Stardust Gardens
Supportive
Housing
Operating Subsidy
Commitment
Letter
Item 7-A
September 1, 2026
1 Rendering of RESHAP Courtyard
Image courtesy of David Baker Architects
About the RESHAP and West Midway
Developments
• RESHAP – a 332-unit supportive housing
campus providing homes and services to
individuals and families at risk of
homelessness
• Replaces the Alameda Point Collaborative (APC),
Operation Dignity, and Building Futures outdated
Navy-era housing
• West Midway – 478-units of market-rate,
workforce, and moderate-income housing
• Developed on vacant property starting at Main
Street and West Midway
• Last phases are in area where APC and Operation
Dignity currently provide housing
• Replaces backbone infrastructure on West Midway,
Orion Street and possibly West Tower Avenue
• Developers building pads for RESHAP
2 RESHAP
Approximate
Boundary West Midway
Approximate
Boundary
Map of RESHAP / West Midway
Development Phasing
3 Stardust
Gardens –
First
Phase, 80
units
APC Residents to Move
from Here to Stardust
Gardens
Examples of Current APC
Housing to be Replaced
Source: Alameda Point Collaborative
Building & Operating Supportive Housing
4 Supportive housing is a combination of affordable,
permanent housing and coordinated support services
designed to help individuals and families dealing with
complex challenges live with stability and dignity
Development/Construction Subsidy:
- Needed to build the building (land contribution, grants, loans)
Operating Subsidy:
- What is needed when tenants cannot pay enough rent to cover annual expenses over life of building
- More often needed with supportive housing (tenants pay very low rents, generally 30% of their income)
- Usually comes in form of “Project Based Vouchers” or
federally-assisted rent subsidies to tenants
Rendering of Stardust Gardens
Image courtesy of David Baker Architects
Stardust Gardens Current Status
5 Development Subsidy Secured:
• $44.6 million in State funds (AHSC and MHP)
• $21.9 million in Local, Federal, County support
• Seeking $27 million in Low Income Housing Tax Credits on September 8
• If awarded, have $63 million in construction loans secured Operating Subsidy:
• Without an operating subsidy, the project could not serve APC residents
• Needs operating subsidy in order to serve populations at risk of homelessness
Project Based Vouchers
6 What is a Project Based Voucher?
• Rent subsidy (generally Federal funds, for example, Section 8) • Administered by local housing authority. In City of Alameda, the Alameda Housing Authority
• Covers difference between regulated rent amount, and 30% of resident income
APC Already has Project Based Vouchers (PBVs)
• 25 PBVs already exist at the units that will be demolished, contributing approximately $785k to APC annually
• Immediate request to AHA is to issue letter of commitment for 30 PBVs, with likelihood that APC residents would use their vouchers at Stardust Gardens
A Nominal Cost to Use Existing APC Vouchers for Stardust Gardens • Some APC residents might not move to Stardust Gardens and would receive tenant voucher from AHA to use anywhere
• Other voucher holders might move in given limited supply of housing
RESHAP Project History
7 The Alameda Housing Authority has had ten years
to find a way to commit vouchers to this project
2015
APC,
Building
Futures,
Operation
Dignity select
MidPen as
RESHAP
Developer
2025
Stardust
Gardens
State AHSC
Award
2026
State
MHP
Award
2023
Council
approves new
DA, DDAs for
RESHAP and
West Midway
Feb:
MidPen
and AHA
meet to
discuss
AHA’s
current and
future role
2016
Oct:
MidPen
and AHA
meet to
discuss
project
update and
operating
subsidies
2017 2018 2019 2020 2021 2022
Oct:
MidPen
and AHA
meet to
discuss
progress
and
operating
subsidies
July:
MidPen
applied to
AHA for
Project-
Based
Vouchers
and was
not
awarded
June:
MidPen
applied for
Project-
Based
Vouchers
and was
not
awarded
All parties
coordinate on
resident
noticing
MidPen, City
made aware of
AHA changing
budget status
2024
Jan:
MidPen
responded
to AHA’s
Letter of
Interest
March:
MidPen and
AHA meet
Council
approves Main
Street
Neighborhood
Specific Plan
City issues
RFP for
West
Midway
Developer
First
RESHAP
DDA
Signed
Timeline Moving Forward and Dependencies
8 2026
Sept 1 Sept 3-8 Dec 9 June 7 Feb
2026 …22 mos construction… 2029 …relocation… 2030
This
Council
Meeting
Tax Credit
and Bond
Application
Due
State
Awards Tax
Credits
Deadline to
Commence
Construction
of Stardust
Gardens if
Awarded
Construction
Completion
Catellus/Brookfield
begin West Midway
site work where
current units sit
• City staff is recommending a commitment letter only, no funds need to be allocated until FY2028-9
• This ensures project can continue to be represented as replacement housing for APC, so County can release Legally Binding Agreements (LBAs). Without a commitment, we cannot release the property for development.
