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3/3/2021 - Meeting Materials REGULAR MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday, March 3, 2021 4:00 p.m. This meeting will be an electronic meeting pursuant to Salt Lake City Emergency Proclamation No.2 of 2020(2)(b). To access and participate in the meeting please visit https://saltlakecity.webex.com/saltlakecity/j.php?MTI D=md0b675914890e452242fa27c02f4c7c8 Meeting Password: mHruA8Tsp24 I, Brian Doughty, Redevelopment Advisory Committee Chair, hereby determine that conducting the Redevelopment Advisory Committee meeting at the anchor location presents a substantial risk to the health and safety of those who may be present at the anchor location. The World Health Organization, the President of the United States, the Governor of Utah, the Salt Lake County Health Department, Salt Lake County Mayor, and the Mayor of Salt Lake City have all recognized a global pandemic exists related to the new strain of the coronavirus, SARS- CoV-2. Due to the state of emergency caused by the global pandemic, I find that conducting a meeting at an anchor location under the current state of public health emergency constitutes a substantial risk to the health and safety of those who may be present at the location. Moreover, the City & County Building, which is the anchor location for Redevelopment Advisory Committee meetings, is presently closed for regular occupation due to damages sustained during the March 2020 earthquakes. Agenda 1. Roll Call 2. Briefing by the Staff A. Utah Theater Historical Documentation—Lauren Parisi, Project Manager RDA Staff will give a briefing of the Utah Theater Historical Documentation. 3. Business A. Housing Development Loan Program Policy Follow-Up—Tammy Hunsaker, RDA Deputy Director Staff will present the RDA Loan Program Policy for recommendation for approval of a resolution establishing a policy for a Housing Development Loan Program. 4. Adjournment People with disabilities may make requests for reasonable accommodation no later than 48 hours in advance in order to attend this Redevelopment Advisory Committee. Accommodations may include alternate formats, interpreters, and other auxiliary aids. This is an accessible facility. For questions, requests, or additional information,please contact the RDA at 801-535-7240. \..`1 I 'Si,,% y4 MAYOR ERIN MENDENHALL 9wargDANNY WALZ Executive Director = — - Director REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: March 22,2021 PREPARED BY: Lauren Parisi RE: Utah Theater Historic Documentation REQUESTED ACTION: Briefing regarding the Utah Theater's Historic Documentation POLICY ITEM: Central Business District—Utah Theater Redevelopment Project BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: In December of 2019,the RDA Board of Directors("Board")authorized a land write-down for the sale of the Utah Theater property(originally the Pantages Theater)located at 144 -158 S. Main Street subject to multiple contingencies. One of these contingencies required that: Prior to demolishing the Utah Theater, the RDA ensures historic elements of the theater are sufficiently documented through measured drawings,film,photographs, and/or written data to provide a detailed record to the Board and public of the property's significance. To satisfy this requirement,the RDA released an RFP for the Theater's historic documentation in March of 2020 and the selection committee ultimately chose local design firm Modern Out West to complete the project. Modern Out West's team began their documentation work inside the Theater in July of 2020. This work involved diligently sketching,painting, scanning,photographing and filming the Theater building to create the following deliverables: • Updated intensive level survey to the Utah State Historic Preservation Office's standards involving the collection of Sanborn maps, original blueprints,newspaper clippings,tax files,title reports,historic concert programs, etc. • Experimental drawings including pencil sketches,charcoal drawings,watercolors and streetscapes of the existing and original building • Architectural drawings including a site plan, elevations, floor plans, cross sections,reflected ceiling plans, analytiques and detailed drawings of architecturally significant features throughout the building • Photographs including a collection of historic photos as well as new,professional photos taken of the existing building and architecturally significant features • Drone video footage of the Theater's interior • 3D scan of the building and associated point cloud data • Virtual reality tour of the building • Interactive online archive/website accessible