Report Prepared by: Leah Brown, Management Analyst, Development Services Department
Title
SUBJECT: Authorization to Approve a Subordination Agreement for the Sunny View Apartments
REPORT IN BRIEF
Considers authorizing to approve a Subordination Agreement for the Sunny View Apartments.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the Subordination Agreement presented by Standard Communities for the Sunny View of Merced, LP, a California limited partnership; and,
B. Authorizing the City Manager to make any minor changes to the agreement should any edits be necessary, subject to the agreement being approved as to form by the City Attorney; and,
C. Authorizing the City Manager to execute all necessary documents.
Body
ALTERNATIVES
1. Approve as requested by City Staff; or,
2. Deny; or,
3. Refer to City Staff for reconsideration of specific items to be addressed in City Council motion; or,
4. Continue to a future City Council meeting (date and time to be specified in City Council motion).
AUTHORITY
Charter of the City of Merced, Section 200, et seq
CITY COUNCIL PRIORITIES
This action is consistent with the adopted FY 2024-2025 Goals and Priorities, and Pro-Housing Policies of the City of Merced.
DISCUSSION
On December 5, 2005, the City Council of the City of Merced adopted Resolution 2005-147, approving, and authorizing the execution of a loan and regulatory agreement between the City and Sunny View of Merced, L.P. The loan was for $1,761,000 in HOME funds over three years. In June 2006, Council approved amendments to the agreements to be consistent with the state regulatory agreement.
The Sunny View Apartment complex is a 113 unit complex affordable to households that have low income, located at 1102-1194 D Street.
Sunny View of Merced, L.P. is refinancing their existing senior financing encumbering the project. The request, pre-, and post-financing structure are attached. The lender, CBRE, as the originator of the Freddie Mac loan, is requiring a subordination agreement with the City of Merced, subordinating the City’s subordinate loan and regulatory agreement to the new Freddie Mac loan.
IMPACT ON CITY RESOURCES
No appropriation of funds is needed.
ATTACHMENTS
1. Resolution 2005-147 with documents
2. Letter Requesting Subordination
3. Subordination Agreement