City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2023-00439 6/13/2023 Discussion Item 2.
Authority to Execute Capitalized Operational Reserve Commitment with The John Stewart Company in the Amount of $3.4 Million in Mixed-Income Housing Funds for the Rehabilitation of the Sequoia Hotel
File ID: 2023-00439
Location: 911 K Street, District 4, Represented by Councilmember Valenzuela Recommendation: Adopt a City Council Resolution authorizing the Sacramento Housing and Redevelopment Agency to a) approve a funding commitment of $3.4 million in Mixed-Income Housing Funds (MIHF) funds to the Sequoia (Project), b) execute a Funding Commitment Letter with The John Stewart Company (JSCo) or related entity, c) amend the SHRA budget, and d) execute all necessary documents associated with this transaction.
Contact: Christine Weichert, Director, Development Finance, (916) 440-1353, [email protected]; Whitney Bonner, Program Manager, Development Finance, (916) 440-1325, [email protected], Sacramento Housing and Redevelopment Agency
Presenter: Whitney Bonner, Program Manager, Development Finance, (916) 440-1325, [email protected], Sacramento Housing and Redevelopment Agency Attachments:
1-Description/Analysis
2-City Council Resolution
3-Exhibit A to Conditional Loan commitment
4-Vicinity Map
5-Photo
6-Project Summary
7-Cash Flow Proforma
8-Maximum Income and Rent Limits 2023
Additional Description/Analysis
Issue Detail: On March 28, 2022, California Department of Housing and Community Development (HCD) announced $332.2 million dollars available through a Notice of Funding Availability (NOFA) for
File ID: 2023-00439 6/13/2023 Discussion Item 2.
the Portfolio Reinvestment Program (PRP). The PRP provides funding to HCD-assisted projects where HCD affordability restrictions have expired and have not been removed from the project, HCD affordability restrictions are expiring on or before December 31, 2031, or have been foreclosed on by the Department or another public lender. The PRP funding is derived from the Coronavirus State Fiscal Recovery Fund (CSFRF) established by the federal American Rescue Plan Act of 2021(ARPA) and the state General Fund.
The Sequoia Hotel is located on 911 K Street in downtown Sacramento. The hotel was originally opened in 1910. In 1985, 911 K Street Investors, LP purchased and rehabilitated the Project using funds from Sacramento Housing Redevelopment Agency (SHRA) and the HCD Special User Housing Rehabilitation Program, converting the hotel into an 89-Single Room Occupancy (SRO) project for low and very low-income residents. The Project went into financial default in 2005 and was foreclosed upon in April 2022 by HCD who took ownership of the property. At the request of HCD, the John Stewart Company (JSCo) became its property manager in 2022.
The Project has fallen into serious disrepair and is critically in need of extensive rehabilitation. HCD approached JSCo and requested they acquire the foreclosed property and renovate it with funding from the PRP. Following due diligence and a preliminary determination of feasibility, JSCo submitted a PRP application to HCD for $40 million (the maximum possible award amount), and operating assistance. In addition, JSCo applied to SHRA for $3.4 million in Capitalized Operating Reserves to ensure required property management and case management for residents. It is anticipated the project will be refinanced with the next 10 years.
Project Description:
The Project will rehabilitate 88 permanent supportive housing units and one manager’s unit. The 15 studio units will include new bathrooms and kitchenettes. The 73 SRO units will have access to the common kitchen/lounge area and bathroom on each floor. Several of the SRO units will have stove top burners and all units will have microwaves. The building will have a new heating and cooling system, new flooring, plumbing, mechanical systems, exterior envelope, and light fixtures. Elevators will be replaced and stairwells will include code compliant handrails. The ground floor will be converted to include a manager’s office, service offices, a computer room, laundry room, bike storage, and community room.
Project Based Vouchers and Gap Funding:
In February 2022, SHRA, on behalf of the Housing
Authority, released a Request for Proposals for Project-Based vouchers (PBV) to serve homeless families/individuals. In April 2023, the Developer was awarded 88 project-based vouchers for permanent support/homeless housing units for the Project from SHRA.
Project Developer: The Developer of the Project is JSCo, who was founded by John K. Stewart in 1978 to provide high-quality property management for affordable housing. Today, JSCo is a full- service housing management, development, and consulting organization employing almost 1,500 people throughout California. JSCo is the owner of five affordable developments in Sacramento.
File ID: 2023-00439 6/13/2023 Discussion Item 2.
Property Management: The John Stewart Company (JSCo) will serve as property manager. JSCo manages properties throughout the state of California and directly manages 3,595 market rate and affordable housing units in the Sacramento region.
Resident Services: Lutheran Social Services will provide a minimum of 20 hours per week of on-site resident services that will include enrichment activities, educational classes covering job search skills and resume writing service.
Case Management Services: Lutheran Social Services will provide four full-time onsite case managers who will provide a comprehensive psychosocial assessment of each client, conducted face -to-face, and an evaluation of the client’s medical, psychosocial, environmental, legal, and financial situations, as well as their education, strengths, needs, and available resources. The Case Management services provided will include:
1) Benefits counseling and advocacy
2) Mental health care
3) Physical health care
4) Substance use services
Security Plan:
The Project will include installation of a security camera system where staff will be monitoring surveillance video throughout their shifts to ensure safety. There will be 24/7desk coverage present.
Project Financing: The financing structure of this project includes HCD Portfolio Reinvestment Program funds (PRP), three-years HCD Capitalized Operating Subsidy Reserve (COSR), and SHRA Operating Reserve using Mixed-Income Housing Funds (MIHF).
In addition, SHRA has committed a total of 88 Project Based Vouchers (PBV) to this Project. Funding sources and uses and cash flow proforma for The Sequoia are included in Attachments 7 and 8.
Policy Considerations: The recommended actions are also consistent with a) SHRA Multifamily Lending and Mortgage Revenue Bond Policies adopted by the Council in December of 2019, Subsection 1.1.(3), Rehabilitation of existing affordable housing; and b) the 2021-2029 Housing Element, Goals H-2:1 Provide Opportunities for Affordable Housing Throughout the City.
Regulatory restrictions on the property will be specified in regulatory agreements between the Developer and the Agency for a period of 30 years on the MIHF assisted units.
Economic Impacts: The Sequoia project is expected to create an estimated 564.07 total jobs (319.64 direct jobs and 244.43 jobs through indirect and induced activities) and create an estimated $47,006,085 in total economic output ($28,653,137 of direct output and another $18,352,947 of output through indirect and induced activities). The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research
File ID: 2023-00439 6/13/2023 Discussion Item 2.
calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.
