HomeMy WebLinkAbout FULL_AGENDA_2019-01-19
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HOUSING AUTHORITY
SPECIAL MEETING AGENDA
JANUARY 15, 2019
CITY COUNCIL CHAMBER
22 Civic Center Plaza
Santa Ana, California
5:45 p.m.
(Immediately following the City Council Closed Session Meeting)
TOBER 2, 2006
Miguel A. Pulido
Chairperson
Vicente Sarmiento
Authority Member - Ward 1
VSarmiento@santa-ana.org
David Penaloza
Authority Member - Ward 2
DPenaloza@santa-ana.org
Jose Solorio
Authority Member - Ward 3
JSolorio@santa-ana.org
Roman Reyna
Authority Member - Ward 4
RReyna@santa-ana.org
Juan Villegas
Chair Pro Tem - Ward 5
JVillegas@santa-ana.org
Cecilia Iglesias
Authority Member – Ward 6
CIglesias@santa-ana.org
Authority Member telephone: 714-647-6900
Agenda item inquiries: 714-647-6520
Sonia R. Carvalho S teven A. Mendoza Maria D. Huizar
Authority General Counsel Executive Director Recording Secretary
HOUSING AUTHORITY AGENDA 2 JANUARY 15, 2019
Basic Housing Authority Meeting Information
Five-Year Strategic Plan (2014-2019) Detailed information at: http://www.santa-ana.org/strategic-planning/
Vision, Mission and Guiding Principles - The City of Santa Ana is committed to achieving a shared vision for the organization and its
community. The vision, mission and guiding principles (values) are the result of a thoughtful and inclusive process designed to set the
City and organization on a course that meets the challenges of today and tomorrow.
Vision - The dynamic center of Orange County which is acclaimed for our: •Investment in youth •Safe and healthy community
•Neighborhood pride •Thriving economic climate •Enriched and diverse culture •Quality government services
Mission - To deliver efficient public services in partnership with our community which ensures public safety, a prosperous economic
environment, opportunities for our youth, and a high quality of life for residents.”
Guiding Principles
•Collaboration •Efficiency •Equity •Excellence •Fiscal Responsibility •Innovation •Transparency
Strategic Plan Goals/Objectives/Strategies:
Goal 1 - Community Safety
Goal 2 - Youth, Education, Recreation
Goal 3 - Economic Development
Goal 4 - City Financial Stability
Goal 5 - Community Health, Livability, Engagement & Sustainability
Goal 6 - Community Facilities & Infrastructure
Goal 7 - Team Santa Ana
*********
Code of Ethics and Conduct - The people of the City of Santa Ana, at an election held on February 5, 2008, approved an amendment to the
City Charter which established the Code of Ethics and Conduct for elected officials and members of appointed boards, commissions,
and committees to assure public confidence. A copy of the City’s Code can be found on the Clerk of the Council’s webpage. The
following are the core values expressed: Integrity · Honesty · Responsibility · Fairness · Accountability · Respect · Efficiency
Agenda Information - The agenda descriptions provide the public with a general summary of the items of business to be considered by the
Authority. The Authority is not limited in any way by the “Recommended Action” and may take any action which the Authority deems to
be appropriate on an agenda item. Except as otherwise provided by law, no action shall be taken on any item not listed on the agenda.
Public Comments/Public Input - Pursuant to Government Code Sec. 54954.3, the public may address the Housing Authority and any other
legislative body scheduled to meet on same day and time on any and all matters within the City of Santa Ana's jurisdiction.
At the discretion of the Chair, at the first Public Comment portion of the meeting, all comments may be considered jointly. The public will
be given the opportunity to speak on any and all matters contained on any of the Consent Calendar and Business Calendar items and/or
on issues of public interest within the jurisdiction of the City. For public hearings, members of the public shall be given three (3) minutes
for each duly noticed hearing (unless the matter is continued prior to taking public testimony). All requests to speak shall be submitted in
writing to the Clerk of the Council at the beginning of the meeting and before Public Comments begin. Speaker forms will be available at
the meeting.
REQUESTS TO SPEAK SHALL NOT BE ACCEPTED AFTER THE PUBLIC COMMENT SESSION BEGINS WITHOUT PERMISSION
OF THE CHAIR. When speaking, all persons addressing the Legislative Body shall follow the rules of decorum as detailed on the back
of the speaker form. The presiding officer shall have the power and responsibility to enforce decorum and order of the meeting as set
forth in Section 2-104(c) of the Santa Ana Municipal Code.
Consent Calendar - All matters listed under the Consent Calendar are considered to be routine by the Housing Authority and will be enacted
by one motion without discussion unless a member of the Authority “pulls” an item(s) from the consent calendar for a separate vote.
Senate Bill 343 - As required by Senate Bill 343, any non-confidential writings or documents provided to a majority of the Housing Authority
members regarding any item on this agenda will be made available for public inspection in the Clerk of the Council Office during normal
business hours.
Agenda & Minutes - Staff reports and documents relating to each agenda item are on file in the Office of the Clerk of the Council and are
available for public inspection during regular business hours, 8:00 a.m. – 5:00 p.m., Monday through Thursday and alternate Fridays.
The Clerk’s office is located in City Hall, 20 Civic Center Plaza, Room 809, Santa Ana, California, (714) 647-6520. Authority meeting
agendas, staff reports, and Minutes are available the Friday before an Authority meeting at the following website address: www.santa-
ana.org
Televised Meeting Schedule - All regular meetings will be televised and available for viewing on the City’s cable channel. Meetings held in
the Council Chamber or other designated locations which are televised live on CTV3 Time Warner Cable will be cablecast Mondays at
6:00 p.m., Tuesdays immediately following the meeting at 9:00 a.m., Wednesdays at 6:00 p.m., and Sundays at 1:00 p.m. Meetings
held in locations that do not have a live cable feed will be videotaped and shown on CTV3 the day after the meeting.
DVD copies of the meetings for loan will be available for public circulation at the Santa Ana Main Library the day after a meeting.
HOUSING AUTHORITY AGENDA 3 JANUARY 15, 2019
CITY OF SANTA NA
HOUSING AUTHORITY SPECIAL MEETING
JANUARY 15, 2019
CALL TO ORDER CHAIRPERSON PULIDO
HOUSING AUTHORITY BOARD MEMBERS
IGLESIAS, PENALOZA, REYNA, SARMIENTO
SOLORIO, VILLEGAS
Executive Director, Authority General Counsel,
Recording Secretary
PUBLIC COMMENT ON AGENDA ITEMS AND ITEMS OF PUBLIC INTEREST
(Refer to page 2 “Public Input” for description.)
CONSENT CALENDAR
R ECOM M E N DED ACTION : Approve staff recommendation on Consent
Calendar Items: 1 through 2.
1. SPECIAL MEETING MINUTES OF DECEMBER 18, 2018 {STRATEGIC PLAN NO. 5, 1}
RECOMMENDED ACTION : Approve Minutes.
2. EXCUSED ABSENCES
RECOMMENDED ACTION : Excuse absent Housing Authority Member(s).
*** END OF CONSENT CALENDAR ***
BUSINESS CALENDAR
3. APPROVE A PRE-LOAN COMMITMENT OF $1,069,947 OF AFFORDABLE
HOUSING FUNDS, A 99-YEAR GROUND-LEASE, AND THREE PROJECT-
BASED VOUCHERS TO HOMEAID ORANGE COUNTY AND MERCY HOUSE
LIVING CENTERS FOR THE DEVELOPMENT OF THE FRANCES XAVIER
RESIDENCE PROJECT {STRATEGIC PLAN NO. 5, 3C}
RECOMMENDED ACTION : 1) Authorize the Executive Director of the
Housing Authority and the Recording Secretary to execute a pre-loan commitment
letter with HomeAid Orange County (“HomeAid”) with Mercy House Living
Centers (“Mercy House”) as the service provider for $1,069,947 in Low and Moderate
Income Housing Asset Funds and a 99-year ground-lease of 801, 809 & 809 ½ E.
Santa Ana Blvd (APN: 398-303-04 / 398-303-05 / 398-303-06 / 398-303-07) for the
HOUSING AUTHORITY AGENDA 4 JANUARY 15, 2019
development of the Frances Xavier Residence affordable housing project, subject to
non-substantive changes approved by the Executive Director of the Housing
Authority and Authority General Counsel.
2) Approve an award of three (3) project-based vouchers and authorize the
Executive Director of the Housing Authority and the Recording Secretary to execute
an Agreement to Enter into a Project-Based Vouchers Housing Assistance
Payments Contract with HomeAid for the development of the Frances Xavier
Residence affordable housing project, subject to non-substantive changes approved
by the Executive Director of the Housing Authority and Authority General Counsel.
