HomeMy WebLinkAbout80A - JOINT - JOSEPH HOUSE AMENDREQUEST FOR COUNCIL/
HOUSING AUTHORITY
ACTION
CITY COUNCIL MEETING DATE:
NOVEMBER 7, 2017
TITLE:
APPROVED SECOND AMENDMENT TO
JOSEPH HOUSE LOAN AGREEMENT AND
AFFORDABLE HOUSING COVENANTS
{STRATEGIC PLAN NO. 5,31
CITY MA ER EXECUTIVE DIRECTOR
RECOMMENDED ACTION
CITY COUNCIL ACTION
CLERK OF COUNCIL USE ONLY:
❑ As Recommended
❑ As Amended
❑ Ordinance on 1s' Reading
❑ Ordinance on 2n° Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the City Manager and the Clerk of the Council to execute a Second Amendment to the
Joseph House Loan Agreement and Affordable Housing Covenants with Mercy House Living
Centers, formerly known as Mercy House Transitional Living Centers, to allow for the remaining
transitional housing unit to be turned into permanent affordable housing and dissolve transitional
housing and transitional shelter at 210 E. 16th Street, subject to non -substantiative changes
approved by the City Manager and City Attorney.
HOUSING AUTHORITY ACTION
Authorize the Executive Director of the Housing Authority and the Clerk of the Council to execute a
Second Amendment to the Joseph House Loan Agreement and Affordable Housing Covenants with
Mercy House Living Centers, formerly known as Mercy House Transitional Living Centers, to allow
for the remaining transitional housing unit to be turned into permanent affordable housing and
dissolve transitional housing and .transitional shelter at 210 E. 16th Street, subject to non -
substantiative changes approved by the Executive Director and the Housing Authority General
Council.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION
At its regular meeting on October 25, 2017, by a vote of 6:0 (De Leon absent), the Community
Redevelopment and Housing Commission approved the recommended action.
80A-1
Second Amendment to Joseph House Loan Agreement
and Affordable Housing Covenants
November 7, 2017
Page 2
DISCUSSION
On April 11, 2006, the City of Santa Ana and the former Community Redevelopment Agency of
the City of Santa Ana (RDA) entered into a Housing Development Loan Agreement and
Affordable Housing Covenants with Mercy House Transitional Living Centers (Mercy House) for
the rehabilitation of the Joseph House Project located at 210 E. 16th Street. Mercy House has
operated Joseph House as a transitional housing program for homeless single men in the
community since 1990. At the time of the loan agreement in 2006, the City provided HOME
Investment Partnerships Program (HOME Program) and RDA tax increment funds for the
rehabilitation of the property. At the time of committing the HOME funds, the HOME Program
allowed funds to be used for transitional housing. In accordance with the loan agreement and
funding regulations, the City has continued to monitor Joseph House to ensure compliance with
the loan documents, regulations, and affordable housing covenants.
Due to funding and policy changes at the federal level, a First Amendment to the Agreement was
entered into on December 1, 2016, to modify the Joseph House transitional housing program to
become a dual-purpose facility offering both transitional housing and permanent housing with
supportive services for single homeless men from the community. The proposed program
modification from a transitional shelter to a dual-purpose model included the following: (1) convert
two units of transitional housing into permanent housing with supportive services, offering low
rental costs in compliance with low HOME rents to meet the needs of low-income homeless
individuals in the community; (2) one unit to continue to operate as a transitional housing
program; and (3) leverage rapid re -housing funds to reduce the length of time clients stay at the
shelter with the goal of connecting them to permanent affordable housing opportunities.
In May 2017, Mercy House began operation of the Bridges at Kraemer Place, a 200 -bed year
round emergency shelter located in the City of Anaheim that serves single men and women. The
advent of this large year round shelter for single adults as well as the Courtyard in Santa Ana,
has replaced the need for Mercy House to continue to operate Joseph House as a transitional
shelter. Furthermore, as demonstrated in the Business Plan and analysis of Orange County's
housing market (Exhibit 1), there is a strong need in the community for the development of
affordable housing for low-income including formerly homeless individuals. As such, Mercy
House now seeks to amend the Housing Development Loan Agreement and Affordable Housing
Covenants a second time to allow for the remaining transitional housing unit to be turned into
affordable housing and dissolve transitional housing at the site (Exhibit 2).
