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HomeMy WebLinkAbout2017 CON HA Copper Hills Limited Partnership - Letter of Consent Vista Del Sol ApartmentsCopper Hills Apartments Limited Partnership c/o Southern California Housing Development Corporation of Orange 9421 Haven Avenue Rancho Cucamonga, CA 91730 September 18, 2017 Ms. Leslie Deese Executive Director Community Development Commission -Housing Authority ("CDC -HA") City of National City 140 East 12th Street, Suite B National City, California 91950-6530 Copper Hills Apartments Limited Partnership (the "Partnership") Dear Ms. Deese: Reference is hereby made to that certain Residual Receipts Loan, dated February 9, 1999 and the Rehabilitation Loan, dated June 1, 1999 in the original principal amounts of $2,400,000 and $4,454,037 respectively (the "Loans") from the City of National City Community Development Commission -Housing Authority (the "Lender") to the Partnership, pursuant to that certain Affordable Housing Agreement, Regulatory Agreement and Declaration of Restrictive Covenants, and Operating and Maintenance Agreement, dated December 7, 1998 (the "Loan Agreements"), in connection with the development, construction and operation of that 132-unit apartment complex in National City, California, known as "Vista del Sol Apartments" (the "Property"). The Loans are evidenced by that certain Residual Receipts Promissory Note dated as of February 9, 1999 and that Rehabilitation Promissory Note, dated as of June 1, 1999 (the "Notes") and secured by that certain Deed of Trust dated as of February 9, 1999 and that Construction Deed of Trust, dated as of June 1, 1999 (the "Mortgages") from the Partnership to the Lender. Centerline California Corporate Partners IV LP, the 99.98% investor limited partner of the Partnership (the "Investor Limited Partner"), and Related California Corporate IV SLP, L.P., the 0.01% special limited partner of the Partnership (the "Special Limited Partner"), have agreed to transfer their entire interest in the Partnership to National Community Renaissance of California, a California non-profit corporation ("NCRC") or an affiliate of the General Partner, as defined below. NCRC is affiliated with the Southern California Housing Development Corporation of Orange, the current general partner of the Partnership (the "General Partner"). The purpose of this letter is to request your written consent to the transfer of the interest of the Investor Limited Partner and the Special Limited Partner in the Partnership. Pursuant to Section 6 of the Notes, the Borrower shall not sell, convey, transfer, or dispose of the Property, or any part thereof or interest therein, without first obtaining the written consent of the Lender. The Partnership will remain subject to all existing indebtedness, including the Loan. KH 347114.2 1 Copper Hills Apartments Limited Partnership September 18, 2017 Any reference to the Investor Limited Partner or the Special Limited Partner in the Loan Documents shall henceforth be deemed to refer to NCRC or the designated affiliate of the General Partner and all notices should be sent to: National Community Renaissance of California 9421 Haven Avenue Rancho Cucamonga, CA 91730 Attention: Kevin Chin Please acknowledge consent of such transfer by executing a copy of this letter where indicated below and returning (i) an original executed acknowledgment to my attention at the address listed above and (ii) a copy of the executed acknowledgement to Kevin Chin, Vice President of Project Development via email at kchin@nationalcore.org . Please feel free to contact Kevin Chin at (909) 204-3540 or Sara Silverstein at Klein Hornig LLP, at (202)-842-9006, ssilverstein@kleinhornig.com, with any questions. Thank you for your prompt attention to this matter. Sincerely, COPPER HILLS APARTMENTS LIMITED PARTNERSHIP By: SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION OF ORANGE, its nerj1 parer By: Name: Title: ACKNOWLEDGED AND AGREED BY LENDER: riA),J bro CITY OF NATIONAL CITY COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY By; Leslie Deese Its: Executive Director cc: Atty. Alison Wadle, Alden Torch Financial Atty. Chrysa Long, Klein Hornig LLP Atty. Sara Silverstein, Klein Hornig LLP k1tz346,'Y124.2 2 RESOLUTION NO. 2017 — 58 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE AN ACKNOWLEDGMENT AND AGREEMENT TO THE LETTER OF CONSENT FROM COPPER HILLS APARTMENTS LIMITED PARTNERSHIP DATED SEPTEMBER 