The Idaho Apartments at 10203 San Pablo Avenue is an affordable housing
development providing supportive services to its special needs residents. The
former El Cerrito Redevelopment Agency provided financial assistance to the
project and there is an existing Owner Participation Agreement (OPA), Loan
Agreements and associated documents with Idaho Apartments LP that the City
acquired when it became the housing successor to the former RDA. Rubicon
Programs Inc., the managing general partner of the Apartments, has contacted the
City regarding two proposed transactions involving the Apartments. The first would
occur in the near term (by January 2014) and the second sometime in the first or
second quarter of 2014. City approval is required for both of these transactions.

The first transaction involves the City approving the transfer of the limited partner's
(LP) interest in the property entirely to Rubicon programs. Transfer of an LP's
interest in a property which received Low Income Housing Tax Credits is common
as the tax benefits of the investment expire after 15 years. The City's OPA gives
the City sole discretion to consider whether to approve this type of transfer. The
City Manager may approve the transfer or forward for the City Council's
consideration. The OPA anticipated the eventual exit of the limited partner.

In considering whether to approve this change of the LP, the City's concern is
continuity of the general partner and their continued successful management of the
project, which includes both property management and, in this case, provision of
supportive services. In this case, the proposed new limited partner would be
Rubicon Programs, Inc. and there is no proposed change to the general partner.

Staff believes that Rubicon's request to approve the transfer of the limited partner
interest from the LP (National Equity Fund) to Rubicon Programs, Inc. is
reasonable and in keeping with the purpose of continuing to operate Idaho
Apartments to provide affordable housing to its existing population of residents with
minimal interruption. In addition, the proposed limited partner transfer does not
result in decapitalization, or raiding, of property assets such as operating or
replacement reserves. Unless concerns are raised, the City Manager anticipates
that he will approve the limited partner transfer conditioned on staff review and
approval of the new partnership agreement and transfer documents.

The second transaction involves Rubicon Programs' intent to transfer the Idaho
Apartments to a qualified non-profit housing developer who would continue to
operate the property as affordable housing with supportive services, due to the fact
that they will be discontinuing their affordable housing program in order to better
focus on their core mission. Pursuant to the terms of the City's OPA, a transfer of
the property would require the City's review and approval. Staff is working with
Rubicon, Contra Costa County Conservation & Development staff and County
Health Services staff to work out the possible terms of a transfer. Staff is also in
discussions with the County and Rubicon regarding possible strategies to preserve
and extend HUD grant funding for the provision of supportive services so that the
needs of existing residents of the Idaho can continue to be met under a new
ownership structure. Staff will provide updates to the Council as more details are known.