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HomeMy WebLinkAbout60E - SENIOR RENTAL COMMUNITYREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MAY 1, 2018 TITLE: DENSITY BONUS AGREEMENT TO ALLOW A 418 -UNIT AFFORDABLE SENIOR RENTAL COMMUNITY AT 2222 EAST FIRST STREET {STRATEGIC PLAN NOS. 3,2; 5,3) RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1 s Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute a Density Bonus Agreement with Affordable Housing Land Consultants, Inc., or assigns, for a 55 -year term, subject to non - substantive changes approved by the City Manager and City Attorney for the development of a 418 -unit affordable senior rental residential community at 2222 East First Street. PLANNING COMMISSION ACTION At its regular meeting on September 11, 2017, the Planning Commission recommended approval of the Density Bonus Agreement No. 2017-01 by City Council as conditioned to allow construction of a 418 -unit affordable senior rental residential community at 2222 East First Street located in the Metro East Mixed Use Overlay District (OZ -1). Planning Commission approved the recommended action on September 11, 2017 by a vote of 5:2 (Contreras -Leo and Nguyen opposed). DISCUSSION The California Density Bonus Law allows developers to seek increases in allowed zoning density by providing additional affordable housing units on-site. To make development of on-site affordable housing units feasible, the law allows developers to request incentives or waivers, which are essentially variances from development standards. The first version of the Density Bonus Law was adopted in 1979 and has been amended from time to time. In early 2017, the law was amended to restrict the ability of local jurisdictions to require studies to justify a density bonus and places the burden on local granting authorities to prove that the requested incentives/waivers are not financially warranted. The California Density Bonus Law applies to projects proposing five or more residential units and grants density bonuses to those projects meeting certain requirements for affordability levels and types of housing (family, veterans, etc.). Pursuant to State law and the City's Housing 60E-1 Density Bonus Agreement for 2222 East First Street May 1, 2018 Page 2 Opportunity Ordinance, rental units in such developments that are designated "affordable" must remain so for at least 55 years. For affordable senior housing projects, a developer may seek a density bonus up to 20 percent from base density. In addition, the City's Housing Opportunity Ordinance (HOO), last updated in 2015, augments the California Density Bonus Law by allowing a developer to seek an additional 35 percent density bonus calculated from base density (SAMC Sect. 41-1904.1). A summary of the proposed project's density calculation is provided below: Project Density Calculation Density or Bonus Allowed for Project Provided 285 units (3.17 acres x 90 units/acre base density used Base Density as a standard for 285 units developments in areas designated DC by the General Plan Land Use element 20 -Percent Density Bonus for Senior Projects Provided by 285 x 20% = 57 units + 57 units California Density Bonus Law 35 -Percent Density Bonus Provided by the City's Housing 285 x 35% = 100 units + 76 units Opportunity Ordinance Total Units 442 units maximum 418 units proposed Based on the above calculations, the proposed project complies with both the California Density Bonus Law and the City's Housing Opportunity Ordinance. As such, a Density Bonus Agreement has been prepared (Exhibit 1). Under California Density Bonus Law, a developer may seek incentives or waivers (sometimes called concessions) to increase the viability of the proposed project. The Planning Commission Staff Report from September 11, 2017 provides detailed information regarding the requested incentives/concessions (Exhibit 2). Project Description The project includes demolition of an existing motel and restaurant and construction of an affordable rental senior housing community. The project will contain one structure consisting of a ground -level parking area and five levels of residential above. A total of 418 affordable rental senior units will be provided on the project site, as well as one (1) on-site manager's unit. Units will include studios (91), one -bedroom (262), and two-bedroom (65) units ranging in size from 402 to 899 square feet. All units will contain full kitchens, full bathrooms, storage, and open/common (living) areas. The project will contain 213 guest and resident parking spaces in an at -grade parking area beneath the residential levels. The parking ratio conforms to the provisions in AB 744, which allows affordable rental senior housing projects near major bus lines to provide 0.5 parking spaces per residential unit. Full sized site plans are available for public viewing in the Clerk of the Council Office. 60E-2 Density Bonus Agreement for 2222 East First Street May 1, 2018 Page 3 On September 28, 2017, AMG and Associates submitted a request to the City for a project subsidy equal to 70% of the City's annual affordable housing in -lieu fees collected from developers under the Housing Opportunity Ordinance, up to a maximum of $1.75 million per year for 40 years (Exhibit 3). AMG proposes to use the requested annual payment for debt service on their affordable housing projects located at 2110, 2114 and 2222 E. 15t Street. The request was not approved by the City. In addition, on March 14, 2018, AMG submitted a 4% low-income housing tax credit application to the California Tax Credit Allocation Committee (TCAC). AMG stated on Tab 2a of their application to TCAC: "The City of Santa Ana will provide an Inclusionary Housing Funds loan in the amount of $5,000,000 with an interest rate of 1%, a term of 55 -years and payments based on residual receipts" (Exhibit 4). On April 5, 2018 as part of the City's responsibility to submit a Local Reviewing Agency Project Evaluation Form, the City communicated to TCAC that the developer's "statement that the City of Santa Ana will provide $5,000,000 is incorrect" (Exhibit 5). The City of Santa Ana has not made any commitment in any form to provide $5,000,000 for the development of this project. At this time, the City has made no decisions on whether it will provide financial support for the projects. The approval of the density bonus agreement is in compliance with Section 41-1600 and Section 41-1904.1, et seq., of the Santa Ana Municipal Code, and Section 65915, et seq., of the California Government Code. However, the approval of the density bonus agreement shall not be construed as approval of the financing requested by the developer for the project and does not bind the city in any form to provide future funding for the development of the project. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal # 3 - Economic Development, Objective #2 (create new opportunities for business/job growth and encourage private development through new General Plan and Zoning Ordinance policies), Objective # 5 (leverage private investment that results in tax base expansion and job creation citywide) and 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). FISCAL IMPACT There is no fiscal impact associated with this action. ��� 3", Judsorf Brown Acting Executive Director Community Development Agency Candida Neal Executive Director Planning and Building Agency Exhibits: 1. Density Bonus Agreement 2. Planning Commission Staff Report from September 11, 2017 3. Request for Financing from AMG, September 28, 2017 4. Pages from Tab 2a of the 4% Tax Credit Application 5. Cover Letter Sent to TCAC for the Project Evaluation Form 60E-3 60E-4 RECORDING REQUESTED BY: AND WHEN RECORDED MAIL TO: City of Santa Ana Clerk of the Council 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702 Attention: Clerk of the Council Free Recording pursuant to Government Code 27383 DENSITY BONUS AGREEMENT THIS AGREEMENT, made and entered into this _ day of , 2018, by and between the City of Santa Ana, a charter city and municipal corporation of the State of California ("City"), and Affordable Housing Land Consultants, LLC., a limited liability company ("Developer"). RECITALS: A. Developer is the owner of certain property ("Property") located within the City of Santa Ana, County of Orange, State of California, commonly known as 2222 East First Street, Santa Ana, California, and legally described as set forth in "Exhibit A", attached hereto and incorporated herein by this reference as if set forth in full, and desires to develop an affordable senior housing rental project thereon ("Project"). B. Section 41-1600, et seq., of the Santa Ana Municipal Code and section 65915, et seq., of the California Government Code set forth a process to provide increased residential densities to property owners who guarantee that a portion of their residential development will be available to low income, very low-income, or senior (also known as "qualified") households. These regulations are intended to materially assist the housing industry in providing adequate and affordable shelter for all economic segments of the community and to provide a balance of housing opportunities for very low-income, low income and senior households throughout the city. C. Additionally, Santa Ana Municipal Code section 41-1904.1 provides inclusionary housing development incentives for production of units on-site, including a density bonus concession up to a maximum of 35%. D. Developer is proposing to develop the Project with 418 affordable senior apartment units on the Property as more particularly set forth in Density Bonus Application No. 2017-01 and Site