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Home My WebLink AboutRES NO 107-2023107-2093 RESOLUTION NO. RESOLUTION TO CONDITIONALLY LEND UP TO $1,997,528.29 DOLLARS IN PERMANENT LOCAL HOUSING ALLOCATION FUNDS AND AMERICAN RESCUE PLAN ACT FUNDS, TO HOUSING AUTHORITY OF THE COUNTY OF KERN FOR THE CONSTRUCTION OF A 150-UNIT AFFORDABLE SENIOR HOUSING COMPLEX, AT 4215 LETZRING LANE (APN: 405-020-51) IN BAKERSFIELD, CA. WHEREAS, in 2017, Governor Brown signed Senate Bill 2, the Building Homes and Jobs Act, to establish a $75 recording fee on real estate documents to increase the supply of affordable homes in California as part of a 15-bill package to address the state's housing shortage and high housing costs. Part of the bill established funding for housing -related projects with the Permanent Local Housing Allocation ("PLHA"); and WHEREAS, the Congress of the United States has enacted H.R. 1319, the "American Rescue Plan Act" ("ARPA") at 42 USC 9001 and amendments; and WHEREAS, ARPA provides additional relief to address the continued impact of COVID-19 (i.e., coronavirus disease 2019) on the economy, public health, state and local governments, individuals, and businesses; and WHEREAS, CITY received $94,000,000 in funding to address the negative Impacts of COVID-19; and WHEREAS, CITY has committed approximately $5,000,000 in ARPA funds to build new affordable housing units; and WHEREAS, on June 3, 2022, the CITY distributed a Request for Proposals and advertised the availability of affordable housing funding available through PLHA and ARPA to developers and interested parties; 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 (HOUSING AUTHORITY) is a public body, corporate and politic that develops affordable housing; and WHEREAS, HOUSING AUTHORITY intends to purchase and can 150 affordable housing units, which includes one manager's unit, located at 4215 Letzring Lane (APN: 405-020-51) ("Project Property" herein); and WHEREAS, it is CITY's intent to assist HOUSING AUTHORITY in developing affordable housing by lending HOUSING AUTHORITY up to One Million Nine Hundred Ninety -Seven Thousand, Five Hundred Twenty -Eight Dollars and Twenty - Nine Cents ($1,997,528.29) to develop the affordable housing project on the �ea►cE� Project Property; and m Page 1 of 4 'ORIGINAL' WHEREAS, HOUSING AUTHORITY desires a funding commitment from CITY to apply for nine percent (9%) Low Income Housing Tax Credits to complement costs to purchase the Project Property and develop all of the affordable units on the Project Property. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Bakersfield as follows: 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 HOUSING AUTHORITY in the development of the Project Property: up to One Million Nine Hundred Ninety -Seven Thousand, Five Hundred Twenty -Eight Dollars and Twenty - Nine Cents ($1,997,528.29) of PLHA and ARPA 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. 3. This funding commitment is made with the following conditions: 3.1. This commitment is based on the project pro -forma dated June 12, 2023 including a minimum project size of 150 units with 16 units affordable to senior households at 30%, 33 units affordable to senior households at 40%, 60 units affordable to senior households at 50%, 27 units affordable to senior households at 60%, 12 units affordable to senior households at 80% area median income (AMI) or less with one manager's unit and one employee unit. 3.2. Key components of the project pro -forma (affordability, developer fee, sources and uses, etc.) shall not change without CITY's administrative approval. 3.3. All ARPA units shall remain restricted for a minimum period of 20 years, while all PLHA assisted units shall remain affordable for a minimum of 55 years. Further, all programmatic requirements in accordance with ARPA and PLHA regulations shall be complied with. 3.4. HOUSING AUTHORITY 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. 3.5. Construction of the project shall not commence until HOUSING AUTHORITY can demonstrate that all funding is committed for the project's construction and permanent financing. okOAKr'1s > m Page 2 of 4 r- `ORIGINAL 3.6. HOUSING AUTHORITY and staff shall provide regular updates, no less than annually, to the CITY regarding HOUSING AUTHORITY's ability to secure financing and commence construction. The first check -in shall occur in September 2023 and shall continue annually during the predevelopment period of this project. 3.7. If all financial commitments necessary for the project to be developed are not secured and building permits are not pulled for Letzring Lane Senior Apartments by December 31, 2024, this funding commitment shall expire unless extended in writing by the Bakersfield City Manager. 3.8. CITY expects HOUSING AUTHORITY 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. 3.9. A final subsidy underwriting and layering review is completed by the City of Bakersfield to confirm the projects viability and full compliance with ARPA regulations pursuant to 24 CFR 92.250 and with PLHA programmatic guidelines as required by the California Department of Housing and Community Development, including all program guidelines and requirements in the Notice of Funding Availability for which funds under this resolution are governed. 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 ARPA program and PLHA program, or the City of Bakersfield's underwriting and subsidy -layering review during this review will result in the denial of ARPA and PLHA funding for this undertaking. 3.10. HOUSING AUTHORITY 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. 3.11. HOUSING AUTHORITY 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. $EKE Department of Housing and Urban Development under 24(` Page 3 of 4 ~ o `ORIGINAL 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. 3.12. HOUSING AUTHORITY understands that the award or commitment of ARPA 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 and the HOME Investment Partnership Program. 3.13. The City Council gives authority to the City Manager or 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 1 o of the City of Bakersfield at a regular meeting thereof held on JUL UZ by the following vote: ✓ ✓ ,/ ✓ r ✓ AY COUNCILMEMBER: ARIAS, GONZALES, WEIR, SMITH,-HtK-NM7J, GRAY, KAUR NOES: COUNCILMEMBER: ABSTAIN: COUNCILMEMBER: COUNCILMEMBER: A . ' (�\ , . JULIE DRIMAKIS, CPMC, MMC CITY CLERK and Ex Officio Clerk of the Council of the City of Bakersfield APPROVED JUL 12 2023 By KAREN GOH Mayor APPROVED AS TO FORM: VIRGINIA GENNARO City Attorney lJ �'%HUA H. RUDNICK uty City Attorney JHR:em O .� 5:\COUNCIL\Resos\23-24\4215LetaingLnReso.docx �- m Page 4 of 4 vORiGINA