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<br />t1AÞ~ <br /> <br />Michael Church <br />Planning and <br />Redevelopment Manager <br /> <br />Director of Community <br />Development Services <br /> <br /> <br />~ <br /> <br />~ <br /> <br />~y~ <br /> <br />Attachments <br /> <br />1, Staff comparison of the two affordability offers made by Archstone. <br />2. Memo from Peter Kelly, Clover Capital, dated 9/1/00 <br />3. Regulatory Agreement in the Council Study for review <br /> <br />HISTORY <br /> <br />On October 1, 1985, the City of Redwood City, California approved the issuance of $28,000,000 of non- <br />recourse (to the City) Multifamily Housing Revenue Bonds to make a loan to Redwood Shores Apartment <br />Associates, Ltd., to finance the acquisition, construction, and equipping of a 304 unit multifamily <br />residential rental development located at 850 Davit Lane, intended for the occupancy in part (20%) by <br />individuals or families of low or moderate income.2 The City acted solely as a conduit issuer and is under <br />no obligation to repay any unpaid principal or interest on the Bonds. <br />In return for the City's cooperation, the original developer, Sequoia Shores, Inc. and The Balcor Company, <br />general partners of Redwood Partners, agreed to rent 20% of the total units of the property to tenants <br />earning no more than 80% of the area median gross income for the duration of the Qualified Project <br />Period ("QPP"). In accordance with the Loan Agreement between the City and the developer, the QPP <br />expired in 1998, <br /> <br />When the bonds were originally issued, a surety bond from Continental Casualty Insurance Company <br />served as credit enhancement for the Bonds ("CNA"). At the time of issuance in 1985, the enhancement <br />resulted in an AAA rating from Standard & Poors. <br /> <br />In September of 1996, the property was sold to Archstone Communities Trust ("Archstone"). When <br />Archstone became the owner, it assumed the obligations to repay the Bonds, CNA remained as the credit <br />enhancer of the Bonds. The CNA surety bond expires on October 1, 2000 and CNA has recently indicated <br />that it does not wish to extend the expiration date, as it no longer provides credit enhancement for tax <br />exempt bonds. <br /> <br />2 The term non-recourse refers to the provisions under which these bonds were issued that removes the <br />City from any financial responsibility associated with these bonds. <br /> <br />3 <br />