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2.5 In 1992, Calibre Ridge was financed in part with the sale of housing tax credits. The housing tax credit program is a program of the IRS. The tax credit program was created in 1987 to encourage private sector investment in the creation of affordable rental housing. Under the tax credit program developments must maintain income and rent restrictions for an initial fifteen year period and for an additional second fifteen year period once the first is completed. The tax credit investor in a proj ect typically remains as owner of the proj ect for the first fifteen years. 2.6 The rental property is currently owned by the Calibre Ridge Limited Partnership. The partnership is as follows: National Equity Fund (Investor) — Limited Partner 99% Twin Cities Housing Development Corporation - General Partner 0.8% Duffy Development Company — General Partner 0.2% 2.7 The National Equity Fund (NEF), a non-profit syndicator of housing tax credits, acquired the tax credits and became the limited partner. The property has reached its end of its initial tax credit compliance period on December 31, 2008. NEF wants to exit the limited partnership on January 1, 2009. NEF's exit of limited partner interest will be split by the two general partners as follows: Twin Cities Housing Development Corporation will be 80% Duffy Development Company will be 20% The exit of the limited partner is often the time when a proj ect is restructured and the new owners will recapitalize the property in order to prepare for the remaining 15 year compliance period of affordability. 2.8 Currently the second mortgage from the Roseville Local Development Corporation (RLDC) is due to be repaid in December 2009. Principal and accrued interest would have totaled approximately $288,000. The RLDC served as the pass through entity for HOME funds from Ramsey County. The HOME Investment Partnerships Program Agreement between Ramsey County and the RLDC stipulates that any amount of loan funds repaid to the RLDC by the Partnership will be remitted to Ramsey County. Given this requirement the new Partnership approached Ramsey County to discuss the possibility of a deferral of the term of the loan to December 2022 when the other deferred loans mature. Ramsey County recommended that the loan be assigned to the Ramsey County HRA after which the County will extend the loan to 2022. 2.9 The City Attorney Jay Squires has reviewed the attached document since the HRA does not presently have an attorney. All bills for Jay Squires time is being paid by the property owner of Calibre Ridge. 3.0 LDC SUGGESTED ACTION 3.1 Staff is recommending the LDC Authorize transfer of the Calibre Ridge loan over to the Ramsey County HRA. LDC RHRA Action (111808) — Page 2 of 3