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THE CITY OF <br /> 03 V <br /> CITY COUNCIL AGENDA REPORT <br /> pLE ASANTON® <br /> January 18, 2011 <br /> Assistant City Manager <br /> TITLE: APPROVE AN AMENDMENT TO THE HELP PROMISSORY NOTE AND <br /> APPROVAL OF A $450,000 ALLOCATION FROM THE LOWER INCOME <br /> HOUSING FUND TO ASSIST WITH REPAYMENT OF THE HELP LOAN <br /> SUMMARY <br /> In July 2005, the City was awarded a Housing Enabled by Local Partnerships Program <br /> ( "HELP ") loan from the California Housing Finance Agency ( "CaIHFA ") in the amount of <br /> $1,500,000 to assist with the construction of an Assisted Living Facility, which now <br /> operates as the Parkview located at 100 Valley Avenue. Recently, CaIHFA informed <br /> the City of a program that reduces interest on the loan if it is paid in full by the end of <br /> this month. Staff and BLP Partnership, Inc, (BRIDGE Housing) the Parkview's owner, <br /> have agreed to take advantage of the early payment program to realize interest savings <br /> of approximately $90,000. To pay off the loan, BLP will be pay $1.2 of the amount due <br /> from proceeds obtained as part of the project's recent permanent financing and the City <br /> will pay the remainder, which is estimated at $450,000 (The actual amount paid may be <br /> slightly lower or higher based on the exact day the loan is repaid which will impact loan <br /> interest due.) In accordance with existing HELP loan documents, the City is required to <br /> repay CaIHFA and BLP is required to repay the City. With the pay -off of CaIHFA, BLP <br /> will only owe the City $450,000 that will be outstanding after CaIHFA is repaid. As a <br /> result, the Promissory Note between the City and BLP requires an amendment. <br /> RECOMMENDATION <br /> Approve the Amended and Restated HELP Promissory Note (Attachment 1) and <br /> appropriate an amount estimated at $450,000 from the Lower Income Housing Fund to <br /> assist with the repayment of the existing Help Loan with CaIHFA. <br /> FINANCIAL STATEMENT <br /> The $450,000 appropriation from the City Lower Income Housing Fund is anticipated to <br /> be fully repaid by BLP no later than December 31, 2015. There are adequate funds <br /> available in the Lower Income Housing Fund to make this loan. <br />