03-27-2012 CC RPT 28 - Laserfiche WebLink

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RDA Property Disposition Guidelines • Page 3 On December 17, 2009, the Housing Authority and the Agency entered into a Housing Cooperation Law Agreement to allow the Housing Authority to purchase vacant, foreclosed homes, rehabilitate them and sell or rent such homes to income eligible residents through the Targets of Opportunity (TOO) Program. The TOO Program was funded with $5 million of redevelopment 20% set-aside funds and a $20 million dollar line of credit. The properties that were acquired through the TOO Program will remain with the Housing Authority for affordable homeownership and rental opportunities. The $20 million line of credit has a current outstanding balance of $1.1 million which is due in full on July 1, 2012. Repayment of this amount is listed on the ROPS and will be made with revenue previously received from land sales deposited into the low and moderate income housing fund. In 2010, the Redevelopment Agency of the City of Riverside (Agency) was mandated by the State of California (State) to pay a total of $20,571,233 to the State Supplemental Educational Revenue Augmentation Fund (SERAF) to help address the State budget crisis. Of this amount $17,061,841 was paid in May 2010 and $3,509,932 was paid in May 2011. The law requiring the payments also allowed for agencies to borrow funds as needed from the low and moderate income housing fund to make the payment and required repayment within five years. The Agency borrowed funds from the redevelopment low and moderate housing set-aside funds to meet the requirement; however, no repayment schedule was approved at that time. In accordance with AB 1X 26, Health and Safety Code 34171(d)(1)(G), both loans are enforceable obligations and must be repaid by the Successor Agency to the Housing Authority. The $17,061,841 loan has to be repaid by May 10, 2015 and the $3,509,932 loan has to be repaid by May 10, 2016. Section 34180(b) of AB 1X 26 provides that the Successor Agency may, with the Oversight Board approval, refund debt of the former Agency in order to provide for savings or to finance debt service spikes; provided, however, that no additional debt is created and debt service is not accelerated. Pursuant to AB 1X 26 Section 34180(b), staff recommends that the attached repayment schedule (Exhibit D) for the SERAF loans be approved. With the proposed schedule, payments would occur in July and February of each fiscal year beginning in July 2012. With this proposed repayment schedule, the loans the former Agency had borrowed from the Low and Moderate Housing set-aside funds will be paid off by February 2016. The proposed schedule would provide for a payment based on the estimated ability to pay in July 2012 and payments thereafter designed to minimize spikes considering the total payment required for both loans. No interest payments are required on these loans. Approval of this repayment schedule will also allow the Housing Authority to complete the rehabilitation of several of the foreclosed properties that are currently on hold due to the court stay on redevelopment and the subsequent elimination, without the need for additional low and moderate housing funds that had been previously pledged to the Housing Authority for this purpose. Properties with Existing Obligations/Contracts Pursuant to Health and Safety Code Section 34181, the Oversight Board is responsible for directing the Successor Agency to dispose of properties of the former Redevelopment Agency (Agency). There are several properties which were acquired by the Agency that are currently obligated pursuant to third party agreements. The properties have been identified and are detailed in the attached Exhibit E.