Community Redevelopment Agency of the CITY OF LOS ANGELES eRA/LA BUILDING COMMUNITIES D.ATE I MAR 72011
FILE CODE I
1200 West 7th Streeti Suite 500 r 213 977 1600 I F 213 977 1665 Los Angeles I California 9.0017-2381 www.crala.org
CRA File No.. qSftr;D Council District: 7 Contact Person: D. Villegas Phone #818-623-1068 Honorable Council of the City of Los Angeles John Ferraro Council Chamber 200 N. Spring Street Room 340, City Hall Los Angeles, CA. 90012
COUNCIL TRANSMITTAL: Transmitted herewith, is a Board Memorandum adopted by the Agency Board on March 7, 2011, for City Council review and approval in accordance with the "Community Redevelopment Agency Oversight Ordinance" entitled:
VARIOUS ACTIONS RELATED TO: Osborne Apartments. Loan Agreeement with Osborne Street Housing Partners, L.P. (The Related Companies of California, LLC) in an amount not to exceed $4,000,000 for development of Osborne Apartments at 12041 N. Osborne Street outside of the Earthquake Disaster Assistance Project for Portions of Council District 7 (aka Pacoima/Panorama City Project Area). EAST VALLEY REGION (CD?)
RECOMMENDATION That City Council approve(s) recommendation(s) on the attached Board Memorandum.
ENVIRONMENTAL REVIEW The proposed Osborne Apartments project is exempt from provisions of the California Environmental Quality Act ("CEQA") pursuant to Section 15194 of the State CEQA Guidelines.
FISCAL IMPACT STATEMENT There is no fiscal impact to the City's General Fund, as a re
cc: Sharon Gin, Office of the City Clerk (Original & 3 Copies on 3-hole punch) Lisa Johnson Smith, Office of the CAO Ivania Sobalvarro, Office of the CLA Steve Ongele, Office of the Mayor Noreen Vincent, Office of the City Attorney THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA MEMORANDUM 10
DATE: MARCH 8, 2011 PC 1300 100651 TO: CRA/LA BOARD OF COMMISSIONERS
FROM: CHRISTINE ESSEL, CHIEF EXECUTIVE OFFICER
STAFF: MARGARITA H. DE ESCONTRIAS, REGIONAL ADMINISTRATOR DURAN VILLEGAS, PROJECT MANAGER DORA HUERTA, ASSISTANT PROJECT MANAGER
SUBJECT: Osborne Apartments. Loan Agreement with Osborne Street Housing Partners, L.P. (The Related Companies of California, LLC) in an amount not to exceed $4,000,000 for development of Osborne Apartments at 12041 N. Osborne Street outside of the Earthquake Disaster Assistance Project for Portions of Council District 7 (aka Pacoima/Panorama City Project Area). EAST VALLEY REGION (CD 7)
LOAN Approved at the Investment Committee on February 23,2011. COMMITTEE:
RECOM MEN DATION(Sl
That the eRA/LA Board of Commissioners:
1. Adopt a Subordination resolution making a finding that an economically feasible alternative method of financing the Project on substantially comparable terms without subordination of the eRA/LA's deed of trust and affordabllity restrictions is not reasonably available and authorizing subordination of the eRA/LA's deed of trust, covenants, and use restrictions to conventional and public sector loans.
That the CRNLA Board of Commissloners, subject to City Council approval:
1. Amend the Pacoima/Panorama City FY11 budget to transfer $564,700 of tax increment from budget line item Economic Development (PC6990) to budget line item Affordable Housing (PC1300) for development of Osborne Apartments;
2. Adopt a Finding of Benefit resolution making a finding that the expenditure of Low and Moderate Income Housing Funds and Tax Increment Funds outside of the Pacoima/Panorama City Project Area Project Area for the proposed Osborne Apartments project is of benefit to the project area, and request tfle City Council to also adopt said resolution; and
3. Authorize the Chief Executive Officer (CEO) or designee to execute a Construction and Permanent Loan Agreement in an amount not to exceed $4,000,000 and related loan documents with Osborne Street HOUSing Partners, L.P., a California limited partnership, for development of a 60~unit affordable senior and family rental project in the Lakeview Terrace community. Osborne Apartments Construction and Permanent Loan PAGE2
SUMMA.RY
The recommended action is needed to authorize a construction and permanent loan in the amount of $4,000,000 to Osborne Street Housing Partners, L.P. ("Borrower") for the construction of Osborne Apartments ("Project"), a 60-unit affordable housing development that will serve a mix of large families and seniors. A eRA/LA commitment is needed to successfully compete for other outside funding sources with application deadlines in 2011. CRA/LA loan proceeds will be disbursed at closing of the construction financing at which time all other funding commitments will be in place. eRA/LA proceeds will be used toward reimbursement of a portion of the site acquisition and construction costs.
