Title
Adoption of Resolution Authorizing the City Manager, or Designee, to Execute an Affordable Housing and Sustainable Communities Implementation and Mutual Indemnity Cooperation Agreement Among the City of Alameda, MidPen Housing Corporation and the San Francisco Bay Area Water Emergency Transportation Authority, and Amendments Thereto, in Furtherance of a $44,550,361 Affordable Housing and Sustainable Communities Program Round 9 Award for the Stardust Gardens Housing Development and Related Transportation Improvements. (Base Reuse and Economic Development 29061822)
Body
To: Honorable Mayor and Members of the City Council
From: Gerry Beaudin, City Manager
EXECUTIVE SUMMARY
On December 10, 2025, the City of Alameda (City) and MidPen Housing Corporation (MidPen) were conditionally awarded $44,550,361 in grant and loan funding through Round 9 of the State of California’s Affordable Housing and Sustainable Communities (AHSC) program. The award funds will support the development of Stardust Gardens, the 80-unit first phase of the 332-unit Rebuilding Existing Supportive Housing at Alameda Point (RESHAP) project, along with an array of transit, bicycle, and pedestrian improvements within close proximity of RESHAP. This includes installing electric ferry charging capabilities at the Seaplane Lagoon Ferry Terminal by the San Francisco Bay Ferry Water Emergency Transportation Authority (WETA).
On January 20, 2026, City Council adopted a resolution authorizing the Interim City Manager to execute the Program Award Documents with the California Department of Housing and Community Development (HCD), including the AHSC Standard Agreement. This Standard Agreement is the master funding agreement under which the City and MidPen, as co-applicants, are jointly liable to HCD for completion of the entire AHSC-funded project, and under which grant funds are disbursed as reimbursed progress payments. That staff report noted that, separately, staff would return to City Council for authorization of additional agreements associated with the grant application. This item fulfills that commitment.
Because the award funds distinct scopes of work to be completed by three separate parties (the City, MidPen, and WETA)-and because WETA is not a party to the Standard Agreement-the AHSC Program Guidelines require a separate agreement among the parties allocating roles, responsibilities, and risk, and establishing the process for requesting and passing through grant reimbursements. Staff recommends that City Council adopt a resolution authorizing the City Manager, or designee, to execute the AHSC Implementation and Mutual Indemnity Cooperation Agreement (Cooperation Agreement) (Exhibit 1) among the City, MidPen, and WETA.
BACKGROUND
The AHSC program was established in 2014 by the State Legislature and is funded by the State Greenhouse Gas Reduction Fund, or “Cap-and-Trade” system. AHSC is administered by the State of California’s Strategic Growth Council (SGC) and implemented by HCD. The purpose of the AHSC Program is to reduce and offset greenhouse gas (GHG) emissions through projects and practices that support infill and compact development and advance related public policy objectives. AHSC seeks to fund affordable housing and transportation projects near daily destinations, such as jobs, to help California meet its climate and equity goals.
On May 20, 2025, staff provided an update to City Council on the City’s joint application with MidPen for Round 9 of the AHSC funding program. As part of that update, staff informed City Council that, if awarded a grant, they would bring back to City Council for consideration any necessary approvals.
On May 28, 2025, the City and MidPen submitted a joint application for AHSC Round 9. The joint application was one of 47 received by HCD.
On December 10, 2025, the SGC awarded the City and MidPen $44,550,361 million in grant funding, and the City and MidPen received a Conditional Award letter from HCD. This application was the highest-scoring application in the State.
On December 17, 2025, Interim City Manager Politzer accepted the terms and conditions of the Conditional Award, including a commitment to bring before City Council for consideration, within sixty (60) calendar days of the date of the Conditional Award, a resolution authorizing the execution of Program Award Documents.
On January 20, 2026, City Council adopted a resolution authorizing the Interim City Manager to execute the standard agreement and all necessary amendments.
DISCUSSION
The AHSC Suite of Documents and Approvals
The AHSC award is implemented through a defined sequence of documents:
- The Conditional Award letter (accepted December 17, 2025) establishes the conditions of award.
- The AHSC Standard Agreement is the master funding agreement between HCD and the award recipients (the City and MidPen), prepared by HCD. Consistent with the January 20, 2026 resolution, the City Manager will execute the Standard Agreement on the City’s behalf. Under the AHSC Round 9 Program Guidelines (Guidelines), all applicants sign the Standard Agreement and are jointly and severally liable to HCD for completion of the entire AHSC-funded project. The Guidelines further provide that AHSC grant funds are disbursed as reimbursed progress payments, with costs incurred after the award date eligible for reimbursement upon execution of the Standard Agreement.
