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Council approves amended development agreement for 115-unit Second Street affordable housing project
Summary
The Corona City Council approved an amended development agreement for the 115-unit Second Street Family Apartments after the developer secured $40 million in low-income housing tax credits and the county agreed to financial support and project-based vouchers.
The Corona City Council on a 4-0 vote approved an amended and restated Development and Disposition Agreement (DDA) for the Second Street Family Apartments, a 115-unit affordable housing development to be built by CNC Development.
City housing staff said the amendment was necessary to comply with investor requirements tied to low-income housing tax credits. Karen Roper, a city staff member who presented the project, told the council CNC secured $40,000,000 in tax credit financing and that the developer has requested several standard financing-related adjustments to the DDA.
Roper said the county stepped in to fill a financing gap, committing $4,000,000 in residual receipts loans and eight project-based vouchers. “The county is committing to $4,000,000 in residual receipts loans as well as 8 project based vouchers,” Roper said. She described the developer as experienced and noted the county’s support was key to preserving the tax credit award.
Council members and staff said the amended terms include customary subordination language and an extended residual-receipts loan structure; city loan repayment will be tied to project cash flow and will be shared with the county. Roper described the loan as a 55-year term with later repayment from residual receipts and noted foreclosure on tax-credit projects is rare.
The Planning and Housing Commission reviewed the amended DDA on Aug. 11 and recommended approval. Councilmember Tony moved the agreement and a second motion carried the item. The city anticipates closing escrow on Oct. 15 and staff said a groundbreaking could occur in January if financing and conditions remain on schedule.
The council’s action authorizes the amended DDA and the city to accept the revised financing structure. Staff said the amendment increases the city’s loan slightly to reflect higher land value and makes other technical changes required by the tax-credit lenders.
The developers — representatives from CNC Development were present at the hearing — and city staff said the project includes 115 units and will include permanent supportive housing units developed under a separate agreement on the same five-acre site.
Construction and operational details such as contractor selection and construction schedule were not fully specified in the council presentation; staff said additional implementation steps will follow the close of escrow and be reported back to council as required.