Osborne Apartments will be comprised of 60 affordable units (including 1 one-bedroom resident manager's unit) in side-by-side buildings with distinct amenities for each resident population. The Project consists of 42 senior one-bedroom apartment units in one building and 18 two-story three-bedroom townhomes for large families.
PREVIOUS ACTIONS
Initial Action.
DISCUSSION & BACKGROUND
Location and History
The Project site is located just outside of the Pacoima/Panorama City Project Area at 12041 N. Osborne Street in the Lakeview Terrace community. The site is currently vacant and the surrounding neighborhood includes a vacant lot and liquor store to the east; multi-family residential uses to the north, including a residential facility operated by the Salvation Army and condominium units; a baseball field to the west; and Hansen Darn Park, the Lake View Terrace Library and the former Children'S Museum to the south across Osborne Street.
The Project consists of two contiguous parcels, including a 62,457 square foot parcel and a 38,2.4~1 square foot parcel, both of which are situated on the north side of Osborne Street, between Foothill Boulevard and Dronfield Avenue (See Attachment A - Location/Site Map). The Assessor Parcel Numbers are 2532-017-065 and 2532-017-066.
The site is controlled by the Borrower through an Assignment and Assumption Agreement to the Purchase Agreement, entered into between the buyer of the site and Osborne Street Housing Partners, L.P. assigning the buyer's interest in the Purchase Agreement to Osborne Street Housing Partners, L.P. The current site owner originally entered into a purchase agreement with the buyer for acquisition of the site in July 2009. Several amendments have allowed for extensions to the closing dates with a current closing date of September 2011 with an option to extend it through December 2011.
Developer Entity
The developer, The Related Companies of California, LLC ("Related"), formed in 1989, and is an affiliate of The Related Companies, L.P., a real estate firm based in New York City with divisions specializing in development, property management, and financial services. Since its inception, Related has developed over 8,500 units of housing in the state, with properties in Los Angeles, Los Angeles County, Orange County, San Bernardino County, San Diego, San Diego County and in Northern California. The projects range from apartments for low- and moderate- Osborne Apartments Construction and Permanent Loan PAGE 3 income seniors and families to a mixed-income high-rise apartment development in downtown San Francisco. Its affordable housing developments have received numerous awards and honors. Related currently has approximately 378 units in four projects under construction and an additional fourteen projects (2,632 units) in predevelopment
Related is a for-profit company with a real estate development staff of 35 that includes developers as well as experts in the fields of finance, design and construction. Key staff include Bill Witte, President and Managing Partner; Frank Cardone, Chief Operating OfficerlDirector of Development; Steven Sherman, Chief Financial Officer; and Beatrice Hsu, Vice President of Development. Mr. Witte has served as the organization's President and Managing Partner since the organization's creation in 1989, overseeing development of all of its 8,500 units. Prior to that time, Mr. Witte served as Deputy Mayor for Housing and Neighborhoods in San Francisco.
The borrowing entity will be Osborne Street Housing Partners, L.P. a California limited partnership comprised of Related\Osborne Street Development Co., LLC as Administrative General Partner. Related\Osborne Street Development Co., LLC is a California limited liability company formed June 18, 2010. The LLC is comprised of a single managing member, The Related Companies of California, LLC, the developer of the proposed project. A to be determined nonprofit entity/partner will enter as Managing General Partner. A tax credit investor will be admitted as limited partner at close of construction financing.
