Title
Request to Amend the Affordable Housing Loan Agreement between the City of Phoenix and Sunnyslope Housing Limited Partnership (Ordinance S-49166)
Description
Request to authorize the City Manager, or his designee, to amend the Affordable Housing Loan Agreement, Contract 107641, between the City of Phoenix and Sunnyslope Housing Limited Partnership, an Arizona limited partnership, (the “Owner”) to change the affordability restriction of the City’s set aside units from serving households at 50 percent of the Phoenix Median Family Income to 60 percent of the Phoenix Median Family Income. Authorization is also requested for the City Manager, or his designee, to execute all necessary documents.
Report
Summary
Contract 107641 was executed on Oct. 1, 2003, with the Owner to assist with the development of the 150-unit Hacienda at Sunnyslope Apartments, located at 730 W. Vogel Ave. This contract represents an investment by the City of $3 million of General Obligation Bond funds into the project in the form of a loan which secured 33 City set aside units for households at or below 50 percent of the Phoenix Median Family Income. In 2010, the property experienced financial distress in the wake of the recession. As a result, it filed for Chapter 11 Bankruptcy in January 2011. In December 2012, the Bankruptcy Court approved an amended plan of reorganization which included the City’s contract. This plan effectively froze all debts on the property and restructured the ownership.
The owner is currently in the process of repositioning the property in the hopes of creating long term financial stability and ensuring the affordability and public benefit can be provided throughout the entire term of the City’s contract. To facilitate this, the owner has requested the City to change the affordability restriction of the City’s set aside units from serving households at 50 percent of the Phoenix Median Family Income to 60 percent of the Phoenix Median Family Income. This change still provides affordability for the 33 City set aside units for 25 years, the remaining term of the contract.
Financial Impact
There is no financial impact to the General Fund.
Location
730 W. Vogel Ave.
Council District: 3
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing Department.