STRATEGIC PLAN ALIGNMENT
The activities covered by this report allow the City to meet Goal # 5 (Community Health,
Livability, Engagement & Sustainability), Objective # 3 (Facilitate diverse housing opportunities
and support efforts to preserve and improve the livability of Santa Ana neighborhoods).
80A-2
Second Amendment to Joseph House Loan Agreement
and Affordable Housing Covenants
November 7, 2017
Page 2
FISCAL IMPACT
There is no fiscal impact associated with this action.
Exhibits: 1. Joseph House Business Plan
2. Second Amendment to Housing Development Loan Agreement and
Affordable Housing Covenants
• I .
Exhibit 1
Business Plan
For Joseph Residence
Permanent Housing Program
Submitted to the City of Santa Ana
9/28/2017
Plan to transition Joseph House from its current state as a dual-purpose facility to a
facility exclusively providing permanent housing with supportive services for single,
homeless or low-income men from the community known as Joseph Residence.
Executive Summary
On April 1 1, 2006, the City of Santa Ana and the former Community Redevelopment
Agency of The City of Santa Ana (RDA) entered into a Housing Development Loan
Agreement and Affordable Housing Covenants with Mercy House Transitional Living
Centers (Mercy House) for the rehabilitation of the Joseph House Project located at
210E. 16th Street. Mercy House operated Joseph House exclusively as a transitional
housing program for homeless single men with in the community from 1990 -2015. At the
time of the loan agreement in 2006, the City provided HOME Investment Partnership
Program (HOME Program) and RDA tax increment funds for the rehabilitation of the
property.
In 2015, Mercy House submitted a request that was approved by the City and
amended the HOME Program agreement to modify the Joseph House Transitional
Shelter to a dual-purpose facility offering both transitional housing and permanent
housing with supportive services for single, homeless from the community. This included
transitioning two of the transitional housing units into permanent housing with supportive
services, offering low rental costs in compliance with HOME low rents to meet the needs
of low-income and formerly homeless individuals. The remaining unit was kept as
transitional housing serving homeless single men.
In May 2017, Mercy House begun operation of the Bridges at Kraemer Place, a 200 -bed
year round emergency shelter located in the City of Anaheim that serves single men
and women. The advent of this large year round shelter for single adults as well as the
Courtyard in Santa Ana, has replaced the need for Mercy House to continue to
operate Joseph House as a transitional shelter. Furthermore, as demonstrated in the
analysis of Orange County's housing market, there is a strong need in the community
for the development of affordable housing for low-income including formerly homeless
individuals.
This document demonstrates Mercy House's plan to further modify Joseph House from
its current state as a dual-purpose facility to a facility exclusively providing permanent
housing with supportive services for single, homeless or low-income men from the
community.
Page 1 of 13
Organization Summary
Mercy House Living Centers ("Mercy House") is a non-profit organization serving the
homeless in Orange County, San Bernardino County, Riverside County. The non-profit
was incorporated in 1988, began operations in 1990 and has been able to operate
successful homeless service programs for over 27 years.
Mercy House was quickly grown from a single shelter serving 10 single men, to a full
system of care designed to meet the needs of the homeless at all stages of their
struggle. In the past year, Mercy House provided services to nearly 5,000 of our
community's most vulnerable men, women, and children. Though our services have
expanded and changed, our mission and reason for existence remains the same: to
end the homelessness of all who enter our system of care.
Over the years we have created a system of care based on a blend of both continuum
of care and housing first models of ending homelessness. This includes operating a
variety of programs ranging from homeless prevention, emergency services and
shelters, transitional and interim housing, rapid re -housing programs, permanent
supportive housing, residential services and affordable permanent housing facilities. The
intention of these programs is to address homelessness at every level. The diversity of
these programs has also afforded us the experience of working with a wide variety of
homeless subpopulations including, but not limited to; families, adult men and women,
mothers and their children, veterans, chronically homeless individuals, persons living
with HIV/AIDS, individuals overcoming substance addictions, and those who are both
physically and/or mentally disabled.