JOINT SESSION OF THE CITY COUNCIL AND THE HOUSING AUTHORITY AGENCY
4. APPROVE A PRE-LOAN COMMITMENT OF $3,170,547 OF AFFORDABLE
HOUSING FUNDS AND EIGHT PROJECT-BASED VOUCHERS TO NATIONAL
COMMUNITY RENAISSANCE OF CALIFORNIA AND MERCY HOUSE LIVING
CENTERS FOR THE DEVELOPMENT OF THE SANTA ANA UNITED
METHODIST CHURCH PROJECT {STRATEGIC PLAN NO. 5, 3C}
RECOMMENDED ACTION :
CITY COUNCIL
Authorize the City Manager and the Clerk of the Council to execute a pre-loan
commitment letter with National Community Renaissance of California (“National
CORE”) with Mercy House Living Centers (“Mercy House”) as the service provider
for $3,170,547 in Inclusionary Housing Funds for the development of the Santa Ana
United Methodist Church affordable housing project located at 609 N Spurgeon
Street, Santa Ana, CA 92701, subject to non-substantive changes approved by the
City Manager and City Attorney.
HOUSING AUTHORITY
Approve an award of eight (8) project-based vouchers and authorize the Executive
Director of the Housing Authority and the Recording Secretary to execute an
Agreement to Enter into a Project-Based Vouchers Housing Assistance Payments
Contract with National CORE for the development of the Santa Ana United
Methodist Church affordable housing project, subject to non-substantive changes
approved by the Executive Director of the Housing Authority and Authority General
Counsel.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION
RECOMMENDATION
At its special meeting on December 19, 2018, the Community Redevelopment and
Housing Commission (CRHC) by a vote of 5:0 (Ramos and Urzua abstained):
1) Recommended that the City Council authorize the City Manager to execute a
pre-loan commitment letter with National CORE with Mercy House as the
service provider for $3,170,547.00 in Inclusionary Housing Funds for the
development of the Santa Ana United Methodist Church affordable housing
project located at 609 N Spurgeon Street, Santa Ana, CA 92701.
HOUSING AUTHORITY AGENDA 5 JANUARY 15, 2019
2) Recommended that the Housing Authority approve an award of eight (8)
project-based vouchers and authorize the Executive Director of the Housing
Authority to execute an Agreement to Enter into a Project-Based Vouchers
Housing Assistance Payments Contract with National CORE for the
development of the Santa Ana United Methodist Church affordable housing
project.
*** END OF BUSINESS CALENDAR ***
COMMENTS
5. HOUSING AUTHORITY MEMBER COMMENTS
AT THIS TIME Housing Authority members may comment on non-agenda matters
and ask questions of or give directions to staff. NO action may be taken on non-agenda
items unless authorized by law.
ADJOURNMENT
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HOUSING AUTHORITY MINUTES 1 DECEMBER 18, 2018
MINUTES OF THE SPECIAL MEETING
OF THE HOUSING AUTHORITY AGENCY
SANTA ANA, CALIFORNI A
DECEMBER 18, 2018
CALLED TO ORDER COUNCIL CHAMBER
22 CIVIC CENTER PLAZA
SANTA ANA, CA
7:43 P.M.
ATTENDANCE AUTHORITY MEMBERS Present:
MIGUEL A. PULIDO, Chair
JUAN VILLEGAS, Chair-Pro Tem
CECILIA IGLESIAS
DAVID PENALOZA
ROMAN REYNA
VICENTE SARMIENTO
JOSE SOLORIO
AUTHORITY MEMBERS Absent:
STAFF Present:
RAUL GODINEZ, II, City Manager
SONIA R. CARVALHO, City Attorney
MARIA D. HUIZAR, Authority Secretary
PUBLIC COMMENT - None
CONSENT CALENDAR ITEMS
MOTION: Approve staff recommendation on Consent Calendar Items: 1 and 2.
MOTION: Solorio SECOND: Villegas
VOTE: AYES: Iglesias, Penaloza, Pulido, Reyna, Sarmiento, Solorio,
Villegas (7)
NOES:
None (0)
ABSTAIN:
None (0)
ABSENT:
None (0)
1-1
HOUSING AUTHORITY MINUTES 2 DECEMBER 18, 2018
1. REGULAR MEETING MINUTES OF DECEMBER 4, 2018 {STRATEGIC PLAN NO.
5, 1}
MOTION: Approve Minutes.
2. EXCUSED ABSENCES – None.
*** END OF CONSENT CALENDAR ***
BUSINESS CALENDAR
JOINT SESSION OF THE CITY COUNCIL (ITEM 80A) AND THE HOUSING AUTHORITY
AGENCY (ITEM 3)
3. RECEIVE AND FILE HOUSING SUCCESSOR ANNUAL REPORT FOR FY
2017-18 – LOW AND MODERATE INCOME HOUSING ASSET FUND
{STRATEGIC PLAN NO. 5, 1}
MOTION: Receive and file.
MOTION: Villegas SECOND: Iglesias
VOTE: AYES: Iglesias, Penaloza, Pulido, Reyna, Solorio,
Villegas (6)
NOES:
None (0)
ABSTAIN:
None (0)
ABSENT:
Sarmiento (1)
*Item considered and voted during the Regular Open Session meeting.
4. APPROVE AMENDED AND RESTATED BOND REGULATORY AGREEMENT
FOR CITY GARDENS APARTMENTS {STRATEGIC PLAN NO. 4, 1}
Monica Mejia, on behalf of Linc Housing, addressed City Council to request
support for item.
MOTION: Authorize the Housing Authority Executive Director and Housing
Authority Recording Secretary to execute an Amended and Restated Bond
Regulatory Agreement with LINC-Bristol Associates I for City Gardens
Apartments at 2901-2955 North Bristol Street, Santa Ana, CA 92706, subject
to non-substantive changes approved by the Executive Director and
Authority General Counsel
1-2
HOUSING AUTHORITY MINUTES 3 DECEMBER 18, 2018
MOTION: Solorio SECOND: Villegas
VOTE: AYES: Iglesias, Penaloza, Pulido, Reyna, Sarmiento,
Solorio, Villegas (7)
NOES:
None (0)
ABSTAIN:
None (0)
ABSENT:
None (0)
*** END OF BUSINESS CALENDAR ***
COMMENTS
5. HOUSING AUTHORITY MEMBER COMMENTS – None.
ADJOURNMENT – 7:45 P.M.
Maria Huizar,
Recording Secretary
1-3
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3-1
3-2
3-3
3-4
3-5
3-6
3-7
3-8
SANTA ANA CITY COUNCIL
Miguel A. Pulido
Mayor
mpulido@santa-ana.org
Michele Martinez
Mayor Pro Tem, Ward 2
mimartinez@santa-ana.org
Vicente Sarmiento
Ward 1
vsarmiento@santa-ana.org
Jose Solorio
Ward 3
jsolorio@santa-ana.org
P. David Benavides
Ward 4
dbenavides@santa-ana.org
Juan Villegas
Ward 5
jvillegas@santa-ana.org
Sal Tinajero
Ward 6
stinajero@santa-ana.org
MAYOR
Miguel A. Pulido
MAYOR PRO TEM
Michele Martinez
COUNCILMEMBERS
P. David Benavides
Vicente Sarmiento
Jose Solorio
Sal Tinajero
Juan Villegas
CITY OF SANTA ANA
20 Civic Center Plaza ● P.O. Box 1988
Santa Ana, California 92702
www.santa-ana.org
CITY MANAGER
Raul Godinez II
CITY ATTORNEY
Sonia R. Carvalho
CLERK OF THE COUNCIL
Maria D. Huizar
December 4, 2018
Scott Larson, Executive Director of HomeAid Sent via E-mail
Larry Haynes, Executive Director of Mercy House
HomeAid Orange County / Mercy House Living Centers
24 Executive Park, Suite 100
Irvine, CA 92614
Subject: Award Recommendations by Review Panel for RFP # 18-056
Dear Mr. Larson and Mr. Haynes,
Thank you very much for your proposal submitted in response to our RFP for Affordable
Housing Development (RFP # 18-056). The City of Santa Ana received a total of thirteen
(13) proposals requesting over $52 million and 304 Project-Based Vouchers. We thank
you for your proposal and your commitment to develop affordable housing for the
residents of the City of Santa Ana.
