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AHA-2019-004 AHA—RESOLUTION NO. 201 9—0 0 4 A RESOLUTION OF THE GOVERNING BOARD OF THE ANAHEIM HOUSING AUTHORITY APPROVING I.) A COOPERATION AGREEMENT FOR THE ECONO LODGE 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 JAMBOREE HOUSING CORPORATION; III.) AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ANAHEIM HOUSING AUTHORITY, OR HIS DESIGNEE, TO NEGOTIATE THE TERMS OF AND FINALIZE AN AFFORDABLE HOUSING AGREEMENT; IV.) AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ANAHEIM HOUSING AUTHORITY, OR HIS 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 Funds") from HUD pursuant to 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" at 24 CFR Part 92 (Complete Rule) http:I/www.ecfr.gov/cgi-bin/text- idx?tpl=/ecfrbrowse/Title24/24cfr92 main 02.tpl (together,"HOME Program"); and WHEREAS, HOME Program has, among its purposes, the strengthening of public-private partnerships to provide more affordable housing, and particularly to provide decent, safe, sanitary, and affordable housing, with primary attention to housing for very low income and lower income households in accordance with the HOME Program;and WHEREAS,the HOME 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 1 i 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, Jamboree Housing Corporation ("JHC") and its wholly-owned subsidiary, JHC-Acquisitions LLC, a California limited liability company, ("Developer") have informed Authority and City that JHC and Developer have entered into a "Site Purchase Agreement" to acquire that certain 1.001-acre parcel of real property located at 2691 West La Palma Avenue, Anaheim, California (the "Site") for a permanent supportive housing project; the Site is currently improved with and operated by Operator as a 70-room motel that is commonly referred to as the "Econo Lodge Motel";and WHEREAS, JHC and Developer have further informed Authority and City that it is the intention of JHC and Developer that upon acquiring the Site, JHC and Developer will convert and rehabilitate the existing improvements at the Site for use as an affordable rental housing project;and WHEREAS, Authority and JHC will enter into that certain Preliminary Award Letter dated as of July 30, 2019 (the "Letter"), pursuant to which Authority will make a preliminary award of a HOME and/or Housing Asset Funds to JHC, in the form of a loan, for the purpose of assisting JHC with the acquisition, the rehabilitation and conversion of the Econo Lodge Motel and long-term management and operation of a permanent supportive housing project thereon by JHC or an affiliate of JHC (the "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 JHC, Authority staff and legal counsel have prepared the form of Preliminary Award Letter (the "Letter"), which provides for(a)the Authority Executive Director to enter into an Affordable Housing Agreement with JHC for the acquisition, rehabilitation and conversion of the Econo Lodge Motel and operation and management by Developer of a 69-unit permanent supportive housing project at the Site for not fewer than 55-years(the"Project"); and (b) Authority to provide a loan to Developer sourced from HOME Funds and/or Housing Asset Funds, 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 (Econolodge 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 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 2 WHEREAS, the Letter contemplates that upon acquiring the Site Developer will be required to relocate eligible occupants of the Econo Lodge Motel; the acquisition of the Site and the implementation of the Project shall comply with the all applicable requirements of the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA), as amended,the implementing regulations of Handbook 1378 of the Department of Housing and Urban Development(HUD), the California Relocation Assistance Law, Government Code Section 7260, et seq., and the Relocation Assistance and Real Property Acquisition Guidelines adopted by the Department of Housing and Community Development and set forth at Title 25, California Code of Regulations Section 6000,et seq. (Guidelines)(collectively,the "Relocation Laws");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 Funds and 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 four percent(4%)Low Income Housing Tax Credits("Tax Credits") and housing bonds for the Project; if Developer does not receive such allocation of 4% Tax Credits, Developer shall submit a second Application of 4% Tax Credits to TCAC following notification that Developer's first Application was not successful; provided,that any increase in the amount of the Anaheim Loan to be provided by Authority to Developer form 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 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 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 3 WHEREAS, Authority and City held a public hearing to consider the Amended 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 acquisition, 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 69-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 JHC, 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 his 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 executed and attested, shall be placed on file in the office of the City