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MidPen plans to refinance the property within two years, at which time they will <br />undertake a full rehabilitation to upgrade the interior and exterior of the building. This <br />rehab will include a new roof, seismic structural upgrades, replacement of degrading <br />stairs, repairs to exterior stucco, replacement of obsolete electrical systems, plumbing <br />and mechanical upgrades, lead and asbestos remediation, energy efficient lighting, <br />replacement of interior finishes, ADA retrofit, and the addition of a new community <br />room. The property rehabilitation will require temporary relocation of the existing <br />tenants. MidPen is working with a relocation specialist and has included these expenses <br />in their budget. <br />MidPen will set aside 50% of the total units for persons with special needs at extremely <br />low income at or below 30% of the area median income (AMI) (or approximately 28 <br />units, rounding up). The balance of the units will be affordable to very low income <br />households at or below 50% of the AMI (or approximately 27 units). <br />Project Budget for Use of Redwood City Funds <br />MidPen is requesting $1,100,000 in funds from Redwood City for the Atherton Court <br />project. They propose that the funds be used entirely to repay a portion of the property <br />acquisition cost. MidPen purchased the Atherton Court property in December 2016 for <br />$17,125,000, which was funded in part by an acquisition bridge loan from Housing Trust <br />Silicon Valley. Redwood City funds would be used to repay a portion of this bridge loan, <br />concurrent with the construction loan closing anticipated in February 2018. <br /> <br />MidPen submitted the following documents which were reviewed by staff to confirm due <br />diligence was conducted in the acquisition of the property and for evaluation of this <br />funding request: <br />· Appraisal <br />· Rent Roll <br />· 30 Year Cash Flow <br />· Sources and Uses Budget <br />· Preliminary Title Report <br />· Physical Needs Assessment <br />· Mold and Asbestos Survey <br />· Phase 1 Report <br />Commitment of City Funds and Loan Terms <br />The commitment of City funds for this project would be contingent upon development of <br />loan documents that would be subject to Council approval on or before February 1, <br />2018. The recommended loan terms for the $1,100,000 of Affordable Housing Funds <br />are a 3% simple interest, 55 year, residual receipts loan with a requirement to maintain <br />6.3.A. - Page 6