Title
Adoption of Resolution Authorizing the Interim City Manager to Execute a Cooperation Agreement and Any Amendments Thereto between Eden Housing, Inc., a California Corporation, and the City of Alameda for Compliance with the Requirements of a Grant Application Under the Affordable Housing and Sustainable Communities Funding Program for: A) the 70-Unit Family Affordable Housing Project on Block 8 within Site A at Alameda Point and B) Transportation Projects (a Segment of Main Street (West Side) between Pacific and Atlantic Avenues or a Segment of Central Avenue, and Lighting Along the Cross-Alameda Trail). (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
Staff is seeking authorization for the Interim City Manager to execute a Cooperation Agreement with Eden Housing, the Site A affordable housing developer, as part of Eden Housing’s submittal of an Affordable Housing and Sustainable Communities (AHSC) grant application for its 70-unit family housing project (up to $11.3 million). As part of the AHSC grant, transportation projects are also eligible for funding. AC Transit is proposing to purchase an additional bus to service Alameda Point ($1.3 million). City staff is recommending authorization for three potential transportation projects, improvements to a segment of Main Street (west side) between Pacific and Atlantic Avenues or a Segment of Central Avenue that would improve bicycle and pedestrian access and usage (up to $2.7 million) and installing lighting along a 0.8-mile segment of the Cross-Alameda trail ($800,000). The maximum funding request would be $16.2 million.
BACKGROUND
In June 2015, the City Council unanimously approved the Site A Development Plan and a Disposition and Development Agreement (DDA) with Alameda Point Partners (APP), for a 68-acre area within Alameda Point that extends generally from the Main Street entrance of Alameda Point to the eastern edge of the Seaplane Lagoon. Site A includes 800 housing units, 600,000 square feet of commercial development, and extensive parks and utility infrastructure (Site A Project).
Two hundred (200) of the residential units (25%) at Site A are required to be affordable units. One hundred thirty (130) affordable units will be provided in two projects on Block 8: a family project with 70 units (Family Project), and a senior project with 60 units (Senior Project) (collectively, Block 8 Projects). The moderate-income units will be provided in a teacher housing project with Alameda Unified School District (AUSD) or distributed among the market-rate units in the other buildings provided by APP.
In March 2016, APP assigned the Affordable Housing Implementation Plan approved as part of the DDA to Eden Housing, a non-profit affordable housing developer, thereby designating Eden Housing as the Qualified Affordable Housing Developer for the development of the low- and very low-income affordable units within Site A consistent with the DDA. Additionally, on October 17, 2017, the City Council approved a ground lease with Eden Housing for the Block 8 Projects to provide direct site control and to allow an infrastructure contingency plan for Eden Housing in order to obtain public financing for both projects.
As of mid-November 2018, Eden Housing has secured all of its required financing to construct the 60-unit Senior Project and will close on the project in February 2019, and commence construction in March 2019. At this time, Eden Housing is working on financing for the 70-unit Family Project. Specifically, Eden Housing is applying to the State of California through the Affordable Housing Sustainable Communities (AHSC) program for funding for the Family Project, which must include monies for transportation projects in addition to housing to meet the program requirements. As a result, City staff is recommending working with Eden Housing on the AHSC funding application for $3.5 million in funding for two nearby transportation projects, described further below, via a cooperation agreement (Cooperation Agreement).
The following provides a summary of Eden Housing’s current financing plan and commitments for the Family Project:
Block 8 Family Project Financing Plan and Commitments
Alameda Point Family Financing Plan - AHSC (Estimated)
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Funding Source |
Status |
Amount |
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|
Permanent Mortgage Debt* |
Committed |
$5.8 million |
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Federal Home Loan Bank |
Committed |
$0.7 million |
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|
Deferred & Re-contributed Development Fees |
Committed |
$3.6** million |
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|
Master Developer Contribution |
Committed |
$1.7 million |
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Alameda County Housing Bond A1 Funds |
Committed |
$2.0 million |
|
|
Alameda County Housing Bond A1 Funds |
Submitted Application |
$9.2 million |
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|
Affordable Housing and Sustainable Communities |
Pending application |
$4.1** million |
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|
Tax Credit Equity |
Planned application |
$18.9** million |
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Total |
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$52.4 million |
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* Includes 17 Section 811 Vouchers
** Pending results of Alameda County A1 Application, AHSC application request could be increased to maximum of $11.3 million for housing, and tax credit equity could be increased with a competitive application (State special needs credits or 9% credits).
The table above shows an AHSC application amount of $4.1 million but notes that the funding request could increase to $11.3 million depending on the outcome of Eden Housing’s application for Alameda County A1 funds. That funding announcement will be announced in early January 2019. Therefore, the proposed Cooperation Agreement anticipates a maximum funding amount of $11.3 million for the housing project.