Clerk. Further, the Authority Executive Director (or his duly authorized representative) is authorized to implement the Amended 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 his 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 4 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. As the"lead agency" under the California Environmental Quality Act(Public Resources Code Section 21000, et seg.; herein referred to as "CEQA"), the Governing Board of the Housing Authority hereby finds and determines that the proposed project consists of the purchase, rehabilitation and conversion of a motel Site to a permanent supportive housing project (a Class 1 Project) that will not cause a significant effect on the environment and that the Agreement and the purchase, rehabilitation and conversion the motel Site to a permanent supportive housing project pursuant to the Letter is therefore categorically exempt from CEQA pursuant to Section 15301 of Title 14 of the California Code of Regulations. This finding is based on Authority's determination that the Project consists of the operation,repair,maintenance,permitting, leasing, licensing,or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The City Council further determines that the Project consists of an existing facility project (a Class 1 Project) and is therefore categorically exempt from CEQA pursuant to Section 15301 of Title 14 of the California Code of Regulations. . Section 6. The Authority Secretary shall certify to the adoption of this Resolution. 5 THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE GOVERNING BOARD OF THE ANAHEIM HOUSING AUTHORITY THIS THIRTIETH (30`h) DAY OF JULY,2019, BY THE FOLLOWING ROLL CALL VOTE: AYES: Chairman Sidhu and Authority Members Kring, Barnes, Brandman, Moreno, Faessel, and O'Neil NOES: None ABSTAIN: None ABSENT: None ANAH ' OUSING AUT.ORITY By: , IF ,I II �„/ / /V air 4,11No. Authority Seer- ary 6 ATTACHMENT TO RESOLUTION ATTACH COPY OF AGREEMENT ATTACHMENT TO RESOLUTION Page 1 of COOPERATION AGREEMENT (Econo Lodge Apartments) This COOPERATION AGREEMENT (Econo Lodge Apartments Project) (this "Agreement"), dated for identification purposes only as of July 1, 2019 (the "Date of this Agreement"), is entered into by and between the CITY OF ANAHEIM, a municipal corporation and charter city (the "City"), and the ANAHEIM HOUSING AUTHORITY, a public body, corporate and politic and legal entity(the"Authority"). RECITALS A. As of the Date of this Agreement, JHC-Acquisitions, LLC, (the "Developer") has entered into a purchase and sale agreement for several parcels of real property commonly known as 2691 West La Palma Avenue in the City and consisting of several commercial,residential and vacant properties (the "Site). The Site is depicted on the Map which is attached hereto as Exhibit A and incorporated herein by reference. B. The Developer is endeavoring to convert and rehabilitate a 70-unit motel to a 69-unit, plus one manager's unit permanent supportive housing project providing affordable housing to extremely low income households(the"Project"). To this end, Developer will be submitting funding applications for Low Income Housing Tax Credit funding from the California Tax Credit Allocation Committee (TCAC) and State Mental Health Services Act Program funds (MHSA) from the County of Orange (administered by the California Housing Finance Agency). Developer will also seek funding for the Project from other private lenders and investors. C. Pursuant to contract with HUD, the City has received and administers certain funds pursuant to the HOME Investments Partnership Act and Home Investment Partnership Program ("HOME Funds")pursuant to 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" at 24 CFR Part 92 (Complete Rule) http://www.ecfr.gov/cgi- bin/text-idx?tpl=/ecfrbrowse/Title24/24cfr92 main 02.tpl (together, the "HOME Program"). Among the purposes of the HOME Program is to expand the supply of decent, safe, sanitary and affordable housing, with primary attention to rental housing for very low income and low income persons and families. D. The Authority administers project-based rental assistance subsidies 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"). E. The Developer has requested assistance in the form of a loan of$1,600,000 from the City's HOME Funds ("HOME Loan") and 49 project-based Section 8 vouchers ("PBV Assistance") to be provided by the Authority pursuant to the Section 8 Program. F. The Authority and the City (each, a "Party" and together, the "Parties") desire to assist with the Project. To this end, the City desires to make up to $1,600,000 of HOME Funds available to the Authority to enable the Authority to enter into an Affordable Housing Agreement and 1 DOCSOC/1668689 v3/022620-0042 HOME Investment Partnership Agreement with the Developer(the"AHA"). The AHA will set forth the specific terms and conditions under which the Authority will make the HOME Loan and provide the PBV Assistance to the Developer for the Project. 