HomeMy WebLinkAbout04 AFFORDABLE HOUSING GRANT AGREEMENT - FAMILIES FORWARDDocuSign Envelope ID: 4C037491-775A-4B7B-8712-DDCF987DBA56
(s'TAGENDA REPORT
MEETING DATE:
TO:
FROM:
SUBJECT:
SUMMARY
NOVEMBER 7, 2023
Agenda Item ADS
Reviewed:
City Manager
Finance Director
NICOLE BERNARD, ACTING CITY MANAGER & ACTING HOUSING
AUTHORITY EXECUTIVE DIRECTOR
TUSTIN HOUSING AUTHORITY
AFFORDABLE HOUSING GRANT AGREEMENT — FAMILIES
FORWARD
Request for authorization to enter into an Affordable Housing Grant Agreement ("Grant
Agreement") with Families Forward and approve a fund appropriation to construct six -to -
eight affordable rental units utilizing Inclusionary Housing Fee Funds.
RECOMMENDATION
The Tustin Housing Authority Commissioners take the following action:
• Approve the Affordable Housing Grant Agreement between Families Forward and the
City of Tustin and Tustin Housing Authority.
The City Council take the following actions:
• Authorize the Acting City Manager and Acting Housing Authority Executive Director to
execute the Grant Agreement between Families Forward and the City of Tustin and
Tustin Housing Authority for the construction of six -to -eight affordable housing units
subject to modifications and amendments as may be approved by the Acting City
Manager/Acting Housing Authority Executive Director, and in a form approved by the
City Attorney, consistent with the purposes of this Grant Agreement; and
• Appropriate $2,100,000 from the Inclusionary Housing Fee Fund (Fund 577).
FISCAL IMPACT
There is no fiscal impact to the General Fund. The current fund balance of the Inclusionary
Housing Fee Fund is approximately $2,111,000, allowing for an appropriation of $2,000,000
to Families Forward for the project and an appropriation of $100,000 to the General Fund
for City administrative costs associated with the project. In accordance with Municipal Code
Section B9928, all monies in the Voluntary Workforce Housing Incentive Program Fund
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Agenda Report — Families Forward
November 7, 2023
Page 2
(i.e., Inclusionary Housing Fee Fund 577) shall be expended exclusively to provide housing
affordable to extremely low, very low, low, and moderate -income households in the City of
Tustin, and for administration and compliance monitoring of the Voluntary Workforce
Housing Incentive Program.
BACKGROUND
On September 4, 2018, the City Council adopted Ordinance 1941, adding Chapter 9B — the
Voluntary Workforce Housing Incentive Program ("Program") — to the Tustin City Code, and
approved Resolution No. 18-61, the Program In -Lieu Fee. The Program requires the
provision of affordable housing and/or the payment of an in -lieu fee when developers opt to
construct residential uses on commercially -zoned properties within certain Specific Plan
areas.
All in -lieu fees collected from the Program are deposited in a separate account designated
as the Inclusionary Housing Fee Fund (Fund 577). In accordance with Chapter 913, the
monies deposited in the Fund 577 are to be expended exclusively to provide housing
affordable to extremely low, very low, low and moderate -income households in the City of
Tustin, and for administration and compliance monitoring of the Voluntary Workforce
Housing Incentive Program. To date, over $2,111,000 has been deposited in Fund 577.
On July 6, 2023, Families Forward submitted a request for funding and support for a new
affordable housing opportunity in the City of Tustin (included as Attachment 1). Families
Forward requested $2,000,000 from the City for the purpose of acquiring a property in
Tustin and building up to eight (8) units of affordable housing. The affordable housing
project will house families with minor children who are at -risk of or are experiencing
homelessness and are extremely low to low income. The City's funding will be leveraged
with funds from Families Forward and a $2,500,000 capital grant from CalOptima Health.
