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CC SR 20250916 C - AMCAL Loan Senior Housing CITY COUNCIL MEETING DATE: 09/02/2025 AGENDA REPORT AGENDA HEADING: Consent Calendar AGENDA TITLE: Consideration to receive updated information on the transfer of operator interests in Crestridge Senior Apartments from AMCAL to TruAmerica. RECOMMENDED COUNCIL ACTION: (1) Receive and file the Consent Letter, prepared by the City Attorney’s Office and signed by City Manager Mihranian, related to the transfer of operator interests in Crestridge Senior Apartments from AMCAL Multi-Housing, Inc.’s Administrative General Partner Interest to TA MIM Mirandela LLC.; and, (2) Replace the Nonprofit General Partnership from Las Palmas Foundation to AHA MGP Los Angeles IX, LLC. FISCAL IMPACT: None. Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Anita Luck, Special Counsel, Aleshire & Wynder, LLP AL Vina Ramos, Director of Finance VR Brandy Forbes, Director of Community Development REVIEWED BY: Catherine Jun, Deputy City Manager CJ APPROVED BY: Ara Mihranian, AICP, City Manager ATTACHED SUPPORTING DOCUMENTS: A. August 14, 2025 Letter Consent (page A-1) B. Mirandela Letter to City (page B-1) BACKGROUND: In 2009, the former Rancho Palos Verdes Redevelopment Agency (“RDA”) entered into a Disposition and Development Agreement (“DDA”) with AMCAL Rancho Mirandela Fund, L.P. (“Mirandela”) regarding the disposition of certain land to Mirandela to develop 1 a senior housing project called the Crestridge Senior Housing Project (“Project”) at 555 Crestridge Road. The Project consisted of 35 senior apartments, of which 34 are restricted to low- and moderate-income levels (including extremely low, very low, and low income). Furthermore, the DDA had certain limitations on the transfer of interests in the Project until completed. The Project was completed in December 2010 and has been operating for approximately 15 years. In connection with the construction of the Project, the RDA loaned $6,790,000 to Mirandela, pursuant to a Promissory Note executed by both parties (the “Note”). The Note was payable from excess cashflow from the project (primarily from rents) after payment of all other obligations. The current balance of the Loan is now $9,059,102 (principal and accrued interests) and has since been assigned to the City of Rancho Palos Verdes pursuant to that Assignment of Housing Loans dated October 2, 2012. The principal and accrued interests balance is recorded as a note receivable in the City’s Low Moderate-Income Housing (Fund 336). The fund was established to account for low- and moderate-income housing assets that were transferred to the City after electing to retain the housing assets and functions of the former RDA, which was dissolved on January 31, 2012. The loan accrues at a simple interest rate of 3% per annum and is due on December 22, 2065. DISCUSSION: Recently, Mirandela sent the City a letter (Attachment B) regarding the following: • The sale of AMCAL Multi-Housing, Inc.’s Administrative General Partnership interest in Mirandela to TA MIM Mirandela LLC (“AGP”); and • The replacement of AMCAL Mirandela Fund L.P.’s nonprofit Managing General Partner from Las Palmas Foundation to AHA MGP Los Angeles IX, LLC . pursuant to Section 16901 et seq. of the California Corporations Code. This transaction is part of a much larger transaction in which two firms, Manulife and TruAmerica Multifamily, a national owner and operator of multifamily units (“TruAmerica”), are entering into a joint venture to invest in affordable multifamily properties. Manulife, as one of the largest life insurance companies in the world, is entering into a joint venture with TruAmerica due to their expertise in multifamily real estate. Furthermore, Manulife ultimately has an ownership stake of over 90% of the incoming AGP. Thus, although the property management company on Mirandela remains the same, TruAmerica will be taking over AMCAL’s role as the overall operator due to its experience in multifamily asset management. Manulife will be providing capital for this overall portfolio transaction. As part of the review process, the City Staff has also reviewed the Manulife financials. The City Manager, as the Chief Administrative Director of the Successor Agency to the Former RDA, executed a Consent Letter (Attachment A) acknowledging the transfer of the interests. Pursuant to the Consent Letter, none of City’s