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CITY OF HOUSTON - CITY COUNCIL
Meeting Date: 11/19/2019
District K
Item Creation Date: 10/28/2019
HCD19-87 Bellfort Park Loan
Agenda Item#: 11.
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| | | | | | | | Summary:
O2019-0905 ORDINANCE approving and authorizing loan agreement between the City of Houston and KCG DEVELOPMENT, LLC to provide a $3,500,000.00 loan of Hurricane Harvey Community Development Block Grant Disaster Recovery Funds for the City’s Harvey Multifamily Program, to partially finance the renovation of Bellfort Park Apartments, a 64-unit family affordable rental housing community, located in the vicinity of 4135 West Bellfort Street in Houston, Texas - DISTRICT K - CASTEX-TATUM |
| | | | | | | | Background:
The Housing and Community Development Department (HCDD) recommends Council approval of an Ordinance authorizing a $3,500,000.00 loan to KCG Development for the acquisition and renovation of an affordable housing community for individuals and families.
Located within the Braeswood neighborhood of southwest Houston, Bellfort Park Apartments is a 64-unit affordable rental housing community containing a mix of one and two-bedroom units. The development will target a variety of income levels, including families earning 30, 50 and 60 percent of the Area Median Income and below.
The property is currently operating under a five-year Housing Assistance Program contract, which allows the property to serve individuals with an Area Median Income of 80 percent or below.
That contract is nearing expiration, this proposal seeks to acquire and renovate the property so that it may continue to serve low to moderate income families and preserve the existing affordable housing stock.
The loan will be funded by Hurricane Harvey Community Development Block Grant-Disaster Recovery (CDBG-DR17) program funds, which have been awarded by the United States Department of Housing and Urban Development, through the Texas General Land Office to provide affordable rental units for low to moderate income households within the City directly impacted by Hurricane Harvey and in accordance with the City’s Harvey Multifamily Program Guidelines implemented by the HCDD.
The City of Houston loan term and affordability period will be 20 years and will commence when the construction period is completed. Loan will be non-amortizing throughout both the construction and permanent period. Following project completion, the outstanding principal balance of the note shall accrue at 1% interest. Borrower will pay an annual installment equal to the lesser of (i) 1% annually on the outstanding balance of the loan plus accrued unpaid interest, if any, or (ii) 50% of net cash flow, provided the default rate interest of 10% per annum will accrue in the event of default. Interest shall be calculated utilizing a 360-day basis for the actual number of days principal is outstanding. Unpaid interest will accrue and will be payable from future available cash flow. If the loan is not in default at the end of the 20-year term, unpaid principal and interest will be forgiven.
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Sources:
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Uses:
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9% Housing Tax Credit Syndication Proceeds (National Equity Fund)
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$7,361,823.00
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Hard Cost
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$4,653,638.00
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City of Houston Request CDBG-DR17
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$3,500,000.00
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Soft Cost
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$1,892,663.00
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Permanent Loan (JPMorgan Chase Bank, NA)
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$3,150,000.00
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Acquisition Cost
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$6,000,000.00
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In-Kind Equity/ Deferred Developer Fee
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$71,225.00
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Developer Fee
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$1,209,832.00
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Reserves
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$326,915.00
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Total Source of Funds:
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$14,083,048.00
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Total Project Cost:
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$14,083,048.00
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Fiscal Note:
No Fiscal Note is required on grant items.
This item was reviewed by the Housing and Community Affairs Committee on September 17, 2019.
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Tom McCasland, Director |
| | | | | | | | Amount and Source of Funding:
$3,500,000.00 Federal State Local - Pass Through Fund (5030) |
| | | | | | | | Contact Information:
Roxanne Lawson
(832) 394-6307 |
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