AHA-2023-004RESOLUTION NO. AHA-2023-004
A RESOLUTION OF THE GOVERNING BOARD OF THE ANAHEIM
HOUSING AUTHORITY APPROVING I.) A COOPERATION AGREEMENT
FOR THE NORTH HARBOR ANAHEIM PERMANENT SUPPORTIVE
HOUSING APARTMENTS, BY AND BETWEEN THE CITY OF ANAHEIM AND
THE ANAHEIM HOUSING AUTHORITY, SUBSTANTIALLY IN THE FORM
ATTACHED HEREWITH; II.) A PRELIMINARY FUNDING AWARD LETTER,
SUBSTANTIALLY IN THE FORM ATTACHED HEREWITH BETWEEN THE
ANAHEIM HOUSING AUTHORITY AND LINC HOUSING CORPORATION;
III.) AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ANAHEIM
HOUSING AUTHORITY, OR HER DESIGNEE, TO NEGOTIATE THE TERMS
OF AND FINALIZE AN AFFORDABLE HOUSING AGREEMENT; IV.)
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ANAHEIM HOUSING
AUTHORITY, OR HER DESIGNEE, TO EXECUTE AND ADMINISTER THE
COOPERATION AGREEMENT AND PRELIMINARY FUNDING AWARD
LETTER ON BEHALF OF THE ANAHEIM HOUSING AUTHORITY WITH
THE CITY; V.) AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
ANAHEIM HOUSING AUTHORITY, TO ENTER INTO SUBSEQUENT
AGREEMENTS NECESSARY TO IMPLEMENT THE PROJECT, PROVIDED
THAT SUCH AGREEMENTS DO NOT MATERIALLY INCREASE OR
EXTEND THE ASSISTANCE PROVIDED BY THE ANAHEIM HOUSING
AUTHORITY UNDER THE COOPERATION AGREEMENT OR
PRELIMINARY FUNDING AWARD LETTER.
WHEREAS, the Anaheim Housing Authority ("Authority") is a California housing authority
duly organized and existing under the California Housing Authorities Law, Part 2 of Division 24,
Section 34200, et seq., of the Health and Safety Code ("HAL"), and has been authorized to transact
business and exercise the power of a California housing authority pursuant to action of the City
Council ("City Council") of the City of Anaheim; and
WHEREAS, the City of Anaheim ("City") is a California municipal corporation and charter
city; and
WHEREAS, City is a participating jurisdiction with the United States Department of
Housing and Urban Development ("HUD") that has received funds ("HOME -American Rescue Act
Plan Funds" or "HOME -ARP") from HUD pursuant to section 217 of the Cranston Gonzalez
National Affordable Housing Act of 1990, as amended (42 U.S.C. 12701 et seq.) (NAHA). On April
8, 2021, HUD allocation HOME -ARP funds to 651 grantees using the formula established at 24 CFR
92.50 and 92.60.
WHEREAS, HOME -ARP provides funds for homelessness and supportive services
assistance under the HOME statute of Title II of NAHA (42 U.S.C. 12721 et seq.) and authorizes the
Secretary of HUD to waive or specify alternative requirements for any provision of NAHA or
regulation for the administration of the HOME -ARP program, except requirements related to fair
housing, civil rights, nondiscrimination, labor standards, and the environment, upon a finding that the
waiver 3 or alternative requirement is necessary to expedite or facilitate the use of HOME -ARP
funds. Pursuant to ARP, the per -unit cost limits (42 U.S.C. 12742(e)), commitment requirements (42
U.S.C. 12748(g)), matching requirements (42 U.S.C. 12750), and set -aside for housing developed,
sponsored, or owned by community housing development organizations (CHDOs) (42 U.S.C. 12771)
in NAHA do not apply to HOME -ARP funds.
WHEREAS, the HOME -ARP Program funds are used by Authority, as a participating
jurisdiction, to carry out multi -year housing strategies through acquisition, rehabilitation, and new
construction of housing for target income persons and families; and
WHEREAS the City has been allocated grant funding provided by HUD pursuant to the
Housing Opportunities for Persons With AIDS ("HOPWA") program authorized under the AIDS
Housing Opportunity Act (42 U.S.C. 12901 et seq.) (herein referred to as the "HOPWA Act") and the
HOPWA program regulations (24 CFR Part 574); and
WHEREAS Section 574.300 (Eligible Activities) of the HOPWA Regulations authorizes the
use of HOPWA funds for acquisition, rehabilitation, conversion, lease, and repair of facilities to
provide housing and services among other activities with HOPWA funds.
WHEREAS, Authority additionally maintains a Low and Moderate Income Housing Asset
Fund (the "Housing Asset Fund") pursuant to Health and Safety Code Section 34176 and 34176.1,
which Housing Asset Funds are available to Authority to assist in the development and operation of
rental housing in City that is affordable to persons and families of low, very low and extremely low
income; and
WHEREAS, on September 9, 2021, the Department of Housing and Community
Development ("Department") released the Homekey Round 2 Notice of Funding Availability
(NOFA) as an opportunity for state, regional, and local public entities to develop a broad range of
housing types, including but not limited to hotels, motels, hostels, single-family homes and
multifamily apartments, adult residential facilities, and manufactured housing, and to convert
commercial properties and other existing buildings to Permanent or Interim Housing for the Target
Population, as defined; and
WHEREAS, the City ("Co -Applicant") jointly applied for Homekey grant funds with Line
Housing Corporation, a California limited liability company ("Developer") and American Family
Housing USA, a California non-profit benefit corporation, and was awarded Homekey grant funds
for (i) acquisition of the Studio 6 Extended Stay Motel, located at 1251 N Harbor Boulevard and (ii)
conversion and rehabilitation of (119) rooms in the Motel into an 89-unit professionally managed,
interim housing project;
WHEREAS, Developer has informed Authority and City that it is the intention of the
Developer to convert and rehabilitate the existing improvements at the Site for use as an affordable
rental housing project as allowed by the Homekey Program; and
WHEREAS, Authority and Developer will enter into that certain Preliminary Award Letter
dated as of April 18, 2023 (the "Letter"), pursuant to which Authority will make a preliminary award
of HOME -ARP and/or Housing Asset Funds and/or HOPWA Funds to Developer, in the form of a
loan, for the purpose of assisting the Developer with the rehabilitation and conversion of the Studio 6
Extended Stay Motel and long-term management and operation of a permanent supportive housing
project thereon by Developer. The Letter sets forth certain basic business terms which will be
augmented by a comprehensive affordable housing agreement containing terms customary to such
agreements of Authority and including such additional terms as the Executive Director shall deem to
be appropriate (the "Affordable Housing Agreement"); and
WHEREAS, at the request of the Developer, Authority staff and legal counsel have prepared
the form of Preliminary Award Letter (the "Letter"), which provides for (a) the Authority Executive
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Director to enter into an Affordable Housing Agreement with the Developer for the rehabilitation and
conversion of the Studio 6 Extended Stay Motel and operation and management by Developer of a
89-unit permanent supportive housing project at the Site for not fewer than 55-years (the "Project");
and (b) Authority to provide a loan not to exceed $4,900,649 to the Developer sourced from HOME -
ARP Funds and/or Housing Asset Funds and/or HOPWA Funds, (c) 87 Project Based Vouchers
(PBV), and other terms and conditions relating to the Project and Authority's assistance to Developer
for the Project; and
WHEREAS, all initially capitalized terms used in this Resolution without definition have the
meanings set forth in the Letter; and
WHEREAS, by this Resolution, Authority will request that City enter into the agreement
with Authority as submitted herewith entitled "Cooperation Agreement (North Harbor Supportive
Housing Anaheim Apartments)" (the "Cooperation Agreement"). By the Cooperation Agreement,
City would transfer certain moneys as set forth therein to be applied by Authority as provided under
the Cooperation Agreement substantially in the form submitted herewith; and
WHEREAS, City and Authority will execute a Cooperation Agreement pursuant to which
City agreed to contribute HOME -ARP Funds and/or HOPWA Funds to the Project; such Cooperation
Agreement remains in full force and effect and shall apply to the Project as described herein and in
the Letter; and
WHEREAS, Developer is experienced in the construction, development, operation and
management of high quality housing which is intended to be affordable to households exiting
homelessness of extremely low income in Southern California, including, without limitation,
dwelling units developed utilizing HOME -ARP Funds, HOPWA Funds and/or Housing Asset Funds;
and
WHEREAS, Developer (as "Applicant" to TCAC) has informed Authority and City that
Developer intends to submit an application to TCAC ("Application") to obtain an allocation of nine
percent (9%) Low Income Housing Tax Credits ("Tax Credits") for the Project; if Developer does
not receive such allocation of 9% Tax Credits, Developer shall submit a second Application of 9%
Tax Credits to TCAC following notification that Developer's first Application was not successful; If
that second round is not successful, Developer may make an Application for 4% tax credits for one
additional (third) successive round; provided, however, that the Authority shall have no obligation to
increase the amount of the Anaheim Loan and, if one is proposed, such increase in the amount of the