Mission
Mission Statement: To be a leader in ending homelessness by providing a unique system
of dignified housing opportunities, programs, and supportive services.
Operational Statement: To end the cycle of homelessness of those who enter our
system of care.
Page 2 of 13
80A-7
2016-2017 Statistics
Last year, Mercy House set a goal to prevent or end the
our homelessness of 1,200 men, women. and children. We
Results: surpassedthatgoalandprovidedapermanenthousingsolution
to 1,390 men, women, and children in our communities! See
the individual impacts of our programs below:
Marcy Houses Homeless Prevention
Program served 73 families Including
1 219 indwidaals
Housing Portfolio
MINIM
Merccy Houses shelter programs
ended the homelessnes of
107 men, women, & children
Mercy House's ongoing permanent housing programs
provide a permanent housing solution to
1,064 unduplicated incSviduais
see through Rapid Re -Housing
122881n our Affordable Housing Programs
.e 210 In our Permanent Supportive Housing Programs
Housing operated by Mercy House in Orange County:
Total Units: 582
Homeless Prevention (FYI 6)
Rapid Rehousing (FYI 6)
Units Under Development
Low -Income Housing
Permanent Supportive Housing
0 50 100 150 200 250
■Total Units: 582
Page 3 of 13
Legal Entity
Mercy House is a nonprofit 501(c) (3) organization founded in 1988 by Father Jerome T.
Karcher. Mercy House has developed a continuum of care of provide homeless
prevention, emergency shelter and services, transitional housing, and permanent
housing with supportive services to homeless men, women, and children living in
Orange County, San Bernardino County, Riverside County, and Phoenix, Arizona.
Tax 1D: 33-0315864
Until 2009, Mercy House was known as Mercy House Transitional Living Centers. With the
development of the Rapid Re -Housing Program and the Family Redirection Program, it
became clear that permanent housing had emerged as a more viable solution to
ending homelessness for many clients. On February 6, 2009, Mercy House changed its
name to Mercy House Living Centers.
Keys to Organizational Success
• Build and leverage strong, active board of directors.
• Only engage in projects and services that support identified primary strategic
programs
• Continue to design and implement strict financial controls and accountability
• Align programs and services to national best practices to ensure effective
service, delivery, better housing outcomes and increased cost effectiveness.
Organizational Management
Board of Directors
The Board of Directors exists to advocate on behalf of the homeless. This entity has a
responsibility to the agency to co -create and provide resources necessary for the
mission and strategic development of Mercy House with the Executive Director. Board
members are expected to contribute financially to the agency and secure outside
monetary contributions through personal and corporate contacts. It is an expectation
that the Board members attend bi-monthly meetings where they review important and
relevant information relating to the agency's mission. Subcommittees of the Board
address specific needs including strategic planning, fundraising and resource
development, board development, overseeing audit activities, legal, human resources
and agency finances.
The Board holds responsibility for the operation of Mercy House. The Executive
Director's performance is managed by the Board. This allows the staff (including the
Page 4 of 13
Executive Director) to be held accountable to ensure effective service delivery, honest
use of funds, and dignified general operations.
Our current Board of Directors is a mix of 20 members, including participation by a
formerly homeless individual. They come from a variety of sources, with varying
professions. Some have been with Mercy House since its inception and have seen the
agency through its entire history, whereas, others are new and bring an outside
perspective.
Executive Leadership
Larry Haynes is the driving force behind the organization and fills the executive director
role since 1990. His accomplishments include:
• More than 27 years' experience as Executive Director of Mercy House, one of the
longest tenures in Orange County, Calif.
• Grew current agency from the smallest most unstable shelter provider to one of
the most respected homeless service providers in Orange County and
throughout Southern California.
• Increased current agency's financial position from $20,000 in cash and no assets
to an agency with several million dollars in assets, three months operating
reserve, and no current debt service.
• Speaker at numerous local, state, and national workshops and conferences on
homelessness, housing, and leadership issues.
• Led Mercy House in winning contract and operating the Orange County Cold
Weather Armory Emergency Shelter in 2008, increasing services and security
while serving more than 2,000 unduplicated homeless individuals during a five-
month period annually.
