 |
AGENDA ITEM NO. 8.
CITY OF HAWTHORNE City Council AGENDA BILL For the meeting of 06/24/2025 Originating Department: City Attorney |
City Manager:
Department Head:
SUBJECT:
RESOLUTION NO. 8540
AUTHORIZING THE CITY MANAGER TO EXECUTE AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) AND INITIATE FUNDING COMMITMENT LETTER WITH ABODE COMMUNITIES FOR AN AFFORDABLE HOUSING DEVELOPMENT ON THE PARCEL IMMEDIATELY SOUTH OF 14115 CORDARY AVENUE.
AUTHORIZING THE CITY MANAGER TO EXECUTE AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) AND INITIATE FUNDING COMMITMENT LETTER WITH ABODE COMMUNITIES FOR AN AFFORDABLE HOUSING DEVELOPMENT ON THE PARCEL IMMEDIATELY SOUTH OF 14115 CORDARY AVENUE.
RECOMMENDED MOTION:
Staff recommends that the City Council Adopt Resolution No. 8540 and authorize the City manager to execute an Exclusive Negotiating Agreement and Initial Funding Commitment with Abode Communities for an affordable housing development on the Housing Successor Agency to the Hawthorne Community Redevelopment Agency-owned site located immediately south of 14115 Cordary Avenue.
DISCUSSION:
EXECUTIVE SUMMARY:
As part of the City’s ongoing efforts to promote the development of affordable housing on City-owned land, the City of Hawthorne issued a Notice of Funding Availability and Request for Affordable Housing Development Proposals (“NOFA/RFP”) on August 1, 2024. This NOFA/RFP aimed to create affordable housing throughout the City, including on the Housing Successor Agency to the Hawthorne Community Redevelopment Agency-owned site located immediately south of 14115 Cordary Avenue, Assessor Parcel Number 4051-030-902 (“Project Site”) and any other site identified by a developer, resulted in the City receiving 16 proposals. A selection committee composed of representatives from several City departments, as well as an affordable housing consultant (“Selection Committee”), reviewed 16 proposals for the Project Site from 16 separate development teams. No proposals were received for any developer-identified site in the City.
After reviewing all proposals and interviewing four development teams, staff recommends selecting the Abode Communities (“Abode”) development team, based on the team’s depth of experience in development and operations, the overall development and financing concepts for the site, and high-level understanding of local regulations, property management, and social services. Under the recommended proposal, Abode would manage the property once occupied. The proposed development, which may change during the development process, would provide 92 apartment homes and will be restricted to and affordable for families with incomes of no more than 80% of the area median income, as detailed in the Commitment Letter.
If approved by Council, the City would enter into an Exclusive Negotiating Agreement (“ENA”) with Abode along with a six million dollar ($6,000,000) initial funding commitment (“Commitment Letter”) of Low- and Moderate-Income Housing Asset Funds (“LMIHAF”) for the Cordary affordable housing project. The funding commitment may be adjusted later based on the updated development costs and funding sources, including the City’s funding availability. The City’s funding availability for this and other affordable housing developments includes Permanent Local Housing Allocation (“PLHA”) funds, additional LMIHAF, or other City funding sources that may become available. Abode will conduct a community outreach process to provide opportunities for community input before finalizing development concepts and designs. Once the community outreach and design processes are completed, staff would present the final development concept, design, and financial terms, including either a property sale or a long-term ground lease, for Council approval.
BACKGROUND:
The Project Site was acquired by the former Hawthorne Community Redevelopment Agency in 2011 and remained with the City in its role as the Housing Successor Agency. The City previously issued an RFP in 2019 to develop a permanent supportive housing project for veterans experiencing homelessness. A developer was chosen in December 2019, but the City and developer were unable to agree on the number of units. In 2020, the City issued another NOFA/RFP for the property’s purchase and development, but the development project with the selected developer failed to move forward in 2023. The latest NOFA/RFP for the development of this site was issued on August 1, 2024, and has resulted in the recommendation of Abode as the developer and operator of the site.
In August 2022, the City submitted the adopted 6th Cycle Housing Element Update (2021-2029) (“Housing Element”) to the California Department of Housing and Community Development. The adopted Final Housing Element emphasizes the use of City-owned sites as a key program to increase the supply of affordable housing. As land acquisition is typically a significant cost in developing affordable housing, the use of City-owned land would alleviate the impact of land cost on the feasibility of affordable housing development and allow the City’s limited resources to be used more effectively in producing affordable housing.
