20080129_m



COUNTY OF SAN MATEO Inter-Departmental Correspondence
Department of Housing

DATE:				January 8, 2008
BOARD MEETING DATE:				January 29, 2008
SPECIAL NOTICE/HEARING				None
VOTE REQUIRED				Majority

TO:		Honorable Board of Supervisors
FROM:		Duane Bay, Director, Department of Housing
SUBJECT:		Approval of Restructuring of the Funding for the Development of Trestle Glen Apartments

Recommendation
Adopt a Resolution:

1.	Authorizing termination of the existing Section 108 Loan Agreement, Note and Deed of Trust with Northpoint Housing, Inc. for $10,745,000 for Trestle Glen Apartments, and execution of a new Section 108 Loan Agreement with MCB Family Housing, Inc. for $7,145,000 for the development of Trestle Glen at El Camino Village for a term of 55 years; and

Adopt a Resolution:

2.	Authorizing execution of an agreement with MCB Family Housing, Inc. for $621,508 CDBG funds to assist with land acquisition for the development of Trestle Glen Apartments for a term of 55 years; and

Adopt a Resolution:

3.	Authorizing execution of an agreement with Trestle Glen Associates for $1,378,492 HOME funds to assist with the development of Trestle Glen Apartments for a term of 55 years; and

Adopt a Resolution:

4.	Authorizing the Director of the Department of Housing to execute an Agreement with Trestle Glen Associates for $1,500,000 HELP funds to assist with the development of Trestle Glen Apartments for the term of March 24, 2006 though March 23, 2016.

With each resolution authorizing the Director of the Department of Housing or the Director's designee to execute contract amendments and other documents as may be appropriate to achieve the intent of the Agreement, so long as said amendments and other documents do not modify the County's maximum fiscal obligations by more than $25,000 (in aggregate for each Agreement).

Vision Alignment
Commitment: Offer a full range of housing choices. Goal 9: Housing exists for people at all income levels and for all generations of families.

The action contributes to this commitment and goal by creating 119 units of housing affordable to extremely low- and very low-income families located at a major transit node, the Colma BART Station.

Performance Measures:
Measure			FY 2006-07 Actual		FY 2007-08 Target
Number of County-supported affordable housing units completed and occupied			321		400

Background
Trestle Glen Apartments at El Camino Transit Village is a multifamily affordable housing project under development by BRIDGE Housing Corporation. This Project has appeared before the Board six times since November 2005 to request various approvals, primarily related to funding, including authorization for the County to make funding applications to the State and to HUD on behalf of the project. Altogether, the Board has approved the following funding: CDBG $621,508; HOME $1,378,492; HELP $1,500,000 (through the California Housing Finance Agency); and Section 108 Loan Program for up to $10,745,000 (through HUD). The County will only borrow $7,145,000 million Section 108 funds for the Project. One prior Board action involved relocation - approving the Relocation Guidelines and Plan for the project. Another involved assignment of the funding from one BRIDGE nonprofit-affiliate to another. Because the funding sources impose specific restrictions on their uses, and the Project has proceeded well along in its development phase, it has now become desirable and cost-effective to restructure the existing financing. No new funding is being requested.

Discussion

Project Refinement As the Project continues to move forward through its development phases toward an anticipated construction start date of Spring 2008, the Project has been refined and re-defined. In response to the City of Colma’s concern that the Project is not technically located within its jurisdiction, the Project’s name was changed from Colma Transit Village to Trestle Glen at El Camino Transit Village. Amidst Colma’s objections to the over-modern look of the Project, BRIDGE ultimately changed architects to produce a Mediterranean design that Colma felt was more fitting within the character of the surrounding area. In response to tax credit considerations and construction costs, and later to make the Project more competitive in relation to the funding preferences under the State Multiple Housing Program, the number of units had been reduced from 170 family affordable rental units to a 32-unit market rate condominium project plus a 123- unit, and now to a 119-unit, family affordable rental community. Though now with fewer units, the Project will currently yield more bedrooms through the design of more family apartments with two+ bedrooms than when it was a 123-unit project.

Land Subdivision A key element very early on was purchase of the land, splitting it into two parcels each with entitlements, and selling the smaller parcel to a market rate developer to offset Project costs. BRIDGE affiliate Northpoint Housing Inc. purchased the land in November 2006 for approximately $6,900,000 , and subsequently sold off the smaller piece to a third party developer in June 2007 for $3,600,000. This process involved transferring the CDBG, HOME, and HELP debt secured on the larger parcel to the affordable component only.

Northpoint Housing Inc. now plans to complete the subdivision phase by selling the larger parcel to BRIDGE affiliate MCB Family Housing, Inc. (MCB). Prior to commencement of construction, MCB will assign its interest in the land to Trestle Glen Associates, a limited partnership, in order to facilitate the use of tax credits to provide additional funds for the Project. Trestle Glen Associates will be controlled by a BRIDGE affiliate.

Construction of the Affordable Project Trestle Glen MCB will purchase the land from Northpoint Housing, Inc. using the Section 108 and CDBG funds. Northpoint Housing will use MCB’s purchase money to repay the HOME and HELP funds to the County. The existing HOME and HELP loans are being paid off by Northpoint Housing Inc., so that the funds may be re-lent to Trestle Glen Associates for construction of the Project.

Recycling Loan Funds Back To Project As shown in the table below, the refinancing plan and new loan agreements do not require that any additional County monies be allocated.
Existing Borrower & Loan Amount New Borrower & Loan Amount Notes Northpoint Housing Inc. $7,145,000 (Section 108) MCB Family Housing, Inc. $7,145,000 (Section 108) . For land acquisition Northpoint Housing Inc. $ 2million comprising $621,508 (CDBG) & $1,378,492 (HOME) MCB Family Housing Inc. $621,508 (CDBG) For land acquisition Trestle Glen Associates $1,378,492 (HOME) For Construction Northpoint Housing Inc. $1,500,000 (HELP) Trestle Glen Associates $1,500,000 (HELP) For Construction $10,645,000 $10,645,000 Total Amts Unchanged
A complete electronic copy of this report and all referenced resolutions and agreements are available online and complete paper versions are available for review in the Clerk of the Board’s office.

Fiscal Impact
There is no funding change. Previously approved funding totaling $10,645,000 for this project remains the same. No Net County Cost is incurred.