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Home My WebLink AboutRES NO 095-2021RESOLUTION NO. 0 5117 2.021 RESOLUTION TO CONDITIONALLY LEND ;UP TO $3.15 MILLION DOLLARS IN HOME INVESTMENT PARTNERSHIPS (HOME) FUNDS AND PUBLIC SAFETY AND VITAL SERVICES (PSVS) TO THE HOUSING AUTHORITY OF THE COUNTY OF KERN AND THE CESAR CHAVEZ FOUNDATION FOR THE CONSTRUCTION OF A MIXED-USE COMPLEX WITH 85 - UNIT AFFORADBLE HOUSING UNITS AND 5,000 SQUARE FEET OF COMMERCIAL SPACE, AT 1001 BAKER STREET (APN: 014-280-22) IN BAKERSFIELD, CA. WHEREAS, the Congress of the United States has enacted the "HOME Investment Partnerships" Act ("HOME" herein) at 42 USC 12741 et. seq. of the Cranston -Gonzalez National Affordable Housing Act and amendments ("the Act" herein); and WHEREAS, On November 6, 2018, the Public Safety and Vital Services ("PSVS" herein) measure was passed by the voters to address top community priorities, including reducing homelessness and construction of affordable housing for very low, low and moderate -income households; and WHEREAS, CITY has received funds pursuant to the HOME program from the Department of Housing and Urban Development ("HUD" herein) and has funding from the adoption of the Public Safety and Vital Services Measure; and WHEREAS, CITY desires to maintain affordable housing in the city limits of Bakersfield ("the Targeted Area"); and WHEREAS, The Housing Authority of the County of Kern (HACK) and the Cesar Chavez Foundation (CCF) are in the business of developing, managing, and maintaining affordable housing complexes; and WHEREAS, HACK and CCF desire to partner together to purchase and construct 85 affordable housing units, which includes, one manager's unit, and 5,000 square feet of commercial components located at 1001 Baker Street (APN: 014-280-22) ("Project Property" herein); and WHEREAS, it is CITY's intent to assist HACK and CCF in developing affordable housing by lending to HACK up to THREE MILLION ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($3,150,000.00) to construct the Project Property; and WHEREAS, HACK and CCF desire a funding commitment from CITY to apply for the Affordable Housing Sustainable Communities Program and four percent (4%) Low Income Housing Tax Credits to complement costs to purchase and Page 1 of 4 y �, � rn vORIGINAL '` develop all of the affordable 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 HACK and CCF in the development of the Project Property: Up to Three !Million One Hundred and Fifty Thousand Dollars ($3,150,000.00) of HOME and PSVS funds being provided in the form of a three percent (3%) per annum simple interest residual receipts loan, over a 55 -year term. No interest shall accrue during the construction of the project; and 3. This funding commitment is made with the following conditions: 3.1. HACK and CCF will secure a funding commitment from the Strategic Growth Council through the Affordable Housing Sustainable Communities ("AHSC" herein) program. If HACK in unable to obtain funding through the program, HACK shall submit an updated sources and uses statement to demonstrate to CITY the next steps to be taken. 3.2. HACK and CCF shall successfully obtain 4% federal tax credits yielding an estimated $28,611,937 in gross proceeds from the sale of the tax credits. 3.3. This commitment is based on the, project pro -forma dated May 12, 2021, including a minimum project size of 85 units with 41 units affordable to households at 30%, of area median income (AMI), 43 units affordable to households at 60% of the area median income (AMI), and one manager's unit. 3.4. Key components of the project, pro -forma (affordability, developer fee, sources and uses, etc.) shall not change without CITY's administrative approval. 3.5. All HOME assisted units shall remain affordable for a minimum of 20 years. 3.6. All PSVS assisted units shall remain affordable for a minimum of 20 years. 3.7. HACK and CCF 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. Page 2 of 4 o� 6AKF9N � m ORI&NAL� 3.8. Construction of the project shall not commence until HACK can demonstrate that all funding is committed for the project's construction and permanent financing; however, construction shall commence within one year of a funding commitment of HOME funds as defined in 24 CFR 92.504. 3.9. HACK and CCF and staff shall provide regular updates, no less than annually, to the CITY regarding HACK's ability to secure financing, particularly as it relates to federal tax credits. The first check-in shall occur in fall 2022, and shall continue annually during the predevelopment period of this project. 3.10. If all financial commitments necessary for the project to be developed are not secured and building permits are not pulled for the Renaissance at Baker project by December 31, 2022,' this funding commitment shall expire unless extended by the Bakersfield City Manager. 3.11. If applicable to funding, HACK and CCF shall take the necessary steps and shall provide adequate documentation annually during project phases (planning, construction, and permanent financing) to ensure that one or more organizations within the project's partnership qualifies and maintains status as a Community Housing Development Organization (CHDO). 3.12. CITY expects HACK and CCF 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. 3.13. A final subsidy underwriting and layering review is completed by the City of Bakersfield to confirm the projects viability and full compliance with HOME regulations pursuant to 24 CFR 92.250 and PSVS regulations as enumerated in the Request for Proposals dated October 18, 2019 and November 10, 2020. This underwriting review will occur prior to issuing a funding ;"commitment" as defined in 24 CFR 92.2. Failure to fix any compliance issues identified with the HOME Investment Partnership Funds (HOME) program, the Public Safety and Vital Services (PSVS), or the City of Bakersfield's underwriting and subsidy layering review during this review will result in the denial of HOME and PSVS funding for this undertaking. 3.14. The City of Bakersfield, pursuant to its Citizen Participation Plan requirements as defined in its 2020 Consolidated Plan and in accordance with 24 CFR 91.105, successfully completes a Substantial Action Plan Amendment, including adoption by the Bakersfield City Council, to allocate NSP funds towards the project. Page 3 of 4 o4��KF�4 1P ORIGINAL 3.15. 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. ------------0000000 ---- -------- 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 .111N 0 2 711121 by the following vote: AYES: COUNCILMEMBER: ARIAS, GONZALES, WEIR, SMITH, GRAY, FREEMAN, PARLIER NOES: COUNCILMEMBER: � 4. ABSTAIN: COUNCILMEMBER: 1MQ ABSENT: COUNCILMEMBER: IViWI i J LIE DRIMAKIS, CMC CITY CLERK -and--Ex Officio Clerk of the Council of the City of Bakersfield APPROVED JUN 0 2 2021 By: KAREN GOH MAYOR APPROVED AS TO FORM: VIRGINIA GENNARO CITY ATTORNEY By -) -� G� JO HUA H. RUDNICK puty City Attorney JHR:dII Page 4 of 4 o`� 6AKF,p� F- m ORIGAAL