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Amendment to HOME Loan Agreement for the Santa Ana Arts Collective
<br />August 21, 2018
<br />Page 2
<br />2011 HOME Program grant funds plus $24,710.24 in FY 2017 program income that must be
<br />expended prior to drawing down the expiring FY 2011 funds.
<br />Following the adoption of the City's Affordable Housing Funds Policies and Procedures, on June
<br />19, 2018, City Council authorized the Community Development Agency to release the Fiscal
<br />Year 2018 — 2019 Request for Proposals (RFP) seeking proposals to develop affordable rental
<br />and ownership project(s) in the City of Santa Ana with funding from the HOME Program,
<br />Community Development Block Grant Program, Project Based Voucher Program, and Housing
<br />Successor Agency Fund. As part of this RFP, the City made available the $384,573.41 in FY
<br />2011 HOME Program funds that must be expended by September 20, 2018.
<br />In order to commit and expend these funds before the deadline for recapture, staff worked
<br />proactively to determine if there were eligible proposals that could be received from developers
<br />for the $384,573.41 of expiring FY 2011 HOME Program funds. After discussions with the City
<br />and Keyser Marston Associates, Meta Housing Corporation submitted a proposal on July 23,
<br />2018 for an additional $407,871 for the Santa Ana Arts Collective to cover the increased costs of
<br />construction. (Exhibit 2) After receiving the proposal, staff formed a Review Panel to review the
<br />proposal. The proposal was evaluated by the Review Panel based only upon the written
<br />evaluation criteria in the RFP. Following the evaluation process, the Review Panel recommends
<br />an award of $407,871 to pay for the increased costs of construction for the Santa Ana Arts
<br />Collective.
<br />The proposal received from Meta Housing Corporation exceeds the FY 2011 expiring HOME
<br />grant funds by $23,297.59, equal to $407,871 minus the $384,573.41 of expiring FY 2011 HOME
<br />Program funds. However, since the total funds that the City must draw down and expend is
<br />equal to $409,283.65, the additional $23,297.59 is available for the project. If the City does not
<br />commit and expend these funds for this project, the City will lose $384,573.41 on September 20,
<br />2018.
<br />Background on Funding for the Santa Ana Arts Collective and the Amendment
<br />On November 3, 2015, City Council awarded Meta Housing Corporation (Developer) a pre -loan
<br />commitment of Inclusionary Housing Funds, Community Development Block Grant (CDBG) and
<br />HOME Investment Partnerships Program (HOME) funds, not to exceed $4,635,000, for an
<br />affordable housing project called the Santa Ana Arts Collective (Project) located at 1666 N. Main
<br />Street. Due to a substantial financial gap remaining for the Project, on June 20, 2017, City
<br />Council directed staff to amend the Inclusionary Housing loan agreement for an additional
<br />amount not to exceed $2,900,000 in Inclusionary Housing funds and provide for City Council
<br />consideration at the July 5, 2017 meeting. And on July 5, 2017, City Council authorized the City
<br />Manager and the Clerk of the Council to:
<br />1) Execute an amended and restated Community Development Block Grant and Inclusionary
<br />Housing Funds loan agreement with Santa Ana Arts Collective, L.P. for an additional $2,900,000
<br />in Inclusionary Housing Funds as approved by City Council on June 20, 2017 for a total loan
<br />amount not to exceed $5,275,000;
<br />25J-2
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