Description and Project Context
The proposed Project is a new GO-unit intergenerational affordable housing development on an approximately 2.3 acre site, servicing senior and large families in side-by-side buildings. The Project consists of 42 senior one-bedroom/one-bathroom units (approximately 580 sq. ft.) in one three-story building. Amenities in this building will include a community room and kitchen, fitness room, media room, computer room, on-site management and a shaded outdoor patio with barbeques. The remaining 18 units will be three-bedrooms in two-story townhomes (approximately 1,184 sq ft.), which include attached garages. Amenities include a community building with kitchen, children's room, multi-purpose room and computer center. Exterior amenities include an estimated 11,737 square foot central common open space area with a tot- lot and a shaded landscape patio with barbeques. The 59,1 03-square foot structure will be Type V construction, with three story stacked flats and two story townhomes totaling six buildings on site with 72, open and covered, on-grade parking spaces for residents and visitors. The proposed supportive services include after school programs and adult education classes.
The Developer plans to develop the Project in accordance with the Build It Green rating system for rnulti-family new home construction and follow the guidelines established by the GreenPoint Rated Program utilizing a Certified Green Building Professional to oversee sustainable design integration and coordination. Some examples of the sustainable building elements which will be incorporated into the Project, include: exceeding Title 24 by 15%, low flow / water efficient plumbing fixtures, low VOC paints, Energy STAR appliances, Energy STAR iight fixtures, Green labeled carpet and low emitting adhesives / sealants.
Based on California Housing and Community Development (HeD) rents, 9 units will be restricted to Extremely Low Income, 9 units will be restricted to Very Low Income, 24 units will be restricted to Low Income and 17 units will be restricted to Moderate Income households. A one-bedroom manager's unit will be unrestricted.
The proposed affordable housing development is scheduled to commence construction after the Borrower successfully obtains commitments/awards from all funding sources. The other sources of funding are contingent upon the $4,000,000 eRA/LA commitment. If City of Los Osborne Apartments Construction and Permanent Loan PAGE 4
Angeles Housing Department (LAHD) and Tax Credit Allocation Committee (TCAC) commitments/awards are successfully obtained in the upcoming rounds, construction could commence by the end of 2011. The Developer will be allowed up to two attempts to obtain LAHD and TCAC commitments/awards. If unsuccessful, the CRA/LA will reconsider whether the funds should be reprogrammed for other uses.
Community Benefits
Osborne Apartments will replace two vacant lots, totaling approximately 2.3 acres, with an attractive and secure housing development. The Project will provide quality and affordable housing opportunities for families and seniors and is expected to create 117 construction jobs and 3 permanent jobs. All applicable CRA/LA policies will be required of this Project as listed in the Project Summary Report (Attachment G)
This Project is consistent with the current and future "Projects and Programs" for Affordable Housing Development identified under the Pacoima/Panorama City Project Area's Five Year Implementation Plan. The improvements also support the CRA/LA Strategic Plan Goals 1.1.1, 1.1.2 and 2.1 .1.
Findings
The State Redevelopment Law was amended in 1989 (Section 33334.14) to allow subordination of income and use restrictions. The subordination is permitted when the CRA/LA makes a finding that an economically feasible alternative method of financing or refinancing without subordination is not reasonably available and when the eRA/LA obtains written commitments reasonably designed to protect the CRA/LA's investment in the event of default.
Currently, eRA/LA staff is not aware of any domestic lending institutions willing to provide conventional financing without subordination of covenants, as well as CRA/LA loans. Such well- margined low-risk loans are still eligible for credit under the Community Reinvestment Act. The conventional construction and permanent lender has indicated that subordination of the CRA/LA's covenants will be required. Staff recommends that the eRA/LA Board of Commissioners make the finding that an economically feasible alternative method of financing or refinancing without subordination is not reasonably available, but only when the CRA/LA obtains written commitments reasonably designed to protect the eRA/LA's investment in the event of default.
The Subordination Agreement will contain notice provisions such as one or more of the following rights as set forth in the statute:
A. A right of the CHA/U\ to cure a default on the loan.
B. A right of the CFAlLA to negotiate with the lender after notice of default from the lender.
C. An agreement that if prior to foreclosure of a loan, the eRA/LA takes title to the property and cures the default on the loan, the lender wHI not exercise any right it may have to accelerate the loan by reason of transfer of title to the eRA/LA.
D.. Right of the eRA/LA to purchase property from the owner at any time after a default on the loan.
