San Mateo County Supervisors are in the Real Estate Lending Business, Why?

$10,000,000 loan of Measure A money to be approved November 15, 2016

If you object to this contact your Supervisor and let them know. Measure A funds for Mid Pen housing (a financial donor for Yes on K) to purchase an apartment complex. Why don’t they just go to a lender. Is it because they get a better deal from our Supervisors.

MidPen Housing Corp 09/20/2016 donated $30,000.00 to the Yes on K Neighbors for Affordability and Quality of Life with Major Funding by Seton Medical Center.

San Mateo County Supervisors 

Agenda Item 34 Measure A: Resolution regarding acquisition of Atherton Court Apartments:

COUNTY OF SAN MATEO

Inter-Departmental Correspondence Department of Housing

Date: Board Meeting Date: Special Notice / Hearing: Vote Required:

To: Honorable Board of Supervisors

October 6, 2016 November 15, 2016 None
Majority

  1. A)  Authorizing a loan to MidPen Housing of $5,883,211 for the acquisition of real property located at 3752-3770 Rolison Road, also known as Atherton Court, in Redwood City; and
  2. B)  Authorizing the Director of the Department of Housing, or the Director’s designee, to execute a loan agreement with MidPen Housing for the acquisition of Atherton Court in Redwood City, as approved by County Counsel.

BACKGROUND:

On June 28, 2016 the Board of Supervisors adopted a resolution to allocate $10 million in Measure A funding to establish a program to fund the acquisition and to preserve the affordability of apartment buildings rented at below-market rents in San Mateo County. The Board of Supervisors established the Affordable Rental Acquisition and Preservation Program (ARAPP) in recognition of the negative effects on low- and moderate-income households when the sale of existing apartment buildings results in rent increases and displacement.

In an effort to preserve existing, naturally occurring affordable housing, the San Mateo County Department of Housing has provided loan funds to two projects including a nine- unit project located at 168 Pacific Avenue in Pacifica acquired by MidPen Housing and a sixteen unit project located at 1110 Cypress in the City of San Mateo acquired by HIP Housing.

. . .

In early 2016, MidPen Housing, working in partnership with Abode Services, became aware that Atherton Court, a property located at 3752-3770 Rolison Road in Redwood City was being offered for sale. In order to preserve these 55 units of naturally-occurring affordable housing, MidPen Housing submitted an offer to purchase Atherton Court. MidPen Housing has worked closely with the San Mateo County Department of Housing to structure the acquisition and long term operation of Atherton Court to comply with the requirements of the ARAPP loan program.

DISCUSSION:

MidPen Housing applied for funding under ARAPP to support the acquisition of Atherton Court in Redwood City. This property is made up of three buildings with a total of 55 apartments, including 53 studios and two one-bedroom apartments. In negotiating the purchase of this property, MidPen Housing and Abode Services, a service provider working with many of the existing tenants at Atherton Court, became aware of pending offers on the property in which the proposed buyers were seeking to purchase the property fully vacant, which would result in the displacement of 100% of the existing tenants. Because of the need to move quickly to provide funding for the purchase of Atherton Court, the Department of Housing has been working closely with MidPen Housing and has completed underwriting on the project.

Currently at least 47% of the households living at Atherton Court receive some type of rental assistance through either Section 8 Housing Choice Vouchers, HUD VASH Vouchers, or rental assistance from LifeMoves or from Abode Services. MidPen Housing proposes to acquire Atherton Court and complete all health and safety repairs, rent the current vacant units, and any units that become vacant, to tenants at or below 60% AMI. MidPen has also agreed to accept existing holders of Section 8 Housing Choice Vouchers to fill vacant units. Once MidPen has acquired Atherton Court, it plans to restructure the project financing and apply for Low Income Housing Tax Credits and other permanent affordable housing financing. MidPen intends to conduct a comprehensive property needs assessment to identify all the deferred maintenance and property upgrades needed to create a healthy and safe living environment for the tenants and to extend the useful life of the property. MidPen will maintain a rent schedule that results in long term affordability for tenants at or below 80% AMI, in line with the requirements of the ARAPP. MidPen has agreed to set aside units targeted to households with incomes at or below 30% AMI and to offer housing options to San Mateo County clients including homeless and special needs populations.

