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HOUSING AUTHORITY AGENDA REPORT
City of Anaheim
HOUSING AND COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: DECEMBER 17, 2024
FROM: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: APPROVAL OF FIRST AMENDMENT TO ASSIGNMENT AND
ASSUMPTION AGREEMENT WITH GMA PERO, INC.
ATTACHMENT (Y/N): YES ITEM # 02
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the Governing Board of the Anaheim Housing Authority, by Motion, approve a First Amendment to Assignment and Assumption Agreement by and between the Anaheim Housing Authority and GMA Pero, Inc., to amend the term on a month-to- month basis not to exceed December 31, 2026 and set a new monthly rent amount of $14,111.11 per month with a 3% annual escalation for the extended term, for a single parcel of land located at 100 S. Beach Boulevard; and authorize the Executive Director, or her designee, to execute and administer the agreement on behalf of the Anaheim Housing Authority.
DISCUSSION:
In 2019, the Anaheim Housing Authority (Authority) entered into an Agreement for Sale of Property and Joint Escrow Instructions with Evergreen Capital Assets, LLC, to purchase 3.61-acres of land at the southeast corner of Beach Boulevard and Lincoln Avenue that included a motel, restaurant, carwash, and a gas station. The gas station (Site) was the only business acquired with a long-term ground lease. At the close of escrow in December 2019, the Authority assumed the ground lease for the Site located at 100 S. Beach Boulevard through an Assignment and Assumption Agreement (Assumption Agreement) between Evergreen Capital Assets, LLC and the Authority.
The Assumption Agreement was later transferred by the Authority to a new lessee through a second Assignment and Assumption Agreement (Second Assumption Agreement) dated July 14, 2023. This agreement was made between the Authority, Issam B. Nasrallah and Nazih Simaan (the Assignors), and GMA Pero, Inc. (the Assignee). All terms and conditions remained the same, with the only change being the transfer of the ground lease from the Assignors to the Assignee. The Second Assumption Agreement will expire on December 31, 2024. The Authority intends to amend this agreement, effective January 1, 2025, through a First Amendment to the Assignment and Assumption Agreement (First Amendment). The amendment will introduce a month-to- month lease term, a 30-day termination clause, and a three percent annual rent escalation. The gas station tenant currently pays a monthly lease amount of $13,700 to First Amendment to Assignment and Assumption Agreement with GMA Pero, Inc.
December 17, 2024
the Authority and is utilized to pay for on-going asset management costs. All other terms and conditions will remain unchanged. The First Amendment will remain in effect until development of the site is ready to proceed.
Staff is currently working with Brandywine and Innovative Housing Opportunities (Developers) to construct a mixed-use development project consisting of 60 homeownership units, 47 affordable inter-generational rental units, and a commercial component. The first phase of the project, which involves the construction of residential units, is anticipated to begin in the Summer of 2025.
The commercial development, which is currently planned on the Site, is anticipated to follow in about two to three years. Given that the current business is viable and interested in continuing to operate until the future development commences, staff recommends approval of the First Amendment, allowing for continued occupancy on a month-to-month basis.
IMPACT ON BUDGET:
There is no expenditure impact to the Housing & Community Development Department’s Fiscal Year 2024/25 budget.
Respectfully submitted,
Grace Ruiz-Stepter
Executive Director of
Anaheim Housing Authority
Attachment:
1. First Amendment to Assignment and Assumption Agreement
2. Exhibit - Assignment & Assumption Agreement