ATTACHMENT C:
Funding Commitment Letter (January 2026)
City of Palm Springs
3200 E. Tahquitz Canyon Way • Palm Springs, California 92262 Tel: (760) 323-8299 • Fax: (760) 323-8207 • Web:
www.palmspringsca.gov
January 14, 2026
Mr. Ron Wu
Red Tail Multifamily Land Development
2082 Michelson Drive
Irvine, CA 92612
RE: FUNDING COMMITMENT IN THE AMOUNT OF THREE MILLION AND EIGHT HUNDRED THOUSAND DOLLARS ($3,800,000)
Dear Mr. Wu,
I am pleased to inform you the Palm Springs City Council approved your request for funding at its meeting on January 14, 2026. A loan from the City in the amount if Three Million and Eight Hundred Thousand Dollars ($3,800,000) will be made available to Red Tail Multifamily Land Development for a project to develop 82-unit low-income affordable housing project in the City of Palm Springs (Housing Project). The City of Palm Springs anticipates that the loan proceeds in the amount of Three Million Eight Hundred Thousand Dollars ($3,800,000) will be available for disbursement during the first quarter of calendar year 2028, subject to the Borrower’s satisfaction of all applicable pre-closing requirements and documentation of all funding sources. We will provide you with a draft agreement that will outline the terms and conditions for use of the funds, including but not limited to language regarding the selection of tenants which implements the City’s desire to house local residents experiencing housing insecurity. The draft agreement, anticipated to be a Loan Agreement, will require separate City Council approval.
The capital funds are available as a loan for construction and permanent financing under the following terms:
Interest rate: 3% simple annual
Term of Affordability: 55 years
Term of Loan: 57 years
Repayment: Annual payments based on residual receipts
Collateral: Deed of trust secured by the land and improvements In addition to that, pursuant to Resolution No. 24654, the City will extend the benefits of the Affordable and Multi-Family Housing Incentive Program, which provides a reduction of 100 percent of applicable Development Impact Fees and Developer Fees for projects that are 100 percent affordable. “Developer Fees,” as defined in the resolution, include development processing and administrative fees such as application, processing, plan check, and inspection fees required by the City’s codes, ordinances, or resolutions.This Funding Commitment may be
FundingCommitment— RedTailMultifamilyLandDevelopment Post Office Box 27 43 • Palm Springs, California 92263-2743
terminated at the City’s sole and absolute discretion.Additionally, the Funding Commitment may be terminated if the Developer is unsuccessful after three (3) attempts to obtain Low-Income Housing Tax Credits or other required tax-exempt bond financing.
The City and Developer will also enter into a separate Regulatory Agreement containing covenants to protect the City’s financial interest in the Housing Project, including long-term affordability requirements, reporting obligations, and compliance with all applicable federal and State program rules. The Regulatory Agreement will be recorded in the Official Records of Riverside County.
Furthermore, on a date to be determined in the future, the City will, pursuant to Section 147(f) of the Internal Revenue Code, issue public notice and conduct a Tax Equity and Financial Responsibility Act (TEFRA) hearing, followed by City Council consideration and approval of qualified private-activity bonds to be issued by an outside issuer in connection with the Housing Project.
Should you have any questions or require additional information, please contact Jay Virata, Housing and Community Development Director, at 760-323-8228 or by email at [email protected].
Sincerely,
Scott C. Stiles, ICMA-CM
City Manager