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HomeMy WebLinkAbout2025-10-28 Special Agenda PacketIN-PERSON PUBLIC PARTICIPATION: Members of the public are welcome to attend City Council meetings in person. Alternate ways to view meetings live or on-demand include: livestreamed on HBTV Channel 3 (replayed on Wednesday at 10:00 a.m. and Thursday at 6:00 p.m.); live and archived meetings for on-demand viewing accessed from https://huntingtonbeach.legistar.com/calendar , https://bit.ly/SurfCityTV, or the City's YouTube Channel at https://www.youtube.com/cityofhb , or from any Roku, Fire TV or Apple device by downloading the Cablecast Screenweave App and searching for the City of Huntington Beach channel. PRESENTATION MATERIAL: Due to updates to City Council venue, digital presentations or videos will no longer be displayed at City Council meetings as part of public comment. To present images or materials to the City Council, please bring nine paper copies to the City Council meeting. Paper copies will be distributed to City Council Members at the meeting and will be made part of the public record. Members of the audience and speakers shall not wear or display signs that obstruct the view of other audience members. Signs shall remain with the holder and shall not be placed in adjacent seats or in common areas. PUBLIC COMMENTS: Individuals wishing to provide a comment on agendized or non-agendized items including Study Session, Closed Session, and Public Hearing, may do so in person in the City Council Chambers by completing a Request to Speak form delivered to the City Clerk. Sign-ups to Request to Speak will begin in person 30 minutes prior to the start of Study Session, Closed Session, or Regular City Council Meeting, whichever comes first. Sign-ups will be accepted until the commencement of the public comment period. SUPPLEMENTAL COMMUNICATION: Members of the public interested in commenting on agenda-related items may submit a written (supplemental) communication to the City Council via email at SupplementalComm@SurfCity-hb.org. Supplemental Communications are considered public record. Communications received by 5:00 PM Monday prior to the City Council meeting will be distributed to the City Council, posted to the City website, and announced at the City Council meeting, though not read. Please note that Supplemental Communications can only be submitted to SupplementalComm@SurfCity-HB.org. Communications received Monday after the 5:00 PM deadline will only be included in the administrative record. MEETING ASSISTANCE NOTICE: In accordance with the Americans with Disabilities Act, services are available to members of our community who require special assistance to participate in public meetings. If you require special assistance, 48-hour prior notification will enable the City to make reasonable arrangements for an assisted listening device (ALD) for the hearing impaired, American Sign Language interpreters, a reader during the meeting and /or large print agendas. Please contact the City Clerk's Office at (714) 536-5227 or (714) 374-5390 for more information. AGENDA City Council/Public Financing Authority Tuesday, October 28, 2025 Special Meeting - 4:00 PM Special Meeting of the Housing Authority Council Chambers 2000 Main Street Huntington Beach, CA 92648 MAYOR AND CITY COUNCIL PAT BURNS, Mayor CASEY MCKEON, Mayor Pro Tem ANDREW GRUEL, Councilman DON KENNEDY, Councilman BUTCH TWINING, Councilman GRACEY VAN DER MARK, Council Woman CHAD WILLIAMS, Councilman STAFF TRAVIS HOPKINS, City Manager MIKE VIGLIOTTA, City Attorney LISA LANE BARNES, City Clerk JASON SCHMITT, City Treasurer 1 AGENDA October 28, 2025City Council/Public Financing Authority 4:00 PM - COUNCIL CHAMBERS CALL TO ORDER SPECIAL MEETINGS OF THE CITY COUNCIL/PUBLIC FINANCING AUTHORITY AND HOUSING AUTHORITY ROLL CALL Twining, Kennedy, McKeon, Burns, Van Der Mark, Gruel, Williams PLEDGE OF ALLEGIANCE ANNOUNCEMENT OF SUPPLEMENTAL COMMUNICATIONS (Received After Agenda Distribution) PUBLIC COMMENTS (3-Minute Time Limit) At this time, the City Council will receive comments from members of the public regarding topic (s) included on the special agenda. Individuals wishing to provide a comment may do so in person by filling out a Request to Speak form delivered to the City Clerk. All speakers are encouraged, but not required to identify themselves by name. Each speaker may have up to 3 minutes unless the volume of speakers warrants reducing the time allowance. Please note that the Brown Act does not allow discussion or action on topics that are not on the agenda. Members of the public who would like to speak directly with a Councilmember on an item not on the agenda may consider scheduling an appointment by contacting the City Council's Administrative Assistant at (714) 536-5553 or emailing the entire City Council at city.council@surfcity-hb.org. PUBLIC HEARING For the benefit of the public, prior to a public hearing item, each member of the City Council will disclose any ex parte communications they may have had pertaining to the item. In simple terms, public hearings are quasi-judicial proceedings and the information used by the City Council to make its decisions should be limited to that which is obtained during the public hearing. Ex parte communications, then, means any information obtained outside of a public hearing. In such public hearing proceedings, the City Council must uphold constitutional and statutory due process rights of present and non-present parties by disclosing ex parte communications. Ex parte communications include oral and written information, as well as visual or auditory information obtained during a site visit. Individuals wishing to provide a comment on an item scheduled for Public Hearing may do so in person by filling out a Request to Speak form delivered to the City Clerk. All speakers are encouraged, but not required to identify themselves by name. Each speaker may have up to 3 minutes unless the volume of speakers warrants reducing the time allowance. 