STAFF REPORT
Meeting Date: August 19, 2025
To: Honorable Mayor & City Council
From: Logan Phillippo, Real Property Development Manager Subject: City Support for a Developer’s Grant Application for a 100% Affordable Senior Housing Project at 214-216 South Hamilton Drive
Attachments: 1. Draft Funding Commitment Letter
2. Draft Support Letter
INTRODUCTION
Related Companies in partnership with Brisa Development Partners (collectively the “Developer”) intends to develop an eight-story, 100% affordable senior housing project with 82 residential units on privately-owned property at 214-216 South Hamilton Drive (“Hamilton Apartments” or the “Project”).
The Developer has requested the City provide local support for their application to the State Department of Housing and Community Development’s (“HCD”) grant program known as the Multifamily Finance Super Notice of Funding Availability – Los Angeles Disaster (the “MFSN-LA Disaster Grant” or the “Grant”). The Grant makes available, on a competitive basis, program funds totaling approximately $101 million for disaster impacted areas from wildfires occurring in January 2025 in Los Angeles County. The Developer intends to apply for $24 million in funding, which equates to approximately $292,000 per unit and would take the form of a residual receipts loan. This represents 32% of the estimated $75 million in estimated Project costs. If the Grant funds are awarded to the Project, the Developer would be required to enter into a regulatory agreement with HCD and would be required to restrict the rent and occupancy of the units to comply with the affordability standards as set forth by HCD for a term of 55 years.
On July 7, 2025, the MFSN-LA Disaster Grant notice of funding availability was released and on July 21, 2025, the application became available. On July 23, 2025, the Developer contacted Staff to request the local support. Grant applications are due on August 21, 2025, and awards are anticipated to be made in November 2025.
On August 6, 2025, the Affordable Housing Ad Hoc Committee (Vice Mayor Mirisch and Councilmember Wells) met to receive a presentation from the Developer, ask questions, and discuss whether to recommend providing local support to City Council. The Ad Hoc Committee’s discussions are summarized in the Discussion section of this report.
Meeting Date: August 19, 2025
City support for the Project could provide up to 10 points in the Grant program’s scoring in the following ways:
1. Five points will be awarded if the City, through the Director of Community Development, provides a letter of support for the Project; and
2. Five points will be awarded if the City provides an Enforceable Funding Commitment to contribute $500,000 to the Project. These funds would only be disbursed to the Developer if they are awarded the Grant and comply with terms and conditions imposed by the City.
DISCUSSION
Housing Element Context
The Housing Element of the City’s General Plan identifies strategies and programs to facilitate the provision of an adequate supply of safe, affordable housing for all community members regardless of income and those with special housing needs. A key component of the Housing Element is the analysis of potential sites for residential development and the establishment of housing programs to accommodate the City’s share of future housing needs for all income groups as identified through the Regional Housing Needs Assessment (“RHNA”) planning process.
The RHNA process begins with HCD’s projection of future statewide housing growth need, and the apportionment of this need to regions throughout the state. The Southern California Association of Governments (“SCAG”) is the agency responsible for developing an allocation methodology to distribute the Southern California region’s share of statewide housing need to cities and counties by income level, commonly referred to as a RHNA allocation. The RHNA allocation represents the minimum number of potential housing units each community must accommodate through its land use plans and development regulations. The Beverly Hills RHNA allocation for the current 2021-2029 planning period is 3,104 housing units that are categorized by income level as shown in the table below.
Beverly Hills RHNA Allocation, 2021-2029 Planning Period Income Level Percent of AMI* Units
Very Low Up to 50% 1,008
Low 51% - 80% 680
Moderate 81% - 120% 602
Above Moderate 120%+ 814
Total 3,104
*Area Median Income
The Housing Element sets forth the City’s, policies and programs for meeting housing needs, including the RHNA allocation, and states, among many other commitments, that the City will support these efforts by leveraging the local Housing Trust Fund and assisting in the application for State and federal finance resources.
As described in the Housing Element, the City has committed to facilitating the development of 557 units of affordable housing. The proposed Hamilton Apartments Project could deliver up to 81 affordable units (plus one on-site manager’s unit) and could help to fulfill this requirement.
