R-003-2018 - Citywide Affordable Housing - Capitol Motel PropertiesR 18-2
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. R-3-2018
Citywide Affordable Housing — Capitol Motel Properties
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING THE TERM SHEET FOR A LOAN TO HOUSING
ASSISTANCE MANAGEMENT ENTERPRISE FOR A CITYWIDE AFFORDABLE
HOUSING PROJECT LOCATED AT 1749 SOUTH STATE STREET, 1767 SOUTH STATE
STREET, AND 120 EAST WILSON AVENUE.
WHEREAS, the Redevelopment Agency of Salt Lake City ("RDA") was created to
transact the business and exercise the powers provided for in the Utah Title 17C Community
Reinvestment Agency Act (the "Act").
WHEREAS, the Act provides that tax increment funds may be used outside of a project
area for the purpose of increasing the affordable housing supply within the boundaries of Salt Lake
City.
WHEREAS, pursuant to a motion adopted by the RDA Board of Directors on December
12, 2017, the Board set aside $3,200,000, contingent upon an application and review process, to
facilitate the redevelopment of property located at 1729 South State Street, 1749 South State Street,
1767 South State Street, and 120 East Wilson Avenue (collectively, the "Capitol Motel
Assemblage").
WHEREAS, the RDA facilitated a loan application and review process pursuant to the
RDA's loan program policy for a proposed mixed -income housing development to be constructed
at the Capitol Motel Assemblage ("Project").
WHEREAS, on December 21, 2017, the RDA's Finance Committee reviewed the loan
application.
WHEREAS, based on the Finance Committee's recommendations, the RDA staff
recommends the attached set of terms for an affordable housing loan for site acquisition and
predevelopment costs to Housing Assistance Management Enterprise, a Utah nonprofit
corporation, as Borrower, for the Project ("Term Sheet").
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
REDEVELOPMENT AGENCY OF SALT LAKE CITY, that the loan outlined in the Term Sheet
attached hereto is approved, subject to minor changes that do not materially affect the rights and
obligations of the RDA hereunder.
Passed by the Board of Directors of the/�Zedevelopment Agency of Salt Lake City, this 9th day
of Jan, 2018
Transmitted to the Executive Director on January 10 , 2018
The Executive Director:
does not request reconsideration
requests reconsideration at the next regular Agency meeting.
Jacqueline M. Biskupski, Executive Director
Approved as to form:Katherine N. Lewis
46.•
Attest:
Salt Lake City Attorney'•,
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HB_ATTY-#66424-vl-RDA_ Resolution_Capitol_ Motel_Acquisition_Loan.doca
TERM SHEET
AFFORDABLE HOUSING LOAN
CAPITOL MOTEL PROJECT
LOAN TERMS
Amount:
Not to exceed $3,200,000
Phasing of Loan
Allocations:
The loan shall be allocated in two phases as provided below
PHASE I
Type:
Acquisition financing
Amount:
Not to exceed $2,750,000
Eligible Uses:
Up to $2,700,000 for property acquisition and $50,000 for due diligence costs.
LTV:
Loan to Appraised Value of the Land: 90%
Term:
2 years (24 months)
Amortization:
30 years
Interest Rate:
2.87%*
*Note: The interest rate has been calculated as per the RDA Loan Program, as follows:
• Base: 4.87% (2-Year U.S. Treasury Yield Rate of 1.87% plus 300 basis points)
• Interest rate reductions:
- Economic Impact: -0.5%
- Affordable Housing - AMI Targets: -0.5%
- Affordable Housing — Target Populations: -0.5%
- Sustainability: -0.5%
Payments:
Amortizing monthly payment of principal and interest over a 30-year period, estimated
to be $11,402 per month.
Disbursement:
Upon closing of the properties.
Prepayment Penalties:
None
Collateral:
A mortgage lien, that may be subordinated, on properties located at 1729 S State Street,
1749 S State Street, 1767 S State Street, and 120 E Wilson Ave.
Affordability
Requirement:
The RDA will record a restrictive use covenant to require development of affordable
housing with a 50-year affordability period.
Other Requirements:
Project Noticing: On a quarterly basis, the Applicant shall provide the RDA with
written notice to provide assurance that, as the Project progresses, it achieves the
provisions of the loan agreement. Notice shall be provided on the following: 1) updates
to proposed development concepts and 2) intent to apply for and notice of award or
denial of LIHTC and/or other affordable housing subsidies.
PHASE II
Type:
Construction -to -permanent financing
Amount:
Not to exceed $3,200,000*
*Note: This includes the outstanding balance of the acquisition loan provided through Phase 1 and any
additional funds up to $3,200,000.
LTV:
Loan to Appraised Value of the Project: 95%
Term:
20 years (240 months)
Amortization:
30 years
Interest Rate:
1.00%
Payments:
Deferred payments unless there is sufficient cash flow. If the project generates cash
flow after outstanding obligations have been paid, 50% of cash flow shall be provided
as a loan payment.
Loan Forgiveness:
At year 20 the outstanding balance may be forgiven if the project has remained in good
financial and operating condition and continues to meet affordability standards and
requirements.
Prepayment Penalties:
None
Collateral:
A mortgage lien, that may be subordinated, on properties located at 1729 S State Street,
1749 S State Street, 1767 S State Street, and 120 E Wilson Ave.
Contingencies:
Phase II Approval:
The Applicant shall be required to meet the following conditions prior to the execution
of Phase II of the loan allocation process:
• Successfully obtaining sufficient sources of permanent financing.
• Resolution of pending commercial sign matters.
• Demonstration of a financing gap.
• Successfully completing an RDA design review process
• Establishment of a development concept that includes the following:
- A mixed -income project with no less than one-third of the total
residential units provided at market rents and no less than one-third of the
residential units provided at affordable rents (60% AMI and below).
- Ground -floor commercial space or flex space.
• Successfully obtaining zoning and permitting approvals.
Evaluation and approval of Phase II may be provided by the RDA Finance Committee
in accordance with the terms outlined herein.