1 RESOLUTION NO.
A RESOLUTION OF THE GOVERNING BOARD OF THE
ANAHEIM HOUSING AUTHORITY APPROVING A
PRELIMINARY AWARD LETTER AND GROUND LEASE OPTION
AGREEMENT IN SUBSTANTIAL FORM FOR THE
RESYNDICATION OF THE HERMOSA VILLAGE PHASE III
AFFORDABLE RENTAL HOUSING PROJECT GENERALLY
LOCATED AT 1515 S. CALLE DEL MAR TO BE ENTERED INTO
BETWEEN THE AUTHORITY AND HERMOSA VILLAGE PHASE
III HOUSING PARTNERS, L.P.; APPROVING THE DISPOSITION
BY AN OPTION TO GROUND LEASE THE PHASE III SITE;
AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE
AND ADMINISTER THE OPTION AGREEMENT AND
PRELIMINARY AWARD LETTER ON BEHALF OF THE
AUTHORITY; AUTHORIZING THE EXECUTIVE DIRECTOR TO
ENTER INTO AN AFFORDABLE HOUSING AGREEMENT, A
NEW OR AMENDED AND RESTATED GROUND LEASE, AND
RELATED AGREEMENTS AND INSTRUMENTS NECESSARY
TO IMPLEMENT THE HERMOSA VILLAGE PHASE III
PROJECT, PROVIDED THAT SUCH AGREEMENTS DO NOT
MATERIALLY INCREASE OR EXTEND THE FINANCIAL
ASSISTANCE COMMITTED BY THE AUTHORITY BY THE
PRELIMINARY AWARD LETTER; AND MAKING CERTAIN
OTHER FINDINGS IN CONNECTION THEREWITH
WHEREAS, the Anaheim Housing Authority (“Authority”) is a California housing authority duly organized and existing under the California Housing Authorities Law (“HAL”), Part 2, Division 24, Section 34200, et seq., of the Health and Safety Code (“HSC”), and has been authorized to transact business and exercise the power of a California housing authority pursuant to action of the City Council (“City Council”) of the City of Anaheim; and WHEREAS, the Authority also serves as the housing successor to the former Anaheim Redevelopment Agency (“Former Agency”) pursuant to HSC § 34170, et seq ., in particular §§ 34176 and 34176.1 (“Dissolution Law”), and as housing successor, the Authority is required to comply with certain statutory requirements of the California Community Redevelopment Law, HSC §33000, et seq . (“CRL”) as operative post dissolution pursuant to Senate Bill 341 (“SB 341”); and
WHEREAS, the City of Anaheim (“City”) is a California municipal corporation and charter city; and
WHEREAS, the Authority maintains a Low and Moderate Income Housing Asset Fund pursuant to HSC §§ 34176 and 34176.1, which funds are available to the Authority to assist in the development and operation of rental housing in the City that is affordable to persons and families of Low, Very Low and Extremely Low Income; and 2 WHEREAS, Hermosa Village is an existing multi -phased affordable rental housing project in the community that was redeveloped, rehabilitated, owned, managed, and operated by separate partnership entities, each of which has as a general partner an entity that is an affiliate of a parent company, The Related Companies of California, LLC (“Related CA”) which is an affiliate of The Related Companies, L.P., a New York limited partnership; and WHEREAS, there have been four phases of revitalization and operation of Hermosa Village; the third (“Phase III”) and fourth (“Phase IV”, aka “Phase IV-A”) phases comprising 16 buildings and 112 apartments (of the total in all phases of 521 units) are the subject of this Resolution; and
WHEREAS, the properties that comprise Phase III and Phase IV consist of multiple parcels owned in fee by the Authority on which the original Phase III and Phase IV projects were undertaken and presently operate; these properties are the subject of the original Phase III Ground Lease dated as of February 10, 2006 and the original Phase IV Ground Lease dated as of July 27, 2007, entered into between Authority, as lessor, and the original Phase III partnership entity and original Phase IV partnership entity, each as lessee respectively, and other instruments entered into between the Authority and such original Phase III and Phase IV partnerships (together, “Original Project Documents”); and
WHEREAS, a new partnership entity, Hermosa Village Phase III Housing Partners, L.P., a California limited partnership (“New Partnership”) has been formed, which entity will cause termination of the Original Project Documents for the original Phase III and Phase IV projects and will negotiate and enter into a series of new and/or amended and restated Phase III Project documents to undertake a resyndicated and combined Phase III and Phase IV Project (together, “Phase III Project”); and
WHEREAS, in addition to the Option, and thereafter the new or amended and restated Ground Lease, certain parcels within the greater Phase III Project include parcels that are owned by third party owners that are subject to separate ground leases between each fee owner and Developer (“Individual Ground Leases”); and
WHEREAS, the New Partnership, as Developer, intends to acquire from the original Phase III and Phase IV partnership entities and then cause the resyndication, new financing, and new equity investment, additional capital investment, including primary financing sourced from the proceeds of multifamily housing revenue bonds issued by the Authority, the Substantial Rehabilitation of the Improvements, and continued operation, management, and maintenance of the Phase III Project on the Phase III and Phase IV properties (together, Phase III Site) as further set forth in the Affordable Housing Agreement, new or amended and restated Ground Lease, and related implementing instruments; and
WHEREAS, Authority and Developer have negotiated the terms of a Preliminary Award Letter (“Award Letter”) under which Authority commits to (i) make an Authority Loan in an original principal amount of not less than $20,793,383 (“Authority Loan”), (ii) enter into a new Affordable Housing Agreement (“AHA”), (iii) new or amended and restated Ground Lease of the combined Phase III Site (“Phase III Ground Lease”), (i v) repayment of part of the original loans issued by Authority to the original Phase III and Phase IV partnership entities, 3 (v) reinvestment of the remaining principal into the new Phase III Project and (v i) other consideration, all subject to the Award Letter Condition Precedent, by which Developer shall make certain applications: (1) to the California Tax Credit Allocation Committee (“TCAC”) for a reservation of 4% Tax Credits; and (2) to the California Debt Limit Allocation Committee (“CDLAC”) for an award and allocation for the Authority to issue multifamily housing revenue bonds in an aggregate amount not to exceed $37,000,000 (“Bonds”), in the 2025 Round 3 allocation, and if necessary a second round application in 2026 TCAC and CDLAC application cycles; and
