2 - FIRST AMENDMENT TO OPTION AGREEMENT_2020-12-15

Home Browse Search

REQUEST FOR HOUSING AUTHORITY ACTION MEETING DATE: DECEMBER 15, 2020 TITLE: APPROVE A FIRST AMENDMENT TO THE OPTION AGREEMENT WITH WASHINGTON SANTA ANA HOUSING PARTNERS, L.P. FOR THE DEVELOPMENT OF THE CROSSROADS AT WASHINGTON UP TO $157,386 IN REIMBURSEMENTS EXECUTIVE DIRECTOR RECOMMENDED ACTION RECORDING SECRETARY USE ONLY: APPROVED ❑ As Recommended ❑ As Amended CONTINUED TO Authorize the Executive Director of the Housing Authority to execute a First Amendment to Option Agreement with Washington Santa Ana Housing Partners, L.P., a California limited partnership for the development of the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701, (APNs 398-092-13 and 398-092-14) including a maximum reimbursement amount not to exceed $157,386 (if required), subject to non - substantive changes approved by the Executive Director and Housing Authority General Counsel. EXECUTIVE SUMMARY On February 18, 2020, City Council approved a Joint Powers Agreement with the County of Orange to mutually develop the Crossroads at Washington project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701 as joint property owners. City Council also approved an Option Agreement and 65-year Ground Lease for the development of the combined property (Exhibit 1). Since that date, the developer has conducted various environmental assessments on behalf of the City and County as joint owners. The environmental assessments have determined that the combined property owned by the City and County is environmentally contaminated. Due to this unforeseen circumstance, the developer is seeking a reimbursement agreement to pay a portion of the predevelopment and environmental assessment costs they have incurred so far on behalf of the City and County, only if they are unable to proceed with the project. The First Amendment to the Option Agreement commits the City and County to pay $314,772, payable equally in a 50-50 split, if the developer elects not to proceed with the project and declines the City and County's award of affordable housing funds and the 65-year Ground Lease of the environmentally contaminated property for the development of the project. DISCUSSION The Crossroads at Washington (the "Project") is a proposed multifamily affordable housing development at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701. The approximately 2.286-acre site includes two parcels (identified in Table 1) owned by the County of Orange (the 2-1