Rialto Council approves loan modification to enable renovation of 150 Citrus Grove affordable units

The Rialto City Council on Feb. 11 approved a loan modification that city staff said is necessary to secure state tax credits and bond financing for a planned renovation of the 150-unit Citrus Grove affordable-housing complex.

City staff and the project's developer described the action as a restructuring of existing loans and a request for partial debt forgiveness. Colby Cataldi, director of community development, told the council the renovation would preserve 150 affordable units under a 55-year covenant, add Americans with Disabilities Act (ADA) improvements and other structural repairs, and generate increased residual receipts to the city over time.

Cataldi summarized financing details: the current loan balance (principal plus accrued interest) is approximately $21 million to $22 million, the property’s appraised value is about $26 million and the total debt on the property is roughly $40 million. The developer asked the city to forgive about $14 million of that amount. Cataldi said the change would enable the developer to secure roughly $60 million in state tax credits and bond financing to complete the work.

Jason Neil, who spoke for the developer, said structural repairs and accessibility upgrades are urgent and that the renovation would restore the property to prior conditions after years of deferred maintenance.

Resident Solema Hernandez, who said she has lived at Citrus Grove for five years and is the full-time caregiver for a child with disabilities, urged council approval so residents could gain access to ADA-compliant units. “Approving a National Core renovation project would not only be beneficial to those with disabilities, but enhances the experience for better living for all the residents,” Hernandez said.

Councilmembers discussed alternatives and consequences if the city did not agree to the modification. Staff warned that without the city’s forgiveness the developer could lose the state tax credits and tax-exempt bond financing, putting the renovation at risk and increasing the chance of the property falling into deeper disrepair or default. Council members also noted the project will pay building permit fees and that the developer has engineered plans in plan check.

Council consensus was to proceed. A motion to approve the loan modification and related terms passed on a roll-call vote, the council announced, with the action recorded as passed (unanimous). The staff presentation said the renovation budget is in the $12 million to $16 million range (approximately $70,000 per unit), and that the city would also receive a one-time unrestricted payment of about $500,000 from the developer to the general fund.

The council directed staff to finalize the loan-modification documents and return any necessary closing paperwork. Staff also said they would provide a later report listing other affordable-housing properties in the city and details on supportive services and childcare availability at those sites.

Votes at a glance: loan modification and partial forgiveness request for Citrus Grove renovation — approved (unanimous).