As proposed, the acquisition and rehabilitation of Atherton Court meets all of the goals established by the Measure A-funded ARAPP loan program including preservation of naturally affordable rental housing, conversion of unsubsidized rental housing to long term, rent-restricted rental housing serving low, very-low, and special needs populations, and minimizing the displacement and potential homelessness of existing residents. Furthermore this project will improve the quality and condition of 55 units of existing rental housing by addressing deferred maintenance and obsolete systems. The project will also leverage other private and public funding including (a) owner’s equity, (b) other public funds, and (c) private and public debt.

RESOLUTION NO. .
BOARD OF SUPERVISORS, COUNTY OF SAN MATEO, STATE OF CALIFORNIA

******
RESOLUTION: A) AUTHORIZING A LOAN TO MIDPEN HOUSING OF $5,883,211 FOR THE ACQUISITION OF REAL PROPERTY LOCATED AT 3752-3770 ROLISON ROAD, ALSO KNOWN AS ATHERTON COURT, IN REDWOOD CITY; AND B) AUTHORIZING THE DIRECTOR OF THE DEPARTMENT OF HOUSING, OR THE DIRECTOR’S DESIGNEE, TO EXECUTE A LOAN AGREEMENT WITH MIDPEN HOUSING FOR THE ACQUISITION OF ATHERTON COURT IN REDWOOD CITY, AS APPROVED BY COUNTY COUNSEL. ______________________________________________________________

RESOLVED, by the Board of Supervisors of the County of San Mateo, State of California, that

WHEREAS, the Board recognizes the negative effects on low- and moderate- income households caused by the sale of apartments with affordable, below-market rate rents, which can result in rent increases, displacement and potential homelessness; and

WHEREAS, the Board established a program, as part of the Affordable Housing Fund (AHF), to provide funding for the acquisition and preservation of apartment buildings rented at below-market rates in San Mateo County; and

WHEREAS, the Board allocated $10 million in Measure A funds to the Affordable Rental Acquisition and Preservation Program (ARAPP); and

WHEREAS, MidPen Housing has identified property located at 3752-3770 Rolison Road in Redwood City that currently provides fifty-five units of below-market rate rental housing, including housing for a number of tenants that receive rental assistance through Section 8 Housing Choice Vouchers, HUD VASH Vouchers, and rental assistance from LifeMoves or from Abode Services; and

WHEREAS, the property located at 3752-3770 Rolison Road in Redwood City is also known as Atherton Court and was at risk of being sold to a private sector investor, potentially displacing 100% of the existing residents; and

WHEREAS, MidPen Housing has requested $5,883,211 in funding from the San Mateo County ARAPP to acquire and to preserve the affordability of Atherton Court in Redwood City; and

WHEREAS, MidPen Housing will leverage the San Mateo County loan of $5,883,211 with other public and private sector funding for the acquisition of Atherton Court, with a total acquisition price of $17.1 million and will preserve fifty-five units of affordable rental housing in San Mateo County; and

NOW THEREFORE, IT IS HEREBY DETERMINED AND ORDERED that the

Board of Supervisors hereby adopt this Resolution A) authorizing a loan to MidPen Housing of $5,883,211 for the acquisition of real property located at 3752-3770 Rolison Road, also known as Atherton Court in Redwood City; and B) authorizing the Director of the Department of Housing, or the Director’s designee, to execute a loan agreement with MidPen Housing for the acquisition of Atherton Court in Redwood City, as approved by County Counsel.

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Filed under Adrienne Tissier, Board of Supervisors, Carole Groom, Dave Pine, Don Horsley, John Beiers, John Maltbie, Sabrina Brennan, San Mateo County, San Mateo County Clerk to Supervisors, San Mateo County Manager, San Mateo County News, Tax Payer's Advocate, Warren Slocum

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