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AHA-2017/06/06ANAHEIM HOUSING AUTHORITY REGULAR MEETING OF JUNE 6,2017 The Anaheim Housing Authority regular meeting was called to order at 5:40 P.M. in City Council Chambers located at 200 S. Anaheim Blvd. for a joint public comment session with the Anaheim City Council. The meeting notice, agenda, and related materials were duly posted on June 2, 2017. Chairman Tom Tait and Authority Members Kris Murray, Denise Barnes, Jose F. Moreno, Lucille Khng.and Stephen Faes8ni ABSENT: Vice Chairman James Vanderbilt PRESENT:STAFF City Manager Paul Emery, Acting City Attorney Kristin Pelletier and Secretary LindaAnd8|. AGENDA:ADDITIONS/DELETIONS TO THE None COMMENTS:PUBLIC Mike Robbins expressed concern about people currently living in the motel proposed to be purchased by the Housing Authority, stating they may end up on the street and aGO|UUon needed tDbefound. CONSENT CALENDAR: At 819P.M,the consent calendar was considered with Authority Member Moreno pulling |t80 No. 01 for discussion. Authority Member Khng then moved to approve the remainder Ofthe consent calendar oapresented, seconded bvAuthority Member F3ess8|. ROLL CALL VOTE: Ayes —O(Chairman Tait and Authority Members Murray, Barnes, K80reDV` K[iDg. and Faeaee|\. Noes — O. AbseDt— 1 (Vice Chairman Vanderbilt). W1oUnn carried. AHA177 2. Approve minutes of Housing Authority meeting of May 23.2017. AGR- 1. Approve and authorize the Executive Director, o[his designee, k}eXeCUteand 6284.\/|| administer Cooperation Agreement with the City LDtransfer HOME funds, in an amount up to $750,000, for the acquisition of property located at 605 East Avon Place for the Avon/Dakota neighborhood revitalization project. John Woodhead, Community and Economic Development Director, explained the city's Neighborhood Improvement Program identified the Avon/Dakota neighborhood a60ne0f12 challenged neighborhoods throughout the city and classified ii8G8Level 3priority, which he explained exhibited moderate 1Osubstantial sooia|, ecoOO[niC, and physical decline, resulting in increased calls for service from the Police Department and Code Enforcement. He continued that the neighborhood covered approximately 11.2acres and consisted of410W|U-farni|y residential properties with approximately 2UOunits. OnJune 22'2O1O.the Anaheim Housing Authority //\HA\ entered into a neighborhood revitalization agreement with Related Companies of California for Avon/Dakota and subsequently created a neighborhood revitalization plan that Anaheim Housing Authority Minutes nfJune §,2O17 Page 2of6 required the acquisition of deteriorated apartment complexes in the neighborhood for subsequent revitalization and conversions into long-term affordable housing units. Mr. Woodhead reported that iOconnection with the Revitalization Agreement, the City, AHA, and the former Redevelopment Agency (RDA) entered into, and subsequently amended, a Cooperation Agreement where the City and former RDA transferred certain funds to AHA to implement the Revitalization Agreement and Neighborhood Revitalization Plan. Mr, Woodhead concluded that AHA staff had identified 8duplex located ot605E. Avon Place that was for sale, proposed {O acquire the property in continuance of implementing the revitalization agreement and plan, and requested approval of aCooperation Agreement between the City and AHA, towhich the City would transfer up to $750,000 of HOME Investment Partnership Program funds to AHA to assist with the acquisition of property. Authority Member Moreno asked staff to clarify what HOME funds were as well as the purpose ofthe property acquisition. Mr. Woodhead explained HOME funds were federal funds allocated tOthe City. He explained a number of funding sources were typically aggregated in the AHA for housing developments, further noting that HOME funds came with strings and had tobe devoted to affordable housing, adding the acquisition ofthis unit was permitted, Authority Member Moreno confirmed itwas not general fund money and asked ifany displacements would occur. Mr. Woodhead explained relocation plans were adopted when the Revitalization Plan was developed, @Gwell @Gduring each phase Ofdevelopment. H8advised the relocation benefits were generous and many residents choose to take the benefits and move elsewhere, while still receiving super -priority in the Section 