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Gardens, as stipulated under the Purchase and Sale Agreement that will transfer the Pleasanton Gardens site, along with operating reserves, to the City BACKGROUND Since November 2013, MidPen and the City have been collaborating in the redevelopment of the two senior housing complexes, the 50-unit Kottinger Place located on 240 Kottinger Drive and the 40-unit Pleasanton Gardens located on 251 Kottinger Drive, into one senior, affordable housing development known as Kottinger Gardens that consists of Kottinger Gardens Phase 1 and Phase 2 In order to redevelop Kottinger Place into a 131-unit, tax credit senior affordable housing community, Midpen and the City executed a DDLA in November 2013 which provided a LIHF loan commitment of up to $13,750,000 to Kottinger Gardens Phase 1 As Phase 1 nears completion, there is currently a remaining loan commitment balance of $2,575,360 which will now be needed to support the development of the 54-unit Kottinger Gardens Phase 2 Furthermore, upon the transfer of the existing Pleasanton Gardens property from the current owner Pleasanton Gardens, Inc to the City, as stipulated in the executed Purchase and Sale Agreement, the City will also receive $250,000 from the Pleasanton Gardens operating reserve The $250,000 operating reserves and $2,575,360 balance will be provided to MidPen for combined loan total of $2,825,360 for Kottinger Gardens Phase 2. DISCUSSION Midpen has secured commitments for financing the construction of Kottinger Gardens Phase 2 The project has received a construction loan of$21,812,092, a California Housing Finance Agency (the "CaIHFA") permanent loan estimated at $9,085,000, and $4.6 million from Pleasanton's "Base City Allocation" of the $580 million Alameda County Measure Al Housing Bond funds. Midpen also anticipates securing a commitment of 4 percent tax credit financing from TCAC in October/November 2017 Staff has negotiated agreements which specifically address the requirements and expectations for the City's financing and lease of the property which were outlined in the DDLA The form agreements are attached to the Resolution. Major provisions of the documents for Council's consideration are summarized as follows: Ground Lease ® Sets forth the terms of long term leasehold between the City (Lessor) and the limited partnership project owners (Lessee) ® The term of the lease is extended for a period of 75 years to extend through the term of the initial permanent loan financing for the project and, per lender requirements, provides extended time to allow for project refinancing. • Requires the same affordability and use restrictions described in the Regulatory Agreement.