Plan Review No. 2017-08. Without the density bonuses, Developer would only be permitted to build 285 units. E. In light of the purpose of the City and State density bonus law, and the express provisions of California Government Code section 65915(n), as well as Santa Ana Municipal Exhibit J -1- 60E-5 Code section 41-1904.1, the City has determined to grant Developer's application for density bonuses and related concessions and waivers. F. The Project has been granted waivers and concessions of City development standards including (i) reduction of publicly accessible open space from required 15% of total lot area to 3.6%, (ii) reduction in building setback requirements, and (iii) increased driveway width from 24 feet to 25-28 feet. G. City desires to increase the number of affordable rental units and the degree to which they are affordable in the City of Santa Ana. H. In order to promote this goal, City will provide a density bonus to Developer pursuant to the provisions of Sections 65915 through 65918 of the Government Code of the State of California, as well as an additional density bonus pursuant to Santa Ana Municipal Code section 41-1904.1. I. As a condition of approval of the Project with the density bonuses by City, Developer will provide and maintain all of the dwelling units in said Project offering Affordable Rents ("Affordable Rental Units"). WHEREFORE, for and in consideration of the mutual promises, covenants and conditions contained herein, the Parties hereto do hereby agree as follows: I. DEFINITIONS The following words and phrases shall mean and be defined and used for the purposes of this Density Bonus Agreement as follows: A. "Affordable Rent" means the monthly rents which do not exceed the maximum amount applicable to Extremely Low, Very Low and Low Income households, as promulgated by the U.S. Department of Housing and Urban Development (HUD), or by the California Tax Credit Allocation Committee, as applicable. B. "Affordable Rent Schedule" means a rent schedule established as of the date of issuance of an occupancy permit (exclusive of tenant utility payments or security deposits) for the required number/percentage of the total number of units in the Project which are to be rented or available for rent to very low or lower income tenants. Said Affordable Rent Schedule shall be established at the time of the issuance of the.occupancy permit ("Initial Rent Schedule") and shall be created in accordance with the Orange County, California PMSA as published by the United States Department of Housing and Urban Development ("HUD"), adjusted for family size as follows: -2- 60E-6 Residential Units Assumed No. of Persons in Household for Affordable Rent Calculation Studio 1 One Bedroom 2 Two Bedroom 3 C. "Affordable Tenant Rental Period" means with respect to the Project, the period commencing on the date of issuance of the occupancy permit and ending at the expiration of thirty (30) years. D. "Completion of the Project" shall mean the date on which the certificate of occupancy is issued by City for occupancy in the Project. E. "Density bonus" means the number of dwelling units approved by City for development on the Property which exceeds the number specified in Recital D of this Agreement. F. "Development" means construction or rehabilitation or a combination thereof. G. "Income Certification" means an income certification for very low or lower income tenants in a form set forth in `Exhibit B," attached hereto and incorporated herein by this reference as if set forth in full. H. "Lower -Income Tenant" means persons and families whose income does not exceed eighty percent (80%) of the median income for the area, as computed by the method described in the income certificate and for whom an income certification has been obtained or prepared in accordance with the provisions of this Agreement. For purposes of satisfying the lower-income tenant occupancy requirement set forth above, a unit occupied by a person or family who at the commencement of occupancy qualified as a lower-income tenant shall be treated as occupied by a lower-income tenant throughout their tenancy of such unit. Moreover, a unit occupied by a lower-income tenant shall be deemed, upon the termination of such lower-income tenant's occupancy, to be continuously occupied by a lower-income tenant until reoccupied, other than for a temporary period, at which time the character of the unit shall be redetermined. In no event shall such temporary period exceed thirty-one (3 1) days. The very low and lower income units will be intermingled with all other dwelling units in the Project and shall be of a quality and offer a range of sizes and number of bedrooms comparable to those units which are available to other tenants. Tenants in the very low and lower income units shall have equal access and enjoyment to all common facilities of the Project. I. "Very Low Income Tenant" means persons and families whose income does not exceed fifty (50%) of the median income for the area, as computed by the method described in -3- 60E-7 the income certificate and for whom an income certification has been obtained or prepared in accordance with the provisions of this Agreement. II. CONDITIONS TO AGREEMENT A. This Agreement is conditional upon City approval of development plans for the Project which provide for Four Hundred Nineteen (419) total dwelling units in the Project (includes one (1) manager unit) and upon completion of the Project in accordance with such approved plans by Developer. Nothing in this Agreement obligates City to grant such approval or Developer to develop the Project. B. The density bonuses and waivers provided by this Agreement are conditional upon Developer and any successor -in -interest of Developer in the Property being subject to the covenants set forth in this Agreement as running with the Property. If Developer conveys the Property prior to recordation of this Agreement in the official Records of Orange County, no building permit or certificate of occupancy for the Project which would allow for development or occupancy of more dwelling units than specified in Recital D of the Agreement shall be issued, unless the successor -in -interest of Developer of the Property executes a document suitable for recordation in the Official Records of Orange County binding such successor -in -interest to the terms and conditions of this Agreement. AFFORDABLE RENTAL UNIT COVENANT A. Developer covenants that no less than four (42) dwelling units in the Project, or at least 10% of the units in the Project shall at all times during the Tenant Rental Period be rented to, or held vacant and available for immediate occupancy by very low income tenants, as defined in California Health & Safety Code section 50105, at a rent that does not exceed 30 percent of 50 percent of the area median income, as adjusted for household size, including an allowance for utilities. B. Developer covenants that no less than Three Hundred Seventy -Six (376) dwelling units in the Project, or at least 20% of the units in the Project shall at all times during Tenant Rental Period be rented to, or held vacant and available for immediate occupancy by lower income households, as defined in California Health & Safety Code section 50079.5, at a rent that does not exceed 30 percent of 60 percent of the area median income, as adjusted for household size, including an allowance for utilities. C. Developer agrees to make a good faith effort to verify that the income and asset statement provided by an applicant in an income certification is accurate by taking at least one of the following steps as a part of the verification process: (1) obtain a pay stub for the most recent pay period, (2) obtain an income tax return for the most recent tax year, (3) conduct a TRW or similar credit check, (4) obtain an income verification form from the applicant's current -4- 60E-8 employer, (5) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies, or (6) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. D. Upon written request by Developer, City agrees to determine promptly the Initial Rental Schedule based upon the terms of this Agreement and advise Developer of the Initial Rental Schedule within thirty (30) days of the issuance of the occupancy permit. E. Once established, the Initial Rental Schedule shall be adjusted periodically thereafter by an amount equal to the Annual Adjustment Factor ("AAF") published by HUD as applicable to the Santa Ana, California area for existing rental housing programs pursuant to Section 8 of the United States Housing Act of 1937, as amended, or, in the event the Section 8 Program or the AAF published therefore by HUD is terminated or discontinued, the Initial Rental Schedule shall be adjusted periodically by such other annual adjustment factor approved by the Santa Ana Housing Authority based upon annual adjustment factors for any comparable or successor public assisted housing program. F. Developer agrees to accept as tenants on the same basis as all other prospective tenants, very low, low or moderate income tenants who are recipients of federal certificates for rent subsidies pursuant to the existing program under Section 8 of the United States Housing Act of 1937 or its successor, and shall not apply selective criteria to Section 8 certificate holders that are more burdensome than the criteria applied to all other prospective tenants. G. With regard to the Affordable Rental Units and to the extent permitted by law, Developer agrees to give priority and offer a right of first refiisal to the Santa Ana Housing Authority in the processing of applications for very low, low or moderate income