18, 2017, APPROVING THE TRANSFER IN INTEREST OF CENTERLINE CALIFORNIA CORPORATE PARTNERS IV, L.P., AND RELATED CALIFORNIA CORPORATE IV SLP, L.P., AS LIMITED PARTNERS TO NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, A CALIFORNIA NON-PROFIT CORPORATION, OR AN AFFILIATE OF THE GENERAL PARTNER, TO ENABLE THE REFINANCING AND REHABILITATION OF VISTA DEL SOL APARTMENTS LOCATED AT 1545 Q AVENUE IN NATIONAL CITY WHEREAS, National Community Renaissance of California ("NCRC") intends to submit a tax-exempt bond application for Vista Del Sol (the "Property") due June 14, 2016 as part of a new plan to refinance and rehabilitate the multi -family complex located at 1545 "Q" Avenue that consists of 132 units; and WHEREAS, NCRC acquired and rehabilitated the Property with financial assistance from the Community Development Commission of the City of National City ("CDC") in 1998; and WHEREAS, on June 8, 2016, as part of the refinancing of the Property, the Community Development Commission -Housing Authority ("CDC -HA") executed a Commitment Letter to enable CDC-HA's existing loan(s) to be assigned to and assumed by NCRC or a NCRC formed limited partnership as a new loan; and WHEREAS, under the proposed refinancing and rehabilitation plan, NCRC intends to secure tax-exempt bond financing and tax credit allocations and close financing and begin rehabilitation of Vista del Sol in late 2017 or early 2018; and WHEREAS, in order to proceed with new financing, Centerline California Corporate Partners IV L.P., and Related California Corporate IV SLP, L.P., must agree to transfer their entire interest in the as Limited Partners to NCRC as the new Limited Partner; and WHEREAS, pursuant to CDC -HA loan requirements, the Borrower shall not sell, convey, transfer, or dispose of the Property, or any part thereof or interest therein, without first obtaining written consent; and WHEREAS, Copper Halls Apartments Limited Partnership is requesting written consent from the CDC -HA to transfer the interest of the Investor Limited Partner and the Special Limited Partner in the Partnership to NCRC or an affiliate of Southern California Housing Development Corporation of Orange (General Partner) to facilitate the refinancing and rehabilitation of Vista del Sol Apartments. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission -Housing Authority of the City of National City hereby authorizes its Executive Director to execute the Acknowledgment and Agreement to the Letter of Consent from Copper Hills Apartments Limited Partnership dated September 18, 2017, approving the transfer in interest of Centerline California Corporate Partners IV, L.P., and Related California Corporate IV Resolution No. 2017 — 58 Page Two SLP, L.P., as Limited Partners to National Community Renaissance of California, a California non-profit corporation, or an affiliate of the General Partner, to enable the refinancing and rehabilitation of Vista del Sol Apartments located at 1545 "Q" Avenue in National City, a copy of the Consent Letter, dated September 18, 2017, containing the Acknowledgment and Agreement executed by the Executive Director, is on file in the office of the City Clerk. PASSED and ADOPTED this 3rd day of October, 20 Morrison, Chairman ATTEST: Leslie Deese, Secretary APPROVED A ORM: orr s- al Couns Passed and adopted by the Community Development Commission -Housing Authority of the City of National City, California, on October 3, 2017 by the following vote, to -wit: Ayes: Commissioners Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Chairman, Housing Authority , -_-_,,,, Secretary, Housing Authority By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2017-58 of the Community Development Commission -Housing Authority of the City of National City, California, passed and adopted on October 3, 2017. Secretary, Housing Authority By: Deputy (!Z4up"1- CITY OF NATIONAL CITY, CALIFORNIA h1a q-1- 6 COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY COUNCIL AGENDA STATEMENT IEETING DATE: October 3, 2017 AGENDA ITEM NO. 28 ITEM TITLE: Resolution of the Community Development Commission -Housing Authority of the City of National City authorizing the Executive Director to execute an Acknowledgment and Agreement to the Letter of Consent from Copper Hills Limited Partnership dated September 18, 2017, approving the transfer in interest of Centerline California Corporate Partners IV, L.P., and Related California Corporate IV SLP, L.P. as Limited