Council, Housing Authority approve amendments to Burbank Housing Corporation loan agreements to preserve and expand affordable housing

The Burbank City Council and the Housing Authority voted on Jan. 14 to approve phase 1 of an amended and restated master loan agreement (MLA) with the nonprofit Burbank Housing Corporation (BHC), revising loan and affordability terms to help the nonprofit pursue new financing for preservation and development of affordable housing.

The deal, presented by Maribel Leland, housing manager for the city’s Community Development Department, resets interest at 0% on specified authority and city promissory notes, forgives certain accrued interest to improve BHC’s balance sheet and extends minimum affordability covenants so units remain affordable for at least 55 years. Staff emphasized this is “Phase 1” of a multi‑phase process that will return to the council for additional technical decisions.

Nut graf: Why it matters — the city has long used locally restricted funds and note agreements to support BHC’s portfolio of more than 45 rehabilitated buildings. Changes are intended to allow BHC to leverage state and private financing (including tax credits) without the existing cross‑collateralized loan structure preventing new projects.

Key points and council debate - What changed: Staff said the amendment would reset the principal balances of notes to the original principal, set interest at 0% going forward, and forgive a portion of the authority note principal at a rate of one‑fifty‑fifth per year so long as BHC remains in compliance with affordability covenants. City HOME program notes will be reduced to their required 15‑year HOME terms; other city and authority notes are proposed to be extended and tied to an affordability term of no less than 55 years.

- Fairness and risk: City staff and the city attorney noted the trade‑off: subordinating some debt or forgiving interest increases the risk if foreclosure were to occur, but staff framed the city’s priority as preserving, maintaining and expanding affordable housing rather than protecting note repayment streams.

- Specific properties: Staff noted a parallel project proposal for three Fairview properties. Those properties would be treated differently in Phase 1 (deferred balances) to facilitate a specific planned tax‑credit development, but the MLA requires that if those properties do not leave the MLA within five years they will be folded into the general MLA amendments.

Council action and vote Council member Mullins moved and Vice Mayor Takahashi seconded the resolutions. The Housing Authority and the City Council each adopted corresponding resolutions approving the Phase 1 MLA and related amended loan documents. The roll calls were recorded as unanimous: Council Member Anthony — yes; Council Member Mullins — yes; Council Member Rosati — yes; Vice Mayor Takahashi — yes; Mayor Perez — yes.

Context and next steps BHC leaders told council they want to pursue larger projects in Burbank and that clearing accrued interest from the books makes it possible to apply for tax credits and other layered financing. Both city staff and BHC representatives said additional MLA phases would return to council for review, covering details such as long‑term funding for BHC activity centers and other portfolio adjustments.

Ending: Council approved the changes as a policy decision aimed at preserving long‑term affordability and positioning BHC to seek new financing. Staff and BHC said they will return with more detailed follow‑ups and additional phases for council review.