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HOUSING AUTHORITY AGENDA REPORT
City of Anaheim
HOUSING AND COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: NOVEMBER 28, 2023
FROM: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: A RESOLUTION APPROVING THE AMENDED AND
RESTATED PRELIMINARY FUNDING AWARD LETTER FOR
THE NORTH HARBOR ANAHEIM PERMANENT SUPPORTIVE
HOUSING PROJECT PREVIOUSLY KNOWN AS THE STUDIO 6
MOTEL INTERIM HOUSING PROJECT
ATTACHMENT (Y/N): YES ITEM # 09
GOVERNMENT CODE § 84308 APPLIES: NO
RECOMMENDATION:
That the Governing Board of the Anaheim Housing Authority, by Resolution:
1. Approve an Amended and Restated Preliminary Funding 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; for the rehabilitation of the North Harbor Anaheim Permanent Supportive Housing project previously known as the Studio 6 Motel Interim Housing project; and
2. Authorize de minimis changes that do not substantially change the terms and conditions of the Amended and Restated Preliminary Funding Award Letter as determined by the Office of the City Attorney.
DISCUSSION:
On April 18, 2023, the Anaheim Housing Authority (Authority) issued a Preliminary Award Letter (Award Letter) to LINC Housing Corporation (Developer) authorizing the commitment of local funds in support of the rehabilitation of the Studio 6 Motel located at 1251 N. Harbor Boulevard (Project). The Project, currently being operated as interim housing, is now in the process of transitioning into permanent supportive housing (Phase II). On July 26, 2023, the Developer received notification that it was successful in obtaining a Tax Credit funding award from the California Tax Credit Allocation Amended and Restated Preliminary Funding Award Letter for Linc Housing Corporation November 28, 2023
Committee to help finance Phase II of the project. The Developer will be financing the Project with a combination of funding sources including $23,618,043 derived in Tax Credit Equity, $3,945,000 from a private lender, and a City loan of up to $4,900,649, intended to be sourced from HOME American Rescue Plan (ARP) program and Housing Opportunities for Persons with Aids (HOPWA) funds.
CalOptima Health released a Notice of Funding Opportunity (NOFO) on June 22, 2023 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. The funding for this opportunity derives from the State’s Housing and Homelessness Incentive Program (HHIP), which prioritizes addressing the social determinants of health and health disparities for people at risk or currently experiencing homelessness.
Staff submitted a request for HHIP funding consideration in the amount of $3,878,420 including administrative costs for the North Harbor Apartments Project. On October 20, 2023, Staff was notified that the application was successful and a grant award in the amount of $3,878,420 was approved. As a result, staff is requesting to amend the Award Letter. In the original PAL, staff had identified federal HOME dollars as a source of funding for the Studio 6 development. Given that the application to CalOptima Health was successful, the request is to substitute the HOME ARP funds with the awarded CalOptima Health grant funds. The HOME ARP funds initially earmarked for this development will now be used to advance yet another affordable development project in the Housing Authority pipeline, likely the redevelopment of the Tampico motel, thus continuing to grow the stock of Permanent Supportive Housing units in Anaheim.
When approving the original Award 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, the City further analyzed the Project and determined that the Phase II Project is also exempt from CEQA pursuant to Guidelines Section 15301, a Class 1 (Existing Facilities) categorical exemption. 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 to the above CEQA exemption, 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 shall Amended and Restated Preliminary Funding Award Letter for Linc Housing Corporation November 28, 2023
not be subject to a conditional use permit, discretionary permit, or any other discretionary reviews or approvals.
IMPACT ON BUDGET:
There is sufficient budget of $1,522,229 from the HOPWA grant award in the Housing and Community Development Department's Fiscal Year 2023/24 budget. The remaining balance of $3,878,420, previously committed with HOME ARP funds, will be funded with the pending CalOptima Health grant.
Respectfully submitted,
Grace Stepter
Executive Director of Anaheim Housing Authority
Attachments:
1. Resolution
2. Amended and Restated Preliminary Funding Award Letter