to the public at https://pta.lib.utah.edu/ SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET,ROOM 118 WWW.SLC.GOV WWW.SLCRDA.COM P.O.BOX 145518,SALT LAKE CITY,UTAH 84114-5518 TEL 801-535-7240 FAX 801-535-7245 Modern Out West completed their work on November 1, 2020. The material was submitted to the Utah State Historic Preservation Office(SHPO)per their intensive level survey requirements. SHPO's digital archives are housed by the University of Utah's J. Willard Marriott Library where the materials created as a part of this project can be accessed by the public. Any originals that were created such as the pencil sketches, charcoal drawings and watercolors were donated to the Marriott Library to keep within their physical archives. All of the materials were also submitted digitally to the RDA. The Salt Lake City Recorder's Office is currently working on the creation of a retention schedule for the archives,which will eventually be scanned into the City's Laserfiche system that can be accessed internally. In addition to these required archives, a substantial amount of the project materials were compiled and included on an interactive website that can be accessed publicly at https://pta.lib.utah.edu/.Here,the public can read more about the Theater's history and namesake Alexander Pantages,view photographs and architectural drawings,and even take a virtual tour of the Theater. The website link will be posted on the RDA's and City Planning's websites and the virtual tour is also accessible on Google Maps. The Marriott Library will host the website for at least five years, after which they will review their digital preservation plan and capacity to continue hosting the site. Marriott staff have also indicated that they may create a physical exhibit with the project materials in addition to collecting oral histories from those who visited the Theater during its heyday. The RDA is grateful for the work Modern Out West has done not only for creating an extremely thorough archive,but for capturing the spirit of the Theater's true grandeur and preserving its memory forever. Attachments: • Attachment A: Watercolor samples • Attachment B: Architectural drawing samples • Attachment C: Photograph samples Attachment A: Watercolor Samples ;. 4v }Cv _ I 1I i i 1 r''' r. ',7j. , .-1 ,�,S - 4. ,tfe 4a �� �+ �J �_ / .. 1t '' i1l • > ! ,9 t _I. -� rT tf 1 y* fd , i; „ i s 4 ? 1 fIkiii'10/,,, 'IA 1 , '-',r2:' A .,, ., „ ,;„., _,,i, y. _ •i ..fir r 4''t 11 _.. _ , . J r. , ,r , , . . Wj y ` . , .. , 4 ., ,-./.' ,,,,,:,.//1,,,o,.,,„ id, ,,, -.41 . rs p t /�--,1 a ; F - Attachment B: Architectural Drawing Samples 1I I I I I I I I I I 1 1 ' 1 I I I I I I I WIZ Ai tai 2 1Ea,;c 1— .k, LAL .., = (JUANantil I m; ,. - ,r . Jf . 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IN\ s. r � T ,,,,, 'Si,, MAYOR ERIN MENDENHALL 9w DANNY WALZ Executive Director — - _ Director _� Willi; , .r, . ', 1. ��rnn N�,• REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: February 26, 2021 PREPARED BY: Tammy Hunsaker RE: Housing Development Loan Program Policy Follow-up REQUESTED ACTION: Consider recommending approval of a resolution establishing a policy for a Housing Development Loan Program. POLICY ITEM: Affordable housing. BUDGET IMPACTS: N/A. EXECUTIVE SUMMARY: Over the past several months, the Redevelopment Agency of Salt Lake City ("RDA") has been working to establish a Housing Development Loan Program ("Program") intended to provide a one-stop-shop for community partners to access resources for the development and preservation of affordable housing. To this end, a Housing Development Loan Program policy resolution is provided as Attachment A for consideration by the Redevelopment Advisory Committee ("RAC"). The formation of the Program has been several months in the making. During this time,RDA Staff has provided multiple briefings to RAC and the RDA Board of Directors ("Board") on various RDA housing topics, including housing activities, requirements, and outcomes. Additionally, in February of 2020, RDA Staff briefed the Board on the Draft Salt Lake City Housing Implementation Framework, jointly developed by the RDA, Department of Community and Neighborhoods ("CAN") and Division of Housing and Neighborhood Development ("HAND"), that defines the roles and responsibilities of housing activities across City divisions and departments. This framework includes the centralization of City and RDA housing development resources under the RDA. In December of 2020, RAC recommended approval of an RDA Housing Allocation Funds Policy ("Funds Policy") that establishes guidelines for allocating and directing resources for the development and