City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-00439 3/11/2025 Discussion Item 3.
(Housing Authority) Authorization to Execute and Deliver a First Amendment to Master Pledge and Assignment Agreement for Broadway Senior Center Apartments File ID: 2025-00439
Location: 5200 Broadway, District 5
Recommendation: Adopt a Housing Authority Resolution: 1) authorizing the execution and delivery of a First Amendment to Master Pledge and Assignments related to Broadway Senior Center Apartments and the Omnibus Amendment; 2) executing any and all documents deemed necessary and related to the transaction associated with DHI Broadway Associates, LP, or related entity; and 3) making related findings.
Contact: Christine Weichert, Director of Development Finance, (916) 440-1353, [email protected], Sacramento Housing and Redevelopment Agency
Presenter: Whitney Hinton, Program Manager of Development Finance, (916) 440-1325, [email protected], Sacramento Housing and Redevelopment Agency Attachments:
1-Description/Analysis
2-Housing Authority Resolution
3-Vicinity Map
Description/Analysis
Issue Detail: In 2008, The Housing Authority of the City of Sacramento (Issuer) issued Mortgage Revenue Bonds in the amount of amount of $5,456,2000 for Broadway Senior Center Apartments (Project).
Federal, state, and local legislation authorizes the issuance of mortgage revenue bonds by local governments to finance the development, acquisition, construction and/or rehabilitation of multifamily rental projects. The interest on the bonds is exempt from federal and state taxation. For this reason, bonds are an important funding source for affordable housing as they provide below-market financing for qualified rental projects.
DHI Broadway Associates, LP, a California limited partnership (the “Borrower”) acquired and
File ID: 2025-00439 3/11/2025 Discussion Item 3.
rehabilitated Broadway Senior Apartments, a 120-unit affordable multifamily senior development in 2008 knowing that the Mortgage Revenue Bonds must be refinanced, or Remarked, by March 1, 2025.
In order to permit additional time to refinance the Project, the Borrower has requested the Housing Authority, as Bond Issuer, enter into an amendment to the Master Pledge and Assignment with the US Bank National Association to extend the Remarketing Date by six months.
Project Description: Broadway Senior Center Apartments is located at 5200 Broadway. The Project’s 120 units that comprise 112 one-bedrooms and eight two-bedrooms across twenty-five single-story buildings. The community room, laundry facility, and management/leasing offices are in separate buildings. All units are rental units affordable to residents earning between 50 percent - 60 percent of Aera Median Income (AMI). The rent restrictions are enforced through a Regulatory Agreement with the Sacramento Housing and Redevelopment Agency (Agency) for a term of 55 years, expiring in September 2063.
The project was built in 1979. In 2008 all apartment interiors were renovated and upgraded as needed with replacement of countertops, garbage disposal, appliances, refaced or replaced cabinetry in the bathrooms, vinyl, toilets, and bathtubs. Exterior work included replacement and painting of deteriorating side and surrounding fencing, installation of dual-pane windows, and all buildings will have concrete entry ramps and walkways from the property entrance. Site work included improvements to landscaping, modification of sidewalks to correct problematic drainage issues, and upgraded ADA accessibility throughout the complex. Security cameras and enhanced lighting were also installed.
Broadway Senior Center Apartments is an existing housing project made affordable by a project- based Housing Assistance Payment (HAP) contract with the U.S. Department of Housing and Urban Development (HUD) that covers all 120 units. The manager’s unit is covered by the contract but can be rented to the manager at market rate if necessary. Under the HAP contract, tenants pay 30 percent of their income for rent and the balance of the rent is paid by HUD.
Project Developer/Borrower:
Dawson Holdings, Inc., has developed numerous affordable apartment projects. The company is based in Sausalito, and many of the company’s apartment projects are in Sacramento and the San Francisco Bay area.
Property Management: The current property manager, Aperto Property Management, will continue in that function. They are currently managing 152 properties in California, with 13 in the Sacramento area.
Project Financing: The rehabilitation of Broadway Senior Center Apartments used tax exempt mortgage revenue bonds issued by the Housing Authority, Low income Housing Tax credits, a
File ID: 2025-00439 3/11/2025 Discussion Item 3.
deferred fee, and a $2,100,000 Agency loan.
Policy Considerations: The recommended actions are consistent with Sacramento Housing and Redevelopment Agency’s Multifamily Lending and Mortgage Revenue Bond Policies.
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): The proposed action is exempt from environmental review under California Environmental Quality Act (CEQA) Guidelines Sections 15310 and 15301(a) and (d) which exempts bond and loan financing and rehabilitation of existing facilities where the use remains unchanged.
Sustainability: Not applicable.
Commission/Committee Action: At its meeting of March 5, 2025, it is anticipated that the Sacramento Housing and Redevelopment Commission will recommend approval of the attached resolution(s). In the event it fails to do so, Staff will advise the Board/Council at the meeting.
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. They are also consistent with the Agency’s approved Multifamily Lending and Mortgage Revenue Bond Policies, and the City of Sacramento 2021-2029 Housing Element as part of General Plan Sacramento’s 2035 General Plan.
Financial Considerations: The Agency received a one-time issuance fee of 0.25 percent of the bond amount at bond closing and receives annual payments for the monitoring of the regulatory restrictions. Mortgage revenue bonds do not represent a financial obligation of the Agency, the Housing Authority, or the City of Sacramento.
LBE - M/WBE and Section 3 requirements:
M/WBE & Section 3 Considerations:
The items discussed in this report have no M/WBE or Section 3 impact; therefore, M/WBE and Section 3 considerations do not apply.
