DATE: February 20, 2024
TO: Mayor and City Council
FROM: Assistant City Manager
SUBJECT
Title
Sale of Parcel Group 8 for Development of Affordable Housing: Adopt Two Resolutions 1) Approving the Government Code Section 52201 Summary Report for the Project; and Authorizing the City Manager to Execute the First Amendment to the Disposition, Development, and Loan Agreement with RCD GP IV, LLC and Parcel Group 8, L.P. for Transfer of Specified City Owned Properties and for the Development of Housing and Making Specified Findings in Association with Government Code Section 65913.4 Exemption from the California Environmental Quality Act; and 2) Authorizing the City Manager to Execute an Agreement with the Developer Associated with the State of California Affordable Housing and Sustainable Communities (AHSC) Program
End
RECOMMENDATION
Recommendation
That the Council holds a public hearing and adopts the following:
1. A resolution (Attachment II) approving the Government Code Section 52201 Summary Report for the project (Attachment III) and authorizing the City Manager to execute the First Amendment to the Disposition Development and Loan Agreement (DDA) and related documents, with RCD GP IV, LLC and Parcel Group 8, L.P. (Developer) for the transfer of specified properties and for the development of new affordable housing and rehabilitation of units for affordable housing, finding the project is consistent with prior California Environmental Quality Act (CEQA) determinations; and
2. A resolution (Attachment IV) authorizing the City Manager to execute an agreement with the Developer associated with the State of California Affordable Housing and Sustainable Communities (AHSC) Program.
SUMMARY
After abandoning the State Route 238 Bypass Project in the 1970s, Caltrans began selling parcels that had previously been acquired for the planned freeway. In order to ensure that future development of the State Route 238 parcels located in Hayward aligned with the City’s land use policies and overall vision, the City negotiated a Purchase and Sale Agreement (PSA) with Caltrans in 2016 to manage the disposition and development of former right of way for the now defunct 238 Bypass. The City-controlled State Route 238 properties are divided into ten “parcel groups.”
On September 15, 2020, the Council provided authorization for the City Manager to negotiate and enter into an Exclusive Negotiating Rights Agreement (ENRA) with Resources for Community Development (Developer), to develop an affordable housing project on the 2.36-acre Affordable Housing Segment, including new construction of affordable housing on the portion of the property within the City (City Portion) and exploration and identifying the development approach for existing naturally occurring affordable housing on the County Portion (see Attachment II for map). At the same time, Council also adopted a resolution memorializing that the provisions of affordable housing and an expansion of Carlos Bee Park will satisfy the affordable housing and park dedications for Parcel Group 8. Shortly thereafter, Caltrans authorized the subdivision of Parcel Group 8 to allow for the disposition of the affordable housing, park, and market segments during separate transactions.
After extensive community and tenant engagement, the Developer determined that their development approach was to rehabilitate the existing improvements on the County Portion, consisting of at least 11 units of naturally occurring affordable housing. Additionally, the Developer’s project was anticipated to include up to 96 new affordable housing units, along with approximately 3,900 square feet of commercial space on the ground floor on the City Portion.
The Developer submitted their entitlements application under Senate Bill 330/Senate Bill 35 and Density Bonus on March 30, 2022. The project was deemed consistent with the objective standards for the Commercial/High Density Residential General Plan land use designation and related Commercial and Neighborhood Commercial/Residential zoning districts and the project entitlements were approved through the streamlined ministerial review with a Density Bonus and related concessions and waivers.
On June 28, 2022, the City Council authorized the City Manager to negotiate and execute a Disposition Development and Loan Agreement (DDA) and related documents, with the Developer for the transfer of specified properties and for the development of new affordable housing and rehabilitation of units for affordable housing and found the project is consistent with prior California Environmental Quality Act (CEQA) determinations. Developer and City executed the DDA also dated June 28, 2022.
In 2023, the Developer requested that the City consider an amendment to the DDA: extending the required close of escrow date from December 31, 2024 to December 31, 2026 and revising the number and size of units in the development plan. Staff has negotiated an amendment to the DDA discussed further in this staff report.
ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution PG 8 Amendment Approval
Attachment III Resolution PG 8 DDLA AHSC Grant Funds
Attachment IV Updated Gov Code Section 52201 Summary Report