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HomeMy WebLinkAbout01. Adopt Reso-Authorizing CM to Submit CDBG Sect 108 Loan AmendmentSECTION 108 LOANAMENDMENT AUGUST 14, 2018 PAGE 2 and Gardendale Street to the south. It was also noted that the City would be responsible for all maintenance, replacement and operational costs during the lease term, and any other project - related costs exceeding the $10,000,000 total estimated project costs. City of Downey staff has been working with County of Los Angeles staff on the bidding and pre design of the fields on the five acres of land offered by the County of Los Angeles. Design alternatives such as synthetic turf vs grass soccer fields,- inclusion of a score board, and infrastructure improvements have caused the project budget to exceed the County allocated $10,000,000; thus, requiring that the City explore the use of other funds to support the Sports Field Project. The proposed amendment (see Attachment A), will modify the following items that were approved through the original Section 108 loan application: site name; site location; proposed collateral; and, will allow the City Manager to negotiate and execute any appropriate instruments, agreements, and implementing documents, and to take any necessary or appropriate implementing actions related to the Section 108 loan amendment. Quality of Life, Infrastructure& Parks The annual payment on the proposed HUD loan will be made from the City's CDBG entitlement grant. The original application to HUD proposed a loan with a 20 year repayment schedule with the intent to obtain the lowest possible annual payment, and maximize the distribution of the annual CDBG grant for a variety of ongoing activities and needs of the City's low and moderate income residents. It should be noted that CDBG funding has fluctuated through -out the past several years. If the program were to be eliminated entirely, the City will be responsible for finding another funding source for repayment of the bonds, including using general fund dollars, should no other funding source be identified. Attachment A — Resolution Attachment B — Draft AmendmentLetter Attachment C — HUD Funding Approval/Agreement Attachment D — Application for Section 108 Loan Guarantee Program WHEREAS, The City of Downey ("CITY") wishes to amend an existing $3.0 million loan from the Department of Housing and Urban Development through the Section 108 Loan Guarantee Program; WHEREAS, the City intends to use funds obtained from the Section 108 Loan Guarantee Program towards the activity involving the construction of the Rancho Los Amigos South Campus Sports Fields. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DOWNEY DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. That the City authorizes the City Manager to submit the Amendment, and direct the City Manager, as the official representative in connection with the original application and amendment, to provide additional information, all understandings and assurances, as may be required. SECTION 2. The City authorizes the City Manager to execute the Amendment and submit such documents as may be required in order to implement the Amendment. SECTION 3. The City Clerk shall certify to the adoption of this Resolution. SEAN ASHTON, Mayor MARIA ALICIA DUARTE, CMC City Clerk I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of the City of Downey at a Regular Meeting held on the 14th day of August, 2018, by the following vote, to wit: AYES: Council Members: NOES: Council Member: ABSENT: Council Member: ABSTAIN: Council Member: MARIA ALICIA DUARTE, CMC City Clerk Attachment "A" August 15, 2018 Paul Webster, Director Financial Management Division U.S. Department of Housing and Urban Development 451 Seventh St., S.W. Room 7180 Washington, D.C. 20410 Subject:- Amendment to Section 108 Loan Application B-12-MC=06-0516 Dear Mr. Webster, This letter shall serve as the request to amend certain Funding Approval/Agreement and collateral for Project Number B -12 -MC -0516 (collectively, the "Neighborhood Inspiration Center Section 108 Loan Agreement") between the United States of America, by and through the Department of Housing and Urban Development ("HUD") and the City of Downey, a California municipal corporation ("City"). The Inspiration Neighborhood Center Project was a proposal to construct a public facility with multi-purpose community meeting and activity space located at Discovery Park; in addition, it would be the permanent home for the wooden, full-scale model (mock-up) of a space shuttle orbiter. The Inspiration Neighborhood Center would benefit residents immediately surrounding the former NASA/Downey property. The Inspiration Neighborhood Center will now be substituted for the City's first Sports Fields located within five (5) acres of the southeastern