Meeting Date: August 19, 2025
Hamilton Apartments – Proposed Project
The proposed Project is located in the Southeast Area on two parcels at 214-216 South Hamilton Drive (the “Property”), which is on the east side of the street, mid-block, between Wilshire Boulevard to the north and Gregory Way to the south. The Property totals 10,394 square feet of land area (approximately 0.24 acres) according to data from the Los Angeles County Assessor. It is situated in the R-4 Multiple Residential Zone nearby the future La Cienega-Wilshire Metro Station and the City-owned Historic Clock Market and Gale Yard properties, as shown in the diagram below. The Property’s proximity to La Cienega-Wilshire Metro Station make it a strong candidate for funding through various State funding programs that aim to create transit-oriented development. 214-216 South Hamilton Drive
The Property is currently improved with two two-story multifamily apartments. 214 S.
Hamilton contains 3,361 square feet of building area with two two-bedroom residential units. 216 S. Hamilton contains 2,993 of building area with two one-bedroom residential units and one two-bedroom residential unit. Both properties are subject to the City’s Rent Stabilization Ordinance. The Developer has stated they are preparing a relocation plan for the existing tenants. Tenant relocation would be required to be carried out consistent with the requirements of state law and the Rent Stabilization Ordinance.
Meeting Date: August 19, 2025
214 S. Hamilton 216 S. Hamilton
Adjacent to the Property on the north (212 S. Hamilton) is a two-story multifamily building.
To the south is a one-story single-family building (218 S. Hamilton). To the east at the back of the property are two-five story multifamily buildings. The majority of buildings on South Hamilton Drive south of Wilshire are multi-family residential structures, including apartment buildings and condominiums. These range from low-rise (two- to four-story) buildings to some mid-rise structures, but the overall scale is lower than the commercial high-rises found directly on Wilshire Boulevard.
The Developer has entered into an agreement to purchase the Property with an extended contingency period to obtain financing sufficient to support a 100% affordable housing project. The Developer has also stated that, aside from selling the land, it is not intended for the current owner to participate in the Project.
Hamilton Apartments is proposed to be an eight-story, 100% affordable senior housing project with 7 studio units and 75 one-bedroom units for a total of 82 units with the following categories based on Area Median Income (“AMI”): 21 units at 30% AMI, 21 units 50% AMI, 39 units at 60% AMI, and one on-site manager’s unit.
Hamilton Apartments – Entitlements and Future Environmental Review A version of the Project, consisting of 76 market-rate studio units and 14 affordable studio units (90 units in total) was initially submitted to the City on April 26, 2024, pursuant to the "Builder's Remedy" provisions of the California Housing Accountability Act (GC 65589.5(d)). The City has deemed that project application complete. The Developer has stated that it is not intended for the initial applicant to participate in the Project and within the coming weeks the Developer intends to submit revisions that will substantially conform to that April 26, 2024 submittal but also reflect the Project as described in this report (82 units that are all affordable).
In addition to the zoning approvals, Assembly Bill 130 was signed into law on June 30, 2025, with aims to accelerate housing development in California. The bill created a new statutory exemption from the California Environmental Quality Act (CEQA) for qualifying infill housing development projects. Staff has determined the April 26, 2024, submittal qualifies for the exemption and notified the applicant on July 17, 2025. The Developer intends to seek exemption for the Project as revised.
Hamilton Apartments – Development Timeline
Meeting Date: August 19, 2025
While the timing of the Project will heavily depend on the funding sources the Developer is able to secure, the Developer has stated they could begin construction as early as 2027 and open as early as 2029.
The Developer
The development team is a partnership of Related Companies and Brisa Development Partners. Related Companies is a full-service development company with 36 years of experience in market rate, mixed income, and 100% affordable projects. Related Companies has developed more than 21,000 units of housing in California, including more than 3,500 units of senior affordable housing. Notable projects include The Grand in Downtown Los Angeles (100 S. Grand), The Century in Century City (One Century Drive), Belmar Apartments in Santa Monica (1725 Ocean Avenue), Weingart Towers in Downtown Los Angeles (600 S. San Pedro), and Bayview Landing in Newport Beach (1121 Back Bay Drive). Brisa Development Partners is a California-based developer with expertise in California’s grant programs and funding systems for affordable projects.
Requested City Support for Developer’s Grant Application Created in response to the 2025 Palisades, Eaton, and Hughes fires, the MFSN-LA Disaster Grant makes approximately $101 million available to support the development of safe, fire-resilient multifamily low-income housing that will provide long-term stability, protect vulnerable populations, and contribute to a more equitable and resilient Los Angeles. Projects are prioritized, in part, based on their proximity to the fire perimeter. The Grant provides ten points for projects within a one-mile radius, five points for projects within a three-mile radius, and three points for those within a ten-mile radius. Hamilton Apartments is located within ten miles of the Palisades fire and qualifies for three points.