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 One Million Six Hundred Thousand Dollars ($1,600,000)of HOME Funds("Project Funds")held by the City to enable the Authority to make the HOME Loan to the Developer for the Project. Subject to approval by the Authority's governing board of the terms of the AHA and execution thereof by the Authority and Developer,City will make the Project Funds available to the Authority for the Project. Authority shall not disburse the Project Funds to the Developer until the Authority has confirmed that the Developer has satisfied all of the conditions precedent to the disbursement of the HOME Loan pursuant to AHA; provided that the Authority Executive Director may waive, defer or modify such conditions precedent in accordance with the authority granted by the Authority's governing board. The 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, and (ii)to implement the AHA in order to expand the supply of decent, safe, sanitary and affordable housing for very low income and low income persons and families. This Agreement does not constitute a"commitment"of HOME Funds,as the term "commitment"is defined in 24 CFR 92.2. 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 officers,agents, or employees by law for injury caused by negligent or wrongful act or omission occurring in the performance of this Agreement to the same extent that such liability would be imposed in the absence of Section 895.2 of such Code. 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 Agreement shall take effect from and after the date of approval hereof by the Authority Board and the City Council. 2 DOCSOC/1668689v3/022620-0042 IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE RESPECTIVE DATES SET FORTH BELOW. CITY OF ANAHEIM a municipal corporation and charter city Dated: ,2014 By: John E.Woodhead IV Community Development Director ATTEST: THERESA BASS, CITY CLERK City Clerk APPROVED AS TO FORM: ROBERT FABELA,CITY ATTORNEY Leonie Mulvihill Deputy City Attorney IV [Signature block for Cooperation Agreement continued on next page 3 DOCSOC/1668689v3/022620-0042 'Signature block for Cooperation Agreement continued from previous page) AUTHORITY: HOUSING AUTHORITY SECRETARY, a public body,corporate and politic Dated: , 2014 By: John E.Woodhead IV Executive Director ATTEST: THERESA BASS, HOUSING AUTHORITY SECRETARY Authority Secretary APPROVED AS TO FORM: ROBERT FABELA,CITY ATTORNEY Leonie Mulvihill Deputy City Attorney IV 4 DOCSOC/1668689v3/022620-0042 EXHIBIT A MAP OF PROJECT SITE [To be inserted] A-1 DOC SOC/1668689v3/022620-0042 LOCATION MAP . #) ,/ 1 W4LL 111 ,411 • LA PALMA AVENUE JA AVE p I - - _ _� _� f J �z LIc DAD CtF 2691 W. LA PALMA AVENUE N City of Anaheim 7O1N °r4° ANAHEIM HOUSING AUTHORITY • • 1e7s �S�F July 30, 2019 < Ms. Laura Archuleta JHC-Acquisitions LLC do Jamboree Housing Corporation 17701 Cowan Avenue, Suite 200 Irvine, California 92614 SUBJECT: Preliminary Award Letter regarding Certain Financial Assistance by the City of Anaheim and the Anaheim Housing Authority, Including a Loan Sourced from HOME Program Funds and/or Housing Asset Funds, 49 Section 8 PBVs for the Proposed Conversion and Rehabilitation of the 70-Unit Econo Lodge Motel located 2691 W. La Palma Avenue (the "Site") to a Permanent Supportive Housing Project in Anaheim, California Dear Ms. Archuleta: Jamboree Housing Corporation ("JHC") and its wholly-owned subsidiary, JHC- Acquisitions LLC, a California limited liability company, ("Developer") have submitted an application to the City of Anaheim ("City") and the Anaheim Housing Authority ("Authority")l for financial assistance for the proposed affordable housing project called "Econo Lodge Permanent Supportive Housing Project", which is an affordable, conversion and rehabilitation of a 70-unit motel located in Anaheim, California ("Project"). Specifically, the Developer has requested that the City provide a loan of up to $1,600,000 in HOME program funds or moneys from the Authority's Low and Moderate Income Housing Asset Fund ("LMIHAF"). The Developer additionally requested that the Authority provide up to 49 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"). JHC has also submitted applications for funding with the County of Orange for Mental Health Services Act (MHSA) capital funding for thirty-five (35) units in the amount of $9,096,000 and twenty (20) Veterans Affairs Supportive Housing (VASH) Vouchers. JHC will also seek $1,500,000 in funding from the Orange County Housing Trust fund and will also be applying for Tax Credit funding providing an additional $5,632,569 in tax credit equity for the project and authorization for the issuance of multifamily housing bonds. ' The City and the Authority are referred together to as "Anaheim". Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 2 of 13 Land Use Entitlement and Anaheim Assistance In connection with seeking to undertake the Project, JHC and the Developer submitted to the City of Anaheim (the "City") and the Authority' an application for financial assistance and other benefits as herein defined and described (together, "Anaheim Assistance"). JHC has advised the Authority and the City that JHC intends to prepare and submit to the City an application for land use entitlements for the Site, under the Motel and Commercial Office Conversion Ordinance under Chapter 18.38 of the Anaheim Municipal Code ("Land Use Entitlement"). According to JHC and the Developer, the Project will involve the conversion of an existing 70 unit, two-story Motel to a sixty-nine (69)-unit affordable permanent supportive housing project with a surface parking area, subject to approval by the City