As Indicated in Attachment C, Affordable Housing Information, with the approval of this proposal, the Earthquake Disaster Assistance Project Area for Portions of Council District 7 will Osborne Apartments Construction and Permanent Loan PAGE 5 have provided sufficient affordable housing units to comply with the 15% lnclusionary Housing requirement.
As indicated in Attachment C, Affordable Housing Information, with the approval of this proposal, the Earthquake Disaster Assistance Project Area for Portions of Council District 7 will not have spent funds from the Low and Moderate Income Housing Fund in proportion to need, in that the amount of LMIHF spent to date on Very Low units will currently not meet the required percentage, but staff expects to come into compliance on or before the December 31, 2014 statutory compliance,
Financial Analysis
The CRA/LA will enter into a Loan Agreement with the Borrower and provide a $4,000,000 construction and permanent loan with a 55 year term at 3% simple interest accruing from the date of the promissory note, payable based on the CRA/LA's pro rata share of residual receipts loans (see Attachment B-Standard Term Sheet), The CRA/LA loan will be secured by a Deed of Trust that wlll be subordinate to the conventional and public sector lenders, The project's financing consists of conventional construction and permanent bank loans, LAHD funds (to be committed), and equity from the syndication of 9% tax credits (to be allocated) (see Attachment D - Sources and Uses), The Project is expected to close construction financing and start construction December 2011 with a completion date of June 2013.
In order to acquire the site prior to construction start, the Developer is currently negotiating with New Economics for Women (NEW), a non-profit developer, to leverage a portion of their Neighborhood Stabilization Program I! (NSP II) fund allocation, Short term or bridge financing from NEW for site acquisition costs (estimated at $3,150,000) would be taken out by a portion of eRA/LA loan proceeds in two installments; at construction close and permanent loan conversion, Commitment of the subject eRA/LA construction/permanent loan is not conditioned upon the award of NSP II funds,
The total development cost of this affordable family project is $18,104,963 or approximately $301,736 per unit These figures are inclusive of 72 parking spaces, approximately 11,737 square feet of open space, sustainability features and other project amenities. The eRA/LA per unit contribution to the Project for the 59 affordable units is $66,667, and the $4,000,000 eRA/LA loan as a percentage of the total development cost is 22%.
SOURCE OF FUNDS
Pacoima'Panorarna City Redevelopment Project Area Low and Moderate Income Housing Fund and Tax Increment Funds.
PROGRAM ANQ.BUDGET !MPACT
This action will amend the Pacoima/Panorama City FYi1 budget to transfer $564,700 of tax increment from budget line item Economic Development (PC6990) to budget line item Affordable Housing (PC1300) for development of Osborne Apartments. Fo!lowing the approval of this project, $11,846,100 of $18,456,400 will remain for the Affordable Housing category, and $12,419,766 of $18,038,393 will remain for the Economic Development category, Sufficient funds are available to make any legally required State ERAF for FY11.
There is no impact on the City's General Fund as a result of this action. Osborne Apartments Cons« uction and Permanent Loan PAGE 6
ENVIRONMENTAL REVIEW
The proposed Osborne Apartments project is exempt from provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15194 of the State CEQA Guidelines.
AUTHORITY GRANTED TO CEO OR DESIGNEE
If the Loan Agreement is approved, the CRA/LA Chief Executive Officer or designee would be authorized to take such actions as may be necessary to carry out the Agreement, including, but not limited to, executing the CRA/LA Loan Documents and taking the following actions: (1) extending the Initial Term of the Loan by up to one additional year for a total not to exceed three years; (2) approving revisions to the Project Budget, so long as the changes do not increase the amount of the CRA/LA Loan or otherwise have a material adverse impact on the feasibility of the project; (3) negotiating and executing subordination agreements meeting the requirements of California Health and Safety Code Section 33334.14, and making reasonable modifications to the CRA/LA Loan Documents that may be requested by any Senior Lender or Tax Credit Equity Investor, so long as such changes do not adversely affect the receipt of any material benefit by CRA/LA; (4) negotiating and executing Inter-creditor Agreements with and Estoppel Certificates to other lenders, to the extent such Inter-creditor Agreements and Estoppel Certificates are consistent with the terms of the Loan Agreement; and (5) approving certain non-material revisions to the terms of the Loan Agreement reasonably requested by a Permitted Lender or Tax Credit Equity Investor.
