STAFF REPORT
Meeting Date:
June 23, 2026
BUSINESS
24 SUBJECT: FORMATION AND APPOINTMENT OF AN AD HOC COMMITTEE FOR
PROPOSED AFFORDABLE HOUSING PROJECT AT THE NEIGHBORHOOD
CONGREGATIONAL CHURCH
RECOMMENDATION: It is recommended that the City Council:
1. Establish an Ad Hoc Committee comprised of two City Council Members to work with staff and Related California regarding the evaluation of the funding request associated with the approved affordable housing project at Neighborhood Congregational Church;
2. Appoint two City Council Members to serve on the Ad Hoc Committee;
3. Direct the Ad Hoc Committee to work with staff and Related California and return to the City Council with recommendations regarding the funding request as early as July 7, 2026; and
4. Provide that the Ad Hoc Committee shall automatically sunset upon the City Council's consideration and disposition of Related California's funding request, unless otherwise directed by the City Council.
SUMMARY OF THE MATTER
Related California has requested City participation in the financing of a proposed affordable housing development at the Neighborhood Congregational Church site located at 340 St. Ann's Drive. The funding request contemplates the potential use of City housing resources and other financial participation to support the development of affordable housing units.
On January 3, 2026, the Planning Commission approved the proposed affordable housing project pursuant to its review authority under Senate Bill 4 (SB 4). The appeal period has since expired with no appeals submitted. With the local land use entitlement process complete, the next phase of the project involves evaluation of the funding request submitted by Related California.
Related California has requested that the City reach a decision regarding its funding request before July 21, 2026, which is the deadline for submission of its application for Low Income Housing Tax Credits. To facilitate a timely and informed evaluation of the request, staff recommends that the City Council establish an Ad Hoc Committee to work with staff and Related California during the due diligence process and return to the City Council with a recommendation as early as July 7, 2026.
BACKGROUND
The City of Laguna Beach has established affordable housing as a strategic priority and has undertaken numerous efforts to preserve and expand housing opportunities for lower income households. Among these efforts, the City established the Laguna Beach Local Housing Trust Fund and successfully secured a $2.5 million Local Housing Trust Fund grant from the California Department of Housing and Community Development, which requires a dollar for dollar local match.
FORMATION AND APPOINTMENT OF AN AD HOC COMMITTEE FOR PROPOSED
AFFORDABLE HOUSING PROJECT AT THE NEIGHBORHOOD CONGREGATIONAL CHURCH
June 23, 2026
Neighborhood Congregational Church and Related California have proposed the development of an affordable housing project on church property located at 340 St. Ann's Drive. The proposed development consists of deed restricted affordable housing units intended to serve lower income households.
On January 3, 2026, the Planning Commission approved the project pursuant to its authority under SB 4.
Under SB 4, the City's review authority was limited to specific objective standards and public coastal access considerations. Following the Planning Commission's approval, the appeal period expired with no appeals filed, and the project has completed its local land use entitlement process.
As part of the project's financing strategy, Related California has requested financial participation from the City. The City previously identified the Neighborhood Congregational Church site as a potential affordable housing opportunity in its application for Local Housing Trust Fund funding. While the City has identified the potential availability of certain housing funds, staff has determined that additional analysis is necessary to evaluate the overall financing proposal and determine the appropriateness and feasibility of any City financial participation.
Accordingly, the next phase of the project is the evaluation of the funding request submitted by Related California and the consideration of whether, and under what terms, the City may participate in financing the proposed development.
DISCUSSION
The funding request submitted by Related California involves multiple financial considerations, including project costs, funding sources, projected revenues and expenses, long-term affordability commitments, and repayment assumptions associated with any proposed City participation.
Staff has identified several areas requiring additional information and analysis, including:
• A project pro forma and long term financial projections; • Clarification regarding the specific project components for which City funding would be used; • Identification of all proposed funding sources and financing assumptions; • Evaluation of the relationship between available City housing funds and proposed project costs; • Analysis of long term operational and financial sustainability; and • Assessment of risks and obligations associated with any City financial participation.
Related California has advised the City that it intends to submit an application for Low Income Housing Tax Credits by July 21, 2026, and has requested that the City reach a decision regarding its funding request before that deadline. Given the compressed timeline and complexity of the financing proposal, staff believes an Ad Hoc Committee would provide an effective mechanism for facilitating discussions and expediting information gathering and analysis.
The committee would serve in an advisory capacity and would not possess authority to negotiate or commit City funds. Rather, the committee would assist staff in reviewing information provided by Related California and developing recommendations for consideration by the full City Council. The intent is for the
FORMATION AND APPOINTMENT OF AN AD HOC COMMITTEE FOR PROPOSED
AFFORDABLE HOUSING PROJECT AT THE NEIGHBORHOOD CONGREGATIONAL CHURCH
June 23, 2026
Ad Hoc Committee and staff to complete their review and return to the City Council with recommendations as early as July 7, 2026, recognizing that any final decision regarding City financial participation remains solely within the authority of the City Council at a publicly noticed meeting.
Potential responsibilities of the Ad Hoc Committee include:
• Participating in discussions with Related California regarding the funding request and financing assumptions;
• Reviewing information provided by Related California in support of its request; • Assisting in identifying information necessary to evaluate the proposal; • Providing feedback to staff regarding issues and considerations that may warrant additional analysis; and
• Reporting back to the full City Council regarding the status of discussions and recommendations for future Council consideration.
The Ad Hoc Committee is intended to be temporary and limited in purpose. The committee's sole function is to assist staff and facilitate communication with Related California during the City's evaluation of the funding request associated with the approved affordable housing project at Neighborhood Congregational Church. Upon the City Council's consideration and disposition of the funding request, the Ad Hoc Committee will automatically dissolve unless the City Council takes further action to extend or modify its purpose.
FINANCIAL ANALYSIS
The formation of the Ad Hoc Committee has no direct fiscal impact. Existing staff resources will support meeting coordination and administrative activities associated with the committee. Any future financial commitment by the City regarding the proposed affordable housing project would be subject to separate City Council review and authorization.
ENVIRONMENTAL ANALYSIS
The formation of an ad hoc committee is an organizational and administrative activity of government that does not result in a direct or indirect physical change to the environment and is therefore not a project under the California environmental quality act pursuant to CEQA guidelines section 15378.
Submitted By:
. Approved: .
Jeremy Frimond, Assistant City
Manager
Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Jeremy Frimond, Assistant City Manager