Community Development Agency
www.santa-ana.org/community-development
Item # 18
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
October 15, 2024
TOPIC: Permanent Supportive Housing Project at 918 Bewley Street
AGENDA TITLE
Conditional Grant Agreement and Affordable Housing Regulatory Agreement with Declaration of Covenants and Restrictions with Illumination Foundation (Non-General Fund)
RECOMMENDED ACTION
Authorize the City Manager to execute a conditional grant agreement and regulatory agreement with Illumination Foundation for $2,021,319 in Homeless Housing, Assistance and Prevention Program Round 1, 2, and 3 funds for the development of the Richard Lehn Intergenerational Housing Project located at 918 Bewley Street (APN 198-231-10) (Agreement No. A-2024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
On July 18, 2023, the City Council authorized the City Manager to execute a pre- commitment letter with Illumination Foundation for $2,021,319 in Homeless Housing, Assistance and Prevention Program (HHAP) funds and eight project-based vouchers for the development of the Richard Lehn Intergenerational Housing Project located at 918 Bewley Street, Santa Ana, CA 92703 (APN 198-231-10) (Exhibit 1). Regarding these specific HHAP funds, the State of California Department of Housing and Community Development requires that a portion of the City’s HHAP Round 1, 2, and 3 funds be used for homeless youth. If the City does not use the designated portion of HHAP Round 1 funds to serve homeless youth at this project, the Round 1 funds will expire by June 30, 2025, with similar expiration dates for Round 2 and 3 thereafter.
The Richard Lehn Intergenerational Project (Project) is a permanent supportive housing development with two residential buildings for homeless youth and seniors and a preschool. The Project includes the rehabilitation of two 2-story residential buildings into 11 residential units composed of two 1-bedroom units, seven 2-bedroom units, and two 3-bedroom units. One 1-bedroom unit and seven 2-bedroom units will be restricted to homeless youth at or below 30% of the Area Median Income (“AMI”). The two 3- bedroom units will be structured as shared housing for homeless senior citizens at or below 50% of the AMI. One 1-bedroom unit will be unrestricted and reserved for an on- site manager. An existing preschool building will also be renovated and will continue to
Permanent Supportive Housing Project at 918 Bewley Street October 15, 2024
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be a preschool operated by Head Start. The Project includes 29 parking spaces, with 20 spaces for residents and nine spaces for the intended preschool, with one accessible space and one loading parking stall. Following the City Council’s approval on July 18, 2023, this project has been issued a pre-commitment letter for $2,021,319 in HHAP funds, and eight project-based vouchers.
Following the issuance of the pre-commitment letter, Illumination Foundation (“Developer”) worked on meeting various conditions outlined in the letter. One of the primary conditions was that the Developer must provide verification that it has secured all of its remaining financing for the development of the Project. This should be in the form of other enforceable funding commitments in the project’s capital stack, which may include fundraising amounts secured, funds from other public lenders, or any other funding source needed in the project’s capital stack to develop the Project and close on their construction loan financing. To that end, the Developer has secured a loan, fundraising amounts, and funds from CalOptima Health. The Developer is prepared to close on their financing and begin construction of the Project.
The pre-commitment letter is also conditional on the Developer securing any and all permits and discretionary approvals that may be required for the Project by the City.
Now that the Developer has met these two key conditions in the pre-commitment letter, amongst others, the City Council may consider approval of the Conditional Grant Agreement and Regulatory Agreement for the development of the Project. Further details on both Agreements are provided below.
Conditional Grant Agreement
The Conditional Grant Agreement is attached as Exhibit 2. The following key terms are incorporated into the Conditional Grant Agreement:
•Grantee: Illumination Foundation.
•Project: Grantee desires to renovate the existing residential buildings for the purpose of using the property as an 11 unit permanent supportive housing project, which will include: one 1-bedroom unit and seven 2-bedroom units for homeless youth, two 3-bedroom units for homeless senior housing, and one 1- bedroom unrestricted manager’s unit.
•Conditional Grant Amount: $2,021,319 in HHAP Funds, conditional upon successful completion of the Project. In the event the Project is not constructed in compliance with the Scope of Work within two years from the date of the first disbursement of the HHAP Grant funds, the City may terminate the Agreement.
Provided the Developer complies with the terms of the Conditional Grant Agreement and the Regulatory Agreement, it will not be subject to any repayment obligation.
•Disbursement Schedule:
oThe initial disbursement of $1,819,187 will be disbursed upon complete execution of the Conditional Grant Agreement and satisfaction of the conditions to disbursement of HHAP grant proceeds.
Permanent Supportive Housing Project at 918 Bewley Street October 15, 2024
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oThe final contingency payment of $202,132 will be disbursed upon completion of construction of the Project.
•Labor Requirements: The Developer agrees to comply with the City’s Community Workforce Agreement (CWA), which mandates local hiring preferences to boost community employment, requires union labor to uphold collective bargaining standards, ensures workers receive prevailing wages and benefits, and promotes workforce development through training and apprenticeship programs.
The Conditional Grant Agreement has been signed by Illumination Foundation to acknowledge their acceptance of the terms.
Regulatory Agreement
The Regulatory Agreement is attached as Exhibit 3. The following key terms are incorporated into the Regulatory Agreement:
•Term of Agreement: The term of the Regulatory Agreement shall commence on the date a final certificate of occupancy is issued and shall continue for a total period of no less than 55 years.
•Affordability: The Project shall provide the following affordable units:
No. of
Bedrooms
No. of
Units Occupancy Affordability
(Incomes / Rents)
1 1
2 7 Qualified Homeless Youth 30% AMI / 30% AMI MTSP Rent 3 2 Qualified Seniors 50% AMI / 50% AMI MTSP Rent
•Local Preference: The Developer shall give a local preference in selecting residents to residents who live or work in the city.
