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A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF POMPANO BEACH, FLORIDA, APPROVING AND AUTHORIZING THE PROPER CITY OFFICIALS TO EXECUTE A FUTURE ADVANCE AGREEMENT WITH, AND ACCEPT A PROMISSORY NOTE FROM, SONATA APARTMENTS, LTD., TO PROVIDE FINANCIAL ASSISTANCE IN THE FORM OF A $250,000 LOAN TO COMPLETE CONSTRUCTION OF A 121-UNIT MIXED USE, MIXED INCOME HOUSING DEVELOPMENT LOCATED WEST OF DIXIE HIGHWAY BETWEEN NW 6TH STREET AND NW 8TH COURT, AS PROVIDED AND SECURED BY THE FEBRUARY 3, 2022 MORTGAGE AND SECURITY AGREEMENT EXECUTED BETWEEN THE PARTIES; PROVIDING AN EFFECTIVE DATE.
(Fiscal Impact: $250,000 Affordable Housing Trust Fund)
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(Staff Contact: Miriam Carrillo/Alex Goldstein)
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Summary Explanation/Background:
The purpose of this request is to secure $250,000 in Affordable Housing Trust Funds from the City to address construction cost overruns incurred and anticipated after the closing of the transaction.
The Sonata Apartments project, a vital initiative in our community, is currently facing challenges due to unforeseen construction cost overruns. According to the Developer, the project costs have exceeded the budget by $1,800,000. This deviation has created an urgent need for supplementary funding to ensure the successful completion of the project and to address adverse tax consequences resulting from a projected inability to pay off required fees.
The requested $250,000 in Affordable Housing Trust Funds will play a crucial role in mitigating these challenges. The Developer has highlighted that without this additional funding, the Sonata project may face significant difficulties in meeting financial obligations, particularly in paying off the deferred developer fee. It is essential to note that the deferred developer fee constitutes 47% of the project's costs.
The urgency of this matter is underscored by the Developer's projection that, without the requested funding, it would take over 20 years to pay off the deferred developer fee. Swift action to secure additional funding is imperative to ensure the project's financial viability and to uphold the City's commitment to affordable housing initiatives. facilitating this process will significantly contribute to the success of this critical community development endeavor.
Origin of request for this action: Office of Housing and Urban Improvement
Fiscal impact and source of funding: $250,000 Affordable Housing Trust Fund
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