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Approval of Loan Agreements, Resolution, and Appropriation Adjustment Santa Ana Arts Collective Project July 5, 2017 Page 3 November 21, 2016, the City and Meta Housing Corporation was awarded $12,028,626 in AHSC funds, which was later reduced to $9,139,630 in accordance with regulatory restrictions upon acceptance of competitive 9% low income housing tax credits. In addition, $2,885,000 in housing - related grant funds were not accepted because the programmatic requirements resulted in an increased funding gap. The Resolution (Exhibit 4) will allow both Meta Housing Corporation to receive the funds to develop the Project and the City to construct the public improvements linked to the Project. The $1,288,000 Sustainable Transportation Infrastructure Project is a bicycle boulevard treatment along Bush Street from 17th Street to Civic Center Drive connecting to the existing treatments that are being installed this summer. The bicycle boulevard treatment includes green shared lane markings in the roadway with accompanying signage and eight landscaped neighborhood traffic circles along the corridor, connecting the Project with a low -stress bikeway to Downtown Santa Ana. The $22,500 funding contribution for SCAG's Go Human program will be paid directly by the Developer. Regarding the Subordination Agreement with Bank of America, N.A., the City of Santa Ana's total loan for this project is approximately 21 % of the total Project cost (Exhibit 5). As a subordinate loan for a large affordable housing project such as this, it is not uncommon for a more senior lender to request a subordination agreement for the City's smaller loan agreements that allow the senior lender to complete their underwriting and commit their private market financing. As such, this Subordination Agreement will allow Bank of American, N.A. to commit their private market financing for the Project. The State of California AHSC Program will be providing a loan to the Developer in the amount of $4,944,130 for the development of the Project. Under the regulatory requirements for the State, the State's loan must be repaid through residual receipts similar to the City's loans. As such, the 50% of the residual receipts due and payable to the City will be pro -rated between the State and the City based upon the total amount of subsidy provided by each. This is standard for projects such as this that are receiving public subsidies from multiple sources of public financing. STRATEGIC PLAN ALIGNMENT The activities covered by this report allow the City to meet Goal #5 - Community Health, Livability, Engagement & Sustainability, Objective # 3 (Facilitate diverse housing opportunities and support efforts to preserve and improve the livability of Santa Ana neighborhoods), Strategy A (Continue to explore options Citywide regarding the re -use of commercial or industrial buildings that are currently underutilized or vacant for mixed-use residential projects), and Strategy C (Provide that Santa Ana residents, employees, artists and veterans receive priority for affordable housing created under the City's Housing Opportunity Ordinance or with City funding to the extent allowed under state law). 55C-3