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THE CITY OF <br /> ry <br /> l ��.I�a <br /> CITY COUNCIL AGENDA REPORT <br /> pLEASANTONe <br /> March 1, 2016 <br /> City Manager <br /> TITLE: APPROVING A GROUND LEASE AND LOAN DOCUMENTS, AND <br /> AUTHORIZING THE CITY MANAGER TO EXECUTE ALL DOCUMENTS <br /> AND TAKE ALL STEPS RELATED TO THE LOAN OF LOWER INCOME <br /> HOUSING FUNDS FOR KOTTINGER GARDENS PHASE I <br /> SUMMARY <br /> In November 2013, the City Council approved a Disposition, Development and Loan <br /> Agreement with Mid Pen Housing Corporation ("Mid Pen"), which was further amended <br /> on June 16, 2015, (collectively, the "DDLA") for the Kottinger Gardens senior <br /> development (the "Project"). City Council approved a Lower Income Housing Fund loan <br /> commitment to the Project of up to $13,750,000 through the DDLA and a $450,000 <br /> commitment of HOME Program funds for predevelopment. In accordance with terms <br /> generally described in the DDLA, City staff have now negotiated several documents for <br /> Phase I of the Project including the property "Ground Lease", an Affordable Housing <br /> Loan Agreement that sets forth the terms of the LIHF Loan (the "Loan Agreement"), a <br /> Secured Promissory Note (the "Note"), leasehold deeds of trust that secure repayment <br /> of the HOME loan and the LIHF Loan (the "Leasehold Deeds of Trust"), and an <br /> Affordable Housing Regulatory Agreement ("Regulatory Agreement") (collectively, the <br /> "Loan Documents") that will be executed by Kottinger Gardens Phase 1 Associates, <br /> L.P., a limited partnership that will serve as developer for the Phase I project and for <br /> which an affiliate of MidPen serves as general partner. These documents will secure the <br /> City's LIHF Loan and HOME Program Funds and will document the long-term <br /> affordability restrictions associated with those funds to reserve the property for use as <br /> low income senior housing. <br /> RECOMMENDATION <br /> It is recommended that the City Council adopt a Resolution: <br /> 1) Approving the Ground Lease, the Loan Agreement, the Note, the Leasehold <br /> Deeds of Trust, and the Regulatory Agreement, and authorizing the City <br /> Manager or his designee to execute each such document substantially in the <br /> forms attached to the Resolution, with such modifications as may be approved by <br /> the City Manager in consultation with the City Attorney; <br /> 2) Allowing subordination of the Regulatory Agreement and the deeds of trust <br /> executed or to be executed in connection with the financing of the project to the <br /> deeds of trust and the regulatory agreements to be executed and approved <br />