SR 05:026 - Laserfiche WebLink

the City including the Gardens at Ironwood, Ridge View Commons and the Promenade have benefited from this program. In California, the program is coordinated by the California Tax Credit Allocation Committee (CTAC). Housing projects can qualify for either the 9% or 4% tax credit program. Qualifying for 9% is more competitive involving a higher level of project affordability, restricted funding sources and greater project amenities. The 9% and 4% figures indicate that the project earns credits at the rate of either 9% or 4% of the qualified basis for a ten-year period. Therefore, as an example, with the 9% credits, if a project has a total of 40% affordable units and a development budget that includes $4,000,000 in eligible costs, it will qualify for credits as follows: · Eligible Basis = $4,000,0000 eligible development costs · Qualified Basis =$1,600,000 (Eligible Basis x 40% affordable units) · Annual Credit = $144,000 (Qualified Basis x 9%; the amount would be $64,000 with 4% credits) · Total Amount of Housing Tax Credits =$1,440,000 (Annual Credit x 10 years) To qualify for the credits, developers engage in a competitive process administered by CTAC. The competitive process is necessary because the federal govemment limits the amount of credits available. For California, the annual credit limit is equivalent to approximately $1.75 per capita. If the CTAC awards credits, the developer will offer these to private sector limited partners in return for project funding. The amount paid varies but is generally about $0.75-$0.85 of investment equity for every $1 in tax credits. As a result, the amount of equity (cash) made available to the project would be $1,080,000 ($1,440,000 x .75). As indicated, the consultants determined that the use of tax credits might be available to a project as outlined by the Task Force. However, other funding opportunities are available including HUD 236 funds that could provide more funding than the tax credits. Regardless of the programs, the road to identifying funding source(s) will undoubtedly be complex involving numerous parties including the City and Pleasanton Gardens. As a result, at this time, it is difficult to identify a specific funding source or even determine that a project can obtain funding. But the information provided by the consultants indicates a number of funding options may be available for the bulk of project financing. Task Force Recommendation At this stage of the project, the Task Force has concluded its general review and determined there is little opportunity for a major renovation/expansion project to meet long term needs, that a new development is warranted based on long term needs of the project and the community and that and that there are some potential funding sources that could address a significant portion of project financing needs. As a result, The Task Force recommends the City Council authorize the continuation of its work on this project. SR 05:026 Page 5