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Ills Ills ills LEGACY PARTNERS August 17, 2020 Mayor Miguel Pulido Rental Real Estate Santa Ana City Council 20 Civic Center Plaza Property Santa Ana, CA 92701 Management Marketing Re: Item 75B. PUBLIC HEARING- ZONING ORDINANCE AMENDMENT Services NO. 2020-03 TO AMEND CHAPTER 41 (ZONING) RELATING TO THE Corporate HOUSING OPPORTUNITY ORDINANCE AND ADOPT AN AMENDMENT TO Services THE AFFORDABLE HOUSING FUNDS POLICIES AND PROCEDURES. ions DeveloAcquis'tpmenti Dear Mayor Pulido and Honorable Council Members, Design Services As you may know, our proposed multifamily project at 651 W. Sunflower in the South Coast Metro area of Santa Ana was unanimously approved by both Planning Commission Construction Management and City Council last summer. We had planned to close on the land with the Sound Church, pull permits and start construction on the project in May until the COVID crisis Financial Services caused our financial partner to put the project on hold. Ownership The COVID crisis has caused serious economic issues in the apartment industry and have driven rents 10%-15% and values down by 5%to 10%. Our financial partner is committed to close on the land and forward with the Sunflower project at this time, if we can get the costs down to make the underwriting work based upon current economics. As you also know, the Planning Commission recently discussed the merits of applying the $5 per square foot fee to entitled protects since it would serve as a true stimulus to projects that are otherwise ready to go during the most difficult time related to the financial fall -out of the COVID 19 Crisis. A $5 per square foot fee applying to Sunflower would have a direct impact on the Sunflower project and create an immediate construction start this Fall. The project would be a substantial investment in the City, resulting in immediate construction jobs (including a union labor component), and increased property taxes; all at a time in which it is most critically difficult and important. In fairness to all residential projects in the City, (both entitled and proposed), a flat $5 per square foot fee should be adopted to ensure continued housing for years to come. I also want to caution the City, mandating skilled/union labor "across the board" on multi- family projects in Santa Ana. We understand from firsthand experience that the increased costs (25%+) will render residential development totally infeasible and shut down construction in the City. With that said, the City has traditionally encouraged union labor on proposed projects and do consider their support when evaluating the merits of a proposed project. We serve as a good example of a project that worked with 5141 California Avenue, Suite 100, Irvine, California 92617 Legacy Partners • T.949930.6600 F.866260.1910 vmrmlegacypartners.com