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CITY COUNCIL AGENDA REPORT
City of Anaheim
HOUSING AND COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: AUGUST 13, 2024
FROM: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: APPROVAL OF A COOPERATION AGREEMENT FOR
THE TAMPICO MOTEL CONVERSION AFFORDABLE
RENTAL HOUSING DEVELOPMENT AT 120 S. STATE
COLLEGE BOULEVARD
ATTACHMENT (Y/N): YES ITEM # 13
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Resolution, approve a Cooperation Agreement (Tampico Motel Conversion), substantially in the form attached hereto, for the Tampico Motel Conversion Affordable Rental Housing Development by and between the City of Anaheim and the Anaheim Housing Authority, authorize the Director of Housing and Community Development, or her designee, to execute and administer the Cooperation Agreement; and, making certain findings in connection with such approvals.
DISCUSSION:
In April 2023, the Anaheim Housing Authority (Authority) acquired an approximately
0.51-acre parcel, home of the former Tampico Motel, located at 120 S. State College Boulevard (Site). Acquisition of the Site helped eliminate nefarious activities that were becoming a drain to City of Anaheim (City) resources and a nuisance to the neighborhood. Funds for the acquisition of the site derived from the State’s General Fund, secured by the Office of California Senator Tom Umberg to acquire, and convert the motel into permanent supportive housing. The Site was acquired with the intention of developing affordable housing under the City’s Residential Use of Motels, Office, and Commercial Structures Ordinance (Anaheim Municipal Code 18.38.215). The Authority has completed several past strategic acquisitions of nuisance properties with the dual purpose of providing additional housing opportunities while also improving the quality of life for neighboring residents by reducing crime and revitalizing the property. These acquisitions have led to safer, healthier, and more vibrant communities, ultimately benefiting the community as a whole.
On July 31, 2023, the Authority issued a Request for Proposals (RFP) for the development of the Site. The Authority received two proposals. The winning proposal from Jamboree Housing Corporation (Jamboree) is for a 100 percent affordable housing development that will assist young adults (ages 18-24) exiting the foster care system or are experiencing, or at risk of experiencing, homelessness. This population has a Approval of Cooperation Agreement for the Tampico Motel Conversion Affordable Rental Housing Development August 13, 2024
significant need for housing, as demonstrated by data points nationally and locally. This site is ideally situated on a major intersection, close to amenities, public transportation, social services, employment and educational opportunities. Additionally, the City of Anaheim hosts Covenant House, the only shelter for young adults aging out of the foster care system or are experiencing, or at risk of experiencing, homelessness in Orange County, offering a pathway to permanent housing.
The affordable rental development proposal brought forth by Jamboree, herein referred to as the Project, includes a motel conversion apartment development consisting of thirty-two (32) studio rental units inclusive of one (1) one-bedroom manger’s unit. The Project will be 100 percent affordable for young adults with incomes that fall within the extremely low category based on the area median income for Orange County. Project amenities for residents will be located on the ground floor. Amenities will include a community room, fitness room, pet relief area, and outdoor gathering spaces to accommodate various programming and meeting needs of future residents. The Project will require a social services component that provides meaningful support for future residents, including case management, individualized services plans, outplacement, and other essential services. The Project will provide twelve parking spaces, exceeding the parking requirements while also providing a parking ratio that aligns with other recent motel conversions in the City. Since most residents residing in the project do not drive, alternative transportation options will be provided, including bus, bike-sharing programs, and a shuttle service to nearby transit hubs. Additionally, nearby amenities such as parks, retail shops, and grocery stores are within a short walking distance to the property. Staff will continue to work with Jamboree to integrate appropriate art elements and final architectural features to ensure the Project continues the Authority’s legacy of high-quality affordable housing.
Jamboree and Authority staff held a community meeting in July 2024 to review the Project with area residents. Community comments and questions indicated strong support for the Project, with the majority of the questions asked centering on-street parking, security, supportive services, and architectural design.
The total development cost for the Project is approximately $25,912,150. Jamboree proposes to finance the project with a combination of Federal, State, and local funding sources, including 4% Tax Credits and bond financing, which is estimated to provide $9,875,631 in net investor equity and a $1,951,058 permanent loan from a private lender. While most of the funding needed to complete the Project is projected to come from federal tax credits and bond financing, assistance is needed from the Authority to close the remaining financial gap. To address this gap, the Developer has requested that the Authority provide a loan of up to $6,900,000 funded in whole or in part from HOME American Rescue Plan (HOME-ARP), CalOptima Health Homeless Housing Incentive Program (HHIP), Homeless Housing Assistance and Prevention grants (HHAP-TAY), and/or Housing Asset funds. The HOME-ARP and HHIP funds will be structured as a loan of $4,469,386. The HHAP-TAY funds will be structured as a grant, per the funding requirements, amounting to $2,430,614. Jamboree is also requesting thirty-one (31) Section 8 Project-Based Vouchers (PBV) for the project. The Authority proposes to enter into a ground lease for not less than 55 years with Jamboree, valued at approximately $5,120,000. This lease arrangement will allow the Authority to recoup Approval of Cooperation Agreement for the Tampico Motel Conversion Affordable Rental Housing Development August 13, 2024
the land acquisition costs and approximately $327,255 in site preparation costs over the lease term. The City is supporting the project by waiving the Transportation Impact Fee in the approximate amount of $41,504. The ground lease, Authority loan, site preparation costs, and Transportation Impact Fee waiver will be re-paid back to the Authority from 85% of the project’s available cash flow. Including local funding sources as part of the project's financing structure increases the competitive advantage of being awarded tax credits.
Staff is supportive of the Project and therefore recommends that the City Council approve a Cooperation Agreement between the City and Housing Authority to transfer federal and state-restricted housing funds provided directly to the City to the Housing Authority for inclusion in the Authority loan and grant. The Housing Authority will not enter into an Affordable Housing Agreement or release any funding until the Developer has provided evidence that all required third-party funding is in place for this development. Any material changes in the terms outlined in the Preliminary Award Letter will be presented to the Governing Board of the Housing Authority for review and consideration.
The Tax Credit Allocation Committee application submittal deadline is August 27, 2024, with an award expected on December 11, 2024. Should the Project successfully obtain tax credits, Jamboree could begin construction in June or July of 2025.
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
Proposed assistance to the Project includes a loan and a grant to the developer totaling $6,900,000, which are supported by restricted grant funds included in the Housing and Community Development Department’s FY 2024/25 budget.
Respectfully submitted,
Grace Ruiz-Stepter
Director of Housing and Community Development
Attachments:
1. Resolution
2. Cooperation Agreement
3. Location Map
4. Project Plans