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Report of Proposed Transfer of Real Property in the Badger-Ann-Park Redevelopment Area
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This Report of Proposed Transfer of Real Property is issued pursuant to Section 66.1333(9)(a)1.of the Wisconsin Statutes. The Community Development Authority of the City of Madison, Wisconsin (the "Authority"), proposes the following transfer of real property located in the Badger Ann Park Redevelopment Area (the "Redevelopment Area").
The Authority intends to transfer certain real property in the Redevelopment Area by quit claim deed to Burr Oaks Senior Housing, LLC (the "Developer"). The property to be transferred consists of the land and associated property interests in the real estate located at 2409 and 2413 Cypress Way and 826, 830, 834 and 838 West Badger Road in the City of Madison (collectively, the "Authority Properties").
In accordance with the letter of intent and a development agreement to be executed by and between the Developer and the Authority:
(a) Use of the Authority Properties will be restricted in a manner which will carry out the objectives of the Badger Ann Park Redevelopment Plan, for the prevention and alleviation of the conditions of urban blight found by the Authority and the City to be present in the Redevelopment Area.
(b) The Authority shall prepare a certified survey map to assemble and subdivide certain property in the Redevelopment Area, including the Authority Properties.
(c) After demolishing all improvements thereon, the Authority shall convey the Authority Properties to Developer for the purchase price of $300,000, and Developer's affiliate Horizon Construction Group, Inc. shall design and construct thereon a fifty (50) unit affordable senior housing project and associated amenities. The purchase price shall be valid until December 31, 2010.
(d) The Authority shall use its best efforts to obtain and commit thirty (30) Section 8 project-based housing vouchers for the Project by May 31, 2011 and to secure additional annual funding of $385,000 for the Project. Developer shall be responsible for securing all other financing of the Project.
(e) Developer shall be responsible for submitting a tax credit application to WHEDA on or before April 9, 2010, and shall fund the application fee and market study.
(f) Developer shall be responsible for securing a construction lender and tax credit investor for the Project.
(g) Developer shall fund the creation of a Wisconsin limited liability company of which the Authority shall be a member.
(h) Developer shall guaranty the construction completion, construction contract amount and eligible tax credit basis.
(i) The Authority shall earn a Development Fee of $285,000 on the date construction financing closes, plus all cash flow from the Project not allocated to the Investor Member and referenced in (j).
(j) Developer shall earn a non-cumulative fee of 10% of annual cash flow from the Project plus the balance of any Development Fee not paid to the Authority.
(k) The Authority shall reimburse Developer for the WHEDA application fee, reasonable fees for the creation of the limited liability company and the market study if the Authority opts to not proceed with the Project or fails to provide the necessary Section 8 vouchers, or if HOME funds are unavailable for the Project. Such fees shall not be reimbursed if Developer fails to secure tax credits, construction lending, exchange funds or any other financing necessary for the Project.
(l) The Project shall fund an operating reserve totaling at least six months of anticipated expense and debt service and a lease-up reserve of $104,308. Of this lease-up reserve, $75,907 is needed to break even, based on the rent up schedule.
(m) Developer shall ensure the Project is constructed in accordance with all affirmative action, prevailing wage and nondiscrimination laws, and Developer's contractor shall be prequalified by the City of Madison.
(n) Developer shall be the property manager for the Project and shall provide the Authority with Property Management Agreement, residential selection and screening criteria applicable to the Project, and shall ensure the Project complies with the WHEDA land use restriction agreement and all applicable federal tax laws and regulations.
(o) The Authority shall have review and comment opportunity regarding the design, building and finish specifications, development and operating budgets and construction contracts.
(p) Developer shall supply the Authority with completed WHEDA Low-Income Housing Tax Credit application for the Burr Oaks Senior Housing Project.
The Authority, by Resolution No. 2951, adopted on April 8, 2010, conditionally approved of the transfer of the Authority Properties to the Developer subject to the Authority holding a public hearing thereon and to the approval of the transfer by the City's Common Council. On May 13, 2010 the Authority held a public hearing to allow interested parties an opportunity to express their opinions with the respect to the proposed transfer. No one appeared at the hearing and no written comments were submitted.
Reference is made to Authority Resolution No. 2951 for the complete terms and provisions thereof.
The Authority recommends the acceptance of the Report and adoption of its recommendations.
Respectfully submitted,
Community Development Authority of the City of Madison
By:______________________________________
Mark A. Olinger, Executive Director
MAO:AZ:sob