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Home My WebLink AboutJAMBOREE HOUSINGMAYOR li`d)fFiPduE Miguel A. Pulido WONK h4ilY MAYOR PRO TEM Juan Villegas CLrc'l tib ()io 00I[JN IL rl COUNCILMEMBERS , a,rrte -APR p 4 2019 Cecilia Iglesias David Penaloza Vacant ®• C 9AL®, Vicente Sarmiento,0.�`�� Ch�j Jose Solorio March 5, 2019 Laura Archuleta President CITY OF SANTA ANA Community Development Agency 20 Civic Center Plaza c P.O. Box 1988 Santa Ana, California 92702 www.santa-ana.oro (714)647-5360 Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, California 92614 A-2019-054 AG I ING CITY MANAGER Steven A, Mendoza CITY ATTORNEY Sonia R. Carvalho ACTING CLERK OF THE COUNCIL Norma Mitre -Ramirez Re: Budget Inn 1108 N. Harbor Boulevard, Santa Ana, CA 92703 Pre -Commitment Letter for CDBG Loan and Project Based Vouchers Dear Ms. Archuleta: Jamboree Housing Corporation ("Developer") requested financial assistance in connection with the proposed development of an eighty-nine (89) unit affordable housing complex to be located at 1108 N. Harbor Boulevard, Santa Ana, CA 92703 ("Project"). The City of Santa Ana ("City") and the Housing Authority of the City of Santa Ana ("Housing Authority") have reviewed the Developer's request for assistance, and at the City Council / Housing Authority meeting on February 5, 2019, the City Council and Housing Authority Board authorized and approved issuance of this pre -commitment letter evidencing the preliminary award of (collectively, the "City Assistance"): A loan in the maximum amount of $1,687,047 funded from the U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant funds ("CDBG") held by the City of Santa Ana ("City Loan"); and, Eighty-nine (89) U.S. Department of Housing and Urban Development -Veterans Affairs Supportive Housing ("HUD-VASH") Project -Based Vouchers ("PBV") for Permanent Supportive Housing for the Project. This letter shall evidence the City's pre -commitment of the City Assistance to the Developer for the Project subject to the conditions described below. SANTA ANA CITY COUNCIL Miguel A. Pulido Juan Villegas Vicente Sarmiento David Penaloza Jose Solorio Vacant Cecilia Iglesias Mayor Mayor Pro Tem, Ward 5 Ward 1 Ward 2 Ward 3 Ward 4 Ward 6 moulido(Pjsanta-ana.oro iyillegasftisanta-ana.oraysannlento(trdan(g-a0a.o1[1 doenalosa(d).santa-ana.ora jsolorio(Oisanta-ans.orn cialesias(4)santa-ana.orq Page 12 City Loan: The amount of the proposed City Loan has been determined based upon the City's review of the Developer's request for the receipt of the City Assistance and the development proforma and projected cash flows for the Project submitted by the Developer to the City ("Proforma"). The City Manager and Housing Authority Executive Director has authority to approve revised development proformas and projected cash flows for the Project; provided, however, that the City Assistance is not increased or extended. The City Loan shall include the following terms: • $1,687,047 maximum principal amount, or as much thereof as is disbursed for acquisition costs to construct the Project, funded from the HUD CDBG funds held by the City of Santa Ana. • 3% simple interest per annum. Repayment from 50% of Residual Receipts (pro -rata with payments due in connection with other financing provided by other public agencies) (after payment of operating expenses, debt service, any deferred developer fee, and partnership fees to be described in the Agreement) with the remaining 50% to be disbursed to the Developer. Remaining principal and accrued interest due upon the 55th anniversary of the issuance of Certificate of Occupancy and/orfinal building permits or earlier upon sale, refinancing or default. On that date, the City agrees to review the performance of the property and consider in good faith any reasonable request by Developer to modify the terms or extend the term of the City Promissory Notes. Additionally, the City will receive a pro rata share of 50% of the net proceeds received from any sale or refinancing of the Project, after payment of outstanding debt and payment in full of any deferred developer fee and establishment of any reserves and transaction costs. Cost savings from the Project, if any, will be applied first to pay down the City Loan, subject to compliance with the Tax Credit Allocation Committee ("TCAC") Regulations. HUD-VASH PBV's: The Project consists of eighty-nine (89) permanent supportive housing units to be made available at affordable rents to HUD-VASH eligible homeless veterans for a term of fifty- five (55) years. All homeless veterans