Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Raymond Hodges, Director of Housing
Subject: Loan Forgiveness - CDBG Loan
RECOMMENDATION:
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Adopt a resolution authorizing and directing the director of the Department of Housing, or designee(s), to forgive a Community Development Block Grant loan currently held by the Belmont Successor Agency relating to a property located at 730 El Camino Real in Belmont in the original principal amount of $260,000, and to take all actions and execute all documents and amendments as necessary and advisable, in consultation with the County Attorney, to effectuate the loan forgiveness and the release and reconveyance of security instruments issued in connection therewith.
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BACKGROUND:
On May 16, 1995, the County issued a Community Development Block Grant (CDBG) loan in the original principal amount of $260,000 (of which $259,472.90 was disbursed) to Mercy Housing California to finance improvements to a facility at 730 El Camino Real in Belmont. The CDBG loan was made pursuant to a loan agreement and Promissory Note secured by a Deed of Trust recorded against the property. Mercy operated the property as housing for individuals with AIDS pursuant to a separate Development Agreement with the Belmont Redevelopment Agency.
The CDBG loan is a no interest loan and initially required repayment through residual receipts, which were to begin in 2001. Under the Promissory Note, the term of the loan is 47 years from recordation of the Deed of Trust. The loan agreement included a shared appreciation clause that would provide the County with a pro rata share of realized appreciation at note maturity.
In 1999, Mercy ceased operations at the facility and assigned its obligations under the loan to the Belmont Redevelopment Agency, who then leased the property to Kainos, a non-profit organization enabling persons with developmental and intellectual disabilities t...
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