In compliance with the City’s Affordable Housing Funds Policies and Procedures adopted
by City Council on March 20, 2018, staff formed a Review Panel that consisted of the
Executive Director of the City’s Public Works Agency with his designee, the Executive
Director of the Planning and Building Agency with his designee, the Executive Director of
the Community Development Agency, and the Housing Division Manager. The VAMC of
Long Beach, the County of Orange, Keyser Marston Associates, and MDG Associates
served as advisors to the Review Panel. The Review Panel used the proposal Scoring
and Selection Criteria from the RFP to conduct their review. In addition to the Scoring and
Selection Criteria from the RFP, the Review Panel also reviewed the proposed project
design for appropriateness for the proposed target group, compatibility with surrounding
uses, cost effectiveness of construction, and appropriateness of the design and
construction for low maintenance and long term durability.
On October 30, 2018, the Review Panel met and interviewed all of the developers who
submitted a proposal. LINC Housing requested to be removed from consideration prior to
their scheduled interview and therefore their proposal was removed from consideration.
On November 14, 2018, the Review Panel met a second time to discuss and deliberate
EXHIBIT 1
3-9
upon the final scoring and selection of the proposals. Following this process, the Review
Panel agreed upon the final scores below based on an average of the scores from each
member of the Panel:
*Supporting documentation for the scores above may be provided upon request.
Housing Authority Land Asset Requested /
HUD-VASH Vouchers / Non-Housing
Authority Land Asset
Developer Name Project Name FINAL SCORE (Average of Individual
Reviewer Scores)
Orange Housing Development Corporation and
C&C Development, LLC 1126–1146 E. Washington Site 92
Related California The Crossroads at Washington 91
Jamboree Housing REVO Apartments 87
Cesar Chavez Foundation Santa Ana Place 84
Community HousingWorks Transformar 80
Community Development Partners Washington Plaza, GRFLD, Lacy Walk 77
Chelsea Investment Corporation Cielo 76
Habitat for Humanity of Orange County Lacy Street Project 82
Community Development Partners Washington Plaza, GRFLD, Lacy Walk 77
HomeAid Orange County Frances Xavier Residence 90
Community Development Partners Washington Plaza, GRFLD, Lacy Walk 77
Jamboree Housing Budget Inn Site 86
Community Development Partners Westview House 81
Non-Housing Authority Land Asset National Community Renaissance and Mercy
House Living Centers Santa Ana United Methodist Church Site 93
HUD-VASH Vouchers (As the Primary Source
of Financing)
1126 & 1146 E. Washington Avenue
826 N. Lacy/830 N. Lacy
801, 809 & 809 1/2 E. Santa Ana Blvd.
EXHIBIT 1
3-10
Based on the scores above and the relative scoring of proposals competing for the same
land asset or source of affordable housing funds, the Review Panel is recommending the
following award for your organization to our Community Redevelopment and Housing
Commission and to the City Council / Housing Authority for final approval:
Developer: HomeAid Orange County and Mercy House
Project Name: Frances Xavier Residence
Developer Request:
$1,051,629.00
8 HUD-VASH PBVs
Award Recommendation:
Lease Agreement for 801 E. Santa Ana Blvd.
o Appraised Value as of Oct 25, 2018: $788,000
Low and Moderate Income Housing Asset Fund (Housing Successor
Agency Fund): $1,069,947.00
Project-Based Voucher Program (PBV): Three (3) HUD-VASH PBVs
This recommendation is contingent upon final approval by the Community
Redevelopment and Housing Commission (CRHC) and City Council / Housing
Authority. This letter should not be confused with a final pre-loan commitment
letter from the City or Housing Authority. This is only a recommendation by our
Review Panel.
For the next steps:
1) Please acknowledge your willingness to accept this award recommendation and
develop your project (by responding to this e-mail) including the additional
requirements listed below that will be incorporated into your final commitment
from the City / Housing Authority among various other terms:
a. Efforts must be made to incorporate ground -level retail in the project
design to incorporate the site into the forthcoming OC Streetcar.
b. 100% of the units must be permanent supportive housing for individuals
and families referred from the Coordinated Entry System who are residing
in the City of Santa Ana based upon:
i. Proof of strong ties to the community, to include current residency
of an immediate family member – mother, father, sibling, or
grandparent in the City of Santa Ana;
ii. Proof that the individual attended a K-12 school in Santa Ana;
iii. Proof that the individual resided on property zoned for residential
use in Santa Ana and the individual was on the lease and/or paid
utilities necessary for legal use of the property for residential
purposes; or
iv. Knowledge – either first-hand or recorded – by the Santa Ana
Police Department that the individual has been a member of the
Santa Ana homeless community.
EXHIBIT 1
3-11
2) Please acknowledge (by responding to this e -mail) your willingness to reimburse
the City for the cost of an underwriting and subsidy layering review to be
conducted by Keyser Marston Associates (KMA).
3) Staff will coordinate with you a first look of your project in coordination with the
City’s Planning and Building Agency to verify that the project design complies
with the City’s requirements.
4) Staff will complete a National Environmental Policy Act review in compliance with
your award of federal funds.
5) Please draft a presentation that you will provide with staff to the Community
Redevelopment and Housing Commission (CRHC) on December 19th at 4:30PM
in the City Council Chambers. This presentation must be provided to staff before
COB on Tuesday, December 11th. Staff will also coordinate with you on the Staff
Report that will be presented to the Commission and then to City Council /
Housing Authority.
6) Staff will be recommending your award to the CRHC on December 19, 2018 and
to City Council and the Housing Authority in January or February 2019. You
must be present and ready to present your project at both meetings as well as
respond to any questions or concerns.
From all of us here at the City, thank you again for your proposal and congratulations on
your award recommendation. We look forward to working with you to develop affordable
housing for the residents of the City of Santa Ana.
Sincerely,
Judson Brown
Housing Division Manager
Community Development Agency
Housing and Neighborhood Development Division
20 Civic Center Plaza (M-26)
Santa Ana, CA 92701
T: (714) 667-2241
F: (714) 647-6549
www.santa-ana.org/cda
EXHIBIT 1
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SANTA ANA CITY COUNCIL
Miguel A. Pulido
Mayor
mpulido@santa-ana.org
Juan Villegas
Mayor Pro Tem, Ward 5
jvillegas@santa-ana.org
Vicente Sarmiento
Ward 1
vsarmiento@santa-ana.org
David Penaloza
Ward 2
dpenaloza@santa-ana.org
Jose Solorio
Ward 3
jsolorio@santa-ana.org
Roman Reyna
Ward 4
rreyna@santa-ana.org
Cecilia Iglesias
Ward 6
ciglesias@santa-ana.org
MAYOR
Miguel A. Pulido
MAYOR PRO TEM
Juan Villegas
COUNCILMEMBERS
Cecilia Iglesias
David Penaloza
Roman Reyna
Vicente Sarmiento
Jose Solorio
CITY OF SANTA ANA
SANTA ANA HOUSING AUTHORITY
20 Civic Center Plaza ● P.O. Box 22030
Santa Ana, California 92702
(714) 667-2200
www.santa-ana.org
CITY MANAGER
Raul Godinez II
CITY ATTORNEY
Sonia R. Carvalho
CLERK OF THE COUNCIL
Maria D. Huizar
January 15, 2019
Scott Larson
Executive Director
HomeAid Orange County
24 Executive Park, Suite 100
Irvine, CA 92614
Larry Haynes
Executive Director
Mercy House Living Centers
Re: Francis Xavier Residence
801, 809, and 809½ East Santa Ana Boulevard, Santa Ana, CA 92701
Pre-Commitment Letter for: LMIHAF Loan, Project Based Vouchers, and Lease
Agreement
Dear Messrs. Larson and Haynes:
HomeAid Orange County and Mercy Housing Living Centers (“Developer”) requested
financial assistance in connection with the proposed development of a twelve (12) unit
affordable housing complex to be located at 801, 809, and 809½ East Santa Ana Boulevard,
Santa Ana, CA 92701 (“Project”).
The City of Santa Ana (“City”) and the Housing Authority of the City of Santa Ana (“Housing
Authority”) have reviewed the Developer's request for assistance, and at the City
Council/Housing Authority meeting on January 15, 2019, the Housing Authority Board
authorized and approved issuance of this pre-commitment letter evidencing the preliminary
award of (collectively, the “Agency Assistance”):
- A loan in the maximum amount of $1,069,947.00 from the Low and Moderate
Income Housing Asset Fund (“LMIHAF”) held by the Housing Authority of the City
of Santa Ana acting as the Housing Successor Agency (“Agency”) for the Project
(“Agency Loan”);
EXHIBIT 2
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P a g e | 2
- A 99-year ground lease for the property located at 801, 809, and 809½ East Santa
Ana Boulevard (APNs: 398-303-04, 398-303-05, 398-303-06, and 398-303-07,
with a combined appraised value of $788,000.00 as of October 25, 2018); to be
used for development of affordable housing at 801, 809, and 809½ East Santa
Ana Boulevard, Santa Ana, CA 92701 (“Ground Lease”); and,
- Three (3) U.S. Department of Housing and Urban Development-Veterans Affairs
Supportive Housing (“HUD-VASH”) Project-Based Vouchers (“PBV”) for
Permanent Supportive Housing for the Project.
