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HOUSING AUTHORITY AGENDA REPORT
City of Anaheim
HOUSING AND COMMUNITY DEVELOPMENT
DEPARTMENT
DATE: AUGUST 12, 2025
FROM: HOUSING AND COMMUNITY DEVELOPMENT DEPARTMENT
SUBJECT: RIGHT OF ENTRY AND LICENSE AGREEMENT AND
AMENDMENT TO PRELIMINARY AWARD LETTER
AND COOPERATION AGREEMENT FOR THE TAMPICO
MOTEL CONVERSION AT 151 S. CENPLA WAY
(FORMERLY 120 S. STATE COLLEGE BOULEVARD)
ATTACHMENT (Y/N): YES ITEM # 03
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the Governing Board of the Anaheim Housing Authority, by Motion:
1. Approve the First Amendment to Preliminary Award Letter, substantially in the form attached hereto, with Jamboree Housing Corporation regarding the Tampico Motel Affordable Rental Housing Project (Project), located at 151 S.
Cenpla Way (formerly 120 S. State College Boulevard), to increase the interest rate from 3% to the Applicable Federal Rate on a portion of the Housing Authority Loan, change the lien priority for the Authority Rehabilitation Loan, and add Homeless Housing, Assistance and Prevention (HHAP) Round 5 Youth Set-Aside funds as part of the HHAP grant to the Project;
2. Approve the First Amendment to Cooperation Agreement (Tampico Motel Conversion), substantially in the form attached hereto, by and between the City of Anaheim and Anaheim Housing Authority, to increase the amount of funds to be transferred to the Authority, by $587,839.34 in HHAP Round 5 Youth Set- Aside funds, for the Project;
3. Approve a Right of Entry and License Agreement (Accessible Parking Space) substantially in the form submitted herewith, Specialists Management Group LLC, to accommodate continued access to Americans with Disabilities Act (ADA) compliant parking, for a term of 55 years;
4. Authorize the Executive Director of the Anaheim Housing Authority to accept the Quitclaim Deed for partial termination of easement;
5. Authorize de minimis changes that do not substantially change the terms and conditions of the agreements, as determined by the City Attorney’s Office; and
6. Authorize the Executive Director of the Anaheim Housing Authority to execute the agreements and related documents and to take the necessary actions to implement and administer the Agreements.
Right of Entry and License Agreement and Amendment to the Preliminary Award Letter and Cooperation Agreement - Tampico Motel Conversion
August 12, 2025
DISCUSSION:
On August 13, 2024, the Governing Board of the Anaheim Housing Authority (Governing Board) approved a Preliminary Award Letter (PAL) and Cooperation Agreement for the Tampico Motel Conversion located at 151 S. Cenpla Way. These documents outlined the terms and conditions under which financial assistance from the Anaheim Housing Authority (Authority) would be provided to support the project.
Center Housing Partners, LP, a California limited partnership, which is comprised of Jamboree Housing Corporation (Developer) successfully secured 4% tax credits from the California Tax Credit Allocation Committee (TCAC) and an allocation of bonds from the California Debt Limit Allocation Committee (CDLAC). On April 22, 2025, the Governing Board approved the issuance of the bonds.
Subsequent to the April 22, 2025 approval, staff and the project team identified three unforeseen issues necessitating action prior to closing of project financing: tax-related complications for the tax credit investor, loss of social services funding and real property encumbrances. Given the complex nature of tax code, CDLAC approved a 90-day extension to close in order to identify potential solutions and seek necessary approvals.
In collaboration with the Authority, the tax credit investor, RBC Community Investments (RBC), and Jamboree proposed modifications to the soft loan structure to resolve the tax issues. Staff conducted a third-party financial analysis and concluded that the proposed modifications outlined below do not materially or negatively impact the loan repayment or terms.
PAL & Cooperation Agreement Amendments
The previously approved PAL outlines key funding commitments including a 55-year ground lease, 31 Project-based Vouchers, and $6,900,000 in gap financing sourced from HOME American Rescue Plan, Cal-Optima, and HHAP Youth Set Aside funds. All Authority funds, excluding the HHAP Youth Set-Aside, were loaned to the project at a simple 3% interest rate to be repaid from residual receipts. This includes the capitalized value of the ground lease. Staff requests the authority to execute an amendment to the PAL and Cooperation Agreement to reflect the following changes:
1. Increase in Interest Rate on a Portion of Authority Loan:
The amendment adjusts the interest rate on $658,802 of the Authority Improvements Acquisition Loan from three percent (3%) simple interest to the Applicable Federal Rate (AFR) at the time of closing, currently 4.90 percent with compounding interest.
