REPORT TO COUNCIL
SUBJECT
Title
Action on Amendments to the Promissory Note and Covenants with Klamath Associates, L.P. and South Drive, L.L.C. to Modify Existing Terms and Extend the Affordable Housing Requirements for Two Santa Clara County Housing Authority Projects, Klamath Gardens and Bracher Gardens
Report
COUNCIL PILLAR
Promote and Enhance Economic and Housing Development
BACKGROUND
When local Redevelopment Agencies (RDA) in California were dissolved in 2012, their affordable housing functions and assets were transferred to housing successors. The City, as the housing successor, took over the responsibilities and assets related to affordable housing projects previously managed by the RDA. This includes managing loans, enforcing covenants, and ensuring the continued provision of affordable housing.
Klamath Gardens and Bracher Gardens are two 100% affordable housing projects that were funded by the RDA and are currently controlled and owned by entities related to the Santa Clara County Housing Authority (SCCHA). The SCCHA has requested changes to the City's loan terms for these projects to help address financial challenges. In exchange the City will be receiving an extension of the affordability period, allowing the projects to maintain their affordable status and financial stability. The project details are provided below.
Klamath Gardens:
Klamath Gardens is an affordable housing complex located at 2051 Klamath Avenue, Santa Clara, CA. It has 17 apartments for very low-income households and families. The property is owned by Klamath Associates, a California limited partnership affiliated with the SCCHA.
The complex was built with financing from the Low-Income Housing Tax Credit (LIHTC) program, a $681,176 loan from the City of Santa Clara Redevelopment Agency (RDA), and a $750,000 conventional loan from Citibank due in May 2027. The City Loan is evidenced by a Promissory Note dated February 22, 1995, bears 6% simple interest and is payabl...
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