REPORT TO COUNCIL
SUBJECT
Title
Consider Authorizing City Manager to Negotiate and Execute an Amended Loan Agreement with MidPen Housing to Extend the $964,750 HOME Loan for Carroll Inn for 55 Years
Report
SUMMARY OF COMMISSION ACTION
The Housing and Human Services Commission considered this item on June 26, 2024 and voted to approve Alternative 3: Do not grant MidPen’s request for a 55-year extension of the HOME loan for Carroll Inn. The vote was 5-1-1, with Commissioner Weiss dissenting and Commissioner Riviere absent.
FISCAL IMPACT
As of December 31, 2023, the loan issued by the City of Sunnyvale has a principal and interest balance of $1,433,526 which was due in full in March 2024.
Payments received on HOME loans are deposited back to the City’s HOME fund as Program Income and reallocated for future grants and loans. If the request to extend this loan for an additional 55 years is approved, the HOME fund would not receive full loan repayment until 2079; however, annual residual receipt payments would still be deposited into the HOME fund as Carroll Inn cash flow allows. Approving the extension of this loan and lack of full repayment in 2024 would lead to less available funding in future cycles of HOME funding availability for the Tenant Based Rental Assistance (TBRA) program. There is no General Fund impact.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the NOVA Workforce Services reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Authorize the City Manager to negotiate and execute an Amended Loan Agreement with MidPen extending the remaining balance of the HOME Loan for Carroll Inn for an additional 55 years and requiring annual residual receipt payments.
2. Authorize the City Manager to negotiate and execute an Amended Loan Agreement with MidPen extending the remaining balance of the HOME Loan for Carroll Inn for an additional 55 years, with no other loan modifications, allowing the $750,000 principal to continue to be deferred for the new term of the loan.
3. Do not grant MidPen’s request for a 55-year extension of the HOME loan for Carroll Inn.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Authorize the City Manager to negotiate and execute an Amended Loan Agreement with MidPen extending the remaining balance of the HOME Loan for Carroll Inn for an additional 55 years and requiring annual residual receipt payments.
JUSTIFICATION FOR RECOMMENDATION
While the repayment of this HOME loan would allow the City to award greater funds to the Tenant Based Rental Assistance program over future years, staff finds that preservation of Carroll Inn is a priority to ensure these 122 very low-income Single Room Occupancy units in downtown Sunnyvale continue to be available and habitable.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $250 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
A check or “Y” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_Y_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract
___ Labor or personal employment contract
___ General policy and legislative actions
Staff
Prepared by: Jenny Carloni, Housing Officer
Reviewed by: Trudi Ryan, Director, Community Development
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, Interim City Manager
ATTACHMENTS
1. Report to Housing and Human Services Commission [24-0709, June 26, 2024] (without attachments)
2. Existing Loan Agreement for Carroll Inn
3. Loan Extension Request from MidPen - January 18, 2024
4. Carroll Inn Loan Extension Follow Up Letter - May 31, 2024
Additional Attachments for Report to Council
5. Excerpt of Draft Minutes of the Housing and Human Services Commission Meeting of June 26, 2024