- The Cooperation Agreement, discussed below, is a side agreement with the grant recipients that HCD is not party to, which will be used to implement the Standard Agreement and allow for pass-throughs to sub-recipients (in this case, WETA).
- For the Stardust Gardens housing loan, MidPen will subsequently enter into HCD’s standard loan documents at loan closing, including a disbursement agreement, promissory note, deed of trust, and regulatory agreement recorded against the housing site.
Purpose of the Cooperation Agreement
The Cooperation Agreement is the party-to-party agreement that sits alongside the Standard Agreement and is expressly contemplated by the Guidelines in two respects. First, because WETA is not an applicant and will not be a party to the Standard Agreement, the Guidelines require an executed agreement with the transportation agency that will complete the Sustainable Transportation Infrastructure (STI) scope - here, the Seaplane Lagoon Ferry Terminal electrification - establishing WETA’s role and responsibilities for that scope, including WETA's sole responsibility for completing that scope and for any costs that exceed its allocated AHSC grant funds. Second, the Guidelines permit award recipients to allocate risk among themselves through mutual indemnification agreements, provided such agreements do not alter any recipient’s obligations to HCD, including the joint and several liability described above, which remains an obligation of the City and Developer as the applicants and signatories to the Standard Agreement - not of WETA, which has no direct contractual relationship with HCD. Consistent with this, the Cooperation Agreement's indemnification is mutual and several rather than joint: WETA, the City, and Mid-Pen each indemnify the other two, but only for claims arising from that indemnifying party's own performance or failure to perform its own scope of work, and no party is required to indemnify another for that other party's sole negligence or willful misconduct. This is a common approach to allocating funds to transit agencies through the AHSC program, as their participation has been critical to being competitive for this program, but they are unable to commit to delivering housing on land that they do not own with funding that they do not control, and must deliver their own transportation infrastructure themselves.
The Cooperation Agreement is a three-party agreement between the City, MidPen, and WETA that implements the AHSC Financing awarded to the City and MidPen and allocates responsibility among the parties:
|
Funding Component |
Responsible Party |
AHSC Amount |
|
AHSC Loan: Housing Project (Stardust Gardens Housing Project) |
MidPen |
$29,553,361 |
|
AHSC Grant: Sustainable Transportation Infrastructure (STI): Seaplane Lagoon Ferry Terminal electrification |
WETA |
$7,000,000 |
|
AHSC Grant: Sustainable Transportation Infrastructure (STI): City street, bus, pedestrian, and bicycle improvements |
City (Public Works, Transportation Planning) |
$4,530,000 |
|
AHSC Grant: Sustainable Transportation Infrastructure (STI): publicly accessible walkway/streetscape improvements |
MidPen |
$2,820,000 |
|
AHSC Grant: Program Costs (PGM): anti-displacement programming |
City (City Attorney/Rent Program) |
$150,000 |
|
AHSC Grant: Program Costs (PGM): workforce development and other resident programs |
MidPen |
$497,000 |
|
Total AHSC Financing |
|
$44,550,361 |
• Obligations: Each party is solely responsible for completing its own scope of work in accordance with the Guidelines, the Standard Agreement, and the approved application, including scheduling, reporting, and record-keeping requirements.
• Grant fund reimbursement: Consistent with the Guidelines, AHSC grant funds are disbursed by HCD as reimbursed progress payments. The Cooperation Agreement establishes the process by which WETA submits reimbursement requests and supporting documentation for its STI scope and by which the City requests and passes through those grant funds to WETA. The City will similarly seek reimbursement from HCD for its own transportation and anti-displacement program scopes.
• Mutual Indemnity: Each party indemnifies the other parties, their affiliates, directors, officers, members, agents, and employees against any and all claims, losses, and costs, including attorney’s fees, arising from that party’s failure to perform its own obligations. This allocation of risk among the parties is permitted by the Guidelines; it does not alter the City’s and MidPen’s joint and several liability to HCD under the Standard Agreement, but it provides the City with recourse against the responsible party if another party’s non-performance results in liability to the City.