DISCUSSION:
The City received 16 proposals from 16 separate development teams. Each team included at least a lead developer, a social services provider, and an architect. Some of the teams included a co-developer, a landscape architect, and/or a variety of other consultants and partners. The Selection Committee, comprised of City staff from multiple departments, worked with Harris and Associates ("Harris") to evaluate the proposals, to select four development teams for interviews, and to score and rank the teams after those interviews.
Based on the conclusions of the Selection Committee regarding the development team proposals, interviews, subsequent questions/responses, and further discussion among the Selection Committee, staff recommends the selection of Abode due to the depth and breadth of the development team’s local knowledge and experience with affordable developments, the strength of their social services and property management experience, and their management philosophy.
Abode has demonstrated experience in affordable housing development and property management, having developed 81 properties and more than 4,500 units throughout its housing development portfolio. Most of its developments are located in Los Angeles County. Additionally, Abode manages 50 properties with 7,618 residents across 3,398 affordable units.
Abode was founded in 1968 and is based in the city of Los Angeles. The architects on the development team, BSB Design, are based out of the firm’s office in the city of Torrance. Abode has more than five decades of experience developing and managing homes for low- and moderate-income individuals and families of all sizes.
Abode’s proposed development team consists of the following:
Overall, the Selection Committee noted the Abode development team’s strengths in its unique understanding of the Hawthorne area, consideration of local regulations, and thoughtful leveraging of City funds. These qualities and actions, as presented in their interview, set them apart from the other NOFA/RFP respondents.
Abode’s proposal includes a thorough process to solicit feedback from the community regarding the preferred development concepts that best meet the City’s objectives and qualify for adequate private and subsidized public financing. The community outreach process will provide opportunities for community stakeholders to voice their feedback and concerns and for Abode to address them and incorporate them into the development when possible.
Staff Recommendations:
The Selection Committee found that the development team led by Abode Communities submitted a proposal that best satisfied the requirements of the NOFA/RFP evaluation criteria and would be able to develop the Project Site successfully with a process that would appropriately solicit community input and satisfy the City’s objectives for the development.
Staff recommends that Council approve the selection of the Abode Communities development team, the execution of an ENA, and the execution of a Commitment Letter Committing the LMIHAF funds as described in the Commitment Letter enables Abode to begin pursuing and securing additional funding and addresses the City’s obligation to encumber funds to avoid excess surplus penalties relating to Senate Bill 341.
As part of the City’s ongoing efforts to promote the development of affordable housing on City-owned land, the City of Hawthorne issued a Notice of Funding Availability and Request for Affordable Housing Development Proposals (“NOFA/RFP”) on August 1, 2024. This NOFA/RFP aimed to create affordable housing throughout the City, including on the Housing Successor Agency to the Hawthorne Community Redevelopment Agency-owned site located immediately south of 14115 Cordary Avenue, Assessor Parcel Number 4051-030-902 (“Project Site”) and any other site identified by a developer, resulted in the City receiving 16 proposals. A selection committee composed of representatives from several City departments, as well as an affordable housing consultant (“Selection Committee”), reviewed 16 proposals for the Project Site from 16 separate development teams. No proposals were received for any developer-identified site in the City.
After reviewing all proposals and interviewing four development teams, staff recommends selecting the Abode Communities (“Abode”) development team, based on the team’s depth of experience in development and operations, the overall development and financing concepts for the site, and high-level understanding of local regulations, property management, and social services. Under the recommended proposal, Abode would manage the property once occupied. The proposed development, which may change during the development process, would provide 92 apartment homes and will be restricted to and affordable for families with incomes of no more than 80% of the area median income, as detailed in the Commitment Letter.
If approved by Council, the City would enter into an Exclusive Negotiating Agreement (“ENA”) with Abode along with a six million dollar ($6,000,000) initial funding commitment (“Commitment Letter”) of Low- and Moderate-Income Housing Asset Funds (“LMIHAF”) for the Cordary affordable housing project. The funding commitment may be adjusted later based on the updated development costs and funding sources, including the City’s funding availability. The City’s funding availability for this and other affordable housing developments includes Permanent Local Housing Allocation (“PLHA”) funds, additional LMIHAF, or other City funding sources that may become available. Abode will conduct a community outreach process to provide opportunities for community input before finalizing development concepts and designs. Once the community outreach and design processes are completed, staff would present the final development concept, design, and financial terms, including either a property sale or a long-term ground lease, for Council approval.
