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City of Redwood City 6.1.F. - Page 73 Notes to the Basic Financial Statements For the year ended June 30, 2012 NOTE 3- LOANS RECEIVABLE �CONTINUED� These loans bear no interest and are secured by second deeds of trust on the property, and typically, no payments are due until five years after the date of purchase. As of June 30, 2012 the City has outstanding loans of $515,552 to twelve Wyndham Place buyers. Since these loans are not currently available for expenditure,fund balance has been reserved in this amount. 8. City Centre Plaza Loans The former Redevelopment Agency sold several parcels of land to the developers of the City Centre Plaza project (a residential and commercial development) for $1,700,000 in 1996. The developers constructed City Center Plaza, which contains 81 affordable housing units, a childcare facility, residential and commercial parking, and 17,900 square feet of retail space. The promissory note from Mezes Court Associate in the amount of$1,445,000 is to be repaid through 2028 from surplus revenues generated by the housing project and accrued interest at 3%, with $371,076 due to the City's Low and Moderate Income Housing Asset Fund, and $1,073,924 due to the Successor Agency Private Purpose Trust Fund. C. First Time Homebuyer Silent Loan Program In 2000, the former Redevelopment Agency established a First Time Homebuyer Silent Loan Program. Loans are deferred for the first five years, and then amortized at 4% interest over the remaining 25 years. An Equity Participation requirement shares appreciation based on the amount of the Agency's original loan amount. At June 30, 2012 there were outstanding loans to six homebuyers totaling $406,596. Since these loans are not currently available for expenditure, fund balance is categorized as nonspendable in this amount. D. Loans with Non-profits and For Profit Organizations The City and former Agency loaned $500,000 to MP Redwood Court Associates and $650,000 to Hallmark Apartments LLP. The MP Redwood Court Associates loan agreement was entered into in July 2003 for the repair and rehabilitation of housing units. The loan term is 55 years and bears 0% interest. The loan to Hallmark Apartments LLP has interest deferred for the first 30 years after which it bears interest at 3% until the December 2058 maturity. The outstanding balance at June 30, 2012 was $1,133,153. E. Housing Rehabilitation Loans The City and former Agency have outstanding loans for housing rehabilitation in the amount of $1,980,372. F. Shores Childcare Loan The City entered into an agreement with Shores Childcare, LLC whereby $3,200,000 was loaned to Shores Childcare, LLC for construction of a childcare facility on City-owned land in the Redwood Shores area. The term of the loan is 20 years maturing January 2023, with interest payable quarterly and calculated based on the quarterly rate of the State of California Local Agency Investment Fund. The outstanding balance of the loan at June 30, 2012 was$1,867,733. 45