In addition, staff is requesting that the City Council approve three transportation projects, of which two will be funded once more information is obtained regarding the funds needed for the housing project. By approving several potential transportation projects, staff will be able to work with Eden Housing to submit its AHSC application in a timely manner.
The proposed Cooperation Agreement is attached as Exhibit 1.
DISCUSSION
While Eden Housing is the applicant for the AHSC funding and would be solely responsible for the housing component of the application, the Cooperation Agreement lays out the terms and conditions of cooperation between Eden Housing and the City for the housing and transportation components of the AHSC Application, respectively. Eden’s AHSC Application would request a maximum amount of $16.2 million, including $11.3 million for the Family Project; approximately $3.5 million towards the two final selected transportation projects; and $1.3 million for AC Transit to purchase a new zero emission bus for service expansion to/from Alameda Point to accommodate the expected growth. The AC Transit Board approved its participation in the AHSC application at its December 12, 2018 meeting.
City staff is recommending entering into the Cooperation Agreement to help the City fund transportation projects and to assist Eden Housing in funding the delivery of 70 units of affordable family housing at Site A.
Cooperation Agreement:
The following provides a summary of the key provisions and implications of the Cooperation Agreement with Eden Housing:
1. Parties: The parties to the Cooperation Agreement are the City of Alameda and Eden Housing.
2. Project: As described above, Eden Housing is obligated to develop 70 units of affordable family housing targeted at low- and very low-income households at Site A and the City is required to construct the transportation projects (further described below).
3. Purpose: The purpose of the Cooperation Agreement is to outline the terms and conditions of cooperation between the City and Eden Housing for including the transportation projects in Eden Housing’s AHSC funding application for the Family Project at Site A. An agreement between the applicant, Eden Housing, and any provider of transportation improvements to be funded by the AHSC program is required by AHSC to demonstrate that the transportation agency (in this case, the City of Alameda) is obligated to complete the transportation improvements and has sufficient prior experience to do so.
4. Future Cooperation. The Cooperation Agreement contains a provision that the City will cooperate in the future to amend the Cooperation Agreement or enter into another agreement with Eden Housing to address the specific requirements that arise from investors and funders related to the City’s timely completion of the transportation projects, among other potential issues, including potentially indemnifying Eden Housing in the event the City fails to complete the transportation projects in a timely manner.
Transportation Projects:
Staff has identified three transportation projects that meet the grant requirements. The first project, described below, for trail lighting, will be included in the grant application. However, due to the tight delivery timeline for the grant funds, staff is still evaluating, with Eden Housing, whether to submit the Main Street Pathway project (2A below) or the Central Avenue Safety Improvement project (2B below). Both projects present some risk for the City in meeting its project delivery obligations, per the grant and the proposed Cooperation Agreement; however, they present the lowest risk to the City of any feasible transportation projects.
The Main Street Pathway project presents risks since it is not yet designed, and the available right-of-way is not yet well defined. Staff is continuing to evaluate the site and determine what improvements can be constructed. The Central Avenue Safety Improvement project, which is in need of additional funding for pre-construction work and potentially for construction, pending construction escalation costs, is planned to go to construction in 2021, which is the year by which the AHSC grant funding most likely must be spent. Any delays in the Central Avenue project, which is federally funded and partially on State Route 61, could mean the City would not meet its obligations per the Cooperation Agreement. Staff will continue to fully evaluate these options with Eden Housing, and is committed to working with Eden Housing to submit a competitive grant application, with as low as risk as possible for both parties.
1. Trail Lighting on the Cross-Alameda Trail (CAT) segment along Ralph Appezzato Memorial Parkway (RAMP) between Main and Webster Streets ($800,000): Project would add continuous lighting to be located between the walking and bicycling paths along this 0.8-mile segment of the CAT, making the facility available for easy and safe commuting at all hours. The City prepared a bid alternative for lighting for the CAT project, but did not have adequate funding to include it in the current construction project. The lighting would be similar to that on the Jean Sweeney Park segment of the CAT, and due to the timing of the grant would most likely be added in 2020, after the CAT RAMP segment is constructed.
2. A) Main Street Pathway (west-side) Upgrades and Intersection Improvements (up to $2,700,000): Project would widen the west-side path along Main Street between Pacific Avenue and West Atlantic/RAMP from its current 8-9 feet, to a standard 12-foot multi-use pathway, building the proposed configuration of this section of Main Street, per the Alameda Point Master Infrastructure Plan. The intent is for this section to remain even after Main Street is re-built in the future. The project would seamlessly connect the planned Central Avenue two-way separated bicycle lanes, which end at Pacific, with the under-construction two-way separated bicycle lanes along RAMP and West Atlantic, providing a continuous “low stress network” for people of all ages and abilities who are walking and bicycling. The project would also make pedestrian and bicyclist safety and accessibility upgrades to two intersections (Main/RAMP and Main/Pacific), such as accessible pedestrian signals, upgraded curb ramps and possible removal of a free-right turn (at RAMP).