tenants to persons who are referred by the Santa Ana Housing Authority. In the event the Santa Ana Housing Authority cannot provide qualified tenants to Developer within seven (7) days following written notification to the Santa Ana Housing Authority by Developer of a vacancy or pending vacancy in the Project to be filled by low or moderate income tenants so as to meet the requirements of this Agreement, then such vacant unit or pending vacant unit may be rented by Developer to any other low or moderate income tenants in accordance with the requirements otherwise provided herein for such tenants. For purposes of this paragraph, written notification may be made by email, facsimile or another means acceptable to the Santa Ana Housing Authority. H. The affordable units in the Project shall be comparable in bedroom mix and amenities to any market -rate units in the Project and shall be dispersed throughout the Project. There shall be, at all times during the term of this Density Bonus Agreement, Ninety -One (91) studio apartments; Two Hundred Sixty Two (262) one bedroom units; and Sixty -Five (65) two bedroom units, available as affordable units. I. Developer agrees that all of the units will be available to senior citizens or qualifying residents as defined under California Civil Code section 51.3. -5- 60E-9 IV. MISCELLANEOUS A. The provisions of this Agreement shall constitute covenants, conditions, and restrictions which shall run with the land, and shall inure to the benefit of and be binding upon the Developer, its successors and assigns in interest as successive owners of the Project, as provided herein. Any sale, transfer, or lease of the Project shall be deemed to be made and accepted upon and subject to the covenants, conditions and restrictions and provisions hereof whether or not referred to in the instrument of sale, transfer or lease. B. Developer is, and shall be deemed to be, an independent contractor and not an employee of City and shall not become an agent of City. C. Any notices, requests or approvals given under this Agreement from one party to another may be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, registered or certified mail, return receipt requested, to the address of the other party as stated in this paragraph, and shall be deemed given at the time of personal delivery or at the time of deposit for mailing. Either party may change its address for notice by giving written notice thereof to the other party as provided above. If to City: City of Santa Ana Community Development Agency 20 Civic Center Plaza (1\4-26) P.O. Box 1988 Santa Ana, California 92702 Attention: Housing Manager With a copy to: Office of the City Attorney City of Santa Ana 20 Civic Center Plaza, 7th Floor (M-29) Santa Ana, California 92702 If to Developer: Affordable Housing Land Consultants, Inc. 16633 Ventura Blvd., Suite 1014 Encino, CA 91436 D. In the event legal action is brought to enforce any provisions hereof, the prevailing party shall be entitled to reasonable attorney's fees, together with other legally allowed costs. E. Upon issuance of building permits for the Project, this Agreement shall be recorded in the official records of Orange County, California. City and Developer agree to execute and deliver for recordation such additional documents or instruments as the other may -6- 60E-10 reasonably request to further confirm or acknowledge the provisions hereof, including the expiration of the very low or lower income tenant rental period. F. This Agreement may be amended, modified, or changed by the parties hereto, City and Developer, provided that said amendment, modification, or change is in writing and approved by both parties. G. This Agreement has been entered into, is to be performed entirely within, and shall be governed by and construed in accordance with the laws of the State of California. H. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. I. No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is, directly or indirectly, interested. J. Except as set forth expressly herein, the Developer shall carry out the design and construction of the Project in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City of Santa Ana Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act. 42 U.S.C. section 12101, et seq., Government Code section 4450, etseq. K, During the time of Developer's ownership of the Property, the Developer shall maintain the Property and all improvements thereon, including all landscaping, in compliance with the terms of all applicable provisions of the City of Santa Ana Municipal Code, L. In performing its obligations under this Agreement, Developer shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other related activities. Developer affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations -7- 60E-11 M. Developer shall be in default hereunder if it shall fail to observe or perform any covenants, conditions, restriction, or provision contained herein on its part to be observed or performed which continues after notice to Developer and failure to cure as provided herein. If any such default shall have occurred, then and in such event, City shall be entitled in addition to all other remedies provided by law or in equity: 1. To compel specific performance by Developer of its obligations under this Agreement, it being recognized that the beneficiaries of Developer's obligations hereunder cannot be adequately compensated for by monetary damages in the event of Developer's default. 2. In the event the actual rent collected by Developer for any unit required under this Agreement to be rented to very low or lower income tenants is in excess of the maximum affordable rent allowed for such unit in violation of the requirements of Paragraph III of this Agreement, the amount by which any actual rent collected for such unit exceeds the maximum affordable rent for such unit shall be deemed damages payable to City by Developer. Such damages shall be in addition to any other remedy at law or in equity to City. N. Developer agrees to and shall indemnify and hold harmless City, its officers, agents, employees, consultants, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from or relating to (i) Developer's obligations of actions undertaken pursuant to this Agreement; ( ii) a claim, demand or other cause of action that any person has or asserts against Developer; iii) any act or omission of Developer or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the Affordable Units or the Project; or ( iv) the Developer's initial sale of the Affordable Units or Project, except to the extent such matters are caused by the negligence or willful misconduct of City or its officers, employees, agents, consultants, special counsel or representatives. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this paragraph or by reason of the terms of, or effects, arising from this Agreement. The Developer further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs to the extent there is no conflict of interest, Developer should be allowed to use the legal counsel which is also representing Developer for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Developer's obligations under this paragraph shall survive the termination of this Agreement. --Remainder of page intentionally left blank; signature page follows -- -8- 60E-12 IN WITNESS WHEREOF, the parties hereto have caused this Density Bonus Agreement to be executed on the date set forth at the beginning of this Agreement. ATTEST: Maria D. Huizar Clerk of the Council APPROVED AS TO FORM Sonia R. Carvalho RECOMMENDED FOR APPROVAL: Robert M. Zur Schmiede Interim Executive Director Community Development Agency CITY OF SANTA ANA Raul Godinez If City Manager -9- 60E-13 DEVELOPER: AFFORDABLE HOUSING LAND CONSULTANTS, INC. By: Title: Chief Executive Officer A. Legal Description B. Income Certification EXHIBITS -10- 60E-14 EXHIBIT "A" All that certain real property situated in the County of Orange, State of California, described as follows PARCEL 1: THE EAST HALF OF THE NORTH HALF OF LOT "E" OF THE STAFFORD AND TUSTIN TRACT, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2, PAGES 618 AND 619 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA. EXCEPT THAT PORTION THEREOF DESCRIBED AS FOLLOWS BEGINNING AT A POINT ON THE EAST LINE OF SAID LOT "E", DISTANT THEREOF NORTH 0° 17'30" WEST, 288.75 FEET FROM THE SOUTHEAST CORNER OF SAID NORTH HALF OF LOT "E", SAID EAST LINE ALSO BEING THE WESTERLY LINE OF TUSTIN AVENUE, 66.00 FEET WIDE; THENCE SOUTH 890 28' 10" WEST, 170.98 FEET, PARALLEL WITH THE NORTH LINE THEREOF; THENCE NORTH 00 09'00" WEST, 330.50 FEET TO SAID NORTH LINE; THENCE NORTH 890 28' 10" EAST, 170.17 FEET ALONG SAID NORTH LINE TO THE NORTHEAST CORNER THEREOF; THENCE SOUTH 00 17'30" EAST, 330.50 FEET TO THE POINT OF BEGINNING. ALSO EXCEPT THAT PORTION THEREOF, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID NORTH HALF; THENCE NORTH 890 33'25" WEST, 73.40 FEET ALONG THE SOUTH LINE OF SAID NORTH HALF TO A CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 4125.00 FEET FROM WHICH POINT TO A TANGENT BEARS NORTH 90 53' 34" EAST; THENCE NORTH 294.78 FEET ALONG SAID CURVE, THROUGH A CENTRAL ANGLE OF 4° 05'40" TO A LINE PARALLEL WITH THE NORTH LINE OF SAID LOT, WHICH PASSES THROUGH A POINT ON THE EAST LINE OF SAID LOT, NORTH 00 33'32" EAST, 288.75 FEET FROM SAID POINT OF BEGINNING; THENCE SOUTH 890 22'45" EAST, 15.24 FEET ALONG SAID PARALLEL LINE TO THE EAST LINE OF SAID LOT; THENCE SOUTH 00 33'32" WEST, 288.75 FEET TO THE POINT OF BEGINNING. ALSO EXCEPT THAT PORTION DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID NORTH HALF OF LOT E; THENCE WESTERLY ALONG