cover
TO: Mayor Thomas J. Weisner
FROM: Daniel Barreiro, Chief Community Services Officer
DATE: February 12, 2016
SUBJECT:
A Resolution Approving the Execution of an Amendment to a Development Agreement for a HOME Program Loan Between the City of Aurora and VeriGreen Development, LLC (DBA Aurora St. Charles Senior Living L.P.) for a Senior Housing Development in the City of Aurora.
PURPOSE:
To amend a HOME Development Agreement with Aurora St. Charles Senior Living L.P., LLC to extend the loan term from thirty (30) years to forty (40) years.
BACKGROUND:
The proposed loan term amendment has been requested by the Illinois Housing Development Authority so that the City's subordinate 30-year loan term is coterminous with IHDA's first mortgage loan ($2,975,000.00) term of 40 years.
DISCUSSION:
The Aurora St. Charles Senior Living project involves the acquisition and rehabilitation of the former St. Charles Hospital located at 400 E. New York St. The project’s total development cost is approximately $22 million and has been funded by a private first mortgage, federal and Illinois state historic tax credits (River Edge Redevelopment Zone credits), Low Income Housing Tax Credits from IHDA, and deferred developer fee. Approximately 25% of the financing for this project is coming from additional State Historic Tax Credits made possible through the River Edge Redevelopment Zone (RERZ). In order to receive these vital tax credits, the developer needs to have a Certificate of Occupancy by the December 31, 2016 expiration of the RERZ program. In order to allow enough time for the construction schedule as per the RERZ deadline, all funding components officially closed on December 18, 2015.
Through the Development Agreement, the City committed $500,000 (2014: $392,304.74 and 2015: $107,695.26) in HOME Entitlement funds to the project.
On November 25, 2015, the City received a request from IHDA to make the City's 30-year loan term coterminous with IHDA's 40-year loan as this is a requirement for loans that are subordinate to IHDA's. However, with respect to the project's RERZ tax credit time sensitivities, IHDA deferred the City Council approval of the loan term amendment with VeriGreen post-closing, and staff seeks retroactive approval for this loan term extension.
Funding will be available in the City Budget, through budget amendments to program account 213-1330-801-44-33.
IMPACT STATEMENT:
This projects meets the priority goals of the City’s Consolidated Plan for Federal Funding, particularly a need to provide senior housing. The Project will also allow the City to report the creation of 12 affordable senior housing units to HUD. Although the loan term will be extended, this will not create any additional cost to the City.
RECOMMENDATIONS:
That the City Council approve the attached Resolution Approving the Amendment to the Development Agreement for a HOME Program loan between the City of Aurora and VeriGreen Development, LLC (d/b/a Aurora St. Charles Senior Living L.P.) to extend the loan term from thirty (30) years to forty (40) years, and further, that the Mayor and Chief Community Services Officer are hereby authorized to sign all contracts and documents associated with said Development Agreement.
cc: Alderman O’Connor, Chairman
Alderman Mervine
Alderman Bohman
Alderman Mesiacos, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing Execution of an Amendment to a Development Agreement for a HOME Program Loan Between the City of Aurora and VeriGreen Development, LLC (DBA Aurora St. Charles Senior Living L.P.) for a Senior Housing Development in the City of Aurora.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora has initiated numerous community development and
housing activities through funding by the U. S. Department of Housing and Urban Development; and
WHEREAS, the City of Aurora has a Consolidated Plan and Annual Action Plan which
have been adopted by the City Council and which have defined priorities for CDBG and HOME funding; and
WHEREAS, the HOME Investment Partnership Act guidelines established that the City would enter into an agreement with Developers to assist the City in implementing its programs in an effective and efficient manner; and
WHEREAS, the City approved a Development Agreement for a HOME Program loan between the City of Aurora and VeriGreen Development, LLC (d/b/a Aurora St. Charles Senior Living L.P.) for senior housing development through the rehabilitation of twelve low-income senior housing rental units via Resolution Number R15-287 on October 13, 2015; and
WHEREAS, the St. Charles Senior Living Project has been funded through multiple sources, including an Illinois Housing Department Authority (IHDA) loan; and
WHEREAS, the City of Aurora's HOME loan is subordinate to IHDA's loan; and
WHEREAS, on November 25, 2015 IHDA requested that the City amend its original 30-year loan term with VeriGreen Development LLC to match IHDA's 40-year loan term; and
WHEREAS, on December 16, 2015, the City of Aurora and VeriGreen Development, LLC have previously agreed to a HOME Development Agreement, which both parties desire to make coterminous with IHDA's loan term; and
WHEREAS, this Developer Agreement authorized a loan of $500,000 in HOME Investment Partnership Act funds, and the 2016 City Budget for the HOME program provides for this item in account 213-1330-801-44-33.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: Resolution Authorizing the Amendment to the Development Agreement for a HOME Program Loan Term Between the City of Aurora and VeriGreen Development, LLC (DBA Aurora St. Charles Senior Living L.P.) for a Senior Housing Development in the City of Aurora and extends the City's HOME loan term from thirty (30) years to forty (40) years.