of Anaheim Planning Commission. The Project will include sixty-nine studio units, plus one-1 bedroom Manager's unit. Forty-nine (49) of the Project units will be set aside for homeless individuals and twenty (20) for homeless veterans. As specified in the development plans, the Project will include 22 parking spaces and 14,227 square feet of recreation and leisure space. Project amenities include; community room, recreation room with kitchen, community garden are and outdoor courtyard seating. JHC and the Developer propose that JHC, with the written consent of the Authority, as applicable, JHC shall prepare and submit to the City its application for the Land Use Entitlement that includes: a Conditional Use Permit Application, Building Plan Check and, if approved, with construction subject to the City's development standards, zoning and other laws and regulations. In connection with implementation of the Project, JHC has requested that Anaheim provide to JHC or the Developer, by this Preliminary Award Letter the Anaheim Assistance described below. Anaheim states its objective at this time with respect to the proposed development as described by Developer, as referenced in this Preliminary Award Letter, is to satisfy the provisions of the California Tax Credit Allocation 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, City Hall West et seq. ("TCAC Regulations"), in particular Section 10326, albeit there is no intention 201 S Anaheim Blvd,2nd Floor Anaheim, CA 92805 to violate HOME Program requirements, in particular 24 CFR 92.2. If the Developer TEL(714)765-4320 FAX(714)7654331 2The City is a California municipal corporation and charter city; and, the Authority is a public body www.anaheim.net 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". I Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 3 of 13 or JHC receives an award of low-income housing tax credits ("Tax Credits"), then the Developer (or, if applicable, JHC) 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. JHC has indicated that the Developer plans to make an application to the California Tax Credit Allocation Committee (TCAC) for 4% Tax Credits in the 2019 application cycle. If JHC's or the Developer's application for 4% Tax Credits is unsuccessful, provided that JHC or Developer have acted diligently and it appears to the Authority reasonably likely that a resubmittal would be successful, the Authority will agree to allow one additional application to TCAC for an allocation of 4% Tax Credits; provided, however, that the Authority shall have no obligation to increase the amount of Anaheim Assistance to the Project from that described in this Preliminary Award Letter. Anaheim Assistance The City and Authority have reviewed the JHC's and Developer's requests for assistance and on July 30, 2019 at a public meeting authorized and approved issuance of this letter evidencing the preliminary award of the HOME and/or LMIHAF loan and PBV Assistance to the Developer for the Project under 24 CFR 92.504(c)(3) (together, "Anaheim Assistance"). Anaheim has made JHC and 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 ("PJ") 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 the requirements of 'commit to a specific local project' in the definition of 'commitment' in City Hall West §92.2 ..." Thus, while this letter is not a commitment as defined under the 201 S Anaheim Blvd,2nd Floor HOME Program of federal funds for Anaheim Assistance as the term commitment is Anaheim, CA 92805 defined therein, Anaheim intends that this letter evidence the City's and Authority's TEL(714)765-4320 preliminary award of the Anaheim Assistance to the Developer for the Project subject to FAX(714)765-4331 the conditions described below. Further, Anaheim states its objective for the Developer www.anaheim.net 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. Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 4 of 13 The amount of the HOME 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 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 of April 18, 2019 ("Proforma"), 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 or LMIHAF 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 approximately One Million Six Hundred Thousand and No/100ths Dollars ($1,600,000.00) (the "Development Loan"). The Development Loan anticipated to be sourced from one or both of the following sources of money: (1) moneys transferred to the Authority by the City, as such funds have been received by 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 pay such purchase price until the requirements of City Hall West Section 92.2 (described herein) are fully satisfied ("HOME Program") or (2) 201 S Anaheim Blvd,2nd Floor money held in the Authority's LMIHAF pursuant to the Dissolution Law, Health Anaheim, CA 92805 and Safety Code Sections 34170, et seq., in particular sections 34176 and TEL(714)765-4320 34176.1 ("LMIHAF Moneys"). The Development Loan will be a residual FAX(714)765.4331 vAmanaheim.net receipts loan in no lower than third lien position and subordinate to the Primary Loan and the MHSA Loan (as referenced herein) so long as the Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 5 of 13 , amount of the MHSA Loan is as stated in page one of the Preliminary Award Letter. It is anticipated that approximately