WHEREAS, the primary objectives of the Award Letter, Option, then the AHA and Ground Lease between the Authority and Developer are to extend the term of the ground leasehold interests, provide financial assistance, complete the Substantial Rehabilitation, and operate, manage and maintain the 112 apartments with appurtenant facilities for a 57 -year Affordability Period for the Phase III Project; and
WHEREAS, if the New Partnership receives an award of 4% Tax Credits from TCAC and an allocation from CDLAC to issue the Bonds, then Developer and Authority will negotiate and enter into various implementing documents consistent with the Award Letter, including “New Loan Documents” and additional “New Project Documents”; and WHEREAS, by adoption of this Resolution, the Authority intends that this Award Letter fulfill the enforceable financial commitment and site control required under TCAC Regulation Section 10325; and
WHEREAS, under the HAL, the Authority has held a duly noticed public hearing on the proposed Option as described above; and
WHEREAS, on behalf of the New Partnership, The Related Companies of California, LLC (“Related”) has submitted to Authority a development proforma and projected cash flows for the Project dated as of July 7, 2025 that evidences the financial terms associated with the Phase III Project, including without limitation the estimated operating expenses and the estimated Residual Receipts payments and capitalized ground lease payments to Authority, and WHEREAS, Authority has duly considered all terms and conditions of the proposed Award Letter and Option, including all exhibits thereto, and believes the Phase III Project is in the best interests of the City of Anaheim and the Authority and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements.
WHEREAS, the Authority caused proper notice of the public hearing, conducted the public hearing at which testimony was received, both oral and written, in favor, against or neutral to the proposed actions, and the Award Letter and Option were made available for public inspection prior to the Authority’s consideration and action on this matter; and
NOW, THEREFORE , BE IT RESOLVED BY THE ANAHEIM HOUSING
AUTHORITY:
Section 1. The Authority Board finds and determines that the foregoing recitals are true and correct and are a substantive part of this Resolution. 4 Section 2. The Authority Board hereby finds and determines, based on all documentation, testimony and other evidence in the record before it, that (a) the proposed Option to ground lease the Phase III Site for the Phase III and (b) the proposed Award Letter will facilitate the undertaking, completion and operation of the Phase III Project for the 57 -year Affordability Period; and
Section 3. The Authority Board hereby approves the Award Letter and Option between Authority and Developer, with such changes may be mutually agreed by the Executive Director (or her duly authorized representative), the City Attorney, and Developer, respectively, as are minor and in substantial conformance with the form of the Award Letter and Option submitted herewith. The Authority Executive Director and Authority Secretary are authorized to execute and attest the Award Letter and Option and subsequently and subject to compliance with the conditions set forth in the Award Letter, prepare the AHA and Phase III Ground Lease, and various implementing documents on behalf of Authority. In such regard, the Executive Director (or her duly authorized representative) is authorized (a) to sign the final versions of the Award Letter and Option after completion of any such non -substantive, minor revisions, and (b) to negotiate, prepare and execute final versions of the AHA, Phase III Ground Lease, and other instruments implementing the Phase III Project as set forth in the Award Letter, as determined to be appropriate by the Executive Director. Copies of the final form of the Award Letter and Option, when duly executed and attested, shall be placed on file in the office of the Secretary/City Clerk. Further, the Executive Director (or her duly authorized representative) is authorized to implement the Award Letter and Option and take all further actions and execute all documents referenced therein and/or necessary and appropriate to carry out the transaction contemplated by the Award Letter and Option. The Executive Director (or her duly authorized representative) is hereby authorized to the extent necessary during the implementation of the Award Letter to make technical or minor changes and interpretations of the Award Letter after execution, as necessary to properly implement and carry out the Award Letter, including all exhibits thereto, provided any and all such changes shall not in any manner materially affect the rights and obligations of the Authority under the Award Letter.
Section 4. In addition to the authorization of Section 3 above, the Executive Director is hereby authorized, on behalf of the Authority, to sign all other documents necessary or appropriate to carry out and implement the Award Letter and Option, including causing the issuance of warrants in implementation thereto, and to administer the Authority’s obligations, responsibilities and duties to be performed under the Award Letter, Option, and thereafter the AHA and Phase III Ground Lease.
Section 5. The Authority Secretary shall certify to the adoption of this Resolution. 5 THE FOREGOING RESOLUTION IS PASSED, APPROVED AND ADOPTED
BY THE GOVERNING BOARD OF THE ANAHEIM HOUSING AUTHORITY THE 12th DAY OF AUGUST 2025 BY THE FOLLOWING ROLL CALL VOTE:
AYES:
NOES:
ABSTAIN:
ABSENT:
ANAHEIM HOUSING AUTHORITY
ATTEST:
By:
Chair
Authority Secretary
ATTACHMENT TO RESOLUTION
[Attach Copies of Award Letter and Option]