December 6, 2023
Envision Housing LLC
Sibley Simon, Managing Director, Envision II, LLC
189 Walnut Ave.
Santa Cruz, CA 95065
SUBJECT: City of Salinas Conditional Funding Reservation Letter for Predevelopment Funds for the 100% Affordable Multifamily Housing Development at 467/479 E. Market Street Dear Mr. Simon:
The City of Salinas has reserved $500,000 from the California Department of Housing and Community Development (HCD) Prohousing Incentive Program (PIP) funds allocated towards the development of affordable housing within the City of Salinas and to be utilized as gap financing in affordable rental housing developments. The intent of these funds is to provide partial financial assistance with costs associated with the predevelopment phase of the 100% affordable multifamily housing project to be located at 467/479 E. Market Street in Salinas, California. The development will consist of 75 residential units with complementary commercial space, parking, and community amenities on the ground floor.
The terms of the financing will be as follows:
Lender City of Salinas
Borrower Envision Housing LLC
189 Walnut Ave.
Santa Cruz, CA 95065
Loan Amount $500,000 (Predevelopment)
Loan Funding Source Prohousing Incentive Pilot (PIP) Program Interest Rate No more than 3%, simple interest rate
Payment Schedule Interest and then principal to be paid from residual receipts Term 55 Years
Expenditure Deadline City of Salinas funds committed to the 467/479 E. Market Street project must be expended no later than December 31, 2025. Please note the expenditure date is subject to change as the City has not yet received the Standard Agreement for the PIP Program Funds from HCD.
Disbursement Funds will be disbursed on a reimbursement basis.
Conditions Availability of City’s funds are contingent upon the receipt of:
The provision of adequate documentation from Envision Housing LLC demonstrating either the receipt of funds or provision of adequate documentation of a specific intent to provide pre-development funds from the following sources:
Monterey County Community Foundation ($1,500,000)
Housing Trust of Silicon Valley ($1,250,000)
Private Impact Loans ($700,000)
Bridge Loans ($1,600,000)
Investor Equity and Deferred ($3,000,000 – $4,000,000)
3CE Grant - Awarded 9/21/21 ($120,000)
DTSC Grant - Awarded 6/6/22 ($800,000)
The provision of a 467/479 E. Market Street project predevelopment budget, predevelopment scope of work, and predevelopment project timeline.
The PIP Program funds are conditioned on the receipt by the City of such funds from HCD. The funds will be available at the earliest convenience upon execution of the PIP Funding Agreement between the City and Envision Housing LLC.
Sincerely,
Jim Pia
Interim City Manager
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