This change is necessary to meet tax credit requirements for seller-financed improvements. Maintaining the existing structure would trigger the IRS to recategorize this portion of the loan as prepaid interest and reduce the project’s eligible tax credits. These tax considerations do not directly impact the Authority but would cause potential liabilities for the tax credit investor, RBC, and Jamboree. This adjustment is financially beneficial to the Authority, as the higher interest rate will generate greater long-term interest earnings over the life of the loan, without increasing the Authority’s upfront subsidy.
Right of Entry and License Agreement and Amendment to the Preliminary Award Letter and Cooperation Agreement - Tampico Motel Conversion
August 12, 2025
2. Change in Lien Priority:
The amendment reorders the $3,768,453 Authority Rehabilitation Loan to the lowest lien priority among all other project loans. This change is necessary to prevent the loss or reduction in tax credits during the Low-Income Housing Tax Credit (LIHTC) credit period, which runs through 2037. Notably, this revision does not affect the Authority’s repayment order from project cash flow, which remains unchanged.
3. Inclusion of HHAP 5 Youth Set-Aside Funds:
The amendment allocates $587,839.34 from the Homeless Housing, Assistance and Prevention (HHAP) Round 5 Youth Set-Aside to help address an unexpected shortfall in funding for on-site social services. Jamboree originally planned to use CalAIM funds, but changes in funding availability and restrictions on their use for this population in later operational years created a gap. The additional HHAP funds, together with a commitment from Jamboree to secure other funding sources or directly cover these costs, will ensure continued delivery of tailored supportive services for the young adult residents, including case management, life skills training, and connections to employment and education.
In the event additional funding is not approved, the development will continue to move forward; however, the supportive services will be scaled back from 2 full-time employees (FTE) to 1.3 FTE. This reduction would limit the capacity to deliver consistent, trauma-informed care. Reduced staffing would impact access to case management, life skills training, crisis response, and other essential services, while increasing the risk of staff burnout and disrupting continuity of care for the young adult residents.
The amendment to the Cooperation Agreement will authorize the transfer of the HHAP 5 Youth Set-Aside funds from the City of Anaheim to the Authority for disbursement at the close of project financing.
Right of Entry and License Agreement
Upon acquisition of the Tampico Motel, the Authority assumed all existing easements and license agreements encumbering the property. This includes a 1-foot by 20-foot strip of Authority-owned land abutting the shared property line with 116 South State College Boulevard, owned by Specialists Management Group LLC (Pizza Hut Property Owner).
This strip was previously encumbered by a Right of Entry and License Agreement needed to accommodate ADA-compliant parking on their parcel. However, that agreement has since expired, and a new license agreement is now required to formalize continued access. Additionally, an existing ingress/egress access easement granted to the Pizza Hut Property Owner now conflicts with proposed open space improvements at the Tampico Motel site and runs under the existing motel building.
To resolve both issues, staff recommends authorizing the Executive Director, or her designee, to execute a new 55-year Right of Entry and License Agreement allowing continued use of the 20-square-foot area for accessible parking. In return, the Authority will request that the Pizza Hut property owner execute a quitclaim deed to relinquish a portion of their ingress/egress easement. The license and quitclaim are equal in land value and will allow both parties to proceed with their respective projects. Without the quitclaim, the Authority cannot proceed with the proposed open space improvements.
Right of Entry and License Agreement and Amendment to the Preliminary Award Letter and Cooperation Agreement - Tampico Motel Conversion
August 12, 2025
During the 55-year license term, the Authority and the Pizza Hut Property Owner will work collaboratively to establish a long-term solution regarding the 1-foot by 20-foot strip of Authority-owned land. Project financing is expected to close by mid-August.
Once finalized, construction is anticipated to begin in early September 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:
All proposed assistance to the Project is derived from restricted funds provided by the United States Department of Housing and Urban Development (HUD) and in the Housing and Community Development Department’s budget.
Respectfully submitted,
Grace Ruiz-Stepter
Executive Director of
Anaheim Housing Authority
Attachments:
1. First Amendment to Preliminary Award Letter
2. First Amendment to Cooperation Agreement
3. Right of Entry and License Agreement
4. Quitclaim Deed for Partial Termination of Easement