PROJECT SUPPORT
Councilmember Richard Alarc6n supports the recommended action.
Christine Essel Chief Executive Officer
By:
dP;/ CCalvin E. Holli Chief Operating Officer Real Estate and Economic Development Osborne Apartments Consu .sction and Permanent Loan PAGE 7
There is no conflict of interest known to me which exists with regard to any eRA/LA officer or employee concerning this action.
ATTACHMENTS
Attachment A: Location/Site Map Attachment B: Project Term Sheet Attachment C: Affordable Housing Information Attachment 0: Sources and Uses Attachment E: Finding of Benefit Resolution Attachment F: Subordination Resolution Attachment G: Project Summary Report I ATIACHMENT A
SITE/LOCATION MAP
•• ime IIBDomma IiI! ~.~~ " ' Osborne Intergenerational Housing Project
Osborne Intergcneratiunal Housing Project
CRAILA Project Area ATTACHMENT B PROJECT TERM SHEET
Project Name: Osborne Apartments Address 12041 N. Osborne Street East Valley Region; Earthquake Disaster Assistance Project Area for Portions Region and Project Area: of Council District 7 Borrower (Legal Entity): Osborne Housing Partners, L.P. Developer/Sponsor: The Related Companies of California, LLC Total # of Units I Affordable 60 units! 59 affordable units
eRA/LA Loan Amount: $4,000,000 Per Total Units $ 66,667 Per Affordable Units $_ 67,797 Source of eRA/LA funding: LMIHF Interest RatelTerm of Loan: For what is eRA/LA paying: LJ Acquisition [J PredevelopmentiSoft Costs (check all applicable categories) n Relocation o X Construction/Hard Costs
eRA/LA Lien Priority? 3rd position; list all senior lenders: construction/perm lender; LAHD Subordination of Housing [J X Yes or Covenant? o No (if yes, prepare 33334.14 findings) o X TCAC-9% o CDLAC -4% [J CDLAC/Bond Only (no tax credits) [J X LAHD Other Project Funding Sources: [J MHSA [j HCD: TO 0__ ; !NFILL~~; MHP_; GHI_ u City of Industry ! LJ AHP [J X Other: NSP II ..."._.",-"~.~...~.-...~-.~~'-~'~~~-""~"~~~'-'''"-I1 rAi1y special provisions/conditions ! precedent or subsequent? Examples: Allocation by TCAC I within how many rounds; commitment from other funding sources (may include commitment of equity factor): timing of eRA/LA funding; non-disturbance agreement if it is a leasehold deal; any unique, I project-specific issue? __ ~ ~ _ Consistent with eRA/LA Housing I n X Yes I Policy? I" , lLL_·'~~_N_O_(i_'f _N_o~,_br~ie_f_j_us_t_ificatio~_fo_r~de_v~la~ti~o~n~):~.~-.~_.~.~~ ~ ~.•
Project Term Sheet ,..Affordable Housing ATTACHMENT C AFFORDABLE HOUSING INFORMATION SHEET
Project Name: Osborne IntergeneraUonal CRAILA Region: East Valley Region Project Address: 12041 W. Osborne Street, Los Angeles 91342 Pr~}ect Area: Paco~ma/Panorama City Project Developer: Related Companies of California, LLC Date of Pro Forma: .;.2;;./1_8_1,,20_1_1 _
Efficiency One Bedroom Two Badroom Three,Bedroom Four BeCirDOm Extralllely Low Income (~30% AMI) $331 $378 $425 $473 $510 Very-Low Income (31% - 50% AMI) $551 $630 $709- $788 $851 Low Income (51% - 80% AMI) $662 $756 $851 $945 $1,021 Moderate' Income (81 % - 120% AMI) $1,213 $1,386 $1,559 $1,733 $1,871 Manager's Unit $0 $0 $0 $0 $0 Unrestricted Market Market MarX.t Markel Market
:Efficiency ,alii Bedr()D.m , Two Bedroom J'hree Bjildroom Four-B!!iJroam "Total Units' "! ~~d.~~"';~~~~~r cli:-.f~~ Project Area: LMIHF Expenditures Osborne Intergenerational~$-~~.-' 'Racoima/Pal1oralna City (laOtto Present) (ThIS ProJect) Total 'income,1.!I'vels $ % S ,% $ Re(juirelllent '- - % Very-Low Income $7,904,459 38°!