RESOLUTION 2025-
Adopted by the Housing Authority of the City Sacramento on date of
Resolution of the Housing Authority of the City of Sacramento Authorizing the Execution and Delivery of a First Amendment to Master Pledge and Assignment Relating to its Multifamily Housing Revenue Bonds (Broadway Senior Center Apartments) 2008 Issue G-1, Authorizing Other Documents Relating Thereto; and Approving Other Actions and Matters Relating Thereto
BACKGROUND
A. Pursuant to Chapter 1 of Part 2 of Division 24 of the California Health and Safety Code (the “Act”) and a Master Pledge and Assignment dated as of September 1, 2008 (the “Pledge and Assignment”), among the Housing Authority of the City of Sacramento (the “Issuer”), U.S. Bank National Association, as agent of the Issuer (the “Agent”), and U.S. Bank National Association, as holder (the “Holder”), the Issuer previously issued its Housing Authority of the City of Sacramento Multifamily Housing Revenue Bonds (Broadway Senior Center Apartments) 2008 Issue G -1 in the aggregate principal amount of $5,456,200 dated September 23, 2008 (the “Bonds”); and
B. The Issuer loaned the proceeds of the Bonds to DHI Broadway Associates, LP, a California limited partnership (the “Borrower”) for the purpose of financing the acquisition, rehabilitation and development of a 120-unit multifamily rental housing development located in the City of Sacramento, California and commonly known as the Broadway Senior Center Apartments (the “Project”); and
C. The Bonds have a Remarketing Date of March 1, 2025; and D. In order to permit the Borrower additional time to refinance the Project, the Borrower has requested that the Issuer enter into an amendment to the Master Pledge and Assignment with the Agent and the Holder in order to extend the Remark eting Date by six months and U.S. Bank National Association, as Agent and Holder, has agreed to extend the Remarketing Date; and
E. Section 2.9 of the Pledge and Assignment permits the Issuer, the Agent and the Holder to establish a new Remarketing Date; and
F. There has been presented to the Issuer the following in connection with the Bonds:
1. A proposed form of First Amendment to Master Pledge and Assignment (the “First Amendment”) to be entered into by the Issuer, the Agent and the Holder;
2. a proposed form of Omnibus Modification (the “Omnibus Modification”) to be entered into by the Issuer, U.S. Bank National Association, as lender, and the Borrower; and G. The Issuer hereby finds and declares that this resolution is being adopted pursuant to the powers granted by the Act; and
H. All conditions, things and acts required to exist, to have happened and to have been performed precedent to and in connection with the amendment of the Pledge and Assignment as contemplated by this resolution and the documents referred to herein will exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act;
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE HOUSING AUTHORITY OF THE CITY RESOLVES AS FOLLOWS:
SECTION 1.
The Issuer hereby finds and declares that the above recitals are true and correct.
SECTION 2.
The First Amendment, in the form on file with the Clerk, is hereby approved. The Executive Director of the Issuer , is hereby authorized and directed to execute the First Amendment, with such changes, deletions and insertions as may be approved by legal counsel to the Issuer, such approvals being conclusively evidenced by the execution and delivery thereof.
SECTION 3.
The Omnibus Modification, in the form on file with the Clerk, is hereby approved. The Executive Director is hereby authorized for and on behalf of the Issuer to execute and deliver the Omnibus Modification with such changes, additions or deletions as may be approved by such Authorized Officer and legal counsel to the Issuer, such approvals to be conclusively evidenced by the execution and delivery thereof.
SECTION 4.
All actions heretofore taken by the officers and agents of the Issuer with respect to the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the Executive Director is hereby authorized and directed, for and in the name and on b ehalf of the Issuer, to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and deli very of the Bonds in accordance with this Resolution and resolutions heretofore adopted by the Issuer, including but not limited to those certificates, agreements and other documents described in the documents herein approved and any certificates, agreements or documents as may be necessary to further the purpose hereof or provide additional security for the Bonds, but which shall not create any obligation or liability of the Issuer other than with respect to the revenues and assets derived from the proceed s of the Funding Loan or otherwise under the documents listed above.
SECTION 5.
The Executive Director is hereby authorized to execute and deliver any future amendments to the Pledge and Assignment and any of the documents authorized to be executed and delivered pursuant to this Resolution, without further action of the Issuer, for the purposes of (i) adding to the covenants and agreements of the Borrower or of the provider of any bond insurer or liquidity facility; (ii) assigning or pledging additional security for the Bonds; (iii) curing any ambiguity, inconsistency or omission or supplement any defective provision of the Bonds, the Pledge and Assignment, the Agency Agreement or the Regulatory Agreement; (iv) the addition or deletion of provisions relating to the remarketing of the Bonds; (v) providing for any additional procedures, covenants or agreements necessary to maintain the tax -exempt status of interest on the Bonds; and (vi) modifying or eliminating any book -entry registration system for the Bo nds, or (vii) modifying the provisions relating to the maturity, the amortization, the redemption, the interest rate or the method of determining the interest rate of the Bonds, and the corresponding provisions of the Pledge and Assignment and Agency Agree ment or other agreements relating to the Bonds; provided such amendments are (1) made pursuant to the terms of such documents, (2) are consistent with such documents, (3) do not require the consent of the holders of the Bonds, (4) do not provide for any additional duties or costs with respect to the Issuer, (5) in the case of an amendment described in clause (vii), above, will not result in a reissuance of the Bonds for federal income tax purposes, as evidenced by a letter from qualified bond counsel to the Issuer, and (6) do not provide for any additional duties or costs with respect to the Issuer for which the Borrower does not agree in advance to reimburse or indemnify the Issuer therefor.
SECTION 6.
This Resolution shall take effect immediately upon its adoption.