65A - AFFORDABLE HOUSING OPTIONS

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Discussion on Four Affordable Housing Development Projects and Options for City Financial Assistance June 1, 2017 Page 4 There are two deadlines tied to the Santa Ana Arts Collective project. The first is Meta must pull their first building permit for the project by July 28, 2017 or they will lose their 9% LIHTC award. The second deadline is the City will forego the $2.26 million in HOME investment Partnership Program funds if they are not committed to the project by September 30, 2017. First Street Apartments, AMCAL Multi -Housing: 1440 East First Street The First Street Apartments project will provide 69 units of affordable workforce housing. The rental units (less one manager's unit) are 100% affordable to family households earning between 30% and 60% of the AMI. The unit mix currently consists of six four-bedroom units, 28 three- bedroom units and 35 two-bedroom units (one being a manager's unit). This project initially applied to the City for financial assistance through a competitive RFP process for project based vouchers (PBVs) and was awarded eight PBVs by the Housing Authority on May 5, 2015. On February 2, 2016, the City Council approved the Planning Commissions' recommendation to direct Heritage Village OC LLC (Heritage Village) inclusionary housing funds to AMCAL and also directed the City Manager to lead discussions on the project. On April 15, 2016, KMA completed a financial gap analysis and determined $8,795,000 as the City's financial assistance (Exhibit 6). On December 20, 2016, the City Council authorized the City Manager to execute a conditional loan commitment letter with AMCAL for $2,600,000 of inclusionary housing in -lieu fees contingent on the City's receipt of an in -lieu fee payment of $2,600,000 from Heritage Village. In addition, the Housing Authority also authorized the drafting of loan agreements in an amount not to exceed $6,195,000 for a total of $8,795,000 pre -committed for the project. On February 21, 2017, staff agendized the City conditional loan and Housing loan agreements for City Council consideration. The City Council tabled the agreements and requested that an Ad Hoc Committee review the project as well as other projects in the queue. As requested by the Ad Hoc Committee, CSG Advisors completed a second opinion financial gap analysis on May 12, 2017, and determined $8,522,740 as the financial gap for the project (Exhibit 7). On May 16, 2017, AMCAL submitted a letter informing the City that Heritage Village will not be making the initial payment of $2.6M in In -lieu fees in time for the June 28 tax credit application deadline. The delay in payment was also confirmed by a representative from Heritage Village. As such, AMCAL requests that the City bridge the $2.6M of in in -lieu fees with currently available City affordable housing development funds in order to meet the tax credit application deadline. The developer is preparing to apply for 9 percent competitive tax credits on June 28, 2017. Aqua Housing, Community Development Partners: 317 East 17th Street The Aqua Housing project consists of a 58 -unit new construction permanent supportive housing development, for chronically homeless individuals with wrap-around supportive services provided on-site by Mercy Housing Living Centers. The unit mix currently consists of 15 studio units and 43 one bedroom units for 30% and 60% of the AMI. This project applied to the City for financial assistance through a competitive RFP process for 56 Project Based Vouchers (PBVs) on January 31, 2017. On April 4, 2017, the Housing Authority awarded 25 project -based vouchers to the project. However, the project will need an additional 31 PBVs to be feasible and for the developer to apply for the June 28th 9 percent tax credit 65A-4