Title
Report regarding resolutions: 1) approving a loan agreement between the City of South San Francisco (City) and Rotary Plaza, Inc. for $1,076,383 for an affordable housing development at 522 Linden and approving Budget Amendment Number 24.047; 2) approving a loan agreement between the City and Rotary Plaza, Inc. for $556,789 for an affordable housing development at 500 Linden and approving Budget Amendment Number 24.048; and 3) amending Resolution 188-2023 authorizing the City of South San Francisco to apply to the State of California to receive and administer the City’s entitlement of Permanent Local Housing Allocation (PLHA) funds and to enter into all required agreements to receive the PLHA funds. (Elia Moreno, Housing Management Analyst I)
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RECOMMENDATION
Recommendation
Staff recommends that City Council consider adopting the following resolutions:
1. A resolution approving a predevelopment loan agreement between the City of South San Francisco (City) and Rotary Plaza, Inc. for $1,076,383 from Low/ Mod- Income Housing Asset Funds (Fund 241) for the development of approximately 65 family affordable housing units at 522 Linden and approving Budget Amendment Number 24.047 appropriating the loan amount;
2. A resolution approving a predevelopment loan agreement between the City and Rotary Plaza, Inc. for $556,789 from the City’s Permanent Local Housing (PLHA) 2019 and 2020 allocations for the development of approximately 80 senior affordable housing units at 500 Linden and approving Budget Amendment Number 24.048 appropriating the loan amount; and
3. A resolution amending the City’s PLHA 5-year plan and authorizing the City Manager to execute all necessary documents in order to commit PLHA funds to the Rotary Plaza, Inc. project.
Body
BACKGROUND
On December 13, 2023, City Council received a presentation regarding a request from Rotary Plaza, Inc. for funding to support a newly proposed affordable housing development, Rotary Gardens, located at 500 and 522 Linden Avenue. The two-phase development project is anticipated to include an 80-unit senior affordable housing building, and a 65-unit family building. Unit counts are estimated based on preliminary building designs and may be adjusted slightly.
Through Resolution 187-2023, City Council committed $556,789 of the City’s 2019 and 2020 PLHA allocations to the Rotary Gardens senior building and $1,076,383 of the City’s Housing Asset Fund to the Rotary Gardens family building. To effectuate the City’s commitment, staff has drafted and negotiated loan agreements with Rotary Plaza, Inc. and is returning to Council for final loan approval and formal appropriation of the funds, as well as an additional minor amendment to the City’s PLHA 5-Year Plan at the request of the California Department of Housing and Community Development (HCD).
DISCUSSION
Staff continue to work alongside the South San Francisco Rotary Club and Beacon Development (together the Rotary Plaza, Inc. development team) to support the predevelopment of the project. Additionally, staff have negotiated the terms of the predevelopment loan agreement which is now ready for Council’s consideration of approval. The form of the agreements has been included as Exhibit A to the associated resolutions.
Summary of Loan Terms
Both loans have a term of 55 years from the date of the final certificate of occupancy of the building for which the loan was granted. The interest rate is 3%. The loan will be secured by collateral (work product of the pre-development effort) until the properties are acquired by Rotary Plaza, Inc., at which point a Deed of Trust will be recorded against the property.
PLHA 5-Year Plan Amendment
On December 13, 2023, in addition to committing funds to the project, Council approved a resolution authorizing an amendment to the City’s PLHA 5-Year Plan. Resolution 188-2023 allowed for staff to switch to Activity 2 - predevelopment, development, acquisition rehabilitation, and preservation of affordable rental and ownership housing. After further conversations with HCD staff, they recommended the City change from Activity 2 to Activity 1 - the predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low-, very low-, low-, or moderate-income households, including necessary operating subsidies. Activity 1 and Activity 2 both state that they include affordable rental housing, but HCD staff have indicated their preference that this rental housing project be categorized under Activity 1.
FISCAL IMPACT
There is no fiscal impact to the City’s General Fund associated with approving the proposed resolutions. Council’s previous action on December 13, 2023 committed State PLHA funds and Housing Asset Funds to this project; adopting the associated resolutions simply effectuates that commitment.
CONCLUSION
Staff recommends that City Council consider adopting the following resolutions:
1. A resolution approving a predevelopment loan agreement between the City of South San Francisco (City) and Rotary Plaza, Inc. for $1,076,383 from Low/ Mod- Income Housing Asset Funds (Fund 241) for the development of approximately 65 family affordable housing units at 522 Linden and approving Budget Amendment Number 24.047 appropriating the loan amount;
2. A resolution approving a predevelopment loan agreement between the City and Rotary Plaza, Inc. for $556,789 from the City’s PLHA 2019 and 2020 allocations for the development of approximately 80 Senior affordable housing units at 500 Linden and approving Budget Amendment Number 24.048 appropriating the loan amount; and
3. A resolution amending the City’s PLHA 5-Year Plan and authorizing the City Manager to execute all necessary documents in order to commit PLHA funds to the Rotary Plaza, Inc. project.
ATTACHMENTS:
1. December 13, 2023 Staff Report and Resolutions
2. Draft PLHA Application Amendment