Item 14 - Request Approval for Submission of Resyndication Applications of Low-Income Housing Tax Credits & Tax-Exempt Bonds for Affordable Housing Communities1 of 10December 5, 2023, Item #14DATE: TO: FROM: CONTACT: SUBJECT: Summary: AG EN DA REPORT City of Poway December 5, 2023 Honorable Chairman and Members of the Housinj_~uthority Robert Manis, Director of Development Services t(/\ Marie Sanders, Senior Management Analys~ (858) 668-4637 or msanders@poway.org CITY COUNCIL Request for Approval of the Submission of Applications for the Resyndication of Low-Income Housing Tax Credits and Tax-Exempt Bonds for Haley Ranch Estates, Hillside Village, and Parkview Terrace Affordable Housing Communities Community HousingWorks ("CHW") has successfully developed and operates low-income housing tax credit affordable communities within the City of Poway. CHW approached the Poway Housing Authority ("Authority'') for its support and required consent to submit applications for a new reservation of low-income housing tax credits paired with a new allocation of tax-exempt bonds for three of its communities, Haley Ranch Estates, Hillside Village, and Parkview Terrace. If successful, the new funding would extend income affordability and enhance resident quality of life through rehabilitation and repair of housing units, community buildings, and infrastructure. California Municipal Finance Agency, through its Joint-Powers Agreement with the City of Poway, is the anticipated tax-exempt bond issuer. If CHW is successful in obtaining tax-exempt bond financing, the City of Poway will be asked to hold a Tax Equity and Fiscal Responsibilty Act public hearing at a future date to be determined. Neither the City of Poway nor the Poway Housing Authority would experience any fiscal impact related to the bond issuance. Recommended Action: It is recommended the Poway Housing Authority Board: 1) Adopt a Resolution (Attachment A) authorizing Community HousingWorks to submit applications to apply for a new reservation of low-income housing tax credits paired with a new allocation of tax-exempt bonds to the California Tax Credit Allocation Committee and California Debt Limit Allocation Committee for the affordable communities of Haley Ranch Estates, Hillside Village, and Parkview Terrace; 2) Authorize the Executive Director to execute all necessary documents relating to the application and implementation of low-income housing tax credit resyndication for the affordable communities of Haley Ranch Estates, Hillside Village, and Parkview Terrace; and 3) Authorize the Executive Director to execute all necessary documents relating to the support of Community HousingWorks' applications for tax-exempt bonds and low-income housing tax credits for the communities of Haley Ranch Estates, Hillside Village, and Parkview Terrace, including, providing any needed commitment letters consistent with these applications, review
2 of 10December 5, 2023, Item #14and approval of temporary relocation plans for community residents, and California Tax Credit Allocation Committee local reviewing agency packages. 4) Authorize (i) the transfer and assignment of the existing Ground Lease and Regulatory Agreement dated September 26, 2000 by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, and Haley Ranch Estates Housing Associates, L.P., to a new low-income housing tax credit partnership cont.rolled by Community HousingWorks, yet to be formed, (ii) an amendment to the Ground Lease to extend the initial term thereof for a new 55-year term, and (iii) an amendment to the Regulatory Agreement to reaffirm the term thereof as in perpetuity; 5) Authorize (i) the transfer and assignment of the existing Ground Lease for Hillside Village, dated June 8, 2_001, by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, and Community Housing of North County, to a new low-income housing tax credit partnership controlled by Community HousingWorks, yet to be formed, and (ii) an amendment to the Ground Lease to extend the initial term thereof Ground Lease for a new 55-year term; 6) Authorize (i) the transfer and assignment of the existing Regulatory Agreement for Hillside Village, dated February 5, 2002, by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, Breihan Housing Associates, L.P., and Community Housing of North County, to a new low-income housing tax credit partnership controlled by Community HousingWorks, yet to be formed, and (ii) an amendment to the Regulatory Agreement to reaffirm the term thereof as in perpetuity; 7) Authorize (i) the transfer and assignment of the existing Loan Agreement for Hillside Village dated February 5, 2002, by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, and Breihan Housing Associates, L.P., and the existing Promissory Note and Deed of Trust executed by Breihan Housing Asslociates, L.P. to a new