Item 38 - Crossroads at Washington Affordable Housing Project

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Community Development Agency www.santa-ana.org/cd Item # 38 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report August 17, 2021 TOPIC: Crossroads at Washington Affordable Housing Project AGENDA TITLE: Approve a Second Amendment to the Option Agreement with Washington Santa Ana Housing Partners, L.P. for the development of the Crossroads at Washington for up to $300,000 in backstop funding; approve an additional award of $333,742 of Neighborhood Stabilization Program funds and Seven Project-Based Vouchers to the existing Pre-Loan Commitment Letter for $3,971,440, for a total of $4,305,182, to the Related Companies of California, LLC and A Community of Friends for the development of the Crossroads at Washington RECOMMENDED ACTION Authorize the City Manager to execute a First Amended and Restated Pre-Loan Commitment letter with The Related Companies of California, LLC (“Related”) with A Community of Friends (“ACOF”) for a total of $4,305,182 in affordable housing funds, consisting of $3,007,489 in HOME Investment Partnerships Program funds, $963,951 in Neighborhood Stabilization Program funds, and an additional $333,742 in Neighborhood Stablization Program funds. DISCUSSION On February 18, 2020, the City Council approved a Joint Powers Agreement with the County of Orange to mutually develop the Crossroads at Washington affordable housing project located at 1126 and 1146 E. Washington Avenue, Santa Ana, CA 92701 as joint property owners. The City Council also approved an Option Agreement and 65-year Ground Lease with the Related Companies of California for the development of the combined property. 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 Housing Authority and County is environmentally contaminated. Due to this unforeseen circumstance, the developer sought a reimbursement agreement to pay a portion of the predevelopment and environmental assessment costs they have incurred so far on behalf of the Housing Authority and County, only if they are unable to proceed with the project. Approved at the December 15, 2020 Housing Authority meeting, the First Amendment to the Option Agreement commited the Housing Authority 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 Housing Authority and County’s award of affordable housing funds and the 65-year Ground Lease of the environmentally contaminated property for the development