On July 12, 2023, the City Manager and Tustin Housing Authority provided a Letter of
Commitment for Families Forward's capital grant application to CalOptima Health, pledging
$2,000,000 towards the project on the condition Families Forward secured the additional
funding required to complete the project (included as Attachment 2). On October 5, 2023,
CalOptima Health Board of Directors approved Families Forward's application and
committed $2,500,000 in funding towards the project.
The Grant Agreement (included as Attachment 3) outlines the terms and conditions
Families Forward must meet prior to receiving the $2,000,000 grant funds from the City:
• Committed, at minimum, $500,000 of their own funding towards the proposed
Project;
• Received confirmation they have been awarded $2,500,000 in CalOptima capital
grant funding;
• Purchased the real property in Tustin;
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November 7, 2023
Page 3
• Submitted complete applications for all required land use entitlements for the
affordable housing project within one year from the execution date of the Grant
Agreement;
• Received entitlements for the affordable housing project and all building permits
have been issued; and
• Executed and recorded a covenant against the project, in a form approved by the
City Attorney, restricting affordability for 55 years.
While significant development planning remains, Families Forward's tentative development
schedule anticipates they will close escrow on the Tustin property in February 2024, submit
a complete entitlement application in May 2024, with a goal of receiving entitlements for the
project by October 2024. The estimated start of construction would be November 2024,
with a completion date in September 2025. Once the project is open and available for
families to occupy, Families Forward, to the extent permitted by law, will give preference to
families with Tustin ties for unit occupancy in accordance with the "Local Preference Policy"
as adopted by the Tustin City Council on November 6, 2007.
DocuSigned by:
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Christopher Koster
Director of Economic Development
Tustin Housing Authority
Attachment:
DocuSigned by:
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Jerry Craig
Deputy Director of Economic Development
Tustin Housing Authority
1. Letter from Families Forward to City dated July 6, 2023
2. Letter from City Manager and Tustin Housing Authority to Families Forward
dated July 12, 2023
3. Affordable Housing Grant Agreement between Families Forward and the City of
Tustin and Tustin Housing Authority
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Attachment 1
July 6, 2023
Mr. Matthew West
City Manager
City of Tustin
300 Centennial Way
Tustin, CA 92780
Re: Families Forward Funding Request — Tustin Affordable Housing Project
Dear Mr. West,
FAMILIES
FrIRWARD
I am writing on behalf of Families Forward to formally request funding and support for a new affordable housing
opportunity in the City of Tustin. As a trusted and long-standing partner of the City of Tustin, Families Forward has
prevented and ended family homelessness for Tustin families by providing access to housing and resources that
create lasting stability. To accomplish this mission, we have focused extensively on the lack of affordable housing in
Orange County and ways in which that has impacted struggling families. In the City of Tustin alone, we own and
operate 6 units of affordable housing and provide critical rehousing support to families experiencing homelessness
from the city. Recent statistics from the Consumer Price Index Summary show that food prices have increased by
10.6% since November 2021 and housing costs by 7.1%. With inflation continuing to rise, housing and food -insecure
families need affordable housing, supportive services, and resources now more than ever.
With a funding request of $2,000,000 from the City of Tustin, Families Forward intends to acquire a parcel of land
located at 1852/1854 San Juan St, in Tustin. We have already been in discussion with the sellers at this site to acquire
this parcel off -market. Once acquired, Families Forward will build up to 8 units of affordable housing that will house
up to 28 children and adults who are at -risk of or are experiencing homelessness and are extremely -low to low
income. The city's funding will be leveraged with funds from Families Forward and a pending capital grant from
CalOptima Health. Families Forward has submitted a formal grant request to CalOptima Health for $2,500,000 to
ensure this project can become a reality. This grant opportunity from CalOptima Health is targeted at adding critically
needed affordable housing units to Orange County.
