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COOPERATION AGREEMENT
(IG Project)
This COOPERATION AGREEMENT (IG Project) (“Cooperation Agreement”) is dated as of June 11, 2024 (“Date of Agreement”) and entered into by and between the CITY OF ANAHEIM, a charter city and California municipal corporation (“ City”), and the ANAHEIM HOUSING AUTHORITY, a public body, corporate and politic (“Authority”).
R E C I T A L S
A. City is a California charter city and municipal corporation and a participating jurisdiction with the United States Department of Housing and Urban Development ( “HUD”) and funding recipient from the State of California Department of Housing and Community Development (“State HCD”).
B. Authority is a California housing authority acting under the California Housing Authorities Law, Part 2 of Division 24, Section 34200, et seq., of the Health and Safety Code (“HAL”).
Further, Authority serves as the housing successor to the former Anaheim Redevelopment Agency (“Former Agency”) and administers the housing assets and funds of the Low and Moderate Housing Asset Fund (“LMIHAF”) pursuant to Health and Safety Code (“HSC”) Sections 34176 and 34176.1.
Authority is also a participating housing authority in cooperation with and funding recipient of HUD and State HCD programs.
C. Authority is the fee owner of certain real property of an approximate 0.65-acre parcel located within a portion of Assessor Parcel No. 126-602-31 at 130 S. Beach Boulevard near the Southeast Corner of Beach Boulevard and Lincoln Avenue, Anaheim, California (“IG Parcel”).
D. Capitalized terms used in this Cooperation Agreement are as defined in the Award Letter described in the next Recital E. or as otherwise defined herein.
E. Lincoln Beach LP, a California limited partnership (“Developer”) requests that the Authority issue to Developer that certain Preliminary Award Letter dated as of June 11, 2024 (“Award Letter”) to set forth the basic terms to fulfill the requirements for the Authority to provide to Developer the commitment of certain “Authority Assistance” that includes: (i) the ”Authority Loan” as described in Section 8.2 of the Award Letter, which includes a cash subsidy amount of up to $6,000,000 to be sourced from one or more of programs of funds held and administered by the City as further described in the next Recital F., or other governmental funding programs made available to the Authority, and (ii) 46 Section 8 project-based vouchers (“PBVs), with both (i) and (ii) to evidence part of an “enforceable financing commitment” by the Authority to Developer, and (iii) for the Authority to provide to Developer “site control” by that certain Ground Lease Option Agreement (“Option”) for the IG Parcel , all for Developer to plan, construct, and operate a new 47 -unit intergenerational affordable rental housing development for Senior Citizen and Transition Age Youth tenant households (“IG Project”). Developer intends to make application to TCAC to secure an allocation of 9% Tax Credits as part of the funding for the IG Project as described in the Award Letter. The Award Letter and Option are required by the California Tax Credit Allocation Committee (“ TCAC”) and its Tax Credit Rules, in particular California Code of Regulations, Title 4, Division 17, Chapter 1, Section 10325.
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F. Under the Award Letter, the Authority is vested with the discretion to fund the cash subsidy portion of the Authority Loan in part from any eligible affordable housing funding sources that may include without limitation the Authority’s LMIHAF, or each, multiple or any of the following funding sources held and administered by the City: (i) HOME Program1, (ii)) HOME ARP 2, (iii) Permanent Local Housing Allocation Program (“PLHA”)3, (iv) Homeless Housing Assistance and Prevention Grant Program (“HHAP-TAY”)4, or other funds eligible for affordable housing purposes in an amount up to $6,000,000 for the Project (together (i) to (iv) are referred to herein as the “Eligible City Transfer Funds”).