Environmental Considerations:
California Environmental Quality Act (CEQA): This project is categorically exempt under the California Environmental Quality Act (CEQA) per Guidelines Section 15301, Existing facilities, because it includes minor alteration and repair of an existing facility, and Section15332 because it is an infill project and the sites is not more than five acres, is substantially surrounded by urban uses, the project is consistent with the General Plan, and will not result in any significant impacts of noise, air quality or water quality.
National Environmental Policy Act (NEPA): NEPA review is underway for the proposed project and it is anticipated that the review will result in a Finding of No Significant Impact (FONSI). No choice limiting action will be taken prior to completing NEPA review.
Sustainability: The proposed Project has been reviewed for consistency with the goals, policies and targets of the Sustainability Master Plan and the 2030 General Plan. If approved, these projects will advance the following goal, policy and target of goal number one - Energy Independence, specifically by reducing the use of fossil fuels and providing long-term affordable and reliable energy.
Commission/Committee Action: Sacramento Housing and Redevelopment Commission: It is anticipated that, at its June 7, 2023 meeting, the Sacramento Housing and Redevelopment Commission will approve the staff recommendation for this item. Staff will notify the Council in the event this does not occur.
Rationale for Recommendation: The actions recommended in this report support the Agency’s ability to continue to fulfill its mission of providing a range of affordable housing opportunities in the City and are consistent with the Agency’s approved Multifamily Lending and Mortgage Revenue Bond Policies, and the City of Sacramento’s 2013-2021 Housing Element as part of Sacramento’s 2035 General Plan.
Financial Considerations: The recommended funding for this project is $3.4 million in Mixed- Income Housing Funds. SHRA will collect an annual payment of 0.125 percent (12.5 basis points) of the total SHRA funding amount, plus $100 per funded unit, for monitoring the regulatory restrictions
File ID: 2023-00439 6/13/2023 Discussion Item 2.
and administration of the funds.
Local Business Enterprise (LBE): Not applicable.
RESOLUTION NO. 2023 -
Adopted by the Sacramento City Council
on date of
THE SEQUOIA (PROJECT) AUTHORITY TO EXECUTE LOAN COMMITMENT WITH THE JOHN STEWART COMPANY IN THE AMOUNT OF $3.4 MILLION IN MIXED-
INCOME HOUSING FUNDS FOR THE REHABILITATION OF THE SEQUOIA HOTEL
BACKGROUND
A. The John Stewart Company (Developer) has applied for an allocation of $3.4 million in Mixed-Income Housing Fund (MIHF) fund s to assist in funding the operations of the Sequoia Hotel (Project). Additionally, the Developer has applied for an allocation of $46.8 million in California Department of Housing and Community Development (HCD) - Portfolio Reinvestment Program funds to strengthen the funding to rehabilitate this Project. Th is Project will rehabilitate the property and will serve homeless households.
B. The Project is consistent with a) the Sacramento Housing and Redevelopment Agency’s (SHRA) previously approved Multifamily Lending and Mortgage Revenue Bond Policies, Funding Priority #3: Rehabilitation and of existing affordable housing (Resolution No. 2019-0022); b) the Downtown Housing initiative and initiation of the Downtown Specific Plan, to bring 10,000 places to live to Downtown Sacramento by 2025 (Resolution No. 2015-282).
C. This Project is categorically exempt under the California Environmental Quality Act (CEQA) per Guidelines Section 15301, Existing facilities, because it includes minor alteration and repair of an existing facility, and Section15332 because it is an infill project and the site is not more than five acres, is substantially surrounded by urban uses, the project is consistent with the General Plan, and will not result in any significant impacts of noise, air quality or water quality. National Environmental Policy Act (NEPA): NEPA review is underway for the proposed project, and it is anticipated that the review will result in a Finding of No Significant Impact (FONSI).
No choice limiting action will be taken prior to completing NEPA review.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
Section 1. All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.
Section 2. The $3 .4 million Capitalized Operational Service Reserve (COSR) commitment (Commitment), attached hereto as Exhibit A, comprised of Mixed-Income Housing Fund for operations of theProject is approved and allocated for the Project, which will provide 89 permanent supportive housing units and one exempt management unit.
Section 3. SHRA is authorized to negotiate, enter into, execute, and amend as needed the Commitment, funding agreement , and related documents for the acquisition, construction, operation, and permanent financing of the Project with the Developer, and execute other documents, as approved to form by its Office of the General Counsel, perform other actions required for the MIHF funds, including without limits , negotiation, amendment, subordination, regulatory agreement, financial restructuring, and extensions, consistent with its adopted policy and with this resolution.
Section 4. SHRA is authorized to amend its budget and allocate up to $3.4 million of MIHF funds to provide operational financing for the Project.
Table of Contents:
Exhibit A: Commitment Letter
Exhibit A
Effective Date: June 13,2023
Catherine Etzel
The John Stewart Company
1388 Sutter Street, 11th Floor
San Francisco, CA 94109
RE: Capitalized Operational Reserve Grant Commitment for The Sequoia Project
Dear Ms. Etzel:
On behalf of Sacramento Housing and Redevelopment (Agency), we are pleased to advise you of this Commitment of Capitalized Operating Reserve (“Grant”) comprised of $3,400,000 of funds from Mixed-Income Housing Funds for the purpose of financing the acquisition and rehabilitation of that certain real property known as Sequoia located in the City of Sacramento at 911 K Street, Sacramento, California 95814 (Property).
The Agency's decision is based on your application, and all representations and information supplied by you to it. If these representations and information change in a material manner without written approval of the Agency, this C ommitment is void. Agency's o bligation to provide funds are subject to the satisfaction of all the following terms and conditions and Grantee's execution of documentation that is in a form and in substance satisfactory to the Agency.
The Grant shall be made on standard Agency grant documents. Operational Reserve Grant terms not in this C ommitment shall not be included in the final documents without additional environmental review and governing board approval. In the event of any discrepancie s between terms stated in this Commitment and grant documents, the terms stated in this Commitment shall be deemed to be terms of this Commitment.
Unless otherwise agreed in writing by the Agency in exercise of its absolute discretion, the following shall be considered conditions to Agency approva l of a funding commitment. The Agency may, in exercise of its absolute discretion, modify its requirements upon written notice to Grantee given at least sixty (60) days prior to close of escrow for the Property.
This Commitment will expire November 30, 2024, unless a mutually agreed upon extension is made.
1. PROJECT DESCRIPTION: The Sequoia (Project) is an existing building located at 911 K Street in downtown Sacramento. The Project will rehabilitate 88 permanent supportive housing units and one manager’s unit. The 15 studio units will include new bathrooms and kitchenettes. The 73 SRO units will have access to the common kitchen/lounge area and bathroom on each floor. Several of the SRO units will have stove top burners and all units
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
will have microwaves. The building will have a new heating and cooling system, new flooring, plumbing, mechanical systems, exterior envelope, and light fixtures. Elevators will be replaced and stairwells will include code compliant handrails. The ground floor will be converted to include a manager’s office, service offices, a computer room, laundry room, bike storage, and community room.