preservation of housing. The Funds Policy was adopted by the Board in February of 2021. The last step of the process to centralize access to housing development resources is the establishment of the Program as discussed herein. SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV•WWW.SLCRDA.COM P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 FAX 801-535-7245 ANALYSIS & ISSUES: A draft Housing Development Loan Program Policy resolution is provided as Attachment A for the RAC's review and consideration. Once approved by the Board, this policy is intended to be utilized for the deployment of any housing funds allocated to the RDA for the construction and preservation of affordable housing. Highlights of the policy include the following: • Purpose: The purpose of the program is to provide low cost financial assistance to incentivize the development and preservation of affordable housing within Salt Lake City municipal boundaries. The HDLP shall provide a centralized application, underwriting, and approval process regardless of the fund source. • Intent: While specific funding priorities shall be established on an annual basis, the policy provides several overarching intent statements to clarify the desired outcomes of the HDLP. These intent statements include items relating to the equitable distribution of affordable housing, that funding be provided as a loan and not a grant, anti-displacement, and sustainability among others. • Funding Allocations & Priorities: On an annual basis, funding allocations and priorities for the HDLP shall be proposed to the Board through the annual budget process as established in the Funds Policy. Thereby establishing a process for HDLP resources to be directed to specific policy priorities depending on current needs and objectives. • Administration of Funds: Provides for the administration of funds through a transparent notice of funding availability ("NOFA") process. Various sources of funds may be combined into a consolidated NOFA or a NOFA may be issued for a specific funding source. NOFAs could be offered on an annual basis or multiple times per year and can be competitive or open-ended depending on availability of funds, priorities, and demand. • Underwriting Guidelines: Creates standardized underwriting guidelines for three types of loans: 1)Gap Financing: Rental Construction to Permanent, 2) Property Acquisition, and 3) Gap Financing: Homeownership Construction. A uniform set of underwriting policies shall set expectations for both applicants and the Board. • Approval Process: Establishes a standardized approval process that includes a unified review committee that will evaluate applications and provide a recommendation to the Board for consideration. Previously, the review and approval process for affordable housing development loans has varied based on the source of funds and/or program. PREVIOUS BOARD ACTION: • December 2017: The Board adopted a motion directing RDA Staff to draft an RDA Housing Allocation Policy. • May 2018 to March 2019: RDA Staff presented a series of briefings to RAC and the Board regarding housing, including on topics such as historical practices and funding allocations, statutory requirements, and interdepartmental coordination. • June 2019 and June 2020: The Board and Salt Lake City Council allocated sales tax funds to the RDA with legislative intent of consolidating loan administration for the development of affordable housing into a single location. • January - February 2020: RDA Staff briefed RAC and the Board on the Draft Salt Lake City Housing Implementation Framework, a framework that outlines the various roles and responsibilities across City divisions and departments for the implementation of housing. • July 2020: RDA Staff proposed two draft frameworks that were envisioned to be expanded into legislative policies that would carry out the Board's direction and intent to 1) direct the allocation of resources for affordable housing development and preservation and 2) consolidate loan administration for the development of affordable housing into a single location. • December 2020: RDA Staff presented a draft RDA Housing Allocation Funds Policy Resolution and briefed RAC and the Board on the forthcoming draft Housing Development Loan Program Policy. ATTACHMENTS: Attachment A: Housing Development Loan Program Policy Resolution REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. Housing Development Loan Program Policy RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY ADOPTING A HOUSING DEVELOPMENT LOAN PROGRAM POLICY WHEREAS, Salt Lake City has an adopted housing pla at identifies housing needs, priorities, and goals on a