AgdaPkt 2009-07-13 clsd and jnt - Laserfiche WebLink

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6.3A The acquisition of this property is primarily funded from Community Development Block Page 4 Grants (CDBG) and HOME funds.1 A Fair Market Appraisal was conducted by James Nicholas & Associates which determined an initial Fair Market Value of $2,325,000. Upon review of the appraisal by the property owner (who has appraisals conducted almost annually for disbursements pursuant to a Trust),. the owner noted that the original FMV had been very conservative using a capitalization rate of 5%. Subsequently, the Appraiser agreed to reconsider at a slightly higher capitalization rate of 5.25% and arrived at a new value rounded to $2,410,000, which is $85,000 higher than the original stated value as communicated to Council on April 27, 2009. The City applied for $500,000 from the San Mateo County Office of Housing and was awarded $325,000. The funding shortfall of $172,339.40 is available in the Housing Projects account of the Redevelopment Housing fund. The acquisition of the Main Street site will allow the City to meet its CDSG Timely Expenditure and HOME Commitment requirements and remove the threat of losing HOME funding as of July 31. ALTERNATIVES The Council could choose not to approve this activity, acknowledging that some funding would be lost as of July 31, 2009. FISCAL IMPACT The total cost of this property is $2,410,000. 1. $1,301,219.00 will come from federal HOME funds; 2. $611,442 will come from federal COBG funds, 3. $325,000 will come from County HOME funds, 4. The Redwood City RDA appropriation required is $172,339.40 The appropriation from ROA housing funds provides gap financing of $172,339.40 which is needed to make up the difference between federal funds available and the actual fair market value and purchase price of the property. RDA funds will also be used to make a repayment of $526,979 for CDSG & HOME funds previously allocated to Bradford Street acquisition (which has not proceeded within the Consolidated Plan period). The total RDA expenditure will be $699,310. ~/ Chu Chang, P.E. Community Development Director /J~ ~JW~ Patricia J. Webb Housing and Economic Development Manager Peter Ingram \;~ City Manager and Executive Director, Redevelopment Agency ATTACHMENTS 1. Resolution approving Purchase Agreement for the acquisition of 1306 Main Street and authorizing City Manage/Executive Director to execute all pertinent documents relating thereto 1 CDSG and HOME funds listed includes $526,979 expended for Bradford Street acquisition which will be repaid from RDA Housing funds.