BURBANK REDEVELOPMENT AGENCY
Tuesday, June 27, 2006
AGENDA
CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE
This facility is disabled accessible. Auxiliary aids and services are available for individuals with speech, vision or hearing impairments (48-hour notice is required). Please contact the ADA Coordinator at (818) 238-5021 voice or (818) 238-5035 TDD with questions or concerns.
6:30 P.M.
INVOCATION:
The Courts have concluded that sectarian prayer as part of City
Council meetings is not permitted under the Constitution.
FLAG SALUTE:
ROLL CALL:
REPORT TO THE REDEVELOPMENT AGENCY BOARD:
1. REQUEST TO AMEND CERTAIN AGREEMENTS RELATED TO THE MEDIA VILLAGE SENIOR HOUSING PROJECT:
The purpose of this report is for the Redevelopment Agency (Agency) Board to consider a request to amend certain agreements related to the Media Village Senior Housing Project to allow the developer to refinance housing bonds on the residential component.
On December 19, 1995, the Council and Agency Board approved entitlements and a Disposition and Development Agreement with Gangi Development Company for a mixed-use project on a 2.5 acre parcel on the former Pic �N� Save site located at the southwest corner of Third Street and Magnolia Boulevard. Gangi Development Company later formed Media Village Limited, a California limited partnership, for the purpose of developing the project which was completed in December 1999.
The project consists of a three-story, 147-unit affordable senior housing apartment complex above approximately 55,000 square feet of retail space. In addition, the project includes 586 parking spaces in a subterranean parking structure which include 86 spaces for the residential component (with separate access off Third Street), 200 spaces for the retail component and 300 public parking spaces to support business activity in the neighboring area.
The residential component consists of 147 units, including 144 affordable senior apartment units (120 one-bedroom and 24 two-bedroom units) plus three units for on-site apartment managers. Twenty-nine of the units (24 one-bedroom and five two-bedroom units) are restricted to very low-income households (not-to-exceed 50 percent of the County median) and 115 of the units (96 one-bedroom and 19 two bedroom units) are restricted to lower-income households (51 percent to 80 percent of the County median) at affordable rents.
Pursuant to the Disposition and Development Agreement and Grant Deed with the Agency, and Development Agreement and Planned Development with the City, the affordability requirements run with the land in perpetuity. There were no rent restrictions on rents for the three manager units.
On August 1, 1996, the Agency issued a $5 million tax-exempt multi-family housing revenue bond to provide conduit financing to the developer for the residential component of the project. The developer was solely responsible for debt service payments. The debt service payments were paid from proceeds generated by the project pursuant to a loan agreement with the developer which was secured by a deed of trust. The Agency has no obligation to make any payments on the bonds.
On June 2, 2006, a letter was received from Media Village Limited (developer) requesting the Agency to consider amending various documents related to the Media Village Senior Housing Project to enable them refinance the $5 million tax-exempt multi-family housing revenue bonds on the residential component of the project and repay the bonds. The bonds are AAA rated with a 30-year maturity secured by two letters of credit and revenues received from the residential component.
A 10-year irrevocable letter of credit issued by East West Bank on August 1, 1996 expires shortly after August 1, 2006. The developer has informed the Agency that it has decided to redeem the housing bonds through conventional financing insured by the Federal Housing Administration of the United States Department of Housing and Urban Development (HUD), who has provided a written commitment for the loan. The lender is Quaker Capital.
As a condition of the new HUD-insured loan, the Agency is requested to amend certain agreements related to the Media Village Senior Housing Project which includes the subordination of existing housing affordability requirements under the housing bonds and related Agency documents. Staff has reviewed the developer�s proposal, including the terms of the HUD-insured loan, and has also consulted with the City�s bond counsel and City Attorney�s Office. The potential loss of affordability requirements could make the housing rents market rate and unaffordable to current and future tenants. Additionally, there is a possibility of the tax-exempt housing bonds becoming taxable and associated Internal Revenue Service costs could be charged to the Agency (estimated to be at least $1 million). Additional research and discussion is needed in order to avoid risk to the tenants and the Agency. Therefore, staff does not support the developer�s proposal and recommends that the Agency Board reject the developer�s request.
Recommendation:
It is recommended that the Agency Board deny a request by Media Village Limited to subordinate the housing affordability restrictions in related agreements (as a condition of a new HUD-insured loan) to allow the developer to redeem the $5 million tax-exempt housing revenue bonds issued by the Agency on the residential component of the Media Village Senior Housing Project.
RECESS to conclude the City Council meeting.
ADJOURNMENT.