citywide basis ("Housing Plan"). WHEREAS,the Redevelopment Agency of Salt Lake City("RDA")has adopted project area plans that identify housing needs,priorities, and goals on a project area basis("Project Area Plans"). A WHEREAS, the RDA supports the implementation of the Housing Plan and Project Area Plans through various funding sources that are further described'n the RDA Housing Allocation Funds Policy. Ilk WHEREAS,through the RDA Housing Allocat nds Policy,the Board may dedicate funds to be administered for the development and preservation of affordable housing. WHEREAS,the Board of Directors of the Redevelopment Agency of Salt Lake City ("Board")desires to create a program to centralize the application, underwriting, and approval process across all funding sources,providing a one-stop-shop for community partners to access resources for the development and preservation of affordable housing. NOW,THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY,that the following policy for a Housing Development Loan Program are adopted: 1. PURPOSE r The purpose of the Housing Development Loan Program("HDLP")is to provide low cost financi 'stance to incentivize the development and preservation of affordable housing within Sa e City municipal boundaries. The HDLP shall provide a centralized application, underwriting, approval process regardless of the fund source. 2. INTENT The Board intends th nds allocated through the HDLP: a. Provide a mix of affordable housing, serving a range of households and income levels, consistent with income limits and affordability requirements for each fund source,to promote housing opportunity and choice throughout the City for household sizes ranging from single persons to families. b. Foster a mix of household incomes in projects and neighborhoods and to disperse affordable housing projects throughout the City to achieve a balance of incomes in all neighborhoods and communities. Page 1—Attachment A:Draft Housing Development Loan Program Policy c. Promote equity and anti-displacement efforts through the development and preservation of affordable housing in low-income neighborhoods where underserved groups have historic ties, including neighborhoods where low income individuals and families are at high risk of displacement. d. Contribute to the development of sustainable,walkable neighborhoods to expand housing choice near transportation, services, and economic opportunity. e. Support an array of scale of project types, including detached housing, accessory dwelling units,rowhouses, and small to large scale multifamily buildings, that contribute to neighborhood context and livability. Ali f. Incorporate green-building elements and energy efficiency to lower housing expenses, conserve resources, and promote resiliency. g. Leverage private and non-city funding sor to ens e greatest number of quality affordable housing units are preserved or produced. h. Be provided as loans that are repaid over time and not grant , ivable loans, or indefinitely deferred loans. 3. SOURCE OF FUNDS HDLP activities shall be funded through a combination of fund sources(collectively the "Housing Funds") as established through the RDA Housing Allocation Funds Policy. Funding allocations shall be administered through the HDLP to a project directly from an individual fund source with revenues, expenditures, interest,payments and repayments accounted for from the fund source. 1.00 Each of the individual fund sources that comprise the Housing Funds operates under separate state or local laws and regulation. Laws and regulations include restrictions on the incomes of households served,maximum allowable rents, and eligible activities. 4. ANNUAL BUDGET PROCESS , As further described in the RDA Housing tion Funds Policy,the RDA shall present an Annual Housing Development Funding Strategy"Funding Strategy"prior to the annual budget process hat shall include proposed funding priorities and revenues to be administered through the HD or the next fiscal year. The Board shall consider the Funding Strategy as part of the annual b adoption process. 5. FUNDING PRIORITIES To provide flexibility to address current needs and policies, funding priorities will be proposed on an annual basis through the Funding Strategy, subject to approval by the Board. Funding priorities shall align with policies as adopted by the Board and Salt Lake City Council including the Housing Plan,Project Area Plans,RDA Guiding Framework,and RDA Housing Allocation Funds Policy. 