interests or priorities of its liens related to the project, including the Agency Note or any regulatory agreement or 2 deed of trust is affected by the action. There is no language in the DDA or loan requiring consent for transfer of their interest following completion of the project, but the City has accommodated TruAmerica’s request to provide the letter, allowing the transaction to proceed without delay. Overall, this change has no impact on the City’s Successor Agency loan, other than the shift in ownership and related name adjustments. The following assurances were included in the Consent Letter (Attachment A): • The City will review the financial statements of Manulife, the majority investor in the Administrative General Partner, which is a multibillion-dollar investment fund. • The Partners confirm, through their signatures, that the City’s, Successor Agency’s and Housing Authority’s interests in loan repayments will not be diluted or adversely affected by the sale of AMCAL Multi-Housing, Inc.’s General Partner interest to TA MIM Mirandela LLC, or the replacement of Las Palmas Foundation with AHA MGP Los Angeles IX, LLC as Managing General Partner. • All agreements related to the project, including the regulatory, development, and loan agreements, will remain in full force and effect, binding on the relevant entities, and retain the same priority as before the ownership change. • The ownership change is part of TruAmerica’s expansion into affordable housing, as it continues to grow its portfolio as one of the largest multifamily real estate asset managers in the U.S. CONCLUSION: The City Council is being asked to receive and file the Consent Letter related to the transfer of operator interests in Crestridge Senior Apartments from AMCAL to TruAmerica. ALTERNATIVES: In addition to Staff’s Recommendations, the following alternative actions is available for the City Council’s consideration: 1. Take other action as deemed appropriate. 3 ADMINISTRATION DEPARTMENT CITY MANAGER’S OFFICE 30940 HAWTHORNE BLVD. / RANCHO PALOS VERDES, CA 90275-5391 / (310) 544-5207 / FAX (310) 544-5291 / WWW.RPVCA.GOV August 14, 2025 Michael McCloud, Vice President of Asset Management AMCAL Multi-Housing, Inc. 30141 Agoura Road, Suite 100 Agoura Hills, California 91301-4332 SUBJECT: Lender consent to sale of AMCAL Multi-Housing, Inc.’s Administrative General Partner Interest to TA MIM Mirandela LLC and replace the Nonprofit General Partnership from Las Palmas Foundation to AHA MGP Los Angeles IX, LLC Dear Mr. McCloud: We are in receipt of AMCAL’s letter dated October 7, 2024, regarding the sale of AMCAL Multi-Housing, Inc.’s Administrative General Partnership interest to TA MIM Mirandela LLC and the replacement of AMCAL Mirandela Fund L.P.’s nonprofit Managing General Partner from Las Palmas Foundation to AHA MGP Los Angeles IX, LLC pursuant to Section 16901 et seq. of the California Corporations Code. On March 20, 2009, AMCAL Mirandela Fund, L.P. executed a loan with Rancho Palos Verdes Redevelopment Agency in the amounts of $6,790,000 (the “Loan”) for acquisition and new construction of the Mirandela Senior Apartments located at 5555 Crestridge Rd, Rancho Palos Verdes, CA 90275. The Loan has since been assigned to the City of Rancho Palos Verdes pursuant to that Assignment of Housing Loans dated October 2, 2012. As of this date, AMCAL Mirandela Fund, L.P. is owned by AMCAL Multi-Housing, Inc., a California corporation, its Administrative General Partner and Las Palmas Foundation, a California nonprofit public benefit corporation, its nonprofit Managing General Partner. In accordance with the Loan, the City of Rancho Palos Verdes hereby consents to the sale of AMCAL Multi-Housing, Inc.’s Administrative General Partner interest to TA MIM Mirandela LLC, and to the replacement of Las Palmas Foundation, nonprofit Managing General Partner with AHA MGP Los Angeles IX, LLC. A-1 Lender Consent to Sale of AMCAL Multi-Housing, Inc.’s Administrative General Partner Interest August 14, 2025 Page 2 The consent herein is based on the following review and assurances of the new limited and general partners (collectively the “Partners”) of AMCAL Multi-Housing, Inc., as shown by their duly authorized signatures below: a)review by the City of the financial statements of Manulife which entity is a majority investor in the Administrative General Partner or its subsidiary and is a multibillion dollar