portion of the Rancho Los Amigos South Campus Sports Fields, generally bordered by Erickson Avenue to the west, Bonita Street to the north, St. Pius X — St. Matthias Academy to the east, and Gardendale Street to the south. The development of the Rancho Los Amigos South Campus Sports Fields Project includes: three (3) synthetic turf or grass soccer fields of various sizes to support play of youth through high school level of competition, with the largest field being able to host football and lacrosse play as well; a parking lot with an estimated 74 spaces; a 2,100 to 3,000 square -foot building that will house restrooms, concessions, administrative offices, storage and meeting space; shielded directional lighting of sports fields to allow for field usage during dusk/night; fencing along the project boundaries; temporary or permanent bleacher seating; and, drought tolerant landscaping. The city intends to utilize the entire loan program of $3,000,000 (the "HUD Loan Funds") for the development of the Rancho Los Amigos South Campos Sports Fields project. The preliminary budget amount for the Rancho Los Amigos South Campus Sports Fields Project is $10,000,000. Attachment "BI The proposed Rancho Los Amigos South Campus Sports Fields project meets HUD's National Objective to serve residents citywide via the Low/Mod Area benefit; additionally, the construction of a public facility is an Eligible Activity under 24 CFR 570.703(1). Additionally, this letter requests to amend the following: 1. The "Collateral," as defined in the City's Inspiration Neighborhood Center Section 108 Loan Application, is hereby modified to be a "debt service reserve account" to be established and maintained by U.S. Bank National Association in accordance with governing documents and practices approved by HUD. By way of reference, HUD and the City intend to use a "debt service reserve account" similar that as set forth in Paragraph 15(a) of that certain "Contract for Loan Guarantee Assistance Under Section 108 of the Housing and Community Development Act of 1974, As Amended, 42 U.S.C. §5308" Contract No. B -16 -MC -06-0516. 2.- The City Manager or authorized designee to be authorized by the City Council to execute this Letter Amendment, to negotiate and execute any and all appropriate instruments, agreements, and implementing documents, and to take any necessary or appropriate implementing actions (including but not limited to setting up a debt service reserve account) for the purposes of implementing this Letter Amendment. 3. Except as otherwise amended by this Letter Amendment, all the terms and conditions in the Neighborhood Inspiration Center Section 108 Loan Agreement shall remain in full force and effect. If there are any questions regarding this submission, please contact Jessica Flores, Economic Development and Housing Manager or Jose Vazquez, Management Analyst, at (562) 904-7161. Sincerely, CITY OF DOWNEY OFFICE OF THE CITY MANAGER Gilbert A. Livas City Manager cc: Mary Ann Carrasco, CPD Representative GAL/JGV Enclosures Funding r I/ t U.S. Department of Housing and Urban Development Title'I of the Housing and Community Office of Community Planning and Development Development Act (Public Law 930 3) Community Development Block Grant Program HI -00515R of 205158 1. Name of Grantee (as shown in item S of Standard Form 424) 3. Grantee's 9 -digit Tax ID Number 4, Date use of funds may begin CITY OF DOWNEY, CA (mm/dd/yyyy) 2. Grantee's Complete Address (as shown in item 5 of Standard Form 424) 5a: ProjecUGrant No. 1 6a. Amount Approved 11 I I I Brookshire Avenue B - 12 -MC -06-0516 Downey, CA 90241 5b. ProjecUGrant No. 2 6b, Amount Apptoved 5c ProlecVGrant No. 3 6c. Amount Approved 6i_anl Agre-e-meats This Grant Agrezment between the Department of Housing and Urban Development (HUD) and the above named Grantee i5 made pursuant to the authority of Title I of the Housing and Community Development Act of 1974, as amended, (42 USC 5301 et seq.). The Grantee's submissions for Title I assistance, the HUD regulations at 24 CFR Part 570 (as now in effect and as may be amended from time to time), and this Funding Approval, including any special conditions, constitute part of the Agreement. Subject to the provisions of this Grant Agreement, HUD will make the funding assistance specified here available to the Grantee upon execution of the Agreement by the parties. The funding assistance specified in the Funding Approval may be used to pay costs incurred after the date specified in item 4 above provided the activities to which such costs are related are carried out in compliance with all applicable requirements. Pre -agreement costs may not be paid with funding assistance specified here unless they are authorized in HUD regulations or approved by waiver and listed in the special