Anaheim Loan to be provided by Authority to Developer from the amount set forth in the Letter shall
first be approved by the Authority Governing Board; and
WHEREAS, by Authority's commitment of monies sourced in whole or in part from the
Housing Asset Fund and/or HOME -ARP Funds and/or HOPWA Funds for the Agreement and/or the
Anaheim Loan, neither Authority (or Successor Agency or City) nor Developer intends in any
manner to waive any constitutional and/or legal rights under the Dissolution Act or any other
applicable laws; therefore, Authority (and Successor Agency and City) and Developer expressly and
intentionally reserve all rights under any and all applicable laws to challenge the validity of any or all
provisions of the Dissolution Act in any legal manner or proceeding, including challenging
determinations made by the Oversight Board and/or California Department of Finance, without
prejudice to City or Successor Agency or Authority or Developer; and
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WHEREAS, subject to satisfaction of the conditions set forth in the Letter and further
subject to the Affordable Housing Agreement, Developer shall own and shall rehabilitate and operate
the Site and shall cause the Site to be maintained and managed in accordance with the Letter and an
Affordable Housing Agreement and other instruments to be executed by Authority and Developer
with respect to the Project, during the entire 55-year Affordability Period contemplated by the Letter;
and
WHEREAS, the Project is vital to and in the best interest of City and the health, safety and
welfare of its residents, and is in accordance with the public purposes of applicable state and local
laws and requirements; and
WHEREAS, Authority has prepared such notices, plans and reports as may be required prior
to consideration of this matter and has made available for public inspection all such matters prior to
the public consideration of this matter; and
WHEREAS, Authority and City held a public hearing to consider the Letter and the
transaction contemplated therein in accordance with the Housing Authorities Law, the California
Community Redevelopment Law to the extent applicable, Health and Safety Code Section 33000, et
seq., and the Dissolution Act; and
WHEREAS, Authority has duly considered all terms and conditions of the proposed
Agreement, including all attachments thereto, and believes that the Project is in the best interests of
City and the health, safety, and welfare of its residents, and in accord with the public purposes and
provisions of applicable state and local laws and requirements.
NOW, THEREFORE, BE IT RESOLVED BY THE ANAHEIM HOUSING
AUTHORITY:
Section 1. The Authority Board finds and determines that the foregoing recitals are true
and correct and are a substantive part of this Resolution.
Section 2. The Authority Board hereby finds and determines, based on all
documentation, testimony and other evidence in the record before it, that (a) the proposed
rehabilitation and conversion of the Site will assist in the elimination of blight by allowing a parcel
(the Site) constrained with infrastructure deficiencies to be converted to a 89-unit permanent
supportive housing project with the covenants and conditions and rehabilitation costs authorized by
the Letter.
Section 3. The Authority Board hereby approves the Letter between Authority and Linc
Housing Corp., substantially in the form submitted herewith, and the Cooperation Agreement
substantially in the form submitted herewith.
The Authority Executive Director and the Authority Secretary/City Clerk are hereby authorized to
execute and attest the Letter, and subsequently and subject to compliance with the conditions set
forth in the Letter, prepare an Affordable Housing Agreement and various implementing documents
on behalf of Authority, and execute and administer the Cooperation Agreement. In such regard, the
Authority Executive Director (or her duly authorized representative) is authorized (a) to sign the final
version of the Letter after completion of any such non -substantive, minor revisions, (b) to negotiate
and execute the final versions of an Affordable Housing Agreement, and other instruments
implementing the Project as set forth in the Letter; Copies of the final form of the Letter, when duly
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executed and attested, shall be placed on file in the office of the City Clerk. Further, the Authority
Executive Director (or her duly authorized representative) is authorized to implement the Letter and
take all further actions and execute all documents referenced therein and/or necessary and
appropriate to carry out the transaction contemplated by the Letter as well as the Cooperation
Agreement. The Authority Executive Director (or her duly authorized representative) is hereby
authorized to the extent necessary during the implementation of the Letter to make technical or minor
changes and interpretations of the Letter after execution, as necessary, to properly implement and
carry out the Letter, including all exhibits thereto, provided any and all such changes shall not in any
manner materially affect the rights and obligations of Authority under the Letter. The authorization
given to the Authority Executive Director shall not include amendments which would materially
increase or extend the assistance to be provided by the Authority under the Cooperation Agreement
or the Letter.
Section 4. In addition to the authorization of Section 3 above, the Authority
Executive Director is hereby authorized, on behalf of Authority, to sign all other documents
necessary or appropriate to carry out and implement the Letter, including causing the issuance of
warrants in implementation thereto, and to administer Authority's obligations, responsibilities and
duties to be performed under the Letter and agreements subsequently executed to implement the
Letter, including all exhibits thereto. In addition, the Executive Director is authorized to execute and
administer on behalf of the Housing Authority the Cooperation Agreement substantially in the form
submitted herewith.
Section 5. Pursuant to AB 140, which establishes a statutory exemption from the
California Environmental Quality Act (CEQA) for activities funded by Homekey Round 2, the
following CEQA statutory exemption has been added to Health and Safety Code section 50675.1.4:
(a) Notwithstanding any other law, the California Environmental Quality Act (Division 13
(commencing with section 21000) of the Public Resources Code) shall not apply to any project,
including a phased project, funded pursuant to section 50675.1.3 if all of the following requirements,
if applicable, are satisfied: (1) No units were acquired by eminent domain. (2) The units will be in
decent, safe, and sanitary condition at the time of their occupancy. (3) The project proponent shall
require all contractors and subcontractors performing work on the project to pay prevailing wages for
any proposed rehabilitation, construction, or major alterations in accordance with Chapter 1
(commencing with Section 1720) of Part 7 of Division 2 of the Labor Code. (4) The project
proponent obtains an enforceable commitment that all contractors and subcontractors performing
work on the project will use a skilled and trained workforce for any proposed rehabilitation,
construction, or major alterations in accordance with Chapter 2.9 (commencing with Section 2600) of
Part 1 of Division 2 of the Public Contract Code. (5) The project proponent submits to the lead
agency a letter of support from a county, city, or other local public entity for any proposed
rehabilitation, construction, or major alteration work. (6) Any acquisition is paid for, in whole or
part, with public funds. (7) The project provides housing units for individuals and families who are
experiencing homelessness or who are at risk of homelessness. (8) Long-term covenants and
restrictions require the units to be restricted to persons experiencing homelessness or who are at risk
of homelessness, which may include lower income and very low income households, as defined by
Section 50079.5, for no fewer than 55 years. (9) The project does not result in an increase in the
existing onsite development footprint of structure, structures, or improvements by more than 10
percent. Any increase to the existing, onsite development footprint shall be exclusively to support the
provision of or conversion to housing for the designated population, including, but not limited to,
both of the following: (A) Achieving compliance with local, state, and federal requirements. (B)
Providing sufficient space for the provision of services and amenities. (b) If the lead agency
determines that a project is not subject to the California Environmental Quality Act pursuant to this
section, and the lead agency determines to approve or to carry out that project, the lead agency shall
file a notice of exemption with the Office of Planning and Research and the county clerk of the
county in which the project is located in the manner specified in subdivisions (b) and (c) of section
21152 of the Public Resources Code. (c) This section shall remain in effect only until July 1, 2024.