•Supportive Services: Illumination Foundation, at its sole cost and expense, shall provide case management and supportive services to all tenants on the Property. •Miscellaneous: The Developer shall submit and obtain approval of an Emergency Evacuation Plan, Crime-Free Housing Plan, Onsite Parking Management Plan, and a Marketing and Resident Selection Plan.
The Regulatory Agreement has been signed by Illumination Foundation to acknowledge their acceptance of the terms.
Project Description
The Developer proposes to renovate the vacant property located at 918 N. Bewley Street, Santa Ana, California 92703 (APN 198-231-10), which includes two 2-story residential buildings and a preschool facility previously operated by The Lovers of the Holy Cross Sisters.
The Project involves converting the 37,915 sq. ft. lot into an 11-unit permanent supportive housing project, consisting of 10 affordable units and one unrestricted manager’s unit. The affordable units will include:
Permanent Supportive Housing Project at 918 Bewley Street October 15, 2024
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•One 1-bedroom unit for unrestricted use by the property manager. •Seven 2-bedroom units specifically designated for homeless youth. •Two 3-bedroom units designated as shared housing for homeless senior citizens.
The Project also includes a total of twenty-nine (29) parking spaces:
•Twenty spaces reserved for residents.
•Nine spaces designated for the preschool.
•One accessible space and one loading parking stall to accommodate additional needs.
Supportive Services
Illumination Foundation will coordinate the delivery of all resident support services for the Project. A comprehensive array of wraparound services will be provided by Illumination Foundation staff to ensure residents achieve healthy, independent, and fulfilling lives. Utilizing staff trained in best practices ranging from trauma informed care and critical time interventions to housing first, Illumination Foundation will ensure all residents have access to the services they need to thrive.
All residents of the Project will receive access to case management services that will assess their needs and craft individualized care plans that utilize resident self-stated goals in accordance with a strength-based and client-centered model. Services related to these goals include income development and financial literacy, tenancy and other life skills, connections to appropriate mental health and medical services and substance use treatment, and transportation.
Illumination Foundation is positioned to provide high quality services because of strong partnerships with affiliated organizations and community partners. Residents will have the opportunity to be referred to the Illumination Foundation Medical Group for behavioral and physical health services; to a subcontractor, Straight Talk, for behavioral health group sessions; on-site medical coordination through nursing student interns; and parenting classes through The Priority Center and Olive Crest.
In addition to a range of community partners, Illumination Foundation will utilize innovative funding through CalAIM to provide programming like day habilitation courses covering topics such as budgeting, credit recovery, meal planning, anger management, and self-esteem building. Along with access to day habilitation courses, residents will also have access to Enhanced Care Management. As part of the Enhanced Care Management program, enrolled residents will be assigned a lead care manager that will work with their insurance provider and personal care coordinator to facilitate clinical care.
Beyond those services provided to all residents, children will be assigned a Children and Family Program Navigator who is responsible for overseeing the specific needs of children. Developmental screeners will be completed to ensure children are meeting important developmental benchmarks and staff will have access to a clinician to determine appropriate interventions when benchmarks are not met. The navigator will Permanent Supportive Housing Project at 918 Bewley Street October 15, 2024
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coordinate care for the children, such as referrals to internal and external resources, like regional center, literacy development, and children vision and dental clinics. Through their partnership with Children's Hospital of Orange County (CHOC), children are able to receive priority appointments to address their health needs.
Lastly, the on-site preschool operated by Head Start will ensure that appropriately aged children will receive access to schooling and daycare. An on-site garden and chicken coop will allow for the development of community and wellness among residents. The intergenerational nature of the Project will allow for Illumination Foundation to cultivate peer mentorships between senior residents and transitional age youth or single parent residents. These onsite community activities help target the social isolation that can occur with senior populations.
Illumination Foundation has provided services for people experiencing homelessness in the Orange County area for over 15 years and currently operates the City of Santa Ana’s Carnegie Navigation Center (e.g. emergency shelter). This experience and strong working relationship with the City of Santa Ana positions Illumination Foundation to provide the exceptional supportive services the residents need to thrive and live independently.
FISCAL IMPACT
Funds for the Conditional Grant Agreement in the amount of $2,021,319 were budgeted and available in the Homeless Housing, Assistance and Prevention Program Fund accounts as shown below for expenditure in FY 2023-24. A proposed carry-over of unspent funds will be presented to the City Council for approval of carry-over to FY 2024-25; any remaining balances not expended at the end of the fiscal year will be presented to City Council for approval of carry-overs to future fiscal years.
Fiscal
Year
Accounting
Unit-Account Fund Description Accounting Unit,
Account Description Amount
FY 24-25 12218715-69152
Homeless Housing,
Assistance and
Prevention Program
funds Round 1
Loans and Grants $673,773.03
FY 24-25 12218716-69152
Homeless Housing,
Assistance and
Prevention Program
funds Round 2
Loans and Grants $318,510.90
FY 24-25 12218717-69152
Homeless Housing,
Assistance and
Prevention Program
funds Round 3
Loans and Grants $1,029,035.17
Total Expenditures $2,021,319.10
Permanent Supportive Housing Project at 918 Bewley Street October 15, 2024
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EXHIBIT(S)
1. Pre-Commitment Letter
2. Conditional Grant Agreement
3. Regulatory Agreement
Submitted By: Michael L. Garcia, Executive Director of Community Development Agency
Approved By: Alvaro Nuñez, City Manager