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Agenda Item
ASR
Control 25-000494 |
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MEETING
DATE: |
12/16/25 |
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legal entity taking action: |
Board
of Supervisors and Orange County Housing Authority |
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board of supervisors district(s): |
1 |
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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: Approve Loan and Project-Based
Vouchers for Lampson Workforce Housing
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ceo CONCUR |
County Counsel Review |
Clerk of the Board |
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Concur |
No
Legal Objection |
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: |
No |
# of Positions: |
Sole Source: N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 2/25/2025 #22 |
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RECOMMENDED
ACTION(S):
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Acting as the Board of Supervisors: |
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1. |
Authorize the OC Community Resources
Director or designee to utilize up to $1,237,500 for loan financing in
available funding as outlined in the Financial Impact Section to Lampson
Apartments LP, a limited partnership formed by C&C Development Co., LLC, the co-managing general partner with a
second managing general partner to be determined, for the development of
Lampson Workforce Housing, a 77-unit affordable housing development located
at 4665 Lampson Avenue in the City of Los Alamitos, in accordance with the
2025 Supportive Housing Notice of Funding Availability guidelines and policy.
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2. |
Approve loan commitment to Lampson
Apartments LP, a limited partnership, in the amount not to exceed $1,237,500,
subject to contingencies outlined in this Agenda Staff Report. |
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3. |
Approve subordination of the up to
$1,237,500 County loan at construction financing to a first trust deed loan
of approximately $22,500,000 and a second trust deed loan of $9,243,742, with
the ability to increase the subordination amount up to 20 percent due to an
increase of construction costs, and at permanent financing to a first trust
deed loan of approximately $14,957,850, as set forth in this Agenda Staff
Report and authorize the OC Community Resources Director or designee to
subordinate to additional senior debt up to 100 percent of the cumulative
loan to value based on the as-built appraised market value, if necessary,
based on any future changes in the project financing. |
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4. |
Authorize the OC Community Resources
Director or designee to execute subordination agreements; standard set of
loan documents and restrictive covenants; and such additional agreements,
contracts, instructions and instruments necessary or appropriate for construction
and permanent loan financing. |
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5. |
Regarding the County’s Regional Housing
Needs Allocation (RHNA) transfer policy as it applies to this Development,
approve one of two options: |
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a. |
Option A: Waive the County’s RHNA
transfer policy, allowing the City of Los Alamitos to retain RHNA credit for
the four County-restricted units utilizing only County’s local revenue
resources. |
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b. |
Option B: Require the City of Los
Alamitos to provide the County with RHNA credit for the four
County-restricted units utilizing only County’s local revenue resources. |
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6. |
Approve waiver of the County’s match
requirement under the 2025 Supportive Housing Notice of Funding Availability. |
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Acting as the Board of Commissioners to
the Orange County Housing Authority: |
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7. |
Approve the selection of Lampson
Workforce Housing for the utilization of eight Project-Based Vouchers in
accordance with the policies and procedures identified in the Orange County
Housing Authority Administrative Plan and authorize the execution of related
documents, instruments and agreements. |
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8. |
Authorize the Executive Director of the
Orange County Housing Authority or designee to execute agreements related to
the commitment of the U.S. Department of Housing and Urban Development
Project-Based Vouchers in connection with Lampson Workforce Housing, provided
the commitment incorporates the business and financial terms and is subject
to the contingencies set forth in this Agenda Staff Report and is approved as
to form by County Counsel. |
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SUMMARY:
Approval of the County loan and
commitment of eight Project-Based Vouchers subject to the contingencies set
forth and subordination of the County loan at construction and permanent
financing to senior debt for Lampson Workforce Housing will help support the
production of permanent supportive housing in Orange County.