~ $1,241,379 31% $9,145,83a 37% At least 45% Low Income 7,752,600 37% $1,655,172 41% 9,407,772 38% At least 26% Moderate Income 5,347,608 25% $1,103,448 28% - 6,451,056 26% _. Maximum 29'J/Cl Market Rate a 0-1)/0 $0 0% 0 Ol}/Q Maximum 29% TOTAL $Z1,U04,667 100% $4,000,000 100% $25,004,667 100% ,,>: ,~ 100% At least 10% NIA NIA TOTAL The eRA/LA goai is to produce extremely tow-income units whenever feasible. No project shall be funded in which fhe onJy assisted units are for moderate income households if!, ;j', ;j', ;j', ;j', ;1!. ;j', ;j', ;j', ;j', ;j', ;j', ;f ;j', ;f ;f ;f ~ ro sr 'if'. (0 U) 'if 0 0 co o OJ co ~ Ol ,....": N m "'. m oi oj '* ~ oj '*e oj 0 c-: 0> '* oj r-, 0 '"0 ~'" <{) ~ ~'" N ~ '"~ '" '" '" '" ~ '"'" '" '" OJ ~ ~ C> 0 0 <:> <:) 0 <:> V> t- W 0 r-, r-, co 0 W '" 0 '" <:> N .,; co <;(: a q a 'if. 0 0 CO· '" N '" ::r: Y> a. (") ." '" '*c:i OJ '" ...: 6 I.(} ,---: '" tJ) <'oJ. "!. io ' r1I ~ .,... II) ~ <0 ill a 0 -sr 0 co 0 ...... eo ro 0 r-, e-, t-, ::?: ~ ..... so io co r-; c» co 0 N, a r-, r-. "'~ <. on "'~ N' o· '*(Q !- ~ r:i RESOLUTION NO. _ A JOINT RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA AND OF THE CITY COUNCIL OF THE CITY OF LOS ANGELES AUTHORIZING THE EXPENDITURE OF UP TO $4,000,000 OF LOW AND MODERATE INCOME HOUSING FUNDS FROM THE EARTHQUAKE DISASTER ASSISTANCE PROJECT FOR PORTIONS OF COUNCIL DISTRICT 7 PROJECT AREA OUTSIDE OF SAID PROJECT AREA AND FINDING THAT SAID EXPENDITURE BENEFITS THE PROJECT AREA. WHEREAS, the CRA/LA has established the Earthquake Disaster Assistance Project for Portions of Council District 7 Project Area ("Project Area"); and WHEREAS, pursuant to California Health and Safety Code Section 33334.3, the CRA/LA has established a Low and Moderate Income Housing Funds for the Project Area into which not less than 20% of all taxes allocated to CRA/LA pursuant to California Health and Safety Code Section 33670 must be expended for the purposes of increasing, improving and preserving the community's supply of low- and moderate-income housing available at affordable housing costs (Housing Funds"); WHEREAS, the expenditure of Housing Funds outside the Project Area requires a resolution of the eRA/LA and the City Council finding that the expenditure of Housing Funds outside of a project area is of benefit to the project area; and WHEREAS, the CRA/LA desires to provide for renter occupied housing restricted to very low, low and moderate income persons during the existence of the Project Area Implementation. NOW, THEREFORE, THE COMMUNITY REDEVELOPMENT AGENCY OF THE CiTY OF LOS ANGELES, CAliFORNIA, AND THE CITY COUNCil OF THE CITY OF LOS ANGELES, CAliFORNIA DO HEREBY RESOLVE AND FIND AS FOLLOWS: 1. The City Council of the City of Los Angeles, and the eRA/LA do hereby appropriate the sum of $4,000,000 into Project Area's Low and Moderate income Housing Fund to be paid into Low and Moderate Income Housing Fund from property taxes allocated to the CRA/LA pursuant to California Health and Safety Code Section 33670 and the Earthquake Disaster Assistance Project for the Project Area's Redevelopment Plan. 2 Such funds shall be held in the Low and Moderate Income Housing Fund until expended by the CRA/L.A to provide financial assistance of not more than $4,000,000, toward the development of a 60 unit affordable family project located at 12041 N. Osborne Street in the Lakeview Terrace community (collectively "Housing") which is located just outside the Project Area boundary in Council District 7 Any funds herein appropriated which have been so used and thereafter returned to the Earthquake Disaster Assistance Project for the Project Area's Low and Moderate Income Housing Fund shall continue to be appropriated for similar use in such similar projects, which may hereafter be approved by the CRAILA. 3. The City Council of the City of Los Angeles and the CRA/LA find that the provision and improvement of affordable housing, as provided by Health and Safety Code Section 33334.2, outside the Project Area is of direct benefit to the Project Area in assisting the accomplishment of the Project Area objectives. Moreover, housing is itself a fundamental purpose of the Community Redevelopment Law and an inadequate statewide supply of decent, safe, and sanitary housing affordable to persons and families of low or moderate income, threatens the accomplishment of the primary purposes of the Community Redevelopment Law, including job creation, attracting new private investments, and creating physical, economic, social, and environmental conditions to remove and prevent the recurrence of blight. 