The Developer is applying for the Grant, which is scored on a competitive basis with a maximum score of 120 points across six categories: the extent to which a project services the lowest income levels, state policy priorities, project sponsor and project management experience, project readiness, proximity to amenities, and cost containment.
As part of the state policy priority category, an applicant for the Grant can earn up to ten points for achieving local support, as shown below.
• Five points for evidence of local Enforceable Funding Commitments from a city, county, or housing authority for:
• permanent financing loans and/or grants totaling at least $500,000, including but not limited to Measure A funds, Proposition HHH funds, and other local loans and grants; or
• locally administered or funded project-based rental assistance or operating subsidies for at least 20% of restricted units.
• Five points for submission of a formal letter of support for the applicant’s project from the head of the department of planning or other local public entity leading housing related activities for Los Angeles County, or of a city within LA County.
In a competitive environment, small scoring differences of a few points can determine whether a grant applicant is awarded funds. Additionally, it is common for local jurisdictions to provide support (through letters of support or funding commitments) for 100% affordable projects, so it can be expected that other Grant applicants will be able to score these points for their respective applications.
Meeting Date: August 19, 2025
Enforceable Funding Commitment
According to the Grant’s guidelines, an Enforceable Funding Commitment is a letter or other document evidencing, to the satisfaction of HCD, a commitment of funds or a reservation of funds by a project funding source for construction or permanent financing, including, but not limited to, the following:
• Private financing from a lender;
• Deferred-payment financing, residual receipts financing, and grants from public agencies;
• Funds awarded from other HCD programs;
• A land donation in fee interest for no other consideration and that is supported by an appraisal or purchase agreement;
• Owner equity contributions or developer funds; and
• Funds for transportation projects, as applicable.
In the case of the MFSN-LA Disaster Grant, the Enforceable Funding Commitment must come from a city, county, or housing authority. Because the project is located in Beverly Hills, the developer is seeking the Enforceable Funding Commitment from the City.
Additionally, the amount of local support must be a minimum of $500,000.
According to the Grant’s guidelines, an Enforceable Funding Commitment must also contain the following:
• The name of the applicant or developer sponsor;
• The project name;
• The project site address, assessor’s parcel number, or legal description; and • The amount, interest rate (if any), and terms of the funding source.
The Enforceable Funding Commitment may be conditioned on certain standard underwriting criteria, such as appraisals, but may not be generally conditional. Examples of unacceptable general conditions include phrases such as “subject to senior management approval”, or a statement that omits the word “commitment”, but instead indicates the lender’s “willingness to process an application” or indicates that financing is subject to loan committee approval of the project. Contingencies in commitment documents based upon the receipt of tax-exempt multifamily bonds or low-income housing tax credits will not disqualify a source from being counted as committed.
The key terms and conditions written in the Enforceable Funding Commitment letter are as follows:
1. The MFSN-LA Disaster Grant is awarded to the Developer;
2. The Developer provides evidence of sufficient debt and equity to construct the Project at the closing of construction financing and pursues construction of the Project;
3. The City’s funding commitment will be awarded through a loan for the Project’s hard construction costs with a term of 55 years and a 3% simple interest rate with payments drawn from an agreed upon percentage of the residual receipts generated by the Project;
4. The Developer will execute, on forms approved by the City, a regulatory agreement, a promissory note, and a deed of trust to secure the City’s loan; Meeting Date: August 19, 2025
5. The deed of trust will be subordinate to other lenders as necessary for the Developer to obtain sufficient funds to construct the Project;
6. The City’s loan will be disbursed at the time of the Project’s construction financing closing given that the Developer has provided evidence of sufficient debt and equity for the Project’s construction, and other reasonable construction loan disbursement conditions have been met;
7. This letter may not be assigned without prior written approval of the City Manager; and
8. This funding commitment letter shall expire on the earlier of (i) the date the Developer is informed they were not awarded funds from the MFSN-LA Disaster Grant or (ii) December 31, 2027, subject to extensions as approved by the City.
Affordable Housing Ad Hoc Discussions
On August 6, 2025, the Affordable Housing Ad Hoc Committee (Vice Mayor Mirisch and Councilmember Wells) met to receive a presentation from the Developer, ask questions, and discuss whether to recommend providing local support to City Council.
