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<br />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 to the <br />Housing Successor Agency. <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 Redwood City as the Housing <br />Successor Agency. In addition, staff is recommending the Housing Successor Agency <br />approve the prepayment and the modification of terms of the remaining balance of the Note, <br />the 26% Low Mod Fund portion. The terms of the Housing Successor Agency portion of <br />the loan modification request will primarily include an extension of the loan maturity date <br />from 2028 to 2072, including the extension of the affordability covenants. Staff <br />recommends support of this extension when considered together with the prepayment of the <br />RDA General portion of the loan under the proposed terms described in this staff report. By <br />accepting prepayment and extending the loan maturity date the Successor Agency would be <br />supporting MCA’s re-syndication/refinancing and long term preservation of high quality <br />affordable housing. <br /> <br />If the proposed modification is approved, the Successor Agency, Housing 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 Successor Agency could deny the loan modification as requested or recommend <br />other terms. Both of these alternatives would be detrimental to MidPen’s intention to <br />refinance and would have negative impacts to the long term affordability and <br />sustainability of the units, ultimately making these affordable units at risk. Further the <br />Successor Agency would delay the wind down of outstanding assets to meet the State <br />of California Department of Finance (DOF) requirement. <br /> <br />FISCAL IMPACT <br />By approving the prepayment the Successor Agency would be able to meet the DOF <br />requirement to “wind down” outstanding assets. Further, by accepting prepayment the <br />Successor Agency would be supporting MCA’s re-syndication and long term <br />preservation of affordable housing. <br /> <br />If prepayment of the Note is approved as recommended, the additional amount that will <br />flow through to the local taxing entities is $1,421,475 for the outstanding RDA General <br />portion of the principal ($1,073,924) and accrued interest ($347,551) which would occur <br />now, rather than over the next thirteen (13) years. <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 />6.3.B. - Page 3