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HomeMy WebLinkAboutCouncil Provided Information - 8/12/2025CRA BOARD MEETING – AUGUST 12, 2025 SALT LAKE CITY COMMUNITY REINVESTMENT AGENCY PALMER COURT LOAN AMENDMENT PALMER COURT OVERVIEW SUNRISE METRO •Operated by The Road Home •201-unit permanent supportive housing project •CRA requires 60 units to be made available as short- term weekly rentals, also known as Single-Room Occupancy (SRO) units •Units targeted at 30% AMI or less •Current 25-year forgivable loan with CRA matures April 2033 •Borrower seeks to redevelop the entire property •Requesting to amend the unique CRA loan provisions that restrict 60 units to short-term rentals PRIOR BOARD ACTION LOCATION: 999 S Main Street •April 17, 2008: Approval of the requested $3,000,000 25-year forgivable loan and associated term sheet via Resolution 627.02 PALMER COURT OVERVIEW PROPOSED REDEVELOPMENT PROJECT •Phase I: Construct a new 187-unit purpose-built permanent supportive housing project on the east parking lot; Palmer Court (Existing) Gardens at Palmer (Proposed) PALMER COURT OVERVIEW PROPOSED REDEVELOPMENT PROJECT •Phase I: Construct a new 187-unit purpose-built permanent supportive housing project (Gardens at Palmer) on the east parking lot; •Phase II: Demolish existing Palmer Court building; Gardens at Palmer (Proposed) Palmer Court Demolition PALMER COURT OVERVIEW PROPOSED REDEVELOPMENT PROJECT •Phase I: Construct a new 187-unit purpose-built permanent supportive housing project (Gardens at Palmer) on the east parking lot; •Phase II: Demolish existing Palmer Court building; •Future Phases: Development of newly available 5 acres Gardens at Palmer (Proposed) Future Phases PALMER COURT DRAWINGS Palmer Court Gardens at Palmer EXISTING LOAN TERMS: 25-YEAR FORGIVABLE LOAN •Loan was issued in 2008 •Forgiveness provisions begin in 2023 •$300,000 forgiven annually •Loan is fully forgiven at term in 2033 ISSUE: SRO UNITS ARE A CONSTRAINT TO OPERATIONS AND REDEVELOPMENT •Borrower seeks to transfer the loan and its forgiveness provisions to the new Gardens at Palmer project •Gardens at Palmer is proposed to utilize both LIHTC financing and Project-Based Voucher subsidies •SRO units rented on a weekly basis are incompatible with LIHTC regulations and Project-Based Voucher requirements, due to minimum initial lease terms •Existing SRO units can be rented on a weekly basis; however, the average tenure of a tenant in an SRO unit is 3.2 years •Borrower has expressed that modification of this requirement is critical for current and future operational viability PALMER COURT LOAN AMENDMENT REQUEST REQUEST: MODIFY REQUIREMENT FOR 60 SRO UNITS •The Road Home is requesting a modification of the weekly rental provision to allow the 60 units to have longer-term leases (12- month minimum) to assist in the redevelopment project financing. •This modification would apply to the 60 units that are in the existing Palmer Court Development, in addition to the replacement units in Gardens. •This modification will improve existing operations •This modification will ensure Borrower’s ability to unlock required capital and operating subsidy resources PALMER COURT LOAN AMENDMENT REQUEST RECOMMENDATION: GRANT MODIFICATION REQUEST, WITH ADDITIONAL BENEFITS IN FUTURE PHASES •CRA’s financial position does not change under the proposed terms •Borrower commits to prioritizing current Palmer Court SRO residents in the lease-up process of Gardens at Palmer •Borrower commits to a CRA Preference for up to 14 units in Future Phases, where CRA can identify income-eligible households at risk of displacement to be prioritized in unit leasing. Original Loan Amount $3,000,000 Total Amount Owed $3,000,000 Forgiveness Amount To-Date ($900,000) Current Amount Owed to CRA $2,100,000 Questions?