The Ad Hoc Committee expressed general support for identifying opportunities to develop 100% affordable projects on privately-owned property with minimal or no financial commitment from the City. The Ad Hoc Committee did not make a recommendation on whether to provide support, but instead requested additional information to ensure the financial feasibility of the project before making a recommendation. Due to timing constraints associated and the August 21, 2025, Grant deadline, the Committee did not have the opportunity to meet again prior to this August 19, 2025, Study Session.
Staff engaged Keyser Marston Associates, a consulting firm that provides real estate advisory services including a specialization in affordable housing, to review the Developer’s proforma. The consultant determined that the Developer’s financing approach is reasonable but dependent on receiving funding from the Grant and other outside funding sources that are both limited and competitive. A representative from Keyser Marston Associates will be available at the Study Session to answer questions regarding the Developer’s assistance request.
FISCAL IMPACT
Only if awarded funds through the MFSN-LA Disaster Grant, the City would be required to provide funding through a residual receipts loan (discussed in the Recommendation section below), which would be disbursed at the closing of the Developer’s construction financing, which is currently estimated to take place in 2027. Given this timing, and if approved by City Council, Staff would incorporate the $500,000 loan obligation into the budget process for next fiscal year.
This City is not making a financial commitment beyond this $500,000 amount and there are no other financial commitments at this time. The City would be repaid through the Project’s residual receipts, if any, over a 55-year term. Any remaining balance still outstanding at the end of the loan term (if not otherwise extended) will become due and payable. Given the fact that 100% of the units in the Project will be deeply affordable, it is Staff and the City’s consultant’s opinion that the Project will generate minimal cash flow throughout the 55-year covenant period. Therefore, it is likely that City’s financial assistance will be repaid over a protracted time period.
Meeting Date: August 19, 2025
RECOMMENDATION
After separate discussions with the Developer and Keyser Marston Associates, Staff recommends that the Enforceable Funding Commitment, if authorized by City Council, take place in the form of a residual receipts loan with a 3% simple interest rate.
A residual receipts loan is a type of financing commonly used in affordable housing and real estate development, where the repayment of the loan is not based on a fixed amortization schedule, but rather on the actual cash flow (or "residual receipts") generated by the project after all operating expenses, senior debt service, and deferred developer fees have been paid. In other words, the borrower is required to make loan payments only from the net cash flow that remains after covering all required project costs and obligations. If there is no positive cash flow in a given period, no payment is due for that period. Any unpaid principal and interest typically accrue and become due at the end of the loan term or upon sale or refinancing of the property. The interest rate is required to be set at a below market rate in order to be treated as assistance to a project. Simple interest, rather than compounded interest is applied to reflect the extraordinary costs associated with a loan that will negatively amortize. The term of a residual receipts loan is typically set to match the length of the project's affordability covenants (e.g., 55 years for affordable housing).
Staff seeks City Council direction on the following:
1) Whether to provide Enforceable Funding Commitment letter to provide a $500,000 residual receipts loan with a 3% simple interest rate and 55-year affordability term to match the project’s affordability covenant; and 2) Whether to provide a letter of support for the Project.
At this time, if directed by City Council to proceed, Staff is only requesting City Council authorize (1) the City Manager to sign a letter evidencing the City’s commitment to provide a loan in the amount of $500,000, and (2) the Director of Community Development to sign a letter of support for the Project. The details of any loan from the City to be disbursed to the Developer would be formalized and presented to City Council for approval at a future Formal Session closer to the Developer’s construction loan closing, currently projected to take place in 2027. The loan would only be disbursed if the Developer was awarded funds through the Grant and was able to evidence funding from other sources to support their full development costs.
The Developer’s Grant application is due on August 21, 2025. In order to meet this deadline, a resolution authorizing both items above has been placed on the August 19, 2025, Formal Session Consent Agenda for City Council approval. However, Staff will modify the item or may request to remove the item based on direction received from City Council during the Study Session.