2. GRANTEE: The name of the Grantee for the Capitalized Operating Reserve is The John Stewart Company LLC (JSCo) or related entity.
3. PURPOSE OF GRANT: The Grant is to be used by grantee solely to pay for operational expense, for other purposes as Agency expressly agrees to in the Capitalized Operational reserve agreement, and such other agreements as may be generally required by the Agency for the use of the funding source for the Grant.
4. PRINCIPAL AMOUNT OF FUNDS: The combined principal amount of the Fund will be the lesser of the following:
a. Three Million Four Hundred Thousand Dollars and No Cents ($3,400,000.00), or b. An amount to be determined prior to final draw of the Capitalized Operating Reserved based on a project budget approved by Agency.
5. INTEREST RATE: Not Applicable to the project.
6. SOURCE OF FUNDS: SHRA is providing the funds from the following source and is subject to all requirements related to the use of such, whether Agency requirements or otherwise: MIXED INCOME HOUSING FUNDS . This fund is conditioned upon acceptance of Agency’s require ments and conditions related to such financing programs and funding sources, including among others, the required forms of agreements for the Fund; the requirements for covenants, conditions, and restrictions upon the Property; and insurance and indemnity requirements.
7. PURPOSE, TERM AND SOURCE OF GRANT : The Three Million Four Hundred Thousand Dollars and No Cents ( $3,400,000.00) Operational Reserve Grant will be used by the Grantee solely to pay the costs for operation reserve and such other purposes as the Agency expressly agrees to in the agreement.
8. Grantee acknowledges that, as a condition of the Agency’s making of the fund, the Property will be subject to restrictions on future sales and rentals which may result in less income to Grantee than could otherwise be realized, and that such restrictions run with the land, and during their operational term, will bind all successor s in interest.
___________ (Grantee/Grantee Initial)
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
9. SECURITY: The Loan shall be evidenced by promissory note(s) secured by a deed of trust with assignment of rents against the fee and/or leasehold interest in the Property and Improvements, which shall be a lien upon the Property and Improvements subject only to liens senior to the Agency’s lien securing loans from a conventional lender or other lender and such other items as the Agency may approve in writing. Operational reserves shall also be secured by security agreements. The Agency may subordinate said deeds of trust in order to accommodate completion of the development of the Property. The Agency will not subordinate the regulatory agreement(s) to said deeds of trust in orde r to preserve the affordable housing covenants.
10. LEASE AND RENTAL SCHEDULE: All leases of the Property and Improvements shall be subject to Agency's review and approval prior to execution. Grantee shall not deviate from the rental schedule presented in Grantee's application for the Operational reserves without Agency's prior written approval.
11. PROOF OF EQUITY: Low Income Housing Tax Credits is not applicable to the project.
12. OTHER FINANCING: As a requirement of the Operational reserves, shall procure and deliver to Agency evidence satisfactory to Agency that Grantee has obtained the following described financing which may be secured by a lien upon the Property and Improvements superior or subordinate to Agency's liens, and which shall b e otherwise on terms and conditions acceptable to Agency:
a. Such commitments for financing shall not require modification of Agency Operational reserves documents, or any term of this commitment letter. b. Such commitments shall not be based upon sources and u ses of Project funds that are different from those approved by Agency for the project or be subject to conditions which require amendment of other agreements.
13. EVIDENCE OF FUNDS : Prior to the first disbursement of the Capitalized Operational Reserve, Grantee must demonstrate evidence of adequate and assured funding to complete the development of the Project in accordance with the Agency's requirements. Grantee's evidence of available funds must include only one or more of the following: a) Grantee equity; b) firm and binding commitments for the Project from financial institution(s) or from other lender(s) approved by Agency in its absolute discretion; and c) Agency’s contribution, provided, however, that Agency is not obligated by this letter to make a ny contribution not stated in the terms of the letter.
14. SOILS AND TOXIC REPORTS : Grantee has submitted to the Agency a hazardous substances report made in accordance with the American Society for Testing and Materials "Standard Practice for Environmental Site Assessments; Phase I Environmental Site Assessment Process" (Designation E1527 -13) prepared by a licensed or registered environmental engineer or other qualified party prior to Loan closing. Grantee must, as a condition of disbursement of Capitalized Operating Reserve, provide assurances
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
satisfactory to the Agency that hazardous materials are not present on the Property or that any hazardous materials on the Property will be remediated and that no further remediation is then required by the environmental agency having responsibility for monitoring such remediation.
15. CAPITALIZED OPERATION RESERVES IN BALANCE: Grantee will be required to maintain the Capitalize Operational reserves "in balance". The Capitalized Operational reserves is "in balance" whenever the amount of the undisbursed funds, the remaining sums to be provided by the Grantee and the funds from other project lenders or the equity investor are sufficient, in the sole judgement of the Agency. Should the Agency determine that the Operational reserves is not "in balance", the Agency may declare the Capitalized Operational reserves to be in default.
16. PLANS AND SPECIFICATION : Final plans and specificat ions, if any, for the project must be in accord with the proposal approved as part of the Funding application. Final plans and specifications will be subject to Agency's final approval prior to the disbursal of Agency funds. Grantee must obtain Agency's prior written consent to any change in the approved plans and specifications or any material deviation in construction of the project.
The final plans shall incorporate all related mitigation measures, environmental conditions required, if any, for compliance with approvals under CEQA, and/or NEPA, or the U.S.
Department of Housing and Urban Development as conditions of approval of the project.
17. ARCHITECTURAL AGREEMENT: The architectural agreement (Agreement) , if any, for the preparation of the plans and specifications and other services shall be subject to Agency's approval.
18. COST BREAKDOWN: Grantee shall deliver to Agency for Agency's approval prior to commencement of work a detailed cost breakdown of the cost of constructing, financing, and other costs of developing the Improvements, which breakdown conforms to the project plans and specification and the budget approved with this Commitment. Grantee shall also deliver a list of all contractors and subcontractors to be employed in connection with the construction of the Improvements. If required by the Agency , Grantee shall also submit copies of all bids received for each item of work to be performed as well as copies of executed contracts and subcontracts with acceptable bidders.
All contracts, subcontracts, contractors, and subcontractors shall be subject to Agency 's approval prior to close of the Operational reserves funding. Agency also reserves the right to require performance and material payment bonds on any or all contractors, or in lieu of bond a letter of credit acceptable to Agency.
Agency shall make dis bursements of the funds based on a cost breakdown that lists line items in cost categories. Agency shall require that Grantee provide documentation supporting all requests for disbursement of funds, including proof of work done and actual expenditure. Agency shall conduct inspections of the Property to assure that the work was done before making a disbursement.
