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COMMISSIONERS ' <br /> David Dorsey <br /> EVERET ' Maddy Metzger-Utt <br /> ii=fa.L4g6 MEMORANDUM John Mierke <br /> IDRECTORECUTIVE George Perez, Jr. <br /> Bud Alkire Lyle <br /> Lyle Ryan <br /> Todd Taylor <br /> To: Mayor Ray Stephanson <br /> From: Bud Alkire ' <br /> Re: Broadway Plaza Bond ale <br /> Date: May 10, 2011 <br /> For approximately three years, the Housing Authority has been attempting to put together a refinancing package <br /> for Broadway Plaza that would serve two purposes: first,to finance approximately $4.5 million in renovation to <br /> the two towers; and second, to provide additional funds to assist in the financing of the replacement of the <br /> Baker Height neighborhood. This has not been easy as the downturn in the market affected our ability to find <br /> both a tax credit investor and a lender. <br /> Persistence has paid off and we are now able to move forward. Financing has been secured from three financial <br /> institutions: Boston Capital will be the investor in a tax credit limited partnership; Well Fargo will provide a$7 <br /> million permanent loan; and Bank of America will provide construction bridge financing of approximately $5.5 <br /> million. The B of A loan will be for 24 months and will be repaid with Boston Capital's equity contribution. <br /> The technical arrangement will have the ownership remaining of course with the Housing Authority, which will <br /> lease the buildings to the tax credit limited partnership, with EHA serving as the General and Managing partner. <br /> The loans taken out by EHA will be re-lent to the partnership and will be repaid with the building revenues. <br /> (Both buildings have Section 8 contracts(covering 185 of the 190 apartments) controlled by the Housing <br /> Authority and providing for market based rents. This permits us to rent to primarily extremely low income <br /> individuals while receiving market rents.) Our financial proforma, and our obligations to the lenders, provide <br /> for a net income before debt service of not less than 120% of the principal and interest. <br /> We have bid out all of the major elements of the renovation work and are prepared to close on the transaction in <br /> mid June. Because of bond sales will be done on behalf of the partnership, your approval of the bond issuance <br /> is necessary. The required certificate is attached. I have also attached a copy of the minutes of a public hearing <br /> we conducted, after legal notice, at which no one appeared. Also attached are financial summaries of the <br /> transaction. I would be pleased to meet with you or your staff if it would be helpful. <br /> One final note that may be of interest: as you know, we were able to assist the Senior Center during its <br /> renovation by providing meals in our dining room. Deborah Wright and the Senior Center staff are being more <br /> than helpful in returning the favor. Our kitchen will be closed for a portion of our renovation work and we are <br /> working out the details for our temporary use of the Senior Center kitchen. <br /> 4 <br />