2. B) Central Avenue Safety Improvement Project (approximately $2,700,000): The Central Avenue project, to construct safety improvements for all roadway users along Central Avenue between Pacific Avenue/Main Street and Sherman Street/Encinal Avenue totaling 1.7 miles, has a funding gap for pre-construction phases and potentially for construction pending final design and construction cost escalations. The AHSC grant funds would help close this gap and could be used to supplement final design and construction costs. The Central Avenue project has received two federal grants for construction totaling $10.8 million, and when combined with required local match monies, $12.2 million is available to construct the project, which is expected in 2021. The pre-construction phases are being paid by local Measures B and BB as well as Development Impact Fees. The approved concept, except for the Webster Street area, includes a reduction from four to three travel lanes, a center turn lane, bike lanes in the Gold Coast area, a two-way separated bikeway adjacent to three schools, two traffic signals, curb extensions, pedestrian refuge islands, rectangular rapid flashing beacons, new crosswalks and street trees/rain gardens.
Summary Recommendation:
As discussed above, City staff recommends authorizing the Interim City Manager to execute the Cooperation Agreement with Eden Housing as required by the AHSC grant program to obtain funding for City transportation projects and for Eden Housing’s Family Project. Staff further requests Council’s approval authorizing the Interim City Manager to sign the Cooperation Agreement with an additional approval that allows the Interim City Manager to negotiate any amendment to the Cooperation Agreement to the extent required by future lenders or investors for the project. Staff recommends that the Interim City Manager be authorized to sign the revised Cooperation Agreement incorporating such lender’s required language without returning to Council in order that the affordable housing project can go forward in a timely way.
In addition, Council’s approval of the three potential transportation projects provides staff with the necessary flexibility to work with Eden Housing to submit the most competitive grant application given the various program constraints that require a balance of transportation projects that meet program requirements, can be built within a specified timeframe, and have a budget that is compatible with the requested funding for the housing project.
FINANCIAL IMPACT
There is no financial impact to the General Fund or Base Reuse Fund from approving the Cooperation Agreement and approving two transportation projects to be submitted for funding as part of Eden Housing’s AHSC grant application. If Eden Housing is successful in its grant submittal, it would bring in $800,000 for lighting on the CAT RAMP project, and up to $2,700,000 for the Main Street or Central Avenue project. This would have a positive financial impact for the City as it would fund two transportation projects that are not currently funded.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
Approval of the Cooperation Agreement is consistent with the Site A DDA, which requires the City to work in good faith to assist the Affordable Housing developer to secure funding for the family housing project.
ENVIRONMENTAL REVIEW
On February 4, 2014, the City of Alameda certified the Alameda Point Final EIR in compliance with the California Environmental Quality Act (CEQA). The Final EIR evaluated the environmental impacts of redevelopment and reuse of the lands at Alameda Point consistent with the Town Center Plan, which includes Block 8 within Site A. No further review is required.
In accordance with CEQA, the CAT RAMP transportation project is Categorically Exempt under the CEQA Guidelines Section 15301(c) Existing Facilities (Minor alterations to existing facilities including bicycle facilities) and Section 15304 (h) Minor Alterations to Land and the creation of bicycle lanes on existing public rights-of-way.
In accordance with CEQA, the Main Street transportation project is Categorically Exempt under the CEQA Guidelines Section 15304 (h) Minor Alterations to Land and the creation of bicycle lanes on existing public rights-of-way.
In accordance with the California Environmental Quality Act (CEQA), the Central Avenue project is Categorically Exempt under the CEQA Guidelines Section 15301(c) Existing Facilities (Minor alterations to existing facilities including bicycle facilities) and Section 15304 (h) Minor Alterations to Land and the creation of bicycle lanes on existing public rights of way. On a separate and independent basis, the project is also statutorily exempt from CEQA pursuant to Public Resources Code Section 21080.20.5 (restriping of streets and highways for bike lanes in an urbanized area that is consistent with a bike plan). City staff is working with Caltrans on environmental review requirements for the National Environmental Policy Act (NEPA), which is expected to be a categorical exclusion.
RECOMMENDATION
Adopt a Resolution authorizing the Interim City Manager to negotiate and execute a Cooperation Agreement and any amendments thereto between Eden Housing, Inc., a California Nonprofit Public Benefit Corporation, and the City of Alameda for compliance with the requirements of a grant application under the Affordable Housing and Sustainable Communities Funding Program for: A) the 70-unit family affordable housing project on Block 8 within Site A at Alameda Point and B) transportation projects (a segment of Main Street (west side) between Pacific and Atlantic Avenues or a segment of Central Avenue, and lighting along the Cross-Alameda Trail).
Respectfully submitted,
Debbie Potter, Base Reuse and Community Development Director
Financial Impact section reviewed,
Elena Adair, Finance Director
Exhibit:
1. Cooperation Agreement