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Page 5 of 7 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />Total Funding Allocated $2,502,136 $6,514,324 $8,310,000 $17,326,460 <br />The basic terms of the permanent loans are shown in Table 3 below. <br />Table 3. Overview of Permanent Loan Terms <br />Term Detail <br />Loan Type Residual receipt loan <br />Interest 3 percent (simple) <br />Loan Term 57 years <br />Regulatory Term 55 years* <br />*The HOME funding for Rise City Apartments will be a separate loan and is also subject to the HOME <br />regulations, including a 20-year regulatory term. <br />The predevelopment loan will be issued separately for 1580 Maple Street and will have its own loan terms, <br />see Exhibit B of the attached Resolution (Attachment A). The loan documents for Rise City Apartments <br />and 1580 Maple Street will be executed prior to closing construction financing. With City funding <br />commitment at this stage of development, it is expected that Rise City Apartments and 1580 Maple Street <br />will be able to leverage the City funding to obtain County, State and Federal funds needed to make the <br />projects feasible. <br />Staff is also recommending that the City Council approve for each project a per unit subsidy limit that is <br />higher than the NOFA guidelines in order to ensure that the projects comply with Article 34 of the <br />California Constitution. Article 34 requires that "low rent housing projects" developed, constructed or <br />acquired by a state public body obtain voter approval. The provision of financial assistance to a low rent <br />housing project can trigger Article 34 based on case law interpreting Article 34. Pursuant to Health and <br />Safety Code Section 37001, a ”low rent housing project" does not include a development where no more <br />than 49% of the housing units are restricted to households with incomes at or below 80% of area median <br />income. In order to avoid any challenges to the projects, staff is recommending that the City regulate no <br />more than 49% of the units in each project which results in a per unit subsidy of $300,000 for Rise City <br />Apartments and $300,000 for 1580 Maple Street. The HOME funds awarded to Rise City Apartments will <br />still follow the HOME Maximum Per-Unit Subsidy Limits as published by the U.S. Department of Housing <br />and Urban Development. These per unit subsidy limits are reasonable given that both projects are <br />providing a significant number of units affordable to acutely low income and extremely low income <br />households, which units require greater levels of subsidy in order to achieve financial feasibility. <br />Next Steps <br />If the City Council approves the above funding recommendation for Rise City Apartments and 1580 Maple <br />Street, the City Manager will execute a conditional funding commitment letters for each project. For Rise <br />City Apartments, the letter states that it supersedes the prior funding commitment letter dated February <br />14, 2024 and that the City commits $12,326,460 total to the project, conditional upon the ability to <br />leverage funding from other public sources. See Exhibit A of the Resolution (Attachment A). <br />9.A. - Page 5 of 37 <br />471