25-8561.Conduct a Tax and Equity Fiscal Responsibility Act (TEFRA) Public Hearing for the Pelican Harbor Apartments; Adopt Resolution No. 2025-65 Approving the Issuance of the California Municipal Finance Authority’s (CMFA) Continued Issuance of Tax-exempt Bonds in an Page 1 of 2 2 AGENDA October 28, 2025City Council/Public Financing Authority amount not to exceed $20,000,000 for the Pelican Harbor Apartments; and Approve Amendments to Affordable Housing Agreements - continued from the October 21, 2025, City Council/Public Financing Authority Meeting/Housing Authority Special Meeting A) Conduct the TEFRA public hearing pursuant to federal law. B) Adopt Resolution No. 2025-65, “A Resolution of the City Council of the City of Huntington Beach Approving the Issuance of the California Municipal Finance Authority Exempt Facility Bonds in an Aggregate Principal Amount Not to Exceed $20,000,000 for the Purpose of Refinancing the Acquisition, Construction, Improvement and Equipping of Pelican Harbor (Formerly Referred to as Huntington Beach Senior Housing) and Certain Other Matters Relating Thereto” (Attachment 1). C) Adopt First Amendment to Affordable Housing Agreement (Attachment 2). D) Adopt First Amendment to Amended and Restated Agreement Containing Covenants (Attachment 3). E) Adopt First Amendment to City HOME Promissory Note (Attachment 4). F) Adopt First Amendment to City Inclusionary Housing Promissory Note (Attachment 5). G) Authorize the City Manager and Housing Authority Executive Director, or their designees, to execute the above documents. Recommended Action: ADJOURNMENT The next regularly scheduled meeting of the Huntington Beach City Council/Public Financing Authority is Tuesday, November 4, 2025, in the Civic Center Council Chambers, 2000 Main Street, Huntington Beach, California. INTERNET ACCESS TO CITY COUNCIL/PUBLIC FINANCING AUTHORITY AGENDA AND STAFF REPORT MATERIAL IS AVAILABLE PRIOR TO CITY COUNCIL MEETINGS AT http://www.huntingtonbeachca.gov Page 2 of 2 3 City of Huntington Beach 2000 Main Street, Huntington Beach, CA 92648 File #:25-856 MEETING DATE:10/28/2025 REQUEST FOR CITY COUNCIL / HOUSING AUTHORITY ACTION SUBMITTED TO:Honorable Mayor and City Council Members / Honorable Chair and Board Members SUBMITTED BY:Travis Hopkins, City Manager VIA:Jennifer Villasenor, Director of Community Development PREPARED BY:Charles Kovac, Housing Manager Subject: Conduct a Tax and Equity Fiscal Responsibility Act (TEFRA) Public Hearing for the Pelican Harbor Apartments; Adopt Resolution No. 2025-65 Approving the Issuance of the California Municipal Finance Authority’s (CMFA) Continued Issuance of Tax-exempt Bonds in an amount not to exceed $20,000,000 for the Pelican Harbor Apartments; and Approve Amendments to Affordable Housing Agreements - continued from the October 21, 2025, City Council/Public Financing Authority Meeting/Housing Authority Special Meeting Statement of Issue: Jamboree Housing Corporation, the developer of Pelican Harbor Apartments, is requesting that the City Council hold a Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing and adopt a resolution required under federal regulations to maintain the tax-exempt status of previously issued bonds that helped finance the construction of the 43-unit permanent supportive housing community for formerly homeless seniors located at 18431 Beach Boulevard. This action is procedural. It does not authorize any new bonds or financing, nor does it create any financial obligation or liability for the City. Holding this hearing is a federal requirement necessary for the long-term conversion of a portion of the previously issued tax-exempt bonds from construction to permanent financing. In exchange for hosting the TEFRA hearing, the City has secured stronger affordability protections and more favorable loan repayment terms. Financial Impact: This action does not create any new financial obligation for the City. In fact, the City will receive several long-term benefits negotiated with the developer: ·The original 60-year affordability term will be extended to 99 years. ·The developer will pay the City $5,000 per year for 99 years, generating $495,000 in funding City of Huntington Beach Printed on 10/23/2025Page 1 of 4 4 File #:25-856 MEETING DATE:10/28/2025 ·Interest rates on the City’s HOME and Inclusionary Loans will increase from 3% to 5% beginning in year 20, resulting in approximately $4.9 million in increased payments to the City over the extended life of the loans. Recommended Action: A) Conduct the TEFRA public hearing pursuant to federal law. B) Adopt Resolution No. 2025-65, “A Resolution of the City Council of the City of Huntington Beach Approving the Issuance of the California Municipal Finance Authority Exempt Facility Bonds in an Aggregate Principal Amount Not to Exceed $20,000,000 for the Purpose of Refinancing the Acquisition, Construction, Improvement and Equipping of Pelican Harbor (Formerly Referred to as Huntington Beach Senior Housing) and Certain Other Matters Relating Thereto” (Attachment 1). C) Adopt First Amendment to Affordable Housing Agreement (Attachment 2). D) Adopt First Amendment to Amended and Restated Agreement Containing Covenants (Attachment 3). E) Adopt First Amendment to City HOME Promissory Note (Attachment 4). F) Adopt First Amendment to City Inclusionary Housing Promissory Note (Attachment 5). G) Authorize the City Manager and Housing Authority Executive Director, or their designees, to execute the above documents. Alternative Action(s): Do not approve the proposed TEFRA hearing or amendments. This would create financing uncertainty for the completed project and increase the risk of loan default or future foreclosure. Analysis: Background Pelican Harbor Apartments is a 43-unit permanent supportive housing development located at 18431 Beach Boulevard. Completed in December 2024 and fully occupied as of January 2025, the project serves one of the most vulnerable populations in Huntington Beach - formerly homeless seniors, many of whom face