901 P Street, Suite 213A Sacramento, CA 95814 p (916) 654-6340 f (916) 654-6033 www.treasurer.ca.gov/ctcac CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE MEMBERS FIONA MA, CPA, CHAIR State Treasurer MALIA M. COHEN State Controller JOE STEPHENSHAW Director of Finance GUSTAVO VELASQUEZ Director of HCD VACANT Executive Director of CalHFA EXECUTIVE DIRECTOR MARINA WIANT Reservation Letter Tax Exempt April 8, 2025 Betsy McGovern-Garcia Crescent Meadows, L.P. 8445 West Elowin Court Visalia, CA 93291 Email: [email protected] RE:CA-25-448 / Crescent Meadows Ferguson Avenue and Dinuba Boulevard Visalia, CA 93291 Dear Betsy McGovern-Garcia, The California Tax Credit Allocation Committee (CTCAC), in its role as administrator of the federal and California Low Income Housing Tax Credit programs (Tax Credit programs) established by Section 42 of the Internal Revenue Code of 1986, as amended , and Sections 12206, 17058 and 23610.5 of the California Revenue and Taxation Code, respectively, hereby reserves for the project referenced above low-income housing tax credits in the following amount(s) and under the following conditions and limitations: $1,445,633 in federal Tax Credits annually for each of ten years (applicable percentage of 4.00%); These credit amounts have been calculated using a qualified basis and applicable percentage identified in the attached staff report. While the actual qualified basis may change, the credit amounts of the reservations stated above can be adjusted for projects requesting credit under Regulation Section 10326 at the time of placed-in-service. CTCAC has reviewed all documentation required to be submitted before issuance of this letter and finds them to be acceptable and in accordance with the Qualified Allocation Plan. Additionally, CTCAC conducted its initial evaluation to determine the appropriate amount of tax credits needed for financial feasibility and long-term viability. This evaluation is performed to assess whether development and operating costs are reasonable, that program requirements are being adhered to and that no more tax credits are awarded than are needed to fill the gap left after considering all other committed funding. Any special conditions stated in the attached staff report must be adhered to.
Tax Exempt Reservation Letter April 8, 2025 Crescent Meadows / CA-25-448 Page 2 This reservation of tax credits is conditioned upon the receipt of a tax-exempt bond allocation no later than April 8, 2025. CTCAC with an updated development timetable by either December 31 of the year following the year the project received its reservation of Tax Credits for rehabilitation projects, or by December 31 of the second year following the year the project received its reservation of Tax Credits for new construction projects, as required under Regulation Section 10326(j). This Reservation is further conditioned upon the project owner's constructing, purchasing, or rehabilitating the project in accordance with the application submitted to CTCAC and upon the owner placing the project in service within the time periods allowed by law and regulation. This Reservation is further conditioned upon the owner posting project signage at the construction site in a manner consistent with criteria outlined on the CTCAC website at: http://www.treasurer.ca.gov/ctcac/signage/memo.pdf. The allocation may be rescinded if satisfactory progress toward completion is not maintained. Within one year from the CTCAC the issuance of Internal Revenue Service (IRS) Form(s) 8609 and submit the required documentation as specified in CTCAC Regulation Section 10328(e). Prior to issuance of IRS Form 8609, the project owner must submit to CTCAC the following in the form of a CD/DVD/flash drive (Please do not submit these documents in a binder):an updated application (in MS Excel format) which shows in every respect what changes have occurred or are being proposed from the application upon which this Reservation was made (all changes are subject to approval by the Committee); all documents under Regulation Section 10322(i); and all documents required at Placed in Service are located on the CTCAC website at: https://www.treasurer.ca.gov/ctcac/inservice/STOhome.asp Internal Revenue Procedure 94-57 allows owners of qualified housing projects to specify the date on which the gross rent floor described in Section 42(g)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code") will take effect. The IRS will treat the gross rent floor as taking effect on the date of this reservation under Code Section 42(h)(1). However, the IRS will treat the gross rent floor as taking effect on a building's placed in-service date if the building owner designates that date as the date on which the gross rent floor will take effect for the building. The project owner must make this designation to use the placed in-service date no later than the date on which the building is placed in service. If elected, the CTCAC election form on our website (http://www.treasurer.ca.gov/ctcac/inservice/STOhome.asp) will be required to be submitted with the rest of the items listed above prior to issuance of IRS Form 8609. Before issuance of IRS Form 8609, the project owner will be required to sign a CTCAC Regulatory Agreement and lease rider, if applicable, which will bind current and future owners to covenants previously agreed to by the project owner and CTCAC. The project will be monitored by CTCAC for the duration of the compliance period to ensure that the project is abiding by all covenants. Projects will be charged a one-time monitoring fee of $700 per unit. This fee must be paid before any tax forms will be issued and/or the Regulatory Agreement will be recorded. (Credits cannot be claimed if the Agreement has not been recorded.) Within 20 days of the date of this reservation, by 5:00 p.m. on April 28, 2025, the applicant must provide a payment in the amount of $14,456, which is the reservation fee required for this project. Please submit an electronic payment by visiting the CTCAC website https://www.treasurer.ca.gov/ctcac/. If preferred, a check may be made out to CTCAC. The reservation fee is not refundable. By accepting this Reservation, the owner understands and accepts the risks that the U.S. Congress, U.S. Department of the Treasury, or the State of California may change the requirements for the award of tax Tax Exempt Reservation LetterApril 8, 2025Crescent Meadows / CA-25-448Page 3credits by subsequent enactment of law or regulation. The owner further acknowledges that it has consulted its own tax advisor as to any consequences related to this Reservation or eventual award of tax credits.Applicant acknowledges that it is under an affirmative obligation to advise CTCAC of any material change in the nature or composition of the owner or the development team or of any of the specifics of the Project set forth in the Application.Moreover, even after the reservation of tax credits, the amount of such reservation may be adjusted if, upon the initial and subsequent feasibility determinations, CTCAC determines that the Project received more credits than are necessary for financial feasibility of the Project. In addition, CTCAC may rescind a reservation of credits in the event that the maximum amount of credits achievable is insufficient for financial feasibility of the Project.CTCAC accepts no responsibility for any adverse consequences to the owner if the owner chooses to proceed with the project based upon this Reservation. Upon mutual consent with the CTCAC, the project's Reservation may be canceled, and the credits returned to CTCAC to be reused (IRC Sec. 42(h)(3)(C)(iii)).The owner is advised that CTCAC is required by law to perform a financial evaluation of your project after it is placed in service and before issuance of tax forms. CTCAC has the responsibility to determine the reasonableness of all costs included in the development of this project. The evaluation and reasonableness determination may result in the denial of any allocation of tax credits or a reduction in the amount of tax credits finally allocated to this project. If the feasibility analysis indicates that less credits are allowable, the credit allocation will be adjusted accordingly, and the excess credits must be returned.Please examine the provisions of this Reservation carefully and advise me promptly if there are any errors contained herein. If you agree to the terms of this Reservation, please sign, and date this form and deliver the reservation letter and reservation fee no later than 5:00 p.m. on April 28, 2025,to the CTCAC at 901 P Street, Suite 213A, Sacramento, CA 95814. You are encouraged to keep a copy of this document for your records.Executed this 8th day of April 2025.
By: __________________________ Marina WiantExecutive DirectorAccepted this _____day of ________________, 2025.By: ___________________________(signature)___________________________(type or print name)___________________________(type or print title)