THE SOUTH LINE OF SAID NORTH HALF OF LOT E NORTH 890 34'01 " WEST 73.40 FEET TO A POINT ON A CURVE CONCAVED EASTERLY HAVING A RADIUS OF 4125.00 FEET, THE CENTER OF WHICH BEARS SOUTH 800 07'25" EAST; THENCE NORTHERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 020 46' 12" AN ARC LENGTH OF 199.43 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 010 19'28" AN ARC LENGTH OF 95.34 FEET; THENCE NORTH 890 23'21" WEST 6.43 FEET TO A POINT ON THE ARC OF A CURVE CONCAVE EASTERLY HAVING A RADIUS OF 10039.00 FEET THE CENTER OF WHICH BEARS SOUTH 800 14'36" EAST; THENCE SOUTHERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 000 32' 14" AN ARC LENGTH OF 94.13 FEET TO THE POINT OF BEGINNING. THAT EAST 6.00 FEET OF THE WEST HALF OF THE NORTH HALF OF LOT "E" OF THE STAFFORD AND TUSTIN TRACT, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2, PAGES 618 AND 619 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, CALIFORNIA. Assessor's Parcel Number: 402-181-11 60E-15 EXHIBIT B INCOME COMPUTATION AND CERTIFICATION NOTE TO APARTMENT OWNER: This form is designed to assist you in computing Annual Income in accordance with the method set forth in the Department of Housing and Urban Project ("HUD") Regulations (24 CFR 813). You should make certain that this form is ate all times up to date with the HUD Regulations. Re: Santa Ana, California I/We, the undersigned state that I/we have read and answered fully, frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment project. Listed below are the names of all persons who intend to reside in the unit 1. 2. 3. 4. Name of Members Relationship of the to Head of Social Security Household Household Age Number HEAD SPOUSE Income Computation 5. Place of Employment 6. The total anticipated income, calculated in accordance with the provisions of this Certification, of all persons over the age of 18 years listed above for the 12 -month period beginning the date that I/ we plan to move into a unit is $ Included in the total anticipated income listed above are: (a) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (b) the net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization of capital indebtedness or any allowance for depreciation of capital assets), (c) interest and dividends (including income from assets excluded below); (d) the full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts, including any lump sum payment for the delayed start of a periodic payment; B-1 60E-16 (e) payments in lieu of earnings, such as unemployment and disability compensation, workmen's compensation and severance pay; (f) the maximum amount of public assistance available to the above persons other than the amount of any assistance specifically designated for shelter and utilities; (g) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (h) all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and (i) any earned income tax credit to the extent that it exceeds income tax liability. Excluded from such anticipated income are: (a) casual, sporadic or irregular gifts; (b) amounts which are specifically for or in reimbursement of medical expenses; (c) lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and workmen's compensation), capital gains and settlement for personal or property losses; (d) amounts of educational scholarships paid directly to the student or the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such scholarships or payments to veterans not used for the above purposes are to be included in income; (e) special pay to a household member who is away from home and exposed to hostile fire; (f) relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; (g) foster child care payments; (h) the value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977,- (i) 977;(i) payments to volunteers under the Domestic Volunteer Service Act of 1973; 0) payments received under the Alaska Native Claims Settlement Act; (k) income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; (1) payments or allowances made under the Department of Health and Human Services' Low - Income Home Energy Assistance Program; B- 2 60E-17 (m) payments received from the Job Training Partnership Act; (n) income derived from the disposition of funds of the Grand River Band of Ottawa Indians; (o) the first $2,000.00 of per capita shares received from judgment funds awarded by the Indian Claims Commission or the Court of Claims; and (p) at the discretion of Housing Authority of the City of Santa Ana all other income exclusions recognized by the HUD Section 8 Certificate and Voucher Programs. 7. Do the persons whose income or contributions are included in item 6 above: (a) have savings, stocks, bonds, equity in real property or other form of capital investment (excluding the values of necessary items of personal property such as furniture and automobiles and interests in Indian trust land)? No Yes (b) have they disposed of any assets (other than at a foreclosure or Credit Bankruptcy sale) during the last two years at less than fair market value? No Yes (c) If the answer to (a) or (b) above is yes, does the combined total value of all such assets owned or disposed of by all such persons total more than $5,000? No Yes (d) If the answer to (c) above is yes, state: (1) the amount of income expected to be derived from such assets in the 12 -month period beginning on the date of initial occupancy in the unit that you propose to rent (2) the amount of such income, if any, that was included in item 6 above: 8. (a) Are all of the individuals who propose to reside in the unit full-time students*? No Yes *A full-time student is an individual enrolled as a full-time student during each of 5 calendar months during the calendar year in which occupancy of the unit begins at an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance and is not an individual pursuing a full-time course of institutional or farm training under the supervision of an accredited agent of such an educational organization or of a state or political subdivision thereof. B-3 60E-18 (b) If the answer to 8(a) is yes, is at least 1 of the proposed occupants of the unit a husband and wife entitled to file a joint federal income tax return? No Yes 9. Neither myself nor any other occupant of the unit I/we propose to rent is the owner of the rental housing project in which the unit is located (hereinafter the "Owner"), has any family relationship to the Owner; or owns directly or indirectly any interest in the Owner. For purposes of this paragraph, indirect ownership by an individual shall mean ownership by a family member, ownership by a corporation, partnership, estate or trust in proportion to the ownership or beneficial interest in such corporation, partnership, estate or trustee held by the individual or a family member; and ownership, direct or indirect by a partner of the individual. 10. This certificate is made with the knowledge that it will be relied upon by the Borrower to determine maximum income for eligibility to occupy the unit, and I/we declare that all information set forth herein is true, correct and complete and based upon information I/we deem reliable and that the statement of total anticipated income contained in paragraph 6 is reasonable and based upon such investigation as the undersigned deemed necessary. 11. I/we will assist the Owner in obtaining any information or documents required to verify the statements made herein, including either an income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding calendar year. 12. I/we acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our agreement with the Owner to lease the unit and will entitle the Owner to prevent or terminate my/ our occupancy of the unit by institution of an action for ejection or other appropriate proceedings. I/ we declare under penalty of perjury that the foregoing is true and correct. Executed this day of in the City of . California. Applicant Applicant [Signature of all persons over the age of 18 years listed in number 2 above required] B-4 60E-19 FOR COMPLETION BY APARTMENT OWNER ONLY: 1. calculation of eligible income: a. Enter amount entered for entire household in 6 above: $ b. (1) If answer to 7(c) above is yes, enter the total amount entered in 7(d)(1), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance ($ ); (2) Multiply the amount entered in 7(c) times the current passbook savings rate to determine what the total annual earnings on the amount in 7(c) would be if invested in passbook savings ($ ), subtract from that figure the amount entered in 7(d)(2) and enter the remaining balance (3) Enter at right the greater of the amount calculated under (1) or (2) above: $ C. TOTAL ELIGIBLE INCOME Line 1.a plus line 1.b(3)): $ 2. The amount entered in 1.c: Qualifies the applicant(s) as a Low Income Tenant(s). Does not qualify the applicant(s) as a Low Income Tenant(s). 3. Number of apartment unit assigned: Bedroom Size: Rent: $ 4. This apartment unit [was/was not] last occupied for a period of 31 consecutive days by persons whose aggregate anticipated annual income as certified in the above manner upon their initial occupancy of the apartment unit qualified them as Low Income Tenants. 