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Home My WebLink About12 of 2025 - Affordable Housing Loan - Palmer Court AmendmentSALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 115 WWW.SLC.GOV · WWW.CRA.SLC.GOV P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245 SALT LAKE CITY COMMUNITY REINVESTMENT AGENCY RESOLUTION NO. _______________ Adopting Term Sheet for the Palmer Court Affordable Housing Amended Loan Agreement for Construction of the Gardens at Palmer RESOLUTION OF THE BOARD OF DIRECTORS OF THE SALT LAKE CITY COMMUNITY REINVESTMENT AGENCY APPROVING THE TERM SHEET FOR THE PALMER COURT AFFORDABLE HOUSING AMENDED LOAN AGREEMENT WHEREAS, the Salt Lake City Community Reinvestment Agency (CRA) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act, including the development of affordable housing. WHEREAS, Shelter the Homeless II, L.C. (Shelter the Homeless) is a nonprofit organization dedicated to serving individuals experiencing homelessness and working with partners to develop safe facilities and expand solutions to prevent and end homelessness in Utah. WHEREAS, on April 17, 2007, the CRA’s Board of Directors (then known as the Redevelopment Agency of Salt Lake City Board of Directors) (Board) approved Resolution No. 627.02, setting aside $3 million of CRA funds to be distributed to Shelter the Homeless as a forgivable loan with conditions requiring 60 Single-Room Occupancy (SRO) units to be made available as weekly rentals. The $3 million principal remains outstanding. WHEREAS, Shelter the Homeless’ Palmer Court facility is located at 999 South Main Street, and contains 201 units of affordable housing, including 60 units with CRA restrictions. Shelter the Homeless plans to redevelop its Palmer Court facility, which is aging and inadequate, and replace it with a development called Gardens at Palmer on a parcel just east of the existing site. Gardens at Palmer is proposed to include 187 new units of affordable housing. WHEREAS, the transfer of a majority of the existing affordable housing units to a new building will permit the demolition of the existing, inadequate Palmer Court structure, and will further allow for the development of additional affordable housing and other community benefits in future phases of the project. WHEREAS, the transfer of 60 weekly rental SRO units to the new Gardens at Palmer development would hamper redevelopment, as inclusion of weekly rental SRO units may conflict with certain requirements for key sources of funding for the project, including Low-Income Housing Tax Credits (LIHTC) and Project-Based Vouchers (PBV), as well as hamper operational viability. 12 of 2025 WHEREAS, CRA staff recommends that the Board approve the attached Term Sheet to assign the existing $3 million loan to the new project entity for Gardens at Palmer and modify certain loan provisions, including removing the requirement for SRO units to be offered as weekly rentals, and adding requirements for additional affordable housing units to be created in future project phases, while maintaining key loan terms such as the maturity date, annual loan forgiveness, and affordability levels. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Salt Lake City Community Reinvestment Agency that the Palmer Court Affordable Housing Loan Amendment as outlined in the Term Sheet attached hereto is approved, subject to revisions that do not materially affect the rights and obligations of the CRA hereunder. The Board authorizes the Director to negotiate and execute the legal agreements and any other relevant documents consistent with the Term Sheet and incorporating such other terms and agreements as recommended by the City Attorney’s office. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this day of August, 2025. Darin Mano, Chair Approved as to form: __________________________________ Salt Lake City Attorney’s Office Sara Montoya Date:_______________________ The Executive Director: does not request reconsideration requests reconsideration at the next regular Agency meeting. Erin Mendenhall, Executive Director Attest: City Recorder July 23, 2025 12th Sara Montoya, Senior City Attorney 08/14/2025 Darin Mano (Aug 15, 2025 11:36:26 MDT) Darin Mano Rachel Otto (Aug 15, 2025 13:07:11 MDT) Rachel Otto 4 EXHIBIT A – TERM SHEET Term Sheet for the Palmer Court Affordable Housing Loan