An important distinction between Families Forward and other affordable housing developers and housing providers is
our commitment to economic mobility and critical supportive services for all families residing in our units. This
includes case management, life skills training, food assistance, mental health counseling, career coaching, and linkage
to community resources. All residents of these projects can access our full suite of supportive services. It is the goal of
the program for families to graduate from affordable housing into market -rate housing through increases in income,
allowing more families to benefit from these scarce affordable units.
Our extensive experience with projects of this type has made us a trusted and sought after partner. Over the years
we have refined our ability to pursue and deliver on community reinvestment and naturally occurring affordable
housing projects. In 2015, we purchased a 4-plex from the City of Lake Forest and rehabilitated the property with
assistance from private and non-profit partners. In Costa Mesa, Families Forward purchased and rehabilitated a
property which has become home to 8 low-income families as of 2019.
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FAMILIES
FID
Our newest development, The Bungalows, located in Costa Mesa, opened in December 2022 and will house up to 34
residents in 8 units. This is the first project in the county to build ground -up ADUs for families in affordable housing,
and in this was awarded the Innovating Housing Award by the Affordable Housing Clearinghouse, Kennedy
Commission and Orange County Community Housing Corporation. With these projects, Families Forward has
leveraged in -kind expertise, labor, and materials from various building industry professionals including Marx I Okubo,
W.L. Butler, Landsea Homes, HomeAid OC, and Brookfield Residential among others.
In summary, Families Forward is seeking $2,000,000 in funds from the City of Tustin to complete the financing required
to acquire, develop, and build up to 8 units of affordable housing for Tustin families in need. Families Forward is
committed to serving families in need and ensuring that every family has a home and the opportunity to thrive. Thank
you in advance for your consideration and please let me know if you have any questions or concerns.
Sincerely,
Vta+ 4�W4.&
Madelynn Hirneise
Chief Executive Officer
Families Forward
Mhirneise@families-forward.org
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Attachment 2
U N
July 12, 2023
Ms. Sarah Nance
CalOptima Health
505 City Parkway West
Orange, CA 92868
OFFICE OF THE CITY MANAGER
Remembering what connects us.
SUBJECT: Letter of Commitment to Families Forward's Affordable Housing Project in Tustin
Dear Ms. Nance:
The City of Tustin and the Tustin Housing Authority arc pleased to provide this letter of commitment and support for Families
Forward's capital grant application to CalOptima Health. It is our hope that their proposed project, which will build 6 — 8
units of affordable housing in the City of Tustin for families at risk of and experiencing homelessness, will receive this critical
funding. Given the numerous factors that contribute to homelessness in Tustin and Orange County and the growing need,
the City of Tustin stands committed to increasing housing affordability for our most vulnerable residents: families in crisis.
As trusted and long-standing partners, the City of Tustin desires to support Families Forward in the acquisition of an existing
parcel of land at 1852 / 18S4 San Juan St, and build 6 — 8 units of affordable housing for families in need. As part of the City's
dedication to affordable housing for vulnerable populations, the Tustin Housing Authority and the City of Tustin are
committed to allocating $2,000,000 in City -designated affordable housing in -lieu fees to this project on the condition that
Families Forward secures the additional funding required to complete the project. In addition, the City must complete its due
diligence and required obligations as it relates to fund usage.
Families Forward utilizes its deep knowledge, technical expertise, and decades of experience to ensure successful outcomes
for those it serves. Stable, affordable housing is buoyed by critical supportive services for homeless families and children to
help them overcome the trauma and disruption of becoming homeless and provide equitable footing for building a plan to
move forward and regain self-sufficiency. Examples of personalized services include access to mental health counseling for
individuals, couples and families, individualized career assessment and wage improvement plan, food assistance, referrals to
supportive services in the county for childcare, tutoring and legal assistance, and a customized housing plan that is based on
the family stabilizing and thriving.
We strongly support Families Forward's application and this project. We feel confident that Families Forward has the
experience to replicate their existing successful models in affordable housing in our city. The City of Tustin is committed to
supporting this project and the opportunity to create new housing opportunities for families in need.