BACKGROUND
INFORMATION:
On February 25, 2025, the Board of
Supervisors (Board) approved the recommended changes in policy and process for
the 2025 Supportive Housing Notice of Funding Availability (2025 NOFA) and
authorized the OC Community Resources (OCCR) Director or designee to issue the
2025 NOFA making up to $12.05 million in funding and up to 150 Project-Based
Vouchers (PBVs) available for the development of extremely low-income housing
and return to the Board for funding commitments to individual projects.
Lampson Apartments LP, a limited
partnership formed by C&C Development Co., LLC (Developer) responded to the
2025 NOFA with a funding application requesting up to $1.2 million in capital
funding and eight PBVs for a proposed 77-unit affordable and permanent
supportive housing development. Lampson Workforce Housing (Development) will be
located at 4665 Lampson Avenue in the City of Los Alamitos (City).
The Developer will serve as the
co-managing general partner with a second managing general partner to be
determined. The Developer has been
developing affordable housing in Orange County since 1990. To date, the Developer
has produced over 3,200 rental homes throughout California. The developments
have ranged from large multifamily communities, scattered site acquisitions and
the adaptive reuse of hotels/motels.
The Development is part of a future
master planned community infill reuse of a former United States Department of
General Services Administration site located in the City. The proposed 77-unit
affordable housing development will be built in conjunction with 169 new
market-rate, for-sale homes. The master planned community is 12.3 acres, and
the Development will encompass 2.2 acres of this site. The master developer,
who controls the overall site, plans to start grading and site preparation
activities for the master-planned community between January and March 2026.
Construction on the Development is anticipated to be commence no earlier than
April 2026.
Pursuant to 24 CFR 58.22(a), no
Choice Limiting Action (CLA), such as construction or site work including
grading, shall occur prior to obtaining environmental clearance, which has been
received in the form of an Authority to Use Grant Funds (AUGF) on July 24,
2025. Furthermore, under 24 CFR 983.154(b) and (d), development activity shall
not commence after the date of NOFA submission or occur prior to the execution
of the Agreement to Enter into a Housing Assistance Payments (AHAP) contract.
Since the grading is outside of the Developer’s control, and in order to
maintain project feasibility, pursuant to Notice PIH-2018-16, OCHA is seeking a
waiver to 24 CFR 983.154(b) and (d) from the U.S. Department of Housing and
Urban Development (HUD) to allow the master developer to proceed with site
preparation, grading, and related site work on the master-planned community
prior to executing an AHAP. This waiver is essential to align with the
master-planned community timeline and ensure the timely delivery of affordable
housing in a high-need area.
The proposed Development will
consist of 36 one-bedroom, 21 two-bedroom and 20 three-bedroom units (including
one unrestricted unit for property management).
Seventy-six of the 77 units will serve very low to low-income households
with incomes up to 70 percent of the area median income (AMI). Nine of those
units will be restricted by the County of Orange (County) to serve individuals
and families who are experiencing homelessness with incomes at 30 percent AMI.
Eight of these unit rents will be subsidized by the eight PBVs from the Orange
County Housing Authority. Five of the eight units will also be restricted by
the Orange County Housing Finance Trust (OCHFT) to tenants who meet Mental
Health Services Act (MHSA) eligibility criteria.
In addition to office and meeting
spaces for property management and service providers, onsite amenities include
98 parking spaces, a community room and BBQ pavilion and active and passive
green open spaces.
Onsite property management services
will be provided by Advanced Property Services Management, Inc., a wholly owned
subsidiary of the Developer, who will handle the maintenance, operations,
property accounting, tenant oversight and navigations services. All residents
will receive social services from Life Skills Training and Educational
Programs, Inc., which includes services such as life skills training and
financial literacy, health and wellness programs and substance abuse counseling
and treatment. The five MHSA units will receive additional supportive services
from the OC Health Care Agency.
