Housing & Community Services
1500 Warburton Ave.
Santa Clara, CA 95050
408-615-2490
BRACHER SENIOR APARTMENTS – TERM SHEET
AMENDMENT TO THE CITY LOAN AND AGREEMENT CONTAINING COVENANTS
Date: December 5, 2024
REQUEST: South Drive LLC, a California limited liability company (referred to herein as the “Borrower”), as the successor-in-interest to Bracher Associates, a California limited partnership (“Original Borrower”), pursuant to that certain Assignment and Assumption Agreement and Consent (Bracher Senior Housing) made as of August 19, 2014, by and among Original Borrower, Borrower, and the City of Santa Clara, a chartered municipal corporation (“City”), and recorded in the Official Records of Santa Clara County (the “Official Records”) as Document Series No. 22769072(the “Assignment, Assumption, and Consent”), has requested that the City, as the successor agency to the former Redevelopment Agency of the City of Santa Clara (“Original Lender”), extend the maturity date of that certain loan, as more particularly described below, made to the Original Borrower in the original amount of One Million Five Hundred Fifty Thousand and No/100 Dollars ($1,550,000.00) (the “City Loan”), and in exchange for the extending the City Loan, the Borrower will extend the term of that certain Agreement Containing Covenants Affecting Real Property (Including Rental Restrictions) entered into as of August 30, 1994, by and between the Original Borrower and Original Lender , and recorded in the Official Records as Document Series No. 12632298 (the “Covenants Agreement”),for a period of five (5) years, ensuring that the seventy-two (72) units serving senior citizens of very-low income will continue to be made available for affordable housing (collectively, the “Transaction”).
Capitalized terms not otherwise defined herein shall have the meaning ascribed to such term (s) in the Acquisition Loan Agreement dated August 16, 1994, by and between the Original Borrower and Original Lender (the “Loan Agreement”), Promissory Note Secured by Deed of Trust to the Original Lender (Bracher Senior Housing) dated August 30, 1994, made by Original Borrower, payable to Original Lender (the “Promissory Note”), Deed of Trust With Assignment of Rents (Bracher Senior Housing) made as of August 30, 1994, by Original Borrower, as trustor, Santa Clara Land Title Company, as trustee, and Original Lender, as beneficiary, and recorded in the Official Records as Document Series No. 1263229 (the “Deed of Trust”), and the Covenants Agreement (individually and collectively, the “Loan Documents”).
SUMMARY OF CITY ACTIONS:
The summary below describes the City requirements as part of the Transaction.
A. Amendment of Promissory Note: Associated with the Transaction, the terms and conditions of the existing City Loan will be modified, and the Promissory Note will be amended to reflect the requested changes as set forth in Exhibit A attached hereto and incorporated hereby.
B. Amendment of Covenants Agreement: The term of the Covenants Agreement will be extended by five (5) years from November 30, 2050, to November 30, 2055, as set forth in Exhibit B attached hereto and incorporated hereby.
C. Fees: Any fees including documentation, legal fees, recording fees, title fees and any fees incurred in connection with the Transaction shall be borne by the Borrower.
TERM SHEET: South Drive LLC (Bracher Senior Housing)
December 5, 2024
PROJECT DESCRIPTION & FINANCING OVERVIEW
1. PROJECT DESCRIPTION: The property, a n affordable housing rental project consisting of seventy-two ( 72)-rent restricted serving Very Low -Income (as such term is defined in the Loan Documents) senior citizens, is located at 2665 South Drive, Santa Clara (the “Property” or “Project”).
2. EXISTING CITY LOAN: The City Loan is evidenced by the Promissory Note, bears simple 6% interest with annual payments from Residual Receipts (as such term is defined in the Loan Documents), matured on August 30, 2024 (“Maturity Date”), and is secured by the Deed of Trust. In addition to the Promissory Note , the Deed of Trust, and the Loan Agreement, the City recorded the Covenants Agreement. The City receives 75% of Residual Receipts, 90 days after the end of Borrower’s fiscal year or every April 1 of each year. As of November 30, 2024, t he City Loan has an outstanding principal balance of $960,561.21 and $28,974.30 i n accrued , unpaid interest. The City Loan was originally made by Original Lender to Original Borrower and was subsequently assigned by the Original Borrower and assumed by Borrower, pursuant to the Assignment, Assumption, and Consent.