8 housing voucher program. Mr. Woodhead stated when partnering with F{8|eted CO0poDi8S' many residents relocated into their other developments and later had the opportunity to return once the units were rehabilitated. Authority Member Moreno questioned the metrics for determining the 12 challenging neighborhoods, with Mr. Woodhead explaining they were ranked according tOgeneral social ills, service C8l|s. overcrowding, and aging and deteriorating housing stock to establish 8 hierarchy ofchallenged neighborhoods. Hereported hewould make the map within the Consolidated Plan available. MOTION: Authority Member Murray moved to approve Item No. 02, seconded by Authority K8emnberP{[iDg. D|8CU8G|[)N: In response to Authority Member Barnes, Mr. Woodhead explained this property would result in additional housing for extremely low income and very low income levels, 50% and less Ofthe area median income, with total units an}UDd 1800-1700. OVan8|(' he explained projects continued for 55 years, included several thousand units through AHA and RDA, and is a part of addressing affordable housing, conduit bond financing opportunities, and down payment assistance for over 1.OQDaffordable market rate units. ROLL CALL VOTE: Ayes —6(Chairman Tait and Authority Members Murray, Barnes, Moreno, Khng. and Fa8S8e|). NVeS—O. Absent — 1 /Vice Chairman Vanderbilt). Motion carried. 5:00 P.M. PUBLIC HEARING 8:32 P.M. AGR- 3. This is a public hearing to consider a resolution regarding an Amended and Restated 10354.I.A preliminary award letter between the Anaheim Housing Authority (Authority) and Innovative Housing Opportunities, Inc. /C>eve|ope[\regarding the acquisition ofproperty located at 1248 East Lincoln Ave and m parcel located at 1339-1249 East Broadway for Anaheim Housing Authority Minutes ofJune 6,2Ol7 Page 3 of 6 the development and operation of854-uDit senior affordable housing projectinwhich the Authority will acquire the site for $3,574,000 and subsequently ground lease to the Developer. RESOLUTION NO. ARESOLUTION OFTHE ANAHEIM HOUSING AUTHORITY approving aDAmended and Restated Preliminary Award Letter regarding the Sandman Motel Affordable Housing Project between the Anaheim Housing Authority and IOnOV8iiw8 Housing Opportunities, Inc.; authorizing the 8R8UDlptiOO of the Developer's Purchase and Sale Agreement; authorizing the Executive Director to negotiate the terms Ofand finalize anAffordable Housing Agreement; authorizing the Executive Director to implement such Affordable Housing Agreement; and making certain other findings in o0OneC1|nn therewith. The public hearing was considered 8t8:32P.M.with John Woodhead, Community and Economic Development Director, presenting the item. Mr. Woodhead reported the department issued aRequest for Proposals (RFP)0OMay 2`2O10 in order to utilize HOME Investment Partnership Program Funds (HOME) for development of an affordable housing project fVrvvhich|nnov@UveH0Vsing{]ppodunitieSvv8Sthenn/yPGspond8nt and had identified the Sandman Motel property and adjacent vacant parcel, located at124B East Lincoln Avenue for construction and operation of a 54 -unit affordance housing projectfor seniors. On November 1, 2016, AHA approved a Cooperative Agreement with the City and a preliminary funding oVVand letter with the developer. This, he eXp/oiOed, provided for the developer's acquisition of the site at about $3.5 million as well as construction of the project, together with the AHA |o8O of Up to 8ppnDx/nlat8|y $3 nli||iOD in HOME and Community Housing Development Organization (CHDO) funds transferred from the City, including allocation of 53 Section Ohousing vouchers for the project. Hefurther reported staff continued tosupport the project, however due to continued calls for service at the S@ndDl2Oand iOresponse tnfeedback from the community, AHA staff proposed that AHA assume the developer's purchase agreement for the site and immediately acquire and close the Sandman, rather than wait for the developer hoobtain financing for the acquisition and construction ofthe project, Under the amended and restated preliminary award letter, the AHA would acquire the site for subsequent ground lease 0nthe developer who would construct and operate the project. AHA would also provide 8loan Ofjust over $2.3million tOthe developer using HOME Funds and others onhand, adding AHA`sacquisition costs