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6.G. - Pa Re oocT$i� <br />City <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2018 <br />NOTE 3 - LOANS RECEIVABLE (CONTINUED) <br />F. First Community Housing Loan <br />The City entered into an agreement with First Community Housing whereby $2,627,000 ($200,000 from <br />Community Development Block Grant, $1,927,000 from the former Redevelopment Agency low and <br />moderate housing fund, $500,000 pass-through from County of San Mateo) was loaned to First <br />Community Housing for construction of the Villa Montgomery housing development at EI Camino and <br />Vera Avenue. The portion of the loan attributable to the former Redevelopment Agency has been <br />transferred to the City's Low and Moderate Income Housing Asset fund. The loan bears interest at 3% <br />for 40 years. The loan will be repaid annually from 70% of the project's net cash flow. The outstanding <br />balance of the loan at June 30, 2018 was $2,627,000. <br />G. Police Activities League Loan <br />In March 2006, the City paid off a construction loan in the amount of $1,500,000 that the Police <br />Activities League (PAL), a separate, private, non-profit agency, entered into with Bay Area Bank to <br />partially finance the construction of the new PAL community center at Taft School. The City Council and <br />PAL agreed that one-half of the amount, or $750,000, will be paid back to the City by PAL over a period <br />of 15 years. The outstanding balance of the loan at June 30, 2018 was $214,286. <br />H. Kainos Home and Training Center Loan <br />In 1989-90, the City entered into an agreement with Kainos Home and Training Center whereby <br />$548,000 from Community Development Block Grant was loaned to acquire and rehabilitate property <br />at 2555 Middlefield Road. In 2013-14, Kainos Home and Training Center sold 2555 Middlefield Road, <br />and used the proceeds from the sale to purchase 2761 Fair Oaks Avenue. The current City loan is <br />structured as a lien transfer of the original amount plus the shared equity of $437,722 from 2555 <br />Middlefield Road to 2761 Fair Oaks Avenue, totaling $985,722. The loan bears no interest and is due <br />and payable on March 29, 2039. <br />In 1997-98, the City entered into an agreement with Kainos Home and Training Center whereby $57,500 <br />from Community Development Block Grant was loaned to acquire property at 2033 Jefferson Avenue for <br />Kainos Home and Training Center. The loan is deferred and payable upon the sale of the property, at <br />which time the City would receive repayment of the loan plus any accrued equity based on the prorated <br />City share. <br />In 2010-11, the City entered into an agreement with Kainos Home and Training Center whereby <br />$400,000 from the City's HOME and CDBG grant programs were loaned to acquire property located at <br />1122 Valota Road in Redwood City for special needs housing. The loan is deferred for a term of 55 years <br />at 0% interest. <br />In 2012-13, the City entered into an agreement with Kainos Home and Training Center whereby <br />$450,000 from HOME grant was loaned to acquire property located at 1033 Redwood Avenue for special <br />needs housing. The loan is deferred for a term of 30 years at 0% interest. <br />The loans to Kainos Home and Training Center are intended to be forgiven upon maturity, and therefore, <br />an allowance for uncollectible loans has been set up in the amount of $1,893,222. <br />56 262 <br />