SUBJECT/RECOMMENDATION:
Title
Approve an amended loan term of 43 years for funding to be provided by the City of Clearwater to SAH Holdings LP for the land acquisition of real property located at 801 Chestnut St. contingent upon the satisfactory outcome of, as determined by the Economic Development and Housing Director, a subsidy analysis, the receipt of a structural evaluation, approval of all funding sources, and a tenant relocation plan; and authorize the appropriate officials to execute documents required to effect closing of the loan. (consent)
Body
SUMMARY:
Indigo Apartments is comprised of 208 units and was originally developed for low-income senior housing. In 2015, the property was purchased and converted to market rate, excluding 20 units that are legally restricted by HOME funding that was previously provided to the property by the City of Clearwater.
Sunrise Affordable Housing Group, through their special purpose entity SAH Holdings LP (Sunrise) is currently under contract to acquire Indigo Apartments and is planning to convert it to legally restricted affordable housing under a 50-year affordability commitment through the Low-Income Housing Tax Credit (LIHTC) program, implementing income and rent restrictions on 100% of units with thresholds set at 30%, 60% and 80% of area median income. The restrictions will result in significant rent reductions, resulting in an average +/- 51% discount when compared to today’s market-rate rents. The property will be placed in the Pinellas County Land Trust, which will provide a 99-year lease to Sunrise Affordable Housing Group, placing 208 housing units under the county’s land use restrictions.
Originally, Council approved a deferred, 0% interest loan, with a loan term of 40 years in the amount of $1,000,000.00, utilizing a combination of CDBG and SHIP funding. The loan will support the acquisition of the property. The U.S. Department of Housing and Urban Development (HUD) requires all loans to be co-terminus with the 40-year HUD loan of which the term does not begin until the construction-to-permanent conversion. Therefore, the developer is requesting a 43-year term for the City’s loan to conservatively cover the construction period and the 40-year HUD loan Term.
Staff recommends the approval of a 43-year term.
APPROPRIATION CODE AND AMOUNT:
Funding is to be provided by State Housing Initiatives Partnership (SHIP) Program, Community Development Block Grant (CDBG) and CDBG Revolving Loan Funds. No General Fund monies will be appropriated.
USE OF RESERVE FUNDS:
N/A
STRATEGIC PRIORITY:
Objective 2.4 - Supports equitable housing programs that promote household stability and reduces the incidence of Homelessness within Clearwater.
