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Consider/Discuss/Act on a Resolution Approving an Amendment to the McKinney Housing Authority (MHA) Revolving Loan for Newsome Homes Redevelopment Pursuant to a Chapter 393 Loan Agreement Between the City of McKinney and the McKinney Housing Authority
Summary
COUNCIL GOAL: Improve the Quality of Life in McKinney
MEETING DATE: March 21, 2017
DEPARTMENT: Housing and Community Development
CONTACT: Janay Tieken, Housing and Community Development
RECOMMENDED CITY COUNCIL ACTION:
• Approve a Resolution extending the Borrower’s (MHA) loan performance period for qualified expenditures until October 1, 2017 and amending all applicable sections under the loan agreement and Chapter 393 agreement.
ITEM SUMMARY:
• The McKinney Housing Authority (MHA) is requesting a six (6) month extension of the performance period for qualified expenditures from April 1, 2017 to October 1, 2017.
• “Qualified Expenditures” are certain defined and budgeted construction expenses made incident to the Newsome Homes project.
• Final loan disbursement of $385,350 will be made on March 1, 2018 based on qualified expenditures made through October 1, 2017
BACKGROUND INFORMATION:
• Original loan authorization and Chapter 393 agreement was approved on August 4, 2014, Resolution # 0214-08-90.
• Borrower is requesting a loan compliance extension request based on documented construction delays.
• Chapter 393 of the Local Government Code allows the City to provide a low interest, revolving loan facility for a portion of the request. The loan was approved with the following terms:
o Principal Amount: $1,156,052
o Interest Rate: 2.75%
o First advance: $116,000 park fees at issuance of building permit
o Second Advance: $269,350 on March 1, 2016
o Third Advance: $385,350 on March 1, 2017
o Fourth Advance: $385,350 on March 1, 2018
o Repayment: $25,000 annual payments beginning on November 1, 2020 through November 1, 2030; then increasing to $50,000 from November 1, 2031 through November 1, 2035; then increasing to $100,000 from November 1, 2036 to November 1, 2039; and with a final payment of the balance of principal and interest due on November 1, 2040.
o Payments will remain in the revolving fund for future MHA projects, as available, and upon qualifying and as approved by the City Council.
o Loan will contain a savings provision whereby City and Developer will share savings below an agreed GMP.
• The MHA’s annual payment-in-lieu of taxes to the City will also be waived during the term of the loan.
• Project Sources and Uses as of 7/29/14 are attached.
FINANCIAL SUMMARY:
BOARD OR COMMISSION RECOMMENDATION: N/A