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Resolution approving the First Amendment to the Loan Agreement between the City of South San Francisco and BRIDGE Housing Corporation for the development of 158 affordable housing units at 1051 Mission Road, First Amendment to the Affordable Housing Regulatory Agreement, Letter of Intent to allocate Local Housing Trust Fund grant funds, and Budget Amendment Number 25.054.
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WHEREAS, on November 13, 2019, the City Council adopted Resolution No. 153-2019 approving a Purchase and Sale Agreement and Affordable Housing Agreement with BRIDGE Housing Corporation ("BRIDGE") that provided a $2 million predevelopment loan from Fund 823, the City’s Commercial Linkage Fee Fund, to the affordable housing project at 1051 Mission Road (the "Project"); and
WHEREAS, the California Department of Housing and Community Development ("HCD") is authorized to provide up to $57 million under the Local Housing Trust Fund ("LHTF") Program from the Veterans and Affordable Housing Bond Act of 2018 (Proposition 1) (as described in Health and Safety Code section 50842.2 et seq. (Chapter 365, Statutes of 2017 (SB 3))) (the "Program"); and
WHEREAS, HCD issued a Notice of Funding Availability ("NOFA") dated May 3, 2021, under the LHTF Program; and
WHEREAS, the City of South San Francisco (the "City") executed a standard agreement with HCD on August 30, 2022, approving a $2,362,500 award to the City to administer one or more eligible activities using LHTF funds; and
WHEREAS, the City had initially committed LHTF funds to a proposed senior affordable housing project at 201 Baden Avenue, which is not moving forward and thus these funds are now available for another eligible activity specified in the LHTF NOFA; and
WHEREAS, the City now wishes to commit LHTF funds to the Project being developed by BRIDGE; and
WHEREAS, the LHTF standard agreement requires the City to provide an equivalent local match of $2,362,500 and eligible activities must follow the affordability requirements specified in the LHTF NOFA; and
WHEREAS, the City has already committed $2,000,000 in local housing trust fund dollars, funded by Commercial Linkage Fees and kept in Fund 823, for the Project; and
WHEREAS, the City now seeks to increase its funding commitment from $2,000,000 to $2,362,500, funded by Commercial Linkage Fees and kept in Fund 823, to satisfy the LHTF local match requirement; and
WHEREAS, HCD has given the City preliminary approval to change the eligible use of the LHTF funds to a predevelopment loan for the Project, pending the submission of a Letter of Intent indicating the City's commitment to fund the Project with a one-for-one local match to the LHTF Program Funds; and
WHEREAS, funds generated by the City's Commercial Linkage Fee may be used to assist private organizations to increase and improve "the supply of housing affordable to moderate, low, very low, and extremely low-income households" in the City, as set forth in Chapter 8.69 of the South San Francisco Municipal Code; and
WHEREAS, City staff has negotiated a First Amendment to the Loan Agreement with BRIDGE to provide $362,500 in additional loan funds, funded by Commercial Linkage Fee funds; and
WHEREAS, the First Amendment to the Loan Agreement also commits $2,362,500 in LHTF funds to the Project, pending final approval from HCD confirming the Project is an eligible use of Program funds; and
WHEREAS, the First Amendment to the Loan Agreement furthermore requires at least 30% of LHTF funds and match funds, after deducting for administrative expenses, to be expended on assistance to Extremely Low-Income Households as specified in the NOFA.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of South San Francisco:
1. The foregoing recitals are true and correct and made a part of this Resolution.
2. The City Manager, or their designee, is authorized to execute the First Amendment to the Loan Agreement on behalf of the City, a draft of which is attached hereto as Exhibit A and incorporated herein, subject to any amendments that do not materially increase the City's obligations, subject to approval by the City Attorney.
3. The City Manager, or their designee, is authorized to execute any other necessary documents related to the approval and administration of the LHTF grant and Loan Agreement as amended.
4. The City Manager, or their designee, is authorized to send a Letter of Intent to the California Department of Housing and Community Development indicating the City’s intent to increase the City's local contribution from $2,000,000 to $2,362,500 to the affordable housing project by BRIDGE Housing at 1051 Mission Road in substantially the form included as Exhibit B to this resolution.
5. The City Manager, or their designee, is authorized to execute the First Amendment to the Affordable Housing Regulatory Agreement on behalf of the City, a draft of which is attached hereto as Exhibit C and incorporated herein, any amendments that do not materially increase the City's obligations, subject to approval by the City Attorney.
6. The City Council approves Budget Amendment Number 25.054 appropriating $362,500 from Fund 823 to fund the increased City match for the LHTF grant.
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Exhibit A: Draft First Amendment to the Loan Agreement for 1051 Mission Road
Exhibit B: Letter of Intent to Allocate LHTF Funding to 1051 Mission Road
Exhibit C: Draft First Amendment to the Affordable Housing Regulatory Agreement for 1051 Mission Road