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Density Bonus Agreement for 2222 East First Street May 1, 2018 Page 3 On September 28, 2017, AMG and Associates submitted a request to the City for a project subsidy equal to 70% of the City's annual affordable housing in -lieu fees collected from developers under the Housing Opportunity Ordinance, up to a maximum of $1.75 million per year for 40 years (Exhibit 3). AMG proposes to use the requested annual payment for debt service on their affordable housing projects located at 2110, 2114 and 2222 E. 15t Street. The request was not approved by the City. In addition, on March 14, 2018, AMG submitted a 4% low-income housing tax credit application to the California Tax Credit Allocation Committee (TCAC). AMG stated on Tab 2a of their application to TCAC: "The City of Santa Ana will provide an Inclusionary Housing Funds loan in the amount of $5,000,000 with an interest rate of 1%, a term of 55 -years and payments based on residual receipts" (Exhibit 4). On April 5, 2018 as part of the City's responsibility to submit a Local Reviewing Agency Project Evaluation Form, the City communicated to TCAC that the developer's "statement that the City of Santa Ana will provide $5,000,000 is incorrect" (Exhibit 5). The City of Santa Ana has not made any commitment in any form to provide $5,000,000 for the development of this project. At this time, the City has made no decisions on whether it will provide financial support for the projects. The approval of the density bonus agreement is in compliance with Section 41-1600 and Section 41-1904.1, et seq., of the Santa Ana Municipal Code, and Section 65915, et seq., of the California Government Code. However, the approval of the density bonus agreement shall not be construed as approval of the financing requested by the developer for the project and does not bind the city in any form to provide future funding for the development of the project. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal # 3 - Economic Development, Objective #2 (create new opportunities for business/job growth and encourage private development through new General Plan and Zoning Ordinance policies), Objective # 5 (leverage private investment that results in tax base expansion and job creation citywide) and 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). FISCAL IMPACT There is no fiscal impact associated with this action. �� 3", Judsorf Brown Acting Executive Director Community Development Agency Candida Neal Executive Director Planning and Building Agency Exhibits: 1. Density Bonus Agreement 2. Planning Commission Staff Report from September 11, 2017 3. Request for Financing from AMG, September 28, 2017 4. Pages from Tab 2a of the 4% Tax Credit Application 5. Cover Letter Sent to TCAC for the Project Evaluation Form 60E-3