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HomeMy WebLinkAbout2022-002 HARESOLUTION NO. 2022-002 A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF SANTA ANA APPROVING THE GROUND LEASE OF THE HOUSING AUTHORITY OWNED PROPERTY AT 1126, 1136, & 1146 EAST WASHINGTON AVENUE, SANTA ANA, CA 92701 (APNs 398-092-14 & 398-092-13) BE IT RESOLVED BY THE MEMBERS OF THE HOUSING AUTHORITY OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The Housing Authority of the City of Santa Ana conclusively finds, determines and declares as follows: A. The Housing Authority of the City of Santa Ana ("Authority") is a California housing authority duly organized and existing under the California Housing Authorities Law, Part 2 of Division 24, Section 34200, et seq., of the Health and Safety Code, and has been authorized to transact business and exercise the power of a California housing authority pursuant to action of the City Council of the City of Santa Ana ("City Council"). B. The City of Santa Ana ("City") is a California municipal corporation and charter city. C. The Authority serves as the Housing Successor to the former Community Redevelopment Agency of the City ("Former Redevelopment Agency"). D. In 2007, the Former Redevelopment Agency used Low and Moderate Income Housing Asset Funds, also known as Property Tax Increment Housing Set -Aside funds ("Set -Aside Funds") to purchase that certain real property located at 1126, 1136, & 1146 East Washington Avenue, Santa Ana, CA 92701 (APNs 398-092-14 & 398-092-13) ("Authority Site"). E. The County of Orange ("County") owns an adjacent property to the south of the Authority Site ("County Site"). The County and Authority have executed a Joint Powers Agreement to provide a combined Authority Site and County Site (collectively, "Site') totaling approximately 2.28 acres of undeveloped land. The Related Companies of California ("Developer") has proposed the development of The Crossroads at Washington multifamily affordable housing project on the Site, which will have 85 new affordable units and 1 manager's unit, with 42 three- and four -bedroom units for large families, and 43 one- and two -bedroom affordable units for persons experiencing homelessness ("Project"). All of the affordable units in the Project will be for extremely low-income households at 30% Area Median Income. G. To effectuate the development of the Project on the Site, the Authority and County propose to enter into a ground lease with Washington Santa Ana Housing Partners, Resolution No. 2022-002 Page 1 of 4 L.P., a California limited partnership formed by the Developer ("Tenant") for no more than sixty-five (65) years ("Ground Lease'). A true and correct copy of the Ground Lease is attached hereto as Exhibit A and incorporated herein by reference. H. Since the Authority Site was purchased with Set -Aside Funds, the conveyance of the Site through the Ground Lease to the Tenant is subject to the reporting requirements imposed by California Health and Safety Code section 33433 ("H&S 33433"). Specifically, H&S 33433 requires the conveying entity to prepare a report that summarizes the financial terms associated with the proposed disposition transaction. I. The H&S 33433 Summary Report is based upon the information contained within the Ground Lease, and is organized into the following seven sections: i. Salient Points of the Ground Lease; ii. Cost of the Ground Lease to the Agency and the Former Redevelopment Agency; iii. Estimated Value of the Interests to be Conveyed Determined at the Highest Use Permitted under the Property's Zoning; iv. Estimated Reuse Value of the Interests to be Conveyed; v. Consideration Received and Comparison with the Established Value; vi. Blight Elimination; and, vii. Conformance with the AB1290 implementation Plan. J. The Authority made available for public inspection and copying at a cost not to exceed the cost of duplication, the H&S 33433 Summary Report no later than the time of publication of the first notice of the hearing. A true and correct copy of the H&S 33433 Summary Report is attached herewith as Exhibit B and incorporated herein by reference K. Pursuant to H&S 33433, the Housing Successor must also first secure approval of the proposed ground lease agreement from its local legislative body after a public hearing. L. The Project includes 85 units that will be subject to long-term income and affordability covenants. In accordance with California Redevelopment Law, as portrayed in H&S 