Low-Income housing tax credit partnership, yet to be formed, and, (ii) an amendment to the Loan Agreement and amendment to the Promissory Note to restate the loan amount thereunder to include the full principal amount of the Loan and all accrued interest through the date of finance closing, modify the interest rate on the Loan to the Applicable Federal Rate compounding in effect as of the date of finance closing, and extend the term of the Loan for a new 55-year term; and 8) Authorize (i) the transfer and assignment of the Ground Lease and Regulatory Agreement for Parkview Terrace, dated August 29, 1997 by and among the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, Community Housing of North County, and Bowron Road Group, L.P., to a new low-income housing tax credit partnership controlled by Community HousingWorks, yet to be formed, (ii) an amendment to the Ground Lease to extend the initial term thereof for a new 55-year term, and (iii) an amendment to the Regulatory Agreement to reaffirm the term thereof as in perpetuity. Discussion: Community HousingWorks ("CHW") is a nationally recognized 501 (c)(3) nonprofit organization that was founded and has been headquartered in San Diego County since 1988. CHW develops and owns affordable apartment communities with resident-centered services for working families, older adults, and people with disabilities to forge stronger futures. CHW has successfully developed new and renovated existing multi-family, affordable rental apartments in urban, suburban and rural communities in California and Texas. With 4,289 rental apartments operating in 47 communities statewide as of October 2023, and with approximately 428 apartments currently in construction and another 306 apartments in predevelopment, CHW proudly serves more than 11,000 children and adults each year.
3 of 10December 5, 2023, Item #14For three of CHW's affordable communities in Poway (Haley Ranch Estates, Hillside Village, and Parkview Terrace), there is an opportunity to re-apply for new reservations of low-income housing tax credits and an allocation of tax-exempt bonds. If successful, it would extend income affordability and enhance resident quality of life through rehabilitation and repair of housing units, community buildings, and infrastructure. This action authorizes the submission of applications, and, if successful in being awarded tax credits and tax-exempt bonds, Recommended Actions numbers four through eight will be authorized. Each rehabilitation project will have three primary goals: (1) extend the productive life of the existing building beyond the new 55-year affordability period and upgrade to current Americans with Disabilities Act standards; (2) reduce operating expenses for the property and residents with energy and water efficient materials and renewable energy; and (3) improve resident comfort and building functionality. The scope of the rehabilitation prioritizes health and safety and replacement of systems in need of repair. Due to the nature of the proposed rehabilitations, if approved, CHW will contract with Laurin Associates to prepare a Temporary Relocation Plan in compliance with Federal and State Relocation laws and regulations to address the residents of the community who may be temporarily relocated offsite during the rehabilitation and enhancement of the community. There will not be any impact to affordability levels or rent increases due to the rehabilitation. With an award of new low-income housing tax credits, CHW anticipates reinvesting at least $60,000 per housing unit in repairs and upgrades. On-site property management services will continue to be provided by ConAm Management Corporation, and resident services will continue to be provided by CHW with additional third-party partnerships. Haley Ranch Estates Haley Ranch Estates, located at 13455 Poway Creek Rd. is a community that opened in 1992. The community contains 65 single-family homes; all of the homes in Haley Ranch Estates have three bedrooms, two full baths, and two-car garages, with the exception of two homes, the garages are attached. Haley Ranch Estates includes 64 homes restricted at 50% Area Median Income (AMI), and one unit set-a-side for staff. The homes range from 1,129 to 1,232 square feet of living space, plus the 400 square foot garage area. The community features a community center, pool, playground, and barbeque area, and is close to public transportation. The proposed rehabilitation at Haley Ranch Estates will address the deferred maintenance throughout the community. The interior finishes and cabinets will be replaced and the water intrusion issues will be mitigated by foundation repairs. In addition, many updates and repairs to the common areas are required and the parking lots will be repaved. Hillside Village Hillside Village, located at 12979 Community Rd., was first constructed in 2003 and is comprised of 15 two-story residential buildings, a community building, an onsite daycare facility, and on-premises parking. There are 71 townhome-style apartments ranging from 11 one-bedroom units with a bathroom, 19 two-bedroom units with a bathroom, 35 three-bedroom units with two full bathrooms, and 6 units with four-bedrooms and two bathrooms. Hillside Village has 25 homes at 35% AMI, 45 homes at 50% AMI, and one unit set-a-side for staff. Residents of the community have access to parking, a community center, laundry facility, computer lab, playground, basketball court, and
