AgdaPkt 2017-06-12 Joint SA PFA - Laserfiche WebLink

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It is unlikely that any payments on the CDBG loans would be received against the existing balance short of a sale of the Property. Forgiveness of the City loan would simplify the transfer of the Property from MidPen to LifeMoves, remove existing debt that cannot be repaid from operational revenues. Furthermore, the action acknowledges the valuable service that LifeMoves has been providing to the residents of Redwood City and San Mateo County for almost 30 years through its operation of the transitional housing facility. The San Mateo County Board of Supervisors previously approved a similar transaction for LifeMoves in April 2015 that forgave two existing County CDBG loans totaling $1,334,903.79 on the Family Crossroads transitional housing facility in Daly City. The same collaborative recapitalization approach that is being proposed for Redwood Family House, was used by LifeMoves and MidPen in order to successfully restructure the Family Crossroads facility and rehabilitate the property. MidPen and LifeMoves are requesting that the City and County consider complete forgiveness in order to support LifeMoves' mission and ensure the Property remains in service to the community for another generation. Retiring the existing loans on the Property is critical to LifeMoves' future ability to take on new soft debt for the purposes of rehabilitation and long term preservation. In order to effectuate forgiveness of the loans, staff recommends that the City Council approve execution of the following documents (each of which are exhibits to the attached resolution): 1) City Substitution of Trustee and Full Reconveyance (1986 Loan). 2) City Substitution of Trustee and Full Reconveyance (1988 Loan). 3) The Affordability Agreement between the City and LifeMoves. 4) The Right of Repurchase/Right of First Refusal Agreement between MidPen, LifeMoves, and the City. 5) The Right of Purchase/Right of First Refusal Agreement between County of San Mateo, LifeMoves, and the City. In addition to authorizing the above documents, the attached resolution will authorize the City Manager to execute any other documents and take any and all actions necessary to effectuate the forgiveness of the loans and/or the property transfer from MidPen to LifeMoves. ALTERNATIVES The City could deny the loan forgiveness or provide alternative direction. FISCAL IMPACT 6.3.B. - Page 4