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On August 21, 2018, the City of Santa Ana (City) entered into a HOME Loan Agreement with <br />Jamboree Housing Corporation (Developer) for the purposes of providing HOME Program <br />(HOME) funds for the construction of a 76-unit apartment project (Project) located at 3312 <br />West First Street (Site). The 2018 HOME Loan Agreement required the City to provide $352,963 <br />in HOME funds to the Project that are allocated to the City by the United States Department of <br />Housing and Urban Development (HUD). <br />However, the Project's budget has changed materially since 2018, including the following <br />unforeseen issues: <br />During the demolition of existing asphalt and concrete pavements, a second layer of <br />asphalt was discovered beneath the driveway section. <br />During grading activities, approximately 400 cubic yards of contaminated soil was <br />encountered on the Site. <br />Due to consecutive days of precipitation, the stockpiled soil had to be treated for <br />elevated moisture, which also added delays to the Project's construction schedule. The <br />contaminated soil has been treated, buried and capped in place with a low permeable <br />asphalt material per the recommendations of the remediation plan written by the <br />Developer's third -party environmental consultant. <br />As such, the City intends to amend the 2018 HOME Loan Agreement to reflect the revised <br />Project budget, and to increase the amount of HOME funds being provided by the City. <br />At the City's request, Keyser Marston Associates, Inc. (KMA) prepared the following HOME <br />Underwriting & Subsidy Layering Review for the Project. This analysis is prepared in compliance <br />with the requirements imposed by the HOME Program and the City's HOME Project <br />Underwriting and Subsidy Layering Review Guidelines. <br />The KMA analysis includes the following components: <br />An underwriting review to determine the feasibility and to ensure that no more than the <br />necessary amount of HOME funds, in combination with other governmental assistance, <br />is invested by the City in order to provide affordable housing. This section also provides <br />an assessment of the reasonableness of the Developer Fee, cash flow, equity <br />appreciation and profit anticipated to be generated by the Project. <br />An evaluation of the Developer's capacity to develop and operate the Project. <br />A review and summary of the residential rental market for the Project. <br />4. An assessment of other HOME requirements and deadlines, including the financial <br />commitment documentation submitted by the Developer. <br />City of Santa Ana Underwriting & Subsidy Layering Review: Veteran's Village Page 11 <br />25B-35 <br />