4 of 10December 5, 2023, Item #14barbeque area, and is close to public transportation. The proposed rehabilitation at Hillside Village will include the mitigation of water drainage issues, repairs and repaving of the parking lot, and replacement of sections of concrete in the walkways. In addition, the copper plumbing pipes will be replaced and seismic shut off valves will be installed for . all gas meters. Lastly, the exteriors will be treated for termites and painted, and the interiors will have walls repaired, painted, and new flooring installed. Parkview Terrace Lastly, Parkview Terrace, located at 13250 Civic Center Dr. was constructed in 1998. The community is comprised of 18 two-story residential buildings, a community building, and on-premises parking. There are 92 total units with 11 one-bedroom units with a bathroom, 36 two-bedroom units with a bathroom, 35 three-bedrooms with two and one-half bathrooms, and 10 units with four-bedrooms and two bathrooms. Parkview Terrace has 35 homes restricted at 35% AMI, 56 homes restricted at 50% AMI, and one unit set-a-side for staff. Residents have access to parking, a community center, laundry facility, computer lab, playground, tennis court, and barbeque area, and is located within walking distance of bus stops, shopping, restaurants, a medical clinic, and entertainment near Community Park, Poway Branch Library, and the civic center. The proposed rehabilitation at Parkview Terrace consists of common area updates, including new • landscaping, repair of stairways, accessible handrails, replacement of the security system and replacement of sections of sidewalk. The units will have new energy-efficient windows, new flooring, repairs to the walls, doors, and new appliances. Environmental Review: This action is not subject to review under the California Environmental Quality Act (CEQA). Fiscal Impact: There is no fiscal impact associated with approval of this item. If approved, each existing Ground Lease will be amended for a new 55-year term, including the respective annual payment obligations thereunder. Similarly, the Hillside Village Loan Agreement will be amended for a new 55-year term, with the Authority continuing to remain in second position in the cashflow waterfall and loan subordinations, payable through 50% of residual receipts, as required by the Deed of Trust. Public Notification: None. Attachments: A. Resolution B. Location Maps Reviewed/Approved By: Wendaserman Assistant City Manager Reviewed By: Alan Fenstermacher City Attorney
5 of 10December 5, 2023, Item #14ATTACHMENT ARESOLUTION NO. H-23-A RESOLUTION OF THE POWAY HOUSING AUTHORITY APPROVING THE SUBMISSION OF APPLICATIONS FOR THE RESYNDICATION OF LOW-INCOME HOUSING TAX CREDITS AND TAX-EXEMPT BONDS FOR HALEY RANCH ESTATES, HILLSIDE VILLAGE, AND PARKVIEW TERRACE AFFORDABLE HOUSING COMMUNITIES WHEREAS, the Poway Housing Authority ("Authority") is a public body, corporate and politic, organized and existing under the Housing Authorities Law (Health & Safety Code § 34200 et seq.); WHEREAS, a fundamental purpose of the Housing Authorities Law is to expand the supply of low-and moderate-income housing (Health & Safety Code, § 33071 ); WHEREAS, Community HousingWorks, a nonprofit affordable housing developer, is the owner, through its affiliates, of three affordable housing communities in the City of Poway: Haley Ranch Estates, Hillside Village, and Parkview Terrace (collectively, the "Communities"); WHEREAS, the Authority provided a portion of the funding for the construction of the Communities; WHEREAS, Community HousingWorks has requested the Authority to support its reinvestment in the Communities by obtaining a new reservation of low-income housing tax credits and a new allocation of tax-exempt bonds to fund a portion of the rehabilitation of the Communities to enhance the viability of the Communities and quality of life for the residents; WHEREAS, Community HousingWorks has further requested the Authority's consideration for assigning, modifying, and extending the Authority's existing financial support and Regulatory Agreements as described in the staff report; and WHEREAS, the Authority has the power and authority to approve the transactions