Partners to National Community Renaissance of California, a California non-profit corporation, or an affiliate of the General Partner, to enable the refinancing and rehabilitation of Vista del Sol Apartments located at 1545 Q Avenue in National City_ PREPARED BY: Carlos Aguirre, Housing and Econ. Dev. Mgr. DEPARTMENT: Housing & Economic Dev. PHONE: ,619-336-4391 EXPLANATION: See Attachment No. 1 FINANCIAL STATEMENT: ACCOUNT NO. APPROVE�Y: APPROVED. APPROVED: C4a Finance MIS There is no fiscal impact caused by the transfer, as the General Partner and the new Limited Partner will still be responsible for the existing indebtedness owed to the Housing Authority. ENVIRONMENTAL REVIEW: N/A ORDINANCE: INTRODUCTION: FINAL ADOPTION: STAFF RECOMMENDATION: Adopt the Resolution. BOARD / COMMISSION RECOMMENDATION: N/A TTACHMENTS: 1: Background Report 2: Consent Letter 3: Resolution IE'e sott4E' 2.0I4 - 5 g A Attachment No. 1 REFINANCE OF VISTA DEL SOL (FORMERLY "Q" AVENUE COMMUNITY) BACKGROUND National Community Renaissance of California, a California non-profit corporation, (NCRC) recently submitted a tax-exempt bond application for Vista Del Sol (Property) as part of a new plan to refinance and rehab the Property. The Property, located at 1545 "Q" Avenue, National City, CA 91905, is a 132 unit collection of apartment buildings which NCRC' acquired and rehabbed with financial assistance from the Community Development Commission of the City of National City (CDC) in 1998. On June 8, 2016, as part of the refinancing of the Property, the Community Development Commission -Housing Authority (CDC -HA), as the Housing Successor Agency to the CDC, executed a Commitment letter to enable CDC-HA's existing loan(s) to be assigned to and assumed by NCRC or a NCRC formed limited partnership as a new loan (New Loan) under the following terms: • Loan Amount —Up to $7,646,061'' which is the loan balance and accrued interest of the CDC -HA Residual Receipts Loan and CDC -HA Rehabilitation loan as of December 31, 2015. (No additional or new CDC -HA funding is contemplated or proposed in this Commitment Letter); • Interest Rate — 3% simple per annum; • Term of Affordability — 57 years from the date the Assignment & Assumption Agreement and related documents are executed; • Term of the Loan — 57 years from the date the Assignment & Assumption Agreement and related documents are executed; • Repayment: Annual payments based on a to -be -determined percentage of residual receipts to be defined in the assignment and assumption agreement and related document; and, • Collateral: Deed of trust secured by the land and improvements. The New Loan will be non -recourse and subject to meeting all CDC -HA requirements and acceptance of due diligence documentation. The proposed Sources & Uses under the refinancing plan is on the following page. 1 of 2 Attachment No. 1 SOURCES OF FUNDS Total First Mortgage $ 8,236,695 Deferred Dev Note 174,392 General Partner Equity 100 Refinance Loan CDC of City of National City Loans (Assumption) 7,646,061 Seller Canyback Loan (NCRC) 2,895,295 Grants and Federally -Subsidized Loans: All grant proceeds and BMIR Loans used to finance costs in eligible basis - Historic Credits Limited Partner Equity 8,585,157 TOTAL SOURCES OF FUNDS 27,537,699 USES OF FUNDS Land and Building Acquisition 12,484,626 Construction "Hard" Costs 7,149,660 Contractor and Developer Fees 2,438,891 Soft Costs 5,464,522 TOTAL USES OF FUNDS $ 27,537,699 Under the proposed refinancing and rehabilitation plan, NCRC intends to secure tax exempt bond and tax credit allocations and close financing and begin rehabilitation of Vista del Sol in late 2017 or early 2018. In order to proceed with new financing, Centerline California Corporate Partners IV L.P. and Related California Corporate IV SLP, L.P. must agree to transfer their entire interest in the as Limited Partners to NCRC as the new Limited Partner. The purpose of the attached letter is to request written consent to the transfer of the interest of the Investor Limited Partner and the Special Limited Partner in the Partnership. Pursuant to CDC -HA loan requirements, the Borrower shall not sell, convey, transfer, or dispose of the Property, or any part thereof or interest therein, without first obtaining the written consent of the Lender. The Partnership will remain subject to all existing indebtedness to the CDC -HA. NCRC (formerly Southern California Housing Development Corporation) is the developer and property manager of the Property and through its affiliate, The Southern California Housing Development Corporation of Orange, formed Copper Hills Apartments Limited Partnership, to own the Property for tax credit syndication purposes. CDC Residual Receipts Loan Balance as of December 31, 2015 - $973,707: CDC Accrued Interest as of December 31, 2015 - $2,434; CDC Rehabilitation Loan Balance as of December 31, 2015 - $4,454,037; CDC Accrued Interest as of December 31, 2015 - $2,215,883. 