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Home My WebLink AboutItem 21 - First Amendment to Conditional Grant Agreement with Habitat for Humanity Community Development Agency https://www.santa-ana.org/cd Item # 21 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report April 6, 2021 TOPIC: First Amendment to Conditional Grant Agreement with Habitat for Humanity AGENDA TITLE: Approve a First Amendment to the Conditional Grant Agreement with Habitat for Humanity of Orange County for the Development of the Lacy Street Project (Non-General Fund). RECOMMENDED ACTION Authorize the City Manager to execute a First Amendment to the Conditional Grant Agreement with Habitat for Humanity of Orange County for an additional $333,777 in Inclusionary Housing Funds for a total Inclusionary Grant amount of $565,271 for the development of the Lacy Street affordable housing project located at 826 N Lacy Street (APN 398-041-22) and 416 Vance Street (APN 398-041-18), subject to non-substantive changes approved by the City Manager and City Attorney. DISCUSSION On November 17, 2020, the City Council authorized the City Manager to execute a Conditional Grant Agreement with Habitat for Humanity of Orange County for $231,494 in Inclusionary Housing Funds for the development of the Lacy Street affordable housing project located at 826 N Lacy Street (APN 398-041-22) and 416 Vance Street (APN 398- 041-18), referred to hereafter as the “Lacy Street Project”. The Lacy Street Project is composed of two single-family lots located at the southwest corner of Lacy and Vance Streets in the “Historic French Park” community. The land is owned by the Housing Authority and will be leased to Habitat for Humanity under a 99-year Ground Lease. The Project will consist of two (2) single-family detached homes affordable to qualifying moderate income families (up to 120% Area Median Income). The design and construction of the two homes will reflect the architectural elements and finishes that are present in the French Park community. The staff report from the November 17, 2020 is attached as Exhibit 1. Since the beginning of the conceptual design and development of the Lacy Street Project, Habitat for Humanity has been required to coordinate with the Historic French Park Association Architectural Review Committee (the “Committee”). The Committee provided First Amendment to Conditional Grant Agreement with Habitat for Humanity. April 6, 2021 Page 2 6 2 2 a letter of support to Habitat for Humanity for the development of the Lacy Street Project when Habitat submitted their proposal to the City for an award of funds and a ground lease under a 2018 Request for Proposals (RFP # 18-056) process. The letter of support was a requirement in the Request for Proposals for the development of this Housing Authority-owned parcel located in the French Park neighborhood. Regarding Habitat for Humanity’s coordination with the Committee, in August 2018 Habitat for Humanity proposed the construction of two (2) 1,200 square foot, single-family homes on the site. The homes were to be identical and based upon the same product that had been previously built on Bush Street in the City of Santa Ana. It was Habitat for Humanity’s plan to use an existing product/architectural plan to avoid the expense of additional product design costs. This original proposal did not meet the French Park community’s Architectural Guidelines. Therefore, in December of 2018 Habitat for Humanity proposed the construction of a single-story “Craftsman-Style” home and a two- story “Victorian-Style” home as an alternative. To meet the needs of the Architectural Guidelines, these homes were to be approximately 1,550 and 1,650 square feet, respectively. Over the following 12 months, Habitat for Humanity engaged the services of an architectural firm and designed two distinct floor plans in coordination with the Committee. Over the course of this time there were many discussions and meetings, and many revisions to the original plans. In order to comply with the French Park community’s Architectural Guidelines, Habitat for Humanity needs an additional $333,777 for the development of the Lacy Street Project. These funds will offset a portion of the additional construction costs associated with this project to satisfy the French Park community’s requirements. Specifically, the Architectural Guidelines requires wood siding and wood windows, along with additional architectural fees incurred by Habitat for Humanity to construct these custom-built affordable homes. Therefore, staff is recommending approval of this First Amendment to the Conditional Grant Agreement with Habitat for Humanity for an additional $333,777 in Inclusionary Housing Funds (Exhibit 2). This will increase the total Inclusionary Grant amount to $565,271 for the development of the Lacy Street Project. FISCAL IMPACT Funds for the First Amendment to the Conditional Grant Agreement in the amount of $300,399 (90% of the amendment total) are available in the Inclusionary