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HomeMy WebLinkAboutItem 15 Conditional Commitment of $5 M in HOME Funds5th & Meridian Housing Project – Conditional Funding Approval for HOME, Low-Mod Impact Fees, Land Loan & Option to Purchase for the Development of SLA Site 12 for Affordable Housing Presented by: Trina Perez Housing Division Manager Item 15 Recommendation It is recommended that the Mayor and City Council of San Bernardino, California adopt Resolution No.2025-XX: 1.Approve a $5M Conditional HOME Funding Commitment to West Fifth Street Housing Partners LP, an affiliate of Jamboree Housing Corporation for a 106-unit affordable housing project on Site 12 and an adjacent parcel (APN 0142-522-10). 2.Authorize a $1.2M City Promissory Note using Low-Mod Funds to cover eligible impact and permit fees, repayable from project residual receipts. 3.Approve an Option to Purchase Agreement for Site 12, allowing the Partnership to acquire the property for fair market value ($3.59M) via seller carryback financing, contingent on final City Council approval of a Disposition and Development Agreement. 4.Authorize the City Manager and City Attorney (or designees) to execute related documents and take necessary actions, with final agreements returning to Council for approval. Site Overview & Design •Site 12 consists of 16 individual parcels totaling approximately 3.5 acres of city-owned surplus land. •The blue-highlighted parcel is not part of the proposed development and is privately owned and occupied. •The green-highlighted parcel will be included as part of the proposed site plan. Jamboree is actively pursuing an acquisition from the private owner. Site Overview & Design Financing Summary •86%of the $72.5M project is funded by non-City sources •14%is to be City-funded •Total cost:$684.2K per unit •City Conditional Funding Commitments: •HOME Loan: $5M •City Land Loan: $3.59M •Impact Fee Loan (Low: $1.2M •Total Proposed Investment: Approximately $9.79 M Net Investor Equity (Federal)$26,293,370 Net Investor Equity (State)$12,521,948 Permanent Loan $7,196,404 County HOME Loan $10,000,000 Rauch Foundation $1,000,000 Deferred Developer Fee $5,732,020 Non-City Funding Sources $62,743,742 Financing Summary Non-City City Est. Conditional Commitment Background and Funding •On March 5, 2025, the City approved the Exclusive Negotiating Agreement (ENA) between the City and JHC Acquisitions LLC, for the development of Site 12 •On June 4, 2025, the Mayor and City Council allocated $1,034,850.20 in HOME Investment Partnership Program funds (HOME) to Jamboree for the 5th and Meridian Project. •On April 16, 2025, the Mayor and City Council re-allocated $1,878,991.80 in unspent HOME funds to the Jamboree 5th and Meridian Project. •The Housing Division will return to Council to recommend the Jamboree project for future HOME allocations and unspent HOME program income. Proposed Development & Affordability The proposed 106-unit development that is contemplated as one phase but may be developed in two phases due to financing constraints. The development will feature three- story walk-up apartments, detailed as follows: •(1) unrestricted manager’s unit •(35) one-bedroom units •(30) two-bedroom units •(40) three-bedroom units Amenities include: •Community room and Kitchen •Computer lounge •Swimming Pool •Tot-lot: small, designated playground area specifically designed for toddlers and young children HUD 2024 Adjusted Home Income Limits (Gross Income) AMI 1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons 30%$21,550 $24,600 $27,700 $30,750 $33,250 $35,700 50%$35,900 $41,000 $46,100 $51,250 $55,350 $59,450 60%$43,080 $49,200 $55,320 $61,500 $66,420 $71,340 80%$57,400 $65,600 $73,800 $82,000 $88,600 $95,150 Target: Low to Moderate income families earning 30% - 70% of the Area Medium Income(AMI) Funding Request – HOME Loan •Funding Amount: $5 million in Conditional HOME Funds •Loan Structure: Residual receipts loan, secured by the Site •Purpose: Support Project development and close funding gap •Repayment Terms: From available cash flow after operating expenses and senior obligations •Federal Compliance: •Must meet requirements under 24 CFR 92.2 and 24 CFR 92.250(b) •Includes market demand assessment, environmental review, financing plan, and subsidy layering analysis •Unit Restrictions: •20 units restricted under City HOME Regulatory Agreement •(4) Low HOME Units •(16) High HOME Units Funding Request – City Land Loan •Loan Basis: Equivalent to Site 12 sales price •Appraised Value: $3.59 million (as of January 15, 2025) •Purpose: Reduce land acquisition cost burden and maintain project feasibility •Loan Terms: •Secured by the Site •Finalized through Option to Purchase Real Property Agreement •Requires City Council approval •Unit Restrictions: •51 units restricted to Low Income households under City Land Loan Regulatory Agreement Funding Request – Impact Fee Loan •Funding Amount: $1.2 million from Low Mod Funds •Purpose: •Cover eligible City-imposed impact and permit fees •Prevent financing delays and preserve construction timelines •Loan Structure: •Secured by the Property •Memorialized through a Promissory Note •Repaid from residual receipts •Unit Restrictions: •24 units restricted under Impact Fee Loan Regulatory Agreement •12 units for Extremely Low Income (≤30% AMI) •12 units for Very Low Income (≤50% AMI) Option to Purchase Agreement Function: •Governs acquisition terms for Site 12 •Provides the Partnership site control for financing and program compliance, meeting TCAC requirements City Oversight: •Ensures due diligence and protections before conveyance •Final terms of the conveyance will be included in the Disposition and Development Agreement (DDA) which will return to City Council for approval Recommendation It is recommended that the Mayor and City Council of San Bernardino, California adopt Resolution No.2025-XX: 1.Approve a $5M Conditional HOME Funding Commitment to West Fifth Street Housing Partners LP, an affiliate of Jamboree Housing Corporation for a 106-unit affordable housing project on Site 12 and an adjacent parcel (APN 0142-522-10). 2.Authorize a $1.2M City Promissory Note using Low-Mod Funds to cover eligible impact and permit fees, repayable from project residual receipts. 3.Approve an Option to Purchase Agreement for Site 12, allowing the Partnership to acquire the property for fair market value ($3.59M) via seller carryback financing, contingent on final City Council approval of a Disposition and Development Agreement. 4.Authorize the City Manager and City Attorney (or designees) to execute related documents and take necessary actions, with final agreements returning to Council for approval. 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