Senior Group Homes Transfer and Rehabilitation LoanstpW N OF
MEETING DATE: 02/03/15
' ITEM NO.
°s snto5
COUNCIL AGENDA REPORT Lq
DATE: JANUARY 26, 2015
TO: MAYOR AND TOWN COUNCIL f�
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: SENIOR GROUP HOMES TRANSFER AND REHABILITATION LOANS
ADOPT A RESOLUTION AUTHORIZING THE TOWN MANAGER TO
EXECUTE:
A) AGREEMENTS FACILITATING THE TRANSFER OF 185 ANNE WAY
(APN 527 -48 -020) AND 14390 BLOSSOM HILL ROAD (APN 527 -31 -013)
SENIOR GROUP HOMES FROM SENIOR HOUSING SOLUTIONS
(FORMERLY PROJECT MATCH) TO CHARITIES HOUSING
DEVELOPMENT CORPORATION (LOS GATOS SENIOR HOMES LLC).
B) NEW REHABILITATION LOAN AGREEMENTS ADDRESSING
NECESSARY REPAIRS AND IMPROVEMENTS TO PRESERVE THE
LONG -TERM AFFORDABILITY AND MAINTENANCE OF THE HOMES IN
THE TOWN'S AFFORDABLE HOUSING STOCK.
BACKGROUND:
On December 16, 2014, the Town Council considered this agenda item and continued the matter to
the January 20, 2015 meeting. The Council requested the following information: A) appraisal
information documenting the existing value of the homes, B) additional information about the
agreements and financial support provided by the other cities who have Senior Housing Solutions
group homes, C) operating budgets, and D) information about the Limited Liability Corportation
(LLC) being formed by Charities Housing Development for the Los Gatos properties.
DISCUSSION:
The requested information has been provided by Charities Housing, as follows:
PREPARED BY: LAUREL R. PREVETTI
Assistant Town Manager / erector of Community Development
Reviewed by: N/A Assistant Town Manager _'own Attorney z nance
N:\DEV\TC REPORTS\2015 \Senior Group Homes Agmts- 2- 3- 15.doc Reformatted: 5/30/02
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: SENIOR GROUP HOMES TRANSFER
JANUARY 26, 2015
A) Appraisal information documenting the existing value of the homes
Attachments 9 and 10 contain desktop valuations ofthe subject properties using comparable sites
to determine the market values of the subject properties. Attachment 9 contains the information
for the property at 14390 Blossom Hill Road. Attachment 10 contains the information for the
property at 185 Anne Way.
While this approach is acceptable in the real estate industry, the appraiser acknowledges that
housing inventory is low and demand is high, and that "buyers purchase property in this segment
based on market value and not costs."
B) Additional information about the agreements and financial support provided by the other cities
who have Senior Housing Solutions group homes
Attachments 11 through 15 contain reports to the elected bodies regarding the transfer of Senior
Housing Services (SHS) homes to Charities Housing in the cities of Cupertino (Attachment 11),
Sunnyvale (Attachments 12), and Milpitas (Attachment 14). In addition, the City of Sunnyvale
provided federal HOME funds under separate action (Attachment 13) and the County of Santa
Clara is anticipated to take its action in February 2015 (Attachment 15).
C)
Attachment 16 contains the financial statement and supplementary information for the years
ended December 31, 2012 and 2013 for Charities Housing.
Attachment 17 contains the financial statement and supplementary information for the years
ended December 31, 2012 for SHS. Attachment 18 includes an audit summary of net income
loss for SHS in 2012 and 2014.
D) Information about the Limited LiabilityCorportation (LLC) being formed by Charities Housing
Development for the Los Gatos nronerties entitled Los Gatos Senior Homes
Attachment 19 contains the operating agreement for Los Gatos Senior Homes, LLC and
Attachment 20 includes a Demand Promissory Note signed by Charities Housing on July 16,
2014. The Articles of Organization for Los Gatos Senior Homes filed with the California
Secretary of State are contained in Attachment 21. Attachment 22 contains the Statement of
Information filed with the California Secretary of State.
E) Operating Budget for Los Gatos Senior Homes
Attachment 23 contains an operating budget for calendar year 2015 for Los Gatos Senior Homes,
LLC.
Based on the additional financial and comparative information provided, staffrecommends retaining
these properties in the Town's affordable housing inventory for the benefit of current and future
qualified senior residents.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: SENIOR GROUP HOMES TRANSFER
JANUARY 26, 2015
Attachments 1 - 6 (Previously received with December 16, 2014 Staff Report):
1. Draft Resolution
2. Charities Housing Letter
3. Charities Housing Development Corporation Audited Financials FY 2012 -2013
4. Charities Housing Board of Directors Roster
5. 14390 Blossom Hill Road Documents:
a) Assignment and Assumption Agreement and Modification Agreement
b) Affordable Housing Loan Agreement
c) Subordination and Intercreditor Agreement
d) Promissory Note
e) Deed of Trust, Assignment of Rents Security Agreement and Fixture Filing
0 Regulatory Agreement and Declaration Of Restrictive Covenants
6. 185 Anne Way Documents:
a) Assignment and Assumption Agreement and Modification Agreement
b) Affordable Housing Loan Agreement
c) Subordination and Intercreditor Agreement
d) Promissory Note
e) Deed of Trust, Assignment of Rents Security Agreement and Fixture Filing
f) Regulatory Agreement and Declaration Of Restrictive Covenants
Attachments 7 - 8 (Previously received with December 16, 2014 Addendum):
7. Resolution 2013 -036: Below Market Price Housing Program Guidelines Scoring Criteria
8. Resolution 2012 -001: Express the Town Council's Intent to Serve as the Successor Agency of
the Redevelopment Agency of the Town of Los Gatos and to Elect to Retain the Housing Assests
and Functions Previously Performed by the Redevelopment Agency of the Town of Los Gatos
Attachments 9 — 22 received with this Report:
9. Appraisal information for 14390 Blossom Hill Road
10. Appraisal information for 185 Anne Way
11. Report to the Cupertino City Council for its meeting on April 1, 2014
12. Report to the Sunnyvale Housing and Human Services Commission for its meeting on March 26,
2014
13. Report to the Sunnyvale City Council for its meeting on November 11, 2014
14. Pages 9 through 11 of the Milpitas City Council Meeting Agenda for October 21, 2014
describing item number HA3
15. Report to the Board of Supervisors of the County of Santa Clara for its meeting on February 24,
2015
16. Charities Housing financial statement and supplementary information for the years ended
December 31, 2012 and 2013
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: SENIOR GROUP HOMES TRANSFER
JANUARY 26, 2015
17. Senior Housing Solutions financial statement and supplementary information for the year ended
June 30, 2012
18. Senior Housing Solutions summary of net income loss per audits for 2012 and 2014
19. Operating agreement for Los Gatos Senior Homes, LLC
20. Demand Promissory Note signed by Charities Housing on July 16, 2014
21. Articles of Organization for Los Gatos Senior Homes filed with the California Secretary of State
22. Statement of Information filed with the California Secretary of State
23. 2015 Operating Budget for Los Gatos Senior Homes
Distribution:
Kathy Robinson, Charities Housing Development, 1400 Parkmoor Ave., #190, San Jose, CA 95126
Senior Housing Solutions (Project Match), 512 Valley Way, Milpitas, CA 95035
Rebecca Garcia, County of Santa Clara, 3180 Newberry Drive, Suite 4150, San Jose, CA 95118
Kevin Zwick, Housing Trust Silicon Valley, 95 S. Market Street, Suite #610, San Jose, CA 95113
LRP:cg