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Home My WebLink AboutCORNERSTONE HOUSING PARTNERS LP; C/O JAMBOREE HOUSING CORPORATIONIN ,UPANCE NOT RE'OUIMED W0I3K 10AY t'I30CFED MAYOR CL FIK OF, COUNCIL Miguel A. Pulido MAYOR PRO TEM DEC 2 7 2018 Michele Martinez COUNCILMEMBERS P,David Brniento ('q,. CVArn, Vioente Sarmienko UU 6• o:. Jose Solorio gsJ fi'\Id , Sal Tinalero`�g;.°7®`,°`'� Juan Villages November 20, 2018 CITY OF SANTA ANA 20 Civic Center Plaza • P.O. Box 1988 Santa Ana, California 92702 www.santa-ana.ora Cornerstone Housing Partners LP c/o Jamboree Housing Corporation Attn: Laura Archuleta 17701 Cowan Avenue, Suite 200 Irvine, CA 92614 A-2018.280 CITY MANAGER Raul Godinez Ii CITY ATTORNEY Sonia R. Carvalho CLERK OF THE COUNCIL Maria D. Huizar Re: 126 Unit Affordable Housing Apartment Project Known as Cornerstone Apartments Located at 805 - 904 South Minnie Street, Santa Ana, California Dear Ms. Archuleta, On November 20, 2018, the City of Santa Ana and the Housing Authority of the City of Santa Ana (collectively, the "City") authorized the City Manager and Executive Director of the Housing Authority to execute a commitment letter to: 1) resubordinate the current affordable housing loans for the Cornerstone Apartments at 805 - 904 South Minnie Street, Santa Ana, California ("Property") to tax-exempt multifamily bonds (Bonds) in an amount not to exceed $8,700,000 for the rehabilitation of the Property, and 2) execute the necessary documents to level all rents onsite at the 50% Tax Credit Allocation Committee (°TCAC") rents instead of the existing State of California Health and Safety Code rents. The City previously has made forty-two loans to Wakeham -Grant Apartments L.P. ("Existing Owner") in the aggregate principal and interest amount of $9,132,442 secured by deeds of trust encumbering all or portions of the Property (individually, a "City Loan" and, collectively, the "City Loans"). A description of each City Loan is set forth on Exhibit "A" attached hereto. Cornerstone Housing Partners LP (the "New Owner") desires to purchase the Property from Existing Owner, in order to obtain a new construction and permanent tax-exempt loan (the "Senior Loan") to acquire and substantially rehabilitate the Property, to obtain a seller carryback loan from Existing Owner to pay a portion of the purchase price for the Property ("Carryback Loan"), to obtain a new allocation of low income housing tax credits pursuant to Section 42 of the Internal Revenue Code ("Tax Credits") and to assume the City Loans. SANTA ANA CITY COUNCIL Miquel A, PAdo MnIM. Martinez Vicente Sarmiento Jose Serene P. David aenavldes Juan Ullogas Sal Twipo Mayor Ma,rA Pro Tem, Ward 2 Ward 1 Ward 3 Ward 4 Ward 5 Ward G roa�IL&[22S t - naer m narfinez(oTsanfa-ana.ora vsarmienlo(tlsanta-ana.orn Isolorio(Za santa-ane.orn dbenavdesftwta-a tH pl'a 'villeaas(o_ la��{„ -.r rg slinaiero(�santa_ana nro The City now commits itself, subject to the terms of this letter, to permit the New Owner to assume the City Loans and to subordinate the lien of the deeds of trust securing the City Loans and the regulatory agreements encumbering the Property related to the City Loans to the lien of the deed of trust securing the Senior Loan (the "Assumption"), but not the Carryback Loan on the following terms and conditions: Borrower: Cornerstone Housing Partners LP Collateral: Deed of Trust encumbering the Property subordinate to the Senior Loan, but senior to the Carryback Loan. Assumed Loan Amount: Outstanding principal balance and accrued and unpaid interest on the City Loans, less any net proceeds from the sale of the Property to New Owner (but excluding the Carryback Loan). Non -Recourse: The City Loans shall remain non-recourse to New Owner and the partners of New Owner. Assumption Documents: The form of the assumption agreement and Subordination Agreements for the Senior Loan shall be approved by the City and Housing Authority after the New Owner obtains their Tax Credits. Commitment Expiration Date: November 20, 2020 Additional Terms: The City and Authority agree to subordinate the City Loans to a maximum of $8.7 million in Bonds. The City Loans will continue to be repaid from 50% of the residual receipts generated by the Project. Residual receipts will be defined as cash flow remaining after payment of approved cash operating expenses, Bond debt service, repayment of the deferred Developer Fee, and payment of approved Limited and General Partner asset management fees. 100% of the Project's cash flow after payment of operating expenses and Bond debt service will be allocated to repaying the deferred Developer Fee. The payment of Limited Partner asset management fees will terminate at the end of 15 years. The rents may be increased at the Property up to 50% of Area Median Income. Prior to the levying of any rent increase, Jamboree will provide a minimum 60 -day notice instead of the statutory 30 -day notice. This Commitment contains the entire understanding between New Owner and the City with respect to the Assumption, supersedes all prior oral or written communications, and may not be modified or waived except in writing, and signed by the party to be bound thereby. This Commitment and all Assumption documents shall be governed by California law. This Commitment is personal to New Owner and is not assignable or transferable by New Owner. The fulfillment of this Commitment is subject to the approval of various Subordination Agreements and Amendments to the Loan Agreements by City Council and the Housing Authority. If you have any questions or require any additional information regarding this Commitment, please contact Judson Brown, Housing Division Manager, by telephone at (714) 667-2241 or by e-mail at 'brown &santa-ana.org. Sincerely, Raul Godirrez II City Manager City of Santa Ana N Maria D. Hulzar Clerk of the Council Marcia H4unizar,/f Recording Secretary Steven A Mendoza Executive Director Housing Authority of the City of Santa Ana