80B - JOINT - AFFORDABLE HOUSING FUNDS AMCAL

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Allen Matkins Leck Gamble Mallory & Natsis LLP Allen Matldns Attor1900 yMain Law 1900 n Street, 5t" Floor I hvine, CA 92614-7321 Telephone: 949.553.1313 1 Facsimile: 949.553.8354 www.allemnatkins.com William R. Devine E-maih wdevine@allemnatkins.com Direct Dial: 949.851.5412 File Number: 372942-00005/OC1119549.02 August 19, 2016 Sonia R. Carvalho City Attorney City of Santa Ana 20 Civic Center Plaza, M-29 Santa Ana, CA 92701 Re: Heritage Village OC, LLC Dear Ms. Carvalho: I am writing on behalf of my client Heritage Village OC, LLC ("Developer") to propose a resolution of the matter relating to the timing of payment of the affordable housing in lieu fees that the Developer is obligated to pay in conjunction with development of the Heritage Village Project ("Project"). As you know the Project includes a number of buildings that will be developed in three phases, as detailed in the Development Agreement. Pursuant to Section 4-1904(c)(3) of the City Housing Opportunity Ordinance ("HOO") any applicable affordable housing in lieu fee is to be paid prior to issuance of the first building permit for any portion of a residential project. As we have discussed previously, Developer always interpreted the phrase "any portion" to have the same meaning as "each phase" since each phase was a portion of the Project. However, when discussing the phased payment of the in lieu fees with City Staff, City Staff took the position that the HOO required payment of 100% of the affordable housing in lieu fees prior to issuance of the first building permit for Phase 1 of the Project. Based on this interpretation by City Staff it was determined that the only way to resolve the matter was to pursue an amendment to the HOO that would specifically provide for phased payment of in lieu fees for a phased project. Following discussions with City Staff on this matter the Developer filed an application for such an amendment and began the amendment process. During the Planning Commission hearing regarding this matter some objections were raised regarding such amendment. Our understanding is that most of these objections were related to how it might impact the timing of development of the proposed Ameal Affordable Housing Project ("Amcal Project"). Our understanding is that the developers of the Amcal Project plan to seek tax credit financing for their project in the first quarter of 2017. We also understand that in order to obtain the tax credit financing Amcal will need a letter from the City pledging up to $8.75 million toward the cost of development of the Ameal Project. We understand that Amcal is looking for a pledge of $8.75 million from the City toward Ameal's cost of development of their project. We also understand that the City has approximately $2.9 million in its in lieu affordable housing fee fund Los Angeles I Orange County I San Diego I Century City I San Francisco M56