significant health and mobility challenges. The project includes on-site case management and supportive services funded through long-term contracts with the County of Orange. The City contributed a total of $3,127,036 in loan funds to support the project: ·$2,830,697 from the federal HOME Investment Partnerships Program (HOME Loan), and ·$296,339 from local Inclusionary Housing funds (Inclusionary Loan). These residual receipts loans are subordinate to the senior debt and carry a 3% simple interest rate City of Huntington Beach Printed on 10/23/2025Page 2 of 4 5 File #:25-856 MEETING DATE:10/28/2025 Purpose of the TEFRA Hearing Under federal tax law, certain types of tax-exempt bond financing require a public hearing before the bonds can be issued. This requirement, established by the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, ensures transparency and provides an opportunity for public input. A TEFRA hearing must be held by the governing body of the jurisdiction where the project is located (in this case, the Huntington Beach City Council) even if that agency is not issuing or backing the bonds. The original TEFRA hearing for Pelican Harbor was held in December 2021 prior to construction financing; however, that approval expired after three years. To comply with IRS regulations and allow the previously issued bonds to transition from temporary (construction) to long-term (permanent) financing, a new TEFRA hearing must be held by the City Council. This requirement does not reflect a new bond issuance, nor does it represent additional financing or cost to the City. It is a procedural step needed to maintain the tax-exempt status of the bonds already issued. If not completed, the bondholder could lose the ability to keep the bonds tax-exempt, which would create financing instability for the project and increase the risk of foreclosure. Community Benefits In exchange for hosting the TEFRA hearing, the City negotiated several enhancements to its existing loan agreements with Jamboree. These include: ·Extending Affordability to 99 Years: The project will remain affordable to extremely and very low-income seniors for nearly a century, ensuring long-term community benefit. ·New Annual Payment Obligation: Jamboree will make a $5,000 annual payment to the City for the next 99 years, providing an additional $495,000 in local revenue to support affordable housing and homelessness prevention programs. ·Improved Loan Terms for the City: Beginning in year 20, the interest rates on both City loans (the HOME loan and the Inclusionary Housing loan) will increase from 3% to 5%, boosting the future repayment amount owed to the City by nearly $5 million. These benefits were not required as part of the original financing and represent a favorable renegotiation for the City. Importance of Council Action The Pelican Harbor Apartments have already been constructed, are fully occupied, and are providing critical housing and supportive services to formerly homeless seniors. This TEFRA hearing does not City of Huntington Beach Printed on 10/23/2025Page 3 of 4 6 File #:25-856 MEETING DATE:10/28/2025 Environmental Status: Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15194, affordable housing projects meeting specific criteria listed in Section 15192 and 15194 of the CEQA Guidelines are exempt. The Project meets the criteria listed in the above-mentioned sections and is therefore exempt. Strategic Plan Goal: Non Applicable - Administrative Item For details, visit www.huntingtonbeachca.gov/strategicplan. Attachment(s): 1. Resolution No. 2025-65, “Resolution of the City Council of the City of Huntington Beach Approving the Issuance of the California Municipal Finance Authority Exempt Facility Bonds in an Aggregate Principal Amount not to exceed $20,000,000 for the purpose of Refinancing the Acquisition, Construction, Improvement and Equipping of Pelican Harbor (formerly referred to as Huntington Beach Senior Housing) and Certain Other Matters Relating Thereto” 2. First Amendment to Affordable Housing Agreement 3. First Amendment to Amended and Restated Agreement Containing Covenants 4. First Amendment to City HOME Promissory Note 5. First Amendment to City Inclusionary Housing Promissory Note 6. PowerPoint Presentation City of Huntington Beach Printed on 10/23/2025Page 4 of 4 7 8 RESOLUTION NO. 2025-65 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING THE ISSUANCE OF THE CALIFORNIA MUNICIPAL FINANCE AUTHORITY EXEMPT FACILITY BON DS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $20,000 ,000 FOR THE PURPOSE OF REFINANCING THE ACQUISITION, CONSTRUCTION, IMPROVEMENT AND EQUIPPING OF PE LICAN HARBOR (FORMERLY REFERRED TO AS HUNTINGTON BEACH SENIOR HOUSING) AND CERTAIN OTHER MATTERS RELATING THERETO WHEREAS , the California Municipal Finance Authority (the "Authority") executed and delivered its California Municipal Finance Authority Multifamily Housing Rev enue Note (Huntington Beach Senior Housing) 2022 Series A (the "Prior Bonds") for the purpose of making a loan (the "Loan") to Beach Housing Partners LP, a California limited partnership (the "Borrower") a partnership of which Jamboree Housing Corporation (the "Developer") or a related person to the Developer is the general partner, to finance the acquisition, construction, improvement and equipping of a senior multifamily rental hous ing project generally known as Pelican Harbor (formerly referred to as Huntington Beach Senior Housing) located at 18431 Beach Boulevard, Huntington Beach, California (the "Project") which is owned by the Borrower; and The multifamily rental housing project has been fully constructed , and the Borrower is working with one or more lenders to make certain amendments to the terms of the Loan, which amendments and modifications will con s titute a "rei ssuance" of the Prior Bonds for purpo ses of federal income taxation requiring a new public hearing and approval purs uant to Section 147 of the Internal Revenue Code of 1986 (the "Code"), which reissuance does not involve