• Created and acquired funding for the Family Redirection Program during the
Armory program, preventing hundreds of families with children from having to
spend a night in an armory. Since inception this program has served nearly 2,000
families including more than 7,000 parents and children.
Patti Long -Associate Director
As Operations Director, Patti oversees and is responsible for all of the daily activities of
the agency, concretely implementing on behalf of the Executive Director the agency's
mission as defined by the Board of Directors. All staff, with the exceptions of the
Executive and Housing Directors, report to the Operations Director. This is an inherently
dynamic position whose duties will be in constant motion. Therefore, flexibility and
creativity are of premium value. The Operations Director reports to the Executive
Director. Further responsibilities include managing and supervising identified staff, and
coordinating trainings and orientations when needed.
Page 5 of 13
Fi l l
Linda Wilson - Housing Director
As Housing Director, Linda oversees the agency's housing programs, partner relations,
and significantly assists with special projects that add meaningful value to the agency's
system of care. This is an inherently dynamic position whose duties will be in constant
motion. Therefore, flexibility and creativity are of premium value. The Housing Director
reports directly to the Executive Director. Further responsibilities include the design and
implementation of ongoing operations for supportive housing programs, develop and
implementation of Aftercare and support services, delivering Aftercare Services to
Mercy House graduates in the voucher program, delivering Aftercare Services to Mercy
House graduate residing at San Miguel, and the development and implementation of
new projects as identified by Executive and Operations Directors.
Allison Davenport - Program Development and Compliance Director
As the Program Development and Compliance Director, Allison is responsible for
providing support to the Associate Director to ensure effective and compliant service
delivery of existing and expansion projects. This position manages the agency's public
and private grants including procurement, compliance, contracts and reporting. This
position also manages and oversees the agency data and program evaluation. She
reports directly to the Associate Director.
Management of Finances
Mercy House recognizes it is responsible for establishing and maintaining effective
internal controls to ensure compliance with laws, regulations, contracts, and grants
applicable to federal, state, local, and private funding. As a result, Mercy House has
established fiscal accounting procedures in accordance with the Financial Accounting
Standards Board (FASB) and as needed, GASB.
Mercy House follows certain precepts in the conduct of its activities that include:
• A Board of Directors to oversee business activities
• Written policies for all accounting procedures and internal controls
• Separation of accounting duties and responsibilities
• Use software for accounting procedures that can track how grant money
is spent
• An annual outside audit after the fiscal year end (June 30)
The objective of these practices is intended to:
• Provide a reasonable assurance that all assets are safeguarded against
loss by unauthorized use or disposition
• Ensure all transactions are executed in compliance with management
authorizations and are recorded properly and accurately in accordance
with generally accepted accounting principles
Page 6 of 13
80A-11
• Adequately maintain records and internal control procedures to ensure
compliance with laws and regulations
Mercy House has a full-time Finance Manager and supporting accounting team, who
are responsible for the following bookkeeping activities: managing accounts payable,
cash receipts and payroll; preparing monthly financial statements and grant billings
and assisting with the annual budget and audit. Our Operations Director oversees all
financial activities. Our Finance Manager and Operations Director will review financial
statements and budgets with each Program Manager on a regular basis and will make
adjustments on spending as necessary.
We utilize a fund accounting system designed specifically for non-profit agencies. We
use a cash -basis accounting system. Our Finance Manager prepares the following
reports on a monthly basis: balance sheet, profit and loss statement, general ledger,
grant general ledgers, a functional expense report, and other reports as needed and
required. A Certified Public Accountant who is a member of the Board of Directors is
responsible for reviewing all financial statements on a monthly basis, presenting the
organization's financial status at monthly Board meetings, securing Board approval of
financials and preparing the annual tax returns.
Keys to Organizational Success
• Build and leverage strong, active board of directors.
• Only engage in projects and services that support identified primary strategic
programs.
• Continue to design and implement strict financial controls and accountability.
• Align programs and services to national best practices to ensure effective
service delivery, better housing outcomes and increased cost effectiveness.
