City Desk
By Carolyn Schuk

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City's First Time Home Buyers Program Tackles Short Sales

What happens when a participant in Santa Clara's First Time Home Buyer (FTHB) program is forced into a short sale? The city has been grappling with the answer to that question for the last month or so, and at the Sept. 22 Council Meeting, the City Manager offered a policy proposal that was unanimously passed by the Council.

The new policy asks the couple whose short sale put this on the City Council's agenda to begin with, and future FTHB borrowers to get mortgage counseling from a Department of Housing and Urban Development (HUD) certified counseling agency. No short sale request will be considered unless it's part of the counseling action plan.

A short sale would be approved by city after other options have been exhausted, City Manager Jennifer Sparacino told the Council.

Santa Clara's FTHB program helps first time buyers purchase a single-family house, townhouse, or condominium in the City of Santa Clara through the California Housing Finance Agency (CalHFA) as a primary lender, and a second mortgage from the City to "bridge the gap" between the CalHFA and the home's purchase price. To learn more, visit santaclaraca.gov/index.aspx?page=1088.

Great America's New Owner: A Consortium of Private Equity Companies

Last week Santa Clara was abuzz with news that JMA Ventures was buying Great America amusement park from current owner Cedar Fair - thereby removing one roadblock on the road to a 49ers football stadium in Santa Clara, namely a Cedar Fair lawsuit.

JMA Ventures is a San Francisco-based investment company with a portfolio of ski resorts, hotels and upscale restaurants. Great America would be the first amusement park in its bouquet of investments. The company's principal investors are private equity companies, including:

  • ARBOR, a private equity firm that owns food service companies
  • The soon-to-be-public Carlyle Group
  • Former Lehman Private Equity, now known as NB Private Equity Partners Limited, owned by New York investment company Neuberger Berman
  • Real estate development company Millennium Partners
  • Investment banks Morgan Stanley and Pacific Coast Capital (leveraged buyout specialist)
  • San Diego National Bank, acquired by U.S. Bank after its failure in 2009
  • Real estate investment company Somera Capital Management
  • Private equity firm Angelo Gordon, specialists in what they like to call "alternative investment strategies," such as the collateralized debt obligations (CDOs) of recent fame, and the securities of bankrupt companies.

In other actions...

The Council reviewed the activities of the Santa Clara Economic Development Committee, which met on Aug. 22, 2011. Among the items reviewed were the upcoming broker day (October 12, 2011) to promote the business advantages of a Santa Clara location and the city's current rental income. The city's largest tenants are shown in the chart.

You can find the minutes of the Aug. 22, 2011 Economic Development Committee meeting at http://santaclaraca.gov/index.aspx?page=1504, by selecting the meeting summary for Sept. 20, 2011.

The council unanimously approved an $11 million payment to the County Auditor-Controller for the City's participation in the Alternative Voluntary Redevelopment Program. However, the source of the money remains undecided.