Permanent
Financing and PBVs
The Developer is requesting a
permanent loan under the 2025 NOFA in an amount up to $1,237,500. The County
loan will be subordinate to financing as outlined in the financial summary
below. At construction financing, the County will close on its loan and is
requesting authorization to increase the subordination amount up to 20 percent
if there is an increase in construction cost. OCCR is also requesting
authorization to subordinate to additional senior debt up to 100 percent of the
cumulative loan-to-value, based on the as-built appraised market value, if
necessary, based on any future changes in project financing. In determining the
maximum additional senior debt to which the County will subordinate its loans,
OCCR will calculate the senior debt plus the County loans and subtract that
total from the current (within last six months) as-built appraised market
value. If the current as-built appraised market value exceeds the cumulative
senior debt plus the County loans, the County may subordinate to additional senior
debt, if necessary, for the viability of the project.
The Developer is also requesting
eight PBVs to be available to the five one-bedroom, two two-bedroom and one
three-bedroom units in the Development after construction is completed and a
Certificate of Occupancy is issued. These PBVs will be guaranteed for 20 years,
consistent with HUD regulations and will provide rental subsidies to eight of
the units restricted to 30 percent AMI by the County.
Upon approval of the County loan
and PBVs request, the Developer intends to apply for tax credit and bond
financing in February 2026.
The City has expressed strong
support for the project and will defer $1,032,724 of the total $1.9 million in
local impact fees. While this deferral reflects the City’s commitment to
supporting the development, it results in a local contribution that is less
than the County’s and does not meet the matching funds requirement outlined in
the 2025 NOFA. Therefore, the City is requesting a waiver of the NOFA’s
matching requirement (see Attachment D).
Below are the financial summary
highlights of the Construction and Permanent Financing phase of the
Development:
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Construction
Source of Funds |
Funding Amount |
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Construction Loan (Tax Exempt) |
$22,500,000 |
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Construction Loan (Taxable) |
$9,243,742 |
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Orange County Housing Finance Trust
(MHSA Loan) |
$1,574,000 |
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City of Los Alamitos (Def Impact Fees) |
$1,032,724 |
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General Partner Equity |
$100 |
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Deferred Developer Fee |
$4,397,840 |
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Master Developer Transfer |
$3,660,000 |
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Tax Credit Equity |
$1,348,458 |
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Other Costs Deferred Until Completion |
$502,300 |
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Total
Sources of Funds |
$44,259,164 |
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Permanent
Sources of Funds |
Funding Amount |
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Conventional Loan (Tax-Exempt) |
$14,957,850 |
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County of Orange (15G Reserves Loan) |
$1,237,500 |
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Orange County Housing Finance Trust
(MHSA Loan) |
$1,574,000 |
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City of Los Alamitos (Def Impact Fees) |
$1,032,724 |
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Master Developer Transfer |
$3,660,000 |
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General Partner Equity |
$100 |
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Tax Credit Equity |
$13,484,580 |
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State Tax Credit |
$5,502,149 |
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Deferred Developer Fee |
$2,810,261 |
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Total
Sources of Funds |
$44,259,164 |
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Construction
Uses of Funds |
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Acquisition |
$3,660,000 |
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Construction |
$23,270,790 |
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Architectural, Survey, Engineering |
$1,245,000 |
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Loan Interest & Fees |
$4,719,575 |
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Permanent Financing |
$183,079 |
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Legal/ Third Party Fees |
$271,587 |
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Reserves |
$419,100 |
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Construction Hard and Soft Cost
Contingency |
$2,734,579 |
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Other costs |
$2,758,197 |
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Developer Fee |
$4,997,257 |
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Total
Costs |
$44,259,164 |
Note: Financing subject to change
prior to construction and completion of Development. Underwriting guidelines
are in accordance with 2025 NOFA.
Loan
Terms
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Permanent Loan: |
Up to $1,237,500 |
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Interest Rate: |
Three percent
simple |
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Term: |
55 years from
Qualified Project Period |
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Security: |
Third Deed of
Trust at Construction and Second Deed of Trust at Permanent Financing |
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Payments: |
Residual
Receipts per the 2025 NOFA |
The County will record rent and
occupancy restrictions on five one-bedroom, two two-bedroom and two
three-bedroom units for individuals and families experiencing homelessness
earning 30 percent AMI for a period of 55 years via a regulatory agreement, which
will not be subordinated to any conventional deed of trust. The specific rent
and occupancy restrictions may ultimately change based on the final financing
structure of the Development, but in no circumstance shall restrictions be less
than 30 percent AMI for the units subsidized by the PBVs.
