Title
Public Hearing to Consider Adoption of a Joint City Council/SACIC Resolution Approving the Development List of Affordable Housing Projects and Funding Request for Such Projects as Requested by the Alameda Unified School District; and
Recommendation to Authorize the City Manager to Submit the Recognized Obligation Payment Schedule (ROPS) and Administrative Budget for the Period from July 1, 2022 to June 30, 2023 to the Countywide Oversight Board. (Community Development 70161852)
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
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). This would provide for approximately $1.474 million in Redevelopment Property Tax Trust and other Successor Agency funds to be allocated to two affordable housing projects - Rosefield Village, a 92-unit project and 2615 Eagle Avenue, the proposed site of 23-30 affordable units. Staff also recommends authorizing the City Manager to submit the Recognized Obligation Payment Schedule (ROPS 2022-23) and Administrative Budget for the Period from July 1, 2022 to June 30, 2023, to the Countywide Oversight Board. Once the State Department of Finance (DOF) approves the ROPS, the Successor Agency to the CIC of the City of Alameda (Successor Agency) can pay its financial obligations for Fiscal Year (FY) 2022-2023.
BACKGROUND
State Law enacted by Assembly Bill X1 26 (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, Alameda’s former redevelopment agency and the City Council serves as the Successor Agency Board.
Local oversight boards were established to direct the work of winding down the affairs and obligations of each former redevelopment agency. As of July 1, 2018, local oversight boards within Alameda County are now consolidated into the single County of Alameda Countywide Oversight Board (Countywide Oversight Board).
The Successor Agency can only pay obligations listed on the ROPS as approved by the DOF. The Successor Agency is obligated to prepare a Recognized Obligation Payment Schedule (ROPS) for each fiscal year listing all enforceable obligations payable during that twelve-month period. The ROPS must be approved by the Countywide Oversight Board prior to submission to DOF. The deadline for submission to DOF is February 1 of each year.
DISCUSSION
Following is an overview of the major outstanding obligations listed on the Successor Agency’s ROPS schedule for FY 2022-23, 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 $44.9 million in debt service remains on the bonds. Debt service on the bonds continues through 2033.
• 2017 bonds (ROPS No. 58 and 59). Approximately $17.4 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 items 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 and 23)
The Alameda Landing Disposition and Development Agreement (Alameda Landing DDA) is listed as No. 19 on the ROPS with related public improvement obligations included as No. 23. The Alameda Landing DDA provides for disposition of property for development of the Alameda Landing Project encompassing approximately 285,000 square feet of retail and 284 residential units completed to date and a 357-unit residential phase including a 4.5-acre park along the waterfront portion of the property that is currently under construction.
The Successor Agency is obligated under the Alameda Landing DDA to reimburse project costs for demolition of existing structures, installation of streets, utilities, and other backbone improvements. Reimbursements are made from property taxes generated by the project and the adjacent Bayport residential project. The maximum reimbursement amount under the Alameda Landing DDA is $35.5 million, of which $8 million is contingent upon financial performance of the project and $27.5 million is not contingent on performance. The non-contingent portion of the Alameda Landing DDA reimbursement obligation will be satisfied once the ROPS 2021-22B payment is made in January 2022. The $8 million contingent portion of the Alameda Landing obligation is subject to a final determination regarding the financial performance of the project upon full completion. Based on interim information regarding the project’s performance, it is not currently projected that additional payments will be due; however, the obligation is required to remain on the ROPS, with no payment identified, until a final determination is made, likely next fiscal year.
(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.
(4) Boatworks Settlement Agreement (ROPS Nos. 33 and 34)
This settlement agreement (Agreement) obligation of up to $4.5 million to the developer of a residential project is the subject of pending litigation in which the City has taken the position that the 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 to the Agreement between the CIC of the City and the 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 the Housing Authority of the City of Alameda (AHA) to develop affordable housing, including for qualifying AUSD employees.
As provided in the Pass-Through Agreement, AUSD has requested the Successor Agency and City review and approve its FY 2022-23 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, the Settlement Agreement, and 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 to approve the development list and the funding request.
AUSD’s development list includes two projects, Rosefield Village and 2615 Eagle Avenue. Rosefield Village is an existing AHA property that is being redeveloped to increase the total number of affordable apartments. The property previously contained 53 housing units. Forty (40) units have been demolished and construction of the new 78-unit apartment building with community spaces and on-site property management offices is currently underway. Additionally, five of the other buildings on the property will be renovated. When complete, the $77 million redevelopment and renovation project will provide 92 rental units. The project will be affordable to households earning between 20 and 80% of average median income (AMI). The project is anticipated to begin leasing up in early 2022. The Rosefield Village Project was also approved as part of AUSD’s development list last year.
