Agenda Item No. 6A September 13, Honorable Mayor and City Council Members Attention: Laura C. Kuhn, City Manager

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1 Agenda Item No. 6A September 13, 2016 TO: FROM: SUBJECT: Honorable Mayor and City Council Members Attention: Laura C. Kuhn, City Manager Emily Cantu, Housing Services Director (Staff Contact: Daniel Huerta, (707) ) APPROVAL OF AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT BETWEEN THE CITY OF VACAVILLE AND PETALUMA ECUMENICAL PROPERTIES TO NEGOTIATE A DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT FOR AFFORDABLE SENIOR RENTAL HOUSING ON CITY-OWNED HOUSING PROPERTY LOCATED AT 220 AEGEAN WAY (APN ) AND APROVE AN UPDATE TO THE HOUSING DISPOSITION AND DEVELOPMENT STRATEGY DISCUSSION: When redevelopment was eliminated, the City of Vacaville chose to become the Housing Successor, allowing the City to retain ownership of 81 affordable housing properties. The properties must be used for affordable housing, or, if sold for other purposes, sales proceeds must be used for affordable housing. On March 13, 2013, the City Council approved a Disposition and Development Strategy (Strategy) for the properties (See Attachment 1 for an update on the status of the Strategy). Council is being asked to consider re-designating the property located at 220 Aegean Way (See Attachment 2, Map) in the Strategy to allow staff to negotiate a proposed senior affordable housing development on the site. Council is also being asked to consider entering into a negotiating contract for the property. Staff has been working with Petaluma Ecumenical Properties (PEP) on a proposed 60-unit senior affordable apartment complex to be located at 220 Aegean Way. PEP is a non-profit affordable housing developer established in PEP exclusively develops senior affordable housing, and owns/manages 16 properties. All reference checks were excellent in terms of development quality, on-going property management and working relationships. PEP has asked the City to enter into an Exclusive Negotiating Rights Agreement (ENRA) (Attachment 3) to allow exclusive negotiation for a 12-month period with the potential for a 90-day extension. During that time, PEP would determine the physical and land title conditions of the property and type of land use entitlements required, conduct feasibility studies and other due diligence necessary for meaningful negotiation of a Disposition, Development and Loan Agreement (DDLA); this would also secure financing. Staff would negotiate business points that include, but are not limited to, the development schedule, financing, City Housing Successor assistance (if any), property management, amenities and affordability. In addition to considering approval of an ENRA, staff recommends an update to the Strategy to reflect negotiation with PEP for affordable senior housing. The current Strategy designation is to sell the property for retail/commercial development. However, vacancy rates are extremely low at existing senior housing apartment complexes (approximately 0%-1% for affordable and market rate), demonstrating a need for additional senior apartments. Initial data being collected for the 2016 Vacancy Survey continues to support this need. If approved by Council and negotiations are successful, a DDLA will be brought to a future City Council meeting for consideration.

2 FISCAL IMPACT: No General Fund impact. Staff time to implement these actions will be paid within the current Housing Services Department budget. RECOMMENDATION: By simple motion, approve an Exclusive Negotiating Rights Agreement with Petaluma Ecumenical Properties and approve an update to the Disposition and Development Strategy to reflect the negotiation. ATTACHMENTS: Attachment 1: Attachment 2: Attachment 3: Housing Property Disposition and Development Strategy Update Map Exclusive Negotiating Rights Agreement

3 Attachment 1 Housing Successor Affordable Housing Property Disposition and Development Strategy SEPTEMBER 13, 2016 STATUS UPDATE SCATTERED SITES Property Location/ Acreage 2013 Disposition Plan Update 301 Hazel 1 parcel.11 acres First Time Homebuyer through Agency Owned Single-Family Homes Program COMPLETE Sold to eligible low-income first time homebuyer. Orchard 1 parcel 1.36 acres.17 acres for community room/affordable housing purpose 1.19 acres for neighborhood commercial IN PROGRESS - Staff is working with the adjacent affordable housing property owner to achieve the 2013 Disposition Plan goal. Brown 1 parcel.28 acres To Community Development Block Grant (CDBG) for CDBG eligible activity project IN PROGRESS - Sold to CDBG a feasibility study is underway for a Multi-purpose recreational facility on this and other Cityowned adjacent sites to include office space for Housing Services Department staff. Eldridge, Suite parcels.08 acres Retain: Housing office space until relocation possible IN PROGRESS - The City continues to retain this property until Housing Services Department staff can be relocated. Also see status of Brown above. Orange Tree 1 parcel 2.68 acres Retail/Commercial ON-HOLD - Progress will occur as staff time allows. Vanden 1 parcel 8.4 acres Develop: Affordable Housing ON-HOLD - Progress will occur as staff time allows. 220 Aegean 1 parcel 1.82 acres Retail/Commercial Recommendation Develop Senior Affordable Housing

4 EAST MAIN DISTRICT (FORMERLY OPPORTUNITY HILL) Property Location/ Acreage 2013 Disposition Update Mason/Wilson/Catherine/E. Main 16 parcels 4.06 acres Mixed-use and up to 65 units/acre with affordable housing component IN PROGRESS - Staff is exclusively negotiating with Bay Area Urban Development. McClellan/Bush 11 parcels 3.27 acres Develop: Affordable Housing w/mixed-use component (all units affordable) IN PROGRESS - Staff is exclusively negotiating with Bay Area Urban Development. Depot 2 parcels.40 acres Downtown entry development ON-HOLD - Progress will occur as staff time allows. Bush 1 parcel.16 acres To adjacent property owner ON-HOLD - Progress will occur as staff time allows.

5 CALLEN/BENNET HILL STRATEGY Property Location/ Acreage 2013 Disposition Update Callen/Bennett Hill 20 parcels/74 units Develop: Affordable housing COMPLETE 130 affordable apartments were developed

6 MARKHAM/ROCKY HILL STRATEGY Property Location/ Acreage 2013 Disposition Update Lincoln Corner Land 2 parcels 7.43 acres Retain: Long-term lease with Vacaville Depot, LTD (Lincoln Corner Apts) COMPLETE The City continues to retain this land for a long-term lease for affordable housing. Rocky Hill at Holly 6 parcels.96 acres Community garden COMPLETE Sold to Vacaville Storehouse for development of a community garden. Staff continues to work with the buyer towards completion of the project. East Monte Vista/Scoggins 7 parcels 1.07 acres Retail/Commercial IN PROGRESS Staff is working with an affordable housing provider interested in this property. Rocky Hill 1 parcel 1.42 acres Develop: Affordable housing IN PROGRESS - The City has a Disposition, Development and Loan Agreement with Rocky Hill Partners, LP for the development of 39 affordable apartments for Veterans. 20 adjacent to railroad rightof-way 2 parcels Quitclaim: To owner to the east IN PROGRESS - Planned for development as part of the Rocky Hill Trail Capital Improvement Project. Markham at Rocky Hill 2 parcels.48 acres.65 acres Retain: Future development/sale IN PROGRESS - The City continues to retain this property, a portion of which will be developed as part of the Rocky Hill Trail Capital Improvement Project.

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