Agenda Item
City Council
Item #: 7.1. 5/10/2022 File #: 22-0248
TO: Honorable Mayor and Members of the City Council
THRU: Rob Houston, City Manager
FROM: Susan Galvan, Interim Community Development Director
1. SUBJECT
Consideration of a preliminary award of $780,000 of HOME Investment Partnership funds to Katella Terrace, L.P. for the Katella Terrace senior affordable housing project as part of the FY2022-2023 Action Plan.
2. SUMMARY
Preliminary Award of $780,000 of HOME Investment Partnership funds for the property at 1249 E.
Katella Avenue to Katella Terrace, L.P. for the development of a 74-unit affordable senior housing project as part of the FY2022-2023 Annual Action Plan.
3. RECOMMENDED ACTION
1. Approve the allocation of HOME funds to the Katella Terrace senior affordable housing in the FY2022-2023 Action Plan.
2. Authorize the following transfers to 317.9660.56571.20512 Rehab/Dev Loans-Katella Terrace Senior Housing:
a. Transfer $162,014.04 from 317.9660.51771.11110 Block Grant General Administration b. Transfer $442,968.70 from 317.9660.56510.11210 HOME CHDO Allocation $374,400.70 in FY2021-2022
$68,568 in FY2022-2023
c. Transfer $175,017.26 from 317.9660.56510.11250 HOME Developer Projects
3. Authorize the City Manager to execute the attached preliminary award letter of $780,000 in HOME Investment Partnership funds for the Katella Terrace senior affordable housing project and all Department of Housing and Urban Development (HUD) documents related to this commitment.
4. FISCAL IMPACT
The total expenditure for this commitment is $780,000 and will be funded in Rehab/Dev Loans - Katella Terrace Senior Housing (20512) through HOME Investment Partnerships Program (317).
5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community c: Support and enhance attractive, diverse living environments. e: Develop and strengthen collaborative partnerships to enhance and promote quality of life programs, projects, and services.
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Item #: 7.1. 5/10/2022 File #: 22-0248
6. DISCUSSION AND BACKGROUND
The Katella Terrace senior affordable housing project is a 74-unit residential rental project for senior lower income households. The proposed three-story project by Katella Terrace, L.P will be located at 1249 E. Katella Avenue, Orange and will feature 63 parking spaces, a community garden, outdoor patio, and dog park.
The City HOME funds to be allocated to the project total $780,000 in Community Housing Development Organization (CHDO) funds and consists of:
FY2022-2023 CHDO Entitlement $ 68,568.00
Current CHDO Funds Available 374,400.70
Prior year’s unused Administrative Entitlement Funds 162,014.14 Developer Project Funds 175,017.26
Total $780,000.00
If the CHDO FY2022-2023 entitlement is less than $68,568, the difference will be off-set by Developer Project funds. If approved, the City will incorporate the allocation of the funds to the Katella Terrace senior affordable housing project as part of the FY2022-2023 Annual Action Plan.
The Annual Action Plan is required by HUD for the use of the estimated $457,125 in annual HOME entitlement funds and outlines the City’s intention for the use of the funds The applicant will be applying for the State of California Low Income Housing Tax credits to finance the project. This preliminary award letter is a requirement of the process for Katella Terrace, L.P. to successfully receive the tax credits. Actual funding of the project with HOME funds will be contingent on the completion of an environmental review and approval by HUD. The Subsidy layering analysis, required in order to determine that the HOME funding amount is not more than what is determined necessary by HUD, has already been completed.
In addition, the following requirements must be met:
· Acquire firm commitments from all funding sources in sufficient amounts to complete the project;
· Meet all applicable requirements of the HOME Program (24 CFR Part 92); · Organize as a CHDO to act as the developer, sponsor and/or owner of the housing; · Establish a budget and schedule, with borrower certifying that construction is ready to begin within 12 months; and
· Execution City’s HOME Loan documents.
Staff recommends approving the attached draft preliminary award letter to commit $780,000 in HOME funds to the Katella Terrace senior affordable housing project and incorporate the project into the FY2022-2023 Annual Action Plan.
7. ATTACHMENTS
· Draft Preliminary Award Letter
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