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Home My WebLink AboutRES NO 106-2023106-2023 RESOLUTION NO. RESOLUTION TO CONDITIONALLY LEND UP TO $7,585,057 DOLLARS IN REGIONAL EARLY ACTION PLANNING GRANTS OF 2021 (REAP 2.0) AND LOCAL HOUSING TRUST FUND (LHTF) TO THE HOUSING AUTHORITY OF THE COUNTY OF KERN FOR THE CONSTRUCTION OF A 36-UNIT AFFORDABLE HOUSING MIXED USE COMPLEX, AT 530 4tn Street (APN: 009-403-10, 009-403-11, 009-403-12, 009- 403-22, 009-403-24, 009-401-06, 009-402-07) IN BAKERSFIELD, CA. 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, the California Department of Housing and Community Development ("HCD" herein) is authorized to provide funding under the Local Housing Trust Fund ("LHTF" herein) program from the Veterans and Affordable Housing Bond Act of 2018 as described in Health and Safety Code section 50842.2; and WHEREAS, Kern Council of Governments (COG) adopted Resolution 23-13 on June 15, 2023 to conditional committing $6 million in REAP 2.0 funds to CITY to facilitate phase I and II of the Bakersfield Senior Center Mixed -Use project; and WHEREAS, CITY Is proposing to allocate $5,587,057 of REAP 2.0 funds to support phase II of the Bakersfield Senior Center Mixed -Use Project; and WHEREAS, In July 2021, the Bakersfield City Council adopted resolution 124- 2021 to establish a local housing trust fund; and WHEREAS, CITY applied for and received $3,005,000 in LHTF funds from HCD in 2021 and another $2,126,813 in LHTF funds in 2022 to facilitate qualified affordable housing projects; and WHEREAS, on June 13, 2023 CITY completed its Notice of Funding Availability to utilize LHTF and local Public Safety and Vital Services match funds; and WHEREAS, thirteen applications were received requesting funding, with the Bakersfield Senior Center Mixed -Use Project being recommended for an allocation of $2,000,000 in LHTF funds; and WHEREAS, CITY desires to maintain affordable housing in the city limits of o�0PKE9s Bakersfield ("the Targeted Area"); and a Page 1 of 5 WHEREAS, the Housing Authority of the County of Kern (HA) is a developer of affordable housing; and WHEREAS, HA intends to construct 36 affordable housing units, which includes one manager's unit, a new senior center located at 530 4th Street (APN: 009-403-10, 009-403-11, 009-403-12, 009-403-22, 009-403-24, 009-401-06, 009-402- 07) ("Project Property" herein); and WHEREAS, it is CITY's intent to assist HA in developing affordable housing by lending to HA up to SEVEN MILLION FIVE HUNDRED EIGHTY-FIVE THOUSAND AND FIFTY SEVEN DOLLARS ($7,585,057.00) to construct the Project Property; and WHEREAS, HA desires a funding commitment from CITY to apply for Round 5 of the Transformative Climate Communities program as a co -applicant with CITY and, if awarded, apply for an allocation of nine percent (9%) Low Income Housing Tax Credits to 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: 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 HA in the development of the Project Property: Up to Seven Million Five Hundred and Eighty -Five Thousand and Fifty -Seven Dollars ($7,585,057.00) of REAP 2.0 and LHTF 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. HA shall successfully obtain 9% federal tax credits yielding an estimated $1 1,680,739 in gross proceeds from the sale of the tax credits. 3.2. HA shall successfully obtain $7,104,446 in Transformative Climate Communities funding in the Round 5 of the implementation program. 3.3. This commitment is based on the project pro -forma dated June 28, 2023, including a minimum project size of 36 units with 12 units affordable to households at 30%, 7 units at 50%, and 16 units at 60% of area median income (AMI), and one manager's unit. O�KF 3.4. Key components of the project pro -forma (affordabili�, �,, � m Page 2 of 5 v o ORIGINAL developer fee, sources and uses, etc.) shall not change without CITY's administrative approval. 3.5. All REAP 2.0 and LHTF assisted units shall remain affordable for a minimum of 55 years. Further, all programmatic requirements in accordance with REAP 2.0 and LHTF regulations be shall be complied with. 3.6. HA 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. 3.7. Construction of the project shall not commence until HA can demonstrate that all funding is committed for the project's construction and permanent financing. 3.8. HA and staff shall provide regular updates, no less than annually, to the CITY regarding HA's ability to secure financing, particularly as it relates to federal tax credits. The first check -in shall occur in Spring 2024, and shall continue annually during the predevelopment period of this project. 3.9. If all financial commitments necessary for the project to be developed are not secured and building permits are not pulled for Bakersfield Senior Center by December 31 St, 2024, this funding commitment shall expire unless extended by the Bakersfield City Manager. 3.10. If applicable to funding, HA 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). 3.11. CITY expects HA 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. 3.12. A final subsidy underwriting and layering review is completed by the City of Bakersfield to confirm the projects viability and full compliance with REAP 2.0 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. Failure to fix any compliance issues identified with the REAP 2.0 Program, the LHTF program, or the City of Bakersfield's underwriting and subsidy -layering review during this review will result in the denial of REAP 2.0 and LHTF funding for this undertaking. �g5 r\ r\ s choice- o m o voRiGiNAL 3.13. HA shall not undertake or commit any funding to Page 3 of 5 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. 3.14. HA 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. 3.15. HA 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. 3.16. 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. 3.17. 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--------- Page 4 of 5 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 JUL 12 2023 by the following vote: COUNCILMEMBER: ARIAS, GONZALES, WEIR, SMITH, FREEPOAPI, GRAY, KA R NOES: COUNCILMEMBER: ABSTAIN: COUNCILMEMBER: ABSEN COUNCILMEMBER: "-2MX-y\C Ji1 J LIE DRIMAKIS, WC CITY CLERK and Ex Officio Clerk of the Council of the City of Bakersfield APPROVED MAYOR JUL 12 2023 APPROVED AS TO FORM: VIRGINIA GENNARO CITY ATTORNEY By: 7—/• 4L, ��C' JOSHUA H. RUDNICK Deputy City Attorney JHR:dII f- fll Page 5 of 5 " 11 OP!G!, .v,Lc' > m r `ORIGINAL!