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HomeMy WebLinkAbout06- Community Development Commision r CDEVELOPMENT DEPART aNT OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J. HENDERSON SUBJECT: SUNLAC DEVELOPMENT Executive Director PROJECT DATE: April 27, 1994 Synopsis of Previous Commission/Councit/Committee Action(s): On March 12, 1992,the Community Development Commission approved an Owner Participation Agreement (OPA)with Sunlac Development Corporation. On August 16, 1993,the Community Development Commission approved Addendum No. 1 to the previously approved Owner Participation Agreement (OPA). Recommended Motion(s): (COMMUNITY DEVELOPMENT COMMISSION) MOTION: That the Community Development Commission approve a proposal to finalize development of the Falcon Ridge housing development project, allocate $121,400 in available housing set-aside funds and authorize the Chairman and Executive Director to execute any documents © necessary to effectuate implementation of said program. A stretor KENNETH J. HE DERSON Executive Directo _________________________________________________________________________________________________________________________--------_________-- Contact Person(s):Kenneth J. Henderson/Robert J Lemley Phone: 5081 Project Area(s): Mt. Vernon Corridor Ward(s): -Three (3) Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount:$ 121.400 Source: 20% Set-Aside Budget Authority: Requested Commission/Council Notes: ____ _________ ___ __________________________ G KJH:DRE:RJL:paw:snlacdev.cdc COMMISSION MEETING AGENDA Meeting Date: 05/02/94 Agenda Item No: �_ C 4 DEVELOPMENT DEPARTMENT {� STAFF REPORT ------------------------------------------------------------------------------------------------------------------------------- SUNLAC DEVELOPMENT PROJECT On March 12, 1992, the Community Development Commission at the recommendation of the Housing Committee, authorized execution of an Owner Participation Agreement (OPA) with Sunlac Corporation. Execution of this agreement provided for the construction of sixteen (16) high quality single-family detached homes. Agency assistance towards this project consisted of a $425,000 loan to facilitate acquisition of the subject property. On August 16, 1993, the Community Development Commission approved Addendum No. 1 to the (OPA) for the purpose of providing Downpayment Assistance. The program utilized accrued interest ($80,000) on the Agency funded property acquisition loan for funding of the downpayment assistance program. Although all sixteen (16) homes have been built, two of which have been sold and an additional six (6) have been submitted for loan approval, the completion of certain key items remain in jeopardy because of problems arising from the construction lender, Universal Bank. These problems, which are detailed below, can be fully and completely resolved by advancing approximately $121,400, the uses for which are also described below. The aforementioned monies represent an advance on further sales proceeds $71,400,of which shall be repaid to the Agency. This advance is necessitated by a deficiency in the construction loan necessary to properly finance certain items. The construction loan deficiency has further exacerbated the existing financial situation as outlined below: • Universal Bank, after approval of the construction loan. required Mr. Lacy to deposit $50,000 into a "Completion Account". • These additional monies were not disbursed in the individual construction categories, but instead used as additional "equity" for loan audit purposes. At the time the construction loan funded, Universal was going through the federal bank examination process. ----------p----------------- ----- ------------------- /t KJH:DRE:RJL: aw:snlacdev.cdc COMMISSION MEETING AGENDA �j Meeting Date: 05/02/94 Agenda Item No: 6P DEVELOPMENT DEPARTMENT STAFF REPORT SUNLAC DEVELOPMENT PROJECT APRIL 26, 1994 �? PAGE - 2 - ------------------------------------------------------------------------------------------------------------------------ • When a construction category was completed, instead of 100% disbursement, Universal Bank would disburse only 80%, thereby worsening the problem of inadequate funds to complete construction. • Universal will not provide supplemental financing for this project. In addition to the construction loan problem, there was a City requirement that was not apparent during the sub-division approval process. A landscape assessment district was established for the purpose of providing sub-division perimeter slope maintenance. This item was not included in the construction loan because the item was not initially identified. Additional uses of the $121,400 are set forth below: • Asphalt street overlay $ 8,000 • Installation of streetlights $12,000 • Assessment District Landscaping $30,000 • Sales and Marketing Program $10,000 • Fencing 1,700 Lineal Feet $40,000 C • Front Yard Landscaping $15,000 • Loan Extension Fee to Universal Bank $ 6,000 TOTAL $121,400 It is the opinion of staff adoption of this motion will enable the successful completion and marketing of this high quality housing sub-division. Without such assistance, the project will not be completed, the six (6) strong escrows will not be consummated and the remaining inventory will go unsold. Based upon the heretofore mentioned reasons, staff recommends adoption of the form motion. l/WU'I,.IkM4'1 KENNETH J. H NDERSON, Executive Director Development Department i i ------------------------ ----------------------- ------- KJH:DRE:RJL:paw:snlacdev.cdi; COMMISSION MEETING AGENDA Meeting Date: 05/02/94 i Agenda Item No: �_