G. Notwithstanding the potential City funding sources listed Recital F. above, each is subject to the statutes, regulations, and implementing guidelines for each funding program. In this regard, for example, there is no intention to violate HOME Program requirements, in particular 24 CFR
92.2 as this Cooperation Agreement is not a “commitment” of HOME Program funds as therein defined, but the potential to commit and expend such funds in the event Developer receives a Reservation of 9% Tax Credits and the Authority and Developer enter into an Affordable Housing Agreement and Ground Lease that will evidence and comply with a “commitment” of funds pursuant to 24 CFR 92.2. The Tax Credit Rules require Developer to have “site control” and an “enforceable financial commitment” to make application to TCAC to receive a reservation of 9% Tax Credits and, if awarded, to undertake the IG Project, and that is Authority’s intention by the Award Letter.
H. In implementation of the Award Letter and for the Authority to provide to Developer part of its enforceable financing commitment, the City desires to, and hereby commits to transfer to the Authority, upon its request and after the Developer receives a Reservation of Tax Credits the Eligible City Transfer Funds to assist in the financing, development and operation of the IG Project,
1 The City is a participating jurisdiction with HUD that has received funds (“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: https://www.ecfr.gov/cgi- bin/text-idx?c=ecfr&tpl=/ecfrbrowse/Title24/24cfr92_main_02.tpl; https://www.hud.gov/program_offices/comm_planning/affordablehousing/programs/home/ (together, “HOME Program”). The 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 for this IG Project to provide housing to qualified ELI Seniors and TAYs in accordance with the HOME Program and this Award Letter. HOME Funds are used by the City, as a participating jurisdiction, including transfer to Authority, to carry out multi -year h ousing strategies through acquisition, rehabilitation, and new construction of housing for target income persons and families. This Award Letter is not intended as a commitment of HOME Program funds pursuant to Section 92.1 and is subject to the City and/ or Authority’s undertaking the required NEPA review.
2 Further, the City is a recipient of funds appropriated under section 3205 of the American Rescue Plan Act of 2021 (P.L. 117 -2) under the HOME Program to provide homelessness assistance and supportive services .
See: https://www.hudexchange.info/programs/home-arp/
(“HOME ARP”).
3 PLHA funds are City funds allocated by State HCD to for housing- related projects and programs that assist in addressing the unmet housing needs of their local communities . Se e: https://www.hcd.ca.gov/grants-and- funding/programs-active/permanent-local-housing-allocation. 4 The California Department of Business, Consumer Services and Housing Agency, and the Board of the California Interagency Council on Homelessness (“Cal ICH”) implement HHAP funding awards that provide local jurisdictions flexible funding in continued efforts to end and prevent homelessness in their communities, to support regional coordination and expand or develop local capacity to address immediate homelessness challenges, and to build on regional collaboration to develop a unified regional response to homelessness.
See: https://bcsh.ca.gov/calich/hhap_program.html
.
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all in compliance with the applicable funding program requirements, HAL, Dissolution Law, TCAC Rules, and other applicable laws and regulations.
I. In order to provide long -term affordable housing in the community, to eliminate deterioration, and to revitalize the IG Parcel and the surrounding and nearby area, the City intends to facilitate implementation of the IG Project on the IG Parcel and by this Cooperation Agreement authorizes the transfer to the Authority of the Eligible City Transfer Funds as all or part of the cash subsidy portion of the Authority Loan, expressly subject to the terms and conditions herein and pursuant to the terms and conditions of the Award Letter, in particular Developer’s satisfaction of the Award Letter Condition Precedent.
J. In the event that Developer does receive a Reservation of 9% Tax Credits, then as provided in the Award Letter, the Authority and Developer will negotiate the terms of a comprehensive transactional Affordable Housing Agreement and Ground Lease to implement the IG Project on the IG Parcel, and in connection therewith the specific funding sources for the cash portion of the Authority Loan will be determined by the Authority Executive Director who also serves as the City’s Director of Housing and Community Development (together, “Director”), and the City Council and Authority hereby delegate that discretion to the Director.
NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE MUTUAL
PROMISES, COVENANTS AND CONDITIONS CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:
Section 1. TRANSFER BY CITY TO AUTHORITY OF ELIGIBLE CITY TRANSFER FUNDS. City agrees to transfer to Authority the Eligible City Transfer Funds (with the actual amount, if any, as determined by the Director) for the Authority to provide to Developer part of its enforceable financing commitment required by TCAC to undertake the IG Project pursuant to the Award Letter and Option, and later the Affordable Housing Agreement and Ground Lease. (a) Further, as set forth in the Award Letter, Authority covenants and agrees to cause the use and expenditure of the Eligible City Transfer Funds in strict conformance with the statutes, regulation, and notices published by HUD and/or State HCD applicable to such funding programs.
(b) Authority will implement and perform all necessary housing activities in order to expand the supply of decent, safe, sanitary and affordable housing for Extremely Low Income Senior Citizen and TAY Households in the community . The IG Project will include 46 Extremely Low Income Housing Units with one (1) Manager Unit.
(c) Authority may elect to use Eligible City Transfer Funds sourced from any of PLHA, HHAP-TAY, HOME Program, HOME ARP, or other governmental funding sources to fund all or portion or combination thereof to fund the Authority Loan, as delegated to and determined in the sole discretion of the Director.
(d) Each City funding source of Eligible City Transfer Funds will meet program requirements because the Award Letter and Affordable Housing Agreement require that Extremely Low Income Households comprised of tenants who qualify as Senior Citizens or TAYs will occupy 46 of 47 Housing Units and the Affordability Peri od is 55 years, which term equals or exceeds the minimum compliance period for affordable housing projects funded from LMIHAF, HOME Program, 4 4861-6249-0300v2/022620-0106
HOME ARP, PLHA, and/or HHAP -TAY funds. In this regard, Affordable Rent for Extremely Low Income Households as tenants at the IG Project will all comply with such program requirements. (e) The City and Authority have made Developer aware of the applicable laws and regulations related to LMIHAF, HOME Program, HOME ARP, PLHA, and/or HHAP -TAY funding programs as referenced in footnote 1. to 4. inclusive.
(i) This includes without limitation 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 and recipient of HOME Program funds and as transferor of such funds to the Authority from providing a commitment (as the term is defined therein) of HOME Program funds to any specific local project until the affected parties have “ 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. ” 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 ”; 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 IG Project, if any, must meet the requirements of 'commitment to a specific local project’ in the definition of 'commitment' in § 24 CFR 92.2.”. Thus, while as to the Authority Loan (in the event sourced in whole or part with HOME Program funds), the Award Letter is not, and shall not be construed as a “commitment” of HOME Program federal funds as defined under the HOME Program.
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 Cooperation Agreement to the same extent that such liability would be imposed in the absence of Section 895.2 of such Code. (a) To achieve the above-stated purposes, each Party indemnifies and holds harmless the other Party for any loss, costs or expense that may be imposed upon such other Party solely by virtue of such Section 895.2. The provisions of Section 2778 of the California Civil Code are made part hereof as if fully set forth herein.
Section 3. EFFECTIVE DATE. This Cooperation Agreement shall take effect from and after the date of approval hereof by the Authority Board and the City Council.
Section 4. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties of Authority. Authority hereby represents and warrants to City as follows:
(i) Authority of Anaheim Housing Authority. Authority represents and warrants to City it is a public body, corporate and politic, duly existing pursuant to the HAL, and it has 5 4861-6249-0300v2/022620-0106
been authorized to transact business pursuant to action of the City Council. Authority has full power and authority to execute and deliver this Cooperation Agreement and to accept the funds contemplated hereunder, to execute and deliver documents or instruments, if any, executed and delivered, or to be executed and delivered, pursuant to this Cooperation Agreement, and to perform and observe the terms and provisions of all of the above.
