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HomeMy WebLinkAbout2016 CON HA National Community Renaissance of CA - Vista Del Sol Apts Letter of CommitmentChairman Ron Morrison Board Members Jerry Cano Alejandra Sotelo-Solis Mona Rios Albert Mendivil June 8, 2016 PCbR�0R t 7 Community Development Commission Housing Authority Kevin Chin National Community Renaissance of California 9421 Haven Ave Rancho Cucamonga, CA 91730 SUBJECT: COMMITMENT LETTER FOR VISTA DEL SOL Dear Mr. Chin: I am pleased to inform you that on June 7, 2016, the Community Development Commission - Housing Authority (CDC -HA) approved commencing negotiations for an assignment and assumption agreement of up to $7,646,055 in CDC -HA Loans currently encumbering the Vista del Sol property (Property) by National Community Renaissance of California (NCRC) or a NCRC formed limited partnership, subject to mutually acceptable terms. To enable the refinance and rehab of the Property, the CDC -HA funds will be made available as a new loan under the following terms: • Loan Amount —Up to $7,646,055 which is the loan balance and accrued interest of the CDC Residual Receipts Loan and CDC Rehabilitation loan as of December 31, 2015. • 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. If you have any questions, please contact Carlos Aguirre, Community Development Manager at 619-336-4391. Sincerely, Q�- Ron Morrison Chairman 140 East 12th Street, Suite B, National City, CA 91950-6530 Telephone: (619) 336.4254 Fax: (619) 336.4292 RESOLUTION NO. 2016 — 37 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY ("CDC -HA") OF THE CITY OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO EXECUTE A LETTER OF COMMITMENT APPROVING THE COMMENCEMENT OF NEGOTIATIONS FOR AN ASSIGNMENT AND ASSUMPTION AGREEMENT OF UP TO $7,646,055 IN CDC -HA LOANS SUBJECT TO MUTUALLY ACCEPTABLE TERMS THAT WILL 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 consisting 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, NCRC has approached the Community Development Commission - Housing Authority ("CDC -HA"), as the Housing Successor Agency to the CDC, to obtain a Commitment Letter (the "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 (the "New Loan"); and WHEREAS, the New Loan would be 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, and no additional or new CDC -HA funding is contemplated or proposed in this Letter; and WHEREAS, the current levels of affordability at the Property would be extended for an additional 57 years from the date the Assignment and Assumption Agreement and related documents are executed. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission -Housing Authority of the City of National City hereby authorizes the Chairman to execute a Letter of Commitment approving the commencement of negotiations for an Assignment and Assumption Agreement of up to $7,646,055 in CDC -HA loans subject to mutually acceptable terms that will enable the refinancing and rehabilitation of Vista del Sol Apartments located at 1545 "Q" Avenue in National City. A copy of the Commitment Letter is on file in the office of the City Clerk. PASSED and ADOPTED this 7th day of June, ATTEST: Leslie Deese, Secretary on Morrison, Chairman I: udia Gacit a Si General oun.el Passed and adopted by the Community Development Commission — Housing Authority of the City of National City, California, on June 7, 2016 by the following vote, to -wit: Ayes: Boardmembers Cano, Mendivil, Morrison, Rios, Sotelo-Solis. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Chairman, Housing Authority Secretary, Housing Au ority By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2016-37 of the Community Development Commission — Housing Authority of the City of National City, California, passed and adopted on June 7, 2016. Secretary, Housing Authority By: Deputy CITY OF NATIONAL CITY, CALIFORNIA cao\6-a9 -\ -' - COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY COUNCIL AGENDA STATEMENT 1EETING DATE: June 7, 2016 AGENDA ITEM NO. 30 ITEM TITLE: Commission -Housing a Letter of Commitment and Assumption Agreement that will enable the refinancing in National City. Dev. Mgr. APPROVE Report Authority of the City of National City approving the commencement of of up to $7,646,055 in CDC -HA loans and rehabilitation of Vista del Sol DEPARTMENT: Housing, rants, & Asset Ma ge nt Resolution of the Community Development authorizing the Chairman to execute negotiations for an Assignment subject to mutually acceptable terms Apartments located at 1545 Q Ave PREPARED BY: Carlos Aguirre, Community PHONE: 619-336-4391 EXPLANATION: See Attachment No. 1 Background FINANCIAL STATEMENT: APPROVED: APPROVED: Finance MIS See Attachment No. 1 ACCOUNT NO. ENVIRONMENTAL REVIEW: FINAL ADOPTION: N/A ORDINANCE: INTRODUCTION: STAFF RECOMMENDATION: Adopt the Resolution. BOARD / COMMISSION RECOMMENDATION: jN/A ATTACHMENTS: "0vUZ\0\1 N0. r40\6.2 J Attachment No. 1: Background Report Attachment No. 2: Letter of Commitment Attachment No. 3: Resolution Attachment No. 1 REFINANCE OF VISTA DEL SOL (FORMERLY "Q" AVENUE COMMUNITY) BACKGROUND National Community Renaissance of California (NCRC) intends to submit a tax-exempt bond application for Vista Del Sol (Property) due June 14, 2016 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. As part of its bond application, NCRC has approached the Community Development Commission -Housing Authority (CDC -HA), as the Housing Successor Agency to the CDC, to obtain 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. Attachment No. 2 is the Commitment Letter for the bond application. 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 Construction "Hard" Costs Contractor and Developer Fees Soft Costs 12,484,626 7,149,660 2,438,891 5,464,522 TOTAL USES OF FUNDS $ 27,537,699 Under the proposed refinancing and rehab plan, NCRC intends to secure tax exempt bond and tax credit allocations in the 2nd half of 2017, close financing and begin rehabilitation of Vista del Sol in late 2017 or early 2018. In summary staff is recommending approval of the above terms in the Commitment Letter and authorization to execute the Commitment Letter and initiate negotiations with NCRC and draft related documents as needed. ' 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 CALIFORNIA -- NATIONAL' , C.', r JJ!J1 IN CORPORA1t%n June 8, 2016 Kevin Chin National Community Renaissance of California 9421 Haven Ave Rancho Cucamonga, CA 91730 SUBJECT: COMMITMENT LETTER FOR VISTA DEL SOL Dear Mr. Chin: I am pleased to inform you that on June 7, 2016, the Community Development Commission -Housing Authority (CDC -HA) approved commencing negotiations for an assignment and assumption agreement of up to $7,646,055 in CDC -HA Loans currently encumbering the Vista del Sol property (Property) by National Community Renaissance of California (NCRC) or a NCRC formed limited partnership, subject to a mutually acceptable terms. To enable the refinance and rehab of the Property, the CDC -HA funds will be made available as a new loan under the following terms: • Loan Amount —Up to $7,646,055 which is the loan balance and accrued interest of the CDC Residual Receipts Loan and CDC Rehabilitation loan as of December 31, 2015. • 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. If you have any questions, please contact Carlos Aguirre, Community Development Manager at 619-336-4391. Sincerely, Ron Morrison Chairman Community Development Commission -Housing Authority 140 E. 12th St., Ste. B National City, CA 91950-6530 RESOLUTION NO. 2016 — RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION -HOUSING AUTHORITY ("CDC -HA") OF THE CITY OF NATIONAL CITY AUTHORIZING THE CHAIRMAN TO EXECUTE A LETTER OF COMMITMENT APPROVING THE COMMENCEMENT OF NEGOTIATIONS FOR AN ASSIGNMENT AND ASSUMPTION AGREEMENT OF UP TO $7,646,055 IN CDC -HA LOANS SUBJECT TO MUTUALLY ACCEPTABLE TERMS THAT WILL 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 consisting 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, NCRC has approached the Community Development Commission - Housing Authority ("CDC -HA"), as the Housing Successor Agency to the CDC, to obtain a Commitment Letter (the "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 (the "New Loan"); and WHEREAS, the New Loan would be 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, and no additional or new CDC -HA funding is contemplated or proposed in this Letter; and WHEREAS, the current levels of affordability at the Property would be extended for an additional 57 years from the date the Assignment and Assumption Agreement and related documents are executed. NOW, THEREFORE, BE IT RESOLVED that the Community Development Commission -Housing Authority of the City of National City hereby authorizes the Chairman to execute a Letter of Commitment approving the commencement of negotiations for an Assignment and Assumption Agreement of up to $7,646,055 in CDC -HA loans subject to mutually acceptable terms that will enable the refinancing and rehabilitation of Vista del Sol Apartments located at 1545 "Q" Avenue in National City. A copy of the Commitment Letter is on file in the office of the City Clerk. PASSED and ADOPTED this 7ch day of June, 2016. Ron Morrison, Chairman ATTEST: APPROVED AS TO FORM: Leslie Deese, City Clerk Claudia Gacitua Silva General Counsel �fftRAiEO � � '1 CITY OF NATIONAL CITY Office of the City Clerk 1243 National City Blvd., National City, California 91950-4397 619-336-4228 Michael R. Dalla, CMC - City Clerk NATIONAL RENAISSANCE OF CALIFORNIA Letter of Commitment Vista Del Sol Apartments Carlos Aguirre (Housing & Grants) Forwarded Copy of the Letter of Commitment to National Renaissance of CA.