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
19. START OF CONSTRUCTION : Grantee shall commence construction at the earliest possible date subject to the conditions of this Agency and other in volved lenders, but no later than fourteen (14) days following the close of construction financing.
20. COMPLETION OF CONSTRUCTION : Grantee shall complete the construction of the Improvements no later than eighteen (18) months (Construction Period) following the close of construction financing.
21. SECURITY CAMERAS AND OUTSIDE LIGHTING : Project shall include installation of a security camera system at vehicular driveways and additional exterior lighting, and security patrols, all as approved by the Agency.
22. INSURANCE PROVIDER : Each policy of insurance required under the Loan shall be obtained from a provider licensed to do business in California and having a current Best's Insurance Guide rating of A VII, which rating has been substantially the same or increasing for the last five (5) years, or such other equivalent rating, as may reasonably be approved by Lender's legal counsel.
23. PROPERTY INSURANCE: Grantee shall procure and maintain property insurance and during construction Builder's Risk completed value insurance in a form and substance approved by Agency. Coverage shall be for protection against loss of, or damage to the Improvements or materials for their construction to their full insurable value. Grantee shall also procure and maintain insurance against specific hazards affecting Agency's security for the Funds as may be required by Agency, governmental regulations, or any permanent lender. All such policies shall contain a standard mortgagee loss payable clause in fav or of Agency. The insurance required shall be written with a deductible of not more than $25,000.00.
24. COMMERCIAL GENERAL LIABILITY AND OTHER INSURANCE:
Grantee shall carry insurance as set forth below effective prior to the disbursement of the Loan, and such insurance shall be maintained in full force and effect at all times and work is performed in connection with the project. Such insurance coverage must list the Agency as an additional insured, and must be approved in writing by Agency prior to the disbursement of the Loan.
a. Commercial general liability insurance, in Insurance Services Office (ISO) policy form CG 00 01 or equivalent, with limits of liability not less than: $1,000,000 per occurrence, and $5,000,000 general aggregate, all per location of the project, such coverage to include contractual liability to include bodily injury, property damage and personal injury;
b. Personal injury insurance with the employment exclusion deleted, unless the Agency gives prior written approval for the employment exclusion to remain in the policy;
c. Commercial automobile liability insurance for any vehicle used for or in connection with the project, in an amount not less than $1,000,000 and approved in writing by Agency; and
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
d. Workers’ compensation and all other insurance required under applicable law, in the amount required by applicable law or by Agency, whichever amount is greater.
25. TITLE INSURANCE: Grantee must procure and deliver to Agency a n ALTA Lender's Policy of Title Insurance, together with such endorsements as Agency may require, including but not limited to ALTA endorsement nos. 9. 06 and 28 insuring Agency in an amount equal to the principal amount of the Loan and covenants, conditions or restrictions of the Loan, that Agency's Deed of Trust constitutes a third lien or charge upon the Property and Improvements subject only to such items as shall have been approved by Agency.
There must be no exceptions permitt ed for mechanics liens. Title insurance for the Loan must be issued by a title insurer approved by Agency.
26. ORGANIZATIONAL AGREEMENTS: Grantee must submit to Agency certified copies of all of Grantee’s organizational documents, including all amendments, modifications or terminations: if a corporation, Grantee's Articles of Incorporation and By -Laws; if a partnership, its Partnership Agreement and, as applicable, Certificate of Limited Partnership or S tatement of Partnership; if a Limited Liability Company, its Articles of Organization and its Operating Agreement; and in all cases with all exhibits and amendments to such documents, fictitious business name statements, other related filings or recorded d ocuments and such related documents as Agency may request. If it is a corporation, Grantee must submit a corporate borrowing resolution referencing this Loan.
If Grantee is other than a corporation, Grantee must submit such proof of authority to enter this Loan as may be required under the organizational documents.
27. PURCHASE OF PROPERTY: Grantee shall provide Agency with copies of all documents relating to Grantee's purchase of the Property.
28. FINANCIAL INFORMATION: During the term of the Grant, Grantee shall deliver to Agency within 120 days of the end of each fiscal year an audited income and expense statement, a balance sheet, and a statement of all changes in financial position signed by authorized officers of Grantee. Prior to close of the Grant and during its term, Grantee must deliver to Agency such additional financial information as may be requested by Agency. Agency reserves the right to review and approve financial statements and other credit information and references prior to closing. Duri ng the term of the Grant, Grantee must deliver to Agency a monthly rent -roll including household composition information and operating statements with respect to the Property and Improvements, as Agency may request.
29. MANAGEMENT AGREEMENT: Prior to execution, Grantee must submit to Agency any agreement providing for the management or operation of the Property or Improvements by a third party which agreement is subject to Agency Approval.
30. AFFIRMATIVE FAIR MARKETING : Grantee agrees to follow the Agency’s Affirmative Marketing Policies that require outreach to groups least likely to apply for the housing based on local demographic information, providing sufficient marketing time prior to lease Up (as defined in the Affirmative Marketing Policies), and lotteries or other method
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
for initial Lease Up and initial waiting list creation, as agreed upon by the Agency and Grantee prior to the start of Lease Up.
31. RESIDENT SERVICES AGREEMENT : Prior to execution, Grantee must submit to Agency any agreement providing for the resident services by a third party which agreement is subject to Agency Approval. Grantee must provide a minimum 4 full time onsite case managers. The agreement must also include on -site resident servi ces according to the following minimum schedule of twenty (20) hours per week:
a. Resident Services Coordinator: Twenty (20) hours per week (maximum) b. Additional Programming: Balance of minimum Fifteen (15) hours per week shall include, but are not limited to:
i. Educational classes.
ii. Enrichment activities.
32. LOW INCOME HOUSING TAX CREDITS (LIHTC): LIHTC does not apply to this project.
33. SMOKE-FREE ENVIRONMENT : One Hundred percent ( 100%) of the buildings and units must be smoke free (including all forms of smoking that create secondhand smoke that impacts the health of nonsmokers). In addition, all indoor common areas must be smoke-free. Clearly-marked designated smoking areas must be provided.
34. DOCUMENTATION: This letter is not intended to describe all of the requirements, terms, conditions and documents for the Fund, which shall also include customary provisions and documents for an Agency transaction of this type. All documents to b e delivered to or approved by Agency must be satisfactory to Agency in all respects. Grantee must promptly deliver to Agency any further documentation that may be required by Agency.
35. CONSISTENCY OF DOCUMENTS: As a material obligation under this C ommitment, Grantee shall assure that the loan documents for the Project are consistent with lender's commitment approved by the Agency and comply, in all respects, with this Commitment.
