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, 2023 to June 30, 2024 to the Countywide Oversight Board.
In accordance with the California Environmental Quality Act (CEQA) the proposed action is exempt from environmental review pursuant to CEQA Guidelines sections 15378 (not a project) and 15061(b)(3) (no significant environmental impact). (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) by approving the Development List and Funding Request submitted by AUSD. This would provide for approximately $1,663,998 in Fiscal Year (FY) 2023-24 Redevelopment Property Tax Trust Funds to be allocated to Tilden Commons, a proposed 40-50 unit affordable housing project located at 2615 Eagle Avenue.
Staff also recommends authorizing the City Manager to submit the Recognized Obligation Payment Schedule (ROPS 2023-24) and Administrative Budget for the period from July 1, 2023 to June 30, 2024 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) can pay its financial obligations for FY 2023-24.
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 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 Recognized Obligation Payment Schedule (ROPS) for each fiscal year listing all enforceable obligations payable and the source of their payment during that twelve-month period. The Successor Agency can 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 19. 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 2023-24, 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 $41.1 million in debt service remains on the bonds. Debt service on the bonds continues through 2033.
• 2017 bonds (ROPS No. 58 and 59). Approximately $16.7 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 No. 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, 641 residential units completed or under construction, and a 4.5-acre park waterfront park. 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 from property taxes generated by the project and the adjacent Bayport residential project. The Alameda Landing DDA includes a non-contingent reimbursement requirement of $27.5 million, which has been fully satisfied. The Alameda Landing DDA also provides for an additional contingent reimbursement of up to $8 million, which requirement depends upon the financial performance of the project. The contingent reimbursement is not expected to be required and no payment is identified for FY 2023-24; however, the agreement continues to be listed on the ROPS pending a final accounting of project performance.
(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 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 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 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 required to approve the development list and the funding request.
AUSD’s development list includes one project, 2615 Eagle Avenue (Tilden Commons). Tilden Commons is a 40-50 unit housing development of one-, two- and three-bedroom units to be constructed on approximately 1.05 acres 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. Tilden Commons was also approved as part of AUSD’s development list last year.
Tilden Commons 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 a 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 is comprised of $1.664 million requested for FY 2023-24 and $2.0 million requested for FY 2024-25, for a combined request for $3.664 million. The proposed ROPS schedule includes funding for the $1.664 million requested for FY 2023-24. The amount is equal to the estimated maximum amount due under the Pass-Through Agreement. It is anticipated that the remaining $2 million will be included on the ROPS in subsequent fiscal year(s). AUSD has requested that funds be remitted directly to AHA to help fund the Tilden Commons when received.
Staff recommends that the Successor Agency review the development list and funding request and determine that the Tilden Commons is consistent with the Pass-Through Agreement, California Redevelopment Law, and the Settlement Agreement and that the City Council also find that Tilden Commons continues to be 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 AUSD; and
o Authorize the City Manager to submit the ROPS and Administrative Budget for the Period from July 1, 2023 to June 30, 2024 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 Tilden Commons 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 2023-24 to the Countywide Oversight Board and DOF. The proposed ROPS FY 2023-24 administrative budget will be consistent with the Citywide biennial budget for FYs 2023-25 presented to City Council in June 2023.
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 2023-24 has been prepared on a template provided by DOF in accordance with State law. Following approval by the Countywide Oversight Board, ROPS 2023-24 will be submitted to DOF for its approval.
ENVIRONMENTAL REVIEW
Based on the evidence in the record, the proposed action is exempt from the California Environmental Quality Act (CEQA) pursuant to two, independent bases: (1) CEQA Guidelines Section 15378 (not a project); and (2) CEQA Guidelines Section 15061(b)(3) (no significant environmental impact).
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:
Conduct a Public Hearing to:
1. 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.
2. Authorize the City Manager to submit the Recognized Obligation Payment Schedule and Administrative Budget for the Period from July 1, 2023 to June 30, 2024 to the Countywide Oversight Board.
Respectfully submitted,
Lisa Nelson Maxwell, Community Development Director
By,
Lisa Fitts, Community Development Program Manager
Financial Impact section reviewed,
Margaret O’Brien, Finance Director
Exhibits:
1. FY 2023-24 ROPS Schedule and Administrative Budget
2. AUSD Letter
cc: Jennifer Ott, City Manager