Council approves $1 million additional loan for Lincoln Avenue Apartments; CO issues remain

The Calistoga City Council on May 20 approved a loan modification and an additional $1,000,000 loan to the developer of the Lincoln Avenue Apartments to address remaining development impact and connection fees.

Planning and Building Director Greg Desmond told the council the city originally committed $2,000,000 to the project as a long-term loan in exchange for 78 permanently affordable units. After the project completed construction the outstanding development impact fees owed to the city were roughly $1,000,000; the council tonight approved a loan modification to reflect actual fees and authorized an additional $1,000,000 loan funded from Measure D to provide a total city commitment of just over $2,000,000.

The project currently occupies units under temporary occupancy; staff said a small number of utility-related and off-site improvements remain before the final certificate of occupancy (CO) can be issued. The developer, who addressed the council, said cost overruns from off-site work (including an unmarked PG&E high-pressure gas line discovered during construction) exhausted construction proceeds and that the CO is required to access tax-credit investor equity. The developer asked council and staff to expedite outstanding administrative steps and to consider revising off-site agreements where appropriate.

Councilmembers said they supported the loan modification but pressed both staff and the developer to resolve the remaining conditions preventing the CO. The motion to approve the loan modification and additional $1,000,000 loan passed on a voice vote.