AgdaPkt 2000-08-28 - Laserfiche WebLink

Browse Search

3A 2- Owner's Request Since CNA's surety bond will expire in October of this year, in order to maintain the tax exempt financing, Archstone will need to refund the existing Bonds. It is important to note that Archstone has maintained compliance with the Regulatory Agreement although the obligation to do so expired in 1998. The 61 set aside units are still occupied by tenants eaming less than 80% of the area median income. Archstone could retire the Bonds today and have no future requirement to maintain these units. The units could then be rented to tenants without regard to their income, at any rent the market would bear. Archstone requests the City to pennit Refunding Bonds to be issued by the Association of Bay Area Governments ("ABAG"). ABAG is a joint powers authority of which the City is a member' with the standing to issue tax-exempt bonds on behalf of its members. Archstone wishes to use ABAG to ultimately consolidate many of its California bond issues under one Issuer. ABAG will also monitor the project for compliance with the Regulatory Agreement. ABAG has agreed to issue the Refunding Bonds provided that this is acceptable to the City. The issuance of Refunding Bonds will not incur any obligation to maintain the 61 set aside units. However, in exchange for the City's approval, Archstone will agree to a Regulatory Agreement with ABAG to include the following: 1. Thirty units (1/2 of the current amount) to be rented to tenants earning 80% or less of area median income. 2. Rents on those units to be capped at 30% of 80% of area median income. 3. Archstone will agree to a transition period of up to one year to reduce the low- income units through attrition. 4. Modified Qualified Project Period (the period during which the Regulatory Agreement is in effect and during which rents are restricted) to be extended and expire in 2006. Although the number of low-income units will be reduced, approval of the Refunding Bonds will assure that thirty unit:=¡ will be available until at least 2006. Additionally, rents will be capped on those units thus assuring their affordability to those tenants. Position of The Housing and Human Concerns Committee The Housing and Human Concern Committee (HHCC) has reviewed this proposal and believes that this proposal is a good compromise. The HHCC understands that the owners are free to move all of the units to market rates and that preserving 30 units for individuals or families earning 80% or less of the area's median income is beneficial to the community. Fiscal Impact These bonds are obligations of the owners of the apartment complex. The City is not obligated to advance or expend any funds under the City's control should the owners default on these bonds. 2