2 of 2 Attachment No. 2 Copper Hills Apartments Limited Partnership c/o Southem Califomia Housing Development Corporation of Orange 9421 Haven Avenue Rancho Cucamonga, CA 91730 September 18, 2017 Ms. Leslie Deese Executive Director Community Development Commission -Housing Authority ("CDC -HA") City of National City 140 East 12th Street, Suite B National City, California 91950-6530 Copper Hills Apartments Limited Partnership (the "Partnership") Dear Ms. Deese: Reference is hereby made to that certain Residual Receipts Loan, dated February 9, 1999 and the Rehabilitation Loan, dated June 1, 1999 in the original principal amounts of $2,400,000 and $4,454,037 respectively (the "Loans") from the City of National City Community Development Commission -Housing Authority (the "Lender") to the Partnership, pursuant to that certain Affordable Housing Agreement, Regulatory Agreement and Declaration of Restrictive Covenants, and Operating and Maintenance Agreement, dated December 7, 1998 (the "Loan Agreements"), in connection with the development, construction and operation of that 132-unit apartment complex in National City, California, known as "Vista del Sol Apartments" (the "Property"). The Loans are evidenced by that certain Residual Receipts Promissory Note dated as of February 9, 1999 and that Rehabilitation Promissory Note, dated as of June 1, 1999 (the "Notes") and secured by that certain Deed of Trust dated as of February 9, 1999 and that Construction Deed of Trust, dated as of June 1, 1999 (the "Mortgages") from the Partnership to the Lender. Centerline California Corporate Partners IV LP, the 99.98% investor limited partner of the Partnership (the "Investor Limited Partner"), and Related California Corporate IV SLP, L.P., the 0.01 % special limited partner of the Partnership (the "Special Limited Partner"), have agreed to transfer their entire interest in the Partnership to National Community Renaissance of California, a California non-profit corporation ("NCRC") or an affiliate of the General Partner, as defined below. NCRC is affiliated with the Southern California Housing Development Corporation of Orange, the current general partner of the Partnership (the "General Partner"). The purpose of this letter is to request your written consent to the transfer of the interest of the Investor Limited Partner and the Special Limited Partner in the Partnership. Pursuant to Section 6 of the Notes, the Borrower shall not sell, convey, transfer, or dispose of the Property, or any part thereof or interest therein, without first obtaining the written consent of the Lender. The Partnership will remain subject to all existing indebtedness, including the Loan. KH 3471 14.2 1 Attachment No. 2 Copper Hills Apartments Limited Partnership September 18, 2017 Any reference to the Investor Limited Partner or the Special Limited Partner in the Loan Documents shall henceforth be deemed to refer to NCRC or the designated affiliate of the General Partner and all notices should be sent to: National Community Renaissance of California 9421 Haven Avenue Rancho Cucamonga, CA 91730 Attention: Kevin Chin Please acknowledge consent of such transfer by executing a copy of this letter where indicated below and returning (i) an original executed acknowledgment to my attention at the address listed above and (ii) a copy of the executed acknowledgement to Kevin Chin, Vice President of Project Development via email at kchin@nationalcore.org Please feel free to contact Kevin Chin at (909) 204-3540 or Sara Silverstein at Klein Hornig LLP, at (202)-842-9006, ssilverstein r@ kleinhornig.com, with any questions. Thank you for your prompt attention to this matter. Sincerely, COPPER HILLS APARTMENTS LIMITED PARTNERSHIP By: SOUTHERN CALIFORNIA HOUSING DEVELOPMENT CORPORATION OF ORANGE,' n r 1 p ner By: Name: ThI(i—t'1/L- Title: ACKNOWLEDGED AND AGREED BY LENDER: ego CITY OF NATIONAL CITY COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY