Housing Successor Agency
MEETING DATE: 10/14/2015
TITLE:
Title
Creekside Promissory Note Purchase
End
FROM:
Tami E. Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
Staff recommends the City Council authorize McCormack Baron Asset Management to purchase the Creekside Promissory Note at a discount of 7.5% for a Net Present Value of $526,415.
Body
BACKGROUND:
The Creekside Project was a 185-unit affordable rental housing community, placed in service in January 2005. Pursuant to a CTCAC (California Tax Credit Allocation Committee) Regulatory Agreement, the affordability period is through 2034. The project was constructed as a 4% bond transaction, with bonds issued by the California Statewide Communities Development Authority.
The Owner of the Project is Cathedral/Creekside L.P. a California Limited Partnership. The original developer and general partner of the Owner was Charles Ashley. The Managing General Partner was and remains, Community Housing Assistance Program, Inc. (CHAPA). The Limited Partner investor was and remains SunAmerica Housing Fund 1035 (Sun). In 2005, Sun exercised its rights, pursuant to the partnership agreement, to remove Charles Ashley's entity as general partner and to replace it with MBS GP 134 LLC, an affiliate of McCormack Baron. Another affiliate, called McCormack Baron Management Inc. provides the property management services at the site.
The Project financing consists of the following with unpaid principal balances as of 12/31/14:
1st Mortgage bond loan, serviced by PNC Real Estate $ 9,042,800
2nd Mortgage bond loan, serviced by Wells Fargo $ 471,447
3rd Mortgage loan, CC RDA (Housing Successor Agency) $ 1,800,000
The 1st and 2nd mortgage loans bear interest of 5.28% and 6.2% respectively and are current. The 3rd mortgage loan (the Housing Agency Loan) is non-interest bearing, and principal payments are payable from 50% of available residual recei...
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