RESOLUTION NO. __________
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF EAST PALO ALTO
AUTHORIZING THE CITY MANAGER TO ACCEPT FUNDS FROM THE STATE OF CALIFORNIA,
TO EXECUTE AN AMENDMENT TO THE DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT; APPROPRIATING $6,500,000 FOR THE COLIBRI COMMONS PROJECT AT 965 WEEKS (“PROJECT”) IN THE FORM OF A LOAN AND APPROPRIATING AN ADDITIONAL $1,500,000 FOR WATER IMPROVEMENTS BENEFITING THE PROJECT; AND AUTHORIZING
THE CITY MANAGER TO ENTER INTO A FIRST SOURCE AGREEMENT FOR THE PROJECT WHEREAS, in 2009, the City of East Palo Alto Redevelopment Agency purchased the property at 965 Weeks Street (Property) using Low and Moderate Income Housing Funds for the purpose of developing affordable housing on the Property; and WHEREAS, on July 19, 2018, the City released a Request for Proposals (RFP) to select a developer for the Property as an affordable housing development consistent with the general goals and requirements contained in the RFP; and
WHEREAS, on November 8, 2018, the City Council selected the proposal submitted by MidPen Housing Corporation and EPACANDO (jointly, Developer); and WHEREAS, on December 16, 2019, via Resolution No. PC 2019-14, the Planning Commission approved the application for Design Review, Lot Merger, and Density Bonus submitted by the Developer to develop 135 affordable housing units ranging from 30%-60% of Area Median Income (AMI) and one unrestricted manager unit on the Property, and approved the Proposed Initial Study and Mitigated Negative Declaration (IS-MND) for the Project in compliance with the California Environmental Quality Act (CEQA); and
WHEREAS, since the Council’s approval on December 16, 2019 of the IS-MND, there have been no changes to the project that would warrant conducting additional environmental review pursuant CEQA guidelines 15162. Accordingly, there were no significant CEQA issues that could not be mitigated to a less than significant level; and
WHEREAS, the City and the Developer entered into a Disposition, Development and Loan Agreement as of December 15, 2020 (“DDLA”) that provides for the City to loan the Developer $714,000 for Project development costs and to lease the Property to the Developer in accordance with the terms of the Ground Lease attached to the DDLA; and WHEREAS, prior to approving the DDLA the City Council approved the Mitigated Negative Declaration for the Project; and
WHEREAS, on September 12, 2022, pursuant to the 2022-2023 California Budget Bill (Chapter 249, Statutes of 2022, AB 179), Section 19.56, the State allocated to the City $8,000,000 for the Project (“State Funds”) and the City has determined that it is in the best interest of the City to accept the State Funds; and
WHEREAS, the City has determined that it is in the best interest of the City to make a no interest loan to the Developer of $6,500,000 of the State funds for costs associated with the Project, in accordance with the terms of the First Amendment to the DDLA attached to the staff report; and WHEREAS, the City has determined that it is in the best interest of the City and will further the development of the Project to allocate $1,500,000 of the State funds for water improvements to be made by the City to benefit the Development and adjacent properties; WHEREAS, the City of East Palo Alto first enacted a First Source Hiring Policy in 2000, requiring developments that received assistance from the City, as well as the businesses that occupied the developments, to hire local residents and use local small businesses; and WHEREAS, the City Council adopted a First Source Hiring Ordinance on April 5, 2022, adding Chapter 5.11 to the East Palo Alto Municipal Code (EPAMC); and WHEREAS, EPAMC Section 5.11.060(A)(1) states that first source agreements shall contain the same terms set forth in the guidelines’ (“Guidelines”) sample documents, and the form of the first source agreement shall be approved by the City Manager in a form consistent with Chapter 5.11 and the Guidelines;
WHEREAS, given that the Guidelines have not yet been developed, the City will enter into a First Source Agreement, consistent with applicable law, including Chapter 5.11, between the Developer and related employers establishing the hiring process to be followed and containing the employer's commitment to abide by the responsibilities of an employer in order to maximize the number of East Palo Alto residents and disadvantaged workers employed.
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF EAST PALO ALTO HEREBY:
1. Finds the above recitals to be true and accurate, and incorporates them by this reference into this action.
2. Finds and determines that the IS-MND addresses the environmental issues pertaining to the City Council’s actions and that no additional environmental analysis or review is required pursuant to CEQA guidelines 15162.
3. Accepts an award of $8,000,000 from the State of California pursuant to 2022-23 California Budget Bill (Chapter 249, Statutes of 2022, AB 179), Section 19.56 (“State Funds”) and authorizes the City Manager to execute all documents necessary for receipt and administration of the State Funds.
4. Authorizes the City Manager to execute an amendment to the DDLA with the Developer providing the Developer with additional loan funds from the State Funds in the amount of $6,500,000 in substantially the form of the First Amendment to the DDLA attached to the staff report, subject to changes approved by the City Attorney.
5. Authorizes the City Manager to administer $1,500,000 of the State Funds for water improvements to be made by the City to benefit the Development and adjacent properties.
6. Authorizes the City Manager to make such other non-substantive amendments to the DDLA and the Ground Lease as are consistent with the DDLA and this resolution, and to execute such documents necessary to effectuate the purposes of the DDLA and the Ground Lease, including, but not limited to subordination agreements, lease riders, intercreditor agreements, and escrow instructions.
7. Authorizes the City Manager to enter into a First Source Agreement for the Project substantially in the form of the First Source Agreement attached to the staff report, subject to changes approved by the City Attorney.
PASSED AND ADOPTED this 18th day of July 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
SIGNED:
Lisa Gauthier, Mayor
ATTEST: APPROVED AS TO FORM:
James Colin, City Clerk John D. Lê, City Attorney