Risk to the City
This awarded grant, as described above, will generate $44 million of investment in housing and transportation-related infrastructure in West Alameda. But there is some level of risk associated with executing this project that staff wants to ensure City Council is aware of. Stardust Gardens must still secure its housing voucher funding from the Alameda Housing Authority and the US Department of Housing and Urban Development (HUD), and then apply for low-income housing tax credits (LIHTC) to finalize its funding package. MidPen has missed two rounds of quarterly tax credit applications as it cannot apply until the housing vouchers are committed, which has not yet occurred. Staff is working diligently with the Alameda Housing Authority to secure vouchers and ensure MidPen can compete in the winter 2026 round of LIHTC funding. If this final component of funding for the affordable housing is not secured in time to deliver the housing by December 9, 2030, the City will be at risk of falling out of compliance with the Standard Agreement, putting WETA’s project at risk as well.
Next Steps
Following execution of the Cooperation Agreement, the City and MidPen will execute the AHSC Standard Agreement prepared by HCD, as previously authorized by City Council on January 20, 2026. MidPen will then complete HCD’s loan closing documents, including the disbursement agreement, for the Stardust Gardens housing loan. Once the Standard Agreement is executed, the parties may begin incurring costs eligible for reimbursement and will implement their respective scopes of work in accordance with the performance milestones and reporting requirements set forth in the Standard Agreement. Staff will return to City Council for any future actions requiring City Council approval, including any necessary budget appropriations.
ALTERNATIVES
City Council may consider two alternatives:
• Revise the recommended resolution authorizing the City Manager, or designee, to execute the Cooperation Agreement and all amendments thereto prior to approval.
• Do not approve the recommended resolution. Without an executed Cooperation Agreement, WETA would have no mechanism to receive its $7,000,000 AHSC grant, and the Guidelines' requirement for an executed agreement with the non-Applicant transportation agency would remain unmet. Furthermore, because AHSC projects are not partially funded, not approving the resolution could jeopardize the entire $44,550,361 award. Not executing the Cooperation Agreement would also leave all three parties without the several indemnification protections described above.
FINANCIAL IMPACT
While the City has utilized a $9.5 million loan to a master developer to provide necessary infrastructure improvements and site prep to the RESHAP / West Midway developments, and the commitment of free land to MidPen and development fee waivers will be used as financial leverage for the AHSC grant, there is no local match required for the AHSC award, and there is no direct financial impact on the General Fund from execution of the Cooperation Agreement.
AHSC grant funds are disbursed by HCD on a reimbursement basis: the City will incur costs for its street, bus, pedestrian, and bicycle improvements ($4,530,000) and anti-displacement programming ($150,000) and will be reimbursed by HCD through reimbursed progress payments under the Standard Agreement; the City will also pass through reimbursements for WETA’s ferry terminal electrification scope ($7,000,000) as provided in the Cooperation Agreement.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents. Execution of the Cooperation Agreement is in alignment with the City's Climate Action and Resiliency Plan (CARP), Active Transportation Plan's 2030 Infrastructure Plan, Alameda Point Transportation Demand Management Plan, Green Infrastructure Plan, Vision Zero Action Plan, Transportation Choices Plan (TCP), Economic Development Strategic Plan (2018), and Strategic Plan Goal HH6 to support implementation of the RESHAP (supportive housing) development at Alameda Point. This action is subject to the Levine Act.
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.
On a separate and independent basis, this action is categorically exempt from further environmental review pursuant to CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption).
CLIMATE IMPACT
Successful implementation of the AHSC-funded housing, transportation, and programmatic improvements contemplated by the Cooperation Agreement will improve the City's resiliency to the impacts of climate change and support the City's greenhouse gas reduction goals.
RECOMMENDATION
Adopt a resolution authorizing the City Manager, or designee, to execute an Affordable Housing and Sustainable Communities Implementation and Mutual Indemnity Cooperation Agreement among the City of Alameda, MidPen Housing Corporation and the San Francisco Bay Area Water Emergency Transportation Authority, and amendments thereto, in furtherance of a $44,550,361 Affordable Housing and Sustainable Communities Program Round 9 award for the Stardust Gardens housing development and related transportation improvements.
Respectfully submitted,
Abigail Thorne-Lyman, Base Reuse and Economic Development Director
By,
Alisa Horiike, Community Development Fellow
Walker Toma, Community Development Manager
Financial Impact section reviewed,
Ross McCarthy, Finance Director
Exhibit:
1. AHSC Implementation and Mutual Indemnity Cooperation Agreement