the incurrence by the Borrower of new debt; and To facilitate such reissuance for federal tax purposes, the Borrower has requested that the Authority adopt a plan of financing providing for the issuance of exempt facility bond s for a qualified residential rental project pursuant to Section 142(a)(7) of the Code in one or more series issued from time to time, including bonds issue d to refund such exempt facility bonds in one or more series from time to time, and at no time to exceed $20,000,000 in aggregate principal amount (the "Bonds"), to refinance the acquisition , construction, improve ment and equipping of the Project; and Pursuant to Section 147(f) of the Code , the issuance of the Bonds by the Authority must be approved by the City of Huntington Beach (the "City") because the Project is located within the territorial limits of the City ; and The City Council of the City (the "City Council") is the elected le g is lative body of the City and is one of the "applicable elected representatives " required to approve the issua nce of the Bond s under Section 147(f) of the Code ; and 25 -17050/3 91590 9 RESOLUTION N O . 2 025-65 The Authority has requeste d that t he C it y Council app ro ve the issuance of the Bonds by the Authority in order to satisfy t he public approval requirement of Section 14 7(£) of the Code and the requirements of Section 4 of the Joint Exerc ise of Powers Agreement Relating to the California Municipal Finance Authority , dated as of January 1, 2004 (the "Agreement"), among certain local agencies, including the City; and Pursua nt to Section 147(£) of the Code, following notice duly g iven, representatives of the Authority conducted a public hea ring on behalf of the City Council regardin g the iss\}ance of the Bonds in compliance with the requirements of Section 14 7(£) of the Co de and provided minute s of the hearing; and The Ci ty C ouncil now d es ires to a pprove the issuance of the Bonds by the Authority, N OW, T H EREFORE, the City Council of the City of Huntington Beach does he reby re so lve as follows: SECTION 1. The foregoing recita ls are true a nd correct. SECTION 2 . The City Council hereby approves the issuance of the Bonds by the Authority. It is the purpose and intent of the City Co unci l that this resolution constitute approva l of the issuance of the Bonds by the Authority, for the purpo ses of (a) Section 147(£) of the Code by the applicable elected represe ntative of the governmenta l unit havi ng jurisdiction over the area in which th e Project is lo cated, in accordance with said Section 147(£) and (b) Sectio n 4 of the Agreem ent. SECTION 3. The issuance of the Bonds sha ll be subject to the approval of the A uthor ity of any financing documents or execution of amendm ents relating thereto to w hich the Authority is a party. The C ity shall hav e no responsibility or liability whatsoever wit h respect to the Bonds. SECTION 4. The adoption of this Resolution shall not obligate the City or any department t hereof to (i) provide any financing to acq uire or construct the Proj ect or any refinancing of the Proj ect ; (ii) approve any app li cati on or request for o r take any other action in connection w ith any planning approva l, permit or other action necessary for the acqu isi ti on, co nstruct ion, rehabilitation, insta llation or operation of the Proj ect ; (iii) make a ny contribution or adva nce a ny funds whatsoever to the Authority; or (iv) take any further action w ith respect to the Authority or its membership the re in. SECTION 5. The officers of the City are he reby authorized a nd directed, jointly and severally, to do any and a ll things and to execut e and deliver any and all documents which they deem n ecessary or adv isab le in order to carry out , g ive effect to and comply wi th the terms a nd intent of thi s resolution and the financing transaction approved hereby. 2 10 RESOLUTION NO. 2025-65 SECTION 6 . This resolution shall take effect immediately upon its adoption. PASS E D AND ADOPTED by the City Council of the City of Huntington Beach at a special meeting thereof held on the 2gf\-day of October, 2025. .,, Mayor REVIEWED AND APPROVED: INITIATED AND APPROVED: City Manager / I Director of Community Development APPROVED AS TO FORM: City tt01}(ey 3 FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT (18431 Beach Boulevard) THIS FIRST AMENDMENT TO AFFORDABLE HOUSING AGREEMENT (this "First Amendment") dated for identification purposes only as of ____ , 2025, is made and entered into by and among THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City"), THE HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), and BEACH HOUSING PARTNERS LP, a California limited partnership ("Owner") with reference to the following: RECITALS The following Recitals are a substantive part of this First Amendment. Capitalized terms used in these Recitals and not otherwise defined shall have the meaning set forth in the Agreement ( defined below). A.On or about January 5, 2021, City, Authority and Owner entered into that certain Affordable Housing Agreement (the "Agreement"), pursuant to which, among other things, City provided certain financial assistance to Owner to assist Owner to construct a forty-three ( 43) unit senior affordable housing development known as "Pelican Harbor" (the "Project"), on certain real property located at 18431 Beach Boulevard, in the City of Huntington Beach, State of California. B.Owner completed construction of the Project on November 26, 2024, as evidenced by City's issuance of a certificate of occupancy, and is pursuing Conversion. C.Owner's construction and permanent financing are funded with proceeds of mortgage revenue bonds issued by the California Municipal Finance Authority, and thereafter loaned to Owner by U.S. Bank National Association, as "Funding Lender." The original TEFRA hearing authorizing issuance of the bonds has expired, resulting in the need for a new TEFRA hearing to be held by City. D.City has agreed to hold the TEFRA hearing provided Owner agree to certain changes to the terms of the City and Authority loan documents, as further set forth herein and in certain amendments to the Amended and Restated Covenants, the HOME Note, and the Inclusionary Note, all of which amendments are to be entered into concurrently herewith. AGREEMENT: NOW, THEREFORE, City, Authority and Owner hereby agree as follows: 1.The Agreement is hereby amended to provide that in addition to any other payments required to be made by Owner pursuant to the Agreement and/or pursuant to any of the other City or Authority loan documents, commencing in 2026, Owner shall annually pay to City on each July 1 during the term of Amended and Restated Covenants, as amended, a fee in the 882/020587-0153 22702593.6 a09/09/25 11 amount of Five Thousand Dollars ($5,000) to be utilized by City for housing or homelessness prevention activities. 