Ryan Gohlich,
Assistant City Manager
Approved By
Attachment 1
[City Letterhead]
August 19, 2025
Rose Olson, Senior Vice President
Related California
18201 Von Karman Avenue, Suite 900
Irvine, CA 92612
Re: LA Disaster NOFA City of Beverly Hills Funding Commitment for Project at 214-216 South Hamilton Drive, Beverly Hills, California
Dear Ms. Olson,
Related California and Brisa Development Partners, together in partnership as 214 Hamilton, LLC (collectively “the Borrower”), have requested that the City of Beverly Hills (the “City”) support an 82-unit one-hundred percent affordable senior housing development project (“the Project”) located at 214-216 South Hamilton Drive (the “Property”). The Property is located in the Southeast Area of Beverly Hills, and it consists of two parcels totaling 10,394 square feet (approximately 0.24 acres).
The Borrower has requested that the City provide local support for their application to the State Department of Housing and Community Development’s (“HCD”) grant program known as the Multifamily Finance Super Notice of Funding Availability – Los Angeles Disaster (the “LA Disaster NOFA” or the “NOFA”). The NOFA makes available, on a competitive basis, program funds totaling approximately $101 million for disaster impacted areas from wildfires occurring in January 2025 in Los Angeles County.
In order to maximize competitiveness for the NOFA funding, the Borrower has requested a funding commitment from the City in the amount of $500,000.
This letter serves to outline the key terms and conditions the City will impose on the construction to permanent funding commitment for the Project, which includes, but is not limited to, the following:
1. The LA Disaster NOFA is awarded to the Borrower;
2. The Borrower provides evidence of sufficient debt and equity to construct the Project at the closing of construction financing and pursues construction of the Project;
3. The City’s funding commitment will be awarded through a loan for the Project’s hard construction costs with a term of 55 years and a 3% simple interest rate with payments drawn from an agreed upon percentage of the residual receipts generated by the Project;
4. The Borrower will execute, on forms approved by the City, a regulatory agreement, a promissory note, and a deed of trust to secure the City’s loan;
5. The deed of trust will be subordinate to other lenders as necessary for the Borrower to obtain sufficient funds to construct the Project;
6. The City’s loan will be disbursed at the time of the Project’s construction financing closing given that the Borrower has provided evidence of sufficient debt and equity for the Project’s construction, and other reasonable construction loan disbursement conditions have been met;
7. This letter may not be assigned without prior written approval of the City Manager; and
8. This funding commitment letter shall expire on the earlier of (i) the date the Borrower is informed they were not awarded funds from the LA Disaster NOFA, or (ii) December 31, 2027, subject to extensions as approved by the City.
If you have any questions regarding this matter, please contact Real Property Development Manager, Logan Phillippo by email at [email protected].
CITY OF BEVERLY HILLS
BY:
Nancy Hunt-Coffey,
City Manager
Attachment: [City Council Resolution]
Attachment 2
August 19, 2025
Rose Olson, Senior Vice President
Related California
18201 Von Karman Avenue, Suite 900
Irvine, CA 92612
Re: MFSN-LA Disaster Grant City of Beverly Hills Letter of Support for Project at 214-216 South Hamilton Drive, Beverly Hills, California
Dear Ms. Olson,
Related California and Brisa Development Partners, together in partnership as 214 Hamilton, LLC, (collectively “the Developer”) have requested that the City of Beverly Hills (the “City”) support an 82-unit one-hundred percent affordable senior housing development project (“the Project”) located at 214-216 South Hamilton Drive (the “Property”). The Property is located in the Southeast Area of Beverly Hills, and it consists of two parcels totaling 10,394 square feet (approximately 0.24 acres). On behalf of the City of Beverly Hills, I am pleased to provide this letter of support for the Project.
The Project is closely aligned with the community needs striving to assist our senior population with an opportunity to age in place. The City supports this Project and recognizes its alignment with local housing policies and the broader objectives of the Grant. The Project will contribute meaningfully to addressing the critical need for affordable housing in our community, and we look forward to collaborating with the development team to ensure its successful completion.
This letter is provided in accordance with Section IV(C)(ii)(b) – Local Support of the 2025 State Department of Housing and Community Development’s (“HCD”) grant program known as the Multifamily Finance Super Notice of Funding Availability – Los Angeles Disaster (the “Grant”), which awards up to five (5) points for submission of a formal letter of support from the head of the Department of Planning or other local public entity leading housing-related activities for a city within Los Angeles County.
This letter is not intended to be a formal approval of the Project, and the Project will be required to follow all applicable requirements for the development application and City approvals. If you have any questions regarding this matter, please contact Real Property Development Manager, Logan Phillippo by email at [email protected].
CITY OF BEVERLY HILLS
BY:
Michael Forbes,
Director of Community Development