3. SPONSOR: Santa Clara County Housing Authority.
4. CITIBANK LOAN: Citibank made a permanent loan to the Borrower in the amount of $ 1,950,000, payable in monthly instalments, with a maturity date of January 2026. The Loan Documents and the Covenants Agreement are subordinate to the Citibank Loan.
5. AMENDED AND RESTATED CITY LOAN: The revised City Loan terms are set forth in Exhibit A “Amendments to the Terms and Conditions of the Existing City Loan,” attached hereto. The Covenants Agreement shall be amended and restated as set forth in Exhibit B.
6. DOCUMENTATION:
a. This Term Sheet is not intended to set all the terms, conditions and documents required by the City for this transaction, which shall include customary provisions and documents to be approved by City (including, but not limited to, all such documents mentioned in this Term Sheet and all City documents evidencing, securing, or related to City documents related to this Project, shall in all respects be satisfactory to City (collectively, “City Documents”).
b. Additional Documentation: Borrower shall promptly deliver to City any further documentation which may be required by City.
c. Changes or Amendments: No Project loan documents which are subject to City’s review or approval shall be modified in any material aspect or terminated without the prior written approval of the City. Such approval will be focused on whether such changes are consistent with the long-term viability of and financial projections for the Project.
d. Conflict: If a conflict arises between terms herein and terms in the City Documents, the City Documents shall prevail.
e. Expiration: This Term Sheet shall expire if not executed by January 31, 2025.
TERM SHEET: South Drive LLC (Bracher Senior Housing)
December 5, 2024
ATTACHMENT
Exhibit A: Amendments to the Terms and Conditions of the Existing City Loan Exhibit B: Amendments to Agreement Containing Covenants
TERM SHEET: South Drive LLC (Bracher Senior Housing)
December 5, 2024
ACCEPTED BY:
“BORROWER”
South Drive LLC,
a California limited liability company
By: S.P.G. Housing, Inc.,
a California nonprofit public benefit corporation,
its Sole Manager
By:
Name: _________________________________
Title: ____________________
Date: _________________________________
ACKNOWLEDGED BY:
The City of Santa Clara,
a California municipal corporation
By: ______________________________________
Adam Marcus
Housing and Community Services Division Manager
Date: ______________________________________
TERM SHEET: South Drive LLC (Bracher Senior Housing)
December 5, 2024
EXHIBIT A
AMENDED TERMS AND CONDITIONS TO THE EXISTING LOAN
1. LOAN MATURITY DATE: The maturity date of the City Loan will be extended from August 30, 2024, to August 30, 2029.
2. LOAN DOCUMENTS: The Borrower will enter into a First Amendment to the Promissory Note and a First Amendment to the Covenants Agreement, which documents shall evidence the City Loan terms as set forth in this Term Sheet.
3. CASH FLOW PROJECTIONS: Prior to the close of the Transaction, the Borrower shall submit an updated pro forma budget to the City for approval. The pro forma should reflect the Borrower's projections of the income, operating expenses, and cash flow for the Property.
4. ORGANIZATIONAL AGREEMENTS: Borrower shall submit to City, its sole manager’s articles of incorporation, by-laws, corporate resolutions authorizing the Transaction and incumbency certificate with all exhibits and amendments thereto and related filings or recorded documents, current good status certificate s, Borrower’s articles of organization , filed certificate of limited liability certificate, operating agreement and any amendments thereto , and such related documentation as City may request.
5. COMPLIANCE: Prior to closing, the Sponsor must be in compliance on all its projects with the City including, but not limited to, rent and income compliance and document submission compliance.
TERM SHEET: South Drive LLC (Bracher Senior Housing)
December 5, 2024
EXHIBIT B
AMENDMENTS TO AGREEMENT CONTAINING COVENANTS
1. TERM: The term of the Covenants Agreement will be extended by five (5) years, from August 30, 2049, to August 30, 2054.
2. AGREEMENT CONTAINING COVENANTS SUBORDINATION: The Covenants Agreement, as amended, shall remain subordinate to the Citibank Loan.