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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />FEBRUARY 2, 2016 <br />TITLE: <br />COMMUNITY DEVELOPMENT BLOCK <br />GRANT AND INCLUSIONARY HOUSING <br />FUNDS LOAN AGREEMENT — <br />SANTA ANA ARTS COLLECTIVE, LP <br />(STRATEGIC PLAN NO. 5, 3A, 3C) <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />Cl As Amended <br />❑ Ordinance on I" Reading <br />© Ordinance on 2nd Reading <br />E Implementing Resolution <br />E Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and the Clerk of the Council to execute a single loan agreement with <br />Santa Ana Arts Collective, LP for $500,000 in Community Development Block Grant funds and <br />$1,875,000 in Inclusionary Housing Funds for a total combined amount not to exceed $2,375,000 to <br />create 57 units of affordable housing at 1666 N. Main Street; subject to non - substantive changes <br />approved by the City Manager and City Attorney. <br />DISCUSSION <br />On June 1, 2015, City staff issued a Request for Proposals (RFP) soliciting applications for the <br />development of an affordable housing project. The RFP indicated that the City would consider <br />proposals for new construction and /or acquisition and rehabilitation projects. It also indicated that <br />the City had approximately $1,875,000 in Inclusionary Housing funds; $500,000 in Community <br />Development Block Grant (CDBG) funds; $830,000 in federal HOME Program funds to be <br />committed by July 31, 2016; $1,430,000 in federal HOME Program funds to be committed by July <br />31, 2017; and 24 Project -Based Vouchers. <br />On November 3, 2015, City Council approved the proposal award to Meta Housing Corporation <br />(Developer) for the Santa Ana Arts Collective, located at 1666 N. Main Street (Exhibit 1). Staff is <br />now requesting City Council to authorize the execution of the loan agreement for the CDBG <br />Program funds and the Inclusionary Housing funds. Once the project receives Low - Income <br />Housing Tax Credit financing, the HOME Loan Agreement will also require City Council approval. <br />The proposed project, located at 1666 N. Main Street, will enhance the connectivity of the Artist <br />Village in the downtown to the arts and cultural institutions on Main Street including the Bowers <br />Museum, Kidseum, Discovery Cube, The Wooden Floor, Orange County School of the Arts, and <br />others. The proposed project, named the Santa Ana Arts Collective, would adaptively reuse a late <br />modern five -story office building and site, into a community gallery and affordable family <br />25B -1 <br />