5. Method used to verify applicant(s) income: Employer income verification. Copies of tax returns. Other ( ) Manager 60E-20 INCOME VERIFICATION (for employed persons) The undersigned employee has applied for a rental unit located in a project financed under the Housing Authority of the City of Santa Ana Multifamily Housing Revenue Bond Program for persons of low income. Every income statement of a prospective tenant must be stringently verified. Please indicate below the employee's current annual income from wages, overtime, bonuses, commissions or any other form of compensation received on a regular basis. Annual wages Overtime Bonuses Commissions Total current income I hereby certify that the statements above are true and complete to the best of my knowledge. Signature Date Title I hereby grant you permission to disclose my income to in order that they may determine my income eligibility for rental of an apartment located in their project which has been financed under the Housing Authority of the City of Santa Ana Multifamily Revenue Bonds. Signature Please sent to: B- 6 60E-21 Date INCOME VERIFICATION (for self-employed persons) I hereby attache copies of my individual federal and state income tax returns for the immediately preceding calendar year and certify that the information shown in such income tax returns is true and complete to the best of my knowledge. Signature RZO 60E-22 Date REQUEST FOR Planning Commission Action PLANNING COMMISSION MEETING DATE: SEPTEMBER 11, 2017 TITLE: PUBLIC HEARING — SITE PLAN REVIEW NO. 2017-08 AND DENSITY BONUS AGREEMENT NO. 2017-01 TO ALLOW CONSTRUCTION OF AN AFFORDABLE RENTAL SENIOR RESIDENTIAL COMMUNITY WITHIN THE METRO EAST MIXED USE OVERLAY DISTRICT AT 2222 EAST FIRST STREET (STRATEGIC PLAN NOS, 3,2; 5,3) Prepared by Ali Pezeshkpour, Acting Executive Direfor RECOMMENDED ACTION PLANNING COMMISSION SECRETARY APPROVED ❑ As Recommended ❑ As Amended ❑ Set Public Hearing For DENIED ❑ Applicant's Request ❑ Staff Recommendation CONTINUED TO Acting Planni ,.- eager 1. Adopt a resolution approving Site Plan Review No. 2017-08 as conditioned. 2. Adopt a resolution approving Density Bonus Agreement No. 2017-01 as conditioned. Executive Summary Charles Addington with Architects Orange, representing Affordable Housing Land Consultants, Inc. ("AMG & Associates"), is requesting approval of a site plan review (SPR) and a density bonus agreement (DBA) to allow the construction of an affordable 419 -unit rental senior residential community. As proposed, the project requires approval of several waivers from the Metro East Mixed Use (MEMU) overlay district's development standards and/or development concessions through the density bonus agreement. Staff is recommending approval of the applicant's request due to the project's satisfaction of meeting the intent of the MEMU overlay district to promote a pedestrian - oriented environment with a mix of land uses and because the project will provide additional affordable rental housing stock to an underserved segment of the region's population. Table 1: Prosect and Location Information Item I Information Project Address 1 2222 East First Street Nearest Intersection I First Street and Tustin Avenue General Plan Designation I District Center (DC) Arterial Commercial (C-5) with the Metro East Mixed Use overlay district (OZ -1), Active Urban district Zoning Designation Surrounding Land Uses I Commercial _ North Commercial (East) MultipieEF mily Residential South Rehabilitation Facilit West __.__ _ Exhibit 2 6123 SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 2 Item Information Property Size 3.17 acres Existing Site Development The site contains an existing motel and restaurant. Use Permissions Mixed-use projects permitted by the OZ -1 designation; deviations/concessions will address proposed deficiencies Zoning Code Sections Affected Uses I OZ -1, Section No, 4 Develo menl Standards OZ -1, Section Nos. 4 through 7 Project Description The project includes demolition of an existing motel and restaurant and construction of an affordable rental senior housing community. The project will contain one structure consisting of a ground -level parking area and five levels of residential above. A total of 418 affordable rental senior units will be provided on the project site, as well as one on-site manager's unit. Moreover; a total 213 guest and resident. parking spaces will be provided In an at -grade parking area beneath the residential levels. Units will include studios (92), one -bedroom (277), and two-bedroom (49) units ranging in size from 402 to 787 square feet. All units will contain full kitchens, bedrooms, full bathrooms, storage, and open/common (living) areas. Open space will be provided through publIca lly-accessible plazas, private courtyards, or amenity areas. A public plaza with open seating will front First Street and will also contain an alcove programmable with community or commercial activities, such as kiosks or temporary events. The project's leasing office will also front First Street, enhancing its commercial presence. Five courtyards with distinct themes and amenities will be located throughout the interior of the site. Interior common rooms such as recreation areas, fitness centers, and laundry rooms will provide additional amenities to residents and visitors. A common open space "view room" on the top (sixth) level will face southeast toward the interchange between the Costa Mesa (SR-55)/Santa Ana (1-5) freeways. The project will feature a contemporary architectural style common of many multiple -family or mixed-use residential communities under,construction in Santa Ana and the region. Ceramic tile, fiber cement board and siding, smooth stucco finishes, and metal railings will contribute to this theme. These solid materials will ensure that the project ages well for the duration of the building's lifetime. Finally, a large public art piece will be featured on the east elevation of the building at the First Street frontage; this piece will welcome those entering Santa Ana from the east. Background The Metro East Mixed Use overlay district was adopted in 2007 as a result of interest in developing mixed-use residential and commercial projects in its project area. The regulating plan, which establishes land uses and development standards, allows a variety of housing and commercial 66€224 SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 3 projects, including mixed-use residential communities, live/work units, hotels, and offices. Since its adoption, one mixed-use project at 1901 East First Street has been constructed and is occupied. Another, located at 200 North Cabrillo Park Drive, is currently entitled but is undergoing review for proposed revisions. The California Density Bonus law allows developers to seek increases in base density for providing on- site housing units in exchange for providing affordable units on site. To help make constructing on-site affordable units feasible, the law allows developers to seek incentives or waivers, which are essentially variances from development standards that would help the project be built without significant burden and without detriment to public health. The first version of the Density Bonus Law was adopted in 1979 and has since been amended at various times; In early 2017, the law was amended to restrict the ability of local jurisdictions to require studies to "justify" the density bonus and requested incentives/waivers and places the onus on local jurisdictions to prove that the incentives/waivers are not financially warranted. Recent court interpretations of the law have granted unlimited numbers of waivers to projects that meet or exceed the maximum 35 -percent density bonus of base density. Analysis of the Issues Section 8 of the MEMU regulating plan, Implementation, requires the Planning Commission to review an application for development subject to the provisions of the overlay district. Upon review, the Planning Commission may take the following actions: 1. Approve the development plan, 2. Approve the development plan with conditions, or 3. Deny the development plan. Should the Planning Commission approve the Site Plan Review application, it must make four findings of fact relating to furthering the goals of the MEMU overlay district, consistency with the regulating plan; compatibility with the surrounding community, and planning a compatible and harmonious project. In addition, Section 41- 1607 requires an application for a density bonus agreement containing "deviations" (incentiveslwaivers) to be approved by the Planning Commission. The following subsections analyze the applicant's request for both the Site Plan Review and the Density Bonus Agreement applications. Site Plan Review The applicant is requesting site plan approval for a proposed residential community that requires approval of incentives or waivers from the development standards contained with the MEMU overlay district regulating plan. These standards are outlined in Table 2: Conformance to Development Standards. Table 2: Conformance to Development Standards Standard Required b 1 the. MEMU Provided Stories Minimum 3, no maximum g Minimum Site Area —fa 3.17 acres Permitted Frontage Forecourt, shopfront, gallery, or Shopront, with plaza on First Street arcade _ _ as permitted by MEMU 601E325 SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 4 Standard Required by.the.MEMU Provided, Publicly Accessible Open Space 15 percent of total lot area 3.0 percent — Requires furthering the contribute to creating a inceniive/waiver Private/Common Open Space 100 square feel per unit 112 square feet per unit Building Setbacks 0.20'feet (front), 0-10 feet (side), 100 20 (front),, 28-41, (side), 33 (rear) — district feet rear Requires lncenifve/Walver Parking 2 spaces per unit overall — every unit :0.51, spaces per,unit (permitted by must be allocated at least 1. space AB 744 Courtyard height-to-width'ratios 2 to.1 (enclosed on four sides), 3 to 1 Complies; various ratios in excess of o en on one or more sides 2 to 1 and.3 to 1 2rovided Driveway width 24 feet maximum .25.28 feet.— Requires Incenfive/Waiver Building Massing A variety of massing, volume, and Complies; the building features a step -backs are required to increase step -back along. First Street and building articulation breaks in volume to reduce massing As noted in Table 2i the project conforms to the MEMU height/stodes, minimum site area, courtyard design, and buildin incentivestwaivers through the Density Bonus Agreement appli. required public open space areas, building setback requiremen Analysis of the Issues breaks down the project by issue or topic. regulating plan's requirements for g massing but requires approval of cation to allow deviations from the ts, and driveway widths. Table 3: Table 3: Analysis of the Issues Issue::orTo to Question Analysis, Consistency with and Will the' proposed project The proposed project will contain 418 residential units furthering the contribute to creating a (including one manager's unit) without a commercial objectives of the mixed-use, walkable component_ However, It has been designed to feature a large MEMU overlay environment for residents, public plaza at Its frontage on First Street, an alcove for district daytime employees, and temporary activities or kiosks, and a large public art piece. visitors, 'and does it provide Constructing 419 units in the project -area will add to the high,quality architecture and residential 'population in the area, stimulating demand for street activation, stimulate community -serving commercial uses such as restaurants, private investment, and retail stores, dry cleaning services, and other similar uses: implement the General Plan? Finally, the project meets several General Plan goals and policies, including the Land Use. Element's Goal 2 (to encourage diversity of quality housing, affordability levels, and living experiences), Goal 4 (to provide adequate rental and ownership housing and supportive services), and the Housing Element's policies HE -2.3 and 2.4 (to encourage construction of rental housing, facilitate diverse types .of hniminn nrir.es, and sizin SPR No. 2017-08/DBA No..2017-01 September 11, 2017 Page 5 Issue•.or To is Question Analysis Consistency with the Does the project meet the Although the project complies with many 'development MEMU development MEMU regulating plan's standards enumerated in the MEMU regulating plan, it does standards development standards, or not meet the requirements for publicly -accessible open does it require approval of space, building setbacks, and driveway widths. These deviations? standards require approval of incentives/waivers through the Density Bonus. Agreement.' application. Moreover, although slated as a guWeline,in the regulating plan, the unit sizes are well below the 1,200 -square -foot average unit size objective.. The applicant has considered this guideline and proposes;lo compensate through a greater average.,pdvstelcommon open space area of 112 square feet per unit instead of the 100- square-fdot minimum.. In addition, .the proposed parking rate of 015 spaces,per unit is well below the required 2,0 spaces. per unit; however, the applicant is exercising his ability under' AB 744 to provide 0.5 spaces per unit due to the,project site's proximity to two.bus stops with frequent, service. These.siops, are on lines that connect the project site to points west (central Santa Ana, Garden Grove, and Westminster), north (Tustin, Orange, and Placentia), and east (central Tustin). Compatibility with Will the project be well- The proposed development consists of a single six -level adjacent Integrated into the existing project surrounded by single -story structures to the east and development in terms MEMU area and surrounding west. A two-story multiple -family residential community abuts of similarity in scale, development patterns, the site to the 'south, and a single -story commercial height, and site including those in the city of development is to the north across First Street. Although the configuration Tustin? MEMU anticipates developments of this scale. or larger In the "Active Urban" land use district, this development would be the first of its size in its Immediate vicinity. Several design features have been incorporated into the project to break up its massing and to lessen its impacts on adjacent properties. These include breaking up the building's west elevation through courtyards, setting back the building from the east, south, and west through a minimum 20 -foot wide fire lane, and the planting of rapidly -growing eucalyptus trees with minimum 20 -foot brown trunk height throughout, Finally, the proposal to construct a single structure instead of several is. the result of the site's odd shape. Development on the site is further complicated and constrained because the neighboring parcel, although underutilized, is located in the jurisdiction of the City of Tustin. Compatible and _ Does the project, as The proposed project is intended to be a low -impart use: No harmonious land proposed, contribute negative impacts from noise, air quality, aesthetics, or traffic use(s), site design, positively to tile area in which are expected except for temporary impacts arising during and operational it is located? construction of the project. The site's design is intended to standards activate its frontage on First Street by providing flexible community areas that can be, programmed with activities or temporary uses; and the landscape palette has been carefully selected to minimize the site's impact on the surrounding low-rise land uses: 60t527 SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 6 Reduction of onsite Will the reduction in required parking proposed on-site parking, as permitted through AB 744 by AB 744, affect the success of the project or impact the surrounding community? Density Bonus Agreement AB 744 allows senior affordable residential projects whose residents are aged 62 or older to provide a parking rate of 0.5 spaces per residential unit. Staff has analyzed the proposed project, which exercises its right under AB 744, and finds.that there is potential that the project and neighborhood may be Impacted by the reduced parking. The City has Identified the MEMU area for high-intensity, mixed use development in order to reduce demands for parking and traffic Impacts. However, the Mr:MU area is still In transition, and portions including the project site have yet to redevelop and produce the pedestrian -scale environment envisioned by the document. To mitigate these Impacts, staff has added a condition or approval requiring the developer to enter into an agreement with a property within 500 feet of the project site to provide additional guest andlor resident parking during off- peak times. The California Density Bonus Law applies to projects proposing five or more residential units and grants density bonuses to those meeting certain requirements for affordabillty levels and types of housing (family, veterans, etc.). Rental units in such developments that are designated "affordable" must remain so for at least 55 years. For affordable senior housing projects, a developer may seek a density bonus up to 20 percent from base density. The City's Housing Opportunity Ordinance (HOO), last updated in 2015, augments the density bonus concept by allowing a developer to seek an additional 35 percent density bonus calculated from base density (SAMC Sec. 41-1904.1). A summary of the proposed project's density calculation is provided in Table 4: Project Density Calculation. Table 4: Project Density Calculation 1 "ensity_gt'Bonus Allowed for Project Provided Base Density 1285 units (3.17 acres x 90 unitslacre 285 units base density used as a standard for developments in areas designated DC by the General Pian Land Use _ element) 20 -Percent Bonus for Senior Projects +57 units 285 x 0.20 +57 units 35 -Percent Bonus Provided by the +10D units (285 x 0.35) +77 units HOO Total Units __ 442 units maximum —11j 419 units proposed Under the state's Density Bonus Law, a developer may seek Incentives or waivers (sometimes called concessions) to increase the viability of the proposed project. Revisions to the Density Bonus Law, as recent as January 2017, allow developers to seek an unlimited number of waivers from development standards insofar as such waivers are not detrimental to public health or safety, do not negatively SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 7 impact historic resources, or have no feasible mitigation. Further, cities cannot require preparation of additional reports or studies not required by State law to "justify" a developer's request for waivers or incentives. Table 5: Requested IncentiveslConcessions analyzes the applicant's request for deviations from the development standards contained in the MEMU regulating plan. Table 5: Requested IncentiveslConcessions Standard ' Question Anal /sis. Publicly Accessible Would requiring the 15 The MEMU regulating plan requires that publicly -accessible Open Space percent of total lot area open space be provided along main street -facing facades. mandated by the MEMU Because the project has such a limited frontage on First render the project Infeasible? Street, meeting this requirement would result in the building being pushed back significantly from First Street and would render almost the first 113 of the depth'unusable for building area, resulting in a significant loss of units and parking area. Pushing the building back would also reduce the contribution to creating a more urban, walkable environment. The applicant intends to compensate for this reduction by providing a greater average square footage of rivatefcommon o ens ace per unit on the project site. Building Setbacks Would requiring the MEMU's For a project of this size