OCII approves permanent loans for Alice Griffith Phase 3 to fund 122-unit building

The Commission on Community Investment and Infrastructure on June 16 approved permanent loan commitments to support Phase 3 of the Alice Griffith public housing redevelopment in Bayview-Hunters Point.

Staff presented two loan components: Phase 3A and Phase 3B, which together will finance a single 122-unit multifamily building with 93 public housing replacement units and 28 new affordable units. Elizabeth Colomello, a development specialist, said the project is part of the HOPE SF initiative and that the financing combines Choice Neighborhoods Initiative (CNI) funds, OCII subsidy and master-developer subsidy from Lennar. Colomello said MBS and the Housing Authority received a CNI implementation grant of $30.5 million, of which about $21.3 million is allocated to construction. She said OCII’s subsidy for the project is now roughly $13 million of the combined $30.7 million in proposed loans and that Lennar is contributing roughly $17.5 million in subsidy.

Colomello described a two-parcel financing approach to increase tax credit equity: 3A would be financed with tax-exempt bonds and 4% low-income housing tax credits, while 3B would use 9% tax credits. The split, Colomello said, is expected to yield an additional $15 million in tax credit equity and reduce the cost-overrun calculation by about $10 million. She also asked the commission to give the executive director flexibility to shift loan amounts and unit counts between 3A and 3B so long as the combined loan amount does not increase and the total unit count for the building remains the same.

During public comment, a Bayview Hunters Point resident asked whether the project meets requirements in the Health and Safety Code regarding the income targeting of replacement units and the duration of affordability covenants. Colomello and staff responded that affordability restrictions will be recorded and that replacement public-housing units will be supported with operating subsidies so residents pay about 30 percent of income; staff said the affordability restrictions are consistent with the Community Redevelopment Law and that existing tenants in good standing will have the opportunity to occupy the new units. Commissioner questions clarified that the proposed permanent loans would have a 55-year term and that staff is proposing a 3 percent interest rate with limited flexibility to lower it if financial projections require.

Commissioner Bustos moved approval and Commissioner Singh seconded. The commission approved items 5B and 5C by roll-call vote (4 ayes).

The project team will finalize outreach and marketing materials prior to the start of construction; staff said phases 1 and 2 are on schedule for HUD deadlines (completion of phases 1 and 2 by September 2016 and phase 3 by September 2017). Next steps include finalizing the loan documents, submitting marketing and outreach plans for commission review, and progressing applications for tax credits and bond financing.

Details: the loan request description in the staff report lists amounts for Phase 3A and 3B and a combined proposed loan total of about $30.7 million; the permanent loan term was described as 55 years and the proposed interest rate as 3 percent, subject to adjustment based on final financials.