Sincerely,
Matthew S. West
City Manager
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300 Centennial Way, Tustin, CA 92780 • 714-573-3010 • tustinca.org
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CITY OF TUSTIN
Affordable Housing Grant Agreement
THIS TUSTIN AFFORDABLE HOUSING GRANT AGREEMENT (the "Grant
Agreement") is made and entered by and between the City of Tustin, a California municipal
corporation ("Tustin"), and the Tustin Housing Authority, a local housing authority ("Authority",
along with "Tustin" collectively referred to as "City"), and Families Forward, a California
nonprofit corporation ("Grantee"), with respect to the following:
A. City has created the Voluntary Workforce Housing Incentive Program ("VWHIP")
to foster the construction of housing affordable to households of extremely low, very low, low,
and moderate incomes, help the City meet the needs of its local workforce, help meet its share of
regional housing needs, and implement the City of Tustin General Plan Housing Element's goals
and policies.
B. City desires to distribute funds to Grantee in accordance with Tustin City Code
B9928 — Voluntary Workforce Housing Incentive Program Fund ("Fund") and has confirmed the
following:
a. Sufficient funds exist in the Fund;
b. Funds are being committed towards developing an affordable housing project
that will provide housing to extremely low, very low, low and moderate income
households;
c. The Tustin Housing Authority has determined Grantee has sufficient
experience in developing and managing similar affordable housing projects as
the proposed project;
d. Grantee is in negotiations to purchase real property in Tustin on which the
affordable housing project will be built; and
e. City staff do not have an economic interest in the Grantee and/or proposed
affordable housing project.
C. Grantee's mission is to prevent and end family homelessness by providing access
to housing and resources that create lasting stability.
D. Grantee is a long-standing partner of the City, operating twenty (20) affordable
housing units in accordance with the 1996 Homeless Assistance Agreement for the Marine Corps
Air Station — Tustin and subsequent Amendments.
E. Grantee has applied to receive a VWHIP Grant from the City for the construction
of six -to -eight affordable rental units that will house families with at least one minor age child who
are homeless or at -risk of homelessness and are extremely low to low-income income households.
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F. The VWHIP Grant is funded with In -Lieu Fees collected in accordance with
Ordinance No. 1491 and City Council Resolution No. 18-61.
G. City has agreed to award the Grant Funds described in this Grant Agreement on the
terms and conditions set forth in this Grant Agreement and the requirements of state and federal
law.
NOW, THEREFORE, in consideration of the covenants and agreements of the parties set
forth in this Grant Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, agree as
follows.
1. REPRESENTATIONS AND WARRANTIES. Grantee hereby represents and warrants
to City that:
• It is an nonprofit corporation, experienced in developing and managing affordable
housing projects;
• It has committed, at minimum, $500,000 of it's own funding towards the proposed
Project;
• It has received confirmation it has been awarded $2,500,000 in CalOptima capital
grant funding;
• It is currently in negotiations to purchase real property in Tustin and understands
that eligibility to receive Funds is dependent upon successfully purchasing the
Tustin property;
• It will submit complete applications for all required land use entitlements for the
affordable housing project within one year from the execution date of this Grant
Agreement;
• It acknowledges the City will not disburse Funds to the Grantee until Grantee has
entitled the affordable housing project and all building permits have been issued;
• To the extent permitted by law, it will comply with the "Local Preference Policy"
as adopted by the Tustin City Council on November 6, 2007, and give a reasonable
preference in the leasing of the affordable units to prospective tenants that live or
work in the City.
• It understands a covenant, prior to disbursement of Funds, will be executed between
the Grantee and City and will be recorded against the project, in a form approved
by the City Attorney, restricting affordability for 55 years.
• It is in good standing with the IRS and State of California.
2. GRANTEE'S COVENANTS. Grantee covenants and agrees, during the term of this
Grant Agreement to perform all the acts and promises set forth herein.
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2.1. Program Requirements. Grantee has read and shall comply with all of the requirements
outlined in this Grant Agreement. Further, Grantee shall comply with all applicable state, federal,
and local laws.
2.2. Further Assurances. Grantee agrees to execute any further documents as may from
time -to -time in the reasonable opinion of City be necessary to perfect, confirm, establish,
reestablish, continue, or complete the purposes and intentions of this Grant Agreement.
2.3. Other Agreements. Grantee shall not enter into any agreement containing any
provision that would be violated or breached by the performance of its obligations under this Grant
Agreement.
3. ELIGIBLE ACTIVITIES. Funds shall be used for the intended purpose of assisting in
the construction of six -to -eight affordable rental units within Tustin that will house families with
at least one minor age child who are homeless or at -risk of homelessness and are extremely low to
low-income households. Funds should be expended within three (3) years from the execution date
of this Grant Agreement (date signed by the City Manager) and shall be used specifically for
construction expenses associated with the Project. Funds are not to be used for Grantee's
operational expenses.
4. GRANT AMOUNT. The City hereby awards Grantee a grant in the maximum, not -to -
exceed amount, of TWO MILLION DOLLARS ($2,000,000) ("Grant Funds") to assist in the
construction of six -to -eight affordable rental units within Tustin that will house families with at
least one minor age child who are homeless or at -risk of homelessness and are extremely low to
low-income households. The Grant Funds will be disbursed by the City upon the Grantee receiving
all required land use entitlements and all building permits have been issued.
Eligible Activities are considered necessary expenditures that support the construction of the
affordable housing project. In the event the Grantee does not expend the entire grant amount by
the earliest of either; two months after completion of the project or October 31, 2026, the Grantee
must return the remaining balance to the City by the earliest of either; three months after
completion of the project or November 30, 2026.
5. EVENTS OF DEFAULT. The matters described in Sections 5.1-5.3 shall constitute
Events of Default and shall entitle City to exercise the rights and remedies under Section 6.
5.1. Failure of Warrant.. o�presentation to be True. The failure of any representation or
warranty provided by Grantee to be materially true.
5.2. Violation Covenants. Grantee's failure to perform, or violation of, any of the covenants
provided in Section 2.
5.3. Default Under Grant Agreement. Grantee's breach of any of the material terms,
covenants, or conditions set forth in this Grant Agreement.
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6. REMEDIES.
6.1. City's Specific Rights and Remedies. On the happening of any Event of Default, City,
in addition to any and all rights provided by law or equity, may:
(a) Demand repayment of the Grant Funds, with interest at the legal rate;
(b) File suit against Grantee; and
(c) Exercise all other rights and remedies provided by this Grant Agreement or state
or federal law.
6.2. Collection Costs. If suit or action is instituted to enforce any of the terms of this Grant
Agreement, the prevailing party shall be entitled to recover from the other party its attorney fees
and costs in addition to all other sums provided by law.
6.3. Notice of Default. Upon written notice, City shall provide Grantee with sixty (60)
calendar days to cure any other act or omission constituting an Event of Default.
7. REPORTS AND RECORDS RETENTION.
7.1. By July 31, 2025, Grantee shall provide a Progress Report for the period from Grant
execution through June 30, 2025, in a format prescribed by the City, which shall: (1) identify the
Eligible Activities paid from Grant Funds; (2) demonstrate how the Grantee used the Grant Funds
consistent with the requirements of the Grant Agreement; and (3) identify the balance of the Grant
Funds that the Grantee has not spent, if any.
7.2. By November 30, 2026, Grantee shall provide a final Progress Report for the period
July 1, 2025 through October 31, 2026, in a format prescribed by the City, which shall: (1) identify
the Eligible Activities paid from Grant Funds; (2) demonstrate how the Grantee used the Grant
Funds consistent with the requirements of the Grant of the Grant Agreement; and (3) identify the
balance of the Grant Funds that the Grantee has not spent, if any.
