2006 Section 108 Project Summaries - California

Economic Development

Alameda Downtown Revitalization
Alameda, CA
Section 108 Guaranteed Loan- $7,000,000

The City of Alameda will provide financial assistance to the Community Improvement Commission (CIC) for the construction of a new 325-space public parking garage on Oak Street as a part of the expansion of the City's historic business district. The lack of off-street parking spaces in the City's downtown historic district has limited investment and the revitalization of the area. The development of the garage, however, will facilitate the renovation and economic development of the historic Alameda Theater. Also, it will provide needed spaces which will assist business owners in the leasing of 46,000 square feet of vacant retail space and approximately 26,000 square feet of vacant office space within two blocks of the parking structure. The renovation of the Alameda Theater will address the structure's problems with asbestos contamination, lead-paint, and mold, and it will include the removal of the underground storage tanks on the site.

The City will re-lend the Section 108 Guaranteed Loan to CIC for the construction costs of the garage. In conjunction with the guaranteed loan funds, the City will lend an $800,000 Brownfields Economic Development Initiative (BEDI) grant awarded to the City in 2004. The CIC will use the BEDI funds to pay interest for the first three or four years on its loan from the City for garage construction. The CIC will also use $1,125,000 in existing taxable bond proceeds for a total cost of $8,925,000.

The Community Development Block Grant (CDBG) national objective for the City's use of the Section 108 Guaranteed Loan is to benefit low-moderate income persons through job creation. The project will create an estimated 335 new full-time jobs from the surrounding retail and office space.

The City will repay the guaranteed loan funds over a twenty-year period, paying interest only for the first two years. The City will use parking meter revenues and CIC repayment of its loan from the City to repay the Section 108 Guaranteed Loan. To secure repayment of the guaranteed loan funds, the City pledges a first lien on the parking structure, as well as its CDBG funds.

Mill Creek South Mixed-Use Project
Bakersfield, CA
Section 108 Guaranteed Loan- $3,750,000

The City of Bakersfield has designated the Bakersfield Redevelopment Agency (BRA), under the Section 108 Loan Guarantee Program to be the public agency that will be the Borrower of the Section 108 Guaranteed Loan. The BRA will enter into a partnership with the Lenaar Corporation to develop 65,000 square feet of retail space and 100 units of affordable rental housing on an 8-acre site. The current site is contaminated by a former auto wreckage yard, abandoned commercial buildings, and old underground fuel tanks. The BRA already owns 5.5 acres of the site and will use Section 108 guaranteed loans to acquire the remaining 2.5 acres. A Brownfields Economic Development Initiative (BEDI) grant of $750,000 will be used in conjunction with the BRA guaranteed loan to acquire the site and to aid in the relocation of existing businesses. The Lenaar Corporation, as project developer, has arranged approximately $15,000,000 in private financing commitments and will invest approximately $4,900,000 in equity funds for project funding. The project will cost $33,364,000.

The Community Development Block Grant (CDBG) national objective for the City's use of its guaranteed loan funds is to benefit low-moderate income persons through the provision of affordable housing and job creation. The project will create approximately 156 new full-time jobs.

The BRA will repay the Section 108 loan on a twenty-year plan using tax increment revenues from the Southeast Bakersfield Redevelopment Project Area, making only interest payments for the first two years. The BRA will pledge these same revenues as security for repayment of the guaranteed loan. The City of Bakersfield has also pledged its CDBG funds for repayment of its Section 108 Guaranteed Loan.

El Centro Retail Project
Huntington Park, CA
Section 108 Guaranteed Loan- $7,164,000

The City of Huntington Park will utilize a Section 108 Guaranteed Loan to provide financial support to a for profit Developer, El Centro Huntington Park, Limited Liability Corporation (LLC), for the development of the El Centro Retail Shopping Center which will be located on a 75-acre site along Pacific Boulevard, a major street in the City. The site is located within the City of Huntington Park's designated HUD Enterprise Community and the Los Angeles Enterprise Community, which also receives funding for business development through the City's a Micro Revolving Loan Fund Program and the Huntington Park Business Assistance Center. The shopping center development will consist of 926,000 square feet of retail space.

Huntington Park is a predominately Latino community of 61,370 people (based on the 2000 Census) on the near southeast side of Los Angeles, in which 82% of the population qualify as low-moderate income persons. The City will use an $825,000 Economic Development Initiative (EDI) grant competitively awarded to the City in the fiscal year 1999 to use in conjunction with Section 108 Guaranteed Loan funds to help fund the project which will cost a total of $255,516,035.

The project will create an estimated 1,878 new full-time jobs and has already garnered interest from such corporations as Wal-Mart, Lowe's Home Improvement Warehouse, Target, Office Depot, Mervyn's, PetsMart, and Costco. These major retailers will not only provide improved shopping opportunities for the target area's population, but will also help stop the tax leakage the area is experiencing due to the lack of modern retail shopping facilities that contain national retail tenants.

The Community Development Block Grant (CDBG) national objective for the City's use of its guaranteed loan proceeds is to benefit low-moderate income persons through job creation and to aid in the elimination of a blighted area.

The Marlton Square Project
Los Angeles, CA
Section 108 Guaranteed Loan- $6,175,000

The City of Los Angeles will provide financial assistance to Marlton Square Associates, Limited Liability Corporation (LLC), to redevelop the Santa Barbara Plaza, a 19.7-acre designated slum and blight site in south Los Angeles. The project consists of the construction of a mixed-use retail-residential complex consisting of 119,000 square feet of retail space, 140 units of for sale single-family housing, 150 residential condominiums, and a Community Facility. The Section 108 Guaranteed Loan proceeds will only be used for the retail development portion of the project which will be broken down into two phases. The initial phase will be carried out by Marlton Square Associates, LLC, and consists of the assembly of 8.4 acres from the 19.7-acre parcel, relocating existing businesses, environmental remediation/site preparation, and demolishing existing structures. The guaranteed loan funds will be used in the acquisition of the 8.4 acres. The 8.4-acre parcel will then be sold to LNR Marlton Square Associates, LLC who will carry out the second phase of the project. This will consist of the actual development of the retail area.

The City will re-lend the guaranteed loan proceeds, in conjunction with $9,000,000 in existing Section 108 Guaranteed Loan funds, $1,500,000 in Economic Development Initiative (EDI) grants, and $2,000,000 in Brownfields Economic Development Initiative (BEDI) grants received in the 2002 fiscal year to the project. The total project cost is $48,571,955.

The Community Development Block Grant (CDBG) national objective for the City's use of its guaranteed loan proceeds is the prevention and elimination of slums/blight on an area basis. The project will address the conditions of brownfield contamination, disinvestment in the area, lack of employment, low tax base, and lack of housing. Approximately 54,640 low-moderate income persons will benefit from the project.

The City of Los Angeles will repay the loan over a twenty-year period, paying interest only for the first two years. Site-specific tax revenues, which include sales, business, and utility taxes, will be used to repay the Section 108 Guaranteed Loan. To secure repayment of the guaranteed loan funds, the City pledges tax revenues as collateral, a corporate guaranty from LNR Property Corporation, and its CDBG funds.