HomeMy WebLinkAboutResolution 2012-120 N.C.S. 08/06/2012 Resolution No. 2012-120 N.C.S.
of the City of Petaluma, California
APPROVING AN AMENDMENT TO HOME LOAN DOCUMENTS, AN ASSIGNMENT
AND ASSUMPTION AGREEMENT, AND A SUBORDINATION AGREEMENT IN
CONNECTION WITH THE 1995 CITY HOME LOAN FROM BURBANK HOUSING
COMMUNITIES CORPORATION TO ROUND WALK VILLAGE 2 PARTNERS, L.P.
WHEREAS, the City of Petaluma("City") provided a loan of HOME funds in the
amount of$930,567, pursuant to loan documents executed in July 1995 (the HOME Loan
Documents), for the development of an affordable rental housing development known as Round
Walk Village (the Project"); and,
WHEREAS, Burbank Housing Communities Corporation ("BHCC") is the current
owner of the Project and has entered into a purchase agreement to sell the Project to Round Walk
Village 2 Partners, LP. (the"Partnership"); and,
WHEREAS, the Partnership intends to purchase the Project and use funding from a
construction lender and a tax credit investor to undertake a major rehabilitation of the Project;
and,
WHEREAS,the Partnership has informed the City that certain revisions are needed to
the 1-TOME Loan Documents to allow the Partnership to carry out its financing plan for the
rehabilitation of the Project; and,
WHEREAS, the changes required by the Partnership include a reduction in the interest
rate of the HOME Loan for the Project to the "applicable federal rate" (as defined in the Internal
Revenue Code), an extension of the loan term to 55 years, and the City's consent to the
assignment to and assumption by the partnership of all obligations under the I-IOME Loan
Documents; and,
WHEREAS, the Partnership has also informed the City that the City will need to
subordinate the HOME Loan Documents to the deed of trust securing a construction loan in the
maximum amount of$14,000,000 and a permanent loan in the maximum amount of$6,000,000.
Resolution No. 2012-120 N.C.S. Page 1
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Petaluma authorizes the City Manager or his designee to enter into (i) an amendment of the
HOME Loan Documents for the purposes and according to the terms described herein; (ii) an
Assignment and Assumption of the HOME Loan Documents from BHCC to the Partnership; and
(iii) an agreement to subordinate the HOME Loan Documents to the construction and permanent
financing for the Project, together with such additional terms as are required in the judgment of
the Housing Administrator to implement the City-approved financing plan for the Project and
which do not materially increase the City's obligations thereunder.
Under the power and authority conferred upon this Council by the Charter of said City. /7
REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Anrov d as to
Council of the City of Petaluma at a Regular meeting on the 6th day of August, ft m:
2012,by the following vote:
Ci •ttorney
AYES: Albertson, Barrett,Healy,Kearney,Vice Mayor Renee
NOES: None
ABSENT: Mayor Glass, Harris
ABSTAIN: None A
ATTEST: �i•A4alilatt�/
City Clerk Vice Mayor
Resolution No. 2012-120 N.C.S. Page 2