HomeMy WebLinkAbout2002-06-25 - AGENDA REPORTS - CYNCNTRY SENIOR HOUSING AGMT (2)CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:,144-,C,
Item to be presented by: Carl Newton
DATE: June 25, 2002
SUBJECT: AMENDMENT TO CANYON COUNTRY SENIOR HOUSING
DEFERRED IMPACT FEE AGREEMENT
DEPARTMENT: City Attorney's Office
RECOMMENDED ACTION
City Council authorize the City's agreement to an increase in the permissible amount of
outstanding senior debt from Twelve Million Dollars ($12,000,000) to Thirteen Million,
Five Hundred Thousand Dollars ($13,500,000), and authorize the City Manager to execute
the Amendment to Deferral Agreement and Subordination Agreement (the "Subordination
Agreement") in the form herewith presented to the City Council, subject to approval of the
City Attorney.
BACKGROUND
On January 22, the City Council conceptually approved the adjusted impact fee to reduce
the Canyon Country Senior Housing Project (200 units) by $946,432. At the same meeting,
the Council also conceptually approved the idea of having the developer defer the payment
of their fees over time through a formal agreement with the City. On March 26, 2002, the
City Council approved the Agreement for Deferral of Payment of Certain Development
Fees (the "Deferral Agreement") effectively deferring payment of $1,048,458 (the "Deferral
Amount") over a 13 -year period.
Per the terms of the Deferral Agreement, the City agreed to subordinate the Deferral
Amount to those amounts owing by the developer to the Federal Home Loan Mortgage
Corporation ("Freddie Mac"), any replacement lender to Freddie Mac, and any construction
lender or bond trustee related to the project, provided that the amount of all senior debt
outstanding to which the City would be subordinate would not exceed Twelve Million
Dollars ($12,000,000).
For the purpose of accomplishing the subordination, the Subordination Agreement was
received from the applicant on June 24, 2002. This Agreement lists three funding sources
for the project: 1) $10,900,000 in proceeds from the California Statewide Communities
Development Authority sale of Variable Rate Demand Multi -Family Housing Revenue
Bonds, 2) $400,000 in proceeds from the California Statewide Communities Development
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CANYON COUNTRY SENIOR HOUSING
June 25, 2002 — Page 2
Authority sale of Variable Rate Demand Taxable Multi -Family Revenue Bonds and 3)
$2,042,089 from a loan secured by KeyBank National Association. This places the total
outstanding senior debt for the project at $13,342,089 and subordinates the City and the
Deferral Amount to three senior parties in the event of default.
The increase in debt for the project is a result of Keybank National Association opting to
leverage a portion of their equity in cash on the project, as opposed to leaving the totality of
their interest in equity. This request to increase the amount of senior debt on the project is
consistent with previous Council direction for this project to bring the Senior Housing
Project to fruition and has no affect on the repayment schedule or terms.
Authorizing the City's agreement to an increase in the permissible amount of outstanding
senior debt and the execution of the Subordination Agreement will assist the developer
with closing all necessary loans associated with the project and allow the senior
development to take place in a timely manner.
ALTERNATIVE ACTIONS
1. Council not approve execution of the Subordination Agreement and an increase in the
permissible amount of senior debt permitted under the Deferral Agreement, and direct
staff to enforce the points of the agreement.
2. Other action as determined by Council
FISCAL IMPACT
There is no fiscal impact associated with this action. However, in the event of default, the
City will be subordinate to three parties holding senior debt, totaling up to Thirteen
Million, Five Hundred Thousand Dollars ($13,500,000).
ATTACHMENTS
Subordination Agreement (Available in City Clerk's Reading file.)
Resolution
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