Housing Fund, Loans and Grants account (No. 41718820-69152) for expenditure in the current fiscal year. The remaining $33,378 (10%) will be budgeted and included in the FY 2022-23 budget based on the current schedule of performance. EXHIBIT(S) 1. Staff Report from November 17, 2020 2. First Amendment to Conditional Grant Agreement First Amendment to Conditional Grant Agreement with Habitat for Humanity. April 6, 2021 Page 3 6 2 2 Submitted By: Steven Mendoza, Assistant City Manager Approved By: Kristine Ridge, City Manager Exhibit 1: Staff Report from November 17, 2020 https://publicdocs.santa-ana.org/weblink/1/doc/124633/Page1.aspx FIRST AMENDMENT TO CONDITIONAL GRANT AGREEMENT by and between the CITY OF SANTA ANA and HABITAT FOR HUMANITY OF ORANGE COUNTY, a nonprofit organization 416 Vance Street (APN 398-041-18) and 826 N. Lacy Street (APN 398-041-22) Dated: April 6, 2021 EXHIBIT 2 2 FIRST AMENDMENT TO CONDITIONAL GRANT AGREEMENT INCLUSIONARY HOUSING PROGRAM THIS FIRST AMENDMENT TO CONDITIONAL GRANT AGREEMENT (“First Amendment”) dated, for identification purposes only, as of April 6, 2021, is made and entered into by and between the City of Santa Ana, a charter city and municipal corporation (“City”), and Habitat for Humanity of Orange County, a nonprofit organization (“Developer”) with reference to the following: RECITALS: A. The City and Developer executed a Conditional Grant Agreement Inclusionary Housing Program dated November 17, 2020, in the amount of $231,494 (“Grant Agreement”), for the proposed development of two (2) single-family detached homes restricted for sale to moderate income families earning no more than 120% of the Orange County Area Median Income (“Project”) to be located at 416 Vance Street (APN 398- 041-18) and 826 N. Lacy Street (APN 398-041-220) (collectively, the “Property”). B. Developer requested an additional $333,777 from the City in order to offset a portion of the additional construction costs associated with the Project due to the architectural requirements of French Park where the Property is located. C. The City, on the same terms and conditions found in the Grant Agreement, desires to increase such Conditional Inclusionary Grant to Developer in order to make possible the development and construction of the Project, thereby expanding the supply of decent, safe, sanitary and affordable housing within the City. D. This First Amendment is entered into for the purpose of increasing the total amount of the Conditional Inclusionary Grant from the City to the Developer for completion of the Project, pursuant to the Inclusionary Housing Fund regulations and guidelines. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions of said Grant Agreement, except as herein modified, the parties agree as follows: 1. Section 1.1, Defined Terms, shall be amended to increase the total amount in the definition of “Inclusionary Grant” or “Inclusionary City Grant” by $333,777 for a total Inclusionary Grant amount up to $565,271. 2. Section 3.1, Inclusionary Funds, shall be amended to increase the total amount of the Inclusionary Grant by $333,777 for a total Inclusionary Grant amount up to $565,271. EXHIBIT 2 3 3. Section 4.1, Conditions Precedent, subsection (d), Recordation of Affordability Restrictions, shall be amended to increase the total amount of the Inclusionary Grant by $333,777 for a total Inclusionary Grant amount up to $565,271. 4. Exhibit B, Scope of Work/Schedule of Performance, shall be replaced with the updated Scope of Work/Schedule of Performance attached hereto as Exhibit B-1 and incorporated herein by reference. 5. Except as hereinabove modified, all terms and conditions of said Grant Agreement shall remain in full force and effect. {Signatures on following page} EXHIBIT 2 4 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be executed on the date first set forth above. ATTEST: CITY OF SANTA ANA ___________________________ _______________________ Daisy Gomez Kristine Ridge Clerk of the Council City Manager APPROVED AS TO FORM Sonia R. Carvalho City Attorney ___________________________ By: Ryan O. Hodge Assistant City Attorney RECOMMENDED FOR APPROVAL ___________________________ Steven A. Mendoza Executive Director Community Development Agency {Signatures continue on following page} EXHIBIT 2 EXHIBIT 2 5 DEVELOPER: Habitat for Humanity of Orange County By: ____________________________________ Sharon Ellis Its: Executive Director EXHIBIT 2 6 EXHIBIT B-1 SCOPE OF WORK/SCHEDULE OF PERFORMANCE EXHIBIT 2 Exhibit B Updated 3.19.21 Scope of Work/Schedule of Performance Scope of Work The scope of work shall include the preparation of plans, processing for permits, site work, house construction landscaping/fencing, and family selection. Schedule of Performance Months Site Acquisition/Due Diligence Complete Engineer plans Complete Development Review Application Submit 4/1 Construction Drawings 1 City Processing/Permits 4 Grading/Site Improvements 1 House Construction 10 Home Sales 2 Total Schedule 18 EXHIBIT 2