36. CHANGES OR AMENDMENTS: No documents or contracts which are to be delivered to Agency or are subject to Agency's review or approval shall be modified or terminated without the prior written approval of Agency.
37. ACCEPTANCE OF THIS COMMITMENT : Grantee’s acceptance of this Commitment shall be evidenced by signing and delivering to Agency the enclosed copy of this letter.
Until receipt of such acceptance by Agency, Agency shall have no obligation under this letter. Agency may withdraw this Commitment at any time prior to Grantee’s acceptance.
Signatures appear on the following page.
Sincerely,
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
__________________________________
La Shelle Dozier, Executive Director
The undersigned acknowledges and accepts the terms and conditions of the Commitment and Scope of Development, and has executed this Commitment as of the Effective Date.
GRANTEE and GRANTEE:
The John Stewart Company, a California limited liability company
By: _________________________________
Catherine Etzel
Attachment:
Exhibit 1 - Scope of Development
Exhibit 1
The Sequoia
Scope of Development
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
Project Summary:
The Sequoia will be a 89-unit serving homeless housing community located at 911 K Street in Sacramento. The Project was originally a hotel which opened in 1910. In 1985, 911 K Street Investors, LP purchased and rehabilitate the Project using funds from the California Department of Housing and Community Development’s (HCD) Special User Housing Rehabilitation Program, converting the hotel into a 89-unit SRO Project for low and very low-income residents. The Project went into default in 2005 and, following a foreclosure process, is not owned by HCD. At the request of HCD, the John Stewart Company (JSCo) became it’s property manager in 2022.
Scope of Development
In order to maintain the habitability of the Sequoia Hotel, an extensive and comprehensive renovation and retrofit is required that affects all major mechanical/electrical/plumbing/fire safety systems, building construction, equipment and finishes, including the following:
1. Strip walls and ceilings down to the studs and replace rotted framing.
2. Reconfigure residential units for new unit count of 89 residential units as follows:
a. 2nd thru 5th floor; (20) residential units per floor, with a unit mix of (3) Studio units with private baths, (17) Single Room Occupancy Units (SRO’s) with common toilet and baths per floor, plus (2) common toilet rooms, (2) common showers, (1) common kitchen/lounge, and (1) janitor’s closet.
b. 6th floor; (4) Single Room Occupancy Units (SRO’s) with common toilet and baths per floor, plus (2) common toilet rooms, (2) common showers, (1) common kitchen/lounge, and (1) janitor’s closet.
c. Ground floor (5) residential units total with a unit mix of (4) Studio residential units with private toilet and baths, and (1) one bedroom/one bath Manager’s unit.
3. Demo ground floor restaurant and kitchen and create new common use spaces, staff kitchen, accessible toilet rooms, management and service offices, plus (5) residential units per above.
4. Replace one existing open stairwell with new enclosed exit stair and shaft, including code compliant handrails and guardrails.
5. Reconstruct one existing open stairwell for full code conformance. including code compliant handrails and guardrails.
6. Replace elevator and all equipment and controls with new gurney accessible elevator.
7. Replace roof and roof flashing.
8. Replace windows with wood sash windows, semi historic type.
9. Provide new heating and cooling system throughout the building, with thru wall heat pumps at the units and central air heat pumps at the ground floor common areas.
10. Replace existing electric service with new service and wiring throughout.
11. Replace plumbing piping and fixtures throughout, including replacement of broken or blocked piping.
12. Replace domestic hot water boiler and storage tank.
13. All new finishes, fixtures, equipment throughout, including resilient flooring throughout, interior painting, new unit kitchenettes with undercounter refrigerator, microwave and sink, and new electrical devices.
14. Provide new central fire alarm and smoke detection system – current only includes pull stations and battery smoke detectors at rooms.
15. Provide seismic retrofit at the upper floors of the building.
16. Provide new CCTV system.
17. Provide new mechanical ventilation system at corridors, toilet and baths, kitchens, and common areas.
18. Repair exterior building façade.
19. Replace sump pump.
20. Replace trash chute and upgrade trash areas.
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
21. Provide new laundry facility by reconfiguring existing laundry room in basement with new finishes.
22. Provide accessibility modifications including a minimum of 10% of the residential units for the mobility impaired, a minimum of 4% of the units for the audible/visual impaired, main entry, elevator, common areas and toilets, and signage.
23. Provide new electronic entry system with video.
24. Provide new LED lighting throughout, interior and exterior.
25. Repaint building exterior.
26. Replace interior unit entry doors.
27. Replace exterior doors and hardware.
28. Replace common area doors.
29. Provide an Asbestos Containing Materials (ACM) and Lead Based Paint (LBP) survey and O&M Manual.
30. Upgrade automatic fire sprinkler system for compliance with residential hotel ordinance.
31. Provide new window coverings throughout.
32. Provide new site and building accessibility signage, including new marquee.
33. Replace mailboxes with Cluster Box Units.
34. Provide new exterior entry awning.
35. Repair all building leaks.
Attachment 1: Lender’s Minimum Construction Standards
This attachment is from Exhibit 2 from the Lender’s Multifamily Lending and Mortgage Revenue Bond Policies.
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
SHRA RENTAL PROPERTY MINIMUM CONSTRUCTION STANDARDS
The following is a list of the required minimum construction standards that must be incorporated into projects participating in SHRA’s Multifamily Financing and/or Mortgage Revenue Bond programs. All rental units and sites associated with these projects must meet or exceed these standards.
Note: For rehabilitation projects, all of the following standards shall apply. The non-rehabilitation sections below shall apply to new construction projects.
Useful Life Expectancy – Rehabilitation only
SHRA shall reference the current edition of Fannie Mae’s “Instructions for Performing a Multifamily Property Condition Assessment, Appendix F. Estimated Useful Life Tables” in determining the useful life for all building components and systems located within the project. A remaining useful life of 15 years or more is required for all building components and systems located within the approved complex. All items on the Fannie Mae t ables with useful lives indicated to be less than 15 years shall be replaced.
General Requirements
A. All materials funded under this loan must be new unless previously approved. Recycled items must be approved in writing by SHRA prior to their use.
B. All work shall comply with Federal and State ADA accessibility requirements, as well as any other requirements stipulated by the funding source(s). When there are differences the stricter of the two shall apply. The developer is responsible for notifying their architect and/or engineer of all funding sources used on the project. The architect and/or engineer must indicate these funding requirements in the project’s plans/scope.
C. All units shall be approved for occupancy by the local Building Department or any other Agency Having Jurisdiction (AHJ) at the conclusion of the work and prior to occupancy.
D. Web-based security cameras and the equipment to record events are required for primary ingress/egress points to and from the site and for the principal parking and indoor and outdoor common areas where people will be congregating.
