Laserfiche WebLink
The Note that the Sienna Green 1 would give the City is for the $426,500 with an estimated 1- to 3- <br />percent annual interest rate. The final interest rate will be determined closer to the closing of the full <br />financing package. Principal and interest would be paid off at the end of a 30-year term. See <br />Attachment C to review the Note. <br />The Mortgage describes the terms and conditions the City is placing on this loan. To review the loan <br />agreement, see Attachment D. <br />Aeon has requested that the City agree to take a subordinate position on this loan. See Attachment E to <br />review the Master Subordination Agreement. <br />Finally, Aeon has requested that the City enter into a Master Disbursement Agreement. See Attachment <br />F to review the Master Disbursement Agreement. This agreement refers to the fund drawdown schedule <br />agreed to in the Mortgage, which states that Aeon can only access funds on as a cost reimbursement <br />(Mortgage Item 17 (c) ) . <br />These documents have been reviewed by Stephen Suhul, the RHRA's attorney. The City attorney is <br />also aware of what is being proposed. <br />POLICY OBJECTIVE <br />Partnering with Aeon is consistent with the housing goals and policies in the City's 2030 <br />Comprehensive Plan, specifically partnering with government agencies and developers to provide <br />affordable housing (Ch. 6, Policy 1.5) . <br />FINANCIAL IMPACTS <br />A. Memorandum of Understandin� <br />Extending the MOU does not impact the City's budget. <br />S. Mortga�e, Master Subordination Agreement, and Master Disbursement Agreement <br />Taking a subordinate position on the loan to Aeon does not impact the City's budget as the funds to be <br />loaned are grant funds that the City is passing through to Aeon. The City will not be upfronting any of <br />its funds as part of this loan. <br />STAFF RECOMMENDATION <br />A. Memorandum of Understandin� <br />The City Council should extend the MOU between Aeon and the City until December 31, 2010. This <br />document details the roles and responsibilities for both parties related to the pass-through and <br />implementation of the LCDA and TSRA grants awarded to the City on behalf of Sienna Green Phase 1. <br />Extending the agreement through 2010 will keep it in place until the grants are ex <br />S. Mortga�e, Master Subordination Agreement, and Master Disbursement Agreement <br />Staff recommends entering into a mortgage agreement with Sienna Green 1 Limited Partnership. In <br />affordable housing projects that are utilizing t� credits, it is a standard practice for cities to enter into <br />mortgage agreements with the developer. As described in a previous section, loaning the pass-through <br />grant funds to the developer will eliminate the gap that is created by IRS regulations if the grants are <br />converted to loans. <br />Staff also recommends approval of the Master Subordination Agreement with Sienna Green 1 Limited <br />Partnership. The City bears no risk with this loan as the monies described in the documents are grant <br />Page 2 of 3 <br />