6. FUNDS ADMINISTRATION PROCESS Funding shall be administered through a transparent notice of funding availability("NOFA") process and shall incorporate the funding priorities as determined annually by the Board. Funds from multiple fund sources may be combined into a consolidated NOFA or a NOFA may be issued from one fund source.NOFAs may be offered on an annual basis or multiple times per Page 2—Attachment A:Draft Housing Development Loan Program Policy year and can be competitive or open-ended depending on availability of funds,priorities, and demand. 7. BASIC ELIGIBILITY Projects eligible for funding through the HDLP shall at a minimum meet these basic eligibility requirements, as well as specific requirements that may be set forth in individual NOFAs as they are issued. a. Applicant Types: Eligible applicants include entities and organizations with affordable housing development experience, as follows: i. For-profit corporations,partnerships,joint ventures, or sole proprietors. ii. Private incorporated non-profit agencies with IRS 501(c)designation. iii. Public housing agencies or units of local government. b. Project Types: The new construction or substantial rehabilitation of affordable,mixed- use and/or mixed-income housing. c. Uses of Funds:Land/property acquisition,hard construction site improvements, and related soft costs. d. Area Median Income("AMI"):AMI requirements shall reflect the olicies and regulations of the Hou ' unds as defined through the RDA Housing Allocation Funds Policy. e. Financing Gap: Projects shall demonstrate that RDA funding is necessary for the project to succeed and that the request is reasonable. Applicants must obtain commercial loans sized with the highest loan-to-value and lowest debt service parameters that are commercially available in the marketplace and aggressively pursue other funding sources to the fullest extent possible to minimize the HDLP funding request. f. Site Control:Evidence of site control must be demonstrated through ownership, 4option, sale agreement, long-term leasequivalent. Policies and Master Plans: Projects shall align with the Housing Plan,Project Area Plans,Master Plans, and other applicable adopted plans and policies. h. ,'400d Standing: Applications and all of their affiliated entities must be in good standing on all existing contracts administered by Salt Lake City,the RDA,Utah Housing Corporation, and other State and local entities. i. Relocation Plan(if applicable): Displacement is strongly discouraged. However, if it is necessary and unavoidable, the developer must submit a relocation plan that complies with applicable federal, state, and local policies for temporary or permanent displacement. j. Design: Projects shall align with applicable design guidelines and comply with all applicable Salt Lake City building and zoning codes and ordinances. k. Affordable Housing Restriction: A restriction shall be recorded against the property that requires continued use of the specified units as affordable housing for a minimum of 30 years for rental and 15 years for homeownership. A minimum of 20%of the project's units must be deed-restricted affordable. Page 3—Attachment A:Draft Housing Development Loan Program Policy 8. UNDERWRITING STANDARDS Funding shall expand housing opportunities for low-and moderate-income households by reducing a project's financing cost.Flexibility shall be provided to accommodate a wide range ofprojects that may be dependent upon myriad of underwriting standards by outside lenders. With this flexibility in mind, funding shall generally be provided as loans pursuant to the terms and conditions outlined in Exhibit A. 9. EVALUATION &APPROVAL PROCESS For each issued NOFA,the RDA shall evaluate and consider applications for approval as follows: a. Eligibility Review: Funding applications are ini ' eviewed and evaluated in detail by RDA staff based on the requirements liste specific Housing Funds requirements, and additional criteria publis t levant NOFA. b. Review Committee: For applications that meet the basic ' 'bility requirements, applications and supporting materials shall be forwarded t view committee that shall be comprised of members with experience relevant to t ordable housing industry, and may be comprised of RDA/City staff, finance pro als, affordable housing experts, and/or real estate development professionals. The w committee will analyze and rank applications based on the polices contained her d the criteria published in the NOFA. Projects that the Committee finds to r competitively compared with other proposed projects of similar type shall be recommended to the RDA Board for a funding allocation. c. RDA Board of Directors: The RDA Board of Directors shall make the final selection of projects to receive a funding allocation. d. Funding Commitment: The project funding process shall be carried out in two subparts as follows: i. Conditional Commitment Period: The RDA shall issue a Conditional Commitment letter to those applications that are selected for a funding allocation by the RDA Board. The Conditional Commitment letter between the RDA and the applicant shall contain the coy ants,terms and conditions upon which the RDA may provide financial asslEance to the proposed project once financial, legal, and regulatory approvals are obtained. ii. 