Agenda Item AGENDA STAFF REPORT ASR Control 23-000854
MEETING DATE:	11/28/23
legal entity taking action:	Board of Supervisors
board of supervisors district(s):	4
SUBMITTING Agency/Department:	OC Community Resources (Approved)
Department contact person(s):	Dylan Wright (714) 480-2788
	Thomas A. Miller (714) 834-6019

Subject: Approve Shared Use Agreement for Tahiti Apartment Homes and Riviera Motel

ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement to Form

Consent Calendar

3 Votes Board Majority

Budgeted: N/A

Current Year Cost: N/A

Annual Cost: N/A

Staffing Impact:

# of Positions:

Sole Source: N/A

Current Fiscal Year Revenue: N/A

Funding Source: N/A	County Audit in last 3 years: No
Levine Act Review Completed: Yes

Prior Board Action: 12/14/2021 #S39G, 11/17/2020 #S28E, 9/15/2020 #17, 7/28/2020 #25

RECOMMENDED ACTION(S):

Approve and consent to the recording of the Shared Use Agreement and Grant of Nonexclusive Easements between the current owner of the Tahiti Apartment Homes and ground lessee of the Riviera Motel, BEACH2 HOUSING PARTNERS LP and JHC-BEACH3 LLC, respectively.

Approve subordination of the $2.4 million County loan with the original owner of Tahiti Apartment Homes, JHC-BEACH2 LLC, for development of the Tahiti Apartment Homes, including the Deed of Trust and Assignment of Lessors Interest in Leases, Rents and Profits, to the Shared Use Agreement and Grant of Nonexclusive Easements.

Authorize the OC Community Resources Director or designee to execute the Approval of Recording and Subordination by Subordinate Lender contained within the Shared Use Agreement and Grant of Nonexclusive Easements, in substantially the form attached and as approved by County Counsel.

SUMMARY:

Approval to record the Shared Use Agreement and Grant of Nonexclusive Easements between the Tahiti Apartment Homes owner and the Riviera Motel ground lessee and subordination of the previously approved $2.4 million County of Orange loan for the Tahiti Apartment Homes will ensure there is an agreement in place for ongoing operations and maintenance of the common area facilities and that tenants at both properties will have mutual access to these common area facilities.

BACKGROUND INFORMATION:

Since the announcement of the Homekey Program (Homekey) on June 30, 2020, as the successor to Project Roomkey to continue the State of California’s (State) efforts to rapidly expand housing for persons experiencing homelessness, at risk of homelessness and who are inherently impacted by or at increased risk due to the COVID-19 pandemic, the State has released three rounds of Homekey Notices of Funding Availability.

On July 28, 2020, and September 15, 2020, your honorable Board of Supervisors (Board) approved resolutions to submit joint applications for Homekey Round 1 funding with Jamboree Housing Corporation (Jamboree) as the co-applicant for three affordable and supportive housing developments located in the City of Stanton: the Stanton Inn and Suites (Stanton Inn) located on Beach Boulevard, Tahiti Motel, now Tahiti Apartment Homes (Tahiti), located on Beach Boulevard and Riviera Motel (Riviera) located on Katella Avenue. However, as Round 1 funding was oversubscribed, the County only received funding awards for the Tahiti and Stanton Inn.

On November 17, 2020, the Board approved a $2.4 million loan in Housing Successor Agency funds to JHC-BEACH2 LLC for the acquisition and development of the Tahiti and a commitment of 59 Project-Based Vouchers for the Tahiti.

On December 14, 2021, the Board approved the submission of a joint application for Homekey Round 2 funding with Jamboree as the co-applicant for the Riviera and received a $6.07 million award. Additionally, the Board also took subsequent actions to commit 20 Project-Based Vouchers and up to $3,032,983 in funding to JHC-BEACH3 LLC for the Riviera.

As part of the City of Stanton’s original vision for revitalizing the areas of the community where the sites are located, the City ground leased to BEACH2 HOUSING PARTNERS LP, the owner of Tahiti, a piece of vacant land that connected the Tahiti and Riviera properties to be used as common area community space as part of the development of the Tahiti site. The community space was designed to be able to service both the Tahiti and the Riviera residents. However, the Riviera was not awarded during the Homekey funding in Round 1 and had to re-apply for funding under Round 2. Had Riviera been awarded Homekey funding in Round 1, the Shared Use Agreement and Grant of Nonexclusive Easements (Shared Use Agreement) would have been recorded at that time in a lien position senior to the County $2.4 million loan.

Since the Board’s approvals, the Tahiti and Riviera have closed on construction loan financing and are under construction for the conversion into permanent supportive housing. In anticipation of Tahiti and Riviera completing construction and leasing up by early 2024, OC Community Resources is requesting approval to record the Shared Use Agreement between BEACH2 HOUSING PARTNERS LP, the Tahiti owner, and JHC-BEACH3 LLC, the Riviera ground lessee, respectively, and to subordinate the County’s $2.4 million loan with the original owner/borrower, JHC-BEACH2 LLC (now BEACH2 HOUSING PARTNERS LP), for the development of Tahiti to ensure ongoing operation and maintenance of the common area facilities. The Shared Use Agreement needs to be recorded in senior position to the County loan because in the unlikely event the Tahiti property is foreclosed on, the Shared Use Agreement will survive and ensure that Riviera tenants can continue to access the common area facilities. Subordinating to this Shared Use Agreement will not change the County’s financing and repayment terms of the loan but could mean that Jamboree would be entitled to collect payments owed and insurance proceeds, etc. before the County’s Deed of Trust in a foreclosure scenario. Nonetheless, the County’s Regulatory Agreement will not be impacted and will remain in place on title, senior to the Shared Use Agreement and recorded financing instruments.

This approval will allow tenants at both properties to have access to the common area facilities located on the Tahiti property, including a community building containing a leasing office, lounge, kitchen, game room, computer lab, bike storage and TV area.

Compliance with CEQA: This action is not a project within the meaning of CEQA Guidelines Section 15378 and therefore is 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 in regard to a project since it is for the approval to record the Shared Use Agreement and Grant of Nonexclusive Easements for Tahiti and Riviera and subordination of the County's financing to the Shared Use Agreement and Grant of Nonexclusive Easements to ensure tenants at the properties have access to the shared common area facilities. Therefore, this proposed activity is 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: Per 24 CFR Part 58, an Environmental Assessment of the project Tahiti Apartment Homes was completed and the Authority to Use Grant Funds was issued by the U.S. Department of Housing and Urban Development (HUD) on August 3, 2021, for Project-Based Vouchers, and an Environmental Assessment of Riviera Motel was completed and the Authority to Use Grant Funds was issued by HUD on May 21, 2022, for Home Investment Partnership Program funds and on May 23, 2022 for Project-Based Vouchers.

FINANCIAL IMPACT:

N/A

STAFFING IMPACT:

N/A

REVIEWING AGENCIES:

OC Health Care Agency

ATTACHMENT(S):

Attachment A - Shared Use Agreement and Grant of Nonexclusive Easements