BACKGROUND:
The Project Site was acquired by the former Hawthorne Community Redevelopment Agency in 2011 and remained with the City in its role as the Housing Successor Agency. The City previously issued an RFP in 2019 to develop a permanent supportive housing project for veterans experiencing homelessness. A developer was chosen in December 2019, but the City and developer were unable to agree on the number of units. In 2020, the City issued another NOFA/RFP for the property’s purchase and development, but the development project with the selected developer failed to move forward in 2023. The latest NOFA/RFP for the development of this site was issued on August 1, 2024, and has resulted in the recommendation of Abode as the developer and operator of the site.
In August 2022, the City submitted the adopted 6th Cycle Housing Element Update (2021-2029) (“Housing Element”) to the California Department of Housing and Community Development. The adopted Final Housing Element emphasizes the use of City-owned sites as a key program to increase the supply of affordable housing. As land acquisition is typically a significant cost in developing affordable housing, the use of City-owned land would alleviate the impact of land cost on the feasibility of affordable housing development and allow the City’s limited resources to be used more effectively in producing affordable housing.
DISCUSSION:
The City received 16 proposals from 16 separate development teams. Each team included at least a lead developer, a social services provider, and an architect. Some of the teams included a co-developer, a landscape architect, and/or a variety of other consultants and partners. The Selection Committee, comprised of City staff from multiple departments, worked with Harris and Associates ("Harris") to evaluate the proposals, to select four development teams for interviews, and to score and rank the teams after those interviews.
Based on the conclusions of the Selection Committee regarding the development team proposals, interviews, subsequent questions/responses, and further discussion among the Selection Committee, staff recommends the selection of Abode due to the depth and breadth of the development team’s local knowledge and experience with affordable developments, the strength of their social services and property management experience, and their management philosophy.
Abode has demonstrated experience in affordable housing development and property management, having developed 81 properties and more than 4,500 units throughout its housing development portfolio. Most of its developments are located in Los Angeles County. Additionally, Abode manages 50 properties with 7,618 residents across 3,398 affordable units.
Abode was founded in 1968 and is based in the city of Los Angeles. The architects on the development team, BSB Design, are based out of the firm’s office in the city of Torrance. Abode has more than five decades of experience developing and managing homes for low- and moderate-income individuals and families of all sizes.
Abode’s proposed development team consists of the following:
| Lead Developer | Abode Communities |
| Architect | BSB Design |
| Financial Consultant | California Housing Partnership |
| Construction Manager | AMJ Construction Management Inc. |
| Property Manager | Abode Communities |
| Resident Services Provider | Abode Communities |
| Asset Manager | Abode Communities |
Overall, the Selection Committee noted the Abode development team’s strengths in its unique understanding of the Hawthorne area, consideration of local regulations, and thoughtful leveraging of City funds. These qualities and actions, as presented in their interview, set them apart from the other NOFA/RFP respondents.
Abode’s proposal includes a thorough process to solicit feedback from the community regarding the preferred development concepts that best meet the City’s objectives and qualify for adequate private and subsidized public financing. The community outreach process will provide opportunities for community stakeholders to voice their feedback and concerns and for Abode to address them and incorporate them into the development when possible.
Staff Recommendations:
The Selection Committee found that the development team led by Abode Communities submitted a proposal that best satisfied the requirements of the NOFA/RFP evaluation criteria and would be able to develop the Project Site successfully with a process that would appropriately solicit community input and satisfy the City’s objectives for the development.
Staff recommends that Council approve the selection of the Abode Communities development team, the execution of an ENA, and the execution of a Commitment Letter Committing the LMIHAF funds as described in the Commitment Letter enables Abode to begin pursuing and securing additional funding and addresses the City’s obligation to encumber funds to avoid excess surplus penalties relating to Senate Bill 341.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
n/a
FISCAL IMPACT:
There is no immediate financial impact or budget action as a result of the recommended action. Staff would return to Council with proposed business terms associated with the proposed development, including any required investment of Housing Trust Funds or other City resources.
NOTICING PROCEDURE:
72 hours posted notice pursuant to the Ralph M. Brown Act.