This letter shall evidence the Agency’s pre-commitment of the Agency Assistance to the
Developer for the Project subject to the conditions described below.
Agency Loan:
The amount of the proposed Agency Loan has been determined based upon the Agency’s
review of the Developer's request for the receipt of the Agency Assistance and the
development proforma and projected cash flows for the Project submitted by the Developer
to the Agency (“Proforma”). The Housing Authority Executive Director has authority to
approve revised development proformas and projected cash flows for the Project; provided,
however, that the Agency Assistance is not increased or extended.
The Agency Loan shall include the following terms:
$1,069,947.00 maximum principal amount, or as much thereof as is disbursed for
hard and soft costs in constructing the Project, provided from Santa Ana Housing
Successor Agency Low and Moderate Income Housing Asset Funds.
3% simple interest per annum.
Repayment from 50% of Residual Receipts (pro-rata with payments due in
connection with other financing provided by other public agencies) (after payment of
operating expenses, debt service, any deferred developer fee, and partnership fees
to be described in the Agreement) with the remaining 50% to be disbursed to the
Developer.
Remaining principal and accrued interest due upon the 55th anniversary of the
issuance of Certificate of Occupancy and/or final building permits or earlier upon sale,
refinancing or default. On that date, the City/Agency agrees to review the
performance of the property and consider in good faith any reasonable request by
Developer to modify the terms or extend the term of the Agency Promissory Notes.
Additionally, the Agency will receive a pro rata share of 50% of the net proceeds
received from any sale or refinancing of the Project, after payment of outstanding
debt and payment in full of any deferred developer fee and establishment of any
reserves and transaction costs.
EXHIBIT 2
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P a g e | 3
Cost savings from the Project, if any, will be applied first to pay down the Agency
Loan, subject to compliance with the Tax Credit Allocation Committee (“TCAC”)
Regulations and California Health and Safety Code.
Ground Lease:
The Project will be located at 801, 809, and 809½ East Santa Ana Boulevard (APNs: 398-
303-04, 398-303-05, 398-303-06, and 398-303-07) (“Property”). The Housing Authority
currently owns the Property. Accordingly, the Housing Authority Board authorized the
lease of the Property to the Developer for the Project. After Developer secures all of its
remaining financing for the development of the Project, staff will return to the Housing
Authority for consideration of a 99-year Ground Lease Agreement.
HUD-VASH PBV’s:
The Project consists of twelve (12) permanent supportive housing units for homeless
individuals and families, including three (3) units to be made available at affordable rents
to HUD-VASH eligible homeless veterans for a term of fifty-five (55) years. All individuals
and families shall be referred from the Orange County Coordinated Entry System, and
are residing or working in the City of Santa Ana as defined under the City’s criteria. Efforts
shall be made to incorporate ground-level retail as an interface for the forthcoming
Orange County Streetcar.
The HUD-VASH PBV’s shall include the following terms:
Voucher Source: The three (3) HUD-VASH PBVs will be funded exclusively out of
the tenant-based voucher program annual budget authority received by the
Housing Authority from the U.S. Department of Housing and Urban Development
(HUD).
Rents: The PBV Housing Assistance Payments (“HAP”) Contract rents below are
preliminary and contingent upon a reasonable rent determination to be conducted
at the time of execution of the HAP Contract:
o 1 Bedroom - $1,599
o 2 Bedroom - $1,996
In accordance with HUD regulations and the Housing Authority’s Housing Choice
Voucher Program Administrative Plan, these rents are subject to review prior to
the execution of a HAP Contract.
Rents and income requirements for the remaining affordable units shall be based
on the requirements of the federal Low Income Housing Tax Credit Program as
administered by TCAC.
Annual Amount: The Project will receive PBVs for three (3) units:
EXHIBIT 2
3-15
P a g e | 4
Unit Size Income
Target No. Units Proposed Rent Total Annual
Revenue
1-Br 30% AMI 1 $1,599 $19,188
2-Br 30% AMI 2 $1,996 $47,904
The estimated maximum annual amount received under this award is $67,092.
These estimates assume 100% occupancy of the assisted units over the twelve -
month period.
Term: The HAP Contract will have a term of twenty (20) years. Any time before
the expiration of the HAP Contract, the Developer may request an additional
twenty (20) years, subject to a determination by the Housing Authority that it is
appropriate to continue providing affordab le housing for low-income families or to
expand housing opportunities and HUD funding. Subsequent extensions are
subject to the same requirements.
Units Receiving PBV Assistance: The maximum number of units receiving PBV
assistance will be three (3).
General Provisions:
The Agency's obligation to provide the Agency Assistance to the Project is subject to each
of the following conditions:
Developer must provide proof that it has secured all of its remaining financing for
the development of the Project before staff will return to the City Council and/or
Housing Authority for consideration of the Loan Agreement and Ground Lease
Agreement.
All provided funding and project requirements shall conform to the City’s adopted
Affordable Housing Funds Policies and Procedures, unless alternative
requirements are expressly provided in the executed Loan Agreement, Ground
Lease Agreement, or any other documents related to the development of the
Project.
Approval of all required entitlements and discretionary actions, to allow the
construction of a 12-unit affordable housing complex to be located at 801, 809, and
809½ East Santa Ana Boulevard, Santa Ana, CA 92701.
The Agency's obligation to provide the Loan is and shall remain subject to all
covenants, conditions, and restrictions set forth in the Loan Agreement, and in
particular Agency's analysis of the available funding sources and development and
operating costs of the Project and the overall economic feasibility of the Project.
EXHIBIT 2
3-16
P a g e | 5
Review and approval of the documents evidencing the Agency Loan by the City
Council and/or Housing Authority, as applicable.
Review and approval of the documents evidencing the Ground Lease by the Housing
Authority.
Execution of HAP Contracts and all necessary documents for the PBV’s.
Project funding and PBV awards are predicated on the successful execution of a
99-year Ground Lease Agreement by the Developer with the Housing Authority.
Compliance with California Health and Safety Code and applicable regulations set
forth in Section 34176.
Developer, at its sole cost and expense, will be responsible for securing any and all
permits and discretionary approvals that may be required for the Project by the City,
Housing Authority, or any other federal, state, or local governmental entity having or
claiming jurisdiction over the Property or Project. Notably, this pre-commitment letter
shall not obligate the City or any department thereof to approve any application or request
for or take any other action in connection with any planning approval, permit or other
action necessary for the construction, rehabilitation, installation or operation of the
Project.
This pre-commitment letter for the Project will expire on January 15, 2021.
If you have any questions or require any additional information regarding this award letter,
please contact Judson Brown, Housing Division Manager, by telephone at (714) 667-
2241 or by e-mail at jbrown@santa-ana.org.
Sincerely,
_________________________________
Steven Mendoza
Housing Authority Executive Director
Attest:
_________________________________
Maria D. Huizar
Recording Secretary
EXHIBIT 2
3-17
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500 SOUTH GRAND AVENUE, SUITE 1480 LOS ANGELES, CALIFORNIA 90071 PHONE 213.622.8095
1901007:SA:TRB
WWW.KEYSERMARSTON.COM 19090.017.010
ADVISORS IN:
Real Estate
Affordable Housing
Economic Development
BERKELEY
A. Jerry Keyser
Timothy C. Kelly
Debbie M. Kern
David Doezema
Kevin Feeney
LOS ANGELES
Kathleen H. Head
James A. Rabe
Gregory D. Soo-Hoo
Kevin E. Engstrom
Julie L. Romey
Tim R. Bretz
SAN DIEGO
Paul C. Marra
MEMORANDUM
To: Judson Brown, Housing Division Manager
City of Santa Ana
From: Tim Bretz
Date: January 9, 2019
Subject: Francis Xavier Residence: Preliminary Financial Gap Analysis
At your request, Keyser Marston Associates, Inc. (KMA) prepared a preliminary financial
gap analysis for the project proposed to be developed at 801 – 809 ½ East Santa Ana
Boulevard (Site) by HomeAid Orange County (HomeAid) and Mercy House (Mercy
House), collectively referred to as “Developer.” The Site is currently owned by the City
of Santa Ana Housing Authority (Authority). As proposed, the project will include 12
units that will be restricted to extremely-low income households (Project).
