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Home My WebLink AboutSee Appendix A-3, A-7, A-8, A-9AͲ4QualificationCriteriaforNewTenants: UndertheWHP,aRegulatoryAgreementisrecordedagainstthepropertyatclosing.Acopyofthis documentisincludedwiththissubmittal.TheRegulatoryAgreementrequiresthatnewtenantsand,for existingtenants,atleaserenewal,completeanincomeverificationprocesstodetermineeligibilityfor Low,MiddleorModerateincomerentpricing.Forexistingtenants,iftheyqualifytheyareofferedthe accordingdiscountedrent.Iftheydonotqualify,theymayremainatmarketrents.Thisavoidsany issueswithdisplacementofcurrentresidents.Allnewtenantsmusthavequalifiedincomesinoneof thesecategories. Thepropertyisallocatedsuchthat1/3ofunits(143units)arereservedforLowIncomeresidents,1/3 (142units)areforMiddleIncomeresidentsand1/3(142units)forModerateIncomeresidents.Rents aresetnottoexceed35%ofannualincomeandrentgrowthiscappedatthelowerof(i)AMIgrowth and(ii)4%. Seebelowforatableofincomelimitsbasedonhouseholdsize. AͲ5Income/EmploymentProfileofExistingResidents: Basedonthecurrentdatawehaveontheexistingresidents,72%ofcurrentrenterswillincomeͲ qualifyfortheprogram. AͲ6PercentofIncomePaidasRent: SeebelowtableforpercentageofhouseholdincometobepaidinrentbyunittypeandAMIlevel: AͲ7ProjectedNetSaleProceedsatendofYear15andbasisforestimate: ProjecteddispositionproceedstotheCityfortheassetareasfollows: Low Income Middle Income ModerateIncome Household Size(persons) 80% 100% 120% 1 67,872$84,840$101,808$ 2 77,568$96,960$116,352$ 3 87,264$109,080$130,896$ 4 96,960$121,200$145,440$ 5 104,717$130,896$157,075$ IncomeLimits Estimated%ofIncome PaidasRentͲCasaLagoProposal #Units Low Middle Moderate OneBed 79 32% 26% 22% TwoBed 183 35% 30% 25% Three Bed 165 35% 29% 25% 34.5% 29.1% 24.3% x SaleinYear15:$61,688,935 x SaleinYear30:$424,647,526 x SaleinYear35(showninproforma):$625,287,573 Theseprojectionsassume:MiddleͲincomeaffordabilityremainsinplaceatsale,3%annualrentgrowth forrestrictedrents,5.00%exitcaprate. Note,thereasonforthesignificantdifferenceisthatthemajorityofthebondbalancegetspaiddown betweenyears15and35,sothereisminimalremainingbalanceattheendof30yearsandnobalance attheendof35years. AͲ8ProposedPaymentofCityPropertyTaxandCityMonitoringFee TheProjectwillpaytheCityofChulaVistaaHostCityChargeof$200,000/yearescalatingannuallyat 2%.TheCity’sforegonepropertytaxfromtheprojectwouldbe$196,000.Thus,theHostCityCharge makestheprogramentirelyrevenueneutralfortheCity. TheCityofChulaVistacanbereimbursedforanystafftimeand/orcostsincurredinitsreviewofthe Program,inclusiveofanyconsultantcosts.Thiswouldbepayableattheclosingofthetransaction. Inaddition,theProjectwillpaytheCityofChulaVistaanannualMonitoringFeeof$27,755withannual increasesof3%. AͲ9FeeBreakdown Feesintheprogramaredesignedtoincentivizeconversionofmarketrateassetstoworkforcehousing aswellaslongͲtermalignmentofinterestfortheProjectAdministrator(OHG)andCSCDA.Thesefees areconsistentacrossallWorkforceHousingprojectsandinͲlinewithothercomplex,assetͲsecuredbond issuancesofthistype: FeespaidatClosing: • AtClosingFeesarepaidtotheparticipantsasfollows: • $3,000,000totheProjectAdministrator • 1%ofBondIssuancetoCSCDA(estimatedat$3.2million) OngoingFees:[AllongoingcompensationissubordinatetooperatingexpensesandSeriesADebt Service] • ToProjectAdministrator • ProjectAdministrationFee:$500/unit/year($213,500)with3%annualincreases.This feecoversProjectAdministrator’sstaffcostforadministrationoftheassetincluding preparationofallreporting,oversightofthepropertymanagerandregulatory agreement,compliancewithalltermsoftheindenture,etc. • SubordinatedBͲBond:A$6.9millionBBondisgrantedtotheProjectAdministratorin exchangeforassignmentofitsmarketͲratePurchaseandSaleAgreementfortheasset toCSCDA.Thisismeanttoreplicatedeveloperequitythatwouldexistinatypical affordablestructure,butisnotallowedinthistypeoffinancing.TheBͲBondcreates longͲtermalignmentforthesponsortomanagetheassetproperlyandgeneratecash flowsothatseniorbondscanbepaid.Theinterestonthisbondissubordinatedand deferredduringthefirstfewyearsofpropertyoperationsasshowninthecashflowand theprincipalisnotpaiduntilallSeriesAbondshavebeenrepaid. • ToCSCDA • Annualfeeof$150,000annually. AͲ10AssessmentofotherTaxingImpacts: Thecurrentassessedvalueoftheassetis$155,854,147.The1%AdValoremtotaltaxis$1,558,541.Of this,theCityofChulaVistareceives12.6%(perCityofChulaVista2021Ͳ22Budget),whichequatesto $196,376(0.04%of2021Ͳ22GeneralFundRevenue).ApplicationoftheHostCityChargeof$200,000 peryearwith2%annualescalationentirelyoffsetstheCity’sforegonepropertytax. Othertaxingentitiesmayormaynotbeimpactedbytheremovalofthepropertyfromthetaxroll.OHG andCSCDAhavecheckedwithcounsel(MeyersNave)andconfirmedthatnoneoftheschooldistricts willbeimpactedbecausetheyarefundedviathestate’sLocalControlFundingFormula(Noimpactto ChulaVistaElementarySchoolDistrict,SweetwaterUnionHighSchoolDistrictorSouthwestern CommunityCollegeDistrict). Forothertaxingentitiesthatmaybeimpacted,theCitymayexpecttodistributetheproceedsofthe City’ssaleproceedsunderthePublicBenefitAgreementtomakethemwholeforlostpropertytax(see aboveitem#AͲ7fordetailonprojecteddispositionproceeds. AͲ11NotificationProcesstoTenants: Residentnotificationandqualificationoccursforexistingresidentsatleaserenewal.Tenantswillbe askedtoprovidedocumentationofincomeandhaverentsadjustedaccordinglyasdescribedabove. Fornewtenants,theywillbeincomequalifiedupͲfrontbypropertystaff.Ifdesired,wecancoordinate withtheCitytoadvertisediscountedrentsviatheHousingAuthorityorotherwise. TheCityofChulaVistamayalsoopttogiveapriorityintheRegulatoryAgreementtolocalhealthcare workers,policemen,firemen,teachers,governmentemployees,orlocalpublicͲschoolgraduatesetc.