described below and no further action by the Poway Housing Authority Board shall be necessary to implement the transactions contemplated herein. NOW, THEREFORE, BE IT RESOLVED that the Poway Housing Authority is making the following findings in authorizing the submission of applications of low-income housing tax credits and tax-exempt bonds on behalf of the Communities, as follows: SECTION 1: Community HousingWorks is authorized to submit applications to apply for a new reservation of low-income housing tax credits and a new allocation of tax-exempt bonds to the California Tax Credit Allocation Committee and California Debt Limit Allocation Committee for the affordable communities of Haley Ranch Estates, Hillside Village, and Parkview Terrace. SECTION 2: The Executive Director is authorized to execute all necessary documents relating to the application and implementation of low-income housing tax credit resyndication for the affordable communities of Haley Ranch Estates, Hillside Village, and Parkview Terrace. SECTION 3: The Executive Director is authorized to execute all necessary documents relating to the support of Community HousingWorks ' applications for tax-exempt bond and low-
6 of 10December 5, 2023, Item #14Resolution No. H-23-Page 3 income housing tax credits for the communities of Haley Ranch Estates, Hillside Village, and Parkview Terrace, including, providing any needed commitment letters consistent with this resolution, review and approval of temporary relocation plans for community residents, and California Tax Credit Allocation Committee local reviewing agency packages. SECTION 4: The Executive Director is authorized to (i) transfer and assign the Ground Lease and Regulatory Agreement dated September 26, 2000 by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, and Haley Ranch Estates Housing Associates, L.P., to a new low-income housing tax credit partnership controlled by Community HousingWorks, yet to be formed, (ii) amend the Ground Lease to extend the initial term thereof for a new 55-year term, and (iii) amend the Regulatory Agreement to reaffirm the term thereof as in perpetuity. SECTION 5: The Executive Director is authorized to (i) transfer and assign the Ground Lease for Hillside Village, dated June 8, 2001, by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, and Community Housing of North County, to a new low-income housing tax credit partnership controlled by Community HousingWorks, yet to be formed, and (ii) ament the Ground to extend the initial term thereof for a new 55-year term. SECTION 6: The Executive Director is authorized to (i) transfer and assign the Regulatory Agreement for Hillside Village, dated February 5, 2002, by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, Breihan Housing Associates, L.P., and Community Housing of North County, to a new low-income housing tax credit partnership, yet to be formed, and (ii) amend the Regulatory Agreement to reaffirm the term thereof as in perpetuity. SECTION 7: The Executive Director is authorized to (i) transfer and assign the Loan Agreement for Hillside Village by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, and Breihan Housing Associates, L.P., to a new low-income housing tax credit partnership, yet to be formed, and, (ii) amend the Loan Agreement and Promissory Note to restate the loan amount thereunder to include the full principal amount of the Loan and all accrued interest through the date offinance closing, modify the interest rate on the Loan to the Applicable Federal Rate compounding in effect as of the date of finance closing, and extend the term of the Loan for a new 55-year term. SECTION 8: The Executive Director is authorized to (i) transfer and assign the Ground Lease and Regulatory Agreement for Parkview Terrace, dated August 29, 1997 by and between the Poway Housing Authority, as housing successor to the former Poway Redevelopment Agency, Community Housing of North County, and Bowron Road Group, L.P., to a new low-income housing tax credit partnership controlled by Community HousingWorks, yet to be formed, and (ii) amend the Ground Lease to extend the initial term thereof for a new 55-year term, and (iii) amend the Regulatory Agreement to reaffirm the term thereof as in perpetuity. II II II II
7 of 10December 5, 2023, Item #14Resolution No. H-23-Page 3 PASSED, ADOPTED AND APPROVED by the Poway Housing Authority of the City of Poway, California, at a regular meeting this fifth day of December, 2023 by the following vote, to wit: AYES: NOES: ABSTAINED: ABSENT: DISQUALIFIED: ATTEST: Carrie Gallagher, CMC, Secretary Steve Vaus, Authority Chair Poway Housing Authority
8 of 10December 5, 2023, Item #14ATTACHMENT BHaley Ranch Estates
9 of 10December 5, 2023, Item #14Hillside Village Apartments
10 of 10December 5, 2023, Item #14Parkview Terrace Apartments