Market Analysis
Orange County Housing Challenges
According to the Orange County Community Indicators Report (2017), the following
present key indicators of homelessness and housing stability challenges for Orange
County residents:
Rental Affordability
In 2017, the hourly wage needed to afford a median -priced one -bedroom unit was
$27.62, equivalent to an annual income of $57,440. This Housing Wage is up from $25.46
in 2016 and above the previous five-year average of $25.37. Workers earning above
Page 7 of 13
80A-12
minimum wage, but below the Housing Wage of $27.62 may experience increased
economic insecurity, as a larger proportion of their earnings must go towards housing.
High rent burden can also lead to overcrowding and homelessness.
$28/HOUR NEEDED TO AFFORD A ONE -BEDROOM MINIMUM WAGE INCREASES INSUFFICIENT IN THE
IN ORANGE COUNTY FACE OF ORANGE COUNTY'S HEFTY RENT BURDEN
Reglonal Comparison pf the Houdy Wage Needed to Afield Rental Market Af(ardabNty in Orange County. ]016 and 2017
a One -Bedroom Unit. 2017
f
I
k 8 Zi s _ a
`______
U
-
2016
.017
MEDIAN MARKET RENT (MONTHLY)
$1,324
$1,436
jONEBEDROOM
TWO BEDROOM
$ 1.672
$ 1,613
THREE BEDROOM
$2.322
S2.531
AMOUNT A HOUSEHOLD WITH ONE 5 520 S 546
MINIMUM WAGE EARNER CAN AFFORD
TO PAY IN RENT (MONTHLY)
NUMBER OF HOURS PER WEEK A
MINIMUM WAGE EARNER MUST
WORK TO AFFORD A ONE -BEDROOM
APARTMENT
102 IDS
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In Orange County, median hourly wages for carpenters, machinists and administrative
assistants are too low to afford median rent for a one -bedroom unit. Wages for personal
care aides and retail salespersons are lower still, less than half the amount needed to
afford a one -bedroom unit. For these lower-income workers, a substantial proportion of
their personal income must go toward housing, leaving less for other basic needs and
unexpected expenses. High rent burden can also lead to overcrowding, when families
double- or triple -up in a house to save money on rent, or homelessness if a family or
individual gets behind on rent or cannot afford the upfront costs of renting.
RENT BURDEN IS HIGH FOR MANY LOWER -WAGE WORKERS
Hourly Wage Needed to Afford a Median One -Bedroom Unit in Omoge County (20U) Compared to Medan Local Wages in Selected Occupations (3rd Quarter 2016)
Software D2VBIRRer
Biomedical Engineer
Registered Nurse
Computer Programmer
Carpenter
Setreter,%dministralaw Assistant
Machinist
Retail Salesperson
Personal Care Aide
Soun-er Ca,rmurr:rylMieafors Report e,ralysis aIFALMariet Rent cars from the US Oepartnxnf olHausn9 a,M lNhen OevNpmrars uam9 tMn:ethaadroay atthe Ne'Avl
Low1.Houmrg Oaastion GV17M,u Wa9U U8(arvaF.NPyment Oerplmmenf CeOv:ment Occuverm ml Fmpbyrnml3N(ena (3AQUNer20i6)
Page 8 of 13
Homeless Point -in -Time Count
The Homeless Point -in -Time Count and Survey is conducted every two years during the
last part of January. Since 2013, Orange County has seen a continuous increase in the
number of homeless persons in the community.
The 2017 Point -in -Time Count revealed that the number of unsheltered homeless
individuals increased since the 2015 count. A total of 2,584 unsheltered homeless
individuals were found to be living on the streets of Orange County compared to the
2,201 individuals counted in 2015.
Numbers of Unsheltered and Sheltered
Number of People Experiencing Homeless Persons, 2013 - 2017
Homelessness January 27, 2017 6000
4,792 people were homeless in Orange County 5000
on January 27-2811h 4000
3000
2000
• _ 1000 -
3.090,132 4,251 - -- 0.14% 0
3,145,515 4,452 0.14% t1 2013 2015 2017
3,194,024- 4,792 — 0.15% f ■Sheltered ■unsheltered
JJ ®�OCLS F.sStrat"' -nd
Program Implementation and Strategic Changes
Mercy House first began operation of the Joseph
House Transitional Shelter Program in 1990. It was
designed to meet the needs of 10 homeless, single
men within the community. Since that time, Joseph
House rapidly expanded to provide shelter and
supportive services to 21 homeless single men.
