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AHA-2023-009RESOLUTION NO. AHA-2023-009 A RESOLUTION OF THE GOVERNING BOARD OF THE ANAHEIM HOUSING AUTHORITY APPROVING AN AMENDED AND RESTATED PRELIMINARY AWARD LETTER, SUBSTANTIALLY IN THE FORM ATTACHED HEREWITH BETWEEN THE ANAHEIM HOUSING AUTHORITY AND LINC HOUSING CORPORATION; AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ANAHEIM HOUSING AUTHORITY, OR HER DESIGNEE, TO EXECUTE AND ADMINISTER THE AMENDED AND RESTATED PRELIMINARY AWARD LETTER ON BEHALF OF THE ANAHEIM HOUSING AUTHORITY; AUTHORIZING THE EXECUTIVE DIRECTOR OF THE ANAHEIM HOUSING AUTHORITY, OR HER DESIGNEE, 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 AMENDED AND RESTATED 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, on April 18, 2023, the Authority approved issuance of a Preliminary Award Letter ("Original Letter") to LINC Housing Corporation, a California limited liability company ("Developer") authorizing the commitment of local funds approved by the City Council in the form of a City loan of up to $4,900,649, intended to be sourced from HOME American Rescue Plan ("HOME ARP") program and/or Housing Opportunities for Persons with AIDS ("HOPWA") funds, in support of the rehabilitation of the Studio 6 Motel ("Project") located at 1251 N. Harbor Boulevard ("Site"); and WHEREAS, the Project, currently being operated as interim housing, is now in the process of transitioning into permanent supportive housing ("Phase II"); and WHEREAS, on June 22, 2023, CalOptima Health released a Notice of Funding Opportunity ("NOFA") derived from the State Housing and Homelessness Incentive Program ("HHIP") for capital projects that demonstrate how the applicant would increase the number of people connected to permanent housing or increase the number of permanent housing units; and WHEREAS, the City submitted a request for HHIP funding consideration for the Project, and on October 5, 2023, the City was notified that it was successful in obtaining the grant award in the amount of $3,878,420; and WHEREAS, Authority will execute and administer that certain Amended and Restated Preliminary Award Letter dated as of November 28, 2023 (the "Amended and Restated Letter"), pursuant to which Authority will substitute the HOME ARP funds with the awarded CalOptima Health grant funds, and make a preliminary award of HHIP and/or HOPWA Funds to Developer, in the form of a City 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; and WHEREAS, per the Original Letter, the Amended and Restated Letter will continue to set 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, per the Original Letter, the Amended and Restated Letter will continue to provide for: (a) the Authority Executive 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 an 89-unit permanent supportive housing project at the Site for not fewer than 55-years; (b) Authority to provide a loan not to exceed $4,900,649 to the Developer sourced from HHIP Funds and/or HOPWA Funds; and (c) Authority to issue 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 Amended and Restated Letter; and WHEREAS, by Authority's commitment of monies sourced in whole or in part from the HHIP Funds and/or HOPWA Funds for the Affordable Housing Agreement and/or the City 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 Amended and Restated 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 Amended and Restated 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 Amended and Restated 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 has duly considered all terms and conditions of the proposed Amended and Restated Letter, and believes that the Project is in the best interests of City and the 2 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 the Site constrained with infrastructure deficiencies to be converted to an 89-unit permanent supportive housing project with the covenants and conditions and rehabilitation costs authorized by the Amended and Restated Letter. Section 3. The Authority Board hereby approves the Amended and Restated Letter between Authority and Developer, substantially in the form submitted herewith. The Authority Executive Director and the Authority Secretary/City Clerk are hereby authorized to execute and attest the Amended and Restated Letter, and subsequently and subject to compliance with the conditions set forth in the Amended and Restated Letter, prepare an Affordable Housing Agreement and various implementing documents on behalf of Authority. In such regard, the Authority Executive Director (or her duly authorized representative) is authorized: (a) to sign the final version of the Amended and Restated Letter after completion of any such non -substantive, minor revisions; and (b) to negotiate and execute the final versions of an Affordable Housing Agreement, and other instruments implementing the Project as set forth in the Amended and Restated Letter. Copies of the final form of the Amended and Restated Letter, when duly 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 Amended and Restated 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 Amended and Restated Letter. The Authority Executive Director (or her duly authorized representative) is hereby authorized to the extent necessary during the implementation of the Amended and Restated Letter to make technical or minor changes and interpretations of the Amended and Restated Letter after execution, as necessary, to properly implement and carry out the Amended and Restated 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 Amended and Restated Letter. The authorization given to the Authority Executive Director shall not include amendments that would materially increase or extend the assistance to be provided by the Authority under the Amended and Restated 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 Amended and Restated Letter, including causing the issuance of warrants in implementation thereto, and to administer Authority's obligations, responsibilities and duties to be performed under the Amended and Restated Letter and agreements subsequently executed to implement the Amended and Restated Letter. Section 5. When approving the Original Letter on April 18, 2023, the City Council approved the Project under the Assembly Bill (AB) 140 (2021) California Environmental Quality Act (CEQA) exemption. However, after further analysis, the Developer identified timeline, fiscal, and labor