• With commitment letter, there is time for a solution with AHA, but no guarantee that AHA will issue PBVs to backfill City’s commitment.
Staff work with
County to release
LBAs
Alameda Housing Authority Rationale for
Delaying Vouchers – AHA Budget Shortfall
Housing Authority Concern
• Housing Authorities in budget shortfall are not
permitted to issue new PBVs, and become
increasingly restricted each year they are in
shortfall
• While not in shortfall today, AHA staff anticipate
a budget shortfall in future years
• Concerned that issuing new vouchers could
cause AHA to go into shortfall
City Response
• Terminate existing APC voucher contract, which
frees up budget to issue vouchers to Stardust
Gardens to serve same residents
• A nominal increase in cost
• No impact on AHA operations until 2029 – no
risk of impacting shortfall in coming 2-3 years
• AHA’s FY25 audited financial statements (most
recent available online) show AHA is financially
healthy. AHA’s voucher commitment increased
in 2026 sufficient to cover the commitment
• If AHA can show this commitment would put
AHA in shortfall, City staff have offered to work
with AHA on a solution
9 Example of City Desired Activity by AHA:
San Francisco Housing Authority / Treasure Island
Treasure Island IC4.3 Family Housing
• Commitment letter approved by San Francisco
Housing Authority Commission on August 27
• 150 units, including 61 replacement units
• Committing 60 project-based vouchers
• Used AHSC as the competitive process for these
vouchers, though they showed PBVs
• “This action does not present a significant
financial exposure for the Authority” (
Staff
Report)
• Alameda staff do not believe AHA’s claims about
competitive process and budget are accurate.
10 Treasure Island Development
Source: City of San Francisco Planning Department
Staff Recommendation
11 • Authorize City Manager to sign a commitment letter for $1 million annually over 20 years, with 2.5% annual escalation, for total of $25.5 million, starting in 2029.
Letter will be
substantially similar to Exhibit 1.
• This commitment enables MidPen, Catellus, Brookfield to stay on schedule, delivering 810 homes at Alameda Point
• It enables the County to release the legal agreements for property needed for West Midway Development
• Goal would be commitment as a “stop gap” until a deal can be reached with AHA to issue project based vouchers
• However, there is no guarantee that AHA will issue vouchers, so there is some risk
• City and AHA have until end of 2028 to find a solution
Where would funding come from, and what are
tradeoffs?
12 • No impact to City’s regular operating budget
• The source of the commitment would be Alameda
Point building sales
• Base closure law requires funds generated from
Alameda Point to stay at Alameda Point
• Tradeoff would be a slowdown in delivering the
Reuse Area Phase 2 backbone streets (West Tower
Ave, Monarch Street, West Midway Ave, Lexington)
• But other backbone streets and housing at gateway
to Alameda Point would be delivered more quickly
• AHSC application has $7 million commitment to
WETA Seaplane Lagoon Electrification which City
will have to backstop if AHSC grant is lost due to
delays
Deferred Not Delayed
Infrastructure Delivery Tradeoff