HomeMy WebLinkAboutRES NO 182-2021RESOLUTION NO. 18 2- 2 0 2 1
RESOLUTION TO CONDITIONALLY LEND UP TO $1.0
MILLION DOLLARS IN PUBLIC SAFETY AND VITAL SERVICES
(PSVS) FUNDS TO HOUSING AUTHORITY OF THE COUNTY
OF KERN FOR THE CONSTRUCTION OF A 40 -UNIT
AFFORADBLE HOUSING COMPLEX, AT 1201 6r^ STREET and
507 N Street (APN: 009-440-18,009-440-21, and 009-440-
24) IN BAKERSFIELD, CA.
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 funding from the adoption of the Public Safety and Vital
Services Measure to support affordable housing development; and
WHEREAS, CITY desires to maintain affordable housing in the city limits of
Bakersfield ("the Targeted Area"); and
WHEREAS, Housing Authority of the County of Kern (HACK) is a public body,
corporate and politic that develops affordable housing; and
WHEREAS, HACK intends to purchase and construct 40 affordable housing
units, which includes one manager's unit, located at 1201 6th Street and 507 N
Street (APN: 009-440-18, 009-440-21, and 009-440-24) ("Project Property" herein);
and
WHEREAS, it is CITY's intent to assist HACK in developing affordable housing
by lending to HACK up to ONE MILLION DOLLARS ($1,000,000.00) to construct the
Project Property; and
WHEREAS, HACK desires a funding commitment from CITY to apply for four
percent (4%) Low Income Housing Tax Credits to complement costs to purchase
and 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 in the
development of the Project Property: Up to One Million Dollars ($1,000,000.00) of FZAKep
PSVS funds being provided in the form of a three percent (3%) per annum simple o sm
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interest residual receipts loan, over a 55 -year term. No interest shall accrue during
the construction of the project.
3. This funding commitment is made with the following conditions:
3.1. HACK shall successfully obtain 4% federal tax credits yielding
an estimated $6,228,381 in gross proceeds from the sale of the tax credits.
3.2. This commitment is based on the project pro -forma dated
August 16, 2021, including a minimum project size of 40 units with all units
affordable to households at 30%, of area median income (AMI), and one
manager's unit.
3.3. Key components of the project pro -forma (affordability,
developer fee, sources and uses, etc.) shall not change without CITY's
administrative approval.
3.4. All PSVS assisted units shall remain affordable for a minimum of
20 years.
3.5. HACK 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 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 PSVS funds.
3.7. HACK 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 January 2022 and
shall continue annually during the pre levelopment period of this project.
3.8. If all financial commitments necessary for the project to be
developed are not secured and building permits are not pulled for 6th Street
Apartments by January 31, 2023, this funding commitment shall expire unless
extended by the Bakersfield City Manager.
3.9. CITY expects HACK 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.
3.10. A final subsidy underwriting and layering review is completed
by the City of Bakersfield to confirm the projects viability and full compliance with oFOpKFgN
PSVS regulations. This underwriting review will occur prior to issuing a funding F m
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.,commitment" consistent with the HOME Investment Partnership Program
definition in 24 CFR 92.2. Failure to fix any compliance issues identified with the
Public Safety and Vital Services (PSVS) program, or the City of Bakersfield's
underwriting and subsidy -layering review during this review will result in the denial
of PSVS funding for this undertaking.
3.11. HACK shall not undertake or commit any funding to choice -
limiting actions, including entering into any contracts (including conditional
contracts) to undertake such actions prior to the environmental clearance
required under the National Environmental Protection Act (NEPA). Any violations
of this provision may result in the denial of any funding under this resolution.
3.12. HACK understands that this resolution does not constitute a
commitment of funds or site approval, and the commitment of funds or approval
may occur only upon satisfactory completion of environmental review and
receipt by the City of Bakersfield of an approval of the request for release of funds
and certification from the U.S. Department of Housing and Urban Development
under 24 CFR Part 58. The provision of any funds to the project is conditioned on
the City of Bakersfield's determination to proceed with, modify or cancel the
project based on the results of the environmental review.
3.13. HACK understands that the award or commitment of PSVS
funds under this resolution, and all other federal and non-federal fund sources, is
conditioned upon the receipt of NEPA clearance and the provision of federal
assistance under the Housing Choice Voucher program.
3.14. 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.
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aF 0AKF9s
OORIGWAL
I 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 SEP 1; 2021
by the following vote:
V ✓ ✓ ✓ ✓ �-
YES: COUNCILMEMBER: ARIAS, GONZALES, WEIR, SMITH, FREEMAN, GRAY, PARLIER
NOES: COUNCILMEMBER: NBIp.
ABSTAIN: COUNCILMEMBER:
ABSENT: COUNCILMEMBER: A AAI ^ot
�
JI DRIMAKIS, MMC
CITY CLERK and Ex Officio Clerk of the Council of
the City of Bakersfield
APPROVED SEP 15 1021
By:
KAR N GOH
MAYOR
APPROVED AS TO FORM:
VIRGINIA GENNARO
CITY ATTORNEY
B : �� �_
J SHUA H. RUDNICK
eputy City Attorney
IHR:clll
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