Amendment Among the Salt Lake City Community Reinvestment Agency, Shelter the Homeless II, L.C. and Gardens at Palmer TRH LLC for the Development of Gardens at Palmer Purpose To assign and modify the terms of a 2008 loan agreement for $3,000,000 by and between the Salt Lake City Community Reinvestment Agency, f/k/a Redevelopment Agency of Salt Lake City (“CRA”) and Shelter the Homeless II, LC, which is operated by The Road Home Borrower”), enabling the redevelopment of Palmer Court (“Current Project”), which is located at 999 S Main Street. The redevelopment will encompass the construction of a new affordable residential development called Gardens at Palmer (“Gardens”), to be located east of the Current Project, to preserve and facilitate expansion of deeply affordable and permanent supportive housing. Parties Shelter the Homeless II, L.C. (“Current Borrower”) Gardens at Palmer TRH LLC (“Assignee Borrower”) Salt Lake City Community Reinvestment Agency (“CRA”) Properties Parcels 16-07-301-013-0000, 16-07-302-005-0000 and 16-07-301-017-0000. Eligible Use of Funds Funds have already been dispersed and expended for the acquisition of 6.23 acres and then- existing hotel located at 999 South Main Street. Terms Loan Terms annually (2023–2033); fully forgiven by April 1, 2033, in material default (beyond any applicable notice, grace, or cure Same loan terms preserved; maturity date and forgiveness schedule unchanged. SRO Requirements Category Existing Agreement Proposed Modifications and tied to mitigation for previous SRO demolitions. into effect upon amendment execution, in advance of the Affordability Existing Loan Agreement establishes rental limits for SRO units. Existing units are currently rented at rates below the 30% AMI rent limit. preserve affordability, ensuring that all units (currently proposed to be 187 units total) will be rented at deeply affordable rates meaning affordable to households at or below 30% Protections for Current Residents Existing Loan Agreement gives initial priority to former State Street SRO Hotel residents when new units at Palmer Court became available. preference to existing Palmer Court SRO residents when new units at Gardens become available. Proposed amendment also would give preference to residents displaced from other CRA projects in a limited number of units constructed in the redevelopment’s Future Deed Restrictions The requirements for the 60 SRO units are laid out within the loan agreement. for Gardens can be addressed Compliance and Legal Requirements Assignee Borrower will be required to take the following actions to meet the CRA’s compliance and legal requirements: Comply with all local, state, and federal regulations, including zoning, environmental, and fair housing laws. Execute amended loan documents (e.g. promissory notes, loan agreements, security documents, restrictive use agreements) as requested by the CRA and its legal counsel. Receive approval from the CRA and its legal counsel of all matters pertaining to title, legality of the loan, and the legality, sufficiency, and the form and substance of all documents that are requested by CRA for the loan transaction. Provide evidence of insurance in such amounts and with such coverage as requested by the CRA for the property. Such other terms as requested by the CRA’s legal counsel and staff. Conditions for Maintaining Loan Forgiveness Provisions In order for the amended loan and its terms, including forgiveness provisions, to be reassigned from the Current Borrower to Assignee Borrower, the Current Borrower and/or Assignee Borrower must meet the following conditions which must be satisfied in the CRA’s sole discretion: Obtain all financial, legal, and regulatory approvals required for the construction, completion, and operations of Gardens. To facilitate obtaining such approvals and advancing the redevelopment project, CRA will provide necessary documentation on applicable CRA policies, loan compliance, and subordination agreements, as needed. Provide the CRA with updates to Gardens’ sources and uses and operating proforma. Future Phases Tenant Preferences The demolition of the Current Project will enable approximately five acres of the site to be redeveloped beginning in mid-to-late 2028 (“Future Phases”). As part of the site’s redevelopment, the boundaries for the existing three parcels will be