Though homeless single men have consistently been
overrepresented in Orange County Homeless Point -in -
Time counts, the services available to them have not
been able to meet their large numbers. As homeless
services continue to grow and adapt to the needs of
specific subpopulations including homeless families,
the chronically homeless, individuals facing domestic
violence and veterans, there continues to be a lack of
• A 2
.�
Bridges at Kraemer Place: Bridges at Krae mer Place
Is a 24-hour emergency shelter facility In the City of
Anaheim. Currently In Phase 1, Bridges serves 100
adult men and women by providing emergency
shelter, housing search and support, and offers
additional supportive services. Phase 2wlll serve up
to 200 men and women In 2018 and will operate
a full multi -service center, on-site health clinic, full
kitchen, and more.
Page 9 of 13
services designed specifically for single, homeless men.
For many years, Joseph House served as one of the only shelters in Orange County
serving single men.
In May 2017, Mercy House began operations of Bridges at Kraemer Place a 200 -bed
year round shelter for single adult men and women, replacing the need for the Joseph
House facility to continue to operate as a transitional shelter. Additionally, the County of
Orange in partnership with the City of Santa Ana began operations of the Courtyard in
the City of Santa Ana further reducing a local need for shelter beds for single adults.
While the need for shelter beds has diminished as demonstrated in the analysis of
Orange County's housing market, there is a strong need in the community for the
development of affordable housing for low-income including formerly homeless
individuals.
In response to this need, "Joseph House" will be modified to "Joseph Residence" a
3 unit, 15 -bed facility exclusively providing permanent housing with supportive services
for single, homeless or low-income men from the community.
Joseph Residence Permanent Housing Program
The Joseph Residence Permanent Housing Program will be designed to provide low-
income permanent housing with supportive services to 15 low-income single men
including but not limited to those who are homeless or may have other barriers to
housing. Two units have already been converted and one remaining unit will be
converted to permanent housing. Each unit has two bedrooms. One will bedroom in
each unit will house 4 single men in permanent housing; the remaining bedroom will
house 1 single homeless man. Bedrooms will not have private bathrooms. Each unit
offers a communal kitchen, dining area, and living area with shared bathrooms. Mercy
House staff will be available to provide required supportive services include case
management and life skills classes as well as emergency and maintenance assistance.
The targeted outcome for each individual will be long-term, stable housing. Each client
will be provided with case management to identify barriers to permanent housing, with
the ultimate goal being stable housing for each individual, whether that is through our
permanent housing programs, or permanent housing outside of Mercy House's
Continuum of Care.
Eligibility for Admission
To be eligible for admission to the Joseph Residence Permanent Housing Program, an
applicant must be documented and of legal age (18 years of age or older).
Page 10 of 13
Every participant will be required to meet the definition of homelessness as set forth by
HUD and will be required to be under 80% Area Median Income at time of entry and
throughout their stay.
Applicants must be single men and homeless or at risk of homelessness and be willing to
live in a shared space facility. All applicants will be considered individually. Applicants
will be considered when they complete the application packet and the following
criteria are met:
1) Applicant can exhibit documentation confirm homeless status
2) Applicant's verified minimum monthly gross income is $100 over the amount of
resident's rent payment.
3) Household's annual income does not exceed the low-income limits (80% of area
median income) as established by HUD.
4) Household income is such that applicant can satisfactorily meet their debt
obligations without subtracting from other necessary living expenses. This includes
payment of rent, current debt payments and basic necessities.
5) No eviction history for a period of 2 years prior to entry
6) No history of criminal convictions for sex offenses, violent crimes and distribution
of drugs. No outstanding felony warrants.
7) No record of disturbance of neighbors, damage to or destruction of property,
living or housekeeping habits at prior residences, which adversely affects the
health, safety or welfare of other tenants.
8) Willing and able to live cooperatively in a communal living situation and abide
by the policies outlined in the Joseph Residence Rules of Occupancy and Rental
Agreement addendums.
9) Willing to participate in annual recertification meetings to verify income and
continued eligibility.
