DATE: January 16, 2024
TO: Paul Buddenhagen, City Manager
FROM: Chadrick Smalley, Community Development Director
SUBJECT: Adeline Sites Redevelopment
Resolution Of The City Council Of The City Of Emeryville Declaring The Properties At 3602 Adeline And 1132 36th Street (APNs 005-0480-001-01, 005-0480-004 And 005-0480-003) As Exempt Surplus Land Pursuant To Government Code Section 54221(f)(1)(B) Resolution Of The City Council Of The City Of Emeryville Authorizing The Release Of A Request For Proposals For The Redevelopment Of 3602 Adeline And 1132 36th Street (APNs 005-0480-001-01, 005-0480-004 And 005-0480-003)
RECOMMENDATION
Staff recommends that the City Council adopt the above-entitled resolutions declaring the Adeline Sites as Exempt Surplus Land pursuant to California Government Code Section 54221(f)(1)(B) and authorizing the release of a Request for Proposals (“RFP”) for the redevelopment of the Adeline Sites.
BACKGROUND
The City owns three separate contiguous parcels located at 3602 Adeline Street, (APN: 005-0480-001-01, 0.029 acres), 1122 36th Street (APN: 005-0480-004, 0.012 acres), and 1122 36th Street, (APN: 005-0480-003, 0.009 acres), together known as “the Adeline Sites.” The property is bounded by single-family properties to the north, a multi-family and single-family property to the west, Interstate 580 and 36th Street to the south, and a commercial property to the east. Together the Adeline Sites comprise 0.050 acres, which is 2,178 square feet.
The Adeline Sites were acquired using low and moderate-income housing asset funds by the former Emeryville Redevelopment Agency, over 20 years ago, in an effort to assemble properties for a future residential development. Unfortunately, the Emeryville Redevelopment Agency was unable to assemble the additional parcels prior to its dissolution in 2012. Due to the Adeline Sites’ status as a former redevelopment “housing asset”, California Health and Safety Code (“HSC”) Section 33334.16 applies, which requires activities to develop the properties for affordable housing to be initiated within five years from the date of transfer to the City. Otherwise, the properties must be sold, and the proceeds deposited in the City’s Low-Moderate Income Housing Asset Fund.
For the Adeline Sites, the time period described in HSC Section 33334.16 commenced on the date that the California Department of Finance approved the property as a housing asset, or August 31, 2012. On July 25, 2017, the Emeryville City Council adopted Resolution No. 17-130, which extended the time period to initiate development by five years, to September 1, 2022.
On April 5, 2022, the City Council held a Study Session to discuss how to proceed with the redevelopment and disposition of the Adeline Sites and requested that staff draft a Request For Proposals (“RFP”) for the redevelopment of the site as a 1-4-unit co-housing rental home, with a preference for formerly incarcerated individuals.
On July 19, 2022, the City Council adopted Resolution No. 22-106 which authorized the release of an RFP for redevelopment of the Adeline Sites as an affordable housing project and Resolution No. 22-107 declaring the Site Exempt Surplus Land pursuant to Government Code Section 54221(f)(1)(A) which defines “Exempt Surplus Land” to include County or City Surplus Land Transferred for the Development of Affordable Housing with restrictions as described in Government Code Section 25539.4 or 37364. On August 18, 2022, the California Housing and Community Development Department (“HCD”) approved the City’s designation of the Adeline Sites as Exempt Surplus Land.
Staff released the RFP on July 20, 2022, and a mandatory pre-submittal meeting took place on August 2, 2022. Seven individuals participated in the pre-submittal meeting. Developer proposals were due on August 5, 2022, and the City received a response from only one development team, BIG Oakland/Supportive Housing Partners.
The proposal received was for construction of a 5-story residential complex consisting of 18 units, resident lounges on floors 2, 4 and 5, laundry facilities on floors 1 and 3, and a space for a small café to serve as a job training flex space for residents. Staff recommended this proposal be rejected as it did not meet the development goals of the RFP, the development entity did not have sufficient experience or financial capacity to develop the project as proposed, and staff was concerned about the feasibility and risk associated with the financing plan as proposed. On March 23, 2023, BIG Oakland/Supportive Housing Partners was informed of the City’s decision to reject all proposals and to issue a new RFP with revised development goals.
DISCUSSION
Request For Proposals
To solicit interest from a wider array of potential developers and to deliver on policy objectives to increase homeownership, staff has developed an RFP for the redevelopment of the Adeline Sites with homeownership units. The draft RFP includes the following sections:
Purpose of RFP
An overview of the Adeline Sites and a listing of the City’s goals for redevelopment of the properties.