The Developer is requesting the following financial assistance:
1. $1.07 million in Low and Moderate Income Housing Asset Funds (LMIHAF) from
the Authority;
2. Veterans Affairs Supportive Housing (VASH) Vouchers allocated to the Authority
by the United States Department of Housing and Urban Development (HUD); and
3. To enter into a long-term ground lease with the Authority for the Site.
The purpose of the KMA analysis is to evaluate the Developer’s financial assistance
request.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
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EXECUTIVE SUMMARY
Estimated Financial Gap
The results of the KMA financial gap analysis are compared to the Developer’s financial
proposal in the following table:
KMA Developer Difference
Total Construction Costs $4,195,000 $4,234,000 ($39,000)
Outside Funding Sources 3,164,000 3,164,000 -0-
Financial Gap $1,031,000 $1,070,000 ($39,000)
As shown in the preceding table, KMA estimates the Project’s financial gap at $1.03
million. Comparatively, the Developer is requesting $1.07 million in financial assistance
from the Authority. This represents an approximately 1% differential which can be
considered inconsequential. However, it is important to note that the KMA and
Developer estimates differ on a line item by line item basis.
Proposed Funding Sources
The following summarizes the proposed funding sources for the Project:
1. The Project’s stabilized net operating income (NOI) supports a $449,000
conventional permanent loan. The NOI includes the rental subsidy generated by
the following:
a. Three (3) VASH Vouchers awarded to the Project by the Authority; and
b. A Capitalized Operating Subsidy Reserve (COSR) for nine units awarded
by the California Department of Housing and Community Development
(HCD) through the No Place Like Home Program (NPLH).
2. The Developer is proposing to apply for a $2.35 million loan of NPLH funds
awarded by HCD.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
Francis Xavier Residence: Preliminary Financial Gap Analysis Page 3
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3. The Developer is proposing to defer $365,000 of the Developer Fee that is
included in the Project’s development costs. The deferred amount will be repaid
from the cash flow generated by the Project over time.
PROJECT DESCRIPTION
The proposed scope of development can be described as follows:
1. The Site area totals 0.34 acres, or approximately 15,000 square feet of land area.
2. The 12-unit Project represents a density of 35 units per acre.
3. The Project’s unit mix is as follows:
Number of Units Unit Size (SF)
One-Bedroom Units 10 600
Two-Bedroom Units 2 800
Total / Weighted Average 12 633
4. The Project’s gross building area (GBA) is estimated at approximately 14,800
square feet.
5. The Project will include 12 garage parking spaces, which equates to one space
per unit.
6. Each of the 12 units in the Project will be restricted to households earning the
lesser of:
a. Extremely Low Income per the definitions set forth in California Health
and Safety Code (H&SC); and
b. 25% of the NPLH Area Median Income (AMI).
7. The Project will not include an on-site manager’s unit.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
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8. The Project’s units are targeted towards homeless veterans and homeless
individuals.
FINANCIAL GAP ANALYSIS
KMA prepared a pro forma analysis to estimate the Project’s financial gap. The analysis
is located at the end of this memorandum, and is organized as follows:
Table 1: Estimated Construction Costs
Table 2: Stabilized Net Operating Income
Table 3: Financial Gap Calculation
Estimated Construction Costs (Table 1)
KMA reviewed the Developer’s January 9, 2019 pro forma and then independently
prepared a pro forma analysis of the Project. The resulting construction costs are as
follows:
Direct Costs
The direct costs assume that the Project will not be subject to State of California and/or
Federal Davis Bacon prevailing wage requirements. The direct costs applied in this
analysis can be summarized as follows:
1. The on-site improvement costs are estimated at $15 per square foot of land
area, or $225,000.
2. The residential building costs are estimated at $130 per square foot of GBA,
which equates to $1.92 million.
3. A $50,000 allowance for furnishings, fixtures and equipment is provided.
4. The contractor costs are estimated as follows:
a. A 12% allowance for contractors’ fees and general requirements is
provided.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
Francis Xavier Residence: Preliminary Financial Gap Analysis Page 5
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19090.017.010
b. An allowance for construction bonds / general liability insurance at 2% of
construction costs is provided.
5. KMA included a $125,000 direct cost contingency allowance, which is equal to
5% of other direct costs.
KMA estimates the total direct costs at $2.62 million. This equates to $177 per square
foot of GBA.
Indirect Costs
KMA utilized the following assumptions in estimating the indirect costs:
1. The architecture, engineering and consulting costs are estimated at 7% of direct
costs.
2. The Developer estimated the public permits and fees costs at $375,000, or
approximately $31,300 per unit. City of Santa Ana (City) staff should verify the
accuracy of this estimate.
3. The taxes, legal and accounting costs are estimated at 6% of direct costs.
4. The insurance costs are estimated at $27,000, or $2,250 per unit.
5. An approximately $1,700 per unit allowance for marketing and leasing costs is
provided, which equates to $20,000.
6. The Developer set the Developer Fee at $498,000, which is equal to 13% of the
net construction costs.1
7. An indirect cost contingency allowance equal to 7% of other indirect costs is
provided.
KMA estimates the total indirect costs at $1.35 million.
1 Net construction costs equate to the total construction costs less the developer fee amount.
EXHIBIT 3
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Financing Costs
The financing costs for the Project are estimated as follows:
1. The construction period and absorption period interest costs are estimated at
$13,000. These costs are based on the following assumptions:
a. The construction period interest costs are based on a 5.30% interest rate,
a 14-month construction period, and a 60% average outstanding balance.
b. The absorption period interest costs are based on a four-month
absorption period with a 100% average outstanding balance.
2. The Developer estimates the financing fees as follows:
a. The financing fees for the construction loan are estimated at $18,000,
which equates to 7.75 points; and
b. The financing fees for the permanent loan are estimated at $12,000,
which equates to 2.75 points.
3. The following capitalized reserves will be provided:
a. A $67,000 capitalized operating reserve is provided, which equates to six
months of operating expenses and debt service payments; and
b. The Developer included a $112,000 transition reserve to satisfy the NPLH
Program.
KMA estimates the total financing costs at $222,000.
Total Construction Costs
As shown in Table 1, KMA estimates the total construction costs at $4.20 million, which
equates to approximately $349,600 per unit. In comparison, the Developer estimates
the total construction costs at $4.23 million. This equates to an approximately 1%
differential, which can be considered an insignificant difference.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
Francis Xavier Residence: Preliminary Financial Gap Analysis Page 7
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19090.017.010
Stabilized Net Operating Income (Table 2)
The Project’s funding sources include NPLH funds and LMIHAF funds. The Project’s
income and affordability standards must comport with the most stringent of the
following:
1. Income Restrictions: The tenants’ household incomes cannot exceed the stricter
of:
a. H&SC Section 50106 for extremely low income households; and
b. The applicable income limits published by HCD for the NPLH Program.
2. Affordability Restrictions: Rents applied to all of the units must reflect the more
stringent of:
a. H&SC extremely low income rents based on the calculation defined in
Section 50053; and
b. The applicable rents published by HCD for the NPLH Program.
Tenant-Paid Rents
The rents used in this analysis are based on 2018 income and rent information published
by HCD. Additionally, for the purposes of underwriting the project, the maximum
tenant-paid rents are also limited by 30% of the monthly Supplemental Security Income
allowance. The maximum allowable rents, net of the appropriate utility allowances, are
estimated as follows:2
Rent Restriction 1-Bedroom 2-Bedrooms
H&SC ELI / NPLH @ 25% Median
30% Supplemental Security Income $250 $429
H&SC Extremely Low Income $527 $586
NPLH @ 25% NPLH Median $586 $698
Applicable Rents $250 $429
2 The utility allowances are estimated at: $29 for one-bedroom units and $40 for two-bedroom units.
EXHIBIT 3
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The Authority will provide VASH Vouchers for three of the income-restricted units. The
VASH payments are based on the difference between the rent paid by the tenant and
the fair market rent (FMR) approved by HUD. The 2019 FMRs are as follows:
1. $1,599 per unit per month for the one-bedroom units; and
2. $1,996 per unit per month for the two-bedroom units.
In addition, the NPLH Program will provide a COSR for nine one-bedroom units in the
Project. The Developer estimates the FMR for the COSR units at $845 per unit per
month.