conditions to the Funding Approval The Grantee agrees to assume all of the responsibilities for environmental review, decision making, and actions, as specified and required in regulations issued by the Secretary pursuant to Section 104(g) of Title 1 and published in 24 CFR Part 58. The Grantee further acknowledges its responsibility for adherence to the Agreement by sub -re cr st nc enW ies to which it makes fundrn assistance hereunder available. U.S. Department of Housing and Urban Development (By Name) Grantee Name Yolanda Ch5vez CITY OF DOW Y, CA Title Title pia ' slstant creta o rant roggyrarls- Cit ,;, Manager _ " Dale t / itrrlat Date (mrd 11417 -71 category of Tttte i Assislan a for this Funding Action, ` " 8. Special Conditions ' a. D HUD fldCOO ubmf64ion10. check one (check only one) (check one) (mm/d ) Z a. Origfunding a. Entitlement, Sec 106(b) None 9b. Date Grantee Notified Approval b. State -Administered, Sec 106(d)(1) Attached (myyyy) b. Amendment c. HUD -Administered Small Cities, Sec 106(d)(2)(B) 9c. Dateate of of Start of Prpgram Year Amendment Nur ❑ d. Indian CDBG Programs; Sec 106(a)(1) (tr yyyy) ❑ e. Surplus Urban Renewal Funds, Sec 112(b)Ty 1 LAmount of Community Development El (. Special Purpose Grants, Sec 107 Block Grant FY( } FY (, ) FY ( ) g. Loan Guarantee, Sec 108 a. Fonds Reserved for this Grantee b, Funds now Wing Approved - c. Reservation to be Cancelled 1lamiAus U 12a. Amount of Loan Guarantee Commitment now being Approved 12b. Name and complete Address of Public Agency $3,000,000 Community Development Department, Housing Division obra GuaranteeAcoetanceProvisionsfor Designated Agencies: The public agency hereby accepts the Grant Agreement executed by the Department of Housing and Urban Development on the above date with respect to the above grant number(s) as Grantee designated to receive 12c. Name of Authorized Official for Designated Public Agency loan guarantee assistance, and agrees to comply with the terms and NSA conditions of the Agreement, applicable regulations, and other requirements of HUD now or hereafter in effect, pertaining to the Title assistance provided it. Signature HUD Accounting use Only Effective Date Batch TAC Program Y A Reg Area Document No. Project Number Category Amount (mm/ddlyyyy) F E7- Y Project NumberAmount U -1 E: Y Pfaied Number -- Amount 0 Dale Entered PAS (mmldd/yyyy) Date Entered LOCCS (mmlddlyyyy) Batch Number Transaction Cod�e-----T Entered By Verflied By Oe r=Q r;70 form HUD -7082 (4/93) ; Attachment " I I ft I (a) fn the event Downey (the "City") falls to submit notes or other obligations for inspection and guarantee by the Secretary of Housing and Urban Development (the "Secretary") before May 1, 2014 the commitment will ten-ninate and expire as of such date. (b) The repayment schedule for the Guaranteed Loan must be acceptable to the Secretary. (c) Pursuant to 24 CFR 570,705(b)(3), the City shall provide additional secu ity or the Guaranteed Loan and such additional security must be acceptable to the Secretary. The additional security shall be identified in the Contract for Loan Guarantee Assistance specified by 24 CFR 570.705(b)(1), which will be executed at the time the guaranteed obligations are issued. (d) Prior to submitting notes or other obligations for inspection and guarantee by e Secretary, the City shall submit information required under Section 102(b) of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S;C. 353 1). This information shall be submitted on Form HUD -2880 to HUD's Los Angeles Field Office. (e) Any amount of this commitment that is not received by e City as an vanoi under the Guaranteed Loan by September 30, 2018, will be canceled in compliance with 31 U.S.C. 1552(a). Grantee- City of Down11111 ey, Brookshire Downey, CA 90241 DUNS# 067790386 The City of Downey is submitting the applicationfor 1 million in loanguarantee funds• -r Section 108 of • • and Community Development of • The City intends to use this Federal program to construct a public facility Which will benefit residentsimmediately • • • the former'' i• • •• The proposed project will meet the national objective of principally benefitting persons of low and moderate income by providing public meeting space for a variety of • othof residentand t0t6drig spiatd for ne0borhood children. will also serve as a cooling center for nearby elderly residents during the hot summer n • ; Actvot til Project Name: Inspiration Neighborhood Center Project Location: Discovery Park, 12420 Columbia Way Funding Amount: $3,000,000 National Objective: Low -Mod Benefit, Area Benefit 24 CFR 570.208 Eligibility Citation: 24 CFR 507.703 (1) Pro ect Description. The' City is proposing to construct a multi-purpose commun y building be located on dedicated open space the former NASA owned property that was once