'rm Commitment&Loan Closing: Projects that successfully meet conditions be invited to execute a Letter of Commitment that finalizes the loan terms, s to a set of conditions precedent to closing. 7. MONITORING AND CQMPLIANCE The RDA shall be required to monitor, or contract with a third party to monitor,the projects funded through the HDLP. Monitoring shall evaluate and ensure that projects are complying with affordability requirements and other requirements as determined in the loan agreement. Page 4—Attachment A:Draft Housing Development Loan Program Policy EXHIBIT A: Standard Loan Terms and Conditions Standard loan terms and conditions for I)Gap Financing:Rental Construction to Permanent,II) Property Acquisition, and III)Gap Financing:Homeownership Construction are as follows: I. GAP FINANCING: RENTAL CONSTRUCTION TO PERMANENT Limits to Assistance: • Maximize Other Sources:Applicants must demonstrate that they have maximized other available financing sources thereby limiting HDLP funding to the lowest amount necessary to close the funding gap and assure project asibility. • Loan to Value: A loan-to-value limit is not appli owever, land and project costs shall be reasonable as compared similar projec e, scope, and location. • Debt Service Coverage Ratio(DSCR): Repayment t s for amortizing HDLP loans will be calculated as described herein and will be based on a DSCR of 1.10 inclusive of the RDA's loan and all senior debt. • Cash Flow:For loans that qualify for a cash flow repayment structure,pursuant to the standards contained herein, applicants must demon to that theIHIDLP loan can be repaid within its scheduled term or at th of . Repayment: • Depending on the project s capacity for repayment, loans may be repaid as an amortized loan, a cash flow loan based on available cash flow, or a combination of both types of loan. o Amortized Loan: The RDA will determine what portion of its loan can be paid on an amortized schedule with required payments using the DSCR standards contained herein. o Cash Flow Loan: If full amortization is not feasible due to limited cash flow, funds shall be repaid from an agreed upon percentage split of surplus cash flow. Cash flow loans shall be considered only for projects that provide a high level of affordability,target a difficult to serve population,or include other significant public benefit. t the RDA's discretion,payments may not be required and interest may not accrue or e at a reduced interest rate during the construction and lease-up phase. Upon c tion of construction, lease-up,project stabilization,or other fixed date, loans shal egin to accrue interest and shall be subject to repayment. • Any accrued but unpaid interest and principal is due in full at loan maturity. • Loans can be prepaid in whole or in part at any time without penalty. Prepayment does not end the affordability period before its original end date. Term: • RDA loan terms will generally match the term of permanent senior debt, generally up to a maximum of 30-years for projects with non-HUD financing and up to a maximum of 40 years for projects with HUD financing. • Commencement of the loan term and/or repayment period may be deferred for a period of time to allow for completion of construction and lease-up phase. Page 5—Attachment A:Draft Housing Development Loan Program Policy Interest Rate: • Base Interest Rate: The base interest rate shall be as follows: o Amortized Loans: The current U.S. Treasury Yield Curve Rate for the loan term plus 1%, locked in within a month of loan closing,with a maximum base interest rate of 3%. The interest rate for loans with a term longer than 30 years will be based on the 30-year U.S. Treasury Yield Curve Rate. o Cash Flow Loans: The current U.S. Treasury Yield Curve Rate for the loan term plus 2%, locked in within a month of loan closing,with a maximum base interest rate of 4%. The interest rate for loa 'th a term longer than 30 years will be based on the 30-year U.S. Treas d Curve Rate. • Interest will accrue as simple interest. • Funding Priority Incentives: Projects shall have the a o reduce the Base Interest Rate if the project meets the current funding priorities as established annually pursuant to the