Estimated Effective Gross Income
KMA estimates the Project’s effective gross income (EGI) at $142,600 based on the
following:
1. The gross tenant-paid rents are estimated to total $40,300.
2. The gross VASH and COSR subsidies are estimated to total $118,100.
3. A 10% vacancy and collection allowance is applied to the gross income.
Estimated Operating Expenses
The operating expenses are estimated at $88,300 based on the following:
1. The general operating expenses are estimated at $5,700 per unit per year.
2. KMA assumes that the Developer will apply for the property tax abatement that
is accorded to non-profit housing organizations that own and operate apartment
units restricted to households earning less than 80% of the area median income.
The property tax assessment overrides are estimated at $4,200.
3. The Project’s operating budget does not include any social service expenses. Per
the Developer, under the NPLH Program the social services will be provided by
the County of Orange or their designated service provider to provide social
services to the Project’s residents.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
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19090.017.010
4. The NPLH Loan has a mandatory debt service payment equal to 0.42% of the
NPLH Loan amount, which equals $9,900 per year.
5. The replacement reserve deposits are set at $500 per unit per year, which is
required by the NPLH Program.
Estimated Stabilized Net Operating Income
The Project’s EGI is estimated at $142,600, and the operating expenses are estimated at
$88,300. This results in estimated stabilized net operating income of $54,300.
Financial Gap Calculation
The financial gap is estimated by deducting the available outside funding sources from
the Project’s total construction costs. The outside funding sources anticipated to be
received by the Project are described in the following sections of this memorandum.
Available Outside Funding Sources
Permanent Loan
To estimate the maximum permanent loan that can be supported by the Project’s NOI,
KMA assumed that the loan would be underwritten based on the following
requirements:
1. A 118% debt service coverage ratio;
2. A 6.15% interest rate; and
3. A 15-year amortization period.
KMA estimates that the Project’s stabilized NOI can support a $449,000 conventional
loan.
NPLH Loan
The Developer anticipates receiving a $2.35 million NPLH Loan.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
Francis Xavier Residence: Preliminary Financial Gap Analysis Page 10
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Deferred Developer Fee
The Developer is proposing to defer $365,000, or 73% of the Developer Fee that is
included in the Project’s construction costs. The deferred amount will be repaid from
the cash flow generated by the Project over time.
Total Available Outside Funding Sources
As shown in Table 3, the outside funding sources available to the Project are estimated
at $3.16 million.
Financial Gap Calculation
Based on the preceding analysis, KMA estimates the Project’s financial gap as follows:
Total Construction Costs $4,195,000
(Less) Total Available Funding Sources (3,164,000)
Financial Gap $1,031,000
Per Unit $85,900
As shown in the preceding analysis, KMA estimates that the Project exhibits a $1.03
million financial gap. In contrast, the Developer is requesting $1.07 million in financial
assistance from the Authority. This represents a $39,000 differential, which is an
approximately 1% difference. It is the KMA opinion that a difference of this magnitude
can be considered insignificant.
CONCLUSIONS / ISSUES FOR CONSIDERATION
The following summarizes the conclusions of the KMA analysis:
1. Based on the currently available information, it is KMA’s conclusion that the
Project exhibits a $1.03 million financial gap, which is approximately equal to the
Developer’s $1.07 million financial assistance request. As such, KMA concludes
that the Developer’s request is warranted by the Project’s economics.
EXHIBIT 3
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Judson Brown, City of Santa Ana January 9, 2019
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2. It should be noted that the Developer and City staff are discussing the possibility
of adding ground floor retail space to the Project. The addition of retail space to
the Project may require this financial analysis to be updated. Furthermore, it is
important to note that the LMIHAF funds cannot be used to pay for any retail
costs.
3. While the construction costs appear reasonable, KMA recommends that the City
require the Developer to obtain three general contractor bids prior to selecting a
general contractor. The three bids should be provided to the City for review and
approval.
4. KMA recommends the following ground lease terms:
a. A 55-year ground lease.
b. A capitalized ground rent payment equal to the appraised fair market
value of the Site and secured by a promissory note with the following
terms:
i. A 3% simple interest rate; and
ii. Repayment of the capitalized ground rent promissory note equal
to the pro rata share of 50% of residual receipts with other soft
lenders.
EXHIBIT 3
3-28
TABLE 1
ESTIMATED CONSTRUCTION COSTS
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
I.Direct Costs 1
Site Improvements 15,000 Sf Land $15 /Sf Land $225,000
Residential Building Costs 14,792 Sf GBA $130 /Sf GBA 1,923,000
Furnishings, Fixtures & Equipment 50,000
Contractor Fees / General Requirements 12%Construction Costs 258,000
General Liability Insurance / Const Bonds 2%Construction Costs 43,000
Contingency Allowance 5%Other Direct Costs 125,000
Total Direct Costs 14,792 Sf GBA $177 /Sf GBA $2,624,000
II.Indirect Costs
Architecture, Engineering & Consulting 7.0%Direct Costs $184,000
Permits & Fees 2 12 Units $31,250 /Unit 375,000
Taxes, Legal & Accounting 6.0%Direct Costs 157,000
Insurance 12 Units $2,250 /Unit 27,000
Marketing & Leasing 12 Units $1,667 /Unit 20,000
Developer Fee 3 13%Net Construction Costs 498,000
Contingency Allowance 7.0%Other Indirects 88,000
Total Indirect Costs $1,349,000
III.Financing Costs
Interest During Construction 4 $238,000 Loan Amount 5.30%Interest $13,000
Financing Fees 5
Construction Loan $238,000 Loan Amount 7.75 Points 18,000
Permanent Loan $449,000 Loan Amount 2.75 Points 12,000
Capitalized Reserves
Operating Reserve 5 6 Months Operate Expenses & Debt Svc Pmts 67,000
NPLH Transition Reserve 5 112,000
Total Financing Costs $222,000
IV.Total Construction Costs 12 Units $349,600 /Unit $4,195,000
1 Estimates assume prevailing wage requirements will not be imposed on the Project.
2 Based on Developer estimate. The estimate should be verified by City staff.
3 Net construction costs equate to the total construction costs less the developer fee.
4
5 Based on Developer estimates.
Based on a 14-month construction period with a 60% average outstanding balance; and a 4-month absorption period with a 100% average outstanding
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; Pro Forma; trb
EXHIBIT 3
3-29
TABLE 2
STABILIZED NET OPERATING INCOME
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
I.Gross Residential Income 1
Manager's Unit - Unit $0 /Unit/Month $0
ELI H&SC/NPLH @ 25% Median/VASH
1-Bedroom Units @ (600-Sf)1 Units $250 /Unit/Month 3,000
2-Bedroom Units @ (800-Sf)2 Units $429 /Unit/Month 10,300
ELI H&SC/NPLH @ 25% Median/COSR
1-Bedroom Units @ (600-Sf)9 Units $250 /Unit/Month 27,000
VASH/COSR Subsidy
ELI H&SC/NPLH @ 25% Median/VASH
1-Bedroom Units @ (600-Sf)1 Units $1,349 /Unit/Month 16,200
2-Bedroom Units @ (800-Sf)2 Units $1,567 /Unit/Month 37,600
ELI H&SC/NPLH @ 25% Median/COSR
1-Bedroom Units @ (600-Sf)9 Units $595 /Unit/Month 64,300
Gross Rental Income 12 Units $158,400
(Less) Vacancy & Collection Allowance 10.0%Gross Income (15,800)
Effective Gross Income $142,600
II.Operating Expenses
General Operating Expenses 12 Units $5,680 /Unit $68,200
Property Taxes 2 12 Units $350 /Unit 4,200
HCD Mandatory Interest Payment 3 $2,350,000 NPLH Loan 0.42%NPLH Loan 9,900
Replacement Reserve 3 12 Units $500 /Unit 6,000
Total Operating Expenses 12 Units $7,358 /Unit $88,300
III.Net Operating Income $54,300
1
2
3
Based on the assumption that the Developer will receive the property tax abatement accorded to non-profit housing organizations that own and
operate apartment units restricted to households earning less than 80% of the area median income.
Based on the requirements of the No Place Like Home (NPLH) Program.
Based on Orange County 2018 Incomes distributed by HUD/HCD. As pertinent, the rents are based on rents published in 2018 by HCD, CA H&SC
Section 50053, and 30% of SSI. Utility Allowances per the Developer: $29 for 1-Bdrm units; and $40 for 2-Bdrm units.