adjusted to include a new parcel for Gardens, and one or more parcels for Future Phases. As a condition of the amended loan terms, the Borrower, or Assignee Borrower commits to recording a deed restriction, land use restriction agreement, plat notes, or similar mechanism on one or more parcels assigned to Future Phases with the following terms: Any development of the Future Phases shall include at least 100 additional Affordable Residential Housing Units (beyond proposed 187 affordable units in Gardens). o Affordable Residential Housing Units is defined as rental units rent-restricted to households earning 60% of the area median income (“AMI”) and below, or homeownership units restricted to households earning 120% of AMI and below. Subject to all applicable Fair Housing laws and requirements of the Low-Income Housing Tax Credit (LIHTC) program and Housing Authority (as applicable), any development of the site shall give a limited tenant preference of up to 14 residential units to income- eligible households that have been displaced from other CRA-assisted properties (the CRA Preference”). The CRA Preference: o Shall remain in effect for the duration of the loan term, through April 2033; o Shall not result in a refusal to rent to any applicant based on membership in a protected class in violation of federal or state Fair Housing law; o Must be documented in a written Tenant Selection Plan approved by the CRA and, where applicable, the Housing Credit Agency or other funders; o May be implemented only with all required regulatory approvals in place. These CRA Preference restrictions shall run with the land and may be modified only by formal action of the CRA Board of Directors. o In the event that future circumstances, presently unforeseeable or undefined, render this provision impracticable, unenforceable, or contrary to applicable law or policy, the parties shall engage in good faith to modify or waive the provision as necessary. o If the Borrower or Assignee Borrower seeks to modify or remove the CRA Preference prior to April 1, 2033, it shall be their sole responsibility to formally request an amendment from the CRA. Any such request must be submitted in writing and must include clear justification, including legal, financial, or regulatory reasoning for the proposed change. CRA Resolution 12 of 2025 Palmer Court Amendment Final Audit Report 2025-08-15 Created:2025-08-12 By:Caitlin Carlino (caitlin.carlino@slc.gov) Status:Signed Transaction ID:CBJCHBCAABAAQA4X0n1hU5LuzP3BKgM8PikLsGTdXJ-U "CRA Resolution 12 of 2025 Palmer Court Amendment" History Document created by Caitlin Carlino (caitlin.carlino@slc.gov) 2025-08-12 - 11:19:29 PM GMT Document emailed to Sara Montoya (sara.montoya@slc.gov) for signature 2025-08-12 - 11:37:33 PM GMT Email viewed by Sara Montoya (sara.montoya@slc.gov) 2025-08-12 - 11:41:28 PM GMT Document e-signed by Sara Montoya (sara.montoya@slc.gov) Signature Date: 2025-08-14 - 5:43:50 PM GMT - Time Source: server Document emailed to darin.mano@slc.gov for signature 2025-08-14 - 5:43:53 PM GMT Email viewed by darin.mano@slc.gov 2025-08-15 - 4:42:54 PM GMT Signer darin.mano@slc.gov entered name at signing as Darin Mano 2025-08-15 - 5:36:24 PM GMT Document e-signed by Darin Mano (darin.mano@slc.gov) Signature Date: 2025-08-15 - 5:36:26 PM GMT - Time Source: server Document emailed to Erin Mendenhall (erin.mendenhall@slc.gov) for signature 2025-08-15 - 5:36:29 PM GMT Email viewed by Erin Mendenhall (erin.mendenhall@slc.gov) 2025-08-15 - 6:00:30 PM GMT Document signing delegated to rachel.otto@slc.gov by Erin Mendenhall (erin.mendenhall@slc.gov) 2025-08-15 - 6:00:50 PM GMT Document emailed to rachel.otto@slc.gov for signature 2025-08-15 - 6:00:50 PM GMT Email viewed by rachel.otto@slc.gov 2025-08-15 - 7:06:51 PM GMT Signer rachel.otto@slc.gov entered name at signing as Rachel Otto 2025-08-15 - 7:07:09 PM GMT Document e-signed by Rachel Otto (rachel.otto@slc.gov) Signature Date: 2025-08-15 - 7:07:12 PM GMT - Time Source: server Document emailed to Keith Reynolds (Keith.Reynolds@slc.gov) for signature 2025-08-15 - 7:07:14 PM GMT Email viewed by Keith Reynolds (Keith.Reynolds@slc.gov) 2025-08-15 - 9:21:24 PM GMT Document e-signed by Keith Reynolds (Keith.Reynolds@slc.gov) Signature Date: 2025-08-15 - 9:21:37 PM GMT - Time Source: server Agreement completed. 2025-08-15 - 9:21:37 PM GMT