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CITY OF PLEASANTON
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<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />FOR THE YEAR ENDED JUNE 30, 2022
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<br />Note 3: Notes Receivable (Continued)
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<br /> Kottinger Gardens Phase 2 Associates, L.P. – On December 1, 2017, the City executed
<br />a Secured Promissory Note with Kottinger Gardens Phase 2 Associates, L.P. for
<br />$2,861,360, funded from the City's Lower Income Housing Fund, for the development of
<br />the Pleasanton Gardens affordable senior housing project. Interest accrues on the principal
<br />amount at 3 percent per annum. Payments are to be made from excess distributable cash
<br />with the entire principal and interest due in December 2074. The principal and interest
<br />outstanding at June 30, 2022 were $2,861,360 and $395,557, respectively.
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<br /> BLP Partnership, Inc. – In 2005, the City loaned $2,490,000 to BLP Partnership, Inc. for
<br />the predevelopment and construction of the Parkview assisted living facility. The loan
<br />requires an annual interest only payment of 10 percent ($249,000) for 55 years or until the
<br />loan is paid in full. Annual payments are based on the availability of surplus cash from the
<br />operation of the facility according to a "waterfall of payments" provision in the loan
<br />agreement, and any unpaid amounts are accrued to be paid from surplus cash in subsequent
<br />years. At maturity, on September 1, 2060, any unpaid principal and interest will be
<br />forgiven. Consequently, the City has recorded the accrued unpaid interest in an allowance
<br />for doubtful accounts in its Lower Income Housing Fund. During FY 2021/22, BLP paid
<br />the City $249,000 representing a portion of the accrued unpaid interest. As of
<br />June 30, 2022, the accrued unpaid interest in the allowance for doubtful accounts was
<br />$1,372,399 and the principal amount outstanding was $2,490,000.
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<br /> Regional Affordable Housing Projects – The City has also allocated HOME funding via
<br />loans and grants to several regional affordable housing projects that have been deemed to
<br />provide a benefit to Pleasanton residents due to the unique populations they serve. There
<br />are three affordable housing loans outstanding which include: $80,000 to Housing Alliance
<br />for the construction of Lorenzo Creek apartments (28 units of rental housing in
<br />Castro Valley for homeless individuals and families with disabilities); $30,000 to the
<br />Deaf Senior Retirement Corporation for the construction of the Fremont Oak Gardens
<br />(50 units of rental housing in Fremont for very low income deaf seniors); and $50,000 to
<br />Affordable Housing Associates for the construction of the Carmen Avenue apartments
<br />(30 units of rental housing in Livermore for families that were formerly homeless and have
<br />special needs). All three loans are deferred, and the Fremont Oak Gardens and
<br />Carmen Avenue loans bear no interest. The Housing Alliance loan is subject to 3 percent
<br />interest, and payments are deferred for 15 years. Starting March 2021, payments are subject
<br />to available cash flow as determined by Alameda County (the lead agency in the
<br />multi-jurisdictional funding agreement). Interest outstanding on the Housing Alliance loan
<br />at June 30, 2022, was $39,000. The principal amount outstanding for all three loans at
<br />June 30, 2022, was $160,000.
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<br /> Housing Rehabilitation Program – The Housing Rehabilitation Program (HRP) provides
<br />financial assistance for the improvement of properties occupied by very low or low
<br />income homeowners. These loans accrue 3 percent simple interest. Principal and
<br />interest are deferred for thirty years or until such time the property is sold or ceases to be
<br />the principal residence of the borrower. The program was revamped in August 2020, with
<br />a maximum loan amount of $150,000 that is deferred for 30 years at
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