Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Raymond Hodges, Director, Department of Housing
Subject: Rehabilitation of Nugent Square Apartments
RECOMMENDATION:
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Adopt a resolution authorizing and directing the Director of the Department of Housing, or designee, to:
A) Negotiate and execute amendments to the existing 2003 loan agreement and related documents between the County and Nugent Square Partners, LP, to facilitate both the transfer of the Nugent Square Apartments to a new ownership entity and the recapitalization and rehabilitation of the Nugent Square Apartments; and
B) Assign the existing 2003 County loan agreement and related documents to a new ownership entity, Nugent Square Partners II, LP; and
C) Negotiate, amend, and execute any other documents necessary to facilitate the recapitalization of the Nugent Square Apartments.
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BACKGROUND:
In 2003, the County provided a $2,605,240 Community Development Block Grant (CDBG) and Home Investment Partnerships Program (HOME) loan to Nugent Square Partners, LP, a California limited partnership controlled by Eden Housing, Inc. and East Palo Alto Community Alliance and Neighborhood Development Corporation (EPA Can Do) (jointly, the "Developer") to facilitate construction of the Nugent Square Apartments (the "Apartments"). The Apartments is a 32-unit, 100% affordable housing development constructed in 2005 and located at 2361 University Avenue in East Palo Alto. The Developer is now seeking to rehabilitate the Apartments through a recapitalization, in which new funds are brought in to preserve and improve affordable housing. As part of this recapitalization, the Developer is seeking to transfer the existing 2003 County loan agreement and related documents to a new owner, Nugent Square Partners II, LP, which is controlled by the Developer. Moreover, the existing County loan documents are proposed to be amended, with chang...
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