Community Development Agency
www.santa-ana.org/community-development
Item # 16
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
May 19, 2026
TOPIC: First Amendment to Conditional Grant Agreement with Illumination Health + Home for the Richard Lehn Intergenerational Housing Project
AGENDA TITLE
First Amendment to the Conditional Grant Agreement with Illumination Health + Home (formerly Illumination Foundation) for the Richard Lehn Intergenerational Housing Project to Amend Disbursement Provisions for Homeless Housing, Assistance and Prevention Program Funds (Non-General Fund)
RECOMMENDED ACTION
Authorize the City Manager to execute a First Amendment to the Conditional Grant Agreement with Illumination Health + Home (formerly Illumination Foundation) to amend certain disbursement provisions related to the Richard Lehn Intergenerational Housing Project located at 918 North Bewley Street and allow expenditure of remaining Homeless Housing, Assistance, and Prevention Program funds prior to the State of California’s expenditure deadline (Agreement No. A-2026-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
On October 15, 2024, City Council authorized the City Manager to execute a Conditional Grant Agreement with Illumination Health + Home (formerly Illumination Foundation) for $2,021,319 in Homeless Housing, Assistance, and Prevention (HHAP) Program Round 1, 2, and 3 funds for the development of the Richard Lehn Intergenerational Housing Project located at 918 Bewley Street (Exhibit 1). The Richard Lehn Intergenerational Housing Project (Project) is an 11-unit permanent supportive housing project currently under construction. The Project includes the rehabilitation of two (2) two-story residential buildings into eleven (11) residential units comprised of two (2) one-bedroom units, seven (7) two-bedroom units, and two (2) three-bedroom units.
One (1) one-bedroom unit and seven (7) two-bedroom units will be restricted to homeless youth at or below 30% of the Area Median Income (AMI). The two (2) three- bedroom units will be structured as shared housing for homeless senior citizens at or below 50% of the AMI. A comprehensive array of wraparound supportive services will be provided by Illumination Health + Home staff to ensure residents achieve healthy, independent, and fulfilling lives.
Following approval by City Council, the City disbursed the “Initial Disbursement” of 90% or $1,819,187 in HHAP Program funds in accordance with the Conditional Grant
First Amendment to Conditional Grant Agreement with Illumination Health + Home May 19, 2026
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Agreement. The remaining balance is for the “Final Disbursement” of 10% or $202,132 to be disbursed after the Project is complete. However, current State requirements require that HHAP Program Round 3 funds must be expended by June 30, 2026. Any unexpended funds remaining after this expenditure deadline will be subject to recapture or return to the State of California Department of Housing and Community Development (State).
While construction activities remain substantially on schedule and in compliance with the Conditional Grant Agreement, Illumination Health + Home has advised the City that final project completion is dependent upon energization and utility service installation by Southern California Edison. Illumination Health + Home submitted their utility service application on February 12, 2026, and has since experienced delays related to administrative processing, resubmittals, classification reviews, and delayed assignment of an SCE planner. An SCE planner was not assigned until April 15, 2026, and several additional utility review and installation steps remain outside Illumination Health + Home’s control.
Because final energization is not expected to occur before June 30, 2026, the City risks losing the remaining $202,132 in HHAP Program Round 3 funds unless a First Amendment to the Conditional Grant Agreement for the Project is approved by City Council to allow for the disbursement of these funds prior to the State’s expenditure deadline (Exhibit 2). The proposed First Amendment would authorize the City, in its sole and absolute discretion, to disburse remaining HHAP funds prior to June 30, 2026, for eligible reimbursable costs incurred by Illumination Health + Home and consistent with HHAP requirements. The First Amendment would authorize an exception to the existing final disbursement timing provisions before project completion in order to preserve and timely expend the remaining HHAP Program Round 3 funds before the State’s June 30, 2026 expenditure deadline.
Therefore, staff is recommending approval of the First Amendment to Conditional Grant Agreement to protect the City’s remaining HHAP Program Round 3 allocation, preserve funding for the Project, and ensure continued progress toward expanding housing opportunities for youth and seniors experiencing homelessness in Santa Ana. The successful completion of this Project also supports the City in meeting their Housing Element goals and associated policies, and the City’s 2021-2029 Regional Housing Needs Assessment goals before December 31, 2029.
FISCAL IMPACT
Funds for the Conditional Grant Agreement in the amount of $202,132 are budgeted and available in the Homeless Housing, Assistance, and Prevention Program Fund account as shown below for expenditure in FY 2025-26.
Fiscal
Year
Accounting
Unit-Account Fund Description Accounting Unit,
Account Description Amount
FY 25-26 12218717-69152
Homeless Housing,
Assistance and Prevention
Program Round 3 Funds
Loans and Grants $202,132
Total Expenditures $202,132
First Amendment to Conditional Grant Agreement with Illumination Health + Home May 19, 2026
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EXHIBIT(S)
1. Staff Report from October 15, 2024
2. First Amendment to Conditional Grant Agreement
Submitted By: Michael L. Garcia, Executive Director of Community Development Approved By: Alvaro Nuñez, City Manager