term.
Substantial Rehabilitation
The Low -Income Housing Tax Credit program (“LIHTC”) is the nation’s largest federal program for the development of affordable housing. In California, LIHTC is administered by the California Tax Credit Allocation Committee (“TCAC”). TCAC recently awarded the Project an allocation of tax credits to carry out a substantial rehabilitation. In connection with this tax credit award, the Project also received an allocation of tax-exempt bonds from the California Debt Limit Allocation Committee (“CDLAC”).
Although these tax -exempt bonds are not issued or administered by the City, the Tax Equity and Fiscal Responsibility Act (“TEFRA”) requires that the City approve their issuance. The City originally granted this approval on August 13, 2024, through Resolution No. 2024-172. However, due to unforeseen delays in the commencement of the Rehabilitation work, the City’s 2024 TEFRA approval is set to expire on August 13, 2025. An updated resolution is therefore being presented to the City Council concurrently with this item to renew the TEFRA approval.
The scope of the Rehabilitation will include roof repairs, accessibility upgrades, window replacement, electrical and plumbing up grades, asphalt paving repairs, concrete work, carpentry work, cabinet replacement, flooring repairs, painting, and heating and ventilation system repairs. MAAC is also in negotiations with the Chula Vista Elementary School District to acquire the land on which the Project is situated. This acquisition would require an upfront payment but is expected to reduce operating costs over the long term, thereby supporting a more stable fiscal outlook for the Project.
If the Project continues to operate under the ex isting ground lease structure, the City’s Loan will not be extended beyond the term of the ground lease under any circumstances, in order to protect the City’s financial investment in the Project.
TCAC underwriting standards require that the Project demonstrate positive cash flow, with all outstanding debt obligations paid off by the end of the new 55-year term. The City’s current Loan is due and payable in full in 2062; this would result in a mid-term balloon payment that the Project cannot absorb. By extending the Loan term to align with the term of the new TCAC regulatory agreement, the Project can satisfy TCAC’s underwriting requirements. The City’s affordability restrictions would likewise be extended to match the revised Loan term, ensuring continued long-term City oversight of the Project.
In connection with the Rehabilitation, the Project will be transferred from one MAAC -affiliated entity to another, which will require the assignment and assumption of the existing Loan documents. Other minor revisions to the Loan documents and restrictive covenants may also be negotiated between MAAC and the City Manager. Council approval is not required for the transfer or for minor amendments, as a process for P a g e | 4
approving such transfers is already provided in the original Loan documents, and the original authorizing resolutions grant the City Manager authority to approve modifications that do not materially increase the City’s obligations.
Staff recommends that City Council approve the proposed extension of the Loan te rm to support the continued success of the Project.
DECISION-MAKER CONFLICT
Staff have reviewed the property holdings of the City Council members and have found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Co de §87100, et seq.).
Staff are not independently aware and have not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
CURRENT-YEAR FISCAL IMPACT
There are no current-year fiscal impacts as a result of this action. All staff time and costs to prepare this report were included in the current fiscal year budget.
ONGOING FISCAL IMPACT
The proposed action will have no impact on the City’s general fund. Any loan repayments will be recycled into affordable housing programs. While the extension will push out the term of the existing loan by approximately 20 years, it will improve the financial feasibility of the Project and better position it to make annual loan repayments.
ATTACHMENTS
1. Location Map
Staff Contact: Brian Warwick, Housing Manager