201 S. Anaheim Blvd.
Suite 201
Anaheim, CA 92805
Tel: (714) 765-4300
Fax: (714) 765-4630
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING & COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: JUNE 18, 2024
FROM: HOUSING & COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: REQUEST TO APPROVE COOPERATION AGREEMENT TO
TRANSFER CITY OF ANAHEIM NEIGHBORHOOD RESERVE
FUNDS TO ASSIST WITH THE ACQUISITION OF THE RAINBOW
INN MOTEL LOCATED AT 831 S. BEACH BOULEVARD
ATTACHMENT (Y/N): YES ITEM # 25
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion, approve a Cooperation Agreement to transfer $3,000,000 of City of Anaheim Neighborhood Reserve funds to assist with the acquisition of the Rainbow Inn Motel, located at 831 S. Beach Boulevard, by and between the City of Anaheim and the Anaheim Housing Authority, substantially in the form attached hereto; and authorize the Director of Housing and Community Development, or her designee, to execute and administer the Agreement on behalf of the City.
DISCUSSION:
In 2018, the City of Anaheim (City) adopted the Beach Boulevard Specific Plan to facilitate the revitalization of Beach Boulevard. The specific plan outlined various goals and objectives including the need to reduce the oversupply of motel rooms by approximately 50% and to increase the availability of housing to meet regional housing needs while also supporting the additional commercial uses envisioned along the corridor.
Striving to fulfill the goals set forth in the Specific Plan and reduce the number of motel establishments along Beach Boulevard, the Anaheim Housing Authority (Authority) acquired the Covered Wagon Motel and the Anaheim Lodge Motel in 2022, both located adjacent to the Rainbow Inn Motel at 831 S. Beach Boulevard (Site).
On December 5, 2023, the Authority tendered a statutory offer to the property owner, Dhanuba Hospitality, Inc., a California corporation (Owner), to purchase the Site based on an approved appraisal; however, the offer was not accepted at that time.
On May 21, 2024, the Authority approved a Resolution declaring that the acquisition of the Site is a necessity of public interest to begin eminent domain procedures in the event a voluntary private sale could not be reached. The approval of the Resolution was issued as Cooperation Agreement for the Rainbow Inn Motel
June 18, 2024
an action of last resort to allow staff to continue discussions with the owner. Subsequent to the Authority meeting, the Owner accepted the offer price and terms outlined in the December 5, 2023 offer. The attached Agreement for Sale of Property and Joint Escrow Instructions (Agreement) between the Authority and the Owner reflects the total purchase price of $6,930,000. The eminent domain procedures, viewed as a last result, will be avoided should the voluntary private sale, represented by the Agreement, close escrow.
Funding to acquire the Site will be sourced in whole or in part, from Low Moderate Income Housing Asset funds and City Neighborhood Reserve funds in the amount of $6,930,000. The Cooperation Agreement by and between the City and the Authority will authorize the transfer of available City Neighborhood Reserve funds to the Authority to assist with the purchase of the Site.
The Site is an existing 42-key motel located in Council District 1 and is the last remaining parcel needed to assemble a site suitable for the development of an affordable housing project. The future development, approximately 2.72-acres, will include the demolition of the remaining motel and the new construction of a mixed-income development with up to 135 housing units (120 affordable rental units and up to 15 for-sale townhomes).
After completion of the purchase, staff will issue a Request for Proposals (RFP). Selection criteria will be designed to ensure a high-quality project that is inclusive of varying affordable housing opportunities and is in alignment with the Beach Boulevard Specific Plan. After the RFP process is complete, staff will present the selected proposal to the Authority’s Governing Board for review and approval. The development timeline will be dependent on the pipeline of other affordable housing sites within the City and available state and tax credit funding.
This project is in line with City’s Strategic Plan Goal B Enhance Livability, Strategy 2 - Develop strategies to stabilize and expand affordable, workforce, and home ownership housing options for low-income residents.
IMPACT ON BUDGET:
The Housing and Community Development Department has sufficient appropriation in its proposed Fiscal Year 2024/25 budget to support the acquisition of the Site.
Respectfully submitted,
Grace Ruiz-Stepter
Housing & Community Development Director
Attachment:
1. Cooperation Agreement