2.Except as expressly modified by this First Amendment, all of the provisions of the Agreement remain in full force and effect and shall govern the relationship of the Parties. 3.This First Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 882/020587-0153 22702593.6 a09/09/25 [SIGNATURES ON NEXT PAGE] -2- 12 IN WITNESS WHEREOF, City, Authority and Owner have signed this First Amendment as of the date set forth above. ATTEST: By:-------------­Lisa Lane Barnes, City Clerk APPROVED AS TO FORM: f...A-t� {,.., Michael J. Vigliotta, City Attorney ATTEST: By:-------------­Lisa Lane Barnes, Authority Secretary APPROVED AS TO FORM: P�D� fa.. Michael J. Vigliotta Authority Counsel 882/020587-0 I 53 22702593.6 a09/24/25 "CITY" CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By: ____________ _ Travis Hopkins City Manager "AUTHORITY" HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic By: ____________ _ Travis Hopkins Executive Director -3- 13 14 882/0205 8 7 -0 I 53 22702593.6 a09/09/25 "OWNER" BEACH HOUSIN G PART NERS LP, a Cali fornia limited partnership By: JHC-B each LLC, -4- a California limited liability company i ts Managing General Partner By: Jamboree Housing Corporation, a Cal ifornia nonprofi t public be nefit ,o,po.-.tionffi •' k , By. -~·-----~~---­ Name: M i c hael Mass ie Title : Executive Vice President and Chief Development Officer 15 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: THE CITY OF HUNTINGTON BEACH 2000 Main Street Huntington Beach, CA 92648 Attn: City Manager SP ACE ABOVE THIS LINE FOR RECORDER'S USE APN: 159-031-18 FREE RECORDING REQUESTED (Gov't Code Section 27383) FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT CONTAINING COVENANTS (INCLUDING RENTAL RESTRICTIONS) (18431 Beach Boulevard) THIS FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT CONTAINING COVENANTS (INCLUDING RENTAL RESTRICTIONS) (the "First Amendment") dated as of _____ 2025, is entered into by and between BEACH HOUSING PARTNERS LP, a California limited partnership ("Owner"), THE HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic ("Authority"), and THE CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California ("City"). RECITALS The following Recitals are a substantive part of this First Amendment. Capitalized terms used in these Recitals and not otherwise defined shall have the meaning set forth in the Agreement (defined below). A. On or about January 5, 2021, City, Authority and Owner entered into that certain Affordable Housing Agreement (the "Affordable Housing Agreement"), pursuant to which, among other things, City provided certain financial assistance to Owner to assist Owner to construct a forty-three ( 43) unit senior affordable housing development known as "Pelican Harbor" (the "Project"), on certain real property located at 18431 Beach Boulevard, in the City of Huntington Beach, State of California. B. At the original Closing (as defined in the Affordable Housing Agreement), City, Authority and Owner entered into that certain Amended and Restated Agreement Containing Covenants (Including Rental Restrictions, dated February 1, 2022, which was recorded on February 4, 2022 in the Official Records of Orange County as Instrument No. 2022000048870 (the "Agreement"). 882/020587-0153 22709557.2 a09/08/25 16 C. Owner completed construction of the Project on November 26, 2024, as evidenced by City's issuance of a certificate of occupancy, and is pursuing Conversion (as defined in the Affordable Housing Agreement). D. Owner's construction and permanent financing are funded with proceeds of mortgage revenue bonds issued by the California Municipal Finance Authority, and thereafter loaned to Owner by U.S. Bank National Association, as "Funding Lender." The original TEFRA hearing authorizing issuance of the bonds has expired, resulting in the need for a new TEFRA hearing to be held by City. E. City has agreed to hold the TEFRA hearing provided Owner agree to certain changes to the terms of the City and Authority loan documents, as further set forth herein and in certain amendments to the Affordable Housing Agreement, "HOME Note" (as defined in the Affordable Housing Agreement), and the "Inclusionary Note" (as defined in the Affordable Housing Agreement), all of which amendments are to be entered into concurrently herewith. AGREEMENT: NOW, THEREFORE, City, Authority and Owner hereby agree as follows: 1. The Agreement is hereby amended to change the "Term" thereof to the period commencing on date City issued a certificate of occupancy for the Project and ending ninety-nine (99) years thereafter (i.e., on November 26, 2123). 2. Except as expressly modified by this First Amendment, all of the provisions of the Agreement remain in full force and effect and shall govern the relationship of the Parties. 