home to the Apollo and Space Shuttle programs. The proposed •, •i facility will incorporate l- • •historic period in Downey. The new building will serve as a neighborhood center to benefit reside - r: • adjacent residentialcommunity wooden,meeting and activity space, and a permanent home for the ••- s • of a space- • • replicaThe donated to the City of Downey by • woodenAeronautics and Space Administration (NASA) and will incorporate an historic preservation element to this project. The City is required, per a prior agreement with NASA, to house the ••- but • anticipated to be a regionaldraw, • - to the locationof p,ce shuttle, the Endeavour, Page l of 4 December 8,2013 Attachment " Californiaten miles away at the contrastdoes not intend to construct parking for this facility, specifically due to its purpose as a neighborhood center. Users will access the facility by foot or on the fixed -route bus system recently re- routed to include a stop at the park. The project is intended to inspire neighborhood pride and Unity, in • the blighted •, • •, that the property has exhibited for the last decade. A portion of the neighborhood served by the proposed center is the Elm Vista neighborhood, a long-time r of intense Police Department enforcementand preservation efforts. The Center will allow for safe, comfortable meeting and mediation space for the residents. It will be flexible enough to switch from• a smaller group • • sessions to private cubicle spaces for a variety of uses, such tutoring, counseling andlow-income healthcare services. incomeThe space will be adaptable fb� pl ' ay space for neighborhood children. Partnerships are already being developed to provide space for after-school childcare programs for low and moderate ;• -n attending schools within Walking distance of proposed Inspiration Neighborhood Center. Priority for space use will be given to neighbors of Project • • -• on data • 111 census which Was supplied by CPD office, the principal area served by the Inspiration Neighborhood Center is within one quarter mile radius of the project. This area consists of a residential population of 44.9% low and moderate income persons. designated "exceptio community" under Section 24 CFR 570.208(l) (ii), the project proposed by the City complies with the area benefit test, because it exceeds the 43.3% exception threshold for the City 'I of Downey. community"Our analysis also assumed a secondary benefit area with a distance of one half mile from the neighborhood center. This area consists of a residential population of 46.8% low and moderate income persons. As a designated "exception r- • 570.208(l) • exceeds'� -• • • • • i•wney Project Financing: The scope of this project including soft and hard cost will be financed through the loan funds from the Section 108 Loan program. Project-•ule: The City expects to complete the project before • of program y- 1' 1 The design phase will be • • -• Page 2 of 4 December 8, 2013 within 6 months after receiving approval on the Section 108 loan. The construction phase will be completed within 8 months after completion of the design phase and the bid phase. Under the proposed project schedule and cost budget this project will be compliant with the overall benefit requirement under Section 570.20O(a) (3). Where over program years 2012, 2013, and 2014 at least 70 percent of CDBG funded activities will benefit persons of low and moderate income. The amount of loan proceeds requested by the City of Downey is approximately 83%® of the total available to the City under the Section 108 Program. Based on our in- house calculation, the City can borrow up to $3.6 "million. This figure is based on the City's current year CDBG allocation of $1,043,000 multiple by a factor of 5 years and subtracting the loan balance on two existing Section 108 obligations. The City is limiting this application to $3.0 million. Loan Re a ment Structure.. The City is requesting a 20 year loan term with a flexible nonconforming repayment plan. The City is proposing a payment plan consisting of interest only payments for the first four years of the loan followed by interest and principal payment from year 5 through year 20. All payments on this product will be made from the City annual CDBG allocation. The preferred payment plan is reflected below: --. - -• � . � 111 1/1 Repayment Term: 20 years Payment Plan: Year 1 —4 Interest only payments Year 5 — 20 Annual principal payment of $187,500 plus accruing loan interest Pledge of 000,000 toward future CDBG awards The City of Downey adopted a Citizenr. • Plan in June 1995 and approved updatean of -n Participation Plan in May 2010. The Plan establishes amendmentsprocess for public input and notification pertaining to the substantial changes and • the CDBGprogram. public noticepublished local newspaper,Downey Patriot,on December . 