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Resolution authorizing the City Manager or designee to execute a loan agreement of up to $7,867,409 with Rotary Plaza, Inc. or Rotary Gardens, L.P., for the Phase 1 senior housing building (500 Linden Avenue) of the Rotary Gardens affordable housing project.
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WHEREAS, the local Rotary Club and its development partner, Beacon Development (the “Developers”) are developing a two-phase affordable housing project at 500 and 522 Linden Avenue, known as Rotary Gardens; and
WHEREAS, the first phase includes an 80-unit senior affordable housing building (“Senior Project”), and the second phase will include a 64-unit family building (“Family Project”); and
WHEREAS, the Developers’ proposed Senior Project is a vital affordable housing project in the City’s development pipeline that will provide affordable housing to the community; and
WHEREAS, on December 13, 2023, the City committed $556,789 earmarked for the Senior Project as a recipient of a five-year State entitlement grant known as the Permanent Local Housing Allocation (PLHA), which the project utilized the first two years of funds, known as the 2019 and 2020 PLHA allocations; and
WHEREAS, on July 2, 2025, as a project subject to a streamlined ministerial review process under State Assembly Bill AB 2011, the City determined that the Senior Project complies with all such criteria and the Planning Division approved the project ministerially, subject to applicable conditions of approval; and
WHEREAS, on January 14, 2026, the City Council adopted Resolution 01-2026 appropriating $7,867,409 from the Commercial Linkage Fee Fund (Fund 823), approving Budget Amendment Number 26.057, for the Senior Project to close a funding gap necessary for the Developers to apply for California tax credit program funding for the Senior Project and that those appropriations have been approved to be carried forward to FY2026-27; and
WHEREAS, to lessen the burden on City affordable housing funds to make up the funding gap, Resolution 01-2026 also approved a reduction of impact fees of approximately $1,227,935 in exchange for the use of two commercial spaces located within the Senior and Family Projects solely for the City as the master lease holder at a minimal rate and benefit to the community, and no reductions in proposed parking for 500 and 522 Linden; and
WHEREAS, Resolution 01-2026 also authorized staff to negotiate loan terms and return to City Council for approval of a loan agreement and any related documents for an amount not to exceed $7,867,409 for the Senior Project; and
WHEREAS, City staff has negotiated a Loan Agreement with Developer setting for the terms and conditions of making the loan for construction of the Senior Project; and
WHEREAS, the Developers intend to execute an Assignment and Assumption Agreement prior to the execution of the Loan Agreement and accompanying documents that would assign their rights and obligations in the Senior Project from Rotary Plaza, Inc., a California nonprofit public benefit corporation, to Rotary Gardens, L.P., a California limited partnership.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby approves the Loan Agreement between the City and Rotary Plaza, Inc., or Rotary Gardens, L.P. if Rotary Plaza, Inc. executes an Assignment and Assumption Agreement that is signed by the City Manager or designee in the amount of $7,867,409 for construction of the Senior Project attached hereto and incorporated herein as Exhibit A.
BE IT FURTHER RESOLVED that the City Council hereby authorizes the City Manager or designee to execute the Loan Agreement and accompanying documents with Rotary Plaza, Inc. or Rotary Gardens, L.P. substantially in the form of Exhibit A and to make any revisions, amendments, or modifications deemed necessary or appropriate to carry out the intent of this resolution which do not materially alter or increase the City's obligations thereunder, subject to approval as to form by the City Attorney.
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Exhibit A: Draft 500 Linden Fund 823 Loan Agreement