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AHA-2020/10/06 ANAHEIM HOUSING AUTHORITY REGULAR MEETING OF OCTOBER 6, 2020 The Anaheim Housing Authority regular meeting of October 6, 2020 was called to order at 5:20 P.M. telephonically, pursuant to Brown Act related provisions of Governor Newsom's Executive Order N-29-20 (superseding the related provisions of Executive Order N-25-20) in response to COVID-19, in joint session with the Anaheim City Council. The meeting notice, agenda, and related materials were duly posted on October 1, 2020. PRESENT: Chairman Harry Sidhu and Authority Members Stephen Faessel, Denise Barnes, Jordan Brandman, Jose F. Moreno, Lucille Kring, and Trevor O'Neil (all via teleconference). STAFF PRESENT: City Manager Jim Vanderpool, City Attorney Robert Fabela, and Secretary Theresa Bass. ADDITIONS/DELETIONS TO THE AGENDA: None PUBLIC COMMENTS: No electronically submitted public comments related to the Housing Authority agenda. CONSENT CALENDAR: At 5:24 P.M., the consent calendar was considered. MOTION: Authority Member Kring moved to approve the consent calendar as presented, in accordance with reports, certifications, and recommendations furnished each Housing Authority member and as listed on the consent calendar, seconded by Authority Member Faessel. ROLL CALL VOTE: AYES —7 (Chairman Sidhu and Authority Members Faessel, Barnes, Brandman, Moreno, Kring, and O'Neil). NOES —0. Motion carried. AGR- 1. Approve a First Amendment to Professional Services Agreement, in substantial form, 11068.1 with Overland, Pacific & Cutler, LLC, increasing the not to exceed amount from $200,000 to $400,000, for relocation and related services and authorize the Executive Director of the Housing Authority, or designee, to execute and administer the agreement. AHA177 2. Approve minutes of the Housing Authority meeting of September 15, 2020. END OF CONSENT CALENDAR AGR- 3. RESOLUTION NO. AHA-2020-002 A RESOLUTION OF THE ANAHEIM 1492.B.VI HOUSING AUTHORITY authorizing the execution and delivery of its Multifamily Housing AGR- Revenue Notes in one or more series in a cumulative and aggregate principal amount 1492.B.VI not to exceed $30,310,000 for the purpose of financing the acquisition and rehabilitation .0.1 of the Hermosa Village II Apartments Multifamily Rental Housing Project; approving and AGR- authorizing the execution and delivery of any and all documents necessary to execute 1492.B.VI and deliver the Notes, substantially in the form approved hereby, complete the .0.2 transaction and implement this resolution, and ratifying and approving any action Anaheim Housing Authority Minutes of October 6, 2020 Page 2 of 3 heretofore taken in connection with the Notes (112-unit multifamily rental development, 1515 S. Calle Del Mar, Hermosa Village Phase II Housing Partners, L.P.) Community and Economic Development Director John Woodhead reported on June 15, 1999, the Housing Authority approved the Jeffrey-Lynne Revitalization Plan for the revitalization of the Jeffrey-Lynne neighborhood located at 1515 S. Calle del Mar and subsequently entered into phased affordable housing agreements with The Related Companies of California to implement to plan for the Jeffrey-Lynne neighborhood, now known as Hermosa Village, for the acquisition, ground leasing, and substantial rehabilitation of properties within the neighborhood. Mr. Woodhead reported Phases I, II, Ill, and IV have a total of 521 affordable units in the project, with Phase 2 consisting of a 112 multi-family rental development. He stated Hermosa Village Phase II Housing Partners L.P. has requested the Anaheim Housing Authority to issue tax- exempt bond obligations to finance the developer's acquisition and rehabilitation of the Hermosa Village Apartments Phase II project. On October 29, 2019, the Governing Board of the Housing Authority approved a resolution stating its intent to issue tax-exempt bond obligations not to exceed $30,000,000. On November 5, 2019, the City Council conducted a TEFRA public hearing approving the issuance of bond obligations by the Housing Authority. Mr. Woodhead explained the current action would authorize the Authority to proceed and issue up to $20,310,000 in tax-exempt and $10,000,000 in taxable Multifamily Housing Revenue Notes and loan the proceeds of the Notes to the developer to finance the acquisition and improvements. The Notes will be privately placed with a commitment by Union Bank to purchase the Notes and will be repaid solely by project revenues, accordingly