1. Housing Department CITY COUNCIL Washington Park Classics Project Third Amendment Agreement to OPLA Jim Wong, Senior Project Manager October 15, 2012

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6. Housing Department Washington Park Classics Amendment Background: 8-unit for-sale housing project was contracted w/ Trademark Development in Aug. 2005 and completed in May 2012 Under existing OPLA, City’s $1.53M project loan would be repaid from recast loans to homebuyers ($524,245) and the balance would be forgiven ($1,005,624) In late-July 2012, developer requested additional forgiveness on City loan based on project financial shortfall 6

7. Housing Department Washington Park Classics Amendment Background: Additional City loan forgiveness of $368,645 necessary to avoid default and close project cost- revenue gap with $0 profit to developer To meet construction lender’s release requirements and expedite closing of affordable unit #107, City will provide a $74,000 HOP loan to homebuyer City will recover the $74,000 by placing a demand on sales proceeds of 4 units in escrow ($18,500 per unit) 7

8. Housing Department Washington Park Classics Amendment Existing OPLA Terms $1,005,624 of City Loan to be forgiven $524,245 of City Loan recast to homebuyers Affordable units: 4 Moderate income Amended OPLA Terms $1,374,269 of City Loan to be forgiven $155,600 of City Loan recast to homebuyers Affordable units: 3 Low income 3 Moderate income 8

9. Housing Department Washington Park Classics Amendment Staff considered the following: Project’s role in removing neighborhood blight Additional state funding secured to increase number of affordable units and reach low income Developer’s 7-year commitment to the project in the face of major challenges (storm drain, change in construction lender, declining real estate market, tight mortgage lending conditions) 9

10. Housing Department Washington Park Classics Amendment Approval of staff recommendation will: Prevent project from potential default on construction loan Preserve City’s affordable housing covenants Assist successful close-out of project, bringing a positive impact to neighborhood 10

11. Housing Department 11 Washington Park Classics Amendment Project Sales Status Sold: 2 market rate units Affordable unit #107 to close week of Oct. 15 Other 5 affordable units in escrow to close between Oct. 22 to Nov. 15