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Agreement with Illumination Foundation for a Permanent Emergency Homeless Shelter June 16, 2020 Page 3 N Broadway, while Illumination Foundation proposed a configuration of all shelter beds at one site located on the east side of the 55 Freeway near the existing shelter, The Link. Based on this "one site" configuration and location near The Link, staff moved its focus to the Illumination Foundation's proposal, thereby eliminating Jamboree Housing from further consideration. Staff then commenced negotiations with Illumination Foundation to rework their proposal to meet the City needs for the next ten years, focusing upon funding alternatives, COVID- 19-related refinements, and a recuperative care option that would lower the City's overall costs. Additionally, staff negotiated a purchase option. Illumination Foundation Proposal Illumination Foundation proposes to operate a Year -Round Homeless Navigation Center and Recuperative Care Facility (HSNC) located at 1815 Carnegie Avenue in Santa Ana for $4,591,289 for tenant improvements, structural work and startup costs and $3,155,367 for operational costs per year with an annual CPI adjustment of 1.5%. The HSNC will provide a total of 200 beds for individuals, couples, families with children, transitional -aged youth, and special needs populations who are homeless in the City of Santa Ana. The beds are inclusive of 150 Navigation Beds funded by the City of Santa Ana using 7 non - General Fund sources, and 50 Recuperative Beds funded by CalOptima, and the ability to scale up to 250 beds to comply with the City's settlement agreement. The HSNC will include supportive service programs designed to provide a safe environment for those experiencing homelessness on the streets of Santa Ana, and a pathway to transition into permanent housing. The proposal from Illumination Foundation outlines the costs as follows: Illumination Foundation Proposal Building Purchase Price Illumination Foundation Cost $9 200 000 Tenant Improvements $4,000,000 Start Up Costs $591,289 Navigation Center Beds 150 Recuperative Beds 50 Year 1 Operational Costs $3,155,367 1 City Purchase Option $8,200,000 + 50% of CPI 1 Annual consumer race Incex (W-1) Ha/ustment or I.b% For cost comparison purposes, The Link's first year expenses totaled $3,694,039. The largest costs associated with The Link shelter included staffing, security, lease payments, utilities, waste management, transportation, janitorial, and meals. Therefore, the relative costs for Illumination Foundation to operate the proposed shelter are similar to the costs of the Link. Notwithstanding, the Link's second year expenditures will increase due to additional expenses incurred by the operator during the COVID-19 period. Opt Out Option The Operator Agreement details the terms and conditions provided below for The Illumination Foundation ("Contractor") to operate a year-round homeless navigation center and recuperative care facility. This is set for a two-year term, with eight one-year renewal options, for a potential total L•