4. By adopting this Resolution, the CRA/LA hereby finds that the Housing as described hereinabove in Section 2 of this Resolution is of benefit to the Project Area in conformity with the legal requirements of Health and Safety Code Sections 33334.2, 33334.6 and 33413. The payment of funds into the Project Area Low and Moderate Income Housing Fund as required by this Resolution pursuant to said Section 33334.2 and 33334.6 shall constitute an obligation of indebtedness of the CRAILA for the Project Area to the extent of providing for construction and permanent financing of not more than $4,000,000 to be used toward the development of Housing. 5. The CRA/LA's Chief Executive Officer or designee is hereby authorized to retain or pay all interest income earned on this appropriation into the Project Area and Low and Moderate Income Housing Fund. The Chief Executive Officer or designee is further authorized to pay all other income, loan repayments, sale proceeds or revenues received by the CRAILA arising from the expenditure of the funds appropriated by this Resolution, into the Project Area's Low and Moderate !ncome Housing Fund. ADOPTED: __ I hereby certify that the foregoing Resolution was adopted by the City Council and the City of Los Angeles, California, at its regular meeting held ,20_. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Los Angeles on this __ day of, 20.~. ATTACHMENT F SUBORDINATION RESOLUTION RESOLUTION NO. _ A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES1 CALIFORNIA REGARDING THE SUBORDINATION OF ITS USE RESTRICTIONS AND DEED OF TRUST PURSUANT TO SECTION 33334.14 OF THE COMMUNITY REDEVELOPMENT LAW FOR THE OSBORNE APARTMENTS PROJECT, WHEREAS, the Community Redevelopment Agency of the City of Los Angeles, California ("CRNLA") proposes to enter into a Loan Agreement with Osborne Housing Partners, L.P., a California limited partnership to which the eRA/LA will provide financial assistance to the Developer for the purposes of developing housing that is affordable to very low-, low-, and moderate-income persons or families or households (the "Rental Project"); and WHEREAS, the Loan Agreement requires covenants to be recorded against the Rental Project restricting the use of the Project by placing certain limits on the maximum rents that can be charged, and the maximum income that can be earned by tenants qualified to rent such housing (the "Income and Rent Restrictions"); and WHEREAS, the Loan Agreement requires that a Deed of Trust be recorded against the Rental Project as security for the CRA/LA. Loan; and WHEREAS, the Developer anticipates commitments of financing from lenders conditioned upon the subordination of the eRA/LA's Income and Rent Restrictions and Deed of Trust; and WHEREAS, there has been presented to the eRA/LA evidence sufficient on which to find an economically feasible alternative method of financing the Rental Project on substantially comparable terms and conditions, but without subordination, is not reasonably available. NOW, THEREFORE, THE COMMUNITY REDEVELOPMENT AGENCY OF I-HE CiTY OF LOS ANGELES, CALIFORNIA, AND THE CITY COUNCIL OF THE CITY OF LOS ANGELES, CALIFORNIA DO HEREBY RESOLVE AS FOLLOWS: '1, The eRA/LA hereby finds that an economically feasible alternative method of financing the Rental Project on substantially comparable terms and conditions, but without subordination, is not reasonably available. 