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Home My WebLink AboutHABITAT FOR HUMANITY OF ORANGE COUNTYINStli iAvCE N01- I' i lliRr'0 MAYOR Ill Ii'My P N!JCEED Miguel A. Pulido CLI-lii{ 0," C -OU OIL MAYOR PRO TEM COUNCILMEArJuan Villegas APR 0 4 2019 IBERS Cecilia Iglesias David Penaloza Vacant �wY1C� �a4tt4"> Vicente Sarmiento Jose Solorio March 5, 2019 Community Development Agency 20 Civic Center Plaza a P.O. Box 1988 Santa Ana, California 92702 www.santa-ana.ora (714) 647-5360 Troy Hendrickson Vice President of Construction Habitat for Humanity of Orange County 2200 S. Ritchey Street Santa Ana, CA 92705 A-2019-053 ACTING CITY MANAGER Steven A. Mendoza CITY ATTORNEY Sonia R. Carvalho ACTING CLERK OF THE COUNCIL Norma Mitre -Ramirez Re: Lacy Street Project 416 Vance Street (APN 398-041-22) and 826 N. Lacy Street (APN 398-041-22), Santa Ana, CA 92701 Pre -Commitment Letter for Lease Agreement Habitat for Humanity of Orange County ("Developer") requested financial assistance in connection with the proposed development of a two (2) unit affordable housing project to be located at 416 Vance Street (APN 398-041-22) and 826 N. Lacy Street (APN 398-041-22) ("Project"). The City of Santa Ana ("City") and Housing Authority of the City of Santa Ana ("Housing Authority") have reviewed the Developer's request for assistance, and at the joint City Council / Housing Authority meeting on March 5, 2019, the City Council and Housing Authority Board authorized and approved issuance of this pre -commitment letter evidencing the preliminary award of ("Agency Assistance"): A loan in the maximum amount of $231,494 in inclusionary housing in -lieu fee payments made pursuant to the City's Housing Opportunity Ordinance (Article XVIII.I of Chapter 41 of the Santa Ana Municipal Code) (the "Inclusionary Housing Fund") held by the City of Santa Ana for the Project ("City Loan"); and, A 99 -year ground lease for the property located at 416 Vance Street (APN 398- 041-22) and 826 N. Lacy Street (APN 398-041-22), Santa Ana, CA 92701, with a combined appraised value of $578,000.00 as of October 25, 2018; to be used SANTA ANA CITY COUNCIL Miguel A. Pulido Juan Villegas Vicente Sarmiento David Penaloza Jose Solorio Vacant Cecilia Iglesias Mayor Mayor Pro Tem, Ward 5 Ward 1 Ward 2 Want 3 Ward 4 Waid g moulid9@onta-ana.ara vipergs@santa-ana.om yaxl'entoGDsanta-ana aro duenaloza/asantaanm my isolor'o(o)santasnpyy c_,gnsias(o']aant-ana.or Page 12 for the development of affordable housing at 416 Vance Street and 826 N. Lacy Street, Santa Ana, CA 92701 ("Ground Lease"). 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. City Loan: The amount of the proposed City Loan has been determined based upon the City'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 City ("Proforma"). The City Manager and Housing Authority Executive Director has authority to approve revised development proformas and projected cash flows for the Project; provided, however, that the City Assistance is not increased or extended. The City Loan shall include the following terms: • $231,494 maximum principal amount, or as much thereof as is disbursed for hard and soft costs in constructing the Project, provided from the City of Santa Ana Inclusionary Housing Fund. • 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/orfinal building permits or earlier upon sale, refinancing or default. On that date, the City 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 City Promissory Notes. Additionally, the City 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. • Cost savings from the Project, if any, will be applied first to pay down the City Loan. Ground Lease: The Project will be located at 416 Vance Street (APN 398-041-22) and 826 N. Lacy Street (APN 398-041-22) ("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 Page 13 development of the Project, staff will return to the Housing Authority for consideration of a 99 -year Ground Lease Agreement. 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 / 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 and/or 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 2 -unit affordable housing project to be located at 416 Vance Street (APN 398-041-22) and 826 N. Lacy Street (APN 398-041-22), Santa Ana, CA 92701. • The City'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 City's analysis of the available funding sources and development and operating costs of the Project and the overall economic feasibility of the Project. • Review and approval of the documents evidencing the City Loan by the City Council, as applicable. • Review and approval of the documents evidencing the Ground Lease by the Housing Authority as applicable. • 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 March 5, 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'brown a@santa-ana.org. Sincerely, - PA_ Steven A. Mendoza Acting City Manager City of Santa Ana Attest Acting Clerk of Council City of Santa Ana Steven A. Mendoza Executive Director Housing Authority of the City of Santa Ana iLL( Norma Mitre Recording Secretary Housing Authority of the City of Santa Ana