Section 6. In addition to the CEQA exemption, AB 140 provides significant land -use
streamlining for projects utilizing Homekey Round 2 funds. This land use "exemption" is
independent of the CEQA exemption and applies to all Homekey Round 2 funded projects. All
Homekey Round 2 projects are eligible for such streamlining and are "deemed consistent and in
conformity with any applicable local plan, standard, or requirement, and any applicable coastal plan,
local or otherwise, and allowed as a permitted use, within the zone in which the structure is located,
and shall not be subject to a conditional use permit, discretionary permit, or any other discretionary
reviews or approvals." (Health & Saf. Code, § 50675.1.3, subd. (h).) Any project using money from
Homekey Round 2 funds for any of the purposes listed in the Homekey Round 2 NOFA is deemed
consistent with all applicable local regulatory plans and regulations such as the local general plan and
local codes and ordinances. Such projects do not need to undergo any discretionary local permit
review or approval process (e.g., a discretionary use permit process) before being able to proceed
with the project. Notably, AB 140 did not place time limits on the use of this land use exemption, in
contrast to the CEQA exemption, which is time limited.
THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE
GOVERNING BOARD OF THE ANAHEIM HOUSING AUTHORITY THIS
EIGHTEENTH (18th) DAY OF APRIL, 2023, BY THE FOLLOWING ROLL CALL
VOTE:
Chairperson Aitken and Authority Members Rubalcava,
AYES: Diaz, Leon, Kurtz, Faessel and Meeks
NOES: None
ABSTAIN: None
ABSENT: None
ANAHEI -SOUSING AUTHORITY
By:
Chair •son
'T . ':
.Author ty Secretary
ATTACHMENT TO RESOLUTION
Page 1 of 1
ATTACHMENT 1
COOPERATION AGREEMENT
(North Harbor Apartments)
This COOPERATION AGREEMENT (North Harbor Apartments) ("Cooperation
Agreement") dated as of April 18, 2023 ("Date of Agreement"), is entered into by and between the
CITY OF ANAHEIM, a charter city and California municipal corporation ("City"), and the
ANAHEIM HOUSING AUTHORITY, a public body, corporate and politic ("Authority").
RECITALS
A. City is a California charter city and municipal corporation and a participating
jurisdiction with the United States Department of Housing and Urban Development ("HUD") that has
received funds ("HOME -American Rescue Plan Act Funds" or "HOME -ARP") from HUD pursuant
to section 217 of the Cranston Gonzalez National Affordable Housing Act of 1990, as amended (42
U.S.C. 12701 et seq.) ("NAHA"). On April 8, 2021, HUD allocated HOME -ARP funds to 651 grantees
using the formula established at 24 CFR 92.50 and 92.60.
B. HOME -ARP provides funds for homelessness and supportive services assistance under
the HOME statute of Title I1 of NAHA (42 U.S.C. 12721 et seq.) and authorizes the Secretary of HUD
to waive or specify alternative requirements for any provision of NAHA or regulation for the
administration of the HOME -ARP program, except requirements related to fair housing, civil rights,
nondiscrimination, labor standards, and the environment, upon a finding that the waiver or alternative
requirement is necessary to expedite or facilitate the use of HOME -ARP funds. Pursuant to ARP, the
per -unit cost limits (42 U.S.C. 12742(e)), commitment requirements (42 U.S.C. 12748(g)), matching
requirements (42 U.S.C. 12750), and set -aside for housing developed, sponsored, or owned by
community housing development organizations ("CHDOs") (42 U.S.C. 12771) in NAHA do not apply
to HOME -ARP funds.
C. City has been allocated grant funding provided by HUD pursuant to the Housing
Opportunities for Persons With AIDS ("HOPWA") program authorized under the AIDS Housing
Opportunity Act (42 U.S.C. 12901 et seq.) (herein referred to as the "HOPWA Act") and the HOPWA
program regulations (24 CFR Part 574); and Section 574.300 (Eligible Activities) of the HOPWA
Regulations authorizes the use of HOPWA funds for acquisition, rehabilitation, conversion, lease, and
repair of facilities to provide housing and services among other activities with HOPWA funds.
D. Authority is a California housing authority acting under the California Housing
Authorities Law, Part 2 of Division 24, Section 34200, et seq., of the Health and Safety Code ("HAL").
Authority serves as the housing successor to the former Anaheim Redevelopment Agency (the "Former
Agency") and administers the Former Agency's Low and Moderate Housing Asset Fund (the "Housing
Asset Fund") pursuant to Health and Safety Code Sections 34176 and 34176.1.
E. Linc Housing Corporation, a California limited liability company ("Developer") is the
owner of land consisting of approximately 1.47 acres located at 1251 N Harbor Boulevard (the "Site")
and has proposed to develop and operate thereon an 89 unit affordable rental housing project, which
includes 2 manager units (the "Project").
F. As part of its proposal, Developer has requested that City transfer Four Million Nine
Hundred Thousand Six -hundred and Forty -Nine Dollars ($4,900,649) in whole or in part from (the
"Designated HOME -ARP Amount") moneys available to City under the HOME -ARP Program and/or
(the "Designated HOPWA Amount") under the HOPWA Act. Developer has indicated its intention to
secure an allocation of Tax Credit as part of the funding of the Project.
G. In order to eliminate deterioration and to revitalize the Site and the surrounding and
nearby area, Authority and Developer are negotiating toward a comprehensive transactional agreement
(an "Affordable Housing Agreement"). Pending the negotiation and preparation of the Affordable
Housing Agreement, the Authority has executed a letter which sets forth certain preliminary and
tentative deal points (the "Preliminary Commitment Letter").
H. In view of the proposal as received by Authority from Developer, the Authority and
City are entering into this Cooperation Agreement pursuant to which the City agrees to contribute up
to the Designated HOME -ARP Amount and/or the Designated HOPWA Amount in moneys sourced
frorn the City's HOME -ARP Funds and/or HOPWA Act Funds for purposes of assisting in the
development of the Project, as hereinafter further determined.
I. Based upon the foregoing, the City desires to make available and transfer to the
Authority by this Cooperation Agreement HOME -ARP Funds up to the Designated HOME -ARP
Amount and/or HOPWA Act Funds up to the Designated HOPWA Amount.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL
PROMISES, COVENANTS AND CONDITIONS CONTAINED HEREIN, THE PARTIES
AGREE AS FOLLOWS:
Section 1. TRANSFER OF FUNDS BY CITY TO AUTHORITY. City agrees to
transfer to Authority up to the Designated HOME -ARP Amount of HOME -ARP Funds and/or up to
the Designated HOPWA Amount (with the actual amount as transferred constituting "Project Funds")
held by the City to enable the Authority to proceed with and complete those activities which Authority
deems to be necessary and appropriate to accomplish the Project ("Activities").
(a) Further, Authority covenants and agrees to use the Project Funds (i) in strict
conformance with Title II of the Cranston -Gonzalez National Affordable Housing Act (42 U.S.C.
12701-12839) and the HOME Program Regulations codified at 24 CFR Part 92, as amended by the
2013 HOME Final Rule, if applicable, (ii) in strict conformance with the HOPWA Regulations, if
applicable, and (iii) to implement and perform the Activities in order to expand the supply of decent,
safe, sanitary and affordable housing for Extremely Low, Very Low Income and Low Income
Households, and in accordance with any other applicable rules.
(b) Authority may elect to use Housing Asset Funds and/or HOPWA Funds to fund
all or portion or combination thereof to fund the Project, in the sole discretion of the Authority
Executive Director.
Section 2. LIABILITY AND INDEMNIFICATION. In contemplation of the provision
of Section 895.2 of the California Government Code imposing certain tort liability jointly upon public
entities solely by reason of such entities being parties to an agreement as defined by Section 895.4 and
895.6 of such Code, each of the Parties, as between themselves, pursuant to the authorization contained
in Section 895.4 and 895.6 of such Code, will each assume the full liability imposed on it, or any of its
2
officers, agents, or employees by law for injury caused by negligent or wrongful act or omission
occurring in the performance of this Cooperation Agreement to the same extent that such liability
would be imposed in the absence of Section 895.2 of such Code.
