Truckee Town Council approves early loan repayment for Sierra Village apartments
The Truckee Town Council returned to Town Hall for the first time in nearly three months on Tuesday, and as part of a small list of discussion items, took action to generate funds in the short term by accepting early repayment of a $950,000 loan to the owners of Sierra Village apartments.
In 2000, Truckee received a $950,000 grant in HOME funds administered by the California Department of Housing and Community Development. The town used the funds to make a loan to the owners of the apartment project that would become Sierra Village, located at the eastern end of Jeffrey Pine Road. The complex includes a total of 72 units. Of those, 58 are restricted to individuals that make a maximum of 80% of the area’s median income.
The loan agreement called for payments to begin in 2012 with a final payment in 2031. Ownership, however, hasn’t been required to pay anything because there have never been any net revenues from the project. Truckee officials also indicated that while the loan bears interest, the town and the owners of Sierra Village haven’t been in agreement regarding calculation of interest and the amount currently owed.
Ultimately, Sierra Village ownership approached the town with a proposal to immediately repay the existing loan, and after negotiation the two sides settled on $1.4 million for repayment. Town officials indicated that the total amount due in 2031 would be nearly $3 million.
Town staff urged the council to approve the deal for several reasons. Since there have yet to be any payments toward the loan, town staff said there is no reason to think the project will ever have net revenues before the loan comes due in 2031. Staff’s report also said the ownership group has periodically complained about operating at a loss and has threatened to walk away from Sierra Village, complicating the town’s efforts to collect on the loan.
Another reason for accepting early payoff is town staff negotiated to have the ownership group complete a list of renovation items in all Sierra Village units. Work would include HVAC repairs, installation of energy efficient water heaters in every unit, adding energy efficient fridges, stoves and dishwashers, and other improvements.
“Although on paper it looks like we’re getting the short end of the stick, I think in terms of what money is today versus what money is in 11 years and what we can do with it today at today’s costs of things as well … I think this is the right way to go,” said Councilman Tony Commendatore during Tuesday’s Town Council meeting.
The $1.4 million repayment will be restricted to affordable housing projects like Frishman Hollow II.
The council unanimously approved the agreement.
Justin Scacco is a reporter for the Sierra Sun. Contact him at firstname.lastname@example.org or 530-550-2643.
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