HomeMy WebLinkAbout80A - CORNERSTONE APT INTERESTREQUEST FOR COUNCIL/
HOUSING AUTHORITY y ,
ACTION
CITY COUNCIL MEETING DATE:
MAY 1, 2018
TITLE:
APPROVE REQUEST FOR CONSENT BY
JAMBOREE HOUSING CORPORATION TO
ACQUIRE LIMITED PARTNER'S INTEREST
FOR CORNERSTONE APARTMENTS
(STRATEGIC PLAN NO. 4, 5)
012 i
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 161 Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the City Manager and Executive Director of the Housing Authority to approve the
request for consent by Jamboree Housing Corporation and/or an affiliate to acquire the Limited
Partner's interest in the current project partnership for Cornerstone Apartments at 805 — 904 S.
Minnie Street.
DISCUSSION
In 2001 and 2003, the City of Santa Ana ("City") and the former Redevelopment Agency, which is
now the Housing Authority of the City of Santa Ana ("Housing Authority"), made a series of loans
to the Cornerstone Apartments project in support of the proposed acquisition and rehabilitation of
market rate units to affordable, tax credit financed units. A provision of the Loan Documents
allowed the City of Santa Ana and the Housing Authority consent rights over any sale or transfer
of partnership interests. As is customary on tax credit financed projects, at year 15 the Limited
Partner Investor ("Investor") is looking to exit the partnership through the sale of their interest.
The Purchase Option between the Investor and an affiliate of Jamboree Housing Corporation, the
Managing General Partner, allows Jamboree the rights to acquire the Investor's interest.
Following the acquisition of the partnership interest, Jamboree intends to recapitalize the asset to
extend the serviceable life of these 126 affordable rental units, as well as add a community
building to add to the resident services provided to the households. A proposed budget of over
$6.4 million will be used to install new windows, roofs, ADA improvements, install new kitchen
and bathroom cabinets / countertops, new sinks and plumbing fixtures, new flooring throughout
the units, install new appliances, install new hot water heaters, and reline all waste lines.
Jamboree is also exploring ways to address the significant parking constraints in the
80A-1
Request for Consent by Jamboree Housing Corporation
May 1, 2018
Page 2
neighborhood by installing parking lifts for residents. Another significant part of the rehabilitation
scope is the potential addition of a large solar installation, with a portion of the energy savings
going to offset resident electicity demand, reducing their energy bills. The improvements to the
project will not result in displacement or rent increases for the existing tenants.
Approval of this consent to acquire does not otherwise affect the current operations or repayment
of the existing City and Housing Authority debt. The only material change will be the elimination
of the Investor from the Limited Partnership, with Jamboree as the sole remaining entity with
100% ownership. Subsequent actions related to the proposed resyndication / recapitalization of
the Project will be brought forward at a later date. If for any reason, Jamboree could not execute
on their anticipated rehabilitation plans, this would leave the City and Housing Authority in no
worse position than it currently is in with respect to repayment of its' loans.
However, should this consent not be approved, it is possible that the Investor forces the public
marketing of the asset, which could then be purchased by an entity that is less mission focused
than Jamboree, with more of a focus on profits rather than serving the current residents. There
would be no requirement to adequately recapitalize the project, risking it falling into a state of
disrepair.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's efforts to meet Goal # 4 Fiscal Sustainability, Objective #
1 (maintain a stable, efficient and transparent financial environment) 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.
Judson Brown
Acting Executive Director
Community Development Agency
Exhibit: 1. Request for Consent from Jamboree Housing Corporation
80A-2
EXHIBIT 1
March 12, 2018
<Jamboree
Judson Brown
Housing Division Manager
City of Santa Ana
Community Development Agency — Housing and Neighborhood Development Division
20 Civic Center Plaza (M-26)
Santa Ana, CA 92701
RE: Acquisition of LP interest from tax credit investor
Dear Judson:
Per the definition of "Sale" in the capitalized terms for the Loan Agreement for 805 S.
Minnie Street (with various others in substantially similar form), please accept this
notification and request for approval for our acquisition of the limited partner interest in
connection with the subsequent resyndication of the Cornerstone Apartments.
If you should have any further questions, please do not hesitate to contact John Okura at
949-813-6923 or via email at iokura(a)iamboreehousing.com.
Sincerely,
Marcy Finamore
CFO / Executive Vice President
Jamboree Housing Corporation
...a nonprofit corporation dedicated to providing affordable housing
17701 Cowan Ave, Suite 200 • Irvine, CA 92614 • 949.263.8676 FAX 949.263.0647
RPM