(a) To achieve the above -stated purposes, each Party indemnifies and holds
harmless the other Party for any loss, costs or expense that may be imposed upon such other Party
solely by virtue of such Section 895.2. The provisions of Section 2778 of the California Civil Code
are made part hereof as if fully set forth herein.
Section 3. EFFECTIVE DATE. This Cooperation Agreement shall take effect from and
after the date of approval hereof by the Authority Board and the City Council.
Section 4. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties ofAuthority. Authority hereby represents and
warrants to City as follows:
(i) Authority of Anaheim Housing Authority. Authority represents and
warrants to City it is a public body, corporate and politic, duly existing pursuant to the HAL, and it has
been authorized to transact business pursuant to action of the City Council. Authority has full power
and authority to execute and deliver this Cooperation Agreement and to accept the funds contemplated
hereunder, to execute and deliver documents or instruments, if any, executed and delivered, or to be
executed and delivered, pursuant to this Cooperation Agreement, and to perform and observe the terms
and provisions of all of the above.
(ii) Authority of Persons Executing Documents. This Cooperation
Agreement and all other documents or instruments executed and delivered, or to be executed and
delivered, pursuant to this Cooperation Agreement have been executed and delivered by persons who
are duly authorized to execute and deliver the same for and on behalf of Authority, and all actions
required under Authority's organizational documents and applicable governing law for the
authorization, execution, delivery and performance of this Cooperation Agreement and all other
documents or instruments executed and delivered, or to be executed and delivered, pursuant to this
Cooperation Agreement, have been duly taken.
(b) Representations and Warranties of City. City represents and warrants to Authority that
it is a charter city and municipal corporation. City has full right, power and lawful authority to enter
into this Cooperation Agreement and the execution, performance and delivery of this Cooperation
Agreement by City, and persons on behalf of City, have been fully authorized by all requisite actions
on the part of the City Council.
Section 5. DEFAULT AND REMEDIES.
(a) Events of Default. Failure by either Party to duly perform, comply with, or
observe any of the conditions, terms, or covenants of this Cooperation Agreement shall be an Event of
Default. The Party who so fails or delays must immediately commence to cure, correct or remedy such
failure or delay, and shall complete such cure, correction or remedy with reasonable diligence and
during any period of curing shall not be in default. The injured Party shall give written notice of default
to the Party in default, specifying the default complained of by the injured Party. If the default is not
commenced to be cured within thirty (30) days after service of such notice of default and is not cured
promptly in a continuous diligent manner in a reasonable period of time after commencement, the
defaulting Party shall be liable for any damages caused by such default, and the non -defaulting Party
may thereafter commence action for damages with respect to such default or for specific performance
of this Cooperation Agreement.
(b) Remedies. The occurrence of an Event of Default by Authority that is not cured
within the time set forth herein shall relieve City of any obligation to disburse the Project Funds. The
Authority may seek specific performance of this Cooperation Agreement for City's failure to provide
the Project Funds as provided under this Cooperation Agreement. The non -defaulting Party may seek
money damages or any other remedy available at law or equity against the defaulting Party for an Event
of Default hereunder.
Section 6. MISCELLANEOUS.
(a) Time. Time is of the essence in this Cooperation Agreement.
(b) No Third Parties Benefited. This Cooperation Agreement is made and entered
into for the sole protection and benefit of City, its successors and assigns, and the Authority, its
successors and assigns, and no other person or persons shall have the right of action hereon.
(c) Successors and Assigns. The terms hereof shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto; provided, however, that no assignment
of Authority's rights hereunder shall be made, voluntarily or by operation of law, without the prior
written consent of City and that any such assignment without said consent shall be void.
(d) Construction of Words. Except where the context otherwise requires, words
imparting the singular number shall include the plural number and vice versa, words imparting persons
shall include firms, associations, partnerships and corporations, and words or either gender shall
include the other gender.
(e) Partial Invalidity. If any provision of this Cooperation Agreement shall be
declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired.
(f) Governing Law. This Cooperation Agreement and any instruments given
pursuant hereto shall be construed in accordance with and be governed by the laws of the State of
California.
(g) Amendment. This Cooperation Agreement may not be changed orally, but only
by agreement in writing signed by Authority and City.
(h) Captions and Headings. Captions and headings in this Cooperation
Agreement are for convenience of reference only, and are not to be considered in construing the
Cooperation Agreement.
[signature blocks for Cooperation Agreement on next page]
9
IN WITNESS, THE PARTIES HAVE EXECUTED THIS COOPERATION
AGREEMENT (NORTH HARBOR APARTMENTS) AS OF THE EFFECTIVE DATE IN THE
FIRST PARAGRAPH ABOVE.
"CITY"
CITY OF ANAHEIM
a charter city and municipal corporation
an
APPROVED AS TO FORM:
OFFICE OF THE CITY ATTORNEY
Ryan Hodge
Deputy City Attorney
Grace Ruiz-Stepter, Director
Housing and Community Development
AUTHORITY:
ANAHEIM HOUSING AUTHORITY, a public
body, corporate and politic
M.
APPROVED AS TO FORM:
BEST BEST & KRIEGER
Melissa Crosthwaite, Special Counsel
Grace Ruiz-Stepter, Executive Director
City of Anaheim
ANAHIm HOUSING AUTHORITY
Tl�
Est. 1975
April 18, 2023
Ms. Rebecca Clark
Linc Housing Corporation
3590 Elm Avenue
Long Beach, CA 90807
SUBJECT: Preliminary Award Letter regarding Certain Financial Assistance
by the City of Anaheim and the Anaheim Housing Authority,
including a Loan sourced from the HOME ARP, HOPWA Program
Funds, and/or Housing Asset Funds, 87 Section 8 PBVs for the
Proposed Conversion and Rehabilitation of the previous 119-Unit
Studio 6 Extended Stay Motel located at 1251 N Harbor Boulevard to
a Permanent Supportive Housing Project in Anaheim.
Dear Ms. Clark:
This Preliminary Award Letter ("PAL") constitutes the City's commitment to provide
certain financial assistance as herein contained to Linc Housing Corporation ("LH"),
a California non-profit corporation, or another legal entity,under the control of LH (in
either case, "Developer") for the project described, below, which financing will be
evidenced by grant, loan and/or regulatory agreements setting forth the parties' rights
and obligations.
Background
Developer submitted an application to the City of Anaheim ("City") and the Anaheim
Housing Authority ("Authority")' for financial assistance for the proposed affordable
housing project commonly known as "North Harbor (FKA Studio 6 Anaheim) located
at 1251 N Harbor Boulevard, Anaheim, CA", which is a conversion and rehabilitation
of the previous 119-unit Studio 6 Extended Stay Motel currently being used as an
interim housing site for homeless individuals as part of the State's Project Homekey
Round 2 Program.
On January 25, 2022, the Anaheim City Council approved the submission of an
application to the California Department of Housing and Community Development
("HCD") for Homekey grant funds ("Homekey Application"). The Application was
submitted in partnership with the Developer and the project's supportive services
provider, American Family Housing USA, a California non-profit corporation. On
March 28, 2022, the City was notified by HCD that the Homekey Application was
approved and the City would be awarded $26,537,559 to acquire and operate the
The City is a California municipal corporation and charter city; and, the Authority is a public body
corporate and politic organized and existing pursuant to the Housing Authorities Law, California Health
and Safety Code Section 34200, et seq. ("HAL"). In this Preliminary Award Letter, the City and the
Authority are referred to together as "Anaheim".