One Million, Six Hundred Thousand Dollars ($1,600,000.00)(the "Authority Amount") would consist of LMIHAF Moneys and/or HOME Program funds; and • Disbursement procedures for release of the loan proceeds; • Principal amount shall bear three and No/100ths percent (3%) simple interest per annum ; and • Repayment from 85% of Residual Receipts (after payment of operating expenses, debt service, any deferred developer fee, and partnership fees to be described in the AHA); provided that Anaheim acknowledges the Developer is also receiving MHSA funding from the County of Orange (through CaIHFA) and will agree to split Residual Receipts during the term of repayment of the MHSA loan. Residual receipts will be allocated among the public agencies providing financial support for the project based upon the amount of funding provided by each entity. It is anticipated that the value of the Authority's Section 8 PBV will be included in the amount attributable to the Housing Authority as negotiated between the County and the Authority; and • 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. • Cost savings from the Project, if any, will be applied first to pay down the HOME/LMIHAF Loan, subject to compliance with the TCAC Regulations. City Hall West • If JHC or the Developer applies for and receives 4% Tax Credits from TCAC, 201 S Anaheim Blvd,2nd Floor the Development Loan, if any, to be provided as part of the Anaheim Anaheim, CA 92805 Assistance described above would be in an amount to be determined upon TEL(714)765-4320 the approval of JHC's 4% Tax Credit applications. Any increase in the amount FAX(714)765.4331 of the Anaheim Assistance described herein will require approval by the City www.anaheim.net Council and the Authority Board; provided that no increase in the Anaheim Assistance is contemplated. Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 6 of 13 • JHC and 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 Authority loan shall be reduced on a dollar for dollar basis. The City's obligation to provide the HOME Loan and additional subsidies to the Project and the Authority's obligation to provide PBV Assistance to the Project are subject to each of the following conditions: 1. Approval by the Governing Board of the Authority of an AHA by and between the Authority and Developer that more specifically describes and authorizes the disbursement of the HOME 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 69 out of the 70 housing units at the Project to levels that are affordable at 30% of the Area Median Income ("AMI") for a minimum of 55 years, and execution of said AHA contract in a form approved by the City Attorney/Authority General Counsel. The City's HOME Program funds for the HOME Loan will be transferred to the Authority pursuant to a cooperation agreement to be entered into between these entities pursuant to the Home Program. 2. The JHC entity that is the "developer" party under the AHA with Anaheim shall be certified by the City as a qualified Community Housing Development Organization ("CHDO") for development and sponsorship of the Project in compliance with the HOME Program and Final Rule, and a certified CHDO entity shall develop, own and operate the Project under the AHA with Anaheim for the twenty (20)-year term required by the HOME Program. 3. Compliance with the HOME Program, 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. 4. Compliance with and completion of environmental review of the Project pursuant to the California Environmental Quality Act ("CEQA") and the National Environmental Protection Act ("NEPA") and approval thereof(the NEPA clearance for the Project is currently under review by HUD). 5. Determination of federal Department of Housing and Urban Development City Hall West ("HUD") "fair market rent" for purposes of implementing the PBV Assistance to 201 S Anaheim Blvd,2nd Floor the Project will be based and contingent upon approval of an independent Anaheim, CA 92805 appraisal. TEL(714)765-4320 FAX(714)7654331 6. Receipt of Subsidy Layering Review approval from the Tax Credit Allocation www.anaheim.net Committee ("TCAC"). (Pursuant to July 2010 HUD Notice, TCAC may, and is now, performing Subsidy Layering Review for and on behalf of HUD.) Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 7 of 13 7. Sixty-nine (69) of the Seventy (70) "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. One (1) Housing Unit will be rented to an on-site property manager; the manager's unit shall not be required to be rent-restricted. 8. A unit matrix of all units in the Project of sixty-nine (69) units is attached hereto and fully incorporated by this reference as Exhibit A. 9. Sixty-nine (69) of the seventy (70) housing units shall be covenanted as designated HOME Program units with affordable rent charged to the tenant household. No less than twenty one (11) units must be restricted at the low HOME rent and fifty-eight (58) units at the high HOME rent under the HOME Program. Further, all housing units at the Project, except for the HOME units which shall be subject to a twenty (20) year restriction, 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. 10. No units within the Project shall be restricted on the basis of age. 11. Execution of the AHA shall be in a form to be reviewed and approved by Anaheim's City Attorney and/or special counsel. 