Title
Approval of a Resolution Authorizing the Subordination of Community Development Block Grant Loans for Behavioral Health Resources B&B Apartments
Recommended Action
Committee Recommendation:
Not referred to a Committee.
City Manager Recommendation:
Move to approve the resolution authorizing the subordination of Community Development Block Grant loans for Behavioral Health Resources B&B apartments.
Report
Issue:
Whether to approve the resolution authorizing the subordination of Community Development Block Grant loans for Behavioral Health Resources B&B apartments.
Staff Contact:
Anastasia Everett, Sr. Housing Program Specialist, CP&ED, 360.753.8277
Presenter(s):
None - Consent Calendar item.
Background and Analysis:
The City’s Community Development Block Grant (CDBG) funding has been used for improvements of Behavioral Health Resources’ (BHR) B&B Apartments. Loans were issued in 1994, 1995, 1996, 1997 and 2011. BHR has secured new funding to redevelop the B&B apartments, expanding the number of units and making improvements to the building. The redevelopment will offer 19 units of studio and one-bedroom housing for households with incomes up to 50% of area median income at 2104 State Ave. NE.
Supportive services will also be provided. BHR has requested the City subordinate its position of the liens on the property to secure the new funding. The subordination of City loans is a requirement from the new funders to issue their financing of the redevelopment. The subordinations will not have an impact on any other loan terms from the original agreements, including affordability covenants.
Climate Analysis:
Not expected to have an impact on climate.
Equity Analysis:
BHR provides affordable housing for individuals with incomes below 50% area median income who are struggling with mental health and substance use disorders. This action will support underserved and marginalized populations in Olympia.
Neighborhood/Community Interests (if known):
Affordable housing is a top of interest and high priority for the community. This is a project with regional and state funding. Local jurisdictions are coordinating together to support BHR in the improvements of the B&B apartments.
Financial Impact:
The City’s CDBG loans total $143,975. The loans are still due in full upon sale of property. There is a risk of financial impact involved in this subordination. The impact identified is that if the senior lien holders foreclose on the property, City CDBG loans would be last in line for payment.
Options:
1. Move to approve the resolution authorizing the subordination of Community Development Block Grant loans for Behavioral Health Resources B&B apartments.
2. Do not approve the resolution authorizing the subordination of the City’s CDBG loans. This option would put BHR at risk of not receiving their new funding for the improvements of the B&B apartments
3. Take action on another date. This option would delay BHR’s closing on the new funding
Attachments:
Resolution
Agreement