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 2 of 15
Studio 6 Extended Stay Motel for interim housing. During the Interim Supportive
Housing Phase (Phase' I), the Developer requested that the City provide a loan of
approximately $2,877,959 from the Authority's Low and Moderate Income Housing
Asset Fund ("LMIHAF") to support the capital match requirement of HCD and a grant
of approximately $7,523,282 in Homeless Housing Assistance Program ("HHAP")
funds to support the operational match requirement. The Authority and Developer
entered into an Affordable Housing Agreement and associated document for the
duration of the "Interim Housing Period asdefined by the Affordable Housing
Agreement. The Interim Housing Period (or Phase 1) involved the rehabilitation of
eighty-nine (89) units for the purposes of interim housing as required by the Homekey
funding guidelines, with a 15 year affordability covenant. The eighty-nine (89) units
were in fair condition and ready for occupancy after minor repairs, with the exception
of units that required renovation to meet the Homekey accessibility and
hearing/visual requirements. During Phase I, the leasing and temporary community
space were updated and some of the units were utilized for counseling and office
spaces.
As contemplated when the Authority entered into an Affordable Housing Agreement
with Developer for Phase I, the project will now be transitioning into the development
of Permanent Supportive Housing (Phase II), which will involve converting the
existing 119=unit motel currently being utilized for interim housing to an 89-unit
affordable permanent supportive housing project ("Project"). The Project will include
sixty-seven (67) studio units, twenty (20) one -bedroom units, plus two two -bedroom
manager units. For Phase II, the Developer has requested that the City provide, and
the City hereby commits to provide, a loan of up to $4,900,649 consisting of any or
all of the following funding sources: HOME American Rescue Plan Act (HOME ARP)
program funds, Housing Opportunities for Persons with Aids (HOPWA) and/or
moneys from the Authority's Low and Moderate Income Housing Asset Fund
("LMIHAF") ("Anaheim Loan"). The Developer additionally requested that the
Authority provide up to 87 Project -Based Section 8 Vouchers ("PBV Assistance") to
the Developer for the Project pursuant to the Project Based Voucher Law, 42 U.S.C.
1437f(o)(13), and the federal regulations promulgated thereunder set forth at 24 CFR
Part 983 (collectively, the "Section 8 Program"). As specifically referenced in Recital
F of the Affordable Housing Agreement, and as authorized by Section 15.10, the
Affordable Housing Agreement will be amended and restated to address Phase II,
making various changes for consistency and compliance with this PAL, and
extending the term of the Affordable Housing Agreement. In addition to extending
the term of the Affordable Housing Agreement, the amended and restated Affordable
Housing Agreement will specifically provide that the term of the $2,877,959 LMIHAF
loan from the City will also be extended for a new term of 55 years and bear simple
interest at 3% per annum. Any further references to an Affordable Housing
Agreement, or AHA, in this PAL shall mean the Amended and Restated Affordable
Housing Agreement (for Phase 1).
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 3 of 15
It is required that Developer will also be applying for Tax Credit funding providing an
estimated additional $20,447,388 in 9% tax credit equity for the project for Phase II,
for two'(2) successive rounds, if unsuccessful in the first round, and for 4% tax credit
equity for one additional (3rd) round, if necessary, in the manner and with any
limitations that may be designated in this PAL and any additional agreements
entered into in furtherance of this PAL.
Land Use Entitlement and Anaheim Assistance
In connection with seeking to undertake the Project (Phase II as noted), the
Developer submitted to the City and the Authority a request for financial assistance
and other benefits as. herein defined and described (together, "Anaheim
Assistance").
As part of the State's Project Homekey Program, Developer submitted a request to
the City for concurrence with the CEQA and Land use preemption pursuant to
Assembly Bill 140 ("AB 140"). Homekey Round 2 Program projects are entitled to
apply for and receive. a California Environmental Quality Act ("CEQA") exemption
and land use streamlining per AB140 for interim housing projects that will
subsequently be converted into permanent supportive housing units, subject to
specific requirements enumerated in Health and Safety Code section 50675.1.4.
Homekey Round 2 projects are eligible for such streamlining and are deemed
consistent and in conformity with any applicable local plan, standard, or requirement,
and any applicable coastal plan, local or otherwise and allowed as a permitted use,
within the zone in which the structure is located, and shall not be subject to a
conditional use permit, discretionary permit, or any other discretionary reviews or
approvals. (Health and Safety Codes 50675.1.4 and 50675.1.3, Subdivision (h)).
The Developer proposes that, with the written consent of the Authority, as applicable,
the Developer shall prepare and submit to the City an application for Building Plan
Check and, if approved, construction subject to the City's development standards,
zoning and other laws and regulations unless otherwise exempt per AB140 (Health
and Safety Codes 50675.1.4 and 50675.1.3, Subdivision (h).).
In connection with implementation of the Project, the Developer has requested that
Anaheim provide to the Developer, by this PAL, the Anaheim Assistance, more fully
described herein, and has agreed to meet certain obligations in order to receive that
Anaheim Assistance.
• The Developer will submit applications for
above, to complete Phase II (Permanent S
of the site and satisfy the provisions of th
e
Tax Credit financing, as detailed
upportive Housing) development
California Tax Credit Allocation
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 4 of 15
Committee ("TCAC") Regulations Implementing the Federal and State Low
Income Housing Tax Credit Laws, California Code of Regulations, Title 4,
Division 17, Chapter 1, Section 10300, et seq. ("TCAC Regulations"), in
particular Section 10326, albeit there is no intention to violate HOME Program
requirements, in particular 24 CFR 92.2. If the Developer receives an award
of low-income housing tax credits ("Tax Credits"), then the Developer and
Anaheim may negotiate and enter into a comprehensive agreement for the
operation of affordable rental housing improvements (the "AHA") in
implementation of the Tax Credits and the Anaheim Assistance.
With respect to Tax Credits and for further clarification, the Developer is
required to make an application to the California Tax Credit Allocation
Committee (CTCAC) for first round 9% Tax Credits scheduled for April 2023.
If the Developer's application for 9% Tax Credits is unsuccessful, the
Authority will agree to one (1) additional successive application to CTCAC for
an allocation of 9% Tax. Credits.. if that second round is not successful,
Developer shall apply for California Debt Limit Allocation Committee (CDLAC)
for tax exempt bonds and to CTCAC for 4% tax credits for one additional
(third) successive round; provided, however, that the Authority shall have no
obligation to increase the amount of Anaheim Assistance to the Project from
that described in this PAL. If no award is made, Anaheim and Developer
agree to meet and confer as to the next steps, as may be more fully
memorialized in an agreement executed in furtherance of the PAL.
Anaheim Assistance
The City and Authority have reviewed the Developer's requests for assistance and
on April 18, 2023 at a public meeting authorized and approved issuance of this letter
evidencing the preliminary award and commitment of the Anaheim Assistance.
Anaheim has made the Developer aware of the 2013 HOME Final Rule, specifically
including the amendments to the definition of "commitment" in 24 CFR 92.2 that
prohibits the City as a participating jurisdiction ("PY) from providing a commitment
(as the term is defined therein) of HOME Program funds to any specific local project
until "the [City] and project owner [Developer] have executed a written legally binding
agreement under which HOME assistance will be provided to the owner for an
identifiable project for which all necessary financing has been secured, a budget and
schedule have been established, and underwriting has been completed and under
which construction is scheduled to start within twelve months of the agreement date."
(Italics added.) Notwithstanding the definition of "commitment" in 24 CFR 92.2 as
amended by the 2013 HOME Final Rule, 24 CFR 92.504(c)(3) authorizes the City to
"preliminarily award HOME funds for a proposed project, contingent on conditions
such as obtaining other financing for the project" [italics added]; however, this section
goes on to clearly confirm that "[t]his preliminary award is not a commitment to a
project. The written agreement committing the HOME funds to the project must meet
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program, Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim; California
April 18, 2023
Page 5 of 15
the requirements of 'commit to a specific local project' in the definition of
`commitment' in §92.2 ..." Thus, while this letter is not a commitment as defined
under the HOME Program of federal funds for Anaheim Assistance as the term
commitment is defined therein, Anaheim intends that this letter evidence the City's
and Authority's preliminary award of the Anaheim Assistance to the Developer for
the Project subject to the conditions described below. Further, Anaheim states its
objective for the Developer to satisfy the provisions of the TCAC Regulations, in
particular Section 10326, albeit there is no intention to violate HOME Program
requirements, in particular 24 CFR 92.2.
