HomeMy WebLinkAboutJAMBOREE HOUSING CORPORATION (3)MAR 1 2.2021 i' JiiAr,
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MAYOR
Vicente Sarrniento
MAYOR PRO TEM
David Penaloza
COUNCILMEMBERS
Phil Bacerra
Johnathan Ryan Hernandez
Jessie Lopez
Nelida Mendoza
Thai Viet Phan
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March 2, 2021
Laura Archuleta
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CITY OF SANTA ANA
COMMUNITY DEVELOPMENT AGENCY
20 Civic Center Plaza • P.O. Box 1988
Santa Ana, California 92702
(714)647-5360
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President
Jamboree Housing Corporation
17701 Cowan Avenue, Suite 200
Irvine, California 92614
Re: North Harbor Village (previously referred to as "Budget Inn")
1108 N. Harbor Boulevard, Santa Ana, CA 92703
Pre -Commitment Letter for CDBG Loan and Project Based Vouchers
Dear Ms. Archuleta:
A-2021-030
CITY MANAGER
Kristine Ridge
CITY ATTORNEY
Sonia R. Carvalho
CLERK OF THE COUNCIL
Daisy Gomez
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") previously 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 a 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.
SANTA ANA CITY COUNCIL
Vicente Samliento David Panalozz Thai Viet Phan Jessle Lopez Phil Bacena Johnalhan Ryan Hernandez Nelida Mendoza
Mayor Mayor Pm Tenn, Ward 2 Weird Ward Waal Ward5 Ward
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At the City Council / Housing Authority meeting on March 2, 2021, the City Council and
Housing Authority Board authorized and approved issuance of an extension of this pre -
commitment letter to March 2, 2023. 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.
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/or final 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.
The City's lien and regulatory agreement pursuant to the City Loan will be
subordinated pursuant to an approved subordination agreement, in conformance
with the City's adopted Affordable Housing Funds Policies and Procedures.
In the event title to the Property is transferred as a result of a foreclosure, or in the
event the HAP contract is terminated, reduced or not renewed fora reason otherthan
the default of the Borrower, a deed in lieu of foreclosure or other realization upon the
Property under Senior Loan Documents, notwithstanding anything to the contrary
contained in the City's regulatory agreement, the units subject to restriction under the
City's regulatory agreement shall be restricted for rental to and occupancy by
households whose income does not exceed 60% of the area median income for the
Orange County, California PMSA, adjusted for household size, as published by the
U.S. Department of Housing and Urban Development, and rent in such units shall be
restricted to the product of 30% of 60% of the area median income adjusted forfamily
size appropriate for the unit.
Protect -Based Vouchers:
The Project consists of eighty-nine (89) permanent supportive housing units to be made
available at affordable rents for a term of fifty-five (55) years.
The project -based vouchers (PBVs) shall include the following terms:
Voucher Source: The eighty-nine (89) 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).
Fifty-five (55) PBVs must be used to serve chronically homeless individuals with
strong ties to the City of Santa Ana. Four (4) of these fifty-five (55) project -based
vouchers must be designated for non-HUD-VASH homeless veterans as required
by the Veterans Housing and Homelessness Prevention Program funds from the
State of California Department of Housing and Community Development. The
remaining thirty-four (34) PBVs are HUD-VASH PBVs that 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.
In addition, the Authority will also have a local preference for chronically homeless
veterans with strong ties to the City of Santa Ana for fifty-one (51) of these fifty-five
(55) project -based vouchers, but it will not be a requirement as through HUD-
VASH. Specifically, the chronically homeless veterans served at the Project must
be a City of Santa Ana resident established by fulfilling one or more of the following
requirements:
o Proof of strong ties to the community, to include current residency of an
immediate family member — mother, father, sibling, or grandparent in the
City of Santa Ana;
o Proof that the individual attended a K-12 school in Santa Ana;
o Proof that the individual resided on property zoned for residential use in
Santa Ana and the individual was on the lease and/or paid utilities
necessary for legal use of the property for residential purposes; or
o Knowledge — either first-hand or recorded — by the Santa Ana Police
Department that the individual has been a member of the Santa Ana
homeless community.
If there are no chronically homeless veterans with strong ties to the City of Santa
Ana, then these fifty-one (51) project -based vouchers must be used to serve
chronically homeless individuals with strong ties to the City of Santa Ana after the
local veteran preference is exhausted.
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 - $1,527
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 TCAC.
• 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
$1,527
$1,630,836
The estimated maximum annual amount received under this award is $1,630,836.
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).
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 2, 2023.
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(a�santa-ana.ora.
Sincerely,
Kristii er�Ridge
City Manager
City of Santa Ana
Steven A. Mendoza
Executive Director
Housing Authority of the City of Santa Ana
A-2021-030
Attest:
Daisy Gomez Daisy Gomez
Clerk of the Council Recording Secretary
City of Santa Ana Housing Authority of the City of Santa Ana