Title
a. Authorize the Auditor-Controller to increase revenue and appropriations in Economic Development Department's Boronda Housing Set-Aside Unit, 176-8202-DEO013 by $300,000;
b. Approve a loan in the amount of $300,000 between the Housing Successor Agency of the County of Monterey and South County Housing Corporation (SCH) for the redevelopment of the Camphora Labor Camp; and
c. Authorize the Director of the Economic Development Office to make minor revisions to the loan documents (if necessary), execute the loan documents, and execute subsequent loan related documents, including subordination agreements, provided that the Housing Successor Agency's interests are secured only behind the construction or the permanent loan and the loans provided by governmental agencies.
Report
RECOMMENDATION:
a. Authorize the Auditor-Controller to increase revenue and appropriations in Economic Development Department's Boronda Housing Set-Aside Unit, 176-8202-DEO013 by $300,000;
b. Approve a loan in the amount of $300,000 between the Housing Successor Agency of the County of Monterey and South County Housing Corporation (SCH) for the redevelopment of the Camphora Labor Camp; and
c. Authorize the Director of the Economic Development Office to make minor revisions to the loan documents (if necessary), execute the loan documents, and execute subsequent loan related documents, including subordination agreements, provided that the Housing Successor Agency's interests are secured only behind the construction or the permanent loan and the loans provided by governmental agencies.
SUMMARY:
The recommended actions will provide funding in the amount of $300,000 to South County Housing Corporation (SCH) to provide the remaining financing necessary for redevelopment of the Camphora Labor Camp. To fund the loan, it is proposed that the Housing Successor Agency reinvest Boronda Housing Set-Aside funds received from the repayment of a short term note to South County Housing made for the acquisition of the Camphora Farmlabor Camp back into the project as long term financing for the redevelopment of the project. The new loan will be contingent on the repayment of the original short term loan in full.
DISCUSSION:
The Camphora Labor Camp is located in an unincorporated area near Soledad. The property is currently improved with 44-dilapidated market rate rental units that are used primarily by farmworkers.
SCH purchased the property in October of 2010 with the long term plan of razing the buildings and redeveloping the site with safe, affordable, and appropriately sized housing for the current residents as well as other farmworkers. Since acquisition of the site, SCH has managed the property and addressed immediate health and safety issues.
The proposed project is consistent with the County's priorities to develop rental housing for extremely low, very low, and low income households including farm workers who are specifically designated as a special needs population by the County.
In October of 2010, the Redevelopment Agency approved a short term loan of $300,000 from the Boronda Redevelopment Housing Set-Aside Fund. The loan is due in October of 2015. In November of 2013, SCH repaid $100,000 of the loan, leaving a balance of $200,000. Should long term funding be approved, SCH would repay the remaining note in the amount of $200,000 in order to fund the new note in the amount of $300,000.
It is recommended that funding for this project be provided by the Monterey County Housing Successor Agency. Housing Set Aside funds are no longer restricted to former redevelopment areas. Senate Bill #341, approved on October 13, 2013, amended Health and Safety Code Section 34176 and added Section 34176.1 (c) (1) to allow for use of funds anywhere within the jurisdiction of the Monterey County Housing Successor Agency as follows:
"Program income a housing successor receives shall not be associated with a project area and, notwithstanding subdivision (g) of Section 33334.2, may be expended anywhere within the jurisdiction of the housing successor or transferred pursuant to paragraph (2) without a finding of benefit to a project area."
OTHER AGENCY INVOLVEMENT:
An Over-the-Counter grant from the Housing and Redevelopment Office of $25,000 was given to SCH in 2009 to assist with the feasibility of the project. The RDA loan of $300,000 was approved by the Board of Supervisors on June 8, 2010. County Counsel has worked with the Department in preparing and reviewing the underlying loan documents.
FINANCING:
There is no impact on the General Fund. Funding for the loan shall be included in the Boronda Housing Set-Aside (Fund 176, Organizational Unit 8202, Appropriations Unit DEO 013). Payments on the loan will be deposited back into the Boronda Housing Set-Aside fund to finance future projects.
Prepared by:
______________________________
Jane Royer Barr,
Housing Programs Manager, Ext.5389
Approved by:
____________________________
David L. Spaur, CEcD, EDFP
Economic Development Director
Attachments:
Loan Agreement
Regulatory Agreement and Declaration of Restrictive Convenants
Promissory Note
Deed of Trust