Title
Adoption of Resolution Authorizing the City Manager to Execute a Public Housing Cooperation Agreement with the Housing Authority of the City of Alameda, for a Term of 36 Months and up to 24 Months of Extensions for a Total Potential Term of 60 Months, for Independence Plaza Operations at No Cost to the City of Alameda, and to Administratively Extend the Term of the Agreement as Needed; and to Allow the Housing Authority to Secure Replacement Funding for Operations. (Housing and Human Services 10021833)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The Housing Authority of the City of Alameda (AHA) requests that City Council approve a Public Housing Cooperation Agreement for the Independence Plaza site (Exhibit 1), so that Independence Plaza will meet U.S. Department of Housing and Urban Development (HUD) requirements for participation in its Faircloth to Rental Assistance Demonstration (RAD) program. Independence Plaza is an affordable housing complex with 186 units specifically for seniors, located at 703 Webster Street at Wilma Chan Way and Atlantic Avenue. The City of Alameda (City) Successor Agency to the Community Improvement Commission (SACIC) currently subsidizes Independence Plaza in the amount of $2,886,976 annually. This payment schedule expires on January 1, 2027 as set forth on the SACIC Recognized Obligation Payment Schedule (ROPS). After several years of working to identify a replacement funding source, AHA staff has identified the Faircloth to RAD program has a replacement funding source to ensure long term preservation and affordability.
BACKGROUND
HUD’s Faircloth to RAD program is an innovative new means of obtaining additional affordable housing funds for Alameda, which ultimately will take the form of Section 8 project-based voucher (PBV) funding. Faircloth to RAD allows local housing authorities such as AHA, to add replacement Public Housing units to its inventory up to the number of Public Housing units a local housing authority had as of October 1, 1999. AHA currently has a Faircloth unit limit of 120 units. Upon its acceptance of the Independence Plaza units as Public Housing units, HUD will convert the 186 units at Independence Plaza to long-term PBV units.
AHA proposes to use its Faircloth authority of 120 units for PBV at Independence Plaza. The new PBV funding will enable AHA to reduce tenant rent burdens for current and future tenants living at the site, operate Independence Plaza on a more sustainable basis for the long term, and possibly receive funding that AHA could use for additional affordable housing purposes.
On January 19, 1983, the City approved Resolution No. 9967 (Exhibit 2) which approved a Cooperation Agreement between the Housing Authority of the City and the City of Alameda for Independence Plaza (Exhibit 3).
The SACIC currently subsidizes Independence Plaza in the amount of $2,886,976 annually. This payment is included in the ROPS as part of the outstanding debt from the Redevelopment Agency dissolution. The payment schedule for this project expires January 1, 2027 and no new obligations can be added to the ROPS.
DISCUSSION
A Public Housing Cooperation Agreement, Exhibit 1, is required between Public Housing authorities and their localities for all Public Housing units. Its purpose is to establish that Public Housing will be tax-exempt, which is true in any event under California state law, and that the locality will provide these properties and their tenants public services and facilities of the same character and to the same extent as furnished without cost or charge to other dwellings and inhabitants throughout the locality.
The AHA does not need to undertake physical work to develop these units as Public Housing units at this time. Although capital work has been completed by AHA, this HUD funding source may also allow AHA to refinance the project for improvements in the future, if necessary. The Cooperation Agreement would apply only to Independence Plaza operation as Public Housing. The Cooperation Agreement is a requirement of HUD for AHA to receive the Faircloth to RAD funding (also known as Section 9). AHA will then convert those funds to PBV (also known as Section 8) and use the funding for operational costs since the SACIC payment schedule expires January 1, 2027. The AHA is working with HUD to limit the amount of time it takes to convert the units to PBV. Once converted to PBV, the Cooperation Agreement will no longer be necessary. Therefore, the Cooperation Agreement includes a provision that the City Manager may terminate the agreement without returning to City Council. Prompt action to adopt the Cooperation Agreement is critical to complete this process, which would allow HUD to commit PBV funds beginning in 2025.
The initial term of this Agreement is for 36 months, which may be extended two (2) times for up to twelve (12) months each time upon the mutual written agreement of the parties. Should the term of this Agreement need to be extended, without changing any other provision of the Agreement as approved by the City Council, staff further requests that City Council grant the City Manager the authority to administratively extend the term without the need to return to City Council for further approval.
ALTERNATIVES
• Approve the Cooperation Agreement with the AHA for Independence Plaza.
• Do not approve the Cooperation Agreement with AHA for Independence Plaza. This would result in AHA being unable to apply for the Faircloth to RAD funding from HUD and AHA staff would need to seek other funding to replace the SACIC funding that expires January 1, 2027. If no other additional funding is secured, then the continued operation of Independence Plaza would be in jeopardy of closure.
FINANCIAL IMPACT
There is no financial impact to the City from approval of this Cooperation Agreement.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action supports the City’s Strategic Plan Priority to House All Alamedans and End Homelessness.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in California Environmental Quality Act (CEQA) Guidelines Section 15378 and therefore no further CEQA analysis is required.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a resolution authorizing the City Manager to execute a Public Housing Cooperation Agreement with the Housing Authority of the City of Alameda, for a term of 36 months and up to 24 months of extensions for a total potential term of 60 months, for Independence Plaza Operations at no cost to the City of Alameda, and to administratively extend the term of the Agreement as needed; and to allow the Housing Authority to secure replacement funding for operations.
Respectfully submitted,
Amy Wooldridge, Assistant City Manager
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. Cooperation Agreement for Independence Plaza
2. City of Alameda Resolution No. 9967
3. 1983 Cooperation Agreement for Independence Plaza