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Agenda Item
ASR
Control 24-000270 |
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MEETING
DATE: |
05/21/24 |
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legal entity taking action: |
Orange
County Housing Authority acting as the Housing Successor Agency |
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board of supervisors district(s): |
5 |
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SUBMITTING Agency/Department: |
OC
Community Resources (Approved) |
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Department contact person(s): |
Dylan
Wright (714) 480-2788 |
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Julia
Bidwell (714) 480-2991 |
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Subject: Alice
Court Sale and Transfer
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ceo CONCUR |
County Counsel Review |
Clerk of the
Board |
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Concur |
Approved Agreement to Form |
Discussion |
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3 Votes Board Majority |
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Budgeted: N/A |
Current
Year Cost: N/A |
Annual
Cost: N/A |
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Staffing
Impact:
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No |
#
of Positions: |
Sole
Source: N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 2/25/2003 #63, 5/7/2002 #37 |
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RECOMMENDED
ACTION(S):
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1. |
Approve the sale and transfer of Alice
Court (formerly Glenneyre Apartments) from Laguna Housing Partners, L.P. to
Alice Court Apartments, LP, a limited partnership formed by Affordable
Housing Access, Inc. and AOF/Pacific Affordable Housing Corp. |
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2. |
Approve the Assignment and Assumption
Agreement of the County’s Regulatory Agreement between Laguna Housing
Partners, L.P. to Alice Court Apartments, LP, a limited partnership formed by
Affordable Housing Access, Inc. and AOF/Pacific Affordable Housing Corp. as
identified in Attachment A. |
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3. |
Approve Village Investments as the new
property management company replacing Related Management Company for Alice
Court. |
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4. |
Authorize Orange County Housing
Authority Executive Director or designee to prepare and execute Assignment
and Assumption Agreement and any additional documents related to these
approvals as reviewed and approved as to form by County Counsel. |
SUMMARY:
Approval of the
sale and transfer of Alice Court will allow for the continued operation of 26
units of very low- and extremely low-income housing in Orange County.
BACKGROUND
INFORMATION:
On May 7, 2002,
the Board of Supervisors (Board) acting as the Board of Directors for the
Orange County Development Agency approved a loan in the amount of $677,001 of
Orange County Development Agency (OCDA) Housing Set-Aside funds to The Related
Companies of California, LLC (Related California) for the construction and
development of Alice Court, located at 450 Glenneyre Street in the City of
Laguna Beach (City). Later in 2002, Laguna Housing Partners, L.P., a California
limited partnership, was formed between Related California, as its
Administrative General Partner, Jamboree Housing Corporation (Jamboree), as its
Managing General Partner, Centerline Housing Partnership III, L.P., as its
Limited Partner, and RCHP SLP III, L.P., as its Special Limited Partner.
On February 25,
2003, the Board approved a revised loan amount of $680,000 of OCDA Housing
Set-Aside funds to Related California and a loan to the City in the amount of
$163,000 of Strategic Priority Affordable Housing funds (15U funds) due to the
City requiring the project to reduce the number of units from 30 single room
occupancy (SRO) units to 27 SRO units and to fund the gap in the permanent
financing of Alice Court.
The site for Alice
Court is owned by the City and is being leased to Laguna Housing Partners, L.P.
for a nominal fee for a minimum period of 55 years. Alice Court is a 27-unit
apartment building of SRO or efficiency units dedicated to serving very low-
and extremely low-income individuals and/or small households with one unit
reserved for an onsite property manager. Six units are restricted at 30 percent
of the Area Median Income (AMI) and seven units at 40 percent of the AMI, by
the County of Orange (County) via an OCDA regulatory agreement recorded on
December 3, 2004, for a term of 55 years and will remain affordable through
December 3, 2059.
The 15-year tax
credit compliance period for this project has ended and generally this is the
period when certain investors ask to divest themselves from affordable housing
projects resulting in sales or refinances. As such, Alice Court Apartments, LP,
a limited partnership formed by Affordable Housing Access, Inc. (AHA) and
AOF/Pacific Affordable Housing Corp. (AOF), is taking this opportunity to
acquire the project and is requesting the County approve the sale and transfer
of Alice Court from Laguna Housing Partners, L.P. to Alice Court Apartments,
LP. Pursuant to the County’s Loan Agreement with Laguna Housing Partners, L.P.,
the borrower needs to obtain written County consent to sell or transfer the
project or any portion thereof. As proposed, AHA Alice Court, LLC will be the
nonprofit Managing General Partner; AOF Affordable Investments LLC and AHA
Affordable Investments, LLC will serve as Limited Partners.