and construction type, OCFA side and rear setback requires 360 -degree circulation on the project site with standards render the project minimum 20 -foot fire lanes. The addition of landscaping and infeasible? walkways around the project perimeter results in the project not being able to meet the maximum 10 -foot side yard requirement. Further, for a project of this height, the MEMU requires a 100 -foot rear yard setback. Implementing this standard would result in the building being set back an additional 67 feet from the rear lot line, resulting In a significant loss of units and parking area. Driveway width Could the project be If the project were designed with narrower driveways, the redesigned with narrower driveways would not conform to minimum standards driveways to meet MEMU established for fire ingress/egress by OCFA and for trash requirements? truck ingresslegress established by the Public Works Agency and Waste Management, the current waste collector contracted by the 'City. In reviewing the applicant's request, staff has found that the project may impact the surrounding community; however, conditions of approval are intended to mitigate these impacts. Staff has also reviewed the requested incentives/concessions and found that two of the incentives/concesslons, publicly -accessible open space and building setbacks, would not be required if the project did not propose its.double-density unit total. The first incentive/concession, a reduction of publicly -accessible open space, would not be required if the project were constructed with only the 20 -percent State or the 35 -percent local density bonus provisions. A reduction in the overall unit total would allow additional areas on the project site in which 6729 SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 8 additional publicly -accessible open space could be constructed. The second Incentive/concession, a reduction in building setbacks, would be partially negated if the project did not take advantage of the double-density. The project could meet the required 100 -foot rear -yard setback if fewer units were proposed. The side -yard setback would continue to be an issue as the required fire lane would force the project to exceed the maximum setback allowed for side yards. Despite these concerns, recent revisions to the State Density Bonus Law require local jurisdictions to grant any incentives/concessions requested by the applicant in order to facilitate construction of the project while maximizing the requested density bonuses. Finally, staff analyzed additional considerations as required by the Density Bonus Law. There are no historic resources in the immediate vicinity that would be impacted by the proposed development. The project's design and operations, with the requested incentives/waivers, will not be detrimental to public health or safety as the project was reviewed by the City's Development Review Committee, which consists of representatives from Planning, Building Safety, Public Works, Housing, the City Attorney's Office, and the Orange County Fire Authority (OCFA). Should the Density Bonus Agreement application be approved, the agreement will be authorized by the City Council after the Planning Commission considers the application for the project as a whole, including the Site Plan Review application. Additional Considerations While reductions in required on-site parking for projects subject to the Density Bonus Law were traditionally considered an incentive or waiver, AB 744, enacted in late 2015, allows affordable residential projects located within a half -mile distance of major transit lines or major transit stops to provide as little as 0.5 parking spaces per unit. AMG & Associates is exercising this option for the proposed project as two bus lines with frequent service intervals are located in close proximity to the project site. In May 2017, the City received initial conceptual plans from the Orange County Transportation Authority (OCTA) and the California Department of Transportation (Caltrans) indicating that the two agencies are studying proposed improvements to the SR -5511-5 interchange that could impact the project site. One improvement under study, an entrance ramp to 1-5 south from First Street, would cut through the project site and would render the project impossible to build as proposed. The ramp is in the early stages of review. no environmental analysis has been conducted and no funds have been allocated for its construction. SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 9 Table 6: CEQA. Strategic Plan Alianment and Public Notification & Community Outreach CEQA Strategic Plan Alignment, and Public Notification & Community Outreach CEQA CEQA Type Class 32 Categorical Exemption/Sec. 1533 — In -Fill Development Projects Reason(s) The Class 32 exemption applies to projects characterized as infill development meeting Exempt or Analysis the following conditions: 1. The project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulation; 2. The proposed development occurs within city limits on a project site of no more than five acres substantially surrounded by urban uses; 3. The project site has no value as habitat for endangered, rare or threatened species; I. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality; and 5. The site can be adequately served by all required utilities and public services. As outlined in this staff report, the project is consistent with the City's General Pian and the MEMU regulating plan. Further, it is consistent with the density bonus provisions outlined in the City's Housing Opportunity Ordinance. The project site is located within city limits and is less than five acres In size. It is already in an urbanized setting surrounded by urban uses, and the project has not been identified as habitat for endangered, rare or threatened species. The project site and type of development proposed are already addressed in the previously approved environmental impact report (EIR) for (lie h1EMU overlay district (EIR No. 2006-01). However, a Class 32 exemption is required for the project because the original EIR did not require a greenhouse gas study. The applicant submitted a greenhouse gas study to indicate that the project will not negatively impact greenhouse gas reduction goals. In addition, a health risk assessment (HRA) was prepared to identify any impacts from developing a residential community adjacent to a freeway. The HRA recommends that the project incorporate certain window design features on freeway - facing elevations for all units adjacent to the SR -55 freeway, and that the project install air filtrations stems throughout _ Strategic Plan Alignment Goal(s) and Policy(s) _ Approval of this item supports the City's efforts to meet Goat No. 3 (Economic Development) Objective No. 2 of creating new opportunities for businesstjob growth and encourage private development through new General Plan and Zoning Ordinance policies. The item also supports Goal 5 (Community Health, Livability, Engagement & Sustainability) Objective No. 3 to facilitate diverse housing opportunities and support efforts to preserve and improve the livability of Santa Ana neighborhoods_ T Public Notification & Community Outreach Required Measures A public noticed was posted on the project site on September 1, 2017. Notification by mail was mailed to all property owners and occupants within 500 feet of the project site on September 1, 2017. __ Newspaper posting was published in the Orange County Reporter on September 1, 2017. The applicant held a Sunshine Ordinance community meeting on May 25, 2016 at the Saint Jeanne de Lestonnac School. Two members of the public attended: a schoolteacher from the facility and a representative from the City of Tustin. Both voiced their support for f the project. No additional communications regarding the meeting were received after. Additional Measures The Lyon Street Neighborhood Association was contacted by phone to identify any areas of concern. At the time this report was printed, no issues of concern were raised regarding this application. 60t931 SPR No. 2017-08/DBA No. 2017-01 September 11, 2017 Page 10 Conclusion Based on the analysis provided within this report, staff recommends that the Planning Commission adopt a resolution approving Site Plan Review No. 2017-08 and Density Bonus Agreement No. 2017-01 as conditioned. Ali Pezeshkpou , AICP Senior Planner AP:jm S)flannina Cammission12OWWRIUS DBA17.1 AKIG Asses 22,22 E firtPO Exhibits 1. Resolution 2. Vicinity Zoning and Aerial Map 3. Site Photo 4. Site Plan 5. Unit Floor Plans 6. Building Elevations 7. Building Perspectives 8. Landscape Plans 9. Air Quality and Greenhouse Gas Technical Report 10. Health Risk Assessment 66042 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 its absence means we will not be able to move forward with the project. It is this loan that we hoped to retire through the sale of housing credits. If housing credits are not available, we are seeking the City's assistance to pay the annual debt service associated with the bridge loan. As noted in the pro formas presented to the City, the debt service on the bridge loan is about $2.6 million per year. As a result, we request that the City provide, on an annual basis, a portion of the in lieu fees collected from developers to help retire this debt. We are mindful that providing $2.6 million per year may leave the City with limited funds to support other affordable housing endeavors. Therefore, we request that the City earmark 70% of total in lieu fees, to a maximum of $1.75 million per year for 40 years, to AMG to'be used to pay the aforementioned debt service. In exchange