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Home My WebLink AboutRES NO 105-2023105-202: RESOLUTION NO. RESOLUTION TO CONDITIONALLY LEND UP TO $2,394,815 DOLLARS IN HOME INVESTMENT PARTNERSHIPS (HOME) FUNDS, REGIONAL EARLY ACTION PLANNING GRANTS OF 2021 (REAP 2.0) FUNDS, AND PERMANENT LOCAL HOUSING ALLOCATION (PLHA) FUNDS TO GOLDEN EMPIRE AFFORDABLE HOUSING, INC. II (GEAHI-II) FOR THE CONSTRUCTION OF A 16-UNIT AFFORADBLE HOUSING COMPLEX, AT 610 4T" STREET (APN: 009-403-13 & 009-403-14) 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, 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 ("PLHA" herein); and WHEREAS, the Regional Early Action Planning Grants of 2021 ("REAP 2.0" herein) was established as part of the 2021 California Comeback Plan under Assembly Bill 140; and WHEREAS, CITY has received funds pursuant to the HOME program from the Department of Housing and Urban Development ("HUD" herein) and funds pursuant to the REAP program and PLHA program from the California Department of Housing and Community Development (HCD); and WHEREAS, CITY has received a resolution conditionally committing funds REAP 2.0 funds from the Kern Council of Governments as enumerated in Resolution 23-13, dated June 15, 2023; and WHEREAS, CITY desires to maintain affordable housing in the city limits of Bakersfield ("the Targeted Area"); and WHEREAS, Golden Empire Affordable Housing, Inc. II (GEAHI-ll) is a limited liability corporation formed by the Housing Authority of the County of Kern to develop affordable housing; and WHEREAS, GEAHI-II intends to purchase and construct 16 affordable housing units located at 610 4th Street (APN: 009-403-13 & 009-403-14) ("Project�PKF;sue Property" herein); and m Page 1 of 5 WHEREAS, it is CITY's intent to assist GEAHI-II in developing affordable housing by lending GEAHI-ll up to TWO MILLION THREE HUNDRED NINETY-FOUR THOUSAND EIGHT HUNDRED AND FIFTEEN DOLLARS ($2,394,815) to construct the Project Property; and WHEREAS, GEAHI II and CITY intend to submit the 4th Street Apartments as a leverage only project in support of the City, GEAHI II, and other co -applicants' application for implementation funding under Round 5 of the Transformative Climate Communities program. 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 GEAHI-II in the development of the Project Property: Up to Two Million Three Hundred Thousand Eight Hundred and Fifteen Dollars ($2,394,815.00) of HOME, PLHA, and REAP 2.0 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 29, 2023, including a minimum project size of 16 units with 7 units affordable to households at 50%, and 9 units at 120% of area median income (AMI). 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 HOME units shall remain restricted for a minimum period of 20 years, while all PLHA, and REAP assisted units shall remain affordable for a minimum of 55 years. Further, all programmatic requirements in accordance with HOME, PLHA, and REAP regulations be shall be complied with. 3.4. GEAHI-II 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 GEAHI-II can demonstrate that all funding is committed for the project's construction and permanent financing; however, construction shall commence within one year of Page 2 of 5 a funding commitment of HOME funds as defined in 24 CFR 92.504. 3.6. GEAHI-II and staff shall provide regular updates, no less than annually, to the CITY regarding GEAHI-ll's ability to secure financing and commence construction. The first check -in shall occur in October 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 4t" Street Apartments by December 31, 2023, this funding commitment shall expire unless extended by the Bakersfield City Manager. 3.8. GEAHI-II 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). It is understood by GEAHI-II that prior to entering into an agreement for CHDO set -aside funds under the HOME Investment Partnership Program that GEAHI II will submit all required documents to the CITY for confirmation of CHDO status. 3.9. CITY expects GEAHI-II 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 HOME regulations pursuant to 24 CFR 92.250 and with REAP and LHTF 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 HOME program, REAP 2.0 program, and PLHA program, or the City of Bakersfield's underwriting and subsidy -layering review during this review will result in the denial of HOME, REAP 2.0 and PLHA funding for this undertaking. 3.11. The City of Bakersfield, pursuant to its Citizen Participation Plan requirements as defined in its 2025 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 HOME funds towards the project. 3.12. GEAHI-II shall not undertake or commit any funding to choice-p.KF,, limiting actions, including entering into any contracts (including conditioribl s� C ' Page 3 of 5 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. 3.13. GEAHI-II 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. 3.14. GEAHI-II understands that the award or commitment of REAP 2.0 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. 3.15. REAP 2.0 funds under this resolution is conditioned upon approval by the Department of Housing and Community Development of the Kern Council of Government's (COG) application for REAP 2.0 funding dated December 21, 2022 to the Notice of Funding Availability and Final Guidelines - Metropolitan Planning Organization Allocation, Regional Early Action Planning Grant of 2021 (REAP 2.0) dated July 26, 2022 and the execution of a funding agreement by the COG and the Department of Housing and Community Development for said funds, as well as the subsequent agreement between the COG and CITY to administer REAP 2.0 funding. 3.16. 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------------- oOPKf,? sue i10 } r Page 4 of 5 �QRIGI^1P,o HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the 1TfflI of the City of Bakersfield at a regular meeting thereof held on JULZU[[�� by the following vote: ✓ ✓ ✓ ill, ✓ AYES: COUNCILMEMBER: ARIAS, GONZALES, WEIR, SMITH,- FREEMAN, GRAY, KAUR NOES: COUNCILMEMBER: ABSTAIN: COUNCILMEMBER: COUNCILMEMBER:�RX`f1Q�l u-91 &4kW J LIE DRIMAKIS, AMC CITY CLERK and Ex Officio Clerk of the Council of the City of Bakersfield APPROVED JUL 12 2023 AA A `I RAREN • MAYOR APPROVED AS TO FORM: VIRGINIA GENNARO, CITY ATTORNEY By. % -�4- OSHUA H. RUDNICK Deputy City Attorney JHRAI > cn Page 5 of 5