12. The HOME 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 pursuant to the HOME Program. 13. If HOME Program moneys are used to make any portion of the Anaheim Loan, JHC and the Developer shall comply with the 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. 14. If LMIHAF Moneys are used to make the Anaheim Loan, JHC and the Developer shall comply with all applicable requirements of the California Community City Hall West Redevelopment Law, Health and Safety Code Section 33000, et seq., and the 201 S Anaheim Blvd,2nd Floor Dissolution Act, Health and Safety Code Section 34170, et seq., in particular Anaheim, CA 92805 Sections 34176 and 34176.1. TEL(714)765-4320 FAX(714)765-4331 15. JHC and the Developer shall comply with the HAL and any and all other wv✓vr.anaheim.net applicable federal, state and local laws and regulations. • Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 8 of 13 16. All Housing Units at the Project must pass Housing Quality Standard (or other standards as applicable) inspections 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. 17. 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 49 Housing Units to receive PBV Assistance. 18. 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. 19. 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. 20. JHC shall comply with and complete environmental review of the Project pursuant to all applicable federal and state laws and regulations, including the California Environmental Quality Act ("CEQA") 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 Program funds are used to provide the Anaheim Assistance, for the twenty (20)-year term required by the HOME Program or CHDO-sponsored projects, all housing units at the Project must pass HOME Program construction, occupancy, and physical condition requirements as well as federal Housing Quality Standards annual inspections, (and other standards, as applicable) at the completion of construction and thereafter, as required by City Hall West HOME Program regulations as amended by the 2013 HOME Final Rule, and 201 S Anaheim Blvd,2nd Floor meet federal program limitations and other applicable federal, state and local Anaheim, CA 92805 laws and regulations as to be set forth in the AHA. TEL(714)765-4320 FAX(714)765-4331 24. In connection with the development of the Project and subject to compliance with www.anaheim.net the TCAC Regulations, the Developer will be entitled to a developer fee in the Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 9 of 13 amount not to exceed Two Million ($2,000,000.00); receipt of a portion of the developer fee will be deferred. 25. 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. 26. The Anaheim Loan proceeds will be disbursed during construction at such time as all funding sources are committed and available for disbursement other than the MHSA Loan which is a permanent loan, and subject to such terms and conditions precedent as are customary for AHA's entered into by the Authority. 27. 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 Authority in its affordable housing agreements: 28. All grading 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. 29. The Developer shall have secured all necessary institutional financing and funding for the Primary Loan to undertake and complete construction and thereafter operation of the Project. Such financing and funding shall be sufficient to pay all development costs of the Project, through lease-up, as set forth in a final budget(to be defined in the AHA)and consistent with the approved proforma (or as otherwise approved by Anaheim). 30. 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. 31. The Developer shall have provided construction security in favor of Anaheim, which may include a completion guarantee from JHC and/or a letter of credit, and/or payment and performance bonds from the general contractor and City Hall West subcontractors for the Project (or some combination of any or all of the above), 201 SAnaheim Blvd,2nd Floor in an amount sufficient to ensure the Project will be completed, all invoices paid, Anaheim, CA 92805 and all workers paid in conformity with applicable federal and state labor laws, TEL(714)765.4320 and otherwise in compliance with applicable federal and state laws, and placed FM(714)7654331 in service within the time set forth in the schedule for the Project as approved by www.anaheim.net Anaheim. Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 10 of 13 32. 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. 33. The AHA shall provide that each of the following conditions precedent shall be met prior to the release of the PBVs: 34. A final certificate of occupancy for completion of the Project shall have been issued by the City's building official. 35. 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. 36. 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. 37. 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 City Hall West services. The Plan shall include strong programming that engages future tenants 201 SAnaheimBlvd,2ndFloor on a daily basis, and that will have a positive social impact on the residents as it Anaheim. CA 92805 relates to mental wellness and social integration,. The fully programmed kitchen TEL(714)765-4320 (to include stove, oven, refrigerator, microwave, dishwasher) must be well suited FAX(714)765-4331 for strong programming. The Social services plan shall address how the www.anaheim.net proposed programming will support the small unit size concerns and dealing with socialization. Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 11 of 13 38. 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 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. 39. By consideration and action to approve this Preliminary Award Letter, Anaheim hereby authorizes the Executive Director to sign this Preliminary Award Letter on behalf of Anaheim (both the City and the Authority). 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. 40. 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 Preliminary Award Letter, 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 Preliminary Award Letter 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 Preliminary Award Letter and the AHA. 41. In addition, the Executive Director is authorized, on behalf of both the City and the Authority, to sign all other documents necessary or appropriate to carry out and implement this Preliminary Award Letter, 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 Preliminary Award Letter and the AHA. Any and all substantial changes to this Preliminary Award Letter or to the terms and provisions of the AHA and implementing agreements and instruments thereto shall require the City Hall West consideration and action of the City Council and/or the Authority Board, as 201 S Anaheim Blvd,2nd Floor applicable. Anaheim, CA 92805 TEL(714)765.4320 42. The AHA shall provide that each of the following conditions precedent shall be FAX(714)76513331 metrior to the disbursement of anyportion of the HOME Loan and prior to www.anaheim.net p execution of the AHAP: Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 12 of 13 43. All grading permits shall have been issued and the City shall have issued a letter stating that building permits are ready to issue, subject only to payment of fees and the completion of grading of the Project site. 44. Developer shall have secured all necessary financing and funding for the construction and operation 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 consistent with the approved Proforma (or as otherwise approved by Anaheim). 45. Developer shall have provided evidence to Anaheim that Developer has obtained insurance policies and certificates or endorsements therefor acceptable to Anaheim, as described in the AHA. 46. Developer shall have provided construction security in favor of Anaheim, which may include a completion guarantee from Jamboree Housing Corporation and/or a letter of credit and/or performance bonds from the general contractor for the Project (or some combination of these), in an amount sufficient to ensure the Project will be completed and placed in service within the time set forth in the Project schedule approved by Anaheim. 47. Developer shall submit and obtain Authority approval of the construction contract, Developer's limited partnership agreement for the limited partnership entity to be formed to own and operate the Project, and management, marketing and tenant selection plans for the Project. 48. The City's obligation to provide the HOME 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 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. 49. 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 City Hall West under 24 CFR Part 58. Developer and Authority will further agree in the AHA that 201 SAnaheim Btvd,2nd Floor the provision of any federal funds to the Project is and shall be conditioned on Anaheim, CA 92805 Anaheim's determination to proceed with, modify or cancel the Anaheim TEL(714)765-4320 Assistance based on the results of a subsequent NEPA environmental review FAX(714)765-4331 and the outcome of the Subsidy Layering Review. www.anaheimmet Ms. Laura Archuleta JHC-Acquisition LLC Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOME Program Funds and/or Housing Asset Funds, Section 8 PBV Assistance for the 70-Unit Econo Lodge Permanent Supportive Housing Project in Anaheim, California July 30, 2019 Page 13 of 13 50. 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. 51. Should you have any questions or require additional information, please contact Grace Stepter, Deputy Director, at (714) 765-4315 or by email at (gstepter@anaheim.net). Sincerely, John E. Woodhead IV, Housing Authority Executive Director cc: Grace Stepter, Deputy Director Andy Nogal, Community Investment Manager City Hall West 201 S Anaheim Blvd,2nd Floor Anaheim, CA 92805 TEL(714)765-4320 FAX(714)765-4331 vnwi.anaheim.net EXHIBIT A ECONO LODGE APARTMENTS PROJECT AFFORDABLE HOUSING UNITS MATRIX OF UNIT-MIX BY INCOME AND BEDROOM SIZE Bedroom Quantity AMI Studio 69 30% 1-Bedroom (Manager's Unit) 1 Market Rate I 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 2019-004 adopted at a regular meeting provided by law, of the Anaheim Housing Authority held on the 30th day of July, 2019, by the following vote of the members thereof: AYES: Chairman Sidhu and Authority Members Kring, Barnes, Brandman, Moreno, Faessel, and O'Neil NOES: None ABSTAIN: None ABSENT: None IN WITNESS WHEREOF, I have hereunto set my hand this 30th day of July, 2019. SECRETARY OF THE ANAHEIM HOUSING AUTHORITY (SEAL)