Entity Staff Report - 7/4/2021 (2)HOUSING DEVELOPMENT TRUST FUND (HDTF) LOAN REQUEST
COLONY B
MULTI -FAMILY HOUSING
RDA BOARD MEETING –MAY 4, 2021
•Through the 2019-20 budget process, $2.59 million in sales
tax funding was transferred to the RDA for the HDTF
•Purpose is to provide low-cost financial assistance to
incentivize development/preservation of affordable housing
HOUSING DEVELOPMENT TRUST FUND (HDTF)
REQUESTED ACTION
Consider approving a resolution authorizing a loan of
$1,340,000 to Colony B LLC for an affordable multi-family
housing project located at approximately
228 W. 1300 South
•Applicant: Colony B LLC –joint venture between Neighborhood Housing Solutions and Defy CoLabs
•5-story apartment building with 140 units –106 affordable to households earning 50% AMI and below for a minimum of 50 years
•$351/$379 per month at 25% AMI; $736/$792 per month at 50% AMI
•324-520 square feet
•15 units to accommodate individuals with long-term mobility issues
•11 to support youth aging out of foster care
1300 South
Colony B
Colony B
Colony B
FINANCIAL OVERVIEW
*Primary loan terms from Rocky Mountain CRC include 4.496% interest rate, hard repayment, 16 -year term,
40-year amortization.
SOURCES:
Enterprise Green Energy Rebates $168,064 1%
Federal LIHTC Equity Investor $9,599,040 46%
State Equity Investor $701,930 3%
Rocky Mountain CRC Perm. Loan $8,238,773 39%
SLC HDTF $1,340,000 6%
Olene Walker Housing Loan Fund $1,000,000 5%
TOTAL SOURCES $21,047,807 100%
USES:
Land $3,700,000 18%
Site Work $545,280 3%
Hard Costs $11,469,097 54%
Architectural and
Engineering Fees
$415,845 2%
Additional Soft Costs $112,210 1%
Contractor Fee $577,848 3%
Developer Fee $1,275,062 6%
Financing Expenses $1,004,965 5%
Syndication Costs $67,500 .32%
Contingency*$1,475,000 7%
Reserves $405,000 2%
TOTAL USES $21,047,807 100%
ABILITY TO REPAY DEBT
•Project is projected to generate positive cash flow for the entire 16-year investor period and maintain a DCR of 1.15.
This falls within HDTF policy, which requires a 1.1 DCR
•Project has immediate need for financial assistance and can break ground within 3 months of application submittal
Amount:$1,340,000
Interest Rate:1.2% -.25% reductions granted per program guidelines due to project’s proximity to a TRAX Line
*Asking for additional 1.3% reduction to meet senior lender’s 1.15 DCR requirement
Term:16 years
Amortization:40 years
Disbursement:Loan proceeds shall be disbursed through construction draws.
Repayment:Annual hard repayments beginning at the date of project stabilization, estimated to be Q1 of 2023
Security:Deed of trust on property that may be subordinate to senior financing.
Affordable Housing Covenant:A restriction shall be recorded against the property that requires continued use of the specified units as
affordable housing for 50 years (50% AMI & below).
LOAN TERMS
•Encourage a mix of income in individual projects and neighborhoods.
•Create a net increase in affordable housing units while:
o Avoiding displacement of existing affordable housing.
o Retaining and expanding the diversity of AMI and innovative housing types.
•Keep publicly-funded housing projects affordable as long as possible.
•Provide a spectrum of housing options for people of all backgrounds and incomes.
•Include affordable housing in transit-oriented developments because access to public transit
increases access to opportunities. Moderate increases in density should be encouraged along
transit corridors.
GUIDING PRINCIPALS FOR EVALUATING & APPROPRIATING
CITY FUNDS TO HOUSING DEVELOPMENTS:
The Salt Lake City Council will support and fund projects that…
MOTIONS
1.Motion 1: I move that the Board adopt the resolution to approve a loan of $1,340,000 to
Colony B LLC, for an affordable housing project at approximately 228 W. 1300 South
2.Motion 1: I move that the Board not adopt the resolution to approve a loan of $1,340,000
to Colony B LLC, for an affordable housing project at approximately 228 W. 1300 South,
and move on to the next item.