E. Site lighting is required for all parking and outside public spaces, and shall be of LED or similarly energy efficient type. The lenses on the exterior lights shall be cleaned with all oxidation removed or replaced. Light poles shall be new or painted, and shall be structurally sound and stable.
F. The developer’s architect is responsible for providing an Operating Procedure Outline Sheet (OPOS) for window washing systems where applicable, per Cal-OSHA requirements.
G. SHRA encourages the use of energy and water -efficient systems wherever they may be Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
incorporated into the project.
General Requirements – Rehabilitation only
A. Any component of the project which does or ma y present a health or safety hazard to the public or tenants shall be corrected to the satisfaction of the local Building Department or AHJ.
B. A clear pest inspection report will be required at the conclusion of the construction work for rehabilitation projects.
C. For all structures where disturbance of any hazardous materials (e.g. lead, asbestos, mold, etc.) will occur, a clearance report from an environmental consultant is required.
D. Projects deemed historically significant landmark by either the City of Sacramento or the National Register of Historic Places shall consult with the State Historic Preservation Officer (SHPO), and shall conform to the Secretary of the Interior Standards for the Treatment of Historic Properties.
Site Work
A. Trees and large shrubs must be trimmed, grass areas must be mowed, and all planter areas must be weed-free. The landscape design shall incorporate a sustainable design appropriate for the Sacramento Valley. Vegetation that assists in minimizing crime and enhances public safety is preferred. Trees compromising building envelope materials (roofing, siding, windows, etc.) and/or structural integrity (including foundations) must be removed. An arborist shall be consulted for an opinion on trees prior to major branch trimming, root cutting or tree removal. All trees, bushes and other plants that are to be removed shall have the root ball removed by grinding or by mechanical means. A landscape plan describing the above must be provided to SHRA for approval.
B. All landscaped areas must be served by a programmable automated irrigation system. The irrigation controller shall be a “Smart Controller” that senses rain to reduce water use. Irrigation shall be designed to use bubblers and other water saving measures. Irrigatio n must not spray on building. Sprinklers should minimize overspray that runs to storm drain drop inlets. Areas that show evidence of erosion of soil shall be landscaped to eliminate problems. The landscape plan must be approved by SHRA and applied.
C. For gated communities containing swinging vehicle gates, driveways shall be striped to show the area under the gate swings for safety purposes.
D. All projects shall contain trash enclosures with concrete aprons. Trash enclosures shall be made of cinder block or stucco. Trash enclosures shall be accessible to all tenants. Provisions for tenants with disabilities must be addressed in the project Scope of Development or the project plans.
E. All projects shall meet the parking requirements of the local Agen cy Having Jurisdiction (AHJ) over the project. "Grandfathered Projects" will need to show that they are in fact “Grandfathered” or otherwise exempted by the local AHJ. Otherwise, all projects shall meet the
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
governing ADA requirements for parking.
F. A two percent (2%) slope shall be maintained for a distance of five feet from all structures and no standing water shall remain on the site. Provide an on- site drainage system if necessary.
G. Stairways in common areas must include closed risers and non-slip concrete finish or other slip-resistant material on the treads.
H. Exterior mounted electrical, mechanical, and plumbing systems must be protected from vandalism.
Site Work – Rehabilitation only
A. All landscaping and irrigation systems must be in a well-maintained condition.
B. All fencing must be in good and serviceable condition. Existing fencing that is to remain shall be free of flaking paint, rust, or any other signs of failure. If existing fencing shows any signs of failure, it shall be rep aired, painted and restored to look new. All chain link fencing must be removed and replaced with fencing of another approved material. All pedestrian gates hardware must be functional and in new or near -new condition. Access Control systems are required a t exterior pedestrian gates.
C. All driveways and sidewalks must be in good condition. All cracked or uplifted areas (more than ¼”) shall be repaired or replaced.
D. The asphalt shall be in good condition, with no alligator cracking, longitudinal cracking, potholes, or standing water. Repairs to portions of parking lots not suitable for new coatings shall be performed by removing and replacing damaged paving. A new seal -coat or slurry -coat shall then be applied to the entire parking lot surface. Parking spaces shall be restriped, including ADA aisles and other applicable striping/painting.
E. All site accessories (bollards, benches, tables, play equipment, bike racks, mailboxes, shade structures, BBQs, sheds, etc.) shall be replaced or in good repa ir (cleaned, painted and/or re - coated).
Building Envelope and Moisture Protection – Rehabilitation only
A. All areas exposed to moisture must be sealed and watertight. Buildings showing evidence of water intrusion shall have the areas inspected by a lice nsed architect/engineer or by a certified water intrusion expert. A water intrusion report shall be submitted to SHRA, and shall include the cause of the issue and a resolution to eradicate the water intrusion. If the inspection cannot be completed until the demolition phase of the project, the report shall describe a procedure to inspect the issue during demolition.
B. Roofing must have 15 years or more of remaining life with no visible signs of leakage. For roofs containing composition shingles, a maximu m of two layers of shingles are allowed Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
(including any proposed new layers). Provide evidence that the roof system has a 15 -year life remaining on the manufacturer’s warranty.
C. All siding must have 15 years or more of remaining life. Hairline cracks in stucco must be sealed and painted with elastomeric paint. If requested by SHRA, a statement by a licensed architect and/or engineer that the existing siding contains at least 15 years of useful life remaining shall be provided.
D. Fireplaces must be clean and meet applicable air quality standards. Chimneys shall be clean and must be inspected by a certified chimney inspector for structural integrity. All recommended structural repairs shall be performed.
Doors and Windows
A. All dwelling/tenant units mu st have screens on all windows that are designed to open.
Windows designed to open must have functional locks and must operate freely without excessive effort. All windows must be dual -paned (minimum), and shall meet or exceed the State of California’s currently applicable efficiency standards, and any other efficiency standards that may be dictated by the funding source or other governing bodies for the project.
B. All doors must have matching hardware finishes.
C. All exterior doors must have deadbolt locks, keyed latch assemblies, viewers, and screws in strike plates long enough to penetrate the door jamb framing by at least one inch. The dwelling entry door hardware shall have single action hardware to release deadbolt and latch assembly.
D. All sliding exterior doors shall have screen doors and shall have functional locks and must operate freely without excessive effort.
E. All doors and windows must meet current egress standards.
Doors and Windows – Rehabilitation only
A. Retrofit windows are not acceptable. Any windows showing signs of condensation or leakage of any kind shall be replaced.
B. All doors and doorjambs must be in good condition. No damaged or worn doorjambs or doors are allowed. Doors and/or jambs beyond their useful life shall be replaced.
Casework
A. New cabinet boxes shall be made of plywood or solid wood. No particle board boxes will be allowed.
B. All counter tops shall be of solid surface or granite, and in very good condition with no significant scratches, burns or other imperfections.