and loan would be repaid from 85% Ofthe project's residual receipts that exist after the developer pays off certain debts and operating costs, over the 55 year life ofprogram. Mr. Woodhead concluded that the Planning Commission considered project entitlements on May 15, 2017 and recommended approval and that the newly -appointed Housing and Community Development Commission also recommended approval of the project. Chairman Tait opened the public hearing for comments. William Fitzgerald, Anaheim HOME, shared his belief that no one understood how this worked, the funding was circular between the City and AHA, and negatively impacted the taxpayers through subsidized housing for underpaid workers. Healso expressed concerns with the amount Ofparking spaces provided, stating overflow parking could Pe8U|t in the implementation of additional permit parking districts. R.Joshua Collins questioned why this action was performed by the Housing Authority rather Anaheim Housing Authority Minutes ufJune 6,2Ol7 Page 4 of 6 Mr. Woodhead explained the AHA was oseparate legal entity enabled by State law to perform specific actions based ODrules and funding sources. Linda LShDke[ngexpressed support for the project Onbehalf0fthe/\DaheiDl Poverty Cynthia Ward appreciated the architectural detail and extra work put into the project to ha|p c|8oD up 8 pnDb(eDl location. With no further comments offered, Chairman Tait closed the public hearing. DISCUSSION: Authority Member Moreno referred to an earlier public comment and asked what would happen b)any long-term residents currently occupying the motel if itwas purchased and immediately closed and vacated. Mr. Woodhead responded based on 8 consultant study, OO person had established a residency there but were transient occupants not entitled to relocation benefits. He further assured the Authority Members that staff would thoroughly interview all persons remaining otthe site and had budgeted for relocation benefits ifanyone was deemed e|ig|b|e, along with additional rights such as super priority for Section 8v0uche[g. At Authority Member K8OreD0's request, M[ Woodhead agreed to provide afO||oN+up report on any families that were assisted with Pa|0cadOD. Chairman Tait questioned parking availability and whether there was any risk to AHA, Council, or taxpayers. Mr. Woodhead reported the project VV8Se|ig/b|efo[denGitvbOnUsUnderth8ir entitlements which would have @|lovv0d only 27 on-site parking sp@Ce8, but due to parking issues across the city, staff had conducted a parking analysis and was requiring 42 parking spaces. In terms of risk, Mr. Woodhead explained the Housing Authority would own the land and ground lease it to the developer, explaining if anything went wrong on the projectthe|aDd would b8retained and atthe end Vfthe 55-yearterm, the entire project n8vert0dtOtheAHA. Mr. Woodhead confirmed for Authority Member Barnes that this item was related to Item No. 38 Vnthe Council agenda ao3companion item for zoning actions, including parking requirements and highlighted the project's orientation with access only through Lincoln Avenue to lessen impacts b}surrounding neighborhoods. Hoalso confirmed that due hDfunding requirements, the fundamental nature ofthe project coU|dnOtbeCh8OgBdaDdvVoU|dneDl3inoffordeb|e senior housing for 55years. MOTION: Authority Member Mhngmoved toapprove RESOLUTION NO. ARESOLUTION C)FTHE ANAHEIM HOUSING AUTHORITY approving anAmended and Restated Preliminary Award Letter regarding the Sandman Motel Affordable Housing Project between the Anaheim Housing Authority and Innovative Housing Opportunities, Inc.; authorizing the assumption Ofthe Developer's Purchase and Sale Agreement; authorizing the Executive Director to negotiate the terms of and finalize an Affordable Housing Agreement; authorizing the Executive Director toimplement such Affordable Housing Agreement; and making certain other findings in connection therewith, seconded by Authority Member Faessel. Fl{}[L CALL VOTE: AyeS—O (Chairman Tait and Authority Members Murray, Barnes, K4VPano, KriDg' and F8ess8|). Noes —O.Absent —1(Vice Chairman VaOdG[bi|t\. Motion carried. AGR- zL This is a public hearing to consider resolution related to the acquisition of property at 6284.y||| 862 South Dakota Street by the Anaheim Housing Authority and regarding the proposed subsequent ground lease of that property