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; Pro Forma; trb
EXHIBIT 3
3-30
TABLE 3
FINANCIAL GAP CALCULATION
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
I.Available Funding Sources
Permanent Loan 1
Net Operating Income $54,300 NOI (See Table 2)
Income Available for Mortgage 1.18 DCR $45,929 Debt Service
Interest Rate 6.15%Interest Rate 10.22%Mortgage Constant
Permanent Loan $449,000
No Place Like Home (NPLH) Loan 2 $2,350,000
Deferred Developer Fee 2 73%Total Developer Fee $365,000
Total Available Funding Sources $3,164,000
II.Financial Gap Calculation
Total Available Funding Sources $3,164,000
(Less) Total Construction Costs (4,195,000)
III.Financial Surplus / (Financial Gap)12 Units ($85,900)/Unit ($1,031,000)
1 Assumes a 15-year amortization term.
2 Based on Developer estimate.
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; Pro Forma; trb
EXHIBIT 3
3-31
TABLE 4
CASH FLOW ANALYSIS
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
I.Gross Residential Income 1
Gross Affordable Rental Income $40,300 $41,308 $42,340 $43,399 $44,484 $45,596 $46,736 $47,904 $49,102 $50,329
VASH/COSR Subsidy 118,100 121,053 124,079 127,181 130,360 133,619 136,960 140,384 143,893 147,491
(Less) Vacancy & Collection Allowance (15,841)(16,237)(16,643)(17,059)(17,485)(17,922)(18,370)(18,830)(19,300)(19,783)
Effective Gross Base Income $142,559 $146,123 $149,776 $153,521 $157,359 $161,293 $165,325 $169,458 $173,695 $178,037
II.Operating Expenses 2
General Operating Expenses $68,200 $70,587 $73,058 $75,615 $78,261 $81,000 $83,835 $86,769 $89,806 $92,950
Property Taxes 4,200 4,284 4,370 4,457 4,546 4,637 4,730 4,824 4,921 5,019
HCD Mandatory Interest Payment 9,900 10,247 10,605 10,976 11,360 11,758 12,170 12,596 13,036 13,493
Replacement Reserve 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Total Operating Expenses $88,300 $91,118 $94,032 $97,048 $100,168 $103,395 $106,735 $110,189 $113,764 $117,462
III.Net Operating Income $54,259 $55,006 $55,744 $56,473 $57,191 $57,897 $58,590 $59,269 $59,931 $60,575
(Less) Debt Service 3 (45,905)(45,905)(45,905)(45,905)(45,905)(45,905)(45,905)(45,905)(45,905)(45,905)
Net Income After Debt Service $8,354 $9,101 $9,839 $10,568 $11,286 $11,992 $12,685 $13,364 $14,026 $14,670
IV.Cash Flow Available for Contingent Payments $8,354 $9,101 $9,839 $10,568 $11,286 $11,992 $12,685 $13,364 $14,026 $14,670
(Less) Deferred Developer Fee (8,354)(9,101)(9,839)(10,568)(11,286)(11,992)(12,685)(13,364)(14,026)(14,670)
V.Cash Flow after Contingent Payments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Nominal Dollars $2,105,259 $116,000 NPV @ 10% Discount Rate
VI.Residual Receipt Payments to NPLH Loan $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Nominal Dollars $723,281 $40,000 NPV @ 10% Discount Rate
VII.Residual Receipt Payments to Authority Loan $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Nominal Dollars $329,348 $18,000 NPV @ 10% Discount Rate
VIII.Residual Receipt Payments to Developer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Nominal Dollars $1,052,630 $58,000 NPV @ 10% Discount Rate
1
2
3
The affordable rents and VASH/COSR subsidy are assumed to
increase by 102.5%/year. Assumes Year 1 is at stabilization.
General operating expenses are assumed to increase by
103.5%/year, property taxes at 102.0%/year and replacement
reserves remain constant.
SEE TABLE 3
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; CF; trb
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TABLE 4
CASH FLOW ANALYSIS
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
I.Gross Residential Income 1
Gross Affordable Rental Income
VASH/COSR Subsidy
(Less) Vacancy & Collection Allowance
Effective Gross Base Income
II.Operating Expenses 2
General Operating Expenses
Property Taxes
HCD Mandatory Interest Payment
Replacement Reserve
Total Operating Expenses
III.Net Operating Income
(Less) Debt Service 3
Net Income After Debt Service
IV.Cash Flow Available for Contingent Payments
(Less) Deferred Developer Fee
V.Cash Flow after Contingent Payments
Nominal Dollars
VI.Residual Receipt Payments to NPLH Loan
Nominal Dollars
VII.Residual Receipt Payments to Authority Loan
Nominal Dollars
VIII.Residual Receipt Payments to Developer
Nominal Dollars
1
2
3
The affordable rents and VASH/COSR subsidy are assumed to
increase by 102.5%/year. Assumes Year 1 is at stabilization.
General operating expenses are assumed to increase by
103.5%/year, property taxes at 102.0%/year and replacement
reserves remain constant.
SEE TABLE 3
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22
$51,587 $52,877 $54,199 $55,554 $56,943 $58,366 $59,826 $61,321 $62,854 $64,426 $66,036 $67,687
151,178 154,957 158,831 162,802 166,872 171,044 175,320 179,703 184,196 188,801 193,521 198,359
(20,278)(20,785)(21,304)(21,837)(22,383)(22,942)(23,516)(24,104)(24,706)(25,324)(25,957)(26,606)
$182,488 $187,050 $191,726 $196,519 $201,432 $206,468 $211,630 $216,921 $222,344 $227,902 $233,600 $239,440
$96,203 $99,570 $103,055 $106,662 $110,395 $114,259 $118,258 $122,397 $126,681 $131,115 $135,704 $140,453
5,120 5,222 5,327 5,433 5,542 5,653 5,766 5,881 5,999 6,119 6,241 6,366
13,965 14,454 14,960 15,483 16,025 16,586 17,166 17,767 18,389 19,033 19,699 20,388
6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
$121,288 $125,246 $129,341 133,578 $137,962 $142,497 $147,190 $152,045 $157,069 $162,266 $167,643 $173,207
$61,200 $61,804 $62,385 $62,941 $63,471 $63,971 $64,440 $64,876 $65,275 $65,636 $65,956 $66,232
(45,905)(45,905)(45,905)(45,905)(45,905)0 0 0 0 0 0 0
$15,295 $15,899 $16,480 $17,037 $17,566 $63,971 $64,440 $64,876 $65,275 $65,636 $65,956 $66,232
$15,295 $15,899 $16,480 $17,037 $17,566 $63,971 $64,440 $64,876 $65,275 $65,636 $65,956 $66,232
(15,295)(15,899)(16,480)(17,037)(17,566)(63,971)(64,440)(38,425)0 0 0 0
$0 $0 $0 $0 $0 $0 $0 $26,450 $65,275 $65,636 $65,956 $66,232
$0 $0 $0 $0 $0 $0 $0 $9,087 $22,426 $22,550 $22,660 $22,755
$0 $0 $0 $0 $0 $0 $0 $4,138 $10,212 $10,268 $10,318 $10,361
$0 $0 $0 $0 $0 $0 $0 $13,225 $32,638 $32,818 $32,978 $33,116
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; CF; trb
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TABLE 4
CASH FLOW ANALYSIS
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
I.Gross Residential Income 1
Gross Affordable Rental Income
VASH/COSR Subsidy
(Less) Vacancy & Collection Allowance
Effective Gross Base Income
II.Operating Expenses 2
General Operating Expenses
Property Taxes
HCD Mandatory Interest Payment
Replacement Reserve
Total Operating Expenses
III.Net Operating Income
(Less) Debt Service 3
Net Income After Debt Service
IV.Cash Flow Available for Contingent Payments
(Less) Deferred Developer Fee
V.Cash Flow after Contingent Payments
Nominal Dollars
VI.Residual Receipt Payments to NPLH Loan
Nominal Dollars
VII.Residual Receipt Payments to Authority Loan
Nominal Dollars
VIII.Residual Receipt Payments to Developer
Nominal Dollars
1
2
3
The affordable rents and VASH/COSR subsidy are assumed to
increase by 102.5%/year. Assumes Year 1 is at stabilization.
General operating expenses are assumed to increase by
103.5%/year, property taxes at 102.0%/year and replacement
reserves remain constant.
