Title
Public Hearing to Consider Adoption of Joint City Council/SACIC Resolution Approving the Development List of Affordable Housing Projects and Related Funding Requests Consistent with the 1991 Pass-Through Agreement with the Alameda Unified School District (AUSD); and
Recommendation to Authorize the City Manager to Submit the Recognized Obligation Payment Schedule (ROPS) and Administrative Budget for the Period from July 1, 2025 to June 30, 2026 to the Countywide Oversight Board. [City Council and SACIC] (Finance 70124051)
Body
To: Honorable Chair and Members of the Successor Agency to the Community Improvement Commission of the City of Alameda/Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
Staff recommends implementing provisions of the District Housing Fund contained in the 1991 Pass-Through Agreement between the Alameda Unified School District (AUSD) and the former Community Improvement Commission of the City of Alameda (CIC) by approving the Development List and Funding Request submitted by AUSD. This would provide for $1 million in Fiscal Year (FY) 2025-26 and $2 million in FY 2026-27 Redevelopment Property Tax Trust Funds to be allocated to a proposed 40-50-unit affordable family housing project, a development of the Housing Authority of the City of Alameda (AHA) and is located at 2615 Eagle Avenue (The Poplar).
Staff also recommends authorizing the City Manager to submit the Recognized Obligation Payment Schedule (ROPS 2025-26) and Administrative Budget for the period from July 1, 2025 to June 30, 2026 to the Countywide Oversight Board. Once the Countywide Oversight Board and California Department of Finance (DOF) approve the ROPS, the Successor Agency to the CIC of the City of Alameda (Successor Agency) may pay its financial obligations for FY 2025-26.
BACKGROUND
State Law enacted by Assembly Bill X126 (2011), as modified by Assembly Bill 1484 (2012), and Senate Bill 107 (2015), dissolved all redevelopment agencies in California and established successor agencies to administer remaining obligations of the former redevelopment agencies. The City of Alameda (City) serves as the Successor Agency to Alameda’s former redevelopment agency and the City Council serves as the Successor Agency Board (collectively, Successor Agency).
Local oversight boards were established to direct the work of winding down the affairs and obligations of each former redevelopment agency. In July 2018, local oversight boards within Alameda County were consolidated into the single County of Alameda Countywide Oversight Board (Countywide Oversight Board).
The Successor Agency is obligated to prepare a ROPS for each fiscal year listing all enforceable obligations payable, and the source of their payment, during that twelve-month period. The Successor Agency may only pay obligations listed on the ROPS as approved by the Countywide Oversight Board and DOF. The Countywide Oversight Board is scheduled to consider the ROPS on January 23, 2025. The ROPS will then be submitted to DOF prior to the February 1 statutory deadline.
DISCUSSION
The following is an overview of the major outstanding obligations listed on the Successor Agency’s ROPS schedule for FY 2025-26, attached as Exhibit 1. All items have been DOF-approved on previous ROPS schedules.
(1) Bonds (ROPS No. 56, 57, 58, 59, 13)
The Successor Agency has two outstanding bond obligations:
• 2014 Bonds (ROPS No. 56 and 57). Approximately $33.6 million in debt service remains on the bonds. Debt service on the bonds continues through 2033.
• 2017 bonds (ROPS No. 58 and 59). Approximately $15.1 million in debt service remains on the bonds. Debt service on the bonds continues through 2041.
ROPS No. 56 and 58 identify payments to bond holders, while ROPS No. 57 and 59 identify funds required to be reserved for payments due to bond holders in the subsequent fiscal year. The Successor Agency is also responsible for trustee fees (ROPS No. 13) in connection with the bonds.
(2) Alameda Landing Disposition and Development Agreement (ROPS 19)
The Alameda Landing Disposition and Development Agreement (Alameda Landing DDA, listed as No. 19 on the ROPS, provides for disposition of property for development of the Alameda Landing project encompassing approximately 285,000 square feet of retail, 641 residential units, and a 4.5- acre park waterfront park.
No payment is identified for the Alameda Landing obligation in FY 25-26 and the item is identified as “retired.” This is because the tax increment reimbursement under the DDA has been paid in full and an additional contingent reimbursement of up to $8 million was determined not to be required based on the project’s financial performance. The item will not appear on the ROPS schedule in future years.
(3) Independence Plaza Agreement (ROPS No. 28)
The Independence Plaza agreement is a commitment by the Successor Agency to provide an operating subsidy for the 186-unit Independence Plaza affordable senior apartment property. Payments occur twice per year and reflect the subsidy required to operate and maintain the units. The payment schedule for this project expires January 1, 2027.
(4) Boatworks Settlement Agreement (ROPS Nos. 33 and 34)
This settlement agreement obligation of up to $4.5 million owed to the developer of a residential project is the subject of pending litigation in which the City has taken the position that the settlement agreement has expired. However, the Successor Agency is obligated to continue to list the Agreement on its ROPS schedule, with no payment identified until the litigation is resolved.
(5) Guyton Judgment and Settlement Agreement and Alameda Unified School District Pass-Through Agreement (ROPS No. 36)
The Successor Agency is a party (as a successor in interest) to the agreement between the CIC and AUSD pursuant to Health and Safety Code Section 33401, dated November 12, 1991 (Pass-Through Agreement), which provides that eight percent (8%) of property taxes allocated for the Business and Waterfront Improvement Project (BWIP) project area are designated for use by AUSD for affordable housing purposes. AUSD’s use of the funds must comply with the terms of a separate 1990 Guyton Judgement and Settlement Agreement (Settlement Agreement), which requires the City to undertake certain activities to further affordable housing production. AUSD has entered into a Memorandum of Understanding (MOU) with AHA to develop affordable housing, including for qualifying AUSD employees.