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
C. Face frames, doors and drawer faces shall be solid hardwood. No plastic laminate finishes will be allowed.
Casework – Rehabilitation only
A. All cabinets shall be replaced or in very good condition, within their 15 year useful li fe, both structurally and in appearance.
Finishes
A. All dwelling unit kitchens shall contain luxury vinyl plank (LVP) flooring. Bathrooms must be floored with LVP, sheet vinyl or ceramic tile to provide a cleanable, impervious surface.
Bedrooms, hallwa ys, and living and dining rooms may be floored with carpeting, LVP or hardwood. Wear layer of LVP shall be at least 12 mils inside dwelling units. Tenant unit entries shall be floored with LVP or ceramic tile.
In common areas, corridors may be floored wit h LVP, glue -down carpeting, or carpet tiles.
Community rooms and kitchens shall be floored with LVP. Wear layer of LVP in common/commercial areas shall be a minimum of 20 mils thick.
Carpet shall meet or exceed the minimum standards as set by HUD’s UM-44D bulletin.
Finishes – Rehabilitation only
A. Floor coverings must be in good, useable condition - no holes, tears, rips, or stains.
B. All exterior and interior surfaces must be painted. No peeling, cracking, chipping, or otherwise failing paint will be allowed. All painted surfaces must be new, or in near new condition and appearance.
C. Acoustic (popcorn) ceiling texture must be remo ved and refinished with new texture to match wall texture.
Equipment
A. Dishwashers, refrigerator/freezer, oven, stoves and garbage disposals are required in all dwelling unit kitchens. All appliances must be new or in very good operating condition. All appliances must be Energy Star rated, as applicable. Appliances slated for ADA units shall be per code requirements.
B. SRO projects are encouraged to provide the appliances listed above and will be reviewed and approved on a case-by-case basis.
C. All kitchens must have adequate cabinet and counter space. Installation of shelving for microwaves is required if over -the-range microwaves are not used, with the exception of ADA units.
Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
Furnishings
A. Dwelling units must have window coverings on all windows.
Special Construction
A. Non-habitable structures on property must be painted to match primary buildings and must be structurally sound.
B. Laundry facilities must be provided on the basis of one washer and dryer for every ten dwelling units. Ten per cent of the total number of washer/dryers must be ADA -accessible machines (unless the ADA units contain their own laundry facilities). Solid surface countertops will be required within laundry rooms and countertops shall meet all ADA requirements.
C. Public pool areas shall have self-closing gate(s). Fences and gates at pool areas shall meet applicable current codes and standards. Joints between coping and concrete deck shall be appropriately caulked. Existing pools shall have no cracks in plaster or til e grout joints. The Developer is responsible for ensuring pool and surroundings meet all applicable current codes and standards. If a project contains two or more pools, at least one must remain following rehabilitation.
Mechanical/Plumbing
A. Water heaters must be installed per current applicable codes.
B. All common areas and tenant units must have heating and air conditioning. Wall mount (i.e. PTAC units) or central systems are acceptable. Evaporative coolers are not acceptable. HVAC units should be protected from vandalism, pursuant to discretion of SHRA.
C. Toilets, showerheads, faucets, and mixing valves shall be new and meet current water conservation codes.
D. Tub surrounds must be one unbroken piece per wall and must be of solid surfaces (such as “Swanstone” or other solid acrylic materials, quartz composites), or other similar materials.
Fiberglass/acrylic surrounds are acceptable.
Mechanical/Plumbing – Rehabilitation only
A. All toilets, sinks, and tubs shall be chip and stain free.
Electrical
A. All units must have smoke/carbon monoxide detectors installed per current code.
B. Wiring from telephone/data/cable suppliers shall be installed within walls, attic spaces, and/or crawl spaces. No conduits are allowed to be mounted on the exterior of the buildings in new Sacramento Housing and Redevelopment Agency “Changing Lives” 801 12th Street · Sacramento, CA 95814 · www.shra.org
construction.
Electrical – Rehabilitation only
A. All electrical panels shall meet current code.
B. Any rehabilitation projects with un -grounded electrical systems shall be re -wired with grounded systems to meet current code.
C. For rehabilitation projects, switches, outlets and light fixtures shall be replaced with devices that meet current applicable codes.
D. Wiring mounted on the exterior of the surface may be allowed if it is concealed in conduit and conduit is painted to match exterior siding. For projects where exterior siding will be removed, this wiring shall be installed within walls, attic spaces, and/or crawl spaces.
Resident Services Community Space
All properties, regardless of project type (i.e. senior , family, or large family), must devote a minimum of 1,200 s.f. to actual resident services/community space. Resident services space includes common kitchens, computer rooms, meeting rooms and general gathering space. It does not include public restrooms, leasing offices, laundry facilities and lobbies. Common kitchens are required, including refrigerator, stove, garbage disposal, and dishwasher.
For existing buildings, these requirements shall apply unless SHRA deems there to be significant physical constraints.
End of Scope of Development
CHANGING LIVES
- The Sequoia (911 K Street)
The Sequoia
0 Feet
100
Map
Locati
200
Attachment 4
SHRAGIS
April 25, 2023
Attachment 5
Sequoia
Attachment 6
Addresses
Number of Units
Project Type
Acreage
Unit Mix and Rents 50% AMI
Exempt
Management Unit
SRO Unit 73 0
Studio Unit 15 0
1BR/1BA 0 1
Total Units 88 1
Square Footage Unit Size (sq.ft.)Total (sq. ft.)