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Organization
Chart (Before): Laguna Housing
Partners, L.P. |
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Jamboree Housing
Corporation (Existing
Managing General Partner) |
Related
California
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Centerline
Housing Partnership III, L.P. (Existing
Limited Partner) |
RCHP SLP III,
L.P. (Existing
Special Limited Partner) |
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Organization
Chart (After /As Proposed): Alice Court
Apartments, LP |
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AHA Alice Court,
LLC (New General
Partner) |
AOF Affordable
Investments LLC (New Limited
Partner) |
AHA Affordable
Investments, LLC (New Limited
Partner) |
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Each affordable
housing development financed with tax credits is owned by a limited
partnership, which is a single-purpose entity formed by two or more entities
with at least one limited partner and one general partner to finance, own and
operate the development for the initial 15-year tax credit compliance period.
The limited partner invests equity in a development to help finance its
construction or rehabilitation in exchange for state or federal tax credits and
associated tax benefits over a 10-year period. The limited partner may engage
in and possess any interest in other business ventures (including limited
partnerships) of every kind, nature and description, independently or with
others, but does not take part in the management or control of the business of
the limited partnership or transact any business in the name of the limited
partnership, nor does it have the power of authority to bind the limited
partnership to any agreement or document in the name of the limited
partnership. The general partner has exclusive control over the business of the
limited partnership and has all rights, powers and authority to manage and
control the business affairs of the limited partnership and oversees its
day-to-day operations.
AHA is a 501(c)(3)
nonprofit public charity founded in 1999. AHA and its partners have acquired,
rehabilitated and constructed a portfolio of 21,433 affordable apartments units
throughout the western United States dedicated to serving low-income
individuals, families and seniors in over 150 affordable communities
concentrated in California.
AOF is a nonprofit
affordable housing organization incorporated in 1997 and is a subordinate of
The American Opportunity Foundation, Inc. and has a portfolio of over 150
communities across the Pacific Coast.
As part of this
sale and transfer, the limited partnership will make minor improvements such as paint, improved signage and some
unit interior renovations based on the results of the Property Condition
Assessment performed by Partner Engineering and Science, Inc. The ground lease
with the City and the term of affordability of their agreement with the City
will also be extended to 2085.
During the
affordability period, changes to the property management agent or company are
subject to County approval. As such, OCCR is also requesting authorization to
approve request for substitution of property management agent or company for
Alice Court. OCCR staff performed the required due diligence to ensure that the
new property management agent or company is vetted and consistent with the
Notice of Funding Availability (NOFA) policy and process.
The current
property management company, Related Management Company, will be replaced with
Village Investments (Village).Village is an affiliate of VPM Management, Inc.
and Village Real Estate, Inc., that provides a full-service residential
property management company operating under a California real estate license
established in 1965 and has managed over 15,000 apartments located in
California and has renovated over 8,800 units.
Approval of the
sale and transfer of Alice Court to Alice Court Apartments, LP, a team of
experienced affordable housing investors and operators, the assignment of the
existing County Regulatory Agreement to this new limited partnership, and the
approval of Village Investments as the new property management company of Alice
Court will preserve and allow for continued operation and maintenance of the
26-units of affordable housing at Alice Court for the outstanding 35 years
under the County’s original Regulatory Agreement.
The County loans
to Laguna Housing Partners, L.P. and to the City will be paid off as part of
this transaction and the partnership, Alice Court Apartments, LP, is in good
financial standing and not in default with any of its lenders. The project is
being operated in compliance with all regulatory agreements. OC Community
Resources staff recommends approval of the sale and transfer of Alice Court
from Laguna Housing Partners, L.P. to Alice Court Apartments, LP and the
assignment of the County’s Regulatory Agreement to a new First Deed of Trust.
Compliance with CEQA: This action is not a project
within the meaning of CEQA Guidelines Section 15378 and is therefore not
subject to CEQA, since it does not have the potential for resulting in either a
direct physical change in the environment, or a reasonably foreseeable indirect
physical change in the environment. The approval of this agenda item does not
commit the County to a definite course of action regarding the project since it
is for approval of the partnership interest transfer and change in property
management company related to the continued operation of 26 affordable housing
units within Orange County. This proposed activity is therefore not subject to
CEQA. Any future action connected to this approval that constitutes a project
will be reviewed for compliance with CEQA.
Compliance
with NEPA:
The proposed activity is exempt per 24 Code of Federal Regulations part 58.34
(a)(3).
FINANCIAL IMPACT:
N/A
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A - Assignment and
Assumption of Regulatory Agreement
Attachment B - Code of Federal Regulations Title 24 Part 58.34(a)(3)