there is no risk to the Housing Authority nor the City should the developer fail to meet its repayment obligations. DISCUSSION: Authority Member Kring shared this was close to her home, commended The Related Companies for changing the entire character of the neighborhood since 1999, and supported the project. MOTION: Authority Member Kring moved to approve RESOLUTION NO. AHA-2020-002 A RESOLUTION OF THE ANAHEIM HOUSING AUTHORITY authorizing the execution and delivery of its Multifamily Housing Revenue Notes in one or more series in a cumulative and aggregate principal amount not to exceed $30,310,000 for the purpose of financing the acquisition and rehabilitation of the Hermosa Village II Apartments Multifamily Rental Housing Project; approving and authorizing the execution and delivery of any and all documents necessary to execute and deliver the Notes, substantially in the form approved hereby, complete the transaction and implement this resolution, and ratifying and approving any action, seconded by Authority Member Faessel. DISCUSSION: Authority Member Moreno referenced a conversation with a private developer wherein it was suggested that affordable housing loses money for developers and he asked whether these bonds and projects also lost money. Mr. Woodhead stated these deals were structured differently than a solely private sector, for-profit development scenario, as the Housing Authority looks at all costs associated with the project against revenues, deducts from revenues all of those costs including a developer fee, administration fees, reserves, etc., then draws a line and whatever is left over from revenue is a residual that is split between the Housing Authority and the developer. He reported the City receives 50-85% of residuals after all costs, without necessarily looking at profits and with developers receiving various fees and then sharing anything remaining after all other costs are paid. In response to Authority Member Anaheim Housing Authority Minutes of October 6,2020 Page 3 of 3 Moreno, Mr. Woodhead explained that the residual receipts help keep the Housing Authority staffed, functioning, and reinvesting in affordable housing projects. Authority Member Moreno suggested there was a positive cash flow for developers in affordable housing developments, even if less than under market rate conditions, to which Mr. Woodhead concurred noting the analyzation of date, amortization rules, and tax consequences. Authority Member O'Neil questioned what other sort of things are provided to affordable housing developers to lessen their hard costs. Mr. Woodhead explained that the Authority ensures during the analysis that there is a positive cash flow, all debt is going to fully amortize in a reasonable period of time so no default occurs, and then to the extent any money remains there is a policy for money to come back to the Housing Authority. In response to Authority Member O'Neil, Mr. Woodhead explained the developers can receive tax credits which act as equity provided by tax credit syndicators, there are tax consequences that require debt to be paid, and the Housing Authority often contributes land under a ground lease to receive lease payments out of residual receipts from the project. Authority Member O'Neil confirmed that some incentives and reduced costs are what make it possible for the developers to make a profit that they may be able to under market conditions. MOTION: Authority Member Kring moved to approve RESOLUTION NO. AHA-2020-002 A RESOLUTION OF THE ANAHEIM HOUSING AUTHORITY authorizing the execution and delivery of its Multifamily Housing Revenue Notes in one or more series in a cumulative and aggregate principal amount not to exceed $30,310,000 for the purpose of financing the acquisition and rehabilitation of the Hermosa Village II Apartments Multifamily Rental Housing Project; approving and authorizing the execution and delivery of any and all documents necessary to execute and deliver the Notes, substantially in the form approved hereby, complete the transaction and implement this resolution, and ratifying and approving any action, seconded by Authority Member Faessel. ROLL CALL VOTE: AYES — 7 (Chairman Sidhu and Authority Members Faessel, Barnes, Brandman, Moreno, Kring, and O'Neil). NOES —0. Motion carried. ADJOURNMENT: With no further business to conduct, Chairman Sidhu adjourned the meeting of the Anaheim Housing Authority at 5:38 P.M. Res.ectf�I"' submitted, Theresa :-ss, CMC Secretary, Anaheim Housing Authority