Item 12 - Agreements for Habitat for Humanity of Orange County Affordable Ownership Units

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Habitat for Humanity of Orange County Affordable Ownership Units July 16, 2024 Page 2 GOVERNMENT CODE 484308 APPLIES: Yes PLANNING COMMISSION RECOMMENDATION At its regular meeting on June 10, 2024, the Planning Commission held a duly noticed public hearing and at that time considered all testimony, written and oral, and unanimously (5-0-0-2, with Commissioners Ramos and Oliva absent) recommended that the City Council approve Density Bonus Agreement No. 2024-01, as conditioned. As part of its actions, the Planning Commission also voted unanimously (5-0-0-2, with Commissioners Ramos and Oliva absent) to approve Tentative Tract Map (TTM) No. 2023-05, as conditioned. DISCUSSION On November 15, 2022, the City Council authorized the City Manager to execute a pre - commitment letter (Exhibit 1) with Habitat for Humanity of Orange County ("Habitat for Humanity") for $2,200,000 in Inclusionary Housing Funds for the development of six affordable ownership units located at 1921 W Washington Avenue, Santa Ana, CA 92706 (APN 405-101-37) ("Project"). The Project will include six newly constructed three -bedroom, two -bath homes affordable to low-income households earning less than 80% of the area median income (AMI) with a local preference for residents who live and/or work in the City. The pre -commitment letter was executed following a competitive Request for Proposals process approved by City Council in December 2021. After the City Council approves a pre -commitment of funding for an affordable housing project, the developer must secure their entitlements and their remaining sources of financing as two primary conditions before staff will return to City Council. Relative to the Project's entitlements, on June 10, 2024, the Planning Commission held a public hearing for the Project, where they voted unanimously to approve Tentative Tract Map No. 2023-05 and to recommend that the City Council approve Density Bonus Agreement No. 2024-01 with conditions. Relative to securing their remaining sources of financing, Habitat for Humanity has finalized their budget for the successful construction of the Project. Now that Habitat for Humanity has met these two conditions in the pre - commitment letter, City Council may consider approval of the Conditional Grant Agreement and Density Bonus Agreement for the development of the Project. Further details on both Agreements are provided below. Conditional Grant Agreement The Conditional Grant Agreement is attached as Exhibit 2. Amongst various other terms, the following key terms are incorporated into the Grant Agreement: • Developer: Habitat for Humanity of Orange County. • Conditional Grant Amount: $2,200,000 in Inclusionary Housing Funds, conditional upon successful completion of the Project. • Disbursement Schedule: 90% of the funds will be disbursed upfront for the construction, with a 10% contingency: