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• A greater risk than losing the preference for senior housing is the Toss of the state's income, rent and disability covenants. Willow Pond's MHFA restrictive land use covenant does not automatically extend the restrictions beyond the first 15 year period. Consistent with MHFA policy and the attached MHFA Housing Tax Credit Program, Qualified Contract Process Guide, Attachment G, Willow Ponds can opt -out of its restrictions and convert to market rate rents, higher income tenants, and provide no requirement to rent to disabled tenants. In fact, the project could be sold as condominiums. The City's covenant does not restrict occupancy to leasing, I believe. If the project characteristics are not addressed currently, the likelihood of eliminating the existing income and disability restrictions would be enhanced. Per the recent property appraisal, market rate vs. restricted rents increases the property value by $700,000. The question to ask is: why would an owner not seek higher economic values as presented in the market place vs. keeping restrictive rents and tenant qualifications of incomes and disabilities? My proposal is to keep the project not only for seniors but for continued affordable rents and disability characteristics. I believe the City's generous TIF assistance was not for the sole purpose of limiting the project to seniors but was predicated on thirty years of affordability and disabled tenant preference. The original TIF plan and state law in 1995 would not permit local public assistance for market rate seniors. The cornerstone of the TIF assistance is to create and preserve affordability and not to singularly restrict occupancy to seniors. In summary, the option to convert to market rate conditions may be the greatest threat of not approving the proposal as presented here. 11