challenges related to AB 140 CEQA requirements that would severely hinder the Project from meeting the State of California TCAC deadlines. Accordingly, as part of the State's Project Homekey Program, the Developer has submitted a request to the City for a CEQA Class 1 (Existing Facilities) categorical exemption pursuant to CEQA Guidelines Section 15301. A Class 1 categorical exemption applies to projects consisting of the renovation of an existing facility with negligible or no expansion of its existing or former use. The Project primarily consists of repurposing the existing space with no increase in square footage of the building and site and interior/exterior building renovations; therefore, meeting the requirements for a Class 1 Categorical Exemption. Section 6. AB 140 provides significant land -use streamlining for projects utilizing Homekey Round 2 funds. This land use "exemption" is independent of the AB 140 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 AB 140 CEQA exemption, which is time limited. 4 THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED BY THE GOVERNING BOARD OF THE ANAHEIM HOUSING AUTHORITY THIS TWENTY- EIGHTH (28th) DAY OF NOVEMBER, 2023, BY THE FOLLOWING ROLL CALL VOTE: AYES: Chairperson Aitken and Authority Members Rubalcava, Diaz, Leon, Kurtz, Faessel and Meeks NOES: None ABSTAIN: None ABSENT: None ANAHE HOUSING AUTHORITY By: Chai Orson T Authority Secretary ATTACHMENT TO RESOLUTION Page 1 of 1 City of Anaheim ANAHEIM HOUSING AUTHORITY November 28, 2023 Ms. Rebecca Clark Linc Housing Corporation 3590 Elm Avenue Long Beach, CA 90807 SUBJECT: Amended and Restated Preliminary Award Letter regarding Certain Financial Assistance by the City of Anaheim and the Anaheim Housing Authority 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 amended and restated Preliminary Award Letter (the "Amended and Restated Letter") amends, restates, and supersedes the Preliminary Award Letter issued by the Anaheim Housing Authority ("Authority") to Linc Housing Corporation ("LH"), a California non-profit corporation, or another legal entity under the control of LH (in either case, "Developer") on April 18, 2023 (the "Prior Letter"), for the proposed conversion and rehabilitation of the Studio 6 Motel located at 1251 North Harbor Boulevard to a permanent supportive housing project described below, which financing will be evidenced by grant, loan and/or regulatory agreements setting forth the parties' rights and obligations. The Prior Letter provided the Developer HOME American Rescue Plan (ARP) funds to help finance the development of the Project; however, the Project recently was awarded a grant from CalOptima Health in the amount of $3,378,420 through the Homelessness Incentive Program (HHIP), which prioritizes addressing the social determinants of health and health disparities for people at risk or currently experiencing homelessness. As such, the Authority is amending the Prior Letter to substitute the HOME ARP funds of $3,378,420 for CalOptima Health grant funds. Background Developer submitted an application to the City of Anaheim ("City") and the Anaheim Housing Authority ("Authority")I 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 ' 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 Amended and Restated Letter, the City and the Authority are referred to together as "Anaheim" 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 2 of 14 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 Studio 6 Extended Stay Motel for interim housing. During the Interim Supportive Housing Phase (Phase 1), 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" as defined 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 11), 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 11, 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: CalOptima Health grant 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 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, andlor Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 3 of 14 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 Amended and Restated Letter, 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 Amended and Restated Letter shall mean the Amended and Restated Affordable Housing Agreement (for Phase II). The Developer was awarded Tax Credit funding on July 26, 2023 providing an additional $23,618,043 in 9% tax credit equity for the Phase II project. 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"). When approving the Prior Letter on April 18, 2023, the City Council approved the Project under the Assembly Bill (AB) 140 (2021) California Environmental Quality Act (CEQA) exemption. However, after further analysis, the Developer identified timeline, fiscal, and labor challenges related to AB 140 CEQA requirements that would severely hinder the Project from meeting the State of California TCAC deadlines. Accordingly, as part of the State's Project Homekey Program, the Developer has submitted a request to the City for a CEQA Class 1 (Existing Facilities) categorical exemption pursuant to CEQA Guidelines Section 15301. A Class 1 categorical exemption applies to projects consisting of the renovation of an existing facility with negligible or no expansion of its existing or former use. The North Harbor Apartments project primarily consists of repurposing the existing space with no increase in square footage of the building and site and interior/exterior building renovations; therefore, meeting the requirements for a Class 1 Categorical Exemption. In addition, the Phase II project is eligible for significant land use streamlining under Assembly Bill 140, approved by the state legislature in 2021 (Health & Saf. Code, § 50675. 