Item 119/2025
Final
City of Garden Grove
INTER-DEPARTMENT MEMORANDUM
To:
Lisa L. Kim From: Ursula Luna-Reynosa
Dept:
City Manager Dept: Economic Development and
Housing
Date: 4/8/2025
Subject: Approval of a Preliminary Award Letter between the City of Garden Grove, Garden Grove Housing Authority, Domus Development, LLC, and Korean Community Services, Inc. (Joint Action Item with the Garden Grove City Council)
OBJECTIVE
To request the City Council and Housing Authority to consider the approval of the proposed “Preliminary Award Letter” between the City of Garden Grove, the Garden Grove Housing Authority, Domus Development LLC, and Korean Community Services, Inc., which will provide Developer an enforceable commitment of housing funds and project based vouchers for the construction of an 81 -unit senior affordable housing development at St. Anselm’s Episcopal Church.
BACKGROUND
In December 2023, the City issued a Request for Proposals (RFP) for the development of affordable housing. Domus Development LLC and Korean Community Services, Inc. (collectively, the “Developer”) submitted a proposal in response to the RFP, which was selected for further negotiation and consideration as it demonstrated the best leverage of City/ Housing Authority resources. St. Anselm’s Church played a key role in the resettlement of Vietnamese refugees, and church members founded St. Anselm’s Immigrant and Refugee Community Center in 1977 to provide English classes and other services to Vietnamese refugees who had settled in Garden Grove. In the early years, the center also provided job training, counseling, and other assistance and quickly became a vital resource for thousands of refugees and immigrants in Orange County.
Discussions regarding the City’s funding commitment experienced delays in 2024 due to the cancellation of the California Department of Housing and Community Development (HCD) 2024 Multifamily Housing Program (MHP) Super Notice of Funding Availability (Super NOFA), which postponed the Developer’s ability to pursue critical external financing. Negotiations with the Developer resurfaced in December 2024 when HCD finally released the Super NOFA.
The deadline to respond to the 2025 MHP Super NOFA is April 15, 2025.
Item 122/2025
The Award Letter pertains to the proposed St. Anselm Senior Apartments (the “Project”), an 81-unit affordable rental housing development to be located at 9473 Larson Avenue and adjacent parcels in Garden Grove’s Koreatown neighborhood. The Project will be a 100% senior project with a combination of permanent supportive housing (PSH) and affordable housing; including 21 units dedicated to chronically homeless seniors and 59 units for income- qualified seniors. The housing unit mix includes 31 studios, 37 one -bedroom units, and 13 two-bedroom units, one of which is designated as a manager’s unit. The Project includes approximately 63,750 square feet of residential and amenity space, incl uding 5,000 square feet of interior community areas and 13,000 square feet of open space. Onsite amenities and services will include case management, medical and mental health care, substance use disorder treatment, life skills training, and recreational p rogramming. The development will be subject to a 55 -year affordability covenant, ensuring long -term housing affordability for seniors at extremely low and very low-income levels.
To facilitate the Project’s financing and development, the City and the Garden Grove Housing Authority are recommending a commitment up to $2,000,000 in Permanent Local Housing Allocation (PLHA) funds and 21 project-based vouchers (PBVs), contingent on meeting certain funding and programmatic milestones, such as subsidy layering review and NEPA. The Project is being structured to meet funding eligibility criteria for the MHP Super NOFA, Low-Income Housing Tax Credit (LIHTC) program, and California Debt Limit Allocation Committee (CDLAC) bond financing. The Award Letter provides evidence of the City’s enforceable funding commitment as required by HCD, the Tax Credit Allocation Committee (TCAC), and CDLAC for the Developer’s funding applications. The Developer will assign the Award Letter and all related site control documentation to a new limited partnership entity that will serve as the legal owner of the Project. This new entity will include Domus Development LLC, Korean Community Services, Inc., and Spectrum GP LLC as general partners.
DISCUSSION
The Preliminary Award Letter formalizes the City’s commitment to support the development of the St. Anselm Senior Apartments, a deeply affordable and service -enriched housing project designed to address the housing needs of extremely low and very low-income senior residents, including chronically homeless individuals. The Developer proposes to leverage this local commitment as a critical component of its competitive applications to multiple state - level funding sources, including:
$16.9 million in State MHP funding through the 2025 Super NOFA Round 3, 4% Low -Income Housing Tax Credits from the California Tax Credit Allocation Committee (TCAC), and
Tax-exempt bond allocation from the California Debt Limit Allocation Committee (CDLAC).
The City’s assistance will be structured as a residual receipts loan of up to $2,000,000, funded by the PLHA program, as well as the commitment of 21 PBVs. These resources represent a significant local investment and demonstrate Garden Grove’s commitment to developing high-quality affordable housing solutions that prioritize its most vulnerable populations.
Item 122/2025
Of the 81 total units proposed, 21 are designated as PSH units restricted to extremely low - income seniors (30% AMI), with priority given to individuals who are chronically homeless and/or eligible under the Mental Health Services Act. The remaining 59 units will be affordable to very low-income seniors at 40% and 50% AMI. The Developer will implement a reasonable referral and preference plan for the affordable units in the Project, including cooperation with the County in its implementation of the Coordinated Entry System, in the following order of reasonable preferences: (1) persons exiting from the Central Cities Navigation Center , (2) former recipients of, or exiting from Garden Grove’s tenant-based rental assistance programs, (3) persons who were previously displaced by Garden Grove, (4) persons on the Garden Grove Housing Authority’s waiting list, (5) persons who live, work or have been hired to work in Garden Grove, which coul d include persons from disadvantaged or low-income communities as defined by HCD, (6) other persons with ties to Garden Grove who qualify as senior, and (7) other persons without ties to Garden Grove who qualify as senior.
The development will be built on a site comprised of four contiguous parcels totaling approximately 1.25 acres, located within the Koreatown neighborhood of Garden Grove. This location is in close proximity to transit, services, and community amenities, making it ideal for senior housing . The project also takes advantage of “by -right” approval under state supportive housing laws, and is not subject to CEQA per Government Code Section 65651.
The proposed unit mix and supportive services are aligned with local and regional priorities to com bat homelessness, expand affordable housing, and serve aging populations with dignity. A robust service plan, led by Korean Community Services, will ensure wraparound services and ongoing support for residents’ physical and mental well-being, financial stability, and quality of life.
Approval of the Award Letter positions the City and Housing Authority to execute an Affordable Housing Agreement (AHA) upon successful award of outside funding, and enables the Developer to proceed with critical next steps, including finalizing project design, securing additional financing, and preparing for construction.
FINANCIAL IMPACT
Approval of the Preliminary Award Letter includes a Garden Grove Loan of: (1) a subsidy up to $2,000,000 funded from PLHA funds, and (2) twenty-one (21) Project Based Vouchers.
Funds are available presently from the PLHA previously allocated to the Housing Authority.
The approval of the Preliminary Award Letter will commit such funds pursuant to applicable laws and regulations.
RECOMMENDATION
It is recommended that the City Council and Housing Authority:
Approve the Preliminary Award Letter and authorize the City Manager/Director to make minor modifications as needed, and sign the Award Letter on behalf of the City and Housing Authority; and
Authorize the City Manager/Director on behalf of the City and the Housing Authority to execute the Affordable Housing Agreement, and any pertinent related documents, Item 122/2025
including all exhibits, instruments, implementing agreements (including assignment agreements), and to make minor modifications as needed on behalf of the City and Housing Authority.
ATTACHMENT(S)
1. Preliminary Award Letter