HomeMy WebLinkAboutRES NO 083-18RESOLUTION NO. 08 3— 18
RESOLUTION TO LEND $1.5 MILLION DOLLARS IN HOME
INVESTMENT PARTNERSHIPS (HOME) FUNDS TO TEGELER
HOTELS, LP FOR THE REHABILITATION CONSTRUCTION OF
THE TEGELER SINGLE ROOM OCCUPANCY (SRO)
PROJECT, AT 1908 H STREET IN BAKERSFIELD, CA.
WHEREAS, the Congress of the United States has enacted the "HOME
Investment Partnerships" Act ("the Program" herein) at 42 USC 12741 at. seq. of
the Cranston -Gonzalez National Affordable Housing Act and amendments ("the
Act" herein); and
WHEREAS, CITY has received funds pursuant to the Program from the
Department of Housing and Urban Development ("HUD" herein); and
WHEREAS, CITY desires to maintain affordable housing in the city limits of
Bakersfield ("the Targeted Area"); and
WHEREAS, Tegeler SRO Associates, LP (TEGELER) is in the business of
managing, maintaining and rehabilitating affordable housing complexes; and
WHEREAS, TEGELER intends to purchase and rehabilitate the Tegeler Hotel,
located at 1908 H Street and a 53 -unit SRO Hotel ("Project Property" herein);
and
WHEREAS, it is CITY's intent to assist Tegeler in maintaining affordable
housing by lending to TEGELER up to ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000.00) to rehabilitate the Project Properties; and
WHEREAS, TEGELER desires a funding commitment from CITY to apply for
nine percent (97o) Low Income Housing Tax Credits to complement costs to
purchase and rehabilitate all of the affordable SRO units that make up the
Project Property.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Bakersfield as follows:
1. The above recitals are true and correct and incorporated herein.
2. The City Council finds and declares that it is necessary and in the
best interests of the City to provide the following assistance to TEGELER in the
rehabilitation of the Project Property: One Million Five Hundred Thousand Dollars
($1,500,000.00) of HOME funds being provided in the form of a one percent (1%) carF
simple interest residual receipts loan, over a 55 -year term. No interest shalb< am
accrue during the construction of the project; and
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3. This funding commitment is made with the following conditions:
3.1. TEGELER shall successfully obtain the 9% federal tax credits
yielding an estimated $6,650,000 in gross proceeds from the sale of the tax
credits; and
3.2. This commitment is based on the project proforma dated
June 16, 2016, including a minimum project size of 53 units with six units
affordable to households at 30%, 28 units at 40% and 18 units at 45% of area
median income (AMI).
3.3. Key components of the project proforma (affordability,
developer fee, sources and uses, etc.) shall not change without CITY's
administrative approval.
3.4. All HOME assisted units shall remain affordable for a minimum
of 15 years.
3.5. TEGELER shall sign and record an affordability covenant on
the Project Property that secures the affordability and monitoring rights of the
City of Bakersfield for the duration of the affordability period.
3.6. Construction of the project shall not commence until
TEGELER can demonstrate that all funding is committed for the project's
construction and permanent financing; however, construction shall commence
within one year of this funding commitment.
3.7. TEGELER shall provide regular updates, as required by CITY,
regarding TEGELER's ability to secure financing, particularly as it relates to
federal tax credits. The first update shall occur in fall 2018, and shall continue
monthly during the predevelopment period of this project.
3.8. If rehabilitation construction of the Tegeler SRO Hotel does
not commence by March 20, 2019, this funding commitment shall expire unless
otherwise extended by the City Manager.
3.9. If applicable to funding, TEGELER shall take the necessary
steps and shall provide adequate documentation during project phases
(planning, construction, and permanent financing) to ensure that one or more
organizations within TEGELER's partnership qualifies and maintains status as a
Community Housing Development Organization (CHDO).
3.10. CITY expects TEGELER to take all necessary steps, including
the reduction of the project developer fee, to avoid returning to CITY for
additional subsidies if project costs exceed budget. oce�H%
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3.11. The City Council gives authority to the City Manager or his
designee to carry out The direction of this resolution upon the conditions and
terms provided herein.
HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the
Council of the City of Bakersfield at a regular meeting thereof held on JUN 7 11 9018
by the following vote:
✓ ✓ ✓ ✓✓ ✓
AYESCOUNCILMEMBER: RIVER(,, GONZALES, WEIR, SMITH, FREEMAN, SULLIVAN, PARLIER
NOES: COUNCILMEMBER:
ABSTAIN: COUNCILMEMBER: NO
ABSENT: COUNCILMEMBER: NO
'L na�4 JD4
HRIST�R GERRY
ACTING CITY CLERK and Ex Officio Clerk of
the Council of the City of Bakersfield
APPROVED JUN 2 0 2018
I
APPROVED AS TO FORM:
VIRGINIA GENNARO
CITY ATTORNEY
"RUDNICK
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