1.3) 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 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 4 of 14 shall not be subject to a conditional use permit, discretionary permit, or any other discretionary reviews or approvals. In connection with implementation of the Project, the Developer has requested that Anaheim provide to the Developer, by this Amended and Restated Letter, the Anaheim Assistance, more fully described herein, and has agreed to meet certain obligations in order to receive that Anaheim Assistance. The Developer was awarded Tax Credit funding on July 26, 2023 to complete the Phase II (Permanent Supportive Housing) development of the site. The Developer shall 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, et seq. ("TCAC Regulations"). The Developer and Anaheim will 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. Anaheim Assistance The City and Authority reviewed the Developer's requests for assistance and on April 18, 2023 at a public meeting authorized and approved issuance of the Prior Letter evidencing the preliminary award and commitment of the Anaheim Assistance. The City and Authority on November 28, 2023 at a public meeting authorized and approved issuance of this Amended and Restated Letter. The amount of the CalOptima Health, 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 CalOptima Health, 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 CalOptima Health, HOPWA and/or LMIHAF Funds in the Anaheim Loan, would include the following terms as well as 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 5 of 14 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 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 the City (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 34176 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 ($4,900,649)(the "Authority Amount") would consist of LMIHAF Moneys and/or CalOptima Health funds and/or (3) HOPWA Funds2; • Disbursement procedures for release of the loan proceeds; • Principal amount shall bear three and No/100ths 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 551 anniversary of the Closing or earlier upon sale, refinancing or default. 2 In this Amended and Restated Letter, Anaheim Loan and or "CalOptima Health, HOPWA and/or LMIHAF Loan" are used interchangeably. 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 6 of 14 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. • 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 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; 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 7 of 14 ■ (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: 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 8 of 14 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 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 HOPWA Program. 2. Compliance with the CalOptima Health funds, the HOPWA Program, the LMIHAF funds, the Section 8 Program, and applicable federal regulations set forth in 24 CFR Part 983. 3. Compliance with the California Environmental Quality Act ("CEQA") requirements unless, pursuant to Section 15301, a Class 1 (Existing Facilities), as a Categorical 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. 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"). 99&009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 9 of 14 9. There shall be three (3) floating units designated as HOPWA units which shall be covenanted as HOPWA units with affordable rent charged to the tenant household. Further, all three (3) floating HOPWA housing units at the Project shall be restricted as set forth herein and in the AHA for a minimum of ten (10) 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 ten (10) 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. 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. 11. The 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 HOPWA Program moneys are ultimately used to make any portion of the Anaheim Loan, the Developer shall comply with the 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.. 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. 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. 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 10 of 14 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 Section 15301, a Class 1 (Existing Facilities), as a Categorical Exemption for this Project, as determined to be applicable and appropriate and the National Environmental Protection Act ("NEPA") and approval thereof, as applicable. 21. 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. 22. 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. 23. Execution of the AHA shall be in a form to be reviewed and approved by Anaheim's City Attorney and/or special counsel. 24. 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 998,009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 11 of 14 insured or other endorsements therefor acceptable to Anaheim, as described in the AHA. c. 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. 25. 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. 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 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 12 of 14 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 Amended and Restated Letter, as contained in the Social Services Plan. 26. 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). 27. 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. 28. 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. 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 13 of 14 29. By consideration and action to approve this Amended and Restated Letter, 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. 30. 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 Amended and Restated 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 Amended and Restated 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 Amended and Restated Letter and the AHA. 31. 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 Amended and Restated 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 Amended and Restated Letter and the AHA. Any and all substantial changes to this Amended and Restated Letter 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. 32. 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 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. 33. 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 998.009/572345 Ms. Rebecca Clark Linc Housing Corporation Preliminary Award by City of Anaheim and Anaheim Housing Authority of HOPWA Program Funds, CalOptima Health Funds, and/or Housing Asset Funds for the 87-Unit Permanent Supportive Housing Project in Anaheim, California November 28, 2023 Page 14 of 14 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. 34. 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 998.009/572345 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-2023-009 adopted at a regular meeting provided by law, of the Anaheim Housing Authority held on the 28th day of November, 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 29th day of November. 2023. ARY OF THE ANAHEIM HOUSING AUTHORITY (SEAL)