for this assistance, AMG will income -restrict the units for a period of 55 years. By participating in this manner, the City will realize the development of over 1,000 affordable units to address the needs of lower income families and seniors. Although a bridge loan of $50 million is substantial, when viewed on a per unit basis of approximately $50,000, it is substantially less than the level of assistance provided by the City to other projects. Indeed we estimate this level of assistance is about one-fourth to one-third the level of assistance granted other projects. In the course of various discussions, AMG was asked to respond to the suggestion that there may be other ways to improve project economics, such as reducing the project size, or creating a mixed used project of market rate and income -restricted units. While AMG has explored these options, it is not able to reduce the number of units, as a reduction of units adversely affects the overall financial viability of the project. In addition, because of the complex financing associated with this project, including the 4% tax credits, it is not possible to introduce market rate units or significant non-residential uses, without jeopardizing project financing and the resultant affordable units. In addition to possible project revisions, AMG was also to comment on whether a reduction or waiver of impact fees would be helpful. The short answer is yes. Based on the project as currently proposed, we estimate the project will incur the following fees (expressed in millions): Park: $ 7.2 Traffic/Tra nsportatio n: 6.8 Sewer: 4.7 Capital: 4.5 School: 2.2 Fire: 1.3 Total $ 26.7 Not included in the above figures is the cost of processing the application through the planning process. Actual and projected costs for the entitlement process are expected to equal about $175,000. To the extent the City is able to reduce or waive any of the above fees, it certainly impacts project economics in a favorable way. 60E-34 In summary, AMG is seeking the City's assistance to bring forward over 1,000 units of affordable housing for families and seniors. As outlined in this letter, we suggest there are least three ways to do so: 1. Modify the HOO to allow for creation of housing credits; 2. On annual basis, direct up to $1.75 million of in lieu fees to this project; 3. Waive or reduce some or all of the project impact fees. We stand ready to work with you to select the best method or combination of methods to make this project a reality. Sincerely, Jesus Armas C: Alexis Gevorgian 60E-35 Exhibit A Proposed Amendment to Santa Ana Housing Opportunity Ordinance Sec. 41-1904 (d) Inclusionary Housing Credits A developer who provides more affordable housing units than required under this article may credit the additional number of affordable housing units against future projects. Credits may be transferred or sold to any other person or entity subject to compliance with following conditions: 1. The square footage of the excess inclusionary units shall equal 110% of the required inclusionary units. In the event the square footage calculation yields less than 110%, the difference shall be satisfied through the payment of an in -lieu fee, consistent with Section 41- 1904 (c). 2. A written agreement with the holder of the rights of the excess inclusionary units consenting to the transfer of the credits. 3. Any credits must be applied to another development project within Santa Ana city boundaries. For purposes of this section, "applied" shall mean that the credits are committed for use at a development project and included in a developer's proposed inclusionary housing plan. 4. Inclusionary units receiving monetary subsidies through the city shall not receive credits unless the city has been reimbursed for its financial assistance. 60E-36 VILLA COURT SENIOR APARTMENTS DESCRIPTION OF FINANCING Villa Court Senior Apartments will be financed utilizing 4% Low -Income Federal Housing Tax Credits awarded by the California Tax Credit Allocation Committee and tax-exempt bonds awarded by the California Debt Limit Allocation Committee. The project will use a private -placement structure with no permanent credit enhancement or rating attached to the tax-exempt bonds. The $120,000,000 ($85,000,000 Series A and $35,000,000 Series B) bond issuance will only consist of tax-exempt debt. Proceeds will be funded on a draw -down basis as and when project costs are incurred. The primary security for the bonds will be the proposed project. Other sources of construction financing include low-income housing tax credit equity in the amount of $10,731,162. Additionally, the developer will be deferring the entire $13,500,000 developer fee, and the project partnership will defer $2,219,232 in costs (including the operating reserve). Upon lease -up of the entire project, the remainder of the low-income housing tax credit equity in the total amount of $53,600,394 will be available to 1) pay down the $85,000,000 Series A tax-exempt bonds to $45,000,000; 2) pay down the deferred developer fee to $7,850,000; and 3) fund deferred costs in the amount of $2,219,232. Concurrent with the stabilization of the project, the remaining $45,000,000 in Series A bonds will convert to a long-term permanent source with an interest rate of 5.250%, a 35 - year amortization and a 30 -year term. Similarly, the $35,000,000 in Series B Bonds will convert to permanent phase with an interest rate of 5% and a 45 -year term, with payments based on a 75% share of proiect cash flow. The,Citvo6 SantaYAna(wililsprovide,an; The bonds will be issued around June 13, 2018 pending satisfaction of the closing conditions identified in the commitment letter from Citibank, N.A. The tax credit equity provider will have standard closing conditions, as well as mandate specific guaranties related to tax credit delivery, adjustments and recapture. Exhibit'y- 60E-37 Financing Plan for Villa Court Senior Apartments - Santa Ana, CA Construction Financing Construction financing will be provided by the following sources, organized by lien priority: Source Type Amount Interest Rate Term (Months) Payment Terms Citibank, N.A.- T.E. Bonds (Series A) Construction Loan $ 85,000,000 4.00% 30 Interest Only Bonneville Aff. Hsg. Capital, LLC- T.E. Bonds (Series 9) Construction Loan $ 35,000,000 8.00% 30 Interest Only Pacific West Communities, Inc. Def. Developer Fee $ 13,500,000 0.00% 30 No Pmts. Santa Ana Senior Associates, a California L.P. Deferred Costs $ 2,219,232 N/A N/A N/A City Real Estate Advisors Tax Credit Equity $ 10,731,162 N/A N/A N/A Total 1 1 $ 146,450,3941 1 All of the funds identified above, with the exception of the tax credit equity, are committed at this time. Permanent Financing Permanent financing will be provided by the following sources, organized by lien priority: Source Type Amount Interest Am/Term Rate Years Payment Terms Citibank, N.A.-T.E.Bonds (Series A) Permanent Loan $ 45,000,000 5.25% 35/30 Conventional Bonneville Aff. Hsg. Capital, LLC -T.E. Bonds (Series B) Permanent Loan $ 35,000,000 5.00% 45/45 Res. Receipts City of Santa Ana- Inclusionary Housing Funds Inclusionary Hsg. Funds $ 5,000,000 1.00% 55/55 Res. Receipts Pacific West Communities, Inc. Def. Developer Fee $ 7,850,000 0.00% 13/13 Res. Receipts City Real Estate Advisors Tax Credit Equity $ 53,600,394 N/A N/A N/A Total 1 $ 146,450,394 All of the funds identified above, with the exception of the tax credit equity and the City Inclusionary Housing Funds, are committed at this time. Soecial or Unusual Financing Features There are no special or unusual features that pertain to the financing discussed above. 60E-38 MAYOR Miguel A. Pulido MAYOR PRO TEM Michele Martinez COUNCILMEMBERS P. David Benavides Vicente Sarmiento Jose Solodo Sal Tinajero Juan Villages April 5, 2018 CITY OF SANTA ANA 20 Civic Center Plaza • P.O. Box 1988 Santa Ana, California 92702 714-647-6900 w .santa-ana.oro California Tax Credit Allocation Committee Attn: Janice Corbin 915 Capitol Mall Sacramento, CA 95814 SUBJECT: CA-18-XXXX /Villa Court Senior Apartments To Whom It May Concern: CITY MANAGER Raul Godinez II CITY ATTORNEY Sonia R. Carvalho CLERK OF THE COUNCIL Made D. Huizar The City of Santa Ana is pleased to submit its Local Reviewing Agency Project Evaluation Form for the above -referenced application for Low -Income Housing Tax Credits. As requested, we conducted a site visit and have included a number of photographs with the completed evaluation (see enclosure). The applicant incorrectly stated on Tab 2a of their application: "The City of Santa Ana will provide an Inclusionary Housing Funds loan in the amount of $5,000,000 with an interest rate of 1%, a term of 55 -years and payments based on residual receipts." The City of Santa Ana has not made any commitment in any form to provide $5,000,000 for the development of this project. The statement that the City of Santa Ana will provide $5,000,000 is incorrect (see enclosure). The payment for our evaluation of this project may be sent to the following address: City of Santa Ana Attn: Judson Brown 20 Civic Center Plaza, M-26 Santa Ana, CA 92701 If you have any questions regarding this evaluation, I can be reached by telephone at (714) 667- 2241 or by e-mail at jbrown(cr�,santa-ana.org. Sincerely, Judson Brown Housing Division Manager Community Development Agency Migual A. Purdo Michele Martinez Vicente Samuento Mayor Mayor Pro Tem Ward2 Ward mpulido0santa-ana om mlm rflnezlarssnta-ens em mnnientonsantaans Exhibit SANTA ANA CITY COUNCIL Jose Selene P. Dowd Benavides Juan Villages Sal Tineielo Ward 3 Ward 4 Wald 5 Ward 6 dbenayldes0santaana.om Ivgleoasdasantaana one sdnaieronsente-ane.one 60E-40