As provided in the Pass-Through Agreement, AUSD requested the Successor Agency and City review and approve its list of prioritized housing programs and projects (development list), and a related funding request at a noticed public hearing. AUSD’s request is attached as Exhibit 2.
The Successor Agency’s review is limited to whether or not the proposed projects and programs are consistent with the requirements of the Pass-Through Agreement, the Community Redevelopment Law, and the Settlement Agreement. The City's review is limited to whether the proposed projects and programs are consistent with the Housing Element of the General Plan. Assuming such findings are made by the Successor Agency and the City, the Successor Agency and City are required to approve the development list and the funding request.
AUSD’s development list includes one project, The Poplar, located at 2615 Eagle Avenue. The Poplar is a 40-50-unit family housing development of one-, two- and three-bedroom units to be constructed on approximately one acre purchased by AHA from AUSD. The project will be affordable to households earning no more than 80% of AMI. Although located adjacent, but outside of the BWIP, it will benefit the project area by bringing much needed affordable housing to the area. The Poplar was also approved as part of AUSD’s development list last year.
The Poplar is consistent with the Pass-Through Agreement, the Community Redevelopment Law, and the Settlement Agreement, as it will benefit the former BWIP, serve households earning a maximum income of 80% of AMI and will provide a preference for eligible AUSD employees. As is detailed in the attached proposed resolution, the project is also consistent with the City’s Housing Element.
In November 2024, AUSD submitted a funding request comprised of $1 million for FY 2025-26 and $2 million for FY 2026-27, for a total of $3 million. The proposed ROPS schedule includes funding for the $1 million requested for FY 2025-26. The requested amount for FY 2025-26 is within the estimated maximum amount due under the Pass-Through Agreement. AUSD requested that funds be remitted directly to AHA to fund The Poplar.
Staff recommends that the Successor Agency review the development list and funding request and determine that The Poplar is consistent with the Pass-Through Agreement, California Redevelopment Law, and the Settlement Agreement and that the City Council find that The Poplar continues to be consistent with the Housing Element of the General Plan.
(6) Administrative Budget (ROPS No. 46)
Administrative costs are included as ROPS No. 46 and are itemized in the proposed administrative budget. The proposed budget is within the applicable statutory maximum of $250,000.
ALTERNATIVES
Staff recommends that the Successor Agency and City Council:
• Conduct a Public Hearing;
• Adopt a Joint Resolution approving the Development List of affordable housing projects and funding request for such projects as requested by AUSD, including the City Council’s finding that the Projects are consistent with the City’s Housing Element; and
• Authorize the City Manager to submit the ROPS and Administrative Budget for the Period from July 1, 2025 to June 30, 2026 to the Countywide Oversight Board.
The Successor Agency and City Council could decline to move forward with this process but that would jeopardize funding for The Poplar and would cause the proposed ROPS schedule to be revised.
There are no alternatives to the Successor Agency authorizing the City Manager to submit the ROPS to the County Oversight Board and DOF, as the Successor Agency is statutorily obligated to do so. Enforceable obligations could be reduced or removed from the ROPS, but that would mean that the Successor Agency believes those items/activities are no longer enforceable obligations to be paid for with Redevelopment Property Tax Trust Fund monies and there is no reasonable basis for such a belief.
FINANCIAL IMPACT
There is no financial impact from authorizing the City Manager to submit ROPS FY 2025-26 to the Countywide Oversight Board and DOF to pay existing enforceable obligations. The proposed ROPS FY 2025-26 administrative budget will be incorporated into the Citywide biennial budget for fiscal years 2026 and 2027.
Failure to submit the ROPS to the Oversight Board and Department of Finance by the deadlines provided in the redevelopment dissolution statutes would result in the Successor Agency not receiving necessary funds to pay required obligations and the City, as opposed to the Successor Agency, would be subject to penalties of ten thousand dollars ($10,000) per day for every day the ROPS is not submitted pursuant to Health & Safety Code section 34177 (m)(1)(B).
All obligations approved by DOF are paid from Redevelopment Property Tax Trust Fund monies (Fund 701).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
ROPS 2025-26 has been prepared on a template provided by DOF in accordance with State law. Following approval by the Countywide Oversight Board, ROPS 2025-26 will be submitted to DOF for its approval. This action supports the City Strategic Plan priority to Practice Fiscally Responsible, Equitable and Inclusive Governance.
ENVIRONMENTAL REVIEW
This action does not constitute a “project” as defined in 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
Conduct a Public Hearing and then:
1. Adopt a Joint Resolution approving the development list of affordable housing projects and related funding requests as requested by AUSD consistent with the Pass-Through Agreement, including that the Projects identified in the List are consistent with the City’s Housing Element; and
2. Authorize the City Manager to submit the ROPS and Administrative Budget for the period from July 1, 2025 to June 30, 2026 to the Countywide Oversight Board.
Respectfully submitted,
Margaret O’Brien, Finance Director
Exhibits:
1. FY 2025-26 ROPS Schedule and Administrative Budget
2. AUSD Letter