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Page 3 of 4 <br />this MidPen proposes prepayment of the RDA General portion of the Note and proposes an <br />extension to the loan term of the remaining RDA Low Mod portion of the Note. <br /> <br />The Oversight Board approved the recommendation for the RDA General portion <br />prepayment of the Note including outstanding principal and accrued interest on October 29, <br />2015 and the same recommendation has been made to the Redwood City Successor <br />Agency. In addition, staff is recommending the Housing Successor Agency approve the <br />prepayment and the modification of terms of the remaining balance of the Note, the 26% <br />Low Mod Fund portion. The terms of the Housing Successor Agency portion of the loan <br />modification request include an extension of the loan maturity date from January 17, 2028 to <br />the later of (i) 57 years from the date of recordation of the deed of trust securing a new <br />senior loan or (ii) December 1, 2072. Staff recommends support of this extension when <br />considered together with the prepayment of the RDA General portion of the loan under the <br />proposed terms described in this staff report. By accepting prepayment and extending the <br />loan maturity date the Housing Successor Agency would be supporting MCA’s re- <br />syndication/refinancing and long term preservation of high quality affordable housing. <br /> <br />If the proposed modification is approved, the Housing Successor Agency, Successor <br />Agency and MCA would be required to execute new loan documents which are attached to <br />this report. The Affordability Covenants would also be extended by the same number of <br />years as the Note. <br /> <br />ALTERNATIVES <br />The Housing Successor Agency could deny the loan modification as requested or <br />recommend other terms. Both of these alternatives would be detrimental to MidPen’s <br />intention to refinance and would have negative impacts to the long term affordability and <br />sustainability of the units, ultimately making these affordable units at risk. <br /> <br />FISCAL IMPACT <br />If approved, the City as the Housing Successor Agency will receive the unpaid accrued <br />interest on the Low Mod portion of the Note earlier than expected. The modified Note terms <br />will extend the loan repayment of principal and interest by forty four (44) years. Based on the <br />annual simple interest rate of three percent (3%) per annum for the Low Mod loan balance <br />of the Note the total interest accrual would increase by $345,101. <br /> <br />ENVIRONMENTAL REVIEW <br />The recommended action is exempt from the requirements of the California <br />Environmental Quality Act (CEQA) as it does not have potential for causing a significant <br />effect on the environment. <br /> <br /> <br />RHONDA COFFMAN <br />CDBG/HOME ADMINISTRATOR <br /> <br /> <br />6.3.A. - Page 3