2. The CRNLA hereby authorizes the Chief Executive Officer ("CEO") of the eRA/LA, or designee, to take such actions as may be necessary in order to subordinate the CRPJU\'s Income and Rent Restrictions and Deed of Trust to the liens of the lenders providing financing for the Rental Project, but only upon receipt by the CEO or designee of written commitments from such lenders, reasonably designated to protect the eRA/LA's investment in the event of default, including but not limited to the following: a) A right of the CRA/LA to cure a default on the loan; b) A right of the eRA/LA to negotiate with the lender after the notice of default from the lender; c) An agreement that if prior to foreclosure of the loan, the CRA/LA takes title to the property and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan 'by reason of transfer of title to the CRA/LA; d) A right of the CRA/LA to purchase the property from the Developer at any time after default on the loan. ADOPTED: __ PRO.)__";T SUMMARY REPORT Board Item Number: Community Benefits Board Date: 3117/2011 • Construction Local Hiring • Creation of Affordable Housing Project Location • Increase Supply of Housing Stock Primary Address: • New Affordable Covenants 12041 Osborne Street, Los Angeles, CA 9'1342 • Prevailing Wage Jobs Location Description: APN's 2532017065 & 2532017066 Strategic Plan Goals Met • 1.1.1 e Create 40,000 construction career-path Proposed CRAfLA Action Jobs, Map.c, •• t.d bYCRMAGrs ro.m Loan Agreement with Osborne Street Housing e 1.1.2 - Invest in projects and programs to Partners, L.P. in an amount nat to exceed provide 2,000 family-supporti ng permanent $4,000,000 for development of Osborne jobs. Apartments at 12041 N" Osborne Street outside e 2.1" 1 - Cornplete construction of 511ea5t 5,500 of the Earthquake Disaster Assistance Project Units of affordable housing in Redevelopmeni for Portions of Council District 7 (aka Project areas. PacoimalPanorama City Project Area) eRA/LA Policies Applied Additlonal lnformation ~ Construction Jobs Local Hiring Program NIA • Contractor Responsibility • Equal Benefits Elected Officials • Housing Policy • Council District 7, Richard Alarcon • Prevailing Wage • County Supervisor District 3, Zev • Sustainability Consultation Program (Part of Yaroslavsky CRNLA Healthy Neighborhoods Policy) • State Senate District 20, Alex Padilla • Congress District 2B, Howard L, Berman CRA/LA Policies Not Applied • Assembly District 39, Felipe Fuentes Not Applicable to the Project a Public Art Policy, Affordable housing Project Description development. Osborne Iniergenerational Housing is a new • Construction Careers & Project Stabilization, construction affordable development serving very Less than 75 housing units. low-income and low-income residents> The ~ Contractor IService Worker Retention, project will serve a mix of large families and Affordable housing development. seniors in side-by-side buil dings with distinct e liVing Wage amenities for each resident population The 60- e Labor Peace Aqreernent, Less than unit project consists of 42 senior one-becrocm 75 apartment units in one building and 18 two-story housing units. townhomes for large families. • Chikl Care, Affordable housinq development. Project Type R.8sidcntia! Construction Category: New Construction Type of Housing.' Rental Housing Project Features; e Affordable Housing • Apartments e Balconies e Community Room • Gardening I Landscaping ~ Playground e Recreation Room e Townhouse Developer I Paructpantts) eRA/LA Project Staff • Margarita De Escontrias, Regional Administrator e Gerald Gubatan, Sr Planner " Ellen Alderman Comis, Sr Housing Finance Officer " Dora Huerta, Assistant Project Manaqer o Duran Villegas, Project Manage, Project Activities Completed Activitieo'. Scileduled Activities' • Application Submission, 01103/11 e Loan Committee, 02123/11 Agreement TYPEl(s} e Loan Agreement Terms of CRAlLtllnvestment: PrOIGcIID: 10065"1 Data l.ast Updated: 3/11201'1 Objective Coders): Rapor; Generated: 3/11'201~I