Council approves amendment to affordable-housing loan to keep Aspen Court project viable
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Summary
The council unanimously approved a first amendment to the city’s $4.35 million affordable housing loan agreement with National Community Renaissance to allow an interim ownership structure that enables the project to close escrow and compete for tax-credit financing; staff said construction financing could close as early as June.
Lake Forest’s City Council on March 3 approved an amendment to the city and housing authority’s amended and restated affordable housing loan agreement with National Community Renaissance (National Core) for the Aspen Court Affordable Housing Project.
Economic development and housing manager Adrian Grijalva told the council the original agreement established a $4,350,000 city loan and that National Core had submitted a draft site plan showing 21 one-bedroom units, 16 two-bedroom units and 14 three-bedroom units, along with 69 parking stalls and a dedicated office for police services. City staff described the amendment as a transaction-structure change designed to allow escrow to close by assigning the property to an interim owner (NCRCAC Holdings LLC) until the project secures low-income housing tax credit financing; once tax credits and other financing are in place, ownership would transfer to NCRC Aspen Court LP, the limited partnership formed for tax-credit financing.
Staff said construction must begin by March 2028 unless the city grants an extension; failure to meet milestones could constitute default and require repayment. Alexa Washburn, chief development officer with National Core, told council members the earliest the project could close construction financing is June; the developer would then have 180 days to close financing, pull permits and begin construction, which would put a start near the end of the year if financing proceeds on that schedule.
Andrea Alexander told the council she supported the amendment as a flexible way to keep the project alive. Andrew O'Connor raised concerns about the schedule and said he worried the nearby reclamation plant’s odor could prompt lawsuits if apartments are built next to it.
A motion to approve the joint resolution amending the affordable housing loan agreement was made, seconded and recorded as passing unanimously. The amendment preserves the city’s deed-of-trust security and imposes recorded covenants limiting interim-owner use and transfers without city approval.