SEE TABLE 3
Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34
$69,379 $71,114 $72,892 $74,714 $76,582 $78,496 $80,459 $82,470 $84,532 $86,645 $88,811 $91,032
203,318 208,401 213,611 218,951 224,425 230,035 235,786 241,681 247,723 253,916 260,264 266,770
(27,271)(27,953)(28,652)(29,368)(30,102)(30,855)(31,626)(32,417)(33,227)(34,058)(34,909)(35,782)
$245,426 $251,561 $257,851 $264,297 $270,904 $277,677 $284,619 $291,734 $299,028 $306,503 $314,166 $322,020
$145,369 $150,457 $155,723 $161,173 $166,814 $172,653 $178,696 $184,950 $191,423 $198,123 $205,057 $212,234
6,493 6,623 6,755 6,891 7,028 7,169 7,312 7,459 7,608 7,760 7,915 8,073
21,102 21,841 22,605 23,396 24,215 25,063 25,940 26,848 27,787 28,760 29,766 30,808
6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
$178,964 $184,921 $191,083 $197,460 $204,058 $210,884 $217,948 $225,256 $232,818 $240,643 $248,739 $257,116
$66,462 $66,641 $66,767 $66,837 $66,846 $66,792 $66,671 $66,478 $66,209 $65,860 $65,427 $64,904
0 0 0 0 0 0 0 0 0 0 0 0
$66,462 $66,641 $66,767 $66,837 $66,846 $66,792 $66,671 $66,478 $66,209 $65,860 $65,427 $64,904
$66,462 $66,641 $66,767 $66,837 $66,846 $66,792 $66,671 $66,478 $66,209 $65,860 $65,427 $64,904
0 0 0 0 0 0 0 0 0 0 0 0
$66,462 $66,641 $66,767 $66,837 $66,846 $66,792 $66,671 $66,478 $66,209 $65,860 $65,427 $64,904
$22,834 $22,895 $22,938 $22,962 $22,966 $22,947 $22,905 $22,839 $22,747 $22,627 $22,478 $22,298
$10,397 $10,425 $10,445 $10,456 $10,458 $10,449 $10,430 $10,400 $10,358 $10,303 $10,235 $10,154
$33,231 $33,320 $33,384 $33,418 $33,423 $33,396 $33,336 $33,239 $33,105 $32,930 $32,713 $32,452
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; CF; trb
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TABLE 4
CASH FLOW ANALYSIS
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
I.Gross Residential Income 1
Gross Affordable Rental Income
VASH/COSR Subsidy
(Less) Vacancy & Collection Allowance
Effective Gross Base Income
II.Operating Expenses 2
General Operating Expenses
Property Taxes
HCD Mandatory Interest Payment
Replacement Reserve
Total Operating Expenses
III.Net Operating Income
(Less) Debt Service 3
Net Income After Debt Service
IV.Cash Flow Available for Contingent Payments
(Less) Deferred Developer Fee
V.Cash Flow after Contingent Payments
Nominal Dollars
VI.Residual Receipt Payments to NPLH Loan
Nominal Dollars
VII.Residual Receipt Payments to Authority Loan
Nominal Dollars
VIII.Residual Receipt Payments to Developer
Nominal Dollars
1
2
3
The affordable rents and VASH/COSR subsidy are assumed to
increase by 102.5%/year. Assumes Year 1 is at stabilization.
General operating expenses are assumed to increase by
103.5%/year, property taxes at 102.0%/year and replacement
reserves remain constant.
SEE TABLE 3
Year 35 Year 36 Year 37 Year 38 Year 39 Year 40 Year 41 Year 42 Year 43 Year 44 Year 45 Year 46
$93,307 $95,640 $98,031 $100,482 $102,994 $105,569 $108,208 $110,913 $113,686 $116,528 $119,441 $122,428
273,440 280,276 287,282 294,464 301,826 309,372 317,106 325,034 333,160 341,489 350,026 358,776
(36,677)(37,593)(38,533)(39,497)(40,484)(41,496)(42,534)(43,597)(44,687)(45,804)(46,949)(48,123)
$330,070 $338,322 $346,780 $355,450 $364,336 $373,444 $382,781 $392,350 $402,159 $412,213 $422,518 $433,081
$219,663 $227,351 $235,308 $243,544 $252,068 $260,890 $270,022 $279,472 $289,254 $299,378 $309,856 $320,701
8,235 8,400 8,568 8,739 8,914 9,092 9,274 9,459 9,648 9,841 10,038 10,239
31,887 33,003 34,158 35,353 36,591 37,871 39,197 40,569 41,988 43,458 44,979 46,553
6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
$265,784 $274,753 $284,033 $293,636 $303,572 $313,853 $324,492 $335,500 $346,891 $358,677 $370,873 $383,493
$64,286 $63,569 $62,747 $61,814 $60,764 $59,591 $58,289 $56,850 $55,268 $53,536 $51,645 $49,588
0 0 0 0 0 0 0 0 0 0 0 0
$64,286 $63,569 $62,747 $61,814 $60,764 $59,591 $58,289 $56,850 $55,268 $53,536 $51,645 $49,588
$64,286 $63,569 $62,747 $61,814 $60,764 $59,591 $58,289 $56,850 $55,268 $53,536 $51,645 $49,588
0 0 0 0 0 0 0 0 0 0 0 0
$64,286 $63,569 $62,747 $61,814 $60,764 $59,591 $58,289 $56,850 $55,268 $53,536 $51,645 $49,588
$22,086 $21,840 $21,557 $21,237 $20,876 $20,473 $20,026 $19,531 $18,988 $18,393 $17,743 $17,036
$10,057 $9,945 $9,816 $9,670 $9,506 $9,322 $9,119 $8,894 $8,646 $8,375 $8,079 $7,758
$32,143 $31,785 $31,373 $30,907 $30,382 $29,795 $29,144 $28,425 $27,634 $26,768 $25,822 $24,794
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; CF; trb
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TABLE 4
CASH FLOW ANALYSIS
FRANCIS XAVIER RESIDENCE
SANTA ANA, CALIFORNIA
I.Gross Residential Income 1
Gross Affordable Rental Income
VASH/COSR Subsidy
(Less) Vacancy & Collection Allowance
Effective Gross Base Income
II.Operating Expenses 2
General Operating Expenses
Property Taxes
HCD Mandatory Interest Payment
Replacement Reserve
Total Operating Expenses
III.Net Operating Income
(Less) Debt Service 3
Net Income After Debt Service
IV.Cash Flow Available for Contingent Payments
(Less) Deferred Developer Fee
V.Cash Flow after Contingent Payments
Nominal Dollars
VI.Residual Receipt Payments to NPLH Loan
Nominal Dollars
VII.Residual Receipt Payments to Authority Loan
Nominal Dollars
VIII.Residual Receipt Payments to Developer
Nominal Dollars
1
2
3
The affordable rents and VASH/COSR subsidy are assumed to
increase by 102.5%/year. Assumes Year 1 is at stabilization.
General operating expenses are assumed to increase by
103.5%/year, property taxes at 102.0%/year and replacement
reserves remain constant.
SEE TABLE 3
Year 47 Year 48 Year 49 Year 50 Year 51 Year 52 Year 53 Year 54 Year 55
$125,488 $128,625 $131,841 $135,137 $138,515 $141,978 $145,528 $149,166 $152,895
367,746 376,939 386,363 396,022 405,923 416,071 426,472 437,134 448,063
(49,326)(50,559)(51,823)(53,119)(54,447)(55,808)(57,203)(58,633)(60,099)
$443,908 $455,006 $466,381 $478,040 $489,991 $502,241 $514,797 $527,667 $540,859
$331,925 $343,543 $355,567 $368,012 $380,892 $394,223 $408,021 $422,302 $437,082
10,444 10,653 10,866 11,083 11,305 11,531 11,761 11,997 12,237
48,183 49,869 51,615 53,421 55,291 57,226 59,229 61,302 63,447
6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
$396,552 $410,065 $424,047 $438,516 $453,487 $468,980 $485,011 $501,600 $518,766
$47,356 $44,941 $42,334 $39,525 $36,504 $33,261 $29,786 $26,067 $22,093
0 0 0 0 0 0 0 0 0
$47,356 $44,941 $42,334 $39,525 $36,504 $33,261 $29,786 $26,067 $22,093
$47,356 $44,941 $42,334 $39,525 $36,504 $33,261 $29,786 $26,067 $22,093
0 0 0 0 0 0 0 0 0
$47,356 $44,941 $42,334 $39,525 $36,504 $33,261 $29,786 $26,067 $22,093
$16,270 $15,440 $14,544 $13,579 $12,541 $11,427 $10,233 $8,956 $7,590
$7,408 $7,031 $6,623 $6,183 $5,711 $5,203 $4,660 $4,078 $3,456
$23,678 $22,471 $21,167 $19,762 $18,252 $16,631 $14,893 $13,033 $11,046
Prepared by: Keyser Marston Associates, Inc.
Filename: Francis Xavier Residence PF_1 9 19; CF; trb
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HOUSING AUTHORITY
ITEM #4
ITEM IS A JOINT CITY
COUNCIL / HOUSING
AUTHORITY ITEM
PLEASE REFER TO AGENDA
ITEM 80A IN THE CITY
COUNCIL PACKET FOR
STAFF REPORT