CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 2 of 5 BACKGROUND Constructed in 1989, Ridge View Commons – an Eden Housing development – is a 200-unit affordable age-restricted (62 and older) rental housing complex located at 5200 Case Avenue in Pleasanton. The City owns the land and leases it to Eden Housing; during the term of the lease, Eden Housing owns the buildings and improvements on the site. Ridge View's construction was financed through a combination of City loans and Low Income Housing Tax Credit (LIHTC) financing. There are two existing City loans: a $4,000,000 loan, which was a Housing Development Grant (“HDG”) Loan using federal funds granted to the City by the U.S. Department of Housing and Urban Development (HUD), and a $2,457,000 loan that used the City Lower Income Housing Funds (LIHF). Eden Housing has secured authority for approximately $40 million in tax-exempt bond financing and $32 million in equity to be provided by a low-income housing tax credit investor, which will allow Eden Housing to renovate the property while maintaining its long-term affordability. This new financing, known as resyndication, requires update, amendment and re- statement of a series of documents and agreements, to which the City is a party. Among other aspects, these agreements address the existing obligation to repay the City loans, which will be assumed by the partnership that will execute a new ground lease with the City and acquire and rehabilitate the project. DISCUSSION Eden Housing has secured a commitment of 4% tax credit and tax-exempt bond financing, and a construction and permanent conventional loan in the amount of approximately $39,668,600 from Silicon Valley Bank (SVB), a division of First Citizens Bank & Trust Company. The SVB loan will be recorded in senior position to the City's loans. In accordance with the tax credit resyndication schedule, and as required by the project lender, Eden Housing intends to close all financing for the project June 1, 2024, or shortly thereafter, and immediately commence with the project renovation. Staff, in consultation with outside legal counsel, has negotiated updated agreements that will specifically address the requirements and expectations for the City’s financing and lease of the property, and in several instances will improve the terms of the existing agreements. The form agreements are attached to the Resolution, which are collectively provided as Attachment 1. Major provisions of the documents pertaining to the terms of the Ground Lease and Regulatory Agreement are summarized herein: Amended and Restated Ground Lease The existing Ground Lease has a 50-year term that expires in 2038 and requires an annual ground rent of $1.00 for the 10-acre land parcel. Key terms of the Ground Lease have been renegotiated as follows: • The amended and restated Ground Lease will have a new and extended term of 75 years, commencing on the closing date (i.e., expiring in 2099). This will allow for a term that is substantially longer than the standard 55-year tax credit affordability restriction. The extended Ground Lease is required for Eden Housing to close its tax credit resyndication deal. Page 70 of 720