426 Piedmont Avenue and 507 Naranja
Drive
Letter of Loan Commitment and Lease
Option with EAH Housing,
Cooperation Agreement and
Resolution of Appropriation for HOME-
ARP Program Funding
January 30, 2024
• 68 unit, affordable rental project for seniors
• 21 studios
• 46 one-bedroom units
• 1 two-bedroom manager unit
• 45 total parking spaces
1 Project Summary
• ENA approved with EAH Housing
– $2,181,500 requested from Housing Authority
• Request is in addition to land lease of $11,900,000
426 Piedmont Avenue
2 Front façade of 426 Piedmont Avenue
Income Limits
3 Number of Persons in Household
Income Limits* 1 2 3
Extremely Low
Income
0-30% of
AMI $26,490 $30,270 $34,050
Very Low
Income
31-50% of
AMI $44,150 $50,450 $56,750
Low Income 51-60% of
AMI $52,980 $60,540 $68,100
*2023 HCD Limits
– Project will target seniors earning between 30% and 60% AMI.
Unit Mix & Rents
4 *Rents are 2023 CTCAC Rents
Unit Mix and Rents
Unit No. of
units % AMI Gross
rent* Utility allowance Net rent
Studio 16 30% $515 $65 $450
Studio 5 50% $1,031 $65 $966
1-bedroom 5 30% $589 $70 $519
1-bedroom 28 50% $1,178 $70 $1,108
1-bedroom 13 60% $1,418 $70 $1,348
2-bedroom 1 Manager
Unit - N/A -
Source of Funds Cont.
5 Permanent Project Cost Per Unit Cost
Low Income Housing Tax Credit Equity $ 22,589,815 $ 332,203 City of Glendale Housing Authority (Land
Loan) $ 11,900,000 $ 175,000
City of Glendale Housing Authority
(Development Loan) $ 2,181,500 $ 32,081 Accrued Deferred Interest $ 1,267,221 $ 18,636 General Partner Equity $ 100 $ 1 Total Sources $ 37,938,636 $ 557,921 • Housing units will be reserved for lower
income households at affordable rent
levels between 30% & 60% area median
income for a minimum period of 55 years.
68 Residential dwelling
units for seniors
6 Summary of Terms: Letter of Loan
Commitment
67 As affordable rental
housing units
1 Reserved as an on-
site manager unit
• The Housing Authority’s total assistance
will be $14,081,500 (consisting of
$11,900,000 for land & $ 2,181,500
development loan), or approximately,
$207,080.88 per unit.
• Housing Authority’s assistance will be in
the form of residual receipt loans secured
by a Leasehold Deed of Trust that will be
subordinate to a Permanent Financing
Loan.
December 31, 2024
the Letter of Loan Commitment
will expire
7 • The Lease Option will expire on December 31, 2024.
• The Lease Option will automatically expire if EAH Housing have not received an award of 9% Tax Credits from CTCAC in the 2024 awards. • The fully capitalized value of the annual rent (land) will be $11,900,000 paid in the form of promissory notes by EAH Housing upon the terms set forth in the Affordable Housing Agreement (AHA) to be brought to the Housing Authority for consideration.
• The Housing Authority and EAH Housing will execute a Ground Lease subject to conditions precedent to execution of the Ground Lease set forth in the Affordable Housing Agreement and upon EAH Housing’s exercise of the Lease Option. The Ground Lease will run with the affordability covenants(minimum of 55 years).
Summary of Terms: Lease Option
Cooperation Agreement
• Senate Bill 2 (SB 2)
– SB 2 established a permanent source of funding
intended to increase the affordable housing stock in
California.
• PLHA Program
– City received its current allocation of $3,697,671.
– $3,512,787 funded a portion of the acquisition for 426 Piedmont Avenue and 507 Naranja Drive.
– The City is anticipated to receive future allocations of PLHA Program funding in accordance with SB 2.
8 Background of PLHA Funds:
Cooperation Agreement
• City of Glendale would authorize the City Manager
and the Housing Authority would authorize the
Executive Director to execute the Cooperation
Agreement.
– Authorizes the Housing Authority to administer PLHA
Program funding and designating individuals to sign and approve PLHA program documents.
9 Adoption of Resolutions:
10 $2.18 Million in Additional
Financing
Fiscal Impact
§HOME Investment Partnerships American
Rescue Plan (HOME-ARP) Funds
§$2,181,500
§No fiscal impact associated with the
Cooperation Agreement
Next Steps
11 With approval of the Letter of Loan Commitment and
Lease Option, EAH Housing will:
1. Apply for an award of 9% Tax Credits February 2024.
2. If awarded, negotiate an AHA for Housing Authority consideration in Fall 2024. – AHA to be brought to Housing Authority for final approval of project prior to receipt of Tax Credits.
1. Apply for Building Permits.
2. Secure additional funding, in particular the construction loan.
3. Construction could then commence with a target date for completion in 2026.
4. Six months prior to expected Certificate of Occupancy, marketing and lease up to begin.
5. 100% lease-up expected within 90 days of C of O.
With an award of Tax Credits and AHA:
Alternatives
12 Elect to change terms of the Letter of Loan Commitment such as Housing Authority funding levels, income targeting or the term of the Lease Option. In order to meet the February 2024 deadline for the 9% Tax Credit application, any of these changes could be incorporated into the Affordable Housing Agreement, which will be brought to the Housing Authority for consideration later this fall. Elect to change the terms of the Cooperation Agreement, which may be brought to the City Council and Housing Authority for consideration at a later date.
1 Elect not to authorize execution of the Letter of Loan Commitment and Lease Option in any form. If this option is chosen, the Housing Authority could terminate its involvement in the potential joint development of the project. Elect not to authorize execution of the Cooperation Agreement. If this option is chosen, the Housing Authority would not be responsible for administering PLHA Program funds. 2 Alternatives Cont.
13 Consider any other alternative not proposed by staff.3