7.3. Grantee shall keep such books, receipts, purchase orders, and similar documentation
evidencing use of the Grant Funds, and such other records as the City may reasonably request to
evaluate Grantee's compliance with this Grant Agreement. Grantee shall make available to City
and/or their representatives during normal business hours of City all such records pertaining to the
use of funds provided under this Grant Agreement for inspection, including the right to copy, audit
and make records and transcripts from such records. If upon auditing by the City, it is determined
the Grantee did not expend the funds consistent with the Eligible Activities, it may constitute an
Event of Default and, as such, the City may exercise all Remedies identified in Section 6.1.
Grantee is required to retain the records described for five (5) years following the completion of
the project; the provisions of this section shall survive the termination of this Grant Agreement.
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8. GENERAL PROVISIONS.
8.1. Notices. Any notice under the Grant Agreement shall be in writing, without implying
the obligation to provide such notice. Any notice to be given or document to be delivered under
the Grant Agreement shall be deemed to have been duly given (a) when hand delivered to the other
Party; (b) three (3) business days after such notice has been sent by U.S. Postal Service via certified
mail, return receipt requested, postage prepaid, and addressed to the other Party as set forth below;
(c) the next business day after such notice has been deposited with an overnight delivery service
reasonably approved by the Parties (Federal Express, Overnite Express, United Parcel Service and
U.S. Postal Service are deemed approved by the Parties), postage prepaid, addressed to the Party
to whom notice is being sent as set forth below with next -business -day delivery guaranteed,
provided that the sending Party receives a confirmation of delivery from the delivery service
provider; or (d) when transmitted if sent by email to the email address set forth below; provided,
however, that notices given by email shall not be effective unless either (i) a duplicate copy of
such notice is promptly sent by any method permitted under this Section other than by email
(provided that the recipient Party need not receive such duplicate copy prior to any deadline set
forth herein); or (ii) the receiving Party delivers a written confirmation of receipt for such notice
either by email or any other method permitted under this Section. Any notice given by email shall
be deemed received on the next business day if such notice is received after 5:00 p.m. (recipient's
time) or on a non -business day. Unless otherwise provided in writing, all notices hereunder shall
be addressed as follows:
If to City: Director of Economic Development
City of Tustin
300 Centennial Way
Tustin, CA 92780
Attn: Christopher Koster
Email: ckoster@tustinca.org
If to Grantee: Madelynn Hirneise, Chief Executive Officer
Families Forward
8 Thomas
Irvine, CA 92618
Email: mhimeise@tustinca.org
8.2. Indemnity. Grantee agrees to protect, defend, and hold harmless the City and its
elective or appointive boards, officials, officers, agents, employees, and volunteers from any and
all claims, liabilities, expenses or damages of any nature, including attorney's fees, for injury or
death of any person, damage to property, interference with the use of property and any other
monetary damage claims, arising out of, or in any way connected with performance of this Grant
Agreement by Grantee, Grantee's agents, officers or employees, subcontractors, or independent
contractors. The provisions of this section shall survive the termination of this Grant Agreement.
8.3. Counterparts. This Grant Agreement may be executed in multiple counterparts, all of
which together shall constitute one instrument.
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IN WITNESS WHEREOF, Grantee and City have executed this Grant Agreement as of the dates
written below.
APPROVED AS TO FORM
By: for
David Kendig, City Attorney
TUSTIN:
City of Tustin,
a California municipal corporation
Nicole Bernard, Acting City Manager
Dated:
AUTHORITY:
Tustin Housing Authority,
a California housing authority
By:
Nicole Bernard, Acting Executive Director
Dated:
GRANTEE:
Families Forward
IRA
Madelynn Hirneise, Chief Executive Officer
Dated:
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