2615 Eagle Avenue consists of approximately 1.05 acres on two adjacent parcels owned by AUSD. AUSD offered the parcels for sale and received a single response from AHA. The proposed project is a 23-30 unit housing development of one-, two- and three-bedroom units. 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.
Both the Rosefield Village Project and the 2615 Eagle Avenue Project are consistent with the Pass-Through Agreement, the Community Redevelopment Law, and the Settlement Agreement, as they are located in or will be a benefit to the former BWIP, are serving households earning a maximum income of 80% of AMI and will provide a preference for a certain number of units for eligible AUSD employees. As is detailed in the attached proposed resolution, the project is also consistent with the City’s Housing Element.
The funding request includes $1.856 million for FY 2022-23 and $1.713 for future years, for a combined request for $3.569 million. The proposed ROPS schedule funds $1.474 million of the requested amount in FY 2022-23, based on the estimated maximum amount due under the Pass-Through Agreement. It is anticipated that the remaining amounts identified in the funding requested would be included on the ROPS schedule in a subsequent fiscal year(s). Once funds for the ROPS are received, AUSD may submit a reimbursement request up to the amount approved by DOF so that payment may be remitted to AHA to help fund Rosefield Village and 2615 Eagle Avenue.
Staff recommends that the Successor Agency review the development list and funding request and determine that the Rosefield Village and 2615 Eagle Avenue projects are consistent with the Pass-Through Agreement, the California Redevelopment Law, and the Settlement Agreement and that the City Council also find that the Rosefield Village and 2615 Eagle Avenue projects are consistent with the Housing Element of the General Plan.
Administrative Budget (ROPS No. 46)
Administrative costs are included on 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:
o Conduct a Public Hearing;
o Adopt a Joint Resolution Approving the Development List of Affordable Housing Projects and Funding Request for Such Projects as Requested by the Alameda Unified School District; and
o Authorize the City Manager to submit the Recognized Obligation Payment Schedule and Administrative Budget for the Period from July 1, 2022 to June 30, 2023 to the Countywide Oversight Board.
• The Successor Agency and City Council could decline to move forward with this process but that would jeopardize the funding for the Rosefield Village and 2615 Eagle Avenue projects 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.
FINANCIAL IMPACT
There is no financial impact from authorizing the City Manager to submit ROPS FY 2022-23 to the Countywide Oversight Board and DOF. The proposed ROPS FY 2022-23 administrative budget is consistent with the Citywide biennial budget for FYs 2021-23 presented to City Council in June 2021.
All obligations approved by DOF are paid from Redevelopment Property Tax Trust Fund monies (Fund 701, formerly Fund 207).
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
ROPS 2022-23 has been prepared on a template provided by DOF in accordance with State law. Following approval by the Countywide Oversight Board, ROPS 2022-23 will be submitted to DOF for its approval.
ENVIRONMENTAL REVIEW
This action is not a project under Public Resources Code section 21065 or California Environmental Quality Act Guidelines section 15378.
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
It is recommended that the Successor Agency and City Council:
1. Conduct a Public Hearing.
2. Adopt a Joint Resolution Approving the Development List of Affordable Housing Projects and Funding Request for Such Projects as Requested by the Alameda Unified School District.
3. Authorize the City Manager to submit the Recognized Obligation Payment Schedule and Administrative Budget for the Period from July 1, 2022 to June 30, 2023 to the Countywide Oversight Board.
CITY MANAGER RECOMMENDATION
• The City Manager recommends that the City Council Adopt a Joint Resolution Approving the Development List of Affordable Housing Projects and Funding Request for Such Projects as Requested by the Alameda Unified School District; and
• Authorize the City Manager to submit the Recognized Obligation Payment Schedule and Administrative Budget for the Period from July 1, 2022 to June 30, 2023 to the Countywide Oversight Board.
Respectfully submitted,
Lisa Nelson Maxwell, Community Development Director
By,
Lisa Fitts, Community Development Program Manager
Financial Impact section reviewed,
Annie To, Finance Director
Exhibits:
1. Budget
2. AUSD Letter
cc: Eric Levitt, City Manager