City Council

CC 4. Subordination Agreement, allowing Laurel Crest L.P. to Proceed with Refinance of Senior Loan for Laurel Crest Apartments Adopt Resolution No. 23-52, authorizing the City Manager, or his designee, to finalize terms, modify and execute a subordination agreement with respect to the $3,412,500.00 Lancaster Redevelopment Agency Loan and a $4,024,440.00 HCD loan, allowing Laurel Crest, L.P. to proceed with mortgage refinance of senior loan for Laurel Crest Apartments. City staff received a request from Laurel Crest L.P., owner and manager of Laurel Crest Apartments, to subordinate Laurel Crest’s $3,412,500.00 Lancaster Redevelopment Agency loan with the City of Lancaster (City) to a new $1,900,000.00 first mortgage loan (the “New Loan”) from Clearinghouse Community Development Financial Institution (“CCDFI”) and the $4,024,440.00 HCD loan as part of a restructuring of the HCD loan under HCD’s Loan Portfolio Restructuring Program, whereby new loan documents will be issued. Development of Laurel Crest Apartments, a 72-unit complex, was financed through a combination of mortgage loan, multi-family revenue bonds, HCD loan, a Lancaster Redevelopment Agency/the City loan, and the owner/investor. Laurel Crest L.P. (the “Borrower”) now desires to refinance and pay off the existing Bond loan that has a balance of $1,508,096.47 as of May 2023 with a loan provided by CCDFI in the amount of $1,900,000.00. The additional proceeds above the existing loan balance will be used for deferred capital expenditure items, such as a new fence, new boiler, new mailbox area, landscaping, et cetera.