3. This First Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 882/020587-0153 22709557 .2 a09/08/25 [End-Signature Page Follows] -2- 17 IN WITNESS WHEREOF, City, O wner and Authority have ente red into thi s First Amendment as of the date set forth above. "CITY" C ITY OF HUNTINGTON BEAC H By: ____________ _ Travis Hopkins City Manager A TTEST: By:----------­ Li sa Lane Barnes, City Cle rk APPROVED AS TO FORM: By: p __,,\.., ~ p-..,.. Michae l J . Vigliotta City Attorney "AUTHORITY" HUNTINGTON BEACH HOUSING AUTHORITY, a public body corporate and politi c By:. ____________ _ Travis Ho pkins Execu tive Director ATTEST: By:-----------­ Lisa Lane Barnes , Authority Secretary A PPROVED AS TO FORM : f..A-~ By: _________ _ ;..Mic hael J. V ig li otta Au thority Counsel 882/020587-0 I 53 22709557 .2 a09/24/25 "OWNER" BEAC H HO USING PARTNE RS L P a California li mited pa1tnership By: Its: -3 - JHC-Beach LLC, a Californ ia limited lia bility company Managing General Partner By: Jamboree Housing Corporation, a California nonprofit pub lic benefit co rporation ::. M&Al ~ Michael Ma ssie ' Executive Vice President and Chief Deve lopmen t Officer 18 A Notary Publ ic or other officer completing this ce1ti fic ate ve r ifies only the identity of the in di v idual who s ig ne d the doc um ent to whi ch this certificate is attached , and not the truthfulness , accuracy, o r va lidity of that d ocument. State of Cal ifornia tt.O County of ~O_._(--=-(A_Yl--1~---- 0n "fWS . tojz(y0~ ) ) -l nsen 9jl me and title o f t he officer) Notary Publi c , personally appeared t'J\ \ lhfA.e tJl Qc,s 1..z... who proved to me on the bas is of satisfactory ev id ence to be the person(s) whose name (s ) is /are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in h is/he r/their auth o ri zed capac ity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted , executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Cal ifornia that the fore goi n g paragraph is true and co r rect. WITNESS my hand and official seal. Sign ature_..,_~__.__ _ ___;'--"-----------(Seal) 882/020587 -0 153 227095 57.2 a09/08/25 Q,--I ; ' COMM, #2527809 f Notary Publio-Catlfomla ; . • · ORANGE COUNTY f l My Comm. ExplresJuty 21, 20291 19 A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. State of California County of ----------- ) ) On ____________ , before me, _______________ _ (insert name and title of the officer) Notary Public, personally appeared ______________________ _ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PEN AL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature ________________ _ 882/020587-0153 22709557.2 a09/08/25 (Seal) 20 Exhibit "A" LEGAL DESCRJPTION REAL PROPERTY IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRJBED AS FOLLOWS: PARCEL 2, IN THE CITY OF HUNTINGTON BEACH, COUNTY OF ORANGE, ST ATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 76, PAGE 4 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 159-031-18 882/020587-0] 53 22709557.2 a09/08/25 Exhibit "A" 21 FIRST AMENDMENT TO RESIDUAL RECEIPTS PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA This FIRST AMENDMENT TO RESIDUAL RECEIPTS PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH ("First Amendment No. l") is made and entered into as of ______ , 2025 ("Effective Date") by and between BEACH HOUSING PARTNERS LP, a California limited partnership ("Borrower"), and CITY OF HUNTINGTON BEACH, a municipal corporation of the state of California ("City"). The following Recitals are a substantive part of this First Amendment. Capitalized terms used in these Recitals and not otherwise defined shall have the meaning set forth in the Agreement ( defined below). A. On or about January 5, 2021, City, the Huntington Beach Housing Authority, and Borrower entered into that certain Affordable Housing Agreement (the "Agreement"), pursuant to which, among other things, City provided certain financial assistance to Borrower to assist Borrower to construct a forty-three (43) unit senior affordable housing development known as "Pelican Harbor" (the "Project"), on certain real property located at 18431 Beach Boulevard, in the City of Huntington Beach, State of California. B. At the Closing, Borrower executed that certain Residual Receipts Promissory Note Secured by Deed of Trust to the City of Huntington Beach, California, dated February 1, 2022, to evidence and set forth the repayment terms of the HOME Loan (the "HOME Note"). C. Borrower has completed construction of the Project, and is pursuing Conversion. D. Borrower's construction and permanent financing are funded with proceeds of mortgage revenue bonds issued by the California Municipal Finance Authority, and thereafter loaned to Borrower by U.S. Bank National Association, as "Funding Lender." The original TEFRA hearing authorizing issuance of the bonds has expired, resulting in the need for a new TEFRA hearing to be held by City. E. City has agreed to hold the TEFRA hearing provided Borrower agree to certain changes to the terms of the City and Authority loan documents, as further set forth herein and in certain amendments to the Agreement, Amended and Restated Covenants, and the Inclusionary Note, all of which amendments are to be entered into concurrently herewith. AGREEMENT: NOW, THEREFORE, City and Owner hereby agree as follows: 1. The HOME Note is hereby amended to provide that commencing in the twentieth (20th ) year following the year in which the Occupancy Date occurs, the HOME Note 882/020587-0153 22705364.2 a09/08/25 22 shall accrue simple interest at the rate of five percent (5%) per annum on the principal amount outstanding. 2. The HOME Note is hereby amended to change the "Maturity Date" to the ninety-ninth (99th ) anniversary of the Occupancy Date. 3. Except as expressly modified by this First Amendment, all of the provisions of the HOME Note remain in full force and effect and shall govern the relationship of the Parties. 4. This First Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 882/020587-0153 22705364.2 a09/08/25 [End-Signature Page Follows] -2- 23 IN WITNESS WHEREOF, City and Owner each hereby represents that it has read this First Amendment , understands it , and hereby executes this First Amendment to be effective as of the day and year first written above . ATTEST: By: ___________ _ Lisa Lane Barnes , City Clerk APPROV E D AS TO FORM: ?