Title
Adoption of Resolution Amending Previous Authorization of a Portion of the City Base Allocation and Required Match Amount for Site A/Eden Affordable Senior Project and Affordable Family Project for Application to County Rental Housing Development Fund. (Base Reuse 819099)
Body
To: Honorable Mayor and Members of the City Council
From: David L. Rudat, Interim City Manager
EXECUTIVE SUMMARY
On October 2, 2018, the City Council approved a Fifth Amendment to the Site A Disposition and Development Agreement (DDA) with Alameda Point Partners (APP), for a 68-acre area within Alameda Point. The Fifth Amendment modified the Affordable Housing Development Milestone Schedule to provide Eden Housing Inc. (Eden), the Qualified Affordable Housing Developer, an additional two years to secure funding for two affordable housing projects, a 60-unit senior project and a 70-unit family project.
The amended DDA also revised the sources of funding for the two projects, including a revision to the allocation of the City Base funds under the Alameda County Rental Housing Development Fund. The previous allocation of the $5 million in City Base funds was $3 million for the senior project and $2 million for the family project. The requested action would reallocate the funds as follows: $4.5 million for the senior project and $500,000 for the family project. The requested change is financially neutral for both housing projects and has no fiscal impact on the City.
BACKGROUND
In June 2015, the City Council approved the Site A Development Plan and a DDA with APP for a 68-acre area within Alameda Point - Site A, which includes 800 housing units, 200 of which are required to be affordable. Consistent with the DDA, of the 200 affordable housing units, one hundred thirty (130) will be constructed by Eden and provided in two projects on Block 8 for low- and very low-income households. The DDA, as amended, provides for a donation of land by the City for the affordable housing projects and a developer contribution of $3 million as part of the financing for the projects. The developer contribution has previously been deposited into an escrow account.
On November 8, 2016, Alameda County voters passed the Countywide Housing Bond (Measure A1). The $580 million bond program will fund three homeownership programs and two rental housing development programs throughout the County. Of the total Countywide Housing Bond, $425 million is allocated to the Rental Housing Development Fund to assist in the creation and preservation of affordable rental housing for vulnerable populations. Of the total amount allocated to the Rental Housing Development Fund, $225 million is allocated as “Base City Allocation” funding to Alameda County jurisdictions based on a geographical allocation formula. The City of Alameda’s Base Allocation is $10.4 million.
On January 16, 2018, the City Council adopted a resolution affirming its prior commitment of $5 million in City Base Allocation funds to the Site A affordable housing projects. The January 16, 2018 resolution allocated the $5 million as follows: $3 million for the senior project and $2 million for the family project.
APP has requested, and staff is recommending that the City Council adopt a resolution revising its allocation of $5 million in City Base Allocation funds to provide $4.5 million to the senior project and $500,000 to the family project as discussed below.
DISCUSSION
On October 2, 2018, the City Council approved a Fifth Amendment to the DDA, which modified the Affordable Housing Development Milestone Schedule to provide Eden, the Qualified Affordable Housing Developer, an additional two years to secure funding for two affordable housing projects, a 60-unit senior project and a 70-unit family project. The amendment was necessary because Eden failed to obtain financing for all 130 units by October 31, 2018, as required under the initial DDA. Instead, Eden proposed a revised plan, which will result in the 60-unit senior project being built first (construction to be completed by July 2020) and funding for the 70-unit family project secured during 2019.
As noted above, APP has deposited into escrow its $3 million contribution to the two affordable housing projects. Pursuant to the Fifth Amendment to the DDA, Eden has earmarked the entire $3 million developer contribution for the senior project. Because Eden is now moving forward with one housing project, APP is requesting that its $3 million contribution be split between the two affordable housing projects. It is proposed that the developer contribution to senior project be $1.5 million. The balance of APP’s contribution will then be available as leverage for additional financing for the family project when Eden Housing seeks funding for that project.
Given this proposed re-allocation of the APP contribution, it is necessary to reallocate the $5 million City Base funds to back-fill the $1.5 million to be used for the family project. The City’s original $5 million commitment was split $3 million for the senior project and $2 million for the family project. Staff proposes to modify the commitment so that $4.5 million of the City Base Allocation will be used for the senior project and $500,000 will be used for the family project. This reallocation of City Base funds does not change the City’s overall commitment of $5 million to the two affordable housing projects, rather it redistributes the funds between the two projects. Therefore, there is no additional funding risk as the re-allocation of funds is financially neutral, has no financial impact on the City, and is a benefit to both Eden Housing and APP.
Because there is no change in the City’s Base Allocation commitment, and the reallocation will help facilitate the development of the senior project in a timely manner, while allowing Eden Housing to pursue funding for the family project with a $1.5 million developer contribution available to leverage additional funds, staff recommends adoption of a resolution modifying the $5 million Base Allocation. This resolution is required before the County Board of Supervisors will act on the requested change.
FINANCIAL IMPACT
There is no impact to the City’s General Fund from revising the distribution of $5 million from the City’s base allocation of County affordable housing bond funds among the Site A affordable housing projects. The bonds are general obligation bonds issued by Alameda County that are repaid by property owners throughout the County as part of their property tax bill. The City’s matching funds and portion of its base allocation are a critical part of the financing for these two projects, contributing an estimated 17% of the $84.5 million total project cost, without which the project may not be able to be built.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
These affordable housing projects are anticipated to be built pursuant to and consistent with a number of City documents including the Five-year Affordable Housing Pipeline, the Housing Element of the General Plan and the Site A DDA.
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 included Block 8 within Site A. No further review is required for revising the allocation of City Base funds to the affordable housing projects.
RECOMMENDATION
Adopt a Resolution amending previous authorization of a portion of the City Base Allocation and required match amount for Site A/Eden Affordable Senior Project and Affordable Family Project for application to County Rental Housing Development Fund.
Respectfully submitted,
Debbie Potter, Base Reuse and Economic Development Director
Financial Impact section reviewed by,
Elena Adair, Finance Director