shall be referred from the Veterans Affairs Medical Center of Long Beach through the Orange County Coordinated Entry System, and are residing or working in the City of Santa Ana as defined under the City's criteria. Page 13 The HUD-VASH PBV's shall include the following terms: Voucher Source: The eighty-nine (89) HUD-VASH PBVs will be funded exclusively out of the tenant -based voucher program annual budget authority received by the Housing Authority from the U.S. Department of Housing and Urban Development (HUD). Rents: The PBV Housing Assistance Payments ("HAP") Contract rents below are preliminary and contingent upon a reasonable rent determination to be conducted at the time of execution of the HAP Contract: o 0 Bedroom - $1,387 In accordance with HUD regulations and the Housing Authority's Housing Choice Voucher Program Administrative Plan, these rents are subject to review prior to the execution of a HAP Contract. Rents and income requirements for the remaining affordable units shall be based on the requirements of the federal Low Income Housing Tax Credit Program as administered by ICAC. • Annual Amount: The Project will receive PBVs for eighty-nine (89) units: Unit Size Income No. Units Proposed Rent Total Annual Target Revenue 0 -Br 30% AMI 89 $1,387 $1,481,316 The estimated maximum annual amount received under this award is $1,481,316. These estimates assume 100% occupancy of the assisted units over the twelve- month period. Term: The HAP Contract will have a term of twenty (20) years. Any time before the expiration of the HAP Contract, the Developer may request an additional twenty (20) years, subject to a determination by the Housing Authority that it is appropriate to continue providing affordable housing for homeless veterans or to expand housing opportunities and HUD funding. Subsequent extensions are subject to the same requirements. • Units Receiving PBV Assistance: The maximum number of units receiving PBV assistance will be eighty-nine (89). Page 14 General Provisions: The City's obligation to provide the City Assistance to the Project is subject to each of the following conditions: • Developer must provide proof that it has secured all of its remaining financing for the development of the Project before staff will return to the City Council for consideration of the Loan Agreement. • All provided funding and project requirements shall conform to the City's adopted Affordable Housing Funds Policies and Procedures, unless alternative requirements are expressly provided in the executed Loan Agreement or any other documents related to the development of the Project. • Approval of all required entitlements and discretionary actions, to allow the construction of a 89 -unit affordable housing complex to be located at 1108 N. Harbor Boulevard, Santa Ana, CA 92703. • The City's obligation to provide the Loan is and shall remain subject to all covenants, conditions, and restrictions set forth in the Loan Agreement, and in particular City's analysis of the available funding sources and development and operating costs of the Project and the overall economic feasibility of the Project. • Review and approval of the documents evidencing the City Loan by the City Council, as applicable. • Execution of HAP Contracts and all necessary documents for the PBV's. • Compliance with applicable federal regulations set forth in 24 Code of Federal Regulations (CFR) Part 570 and 24 CFR Part 983. Developer, at its sole cost and expense, will be responsible for securing any and all permits and discretionary approvals that may be required for the Project by the City, Housing Authority, or any other federal, state, or local governmental entity having or claiming jurisdiction over the Property or Project. Notably, this pre -commitment letter shall not obligate the City or any department thereof to approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the construction, rehabilitation, installation or operation of the Project. This pre -commitment letter for the Project will expire on March 5, 2021. Page 15 If you have any questions or require any additional information regarding this award letter, please contact Judson Brown, Housing Division Manager, by telephone at (714) 667- 2241 or by e-mail at Ibrown@santa-ana.org. Sincerely, � � — Steven A. Mendoza Steven A. Mendoza Acting City Manager Executive Director City of Santa Ana Housing Authority of the City of Santa Ana IN! ni`��t, No rma- Mitre Acting Clerk of Council City of Santa Ana Norma Mitre Recording Secretary Housing Authority of the City of Santa Ana