The amount of the HOME ARP,.HOPWA and/or LMIHAF Loan and Project Based
Voucher ("PBV") Assistance to be provided to the Project has been determined, and
this letter is provided, and based on, Anaheim's review of the Developer's application
for the HOME ARP, HOPWA and/or LMIHAF Loan and PBV Assistance and the
development proforma and projected cash flows for the Project submitted by the
Developer to Anaheim as part of its Application, as contained in Exhibit A, including
the distribution of housing units ("Unit Mix") to which the PBV Assistance will be
applied as set forth in the Proforma. The Unit Mix is an important part of the
Developer's consideration to Anaheim because the Project is intended to serve a
target population: Extremely Low' Income persons who currently reside in motel
rooms, other unstable or substandard housing, or are otherwise homeless. The
Authority Executive Director has authority to approve revised development
proformas and projected cash flows for the Project; provided, however, that the
Anaheim Assistance is not materially increased or extended.
The AHA, which would'include the infusion of HOME ARP, HOPWA and/or LMIHAF
Funds in the Anaheim Loan, would include the following terms as well as other
provisions designated by the Authority which are customary to agreements of the
Authority providing for the development or rehabilitation of affordable rental housing
units and which involve the use of HOME or other federal funding; such AHA will also
be subject to review by the City Attorney and/or special counsel engaged by the
Authority:
Covenants will be recorded which protect.the interests of the Authority in the
affordable rental units developed; such covenants shall not be subordinated
to deeds of trust or other instruments and, in addition, shall be enforceable by
the City as well as the Authority. If a density bonus agreement is entered into,
the provisions of such density bonus agreement shall also be senior to any
deeds of trust or other instruments.
• A loan of Four Million Nine Hundred Thousand Six Hundred and Forty -Nine
Dollars ($.4,900,649) (the."Anaheim Loan"). The Anaheim Loan anticipated
to be sourced from one or more of the following sources of money:, (1) moneys
transferred to the Authority by the City, as such funds have been received by
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 6 of 15
the City as a participating jurisdiction under the federal HOME Investment
Partnerships Act and the HOME Investment Partnerships Program, in
accordance with Title II of the Cranston -Gonzalez National Affordable
Housing Act (42 U.S.C. 12701 et seq.) and the HOME Program regulations
codified at 24 CFR Part 92, and provided there is and' shall be no
"commitment" of funds to the requirements of Section 92.2 (described herein)
are fully satisfied ("HOME Program") and/or (2) funding provided by HUD
pursuant to the Housing Opportunities for Persons With AIDS ("HOPWA")
program authorized under the AIDS Housing Opportunity Act (42 U.S.C.
12901 et seq.) and/or (3) money held in the Authority's LMIHAF pursuant to
the Dissolution Law, Health and Safety Code Sections 34170, et seq., in
particular. sections 341.76, and 34176.1 ("LMIHAF Moneys"). The Anaheim
Loan will be a residual receipts loan in no lower than third lien position and
subordinate to the Primary Loan. It is anticipated that approximately Four
Million, Nine Hundred Thousand Six Hundred and Forty -Nine Dollars
($4,900,64.9)(the "Authority Amount") would consist of LMIHAF Moneys
and/or HOME ARP Program funds and/or (3) HOPWA Funds2;
• Disbursement procedures for release of the loan proceeds;
• Principal amount shall bear three and No/1.00ths percent (3%) simple interest
per annum;
• Repayment from 70% of Residual Receipts (after payment of operating
expenses, debt service, any deferred developer fee, and partnership fees to be
described in the AHA);
• Remaining principal and accrued interest due upon the 55th anniversary of the
Closing or earlier upon sale, refinancing or default.
• Construction of the Project must be competitively bid in accordance with
applicable federal, state and local laws and regulations, in particular the HUD
requirements;
• This a federally -funded Project and is therefore subject to all federal and state
labor laws, including without limitation, federal Davis Bacon and related prevailing
wage, labor, contracting and contractor requirements. Additionally, the Project is
also a "public works project" and is subject to all state and local laws and
regulations for public works, including without limitation California Labor Code
Section 1720, et seq.
2 In this PAL, Anaheim Loan and or "HOME ARP, HOPWA and/or LMIHAF Loan" are used
interchangeably.
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 7 of 15
• Developer shall include funding in the Project proforma to pay for the Authority's
legal costs, including attorney's fees and other associated costs, related to any
changes requested or proposed by the Developer after execution and closing of
the AHA .
• Cost savings from the Project, if any, will be applied first to pay down the Anaheim
Loan, subject to compliance with the TCAC Regulations.
If the Developer applies for and receives 9% Tax Credits from CTCAC, the
Development Loan, if any, to be provided as part of the Anaheim Assistance
described above would be in an amount to be determined upon the approval
of Developer's 9% Tax Credit applications. Any requested increase in the
amount of the Anaheim Loan described herein would require approval by the
City Council and the Authority Board; provided that no increase in the
Anaheim Loan is contemplated.
• The Developer shall continue to apply for other funding sources; such additional
funding sources, including the conditions related to the provision of such other
funding, shall be subject to prior written approval by the Authority. If other funding
is secured, the Anaheim Loan shall be reduced on a dollar for dollar basis.
• Developer acknowledges it will be required to enter into agreements containing
insurance provisions, as required and determined in the sole discretion of the
Anaheim Risk Manager, that will include, but not be limited to the following:
o Further, Developer shall procure and maintain, at its sole cost and
expense, in a form and content satisfactory to City and Authority duplicate
originals or appropriate endorsements of commercial general liability
insurance policies in the amount of at least Two Million Dollars
($2,000,000) combined single limits, naming City and Authority and its
officers, employees, and agents as additional insureds or co -insureds.
Developer shall also furnish or cause to be furnished to City and Authority
evidence of builder's risk coverage written on a completed value basis in
an amount equal to the full replacement cost of the improvements with
coverage available on the so-called non -reporting "all risk" form of policy,
including coverage against collapse, fire, and water damage, with such
insurance to be in such amounts and form and written by such companies
as shall be approved by City and Authority. Such policy shall name City
and Authority as a loss payee. The foregoing insurance policies:
■ (a) shall be primary insurance and not contributory with any
other insurance which City and Authority may have;
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 8 of 15
■ (b) shall contain no special limitations on the scope of
protection afforded to City and Authority and its officers,
employees, agents, and representatives;
■ (c) shall be "date of occurrence" and not "claims made"
insurance;
■ (d) shall apply separately to each insured against whom claim
is made or suit is brought, except with respect to the limits of the
insurer's liability;
■ (e) shall provide that the policy will not be cancelled by the
insurer or Grantee unless there is a minimum of thirty (30) days
prior written notice to City and Authority;
■ (f) shall be written by a good and solvent insurer admitted in
California and registered with the California State Department of
Insurance; and
■ (g) shall be endorsed to state that any failure to comply with
the reporting provisions of the policies shall not affect coverage
provided to City and Authority.
o Developer shall also furnish or cause to be furnished to City and Authority
evidence reasonably satisfactory to City and Authority that Developer's
Contractor(s) carry workers' compensation insurance as required by law.
Developer shall defend, indemnify, assume all responsibility for, and hold City
and Authority and their officers, officials, members, employees, agents, and
representatives harmless from all claims, demands, damages, defense costs or
liability of any kind or nature relating to (a) any damages to property or death or
injuries to persons (including reasonable attorneys' fees and costs and expert
witness fees), which may be caused by any acts or omissions of Developer
arising from or related to the Project and this PLA, whether such activities or
performance be by Developer or by anyone directly or indirectly employed or
contracted with by Developer and whether such damage shall accrue or be
discovered before or after termination of any agreement, or (b) any litigation,
administrative or adjudicative challenge by third parties to the validity,
applicability, interpretation or implementation of any agreement, or the
certification or approval of the environmental document(s) with respect to the
Project and this PLA, or (c) any default of any agreement by Developer.
