80B - JOINT - AFFORDABLE HOUSING FUNDS AMCAL

Home Browse Search

Award of Affordable Housing Funds to AMCAL December 20, 2016 Page 2 DISCUSSION On April 19, 2016, City Council approved a conditional loan commitment of $8,795,000 of inclusionary housing in -lieu fees to AMCAL Multi -Housing, Inc. (AMCAL) for their First Street Apartments Project by a vote of 6:0. The $8,795,000 came as a request by Heritage Village OC, LLC (Heritage Village) to allocate the in -lieu fees from their Heritage Village project to AMCAL. On August 29, 2016, the City of Santa Ana received a second request from the Heritage Village to pledge City existing affordable housing funds to AMCAL for the First Street Apartments Project (Exhibit 1) resulting from the Heritage Village's request to phase their total in -lieu fee payment. As such, the Heritage Village requests the City fund the difference between the $8,795,000 in - lieu fee and the initial Heritage Village project phase one payment, which will be approximately $2,600,000. On November 14, 2016, AMCAL submitted a letter (Exhibit 2) to the City stating, "We request that any agreement to allow the deferral of the payment of in -lieu fees [from the Heritage Village] be conditioned upon a commitment from the City to use existing City housing funds to bridge the in - lieu fees payable in the future by the Heritage Village development. A commitment by the City to bridge the in -lieu fees would allow the First Street affordable project to proceed as currently scheduled and not suffer any further delays." The City's past practice is to issue Request for Proposals (RFP) for affordable housing funds. The issuance of an RFP allows for transparency and open competition among multiple affordable housing developers throughout Orange County and Southern California who want to develop affordable housing in our community. Each year, developers rely on the City to allow for open competition for affordable housing funds. On December 20, 2016, the City Council will consider a recommended action for the Heritage Village to amend the Development Agreement for their Heritage Village project to allow for phasing of their total in -lieu fee payment of $9,695,725.60 required under the City's Housing Opportunity Ordinance. If the Development Agreement is approved, this would cause a delay in the development of AMCAL's First Street Apartments Project. Therefore, staff recommends an award of $6,195,000 to AMCAL for the First Street Apartments Project (Exhibit 4) to bridge $2,600,000 of inclusionary housing in -lieu fees anticipated to be received from the Heritage Village (Exhibit 5) for the first phase of their project. This pre -commitment letter will provide an opportunity for AMCAL to move forward with the First Street Project to obtain their necessary tax credit financing. The remainder of the $7,095,725.60 of in -lieu fees anticipated from the Heritage Village will be deposited into the City's Inclusionary Housing Fund after the second and third phase of their project, and these remaining funds would be issued through the RFP process. The City currently has $3,448,697 in it's Inclusionary Housing Fund and approximately $6,400,000 in Housing Successor Agency funds. The requests by the Heritage and AMCAL to use $6,195,000 in City existing housing funds contingent on receipt of $2,600,000 from the first phase of the Heritage Village project, will leave a balance of Inclusionary Housing Funds