-<-~ h,Michael J. Vigliotta, City Attorney ATTE ST: By:-----------­ Lisa Lane Barnes, Authority Secretary APPROVED AS TO FORM: . f, Michael J. Vigliotta Authority Counsel 882 /020587 -0 I 53 2270536 4 .2 a09 /24 /25 "CITY" CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By : ______________ _ Travis Hopkins City Manager "AUTHORITY" HUNTINGTON BEACH HOUSING AUTHORITY, a public body , corporate and politic By : ______________ _ Travis Hopkins Executive Director -3- 24 8 82/020587-0 153 22709602.2 a09/08/2 5 "OWNER" BEACH HOUSING PARTNERS LP, a California lim ited partners hip By: JHC-B each LLC , -4- a Californi a limited liability company its Manag ing General Partner By: Jamboree Housing Corporation, a Cali fornia nonprofit pu b lic benefit corport on it By: /l Name: Michael Massie Title : E xecutive Vice Pres ident and Chief Developme nt Officer 25 FIRST AMENDMENT TO RESIDUAL RECEIPTS PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH, CALIFORNIA This FIRST AMENDMENT TO RESIDUAL RECEIPTS PROMISSORY NOTE SECURED BY DEED OF TRUST TO THE CITY OF HUNTINGTON BEACH ("First Amendment No. 1") is made and entered into as of ______ , 2025 ("Effective Date") by and between BEACH HOUSING PARTNERS LP, a California limited partnership ("Borrower"), and CITY OF HUNTINGTON BEACH, a municipal corporation of the state of California ("City"). The following Recitals are a substantive part of this First Amendment. Capitalized terms used in these Recitals and not otherwise defined shall have the meaning set forth in the Agreement ( defined below). A. On or about January 5, 2021, City, the Huntington Beach Housing Authority, and Borrower entered into that certain Affordable Housing Agreement (the "Agreement"), pursuant to which, among other things, City provided certain financial assistance to Borrower to assist Borrower to construct a forty-three (43) unit senior affordable housing development known as "Pelican Harbor" (the "Project"), on certain real property located at 18431 Beach Boulevard, in the City of Huntington Beach, State of California. B. At the Closing, Borrower executed that certain Residual Receipts Promissory Note Secured by Deed of Trust to the City of Huntington Beach, California, dated February 1, 2022, to evidence and set forth the repayment terms of the Inclusionary Loan (the "Inclusionary Note"). C. Borrower completed construction of the Project on November 26, 2024, as evidenced by City's issuance of a certificate of occupancy, and is pursuing Conversion. D. Borrower's construction and permanent financing are funded with proceeds of mortgage revenue bonds issued by the California Municipal Finance Authority, and thereafter loaned to Borrower by U.S. Bank National Association, as "Funding Lender." The original TEFRA hearing authorizing issuance of the bonds has expired, resulting in the need for a new TEFRA hearing to be held by City. E. City has agreed to hold the TEFRA hearing provided Borrower agree to certain changes to the terms of the City and Authority loan documents, as further set forth herein and in certain amendments to the Agreement, Amended and Restated Covenants, and the HOME Note, all of which amendments are to be entered into concurrently herewith. AGREEMENT: NOW, THEREFORE, City and Owner hereby agree as follows: 1. The Inclusionary Note is hereby amended to provide that commencing in the twentieth (20th ) year following the year in which the Occupancy Date occurs, the Inclusionary 882/020587-0153 22709602.2 a09/08/25 26 Note shall accrue simple interest at the rate of five percent ( 5%) per annum on the principal amount outstanding. 2. The Inclusionary Note is hereby amended to change the "Maturity Date" to the ninety-ninth (99 th) anniversary of the Occupancy Date (i.e., November 26, 2123). 3. Except as expressly modified by this First Amendment, all of the provisions of the Inclusionary Note remain in full force and effect and shall govern the relationship of the Parties. 4. This First Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. 882/020587-0153 22709602.2 a09/08/25 [End-Signature Page Follows] -2- 27 IN WITNESS WHEREOF, City and Owner each hereby represents that it has read this First Amendment, understands it, and hereby executes this First Amendment to be effective as of the day and year first written above. ATTEST: By: _________ _ Lisa Lane Barnes, City Clerk APPROVED AS TO FORM : /-Michael J. Vigliotta, City Attorney ATTEST: By:-----------­ Lisa Lane Barnes , Authority Secretary APPROVED AS TO FORM : \ (?A,~ ~Michael J. Vigliotta Authority Counsel 88 2/0205 87-015 3 2270960 2 .2 a09/24/2 5 "CITY" CITY OF HUNTINGTON BEACH, a municipal corporation of the State of California By: ______________ _ Travis Hopkins City Manager "AUTHORITY" HUNTINGTON BEACH HOUSING AUTHORITY, a public body, corporate and politic By : ______________ _ Travis Hopkins Executive Director -3- 28 8 82/020587-0 153 22709602.2 a09/08/2 5 "OWNER" BEACH HOUSING PARTNERS LP, a California lim ited partners hip By: JHC-B each LLC , -4- a Californi a limited liability company its Manag ing General Partner By: Jamboree Housing Corporation, a Cali fornia nonprofit pu b lic benefit corport on it By: /l Name: Michael Massie Title : E xecutive Vice Pres ident and Chief Developme nt Officer TEFRA Public Hearing for Pelican Harbor Senior Housing Project City Council October 21, 2025 29 Background • November 4, 2019, the City Council approved an Acquisition Loan Agreement with Jamboree Housing Corporation to purchase a 0.78- acre parcel of vacant land located at 18431 Beach Boulevard for $3 million consisting of HOME funds and Inclusionary Housing funds. • The Project consists of the development of a 43-unit senior affordable housing project (occupied in January 2025). • On January 19, 2021, the City Council approved an Affordable Housing Agreement with Beach Housing Partners, LP, which included the following affordable housing requirements: The Project will be affordable for 60 years 33 units will be affordable to extremely low-income households (less than 30% of the area median income) 9 units will be affordable to very low-income households (less than 50% of the area median income) One unit will be an on-site manager’s unit 30 Background • The Federal Tax Equity and Fiscal Responsibility Act (TEFRA) requires that a public hearing be held in connection with the issuance of tax-exempt bonds and is held in the jurisdiction the Project is located. • After the TEFRA hearing on December 21, 2021, the City Council approved a tax-exempt bond issuance of up to $20 million for Project construction and permanent financing. • The tax-exempt bonds were eventually issued by California Municipal Finance Authority in the amount up to $20 million. 