Residents for the Joseph Residence Permanent Supportive Housing Program will be
selected based on their eligibility as well as their need for low-income housing and the
statutory purpose in leasing a socially and financially sound housing development,
which provides not only a decent home and suitable living environment, but fosters
economic and social diversity in the tenant body as a whole.
Definition of Homelessness
All clients receiving services through the Joseph Residence Permanent Housing Program
will be required to be homeless as defined by the HEARTH Act's Final Rule Defining
Homelessness (76 FR 75994) published on December 5, 2011.
1. Category 1 - Literal Homelessness:
Page 11 of 13
(1) Individual or family who lacks a fixed, regular, and adequate nighttime
residence, meaning: (i) Has a primary nighttime residence that is a public or
private place not meant for human habitation; (ii) Is living in a publicly or
privately operated shelter designated to provide temporary living arrangements
(including congregate shelters, transitional housing, and hotels and motels paid
for by charitable organizations or by federal, state and local government
programs); or (iii) Is exiting an institution where (s)he has resided for 90 days or less
and who resided in an emergency shelter or place not meant for human
habitation immediately before entering that institution Transitional housing for
homeless persons who originally came from the streets or emergency shelters.
2. Category 2 - Imminent Risk of Homelessness:
(2) Individual or family who will imminently lose their primary nighttime residence,
provided that: (i) Residence will be lost within 14 days of the date of application
for homeless assistance; (ii) No subsequent residence has been identified; and
(iii) The individual or family lacks the resources or support networks needed to
obtain other permanent housing.
3. Category 3 - Homeless Under Other Statutes
(3) Unaccompanied youth under 25 years of age, or families with Category 3
children and youth, who do not otherwise qualify as homeless under this
definition, but who: (1) Are defined as homeless under the other listed federal
statutes; (ii) Have not had a lease, ownership interest, or occupancy agreement
in permanent housing during the 60 days prior to the homeless assistance
application; (iii) Have experienced persistent instability as measured by two
moves or more during in the preceding 60 days; and (iv) Can be expected to
continue in such status for an extended period of time due to special needs or
barriers.
Structure and Location
Joseph Residence is located in the city of Santa Ana in the French Park neighborhood.
Mercy House owns three properties in the same neighborhood and has been an active
participant in the community since 1990. The Joseph Residence property has access to
grocery stores, restaurants and public transportation.
The property is comprised of four units, three of which will be used for permanent
housing with supportive services. The three units are 2 -bedroom units with adequate
cooking and hygiene facilities. The fourth unit is occupied by an on-site residential
coordinator.
Zoning and Uses
Mercy House is currently operating Joseph House under a Conditional Use Permit that
allows the housing of homeless single men.
Page 12 of 13
80A-17
Rehabilitation for Use as Permanent Housing Facility
The Joseph Residence facility would require little rehabilitation to transition to a
permanent housing facility. During the past year Mercy House made a number of minor
repairs to the units. Prior to lease up Mercy House will inspect the units again for any
necessary repairs and/or alterations in preparation for new low-income tenants. It is not
anticipated that these repairs would significantly delay project start-up.
On-going Maintenance of the Facility
Mercy House has on staff Maintenance Managers who are in charge of regular
maintenance and repair of Mercy House's facilities including the Joseph House Facility.
Additionally, Mercy House has connections to a network of professional service
volunteers who provide pro-bono services such as plumbing, electrical and
landscaping as needs should arise.
Volunteer groups will be recruited to support facility beautification projects that include
upgrades to the facility grounds and gardens, interior furniture replacement as well as
interior and exterior painting projects.
Mercy House also allocates a percentage of funding as replacement reserves that may
be used for special projects to improve the facility, regular maintenance and
replacement of furniture as needed.
Strategies for Sustainability and Leveraging
Mercy House has consistently funded the operations of Joseph House as a transitional
shelter for over 25 years and as such has garnered a variety of both public and private
resources to support the project. In moving to a permanent housing facility, Mercy
House will effectively communicate the programmatic changes to these partners to
ensure continued support of the project.
As part of its resource development strategies, Mercy House is engaged in ongoing
funding research that replaces, supplants or provides new funding opportunities.