investment fund; b)assurances by the Partners, as evidenced by their signatures below, that the interests of the City, Successor Agency or Housing Authority in the Loan’s repayments are not being diluted or adversely affected by the sale of the interests of the AMCAL Multi-Housing, Inc.’s Administrative General Partner interest to TA MIM Mirandela LLC, and to the replacement of Las Palmas Foundation, nonprofit Managing General Partner with AHA MGP Los Angeles IX, LLC. c)all the agreements related to the project and development including the regulatory agreement, development agreement, loan agreement and related agreements which affect the City, the Successor Agency and Housing Authority remain in full force and effect and are binding on the entities therein at the same priority as prior to the change of ownership. d)the change is taking place because TruAmerica, as of the largest multifamily real estate asset managers in the United States, is expanding its asset base to include affordable housing. If you have questions or concerns, please contact Brandy Forbes at 310-544-5287 or at bforbes@rpvca.gov. Sincerely, ARA MIHRANIAN, CITY MANAGER A-2 Lender Consent to Sale of AMCAL Multi-Housing, Inc.’s Administrative General Partner Interest August 14, 2025 Page 3 Accepted, Agreed to and assurances confirmed by: AMCAL Mirandela Fund L.P. a California limited partnership By: AMCAL Multi-Housing, Inc., a California corporation Its: Administrative General Partner By: ____________________ Name: ____________________ Title: ____________________ TA MIM Mirandela LLC a Delaware limited liability company _________________________________________ Tammi Warner, Authorized Signatory AHA MGP Los Angeles IX, LLC a California limited liability company By: Affordable Housing Access, Inc. a California nonprofit public benefit corporation Its: Sole Member and Manager By: ____________________ Name: ____________________ Title: ____________________ A-3 4922-1723-1970.1 August 21, 2025 Michael McCloud, Vice President of Asset Management AMCAL Multi-Housing, Inc. 30141 Agoura Road, Suite 100 Agoura Hills, California 91301-4332 SUBJECT: Lender consent to sale of AMCAL Multi-Housing, Inc.’s Administrative General Partner Interest in AMCAL Mirandela Fund, LP to TA MIM Mirandela LLC and replace the Nonprofit General Partnership from Las Palmas Foundation to AHA MGP Los Angeles IX, LLC Dear Mr. McCloud: We are in receipt of AMCAL’s letter dated October 7, 2024, regarding the sale of AMCAL Multi- Housing, Inc.’s Administrative General Partnership interest in AMCAL Mirandela Fund, LP to TA MIM Mirandela LLC and the replacement of AMCAL Mirandela Fund L.P.’s nonprofit Managing General Partner from Las Palmas Foundation to AHA MGP Los Angeles IX, LLC pursuant to Section 16901 et seq. of the California Corporations Code. On March 20, 2009, AMCAL Mirandela Fund, L.P. executed a loan with Rancho Palos Verdes Redevelopment Agency in the amounts of $6,790,000 (the “Loan”) for acquisition and new construction of the Mirandela Senior Apartments located at 5555 Crestridge Rd, Rancho Palos Verdes, CA 90275. The Loan has since been assigned to the City of Rancho Palos Verdes pursuant to that Assignment of Housing Loans dated October 2, 2012. As of this date, AMCAL Mirandela Fund, L.P. is owned by AMCAL Multi-Housing, Inc., a California corporation, its Administrative General Partner and Las Palmas Foundation, a California nonprofit public benefit corporation, its nonprofit Managing General Partner. In accordance with the Loan, the City of Rancho Palos Verdes hereby consents to the sale of AMCAL Multi-Housing, Inc.’s Administrative General Partner interest to TA MIM Mirandela LLC, and to the replacement of Las Palmas Foundation, nonprofit Managing General Partner with AHA MGP Los Angeles IX, LLC. The consent herein is based on the following review and assurances of the new limited and general partners (collectively the “Partners”) of AMCAL Mirandela Fund, LP, as shown by their duly authorized signatures below: a) review by the City of the financial statements of Manulife which entity is a majority investor in the Administrative General Partner or its subsidiary and is a multibillion dollar investment fund; b) assurances by the Partners, as evidenced by their signatures below, that the interests of the City, Successor Agency or Housing Authority in the Loan’s repayments are B-1 Joseph M. Michaels President B-2 B-3 B-4