The Anaheim Loan and additional subsidies to the Project and the PBV Assistance are
subject to each of the following requirements:
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 9 of 15
Entering into an AHA by and between the Authority and Developer that more
specifically describes and authorizes the disbursement of the Anaheim Loan
proceeds to the Developer for construction of specified housing units at the
Project and the application and use of PBV Assistance for the Project, the
restriction of the rents at 87 out of the 89 housing units at the Project to levels
that are affordable at 30% of the Area Median Income ("AMI") for a minimum of
55 years. The City's HOME ARP Program funds and/or the HOPWA funds for
the Anaheim Loan will be transferred to the Authority pursuant to a cooperation
agreement to be entered into between the City and Authority pursuant to the
HOME and HOPWA Program.
2. Compliance with the HOME Program, the HOPWA Program, the LMIHAF funds,
the Section 8 Program, and applicable federal regulations set forth in 24 CFR
Part 92 (as amended by the 2013 HOME Final Rule) and 24 CFR Part 983.
3. Compliance with the California Environmental Quality Act ("CEQA") requirements
unless, pursuant to AB 140 or other basis, as a statutory exemption for this
Project, as determined to be applicable and appropriate. Although Developer
has requested concurrence with CEQA and Land use preemption, nothing
herein shall be construed to limit Anaheim's discretion to conduct environmental
review and/or determine one or more appropriate basis for exemption. (Health
and Safety Codes 50675.1.4 and 50675.1.3, Subdivision (h)).
4. Compliance with the National Environmental Protection Act ("NEPA") and
approval thereof must be adhered to. NEPA clearance for the Project is currently
underway and must be completed and approved by HUD prior to issuance of
funds.
5. Determination of federal Department of Housing and Urban Development
("HUD") "fair market rent" for purposes of implementing the PBV Assistance to
the Project will be based and contingent upon approval of an independent
appraisal.
6. Receipt of Subsidy Layering Review approval from the CTCAC. (Pursuant to
July 2010 HUD Notice, CTCAC may, and is now, performing Subsidy Layering
Review for and on behalf of HUD.)
7. Eighty -Seven (87) of the Eighty -Nine (89) "Housing Units" at the Project shall and
will be restricted to "Affordable Rent" as defined by the TCAC Regulations for a
period not less than 55 years pursuant to conditions, covenants and restrictions
recorded against the Project in the Official Records, County of Orange,
California. Two (2) Housing Units will be rented to on -site property managers;
the manager's units shall not be required to be rent -restricted.
8. A unit matrix of all units in the Project of Eighty -Nine (89) units is attached hereto
and fully incorporated by this reference as Exhibit A ("Unit Mix Matrix").
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 10 of 15
9. All designated HOME ARP units shall be covenanted as HOME ARP units with
affordable rent charged to the tenant household. The number of units restricted
at the low HOME ARP rent and/or high HOME ARP rent will be determined based
on the total HOME ARP Program funds allocated to the Project. Further, all
housing units at the Project shall be restricted as set forth herein and in the AHA
for a minimum of fifty-five (55) years pursuant to a regulatory agreement with
conditions, covenants and restrictions restricting the Developer's and
successors' use, ownership, operation, management, maintenance, transfer and
financing of the Project, and such fifty-five (55) year regulatory agreement shall
be recorded against the Project and Site in the Official Records, County of
Orange, California. No units within the Project shall be restricted on the basis of
age.
10. Execution of the AHA shall be in a form to be reviewed and approved by
Anaheim's City Attorney and/or special counsel.
11. The HOME ARP and/or HOPWA Program funds for the Anaheim Loan will be
transferred by the City to the Authority pursuant to a cooperation agreement to
be considered and action taken by and between the City and Authority.
12. If HOME ARP and/or HOPWA Program moneys are ultimately used to make any
portion of the Anaheim Loan, the Developer shall comply with the HOME ARP,
HOME Program and applicable federal regulations set forth in 24 CFR Part 92
(as amended by the 2013 HOME Final Rule) and 24 CFR Part 983 and/or
applicable regulations and requirements for the HOPWA Program, including, but
not limited to, 42 U.S.C. 12901 et seq. and 24 CFR Part 574.
13. If LMIHAF Moneys are used to make the Anaheim Loan, the Developer shall
comply with 'all applicable requirements of the California Community
Redevelopment Law, Health and Safety Code Section 33000, et seq., and the
Dissolution Act, Health and Safety Code Section 34170, et seq., in particular
Sections 34176 and 34176.1.
14. The Developer shall comply with the Housing Assistance Law (HAL) and any and
all other applicable federal, state and local laws and regulations.
15. All Housing Units at the Project must pass Housing Quality Standard (or other
standards as applicable) inspections as required by applicable funding sources
and, including at the completion of construction, as required by applicable HUD
regulations, specifically including the HOME Program regulations as amended
by the 2013 HOME Final Rule.
16. Execution of an Agreement to Enter into a Housing Assistance Payment Contract
("AHAP") with respect to the provision of PBV Assistance to the Project for the
anticipated 87 Housing Units to receive PBV Assistance.
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 11 of 15
17. Execution of a Housing Assistance Payment Contract ("HAP Contract") with
respect to the provision of PBV Assistance to the Project pursuant to the
requirements of the AHAP.
18. This a federally -funded Project and is, therefore, subject to all federal and state
labor laws, including without limitation federal Davis Bacon and related prevailing
wage, labor, contracting and contractor requirements. Additionally, the Project is
also a "public works project" and is subject to all state and local laws and
regulations for public works, including without limitation California Labor Code
Section 1720, et seq.
19. As and if applicable, the Developer will comply with the federal Davis -Bacon Act
and California Labor Code Section 1720, et seq., relating to prevailing wages
("Prevailing Wage Laws"); in this regard, the Authority and the Developer
understand that such laws and regulations include exemptions that may apply to
the Project, but under the AHA, the Developer will assume responsibility for and
indemnify the Authority (and the City) relating to the Prevailing Wage Laws as
such may be applicable to the Project.
20. Compliance with the California Environmental Quality Act ("CEQA") requirements
unless, pursuant to AB 140 or other basis, as a statutory exemption for this
Project, as determined to be applicable and appropriate and the National
Environmental Protection Act ("NEPA") and approval thereof, as applicable.
21. Receipt of Subsidy Layering Review approval from TCAC. (Pursuant to July 2010
HUD Notice, TCAC may, and is now, performing Subsidy Layering Review for
and on behalf of HUD.)
22. Determination of the HUD "fair market rent" for purposes of implementing the
PBVs for the Project will be based and contingent upon approval of an
independent appraisal.
23. If HOME ARP funds are used to provide the Anaheim Loan, Developer will be
required to comply with HOME ARP Regulations, which are incorporated herein
by this reference.
24. If HOPWA funds are used to provide the Anaheim Loan, Developer will be
required to comply with HOPWA Regulations, which are incorporated herein by
this reference.
25. The Anaheim Loan proceeds will be disbursed during construction at such time
as all funding sources are committed and available and subject to such terms
and conditions precedent as are customary for AHA's entered into by the
Authority and in accordance with any applicable requirements.
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 12 of 15
25. The AHA shall provide that the Closing and each of the following conditions
precedent shall be met prior to the disbursement of any portion of the
Development Loan as well as such additional and other conditions as are
customarily included by City and Authority in its affordable housing agreements:
a. All grading and/or building permits shall have been issued, or be ready to
issue, and the City shall have issued a letter stating that building permits
are ready to issue, subject only to the completion of grading of the Site
for the Project.
b. The Developer shall have provided evidence to Anaheim that the
Developer has obtained insurance policies, certificates, and additional
insured or other endorsements therefor acceptable to Anaheim, as
described in the AHA.
The Developer shall have provided construction security in favor of
Anaheim, which may include a completion guarantee or a letter of credit,
and/or payment and performance bonds from the general contractor and
subcontractors for the Project (or some combination of any or all of the
above), with election at the sole discretion of Anaheim, in an amount
sufficient to ensure the Project will be completed, all invoices paid, and all
workers paid in conformity with applicable federal and state labor laws,
and otherwise in compliance with applicable federal and state laws, and
placed in service within the time set forth in the schedule for the Project
as approved by Anaheim.
d. The Developer shall submit and obtain approval of the Authority for: (i) the
construction contract with its general contractor and the subcontracts
therefor, (ii) the limited partnership agreement for the limited partnership
entity to be formed to own and operate the Project, (iii) management,
scope and funding for all required supportive services, and (iv) the
marketing and tenant selection plans for the Project.
