Item 38 - Crossroads at Washington Affordable Housing Project

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Crossroads at Washington Affordable Housing Project August 17, 2021 Page 2 1 9 7 8 of the project. This Second Amendment to the Option Agreement will commit the Housing Authority and County to pay up to $300,000 for an environmental remediation, payable equally in a 50-50 split, if the Developer, Housing Authority, and County are not able to secure remediation and cleanup funding from the California Department of Toxic Substances Control (“DTSC”). Specifically, 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 “County”) and the Housing Authority of the City of Santa Ana (the “Housing Authority”). Both parcels are currently vacant and free of building structures or occupants. Table 1 – Property Ownership Property Owner Assessor’s Parcel Number Acres Housing Authority of the City of Santa Ana 398-092-14 1.456 County of Orange 398-092-13 0.830 Total 2.286 Washington Santa Ana Housing Partners, L.P. (the “Developer”), a California limited partnership formed by The Related Companies of California LLC and A Community of Friends, the County of Orange, and the Housing Authority entered into an Option Agreement on February 25, 2020, which provided site control for the Developer to apply for the funding needed to develop the Project. Since receiving the City and County’s financial commitments in July 2019, the Developer has invested significant staff time and financial resources in this Project to secure funding and compete for Low-Income Housing Tax Credits from the California Tax Credit Allocation Committee (“TCAC”) while conducting comprehensive environmental due diligence. To date, the Developer has incurred over $764,000 in third-party predevelopment expenses and over $550,000 in staff overhead costs specific to the Project. This includes environmental assessments and $214,772 of non-refundable payments for the required TCAC Allocation Fee ($107,386) and TCAC Performance Deposit ($107,386). The Developer is committed to investing more staff time to develop the Project. The First Amendment to the Option Agreement provided for reimbursement to the Developer for a portion of the costs should the Project not move forward (Exhibit 1). In partnership with the California Department of Toxic Substances Control (“DTSC”), the Housing Authority, and the County, the Developer is coordinating additional site investigations and testing through DTSC’s Targeted Site Investigation Plus (“TSI+”) program. DTSC and their environmental consultant are currently preparing preliminary lab results and cleanup options based on field investigations of both properties. These