33433, the conveyance of property that results in the provision of housing for low- or moderate -income persons satisfies the blight elimination criteria imposed by H&S 33433. Furthermore, the conveyance of the Agency Site will assist in the elimination of blight by allowing for the redevelopment of a vacant property. Thus, the Project fulfills the blight elimination requirement. M. The last AB1290 Implementation Plan completed by the Former Redevelopment Agency was for the 2010 to 2015 period. The Implementation Plan contemplates the development of affordable housing within the Merged Project Area. Specifically, under the heading Short -Term Goals and Objectives, the Implementation Plan includes the following: "Expand the community's supply of housing, including Resolution No. 2022-002 Page 2 of 4 opportunities for low and moderate income housing." Therefore, the Project is in conformance with the AB 1290 Implementation Plan. N. The Ground Leases imposes extraordinary controls on the Project. The impacts created by these requirements reduce the value of the Project from $4.11 million at the highest use permitted under the current zoning, to the established fair reuse value of negative $4.6 million. The Ground Lease requires the Tenant to pay Base Rent to the Authority based on Residual Receipts payments that are generated from cash flow generated by the Project over time. At the end of the Ground Lease Term, the Tenant must repay any outstanding balance of Authority Base Rent. Given that the Base Rent Payments received by the Agency will be greater than the established fair reuse value of negative $4.60 million, it can be concluded that the Agency is receiving fair consideration for the interests being conveyed to the Tenant. O. The Authority has prepared such notices, plans and reports as may be required in connection with its consideration of this matter and has made available for public inspection all such matters prior to its consideration of and action on this matter. P. On June 21, 2022, the Authority held a duly noticed public hearing, and at that time considered all testimony, written and oral. Notice of the time and place of the hearing was published in a newspaper of general circulation in the community once per week for two successive weeks, as specified in Government Code section 6066, prior to the hearing. Section 2. The Authority, acting as the Housing Successor Agency, approves the lease of the Site to Tenant for the development of the Project pursuant to the terms of the Ground Lease attached hereto as Exhibit A and incorporated herein by reference. The Authority hereby authorizes the Executive Director of the Authority to execute the Ground Lease with the County and the Tenant for the development of the Project on the Site, subject to non -substantive changes approved by the Executive Director of the Authority and the Authority Counsel. Section 3. The Authority hereby finds and determines, based on all documentation, testimony and other evidence in the record before it, that the Ground Lease of the Authority Site: (a) will assist in the elimination of blight and provide housing for low- or moderate -income persons, as defined in Health and Safety Code section 50093; (b) is consistent with the implementation plan adopted pursuant to Health and Safety Code section 33490; and, (c) the consideration being paid to the Authority is not less than the fair reuse value for the use and with the covenants and conditions and development costs authorized by the Ground Lease. Section 4. This Resolution shall take effect immediately upon its adoption by the Authority Board, and the Recording Secretary for the Authority shall attest to and certify the vote adopting this Resolution. ADOPTED this 218t day of June, 2022. Resolution No. 2022-002 Page 3 of 4 APPROVED AS TO FORM: Sonia R. Carvalho, General Counsel By: _ � J111 A� Ryan O. odge Assistant Coun el AYES: NOES: ABSTAIN: NOT PRESENT: Boardmembers Boardmembers: Boardmembers: Boardmembers: O Vicente Sarmiento Chair Lopez, Mendoza Penaloza, Phan, Bacerra Sarmiento (6) None (0) None (0) Hernandez (1) CERTIFICATION OF ATTESTATION AND ORIGINALITY I, DAISY GOMEZ, Recording Secretary to the Housing Authority, do hereby attest to and certify the attached Resolution No. 2022-002 to be the original resolution adopted by the Housing Authority of the City of Santa Ana on June 21 2022.1 Date: 2� 2022 Daisy Gomez Recording Secretary City of Santa Ana Resolution No. 2022-002 Page 4 of 4