27. The AHA shall provide that each of the following conditions precedent shall be
met prior to payment under the PBVs:
a. A final certificate of occupancy for completion of the Project shall have
been issued by the City's building official.
b. The final HAP contract has been duly entered into between the Authority
and the Developer pursuant to the Section 8 Laws and all other applicable
federal, state and local laws and regulations.
c. The Developer shall have maintained and have on file with Anaheim
up-to-date insurance policies and certificates or endorsements therefor
acceptable to Anaheim, as described in the AHA.
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 13 of 15
d. The Developer shall have prepared, and the Authority shall have
approved, a detailed Social and Supportive Services Plan ("Social
Services Plan"), which shall describe the social and supportive services
to be provided at the Project, and a detailed budget for the social and
supportive services described in the Social Services Plan. The Social
Services Plan shall further describe the goals and objectives of the social
and supportive services to be provided at the Project. The approved
Social Services Plan shall be made a part of the HAP contract and
contingent on final HAP approval for the PBVs. The Social Services Plan
shall include a robust level of social services offered at the Project and
suitable for the residents' needs and provided by professionally trained
staff. Services must include an assessment of clients' needs, link to
services and verification of services obtained. The Social Services Plan
must also provide clear outcome measurements related to services
provided and must clearly identify if services will be provided by the
Developer or by third party entity(ies). For services to be provided by the
Developer, the Social Services Plan shall clearly identify the budget and
resources available for the services. For services to be provided by third
party entity(ies), the Social Services Plan must include copies of the
agreements or memoranda of understanding that govern provision of the
services. The Social Services Plan shall include strong programming that
engages future tenants on a daily basis, and that will have a positive
social impact on the residents as it relates to mental wellness and social
integration. The fully programmed kitchen (to include stove, oven,
refrigerator, microwave, dishwasher) must be well suited for strong
programming. The Social Services Plan shall address how the proposed
programming will support the small unit size concerns and dealing with
socialization. In addition, Developer shall provide an Operational Services
Budget for provision of the social services contemplated by this PAL, as
contained in the Social Services Plan.
28. The AHA shall provide that each of the following conditions precedent shall be
met prior to the disbursement of any portion of the Anaheim Loan and prior to
execution of the AHAP:
a. Developer shall have secured all necessary financing and funding for the
construction and operation of the applicable phase of the Project. Such
financing and funding shall be sufficient to pay all Project development
costs, through lease -up, as set forth in a final budget (to be defined in the
AHA) consistent with the approved Proforma (or as otherwise approved
by Anaheim).
29. Anaheim's preliminary award of the Anaheim Assistance is and shall remain
subject to all covenants, conditions, and restrictions set forth in the AHA, and in
particular Anaheim's analysis of all the available funding sources and
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 14 of 15
development and operating costs of the Project and the overall economic
feasibility of the Project, including without limitation all funding sources and terms
therefor including the supportable debt (construction and permanent financing),
market value of Tax Credits and tax credit investor equity, deferred developer
fee, if any, and other subordinate debt, if any.
30. Nothing herein shall be construed as a commitment to issue development
entitlements, nor shall it limit in any way the City's discretion with respect to
approval of development entitlements, which shall be independent of funding
commitments.
31. By consideration and action to approve this PAL, Anaheim hereby authorizes the
Executive Director to sign this Preliminary Award Letter on behalf of Anaheim
(both the City and the Authority), with any non -substantive changes to be made
by the City Attorney or Agency Counsel. Further, the Executive Director is
authorized to cause to be prepared and executed the AHA, including the AHAP
and HAP contracts for the PBVs, in implementation of this Preliminary Award
Letter so long as the terms and provisions of the AHA and each and all
implementing agreements and instruments therefor are substantially consistent,
financially and legally, with this Preliminary Award Letter.
32. Further, the Executive Director (or his/her duly authorized representative) is
authorized to implement the AHA and take all further actions and execute all
documents referenced therein and/or necessary and appropriate to carry out the
transaction contemplated by this PAL, and thereafter the AHA including all
exhibits, instruments and implementing agreements thereto. To the extent
necessary during the implementation hereof and thereof, the Executive Director
is authorized to make technical or minor changes and interpretations of this PAL
and the AHA, as necessary to properly implement and carry out the Project
provided any and all such changes shall not in any manner substantially affect
Anaheim's rights and obligations under this PAL and the AHA.
33. In addition, the Executive Director is authorized, on behalf of both the City and
the Authority, to sign any and all other documents necessary or appropriate to
carry out and implement this PAL, the AHA and the Project, including all exhibits
thereto and including causing the issuance of warrants in implementation thereto,
and to administer Anaheim's obligations, responsibilities and duties to be
performed thereunder so long as substantially consistent with this PAL and the
AHA. Any and all substantial changes to this PAL or to the terms and provisions
of the AHA and implementing agreements and instruments thereto shall require
the consideration and action of the City Council and/or the Authority Board, as
applicable.
34. The City's obligation to provide the Anaheim Loan and additional local subsidies
and the Authority's obligation to provide PBV Assistance to the Project are and
shall remain subject to all covenants, conditions, and restrictions set forth in the
Ms. Rebecca Clark
Linc Housing Corporation
Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME ARP,
HOPWA Program Funds, and/or Housing Asset Funds for the 87-Unit Permanent
Supportive Housing Project in Anaheim, California
April 18, 2023
Page 15 of 15
AHA, and in particular Authority's analysis of the available funding sources and
development and operating costs of the Project and the overall economic
feasibility of the Project.
35. In addition to the foregoing, notwithstanding any statement set forth in this letter
or provisions of the AHA, Developer, City and Authority agree and acknowledge
that the AHA will not constitute a commitment of federal funds, and that such
commitment of funds may occur only upon satisfactory completion of
environmental review and receipt by Authority and/or City, as applicable, of a
release of funds from the U.S. Department of Housing and Urban Development
under 24 CFR Part 58. Developer and Authority will further agree in the AHA that
the provision of any federal funds to the Project is and shall be conditioned on
Anaheim's determination to proceed with, modify or cancel the Anaheim
Assistance based on the results of a subsequent NEPA environmental review
and the outcome of the Subsidy Layering Review.
36. Developer and Authority are further prohibited from undertaking or committing
any federal funds to physical or choice -limiting actions, including property
acquisition, demolition, movement, rehabilitation, conversion, repair or
construction prior to the environmental clearance; Developer and Authority
understand that the violation of this provision may result in the denial of any
federal funds under the AHA.
Should you have any questions or require additional information, please contact
Grace Ruiz-Stepter, Executive Director, at (714) 765-4315 or by email at
(gstepter@anaheim. net).
Sincerely,
Grace Ruiz-Stepter
Executive Director
cc: Andy Nogal, Deputy Director
Housing and Community Development Department
EXHIBIT A
NORTH HARBOR APARTMENTS PROJECT
AFFORDABLE HOUSING UNITS
MATRIX OF UNIT -MIX BY INCOME AND BEDROOM SIZE
Bedroom I Quantity I AMI
Studio 1 67 1 30%
1-Bedroom 1 20 1 30%
2-Bedroom (Manager's Unit) 1 2 f Market Rate
SECRETARY'S CERTIFICATE
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ANAHEIM )
I, THERESA BASS, Secretary of the Anaheim Housing Authority, do hereby certify that the foregoing
is the original Resolution No. AHA-2023-004 adopted at a regular meeting provided by law, of the
Anaheim Housing Authority held on the 18' day of April, 2023, by the following vote of the members
thereof:
AYES: Chairperson Aitken and Authority Members Rubalcava, Diaz, Leon, Kurtz,
Faessel, and Meeks
NOES: None
ABSTAIN: None
ABSENT: None
IN WITNESS WHEREOF, I have hereunto set my hand this 19' day of April, 2023.
ET RY OF THE ANAHEIM HOUSING AUTHORITY
(SEAL)