RDA Housing Allocation Funds Policy. For each funding priority met,the project is eligible to receive a .5%reduction from the Base Interest Rate,with the ability to reduce the interest rate to a minimum of 1%. • Interest rates are subject to an adjustment, of up a 1%deviation,based on project cash flow and debt coverage ratio calculated at time of application and underwriting. Affordability Restriction: • Affordability covenant shall be recorded on the property and shall extend for at least the same period as the senior financing or a minimum of 30 years,whichever is greater. Subordination to Senior Debt: • HDLP loans may be subordinated to leverage private financing,with the priority among subsidy lenders typically established based upon size of the loans. Security: 1 Adequate security shall be required, generally in the form of a deed of trust, romissory note, and guarantees. Nur Developer Fee: • Given the rent restrictions on affordable housing projects, affordable housing developments typically do not have significant cash flow after debt service on their primary loans. As such, developer fees are recognized as a significant part of the income on which affordable housing organizations depend for their operations. For projects utilizing a low-income housing tax credit("LIHTC")program,the calculation to determine a maximum developer fee shall be consistent with Utah Housing Corporation's policy,which caps the maximum developer fee. The maximum developer fee for projects not utilizing LIHTC will be evaluated on a case-by-case basis in the context of the proportion of affordable units and AIVIIs. Borrower Contribution: Page 6—Attachment A:Draft Housing Development Loan Program Policy • Borrowers shall contribute a source of financing to the project,whether through an equity contribution or a deferred developer fee or a combination of both.The level of borrower contribution will be considered on a case-by-case basis and will be evaluated based on the type of ownership entity and level of public benefit provided by the project. • For Low Income Housing Tax Credit("LIHTC")projects that are requesting a cash flow loan,the borrower shall maximize the amount of deferred developer fee allowed under Utah Housing Corporation's standards to be allowed in tax credit basis and acceptable for their tax credit investor in that this amount must be payable within a time frame allowed by the LIHTC program as approved by the project's tax counsel. • Projects that have not maximized a developer fee,pursuant to the standards contained herein, or that serve lower AMIs or special populations, such as permanent supportive housing,may have the ability to waive the borrower contribution. Disbursement of Funds: • Funding shall be disbursed as con 'on draws evidenced by supporting documentation demonstrating that w as been completed and that e project is in good financial and legal standing. Other • Loans are non-assumable I o b ' en permi rom the RDA. IIIII Page 7—Attachment A:Draft Housing Development Loan Program Policy II. PROPERTY ACQUISITION Limits to Assistance: • Maximize Other Sources:Applicants must demonstrate that they have maximized other available financing sources thereby limiting HDLP funding to the lowest amount necessary to close the funding gap and assure project feasibility. • Loan to Value: Loans will be sized to a loan-to-value limit of 90%of the as-is appraised value inclusive of the RDA's loan and all senior debt. Repayment: • Depending on the applicant's capacity for repay oans may be repaid as a deferred or interest-only loan. • Any accrued but unpaid interest and principal is due 1 at loan maturity. • Loans can be prepaid in whole or in part at any time wit enalty. Prepayment does not end the affordability period before its original end date. Term: • The maximum loan term shall be 24-months with the ability for one 12-month extension if the project is demonstrating a progression toward construction. Interest Rate: • Base Interest Rate: The base interest rate shall be the current U.S. Treasury Yield for the loan term plus 2.5%, locked in within a month of loan closing,with a maximum base int rest rate of 3%. Nir • Interesivill accrue as simple interest. • Funding Priority Incentives:Projects shall have the ability to reduce the Base Interest Rate if the project meets the current funding priorities as established pursuant to the RDA Housing Allocation Funds Policy. For each funding priority met,the project is eligible to receive a.5%reduction from the Base Interest Rate,with the ability to reduce the interest rate to a minimum of 1%. • terest shall accrue on all loan proceeds disbursed commencing on the