DATE: October 19, 2021
TO: Mayor and City Council
FROM: Assistant City Manager/Development Services Director
SUBJECT
Sale of Parcel Group 3 for Development of New Affordable Housing and a School: Adoption of Resolutions (1) Declaring City-Owned Properties Generally Located between Tennyson Road and Broadway Street as Exempt Surplus Lands; and (2) Approving the Government Code Section 52201 Summary Report for the Project; and Authorizing the City Manager to Negotiate and Execute a Disposition and Development Agreement with Eden Housing, Pacific West Communities, and Strategic Growth Partners for Transfer of Specified City Owned Properties; and Amendment of the Parcel Group 3 Affordable Housing Plan (Planning Application #202001594), Consistent with Prior California Environmental Quality Act Determinations
RECOMMENDATION
That Council holds a public hearing and adopts resolutions (Attachments II and III): (1) declaring City-owned properties generally located between Tennyson Road and Broadway Street as exempt surplus lands pursuant to Government Code Section 54221(f)(1)(H); and (2) approving the Government Code Section 52201 Summary Report for the project (Attachment IV); authorizing the City Manager to negotiate and execute a Disposition and Development Agreement (DDA) and related documents, with Eden Housing, Pacific West Communities, and Strategic Growth Partners (Developer) for the transfer of specified properties and for the development of new affordable housing and a school; and amending the Parcel Group 3 Affordable Housing Plan (Planning Application #202001594) (Attachment V), finding the project is consistent with prior California Environmental Quality Act (CEQA) determinations.
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 align with the City’s land use policies and overall vision, the City negotiated a Purchase and Sale Agreement (PSA) with Caltrans to assume responsibility for the sale of some of these properties to private developers. The City-controlled State Route 238 properties are divided into ten “parcel groups.” These parcels are exempt surplus land pursuant to Government Code Section 54221(f)(1)(H) because the land was granted by Caltrans in trust to the City and for which disposal of the land is authorized or required subject to conditions established by statute.
In April 2018, the Council approved the issuance of a Request for Proposals (RFP) for the cluster of parcels located north of Tennyson Road and east of 16th Street, referred to as “Parcel Group 3.” The RFP process was intended to facilitate the re-sale of the parcels through a competitive process to ensure the best price and land use for the City. Three proposals were received in response to the RFP, and, in July 2018, the Council authorized the City Manager to negotiate and enter into an Exclusive Negotiating Rights Agreement (ENRA) with the proposed Developer, based on their proposal to construct a minimum of 150 affordable housing units and a public community school on the Parcel Group 3 properties.
After significant due diligence and site planning efforts, the Developer submitted an application for development of two five-story residential buildings comprised of 176 affordable rental housing units, a two-story 36,000-square-foot public community school for up to 384 preschool and elementary students, and indoor and outdoor amenity spaces located north of Tennyson Road between 16th Street and the future La Vista Park. The application required a Site Plan Review, Administrative Use Permit, and Density Bonus application, which were approved by the Planning Commission on July 22, 2021. The Planning Commission’s approval of the project was appealed to the Council, and the appeal was denied by the Council on September 28, 2021. Twenty-one parcels of land zoned for single family housing will also be transferred to the Developer, but are not currently planned for development. The 21.5- acre remainder of Parcel Group 3 will be retained by the City for the expansion of La Vista Park.
Now that the planning entitlements have been approved, City staff recommend taking the following actions to facilitate the transfer of the property to the Developer:
1. Entering into a DDA with the Developer for the disposition from the City to Developers for a total purchase price of $3,552,000 the following parcels: a 4.6-acre parcel to be transferred for the development of 176 new affordable rental housing units (Housing Parcel); a 3.2-acre parcel for the development of a new school (School Parcel); and 21 parcels of land zoned for single family housing (Single Family Parcels); and
2. Amending the Parcel Group 3 Affordable Housing Plan to address conflicting affordability requirements between funding sources and State Density Bonus law and to more accurately reflect the unit mix of the affordable housing development project.
If the DDA and amended Affordable Housing Plan are approved, upon execution of the DDA, the City anticipates transferring the property to the Developer later this year and construction is projected to commence soon thereafter.
ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution - PG3 Exempt Surplus Land
Attachment III Resolution - PG3 Public Hearing
Attachment IV PG3 Summary Report - Government Code Section 52201
Attachment V PG3 Modified Affordable Housing Plan