together with several other Housing Authority properties located at 809, 824, 868 South Dakota Street and 606 East Avon Place Anaheim Housing Authority Minutes ofJune 0,2017 Page 5 of 6 pursuant h]8DAffordable Housing Agreement bvand between the Anaheim Housing Authority and Avon Dakota Housing Partners ||,[P..for the rehabilitation and long term operation of a 21 -unit multi -family affordable housing project, RESOLUTION NO. ARESOLUTION OFTHE ANAHEIM HOUSING AUTHORITY approving an Affordable Housing Agreement between the Anaheim Housing Authority and Avon Dakota Housing Partners 11, L.P., authorizing the Executive Director to negotiate the terms of and finalize such Affordable Housing Agreement; authorizing the Executive Director to implement such Affordable Housing Agreement; and making certain other findings in connection therewith. Community and Economic Development Director John Woodhead presented public hearing |Uamn No. 4 reporting it was si[ni|GF and related to, Item No. 1, pertaining to the revitalization of [heAYon/D@k0ta neighborhood. He reported F(8|8ted Companies of California intended to develop a second phase in the neighborhood for which the proposed agreement would provide. Mr. Woodhead reported AHA would acquire seven additional properties consisting of21 units in Avon/Dakota and incur costs equaling about $4.5million for the acquisition, relocation, and interim management ofthe apartments. |naccordance with the Revitalization Agreement and Neighborhood Revitalization Plan, the AHA and another Related affiliates intended to enter an /NTORjob|e Housing Agreement for phase two of the project, pursuant to which AHA would ground lease the sites tOthe developer who would rehabilitate and operate the sites as affordable housing. Under the affordable housing agreement, AHA would receive 05%ofthe project's residual receipts as reimbursement of its acquisition costs and Fent. Additionally, under the agreement the developer would apply for 9% tax credit allocation at the June 28, 2O17deadline 3spart Ofits financing for the project, ondAHAvvOu|da|Gogiv8thadev8|ope[ three other opportunities to apply for those credits, due to their competitiveness. Mr. Woodhead concluded that total project ComtsVv8nejuStoVer$14nni||inn,vViththedewe|operGeekingto obtain $7.3million iOtax credits and permanent financing Df$1.5million. Chairman Tait opened the public hearing for comments. William Fitzgerald, Anaheim HOME, suggested the developer would make money on the project and return it to Council as campaign contributions, questioned why the property was being purchased for more than its listing price, alleged the developer changed its name frequently to cause confusion and make more money, and recommended Chairman Tait abstain from voting as his company had vVV[k6d with Related Companies and other developers. R. Joshua Collins asked the Authority to investigate the previous speaker's comments to protect the taxpayers. With no further comments offered, Chairman Tait closed the public hearing. Chairman Tait stated questions regarding parking and risk had been answered by staff, and stated he was not aware of a conflict, however out of an abundance of caution, declared a potential conference of interest, and left the dais at 9:02 P.K4., handing the gavel to Authority Member Moreno, MOTION: Authority Member Krinomoved tnapprove RESOLUTION NO. AHA -2017-005 A RESOLUTION OF THE ANAHEIM HOUSING AUTHORITY approving an Affordable Housing Agreement between the Anaheim Housing Authority and Avon Dakota Housing Partners 11, L.P., authorizing the Executive Director to negotiate the terms of and finalize such Affordable Housing Anaheim Housing Authority Minutes of June 6, 2017 Page 6 of 6 Agreement; authorizing the Executive Director to implement such Affordable Housing Agreement; and making certain other findings in connection therewith, seconded by Authority Member Murray. ROLL CALL VOTE: Ayes — 5 (Authority Members Murray, Barnes, Moreno, Kring, and Faessel). Noes — 0. Abstain — 1 (Chairman Tait). Absent -1 (Vice Chairman Vanderbilt). Motion carried. Chairman Tait returned to the dais at 9:03 P.M ADJOURNMENT: There being no further business, without objection, Chairman Tait adjourned the meeting of the Anaheim Housing Authority at 9:03 P.M. ctfully submitted, Linda N. Andal, CMC Secretary, Anaheim Housing Authority