Site and Parcel Information
A description of the property, land use requirements (General Plan and zoning), development standards, transportation access, and utility services.
Design and Development Considerations
Concept requirements.
2 or 3 Residential Units marketable for homeownership
3 Bedroom, 2 bathroom minimum per unit
High-quality finishes and details
The home plans submitted should take into account, and be compatible with, the physical and design context of the existing neighborhood housing stock.
Attractive, durable landscaping in accordance with code requirements and best practices Exempt Surplus Land Requirements
Target Population
Households at 120% Area Median Income (“AMI”)
Marketing and Sales Requirements
City Financial Investment
Proposal Requirements
Cover Letter
Experience, Qualifications and Capacity
Development Concept
Pricing and Payment
Management Plan
Marketing and Sales Method
Financing Proposal
Optional: Sustainability, Energy Efficiency and Universal Design Features Evaluation Criteria and Selection Process
A listing of the criteria that will be used to evaluate proposals A description of the selection process including review by City staff, proceeding to a recommendation for an Exclusive Right to Negotiate Agreement (“ERN”), Term Sheet and Lease Disposition and Development Agreement (“LDDA”).
Application Deadline
Description of electronic submittal process for proposals General Terms & Conditions
Statement regarding no representations or warranties by City in RFP Statement regarding City’s right to reject any and all proposals and other general provisions Surplus Lands Act
Pursuant to the Final Surplus Land Act Guidelines (the “Guidelines”), which were released by HCD in April 2021, a local government must make findings to declare a property to be Exempt Surplus Land if it can meet one or more of the identified eleven land types. On July 19, 2022, the City Council made the finding that the Adeline Sites were Exempt Surplus Land based on Government Code Section 54221 (f)(1)(A) which requires surplus land be transferred pursuant to Section 25539.4 or 37364.
This finding supported the City’s intent to dispose of the Adeline Sites for Affordable Rental Housing to very low-income households and pursuant to Section 37364, the City would be required to ensure the following:
The property would provide housing affordable to persons and families of low or moderate income.
If it is in the city’s best interests, the city may sell, lease, exchange, quitclaim, convey, or otherwise dispose of the real property or interest therein at less than fair market value, or purchase an interest in the real property, to provide that affordable housing.
At least 80 percent of the area of the parcel must be disposed of for the development of housing.
Not less than 40 percent of the total number of units shall be affordable to households who incomes are equal to or less than 75 percent of the maximum income of lower income households and at least half of which shall be affordable to very low-income households.
Dwelling units produced for persons and families of low or moderate income shall be restricted by a regulatory agreement for not less than 30 years.
On October 13, 2023, Governor Newsom signed into law Senate Bill 747, which expanded and modified the definition of exempt surplus land under Government Code Section 54221 (f)(1)(B) as follows:
“Surplus land that is less than one-half acre in area and is not contiguous to land owned by a state or local agency that is used for open-space or low- and moderate-income housing purposes.” Since staff is proposing to circulate an RFP to develop homeownership housing at the site, staff finds that the surplus land exemption under Government Code Section 54221 (f)(1)(B) is better aligned with the City’s affordable homeownership policies than the requirements under surplus land exemption (f)(1)(A), which is better aligned with rental housing. The chart below depicts the regulatory requirements for a homeownership project within Surplus Lands Act related to exemption (f)(1)(A) and exemption (f)(1)(B).
Exemption Options
Current –
Exemption(f)(1)(A)
Proposed -Exemption (f)(1)(B)
Maximum Income Level
1 Unit at 50% AMI (Very Low Income)
1 Unit at 75% of 80% AMI (Low Income)
Un-restricted
(All units at 120% AMI)
(Moderate Income)
2023 Max Income of HH4
$73,950
$84,112
$177,500
Affordable Sales Price
1 Unit affordable to 50% AMI
1 Unit at 75% of 80% AMI
Un-restricted
(All units at 120% AMI)
2023 Max Potential Sales Price
$113,036
$145,569
~$478,794
The Adeline Sites are 0.050 acres and not contiguous to any land owned by the state or local agency that is used for open-space or low – and moderate-income housing purposes, therefore, staff recommends the City Council declare the property Exempt Surplus Land and make written findings at a regular public meeting demonstrating that the land meets the requirements within Government Code Section 54221 (f)(1)(B).
Next Steps
If the City Council adopts the resolution declaring the Adeline Sites as Exempt Surplus Land, pursuant to Government Code 54221 (f)(1)(B) staff will provide the adopted resolution to HCD.
If the City Council adopts the resolution authorizing release of the RFP, staff will circulate the RFP