(ii) Authority of Persons Executing Documents. This Cooperation Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Cooperation Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Authority, and all actions required under Authority’s organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Cooperation Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Cooperation Agreement, have been duly taken.
(b) Representations and Warranties of City. City represents and warrants to Authority that it is a charter city and municipal corporation. City has full right, power and lawful authority to enter into this Cooperation Agreement and the execution, performance and delivery of this Cooperation Agreement by City, and persons on behalf of City, have been fully authorized by all requisite actions on the part of the City Council.
Section 5. DEFAULT AND REMEDIES.
(a) Events of Default. Failure by either Party to duly perform, comply with, or observe any of the conditions, terms, or covenants of this Cooperation Agreement shall be an Event of Default. The Party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with reasonable diligence and during any period of curing shall not be in default. The injured Party shall give written notice of default to the Party in default, specifying the default complained of by the injured Party. If the default is not commenced to be cured within thirty (30) days after service of such notice of default and is not cured promptly in a continuous diligent manner in a reasonable period of tim e after commencement, the defaulting Party shall be liable for any damages caused by such default, and the non-defaulting Party may thereafter commence action for damages with respect to such default or for specific performance of this Cooperation Agreement.
(b) Remedies. The occurrence of an Event of Default by Authority that is not cured within the time set forth herein shall relieve City of any obligation to disburse the IG Project Funds.
The Authority may seek specific performance of this Cooperation Agreement for City’s failure to provide the IG Project Funds as provided under this Cooperation Agreement. The non-defaulting Party may seek money damages or any other remedy available at law or equity against the defaulting Party for an Event of Default hereunder.
Section 6. MISCELLANEOUS.
(a) Time. Time is of the essence in this Cooperation Agreement. (b) No Third Parties Benefited. This Cooperation Agreement is made and entered into for the sole protection and benefit of City, its successors and assigns, and the Authority, its successors and assigns, and no other person or persons shall have the right of action hereon. (c) Successors and Assigns. The terms hereof shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto; provided, however, that no assignment 6 4861-6249-0300v2/022620-0106
of Authority’s rights hereunder shall be made, voluntarily or by operation of law, without the prior written consent of City and that any such assignment without said consent shall be void. (d) Construction of Words . Except where the context otherwise requires, words imparting the singular number shall include the plural number and vice versa, words imparting persons shall include firms, associations, partnerships and corporations, and words or either gender shall include the other gender.
(e) Partial Invalidity. If any provision of this Cooperation Agreement shall be declared invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. (f) Governing Law. This Cooperation Agreement and any instruments given pursuant hereto shall be construed in accordance with and be governed by the laws of the State of California.
(g) Amendment. This Cooperation Agreement may not be changed orally, but only by agreement in writing signed by Authority and City.
(h) Captions and Headings. Captions and headings in this Cooperation Agreement are for convenience of reference only, and are not to be considered in construing the Cooperation Agreement.
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IN WITNESS , THE PARTIES HAVE EXECUTED THIS COOPERATION AGREEMENT (IG PROJECT) AS OF THE EFFECTIVE DATE ABOVE.
CITY
CITY OF ANAHEIM, a California municipal
corporation and charter city
Dated: June __, 2024 By:
Grace Ruiz-Stepter, Director of
Housing and Community Development
Department or Authorized Designee
ATTEST
THERESA BASS
City Clerk or Authorized Designee
APPROVED AS TO FORM
OFFICE OF THE CITY ATTORNEY
Ryan O. Hodge, Esq., Deputy City Attorney IV
or Authorized Designee
AUTHORITY:
ANAHEIM HOUSING AUTHORITY, a public
body, corporate and politic
By:
Grace Ruiz-Stepter, Executive Director
ATTEST
THERESA BASS
City Clerk or Authorized Designee
APPROVED AS TO FORM
OFFICE OF THE CITY ATTORNEY
Ryan O. Hodge, Esq., Deputy City Attorney IV
or Authorized Designee