Page 13 of 13
Exhibit 2
i SECOND AMENDMENT TO HOUSING DEVELOPMENT LOAN
AGREEMENT AND AFFORDABLE HOUSING COVENANTS
THIS SECOND AMENDMENT TO HOUSING DEVELOPMENT LOAN
AGREEMENT AND AFFORDABLE HOUSING COVENANTS, made and entered
into this 29th day of September, 2017, by and between MERCY HOUSE LIVING
CENTERS, formerly known as MERCY HOUSING TRANSITIONAL LIVING
CENTERS, a California non-profit public benefit corporation ("Developer"), the City of
Santa Ana, a charter city and municipal corporation organized and existing under the
Constitution and laws of the State of California ("City"), and the Housing Authority of
the City of Santa Ana acting as the Successor Housing Agency to the Community
Redevelopment Agency of the City of Santa Ana ("Successor Housing Agency").
RECITALS
A. The City and Successor Housing Agency entered into a Housing
Development Loan Agreement and Affordable Housing Covenants with
Developer, dated April 11, 2006, to provide financial. assistance from
Redevelopment funds and the United States Department of Housing and
Urban Development ("HUD") under the HOME Investment Partnership
Program ("HOME Program") for the rehabilitation of the Joseph House
Project located at 210 East Sixteenth Street, Santa Ana, for the operation of
a transitional living center for homeless, single men ("said Agreement').
B. Due to funding and policy changes at the federal level, a First Amendment to the
Agreement was entered into on December 1, 2016, to modify the Joseph House
transitional housing program to become a dual-purpose facility offering both
transitional housing and permanent housing with supportive services for single,
homeless men from the community. The proposed program modification from a
transitional shelter to a dual-purpose model included the following: (1)
Transition two units of transitional housing into permanent housing with
supportive services, offering low rental costs in compliance with HOME low
rents to meet the needs of low-income homeless men in the community; (2) One
unit to continue operating as a transitional housing program; and (3) Leverage
rapid re -housing funds to reduce the length of time clients stay at the shelter with
the goal of connecting them to permanent affordable housing opportunities.
C. Due to the need for affordable housing for formerly homeless and low-income
individuals, and in accordance with the terms and conditions of said Agreement, the
parties seek to further amend the Housing Development Loan Agreement and
Affordable Housing Covenants to allow for the remaining transitional housing unit
to be turned into affordable housing and dissolve transitional shelter at the site.
NOW THEREFORE, in consideration of the mutual and respective covenants and
promises hereinafter contained and made, and subject to all of the terms and conditions
of said Agreement and the First Amendment to the Agreement, except as herein
modified, the parties agree as follows:
Section 1. 1, Defined Terms, the first sentence of the definition of "Property"
shall be amended in pertinent part to read as follows:
"The Property is located in the City of Santa Ana, and is used as permanent
housing with supportive services for single, homeless or low-income men
from the community."
2. Section 5.4, Other Terms and Conditions of Loan, subsection (5) shall be amended
to read as follows:
"failure of Developer or a subsequent owner*to use the Property for the
purpose of permanent housing with supportive services for single, homeless
or low-income men from the community."
3. Section 7. 1, Use and Maintenance of the Property, subsection (B) shall be
amended to read as follows:
"Use the Property as a facility offering permanent housing with supportive
services for single, homeless or low-income individuals from the community,
as detailed in the Developer's Plan attached hereto as Exhibit G-1 and
incorporated herein by this reference."
4. Except as hereinabove modified in this Second Amendment, the terms of said
Agreement as modified by the First Amendment shall remain in full force and effect.
In the event of any conflict between the tenns of this Second Amendment and the
terns of said Agreement and First Amendment, the terms of this Second Amendment
shall control.
--signature page to follow--
Fi
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment to
said Agreement the date and year first above written.
ATTEST: CITY OF SANTA ANA
MARIA D. HUIZAR
Clerk of the Council
Recording Secretary
APPROVED AS TO
FORM:
SONJA7R. C,ARVALHO
Raul Godinez II
City Manager
HOUSING AUTHORITY OF THE
CITY OF SANTA ANA
e ROBERT M. ZUR SCHMIEDE
Attorney Interim Executive Director—
Housing Authority
DEVELOPER
MERCY USE LIVING CENTERS
By:
Title:
a
80A-21
80A-22