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ER No. 2019-85/DBA No. 2020-01/SPR No. 2020-01/SPR No. 2020-02/DDA October 20, 2020 Page 4 the execution of the second ENA, the developer has been working on his entitlements for the project. At the September 28, 2020 Planning Commission public hearing, by a vote of 6-0-1 (Phan abstained), the Commission approved Variance No. 2020-05 to utilize the Santa Ana Municipal Code (SAMC) Section 41-1344 standards for hotel off-street parking and to allow deviations from the off-street parking access requirement and Tentative Parcel Map. No. 2020-02 to create two development sites and establish airspace to allow for separate interest and ownership of public parking spaces and to provide vehicular and pedestrian access to a private street through a public access easement and the associated addendum to the Environmental Impact Report (EIR) for the project. In addition, the Planning Commission recommended City Council approval of the addendum, DBA, and SPR applications (Exhibit 4). Economic Development Summary and Subsidy Report Kosmont Companies, a land economics consulting firm, was retained to provide a financial feasibility analysis of the Caribou proposal. In their analysis, Kosmont has validated that the proposed project, which requires the demolition of the current parking structure, replacement of public parking spaces, and the reconnection of Sycamore Street, has a significant financial gap and a subsidy is warranted. The proposed deal structure would minimize the financial gap as follows: The City would segregate typical costs to develop a site such as demolition of the existing parking structure and preparation for development, as well as public improvements such as replacement public parking and a reconnection of a public street (Sycamore Street) as the City's responsibilities. The costs for the City's responsibilities are estimated by the developer at $13 million. The City cost will be based on the actual cost of the public improvements with a maximum cap of $13 million. The City would finance the capital costs through public financing at a later date. The developer will pay the debt service through an Operating Agreement whereby the developer will operate the public parking and pay all costs associated, with no financial risk to the City. The subsidy amount ($13 million) is within the feasibility gap as estimated by Kosmont. The hotel is the biggest economic risk, especially during the recent pandemic. However, the possibility of future conversion to residential if the hotel is not economically viable in the first 5 years provides an economic alternative that helps to mitigate the risk. As part of the approval process and in accordance with Government Code Sections 52201 and 53083, a project summary and economic development subsidy report (Exhibit 5) must be completed and submitted detailing the project, the structure of the public subsidy, projected tax benefits, and estimated number of jobs that would be created by the subsidy. This report shall be available to the public and posted on the City's website until the end date of the economic development subsidy. This analysis does not take into consideration the value of the public benefit of 19 affordable housing units for very low-income families that will be developed on -site by the developer at no cost to the City. 75A-4