2012,• the start of it •. public review and comment period. A public hearing scheduled on January 8, 2013 Page 3 of 4 December 8, 2013 allowed for public input and comment prior to action on this matter by the Downey Ci Council. I or during the 30 day public comment period. Local Aciencv Contacts Brian Saeki, Director of Community Development Edward Velasco, Housing Manager 11111 Brookshire Avenue Downey, CA 90241 Phone: (562) 904-7152 Fax: (562) 622-4816 Email: evelasco@downeyca.org V.11 W W I LOITIVI I Lei 01 V.A,% a GAT -01: ILYA 1:4 0 11611 E a City Council Resolution No. 13-7387 Page 4 of 4 December 8, 2013 ATTACHMENT Inspiration Community Building P wk�Grourl 'Source 2000 Census Count I +, BLOCK L/M CENSUS GROU LOW/MOD POPULATION PERCENT TRACT P COUNT COUNT OF TOTAL S000rtdiwy Area Benefit at -V2 Mile radius from to at, site, BLOCK L/M CENSUS LOW/MOD POPULATION GROU PERCENT TRACT Pii COUNT •COUNT OFTOTAL OULU] December 8, 2013 SECTION • In accordance with Section 108 of the Housing and Community Development Act of 1974, as amended (the "Act'), and with 24 CFR Part 570.704(b), the public entity certifies that: (1) It possess the legal authority to make the pledge of grants required under §570.705(b) (2). (2) It has made efforts to obtain financing for activities described in the application without the use of the loan guarantee and cannot complete such financing consistent with the timely execution of the program plans without such guarantee. In accordance with Section 108 of the Housing and Community Development Act of 1974, as amended (the "Act'), and with 24 CFR Part 570.704(b) (8), the public entity further certifies that: (i) It possesses the legal authority to submit the application for assistance under this subpart and to use the guaranteed loan funds in accordance with the requirements of this subpart. (ii) Its governing body has duly adopted or passed as an official act a resolution, motion or similar action: (A) Authorizing the person identified as the official representative of the public entity to submit the application and amendments thereto and all understandings and assurance containing therein, and directing and authorizing the person identified as the official representative of the public entity to act In connection with the application to provide such additional information as may be required; and (B) Authorizing such official representative to execute such documents as may be required in order to implement the application and issue debt obligations pursuant thereto (provided that the authorization required by this paragraph (B)) may be given by the local governing body after submission of the application but prior to execution of the contract required by §570.705(b). (iii) Before submission of its application to HUD, the public entity has: (A) Furnished citizens with information required by §570.704(a) (2) (1); (B) Held at least one public hearing to obtain the views of citizens on community development and housing needs; and (C) Prepared its application in accordance with §570.704(a) (1) (v) and made the application available to the public. (iv) It is following a detailed citizen participation plan which meets the requirements described in §570.704(a) (2). (v) The public entity will affirmatively further fair housing, and the guaranteed loan funds will be administered in compliance with: (A) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq); and (B) The Fair Housing Act (42 U.S.C. 3601-3619). (vi) In the aggregate, at least 70 percent of all CDBG funds, as defined at §570.3, to be expended during the one, two, or three consecutive years specified by the public entity for its CDBG program will be for activities which benefit low and moderate income persons, as described in criteria at §570.208(a). (vii) It will comply with the requirements governing displacement, relocation, real property acquisition, and the replacement of low and moderate income housing, as described in §570.606. (viii) It will comply with the requirements of §570.200(c)(2) with regard to the use of special assessment to recover the capital costs of activities assisted with guaranteed loan funds. (ix) (Where applicable) It lacks sufficient resources from funds provided under this subpart or program income to allow it to comply with the provisions of §570.200(c)(2), and it must therefore assess properties owned and occupied by moderate income persons, to recover the guaranteed loan funded portion of the capital costs without paying such assessments in their behalf from guaranteed loan funds. (x) It will comply with the other provisions of the Act and with other applicable laws. Public Entity's Legal Name: Cit r -of Downey Date Signature of Authorized Representative: Gilbert A. Livas, City Manager December 8, 2013