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ti - - CONSULTING GROUP LAND USE • COMMUNITY PLANNING - REPRESENTATION September 28, 2017 Robert Cortez, Deputy City Manager City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Dear Mr. Cortez: I write on behalf of AMG and Associates. As you know, last fall, AMG submitted a proposed amendment to Santa Ana's Housing Opportunity Ordinance (HOO). (Exhibit A, attached, is draft language for the amendment submitted by AMG.) As currently in effect, the H00 establishes certain requirements for the production of affordable housing units. Generally, the HOO indicates that applicants subject to the H00 may satisfy its requirements by: one, constructing a certain number of affordable units; two, paying a fee in lieu of constructing the units (in lieu fees); or three, a combination of the two. The amendment, as proposed by AMG, would provide another option. Under the amendment, applicants who produce affordable units in excess of the number required by the H00 would receive credits for the excess units. In turn, other developers could purchase these credits and utilize them to satisfy the provisions of the H00. Over the course of the last year, AMG representatives have participated in numerous conversations with staff regarding the proposed amendment. In addition, representatives attended a stakeholders meeting convened by the City, and briefed various Councilmembers on the proposed amendment. During this period, the City commissioned Keyser Marston Associates to conduct an analysis of the amendment. While we continue to believe the proposed amendment has merit and is an efficient and economical way to help meet the City's goal of producing affordable housing, we have been encouraged to consider alternatives which do not entail amending the H00. It is in this spirit that we offer the following alternative for the City's consideration. As you are aware, AMG has applied for certain planning approvals to develop approximately 1,100 affordable housing units for families and seniors at 2214 and 2222 East First Street. The project, with development costs of $350 million, is being financed through equity, investor financing and 4% tax credits. In addition, a bridge loan of $50.2 million is being provided by institutional investors who focus on the production of affordable housing. The bridge loan is essential to the viability of the project, and Exhibit3 60E-33