RHNA
Credit
Per Section 2.08 of the 2025 NOFA,
for developments located in cities that receive County local funding (such as
General Fund, HSA, or 15G Reserves funds), the County requires acceptance of a
RHNA credit transfer from the County’s allocation to the city’s allocation,
based on the number of County-restricted units. This transfer must be approved
by the governing body of the city in which the Development is located. For this
development, the County is providing funding for nine units and PBVs for eight
of those units. However, the RHNA
transfer is optional for five MHSA-funded units. Therefore, the remaining four County-assisted
units would be subject to the RHNA transfer requirement if the Board opts not
to grant a waiver of this requirement.
The City is requesting a waiver of
the RHNA transfer requirement in an effort to retain as much needed RHNA
credits as possible. This Development
will count towards fulfilling 32 percent of their RHNA obligation (see
Attachment C). According to the City,
this is especially important considering the City’s limited developable land
and lack of local resources available for affordable housing development. The
City has also indicated this development will deliver the City’s first new
affordable units in over 30 years.
Commitment of the County loan and
commitment of the PBVs are contingent upon the following:
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1. |
Completion and
approval of California Environmental Quality Act (CEQA), as applicable. |
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2. |
HUD’s approval
of the waiver to 24 CFR 983.154(b) and (d). |
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3. |
Evidence of
commitment of all construction and permanent financing sources, including the
OCHFT funds and tax credit award. |
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4. |
Receipt and
approval of final project development costs and revised final development
proforma and financing plan (including cash flow analysis) to reflect all
final funding approvals. |
The Project Review Advisory Panel
reviewed this project at their September 11, 2025, meeting and had no concerns.
The supportive housing units in
this Development are part of the 2,396 permanent supportive housing units
identified in the Housing Funding Strategy 2022 Update to address housing needs
for individuals and households experiencing homelessness. As such, these nine
permanent supportive housing units will contribute to the progress in this
effort and provide much needed supportive housing in the near future.
Additionally, these nine supportive housing units will follow the best
practices, guiding principles and commitments of the Homeless Service System
Pillars Report which was created by the Commission to Address Homelessness,
currently known as the Commission to Address Homelessness, and accepted by the
Board on October 18, 2022.
Compliance
with CEQA:
This action is not a project within the meaning of the California Environmental
Quality Act (CEQA) Guidelines Section 15378 (Attachment A) 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 in regard to a project since
it is for an approval of County loans, commitment of eight PBVs, subordination
of the County loan to senior debt for the Development, and to allow the
County’s continued support of the production of supportive housing in 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: In
accordance with 24 Code of Federal Regulations Part 58 (Attachment B), an
Environmental Assessment of the project was completed and an AUGF was issued by
HUD on July 24, 2025 for the PBVs.
FINANCIAL
IMPACT:
The loan commitments will only
affect the notes receivable balance sheet accounts of the fund. Per budgeting
practice, the loan commitments are not built into the fiscal year
appropriations budget process. The $1,237,500 loan will be funded at permanent conversion
anticipated in April 2028 (Fiscal Year 2027-28). The loan will be funded with
100 percent 15G Reserves in Fund 15G.
STAFFING
IMPACT:
N/A
REVIEWING
AGENCIES:
Office
of Care Coordination
Health Care Agency
ATTACHMENT(S):
Attachment
A – California Code of Regulations Title 14 Section 15378
Attachment B – Code of Federal Regulations Title 24 Subtitle A Part 58
Attachment C – City of Los Alamitos Request for
RHNA Waiver
Attachment D – City of Los Alamitos Request for Waiver of Match Requirement