By: Leslie Deese Its: Executive Director cc: Atty. Alison Wadle, Alden Torch Financial Atty. Chrysa Long, Klein Hornig LLP Atty. Sara Silverstein, Klein Hornig LLP t\lfg4 Y 4.2 2 RESOLUTION NO. 2017 — RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY OF THE CITY OF NATIONAL CITY AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE AN ACKNOWLEDGMENT AND AGREEMENT TO THE LETTER OF CONSENT FROM COPPER HILLS APARTMENTS LIMITED PARTNERSHIP DATED SEPTEMBER 18, 2017, APPROVING THE TRANSFER IN INTEREST OF CENTERLINE CALIFORNIA CORPORATE PARTNERS IV, L.P., AND RELATED CALIFORNIA CORPORATE IV SLP, L.P., AS LIMITED PARTNERS TO NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA, A CALIFORNIA NON-PROFIT CORPORATION, OR AN AFFILIATE OF THE GENERAL PARTNER, TO ENABLE THE REFINANCING AND REHABILITATION OF VISTA DEL SOL APARTMENTS LOCATED AT 1545 Q AVENUE IN NATIONAL CITY WHEREAS, National Community Renaissance of California ("NCRC") intends to submit a tax-exempt bond application for Vista Del Sol (the "Property") due June 14, 2016 as part of a new plan to refinance and rehabilitate the multi -family complex located at 1545 "Q" Avenue that consists of 132 units; and WHEREAS, NCRC acquired and rehabilitated the Property with financial assistance from the Community Development Commission of the City of National City ("CDC") in 1998; and WHEREAS, on June 8, 2016, as part of the refinancing of the Property, the Community Development Commission -Housing Authority ("CDC -HA") executed a Commitment Letter to enable CDC-HA's existing loan(s) to be assigned to and assumed by NCRC or a NCRC formed limited partnership as a new loan; and WHEREAS, under the proposed refinancing and rehabilitation plan, NCRC intends to secure tax-exempt bond financing and tax credit allocations and close financing and begin rehabilitation of Vista del Sol in late 2017 or early 2018; and WHEREAS, in order to proceed with new financing, Centerline California Corporate Partners IV L.P., and Related California Corporate IV SLP, L.P., must agree to transfer their entire interest in the as Limited Partners to NCRC as the new Limited Partner; and WHEREAS, pursuant to CDC -HA loan requirements, the Borrower shall not sell, convey, transfer, or dispose of the Property, or any part thereof or interest therein, without first obtaining written consent; and WHEREAS, Copper Hills Apartments Limited Partnership is requesting written consent from the CDC -HA to transfer the interest of the Investor Limited Partner and the Specia( Limited Partner in the Partnership to NCRC or an affiliate of Southern CaTilorrua Housing Development Corporation of Orange (General Partner) to facilitate the refinancing any rehabilitation of Vista del Sol Apartments. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission -Housing Authority of the City of National City hereby authorizes its Executive Director to execute the Acknowledgment and Agreement to the Letter of Consent from Copper Hills Apartments Limited Partnership dated September 18, 2017, approving the transfer in interest of Centerline California Corporate Partners IV, L.P., and Related California Corporate IV Resolution No. 2017 — Page Two SLP, L.P., as Limited Partners to National Community Renaissance of California, a California non-profit corporation, or an affiliate of the General Partner, to enable the refinancing and rehabilitation of Vista del Sol Apartments located at 1545 "Q" Avenue in National City, a copy of the Consent Letter, dated September 18, 2017, containing the Acknowledgment and Agreement executed by the Executive Director, is on file in the office of the City Clerk. PASSED and ADOPTED this 3rd day of October, 2017. Ron Morrison, Chairman ATTEST: Leslie Deese, Secretary APPROVED AS TO FORM: Angil P. Morris -Jones General Counsel CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950 619-336-4228 Michael R. Dalla, CMC - City Clerk October 17, 2017 Mr. Kevin Chin National Community Renaissance of California 9421 Haven Avenue Rancho Cucamonga, CA 91730 Dear Mr. Chin, On October 3rd. 2017, Resolution No. 2017-58 was passed and adopted by the Community Development Commission —Housing Authority of the City of National City, authorizing execution of an Agreement with Copper Hills Apartments Limited Partnership. We are enclosing for your records a certified copy of the above Resolution and a fully executed original Agreement. Sincerely, sv Michael R. City Clerk Enclosures alla, CMC