31 Background • In addition to $3 million in City loans, the Project also included public funding sources from State and County that act as equity while the tax-exempt bonds serve primarily as the construction/permanent loan. • The use of tax-exempt bonds offer lower interest rates compared to regular bank loan, thus providing cost savings and increased leverage of the public funding sources. • The City of Huntington Beach did not issue the tax-exempt bonds for the Project as the repayment of the bonds are the sole obligation of the Developer through the sale of tax credit equity and rental revenues from the Project. 32 Proposed TEFRA Hearing • A portion of the $20 million in tax-exempt bonds will be outstanding at permanent conversion to fund the permanent loan. • The TEFRA needs to be current during conversion from construction to permanent financing and maintain the tax-exempt status. • This action would create the need to hold another TEFRA hearing as the prior TEFRA hearing term expired after three years on December 21, 2024. • The Developer has requested that another TEFRA hearing be held to address the long-term conversion of a portion of the bond proceeds into the permanent loan, and that the City Council consider this action. • There are no additional funds allocated as a result of this TEFRA hearing and no additional bonds will be issued. 33 Proposed Amendments In return for hosting the TEFRA hearing, the City would receive the following concessions from the Developer: • The term of the Project’s affordability covenants shall be increased from 60 years to 99 years. • Developer annually pays the City a $5,000 fee for the term of the Project’s affordability covenants to be used for housing or homelessness prevention activities. • The simple interest on the HOME Loan and Inclusionary Loan shall be increased at Year 20 of the respective Note terms from three (3) percent to five (5) percent. 34 Recommendations • Conduct a TEFRA public hearing; and, • Adopt Resolution No. 2025-65 approving CMFA’s continued issuance of Tax Exempt Bonds in an Amount not to exceed $20,000,000 for the Pelican Harbor Apartments; and, • Adopt the First Amendments to the Affordable Housing Agreement, Amended and Restated Agreement Containing Covenants, City HOME Promissory Note, and City Inclusionary Housing Promissory Note. • Authorize the City Manager and Housing Authority Executive Director, or their designee, to execute the above documents. 35 Questions? 36 October 21, 2025 Mayor Pat Burns Members of the City Council City of Huntington Beach 2000 Main Street Huntington Beach, CA 92648 RE: Item #10 – Tax and Equity Fiscal Responsibility Act (TEFRA) Public Hearing for the Pelican Harbor Apartments Dear Mayor Burns and Honorable Members of the City Council, The Kennedy Commission (the Commission) is a broad-based coalition of residents and community organizations that advocates for the production of homes affordable for families earning less than $30,000 annually in Orange County. Formed in 2001, the Commission has been successful in partnering and working with Orange County jurisdictions to create effective housing and land-use policies that have led to the new construction of homes affordable to lower-income working families. We are writing to support the proposed authorization of up to $20 million in tax-exempt bonds to refinance the acquisition of the Pelican Harbor Apartments (formerly Huntington Beach Senior Housing). Taking proactive steps to facilitate affordable housing assets and for pursuing financing tools that strengthen affordable housing is a crucial part of addressing affordability and accessibility. This bond funding is a critical investment in maintaining the City’s affordable housing stock and ensuring long-term housing stability for vulnerable residents. The Pelican Harbor Apartments have long served as a vital housing resource for seniors who depend on stable, affordable rent levels to remain housed within their community. As housing costs continue to rise across Orange County, the preservation of affordable housing is just as important as the creation of new units. Funding mechanisms such as this work to support quality affordable housing developments and uphold the City’s commitment to maintaining inclusive housing opportunities for residents of all income levels. Developments like Pelican Harbor are essential to protecting seniors from being priced out of their community due to financial strain or housing insecurity. We urge the City Council to approve the issuance of tax-exempt bonds for the Pelican Harbor Apartments and to continue to support affordable housing stock in Huntington Beach. Doing so Meeting Date:_____________ Agenda Item No. ___________ Supplemental Communication 10/21/25 25-801 37 ~Kennedy COMMISSION www.kennedycommt slon.org I 770 I Cowlllll Ave., Sullc 2.00 Ir.-inc, CA 9"26 l 4 1>49 250 0909 will ensure continued stability for senior households and help the City advance its long-term housing goals. We look forward to working with the City of Huntington Beach in its continued action to address housing needs and ensuring that the available housing stock supports all members of the community. If you have any questions, please feel free to contact me at (949) 250-0909 or cesarc@kennedycommission.org. Sincerely, Cesar Covarrubias Executive Director 38