SRO Unit 300 21,900
Studio Unit 150 2,250
Common Areas 2,485 2,485
Total Gross 26,635
Resident Facilities
Permanent Sources Total Per Unit Per Square Foot
Permanent Loan 40,000,000$ 449,438$ 1,501.78$ SHRA Capitalized Operating Reserve 3,400,000$ 38,202$ 127.65$ Existing HCD Loan 2,757,041$ 30,978$ 103.51$ HCD - Operating Reserve (4 mos) 510,568$ 5,737$ 19.17$ HCD Capitalized Operating Service Reserve4,111,184$ 46,193$ 154.35$ TOTAL SOURCES 50,778,793$ 570,548$ 1,906.47$ Permanent Uses Total Per Unit Per Square Foot
Acquisition 2,757,041$ 30,978$ 103.51$ Construction Costs 25,064,945$ 281,629$ 941.05$ Architecture & Engineering 1,375,000$ 15,449$ 51.62$ Permits/Fees 742,500$ 8,343$ 27.88$ Hard Cost Contingency 3,712,500$ 41,713$ 139.38$ TOTAL HARD COSTS 33,651,986$ 378,112$ 1,263.45$ Soft Cost Contingency 340,591$ 3,827$ 12.79$ Financing Cost 3,205,725$ 36,019$ 120.36$ Relocation Expenses 1,912,000$ 21,483$ 71.79$ Replacement Reserves 89,000$ 1,000$ 3.34$ Capitalized Operating Reserves 7,422,184$ 83,395$ 278.66$ Transitional Operating Reserves 510,568$ 5,737$ 19.17$ Legal Fees 195,000$ 2,191$ 7.32$ Developer Fee 1,578,500$ 17,736$ 59.26$ Third Party Fees, Marketing, Other 1,873,239$ 21,048$ 70.33$ TOTAL SOFT COSTS 17,126,807$ 192,436$ 643.02$ TOTAL USES 50,778,793$ 570,548 $ 1,906.47$ SHRA $ per Unit Per Unit Cost
82,908$ 570,548$ $1.00 : $6.88 Management / Expenses
Proposed Developer
Property Management Company
Operating Expenses 830,663$ 9,333$
Property Management Fee 76,485$ 859$
Resident Services 464,619$ 5,220$
Taxes and Insurance 37,021$ 416$
Replacement Reserves 44,500$ 500$
-$ Difference
per unit
Amenities on site will include a common lounge area, Computer room,Community room with Kitchen, laundry facilities, Bike storage, communal shower
Leverage
Leverage
SHRA
John Stewart Company
John Stewart Company
per unit
per unit
per unit
per unit
1 SEQUOIA
Residential Project Summary
911 K Street Sacramento, C A95814
89 Rehabilitation
0.1 Total
73 15
89 Sequoia Area Median Square Total Gross Utility Net Net Rent per Total Monthly Current Unit Type Income % (AMI) Number Feet Sq Feet Rent¹ Allowance Rent Sq Foot Net Rent Annual Rent SRO Units 50% AMI with PBV 73 300 21,900 1,053.00 $ 1,053.00 $ 3.51 $ 76,869$ 922,428$ Studio 50% AMI with PBV 15 150 2,250 1,404.00 $ - $ 1,404.00$ 9.36 $ 21,060$ 252,720$ 1BR/1BA (Exempt Manager) 1 0 0
Totals 89 450 24,150 97,929 $ 1,175,148$
¹Pursuant to 24CFR 983.301, contract rents approved by HUD may exceed the tax-credit rent limits; and the AMI change is due to income averaging regulation by CDLAC. The tenant rent will not exceed 30% of the household adjusted gross income with PBV.
Annual 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Income Increase Per Unit Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Potential Rent 2.50% 1,234,640 1,265,506 1,297,144 1,329,572 1,362,811 1,396,882 1,431,804 1,467,599 1,504,289 1,541,896 Other Income 2.50% 2,338 2,396 2,456 2,517 2,580 2,645 2,711 2,779 2,848 2,919 Less Vacancy 5.00% -61,732 -63,275 -64,857 -66,479 -68,141 -69,844 -71,590 -73,380 -75,214 -77,095 Effective Gross Income $1,175,246 $1,204,627 $1,234,742 $1,265,611 $1,297,251 $1,329,682 $1,362,924 $1,396,998 $1,431,923 $1,467,721 Expenses
Operating Expenses 3.50% 9,333 830,663 859,736 889,827 920,971 953,205 986,567 1,021,097 1,056,836 1,093,825 1,132,109 Property Management 3.50% 859 76,485 79,162 81,933 84,801 87,769 90,841 94,020 97,311 100,717 104,242 Resident Services 3.50% 5,220 464,619 480,881 497,712 515,132 533,161 551,822 571,136 591,125 611,815 633,228 Taxes and Insurance 2.00% 416 37,021 37,761 38,516 39,287 40,072 40,874 41,691 42,525 43,375 44,243 Replacement Reserves 0.00% 500 44,500 44,500 44,500 44,500 44,500 44,500 44,500 44,500 44,500 44,500 Total Expenses 16,329 $1,453,288 $1,502,041 $1,552,488 $1,604,690 $1,658,707 $1,714,604 $1,772,444 $1,832,297 $1,894,232 $1,958,322 Net Operating Income -278,043 -297,414 -317,746 -339,079 -361,456 -384,921 -409,520 -435,299 -462,309 -490,601 Debt Service amount rate amort
Senior Loan $0 0.00% 40 0 0 0 0 0 0 0 0 0 0
HCD Monitoring Fee $40,000,000 0.420% 168,000 168,000 168,000 168,000 168,000 168,000 168,000 168,000 168,000 168,000 SHRA Monitoring Fee $3,400,000 0.125% 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 Debt Service Subtotal 174,250 174,250 174,250 174,250 174,250 174,250 174,250 174,250 174,250 174,250 Cash Available after Debt Service -452,293 -471,664 -491,996 -513,329 -535,706 -559,171 -583,770 -609,549 -636,559 -664,851 Priority Distributions
Asset Management Fee 3.00% 25,000 25,750 26,523 27,318 28,138 28,982 29,851 30,747 31,669 32,619 Net Cash after Priority Distributions -477,293 -497,414 -518,518 -540,647 -563,844 -588,153 -613,621 -640,296 -668,229 -697,471 HCD Loans
Principal Balance $40,000,000 6.250% 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 Interest for Period 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 Accumulated Interest 2,500,000 5,000,000 7,500,000 10,000,000 12,500,000 15,000,000 17,500,000 20,000,000 22,500,000 25,000,000 Balance 42,500,000 45,000,000 47,500,000 50,000,000 52,500,000 55,000,000 57,500,000 60,000,000 62,500,000 65,000,000
HCD - COSR
Principal Balance $2,599,184 2,599,184 2,121,891 1,624,477 1,105,959 565,311 -477,293 -497,414 -518,518 -540,647 -565,311
Balance 2,121,891 1,624,477 1,105,959 565,311 0
SHRA Funds
Principal Balance $3,400,000 3,400,000 3,401,467 2,813,314 2,199,693 1,559,397 891,168 1,467 -588,153 -613,621 -640,296 -668,229 -697,471
3,401,467 2,813,314 2,199,693 1,559,397 891,168 193,698
SequoiaCash Flow ProformaAttachment 7
Attachment 8
The Sequoia
Maximum Income and Rent Limits 2023
Limits at 50% of Area Median Income (AMI)
Housing Trust Funds (HTF)
Mixed Income Housing Funds (MIHF)
Maximum Gross Income Limits
Family Size 50% AMI
1 $35,500
2 $40,550
3 $45,600
4 $50,650
Maximum Gross Rent Limits*
Unit Size 50% AMI
Studio $887.50
1 Bedroom $1,013.75
*The tenant rent will not exceed 50% of the household adjusted gross income and the Project Based Vouchers.