date of rsement. • Interest rates are subject to an adjustment, of up a 1%deviation,based on project cash flow and debt coverage ratio calculated at time of application and underwriting. Affordability Restriction: • Affordability covenant shall be recorded on the property and shall extend for a minimum of 30 years. Subordination to Senior Debt: • HDLP loans may be subordinated to leverage private financing,with the priority among subsidy lenders is typically established based upon size of the loans. Security: Page 8—Attachment A:Draft Housing Development Loan Program Policy • Adequate security shall be required, generally in the form of a deed of trust, promissory note, and guarantees. Developer Fee: • Developer fees are not an eligible cost for a property acquisition loan. Disbursement of Funds: • Funding may be disbursed at loan closing. Other • Loans are non-assumable without written permission from the RDA. Page 9—Attachment A:Draft Housing Development Loan Program Policy III. GAP FINANCING: HOMEOWNERSHIP CONSTRUCTION Limits to Assistance: • Maximize Other Sources:Applicants must demonstrate that they have maximized other available financing sources thereby limiting HDLP funding to the lowest amount necessary to close the funding gap and assure project feasibility. • Loan to Value: Loans will be sized to a loan-to-value limit of 90%of the as-is appraised value inclusive of the RDA's loan and all senior debt. Repayment: • Loans shall be repaid from the sale of housing units in the project. HDLP funds may be repaid after payout to senior loans have been accounted for. • Any accrued but unpaid interest and principal is due in 1 at loan maturity. • Loans can be prepaid in whole or in part at any time wit enalty. Prepayment does not end the affordability period before its original end date. Term: , • The maximum loan term shall be 36-moo Interest Rate: 11 Nr • Base Interest Rate: The base interest rate shall be the current U.S. Treasury Yield for the loan term plus 2.5%, locked in within a month of loan closing, with a maximum base intere3%. Interest will accrue as simple interest. • Funding Priority Incentives:Projects shall have the ability to reduce the Base Interest Rate if the project meets the current funding priorities as established pursuant to the RDA Housing Allocation Funds Policy. For each funding priority met,the project is eligible to receive a.5%reduction from the Base Interest Rate,with the ability to reduce the interest rate to a minimum of 1%. • Interest shall accrue on all loan proceeds disbursed commencing on the date of disbursement. • Interest rates are subject to an adjustment, of up a 1%deviation,based on project cash i �and debt coverage ratio calculated at time of application and underwriting. Affordability Restriction: • Affordability covenant shall be recorded on the property and shall extend for a minimum of 30 years. Subordination to Senior Debt: • HDLP loans may be subordinated to leverage private financing,with the priority among subsidy lenders is typically established based upon size of the loans. Security: • Adequate security shall be required, generally in the form of a deed of trust, promissory note, and guarantees. Page 10—Attachment A:Draft Housing Development Loan Program Policy Developer Fee: • Developer fees will be considered on a case-by-case basis and will be evaluated based on the affordability levels of the project, type of ownership entity, and level of public benefit provided by the project. Borrower Contribution: • Borrowers shall contribute a source of financing to the project,whether through an equity contribution or a deferred developer fee or a combination of both.The level of borrower contribution will be considered on a case-by-case basis and will be evaluated based on the affordability levels of the project, type ownership entity,and level of public benefit provided by the project. • Deferred developer fees shall be paid after the HDLF loan has been fully repaid. Disbursement of Funds: • Funding shall be disbursed as construction draws evidenced by supporting documentation demonstrating that work has been completed and that the project is in good financial and legal standing. Other 1 • Loans are non-assumabl t written permission from the RDA. Page 11—Attachment A:Draft Housing Development Loan Program Policy Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City,this day of ,2021. ,Chair Approved as to form: Salt Lake City Attorney's Office Allison Parks Date: The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall,Executive Dire Attest: SO City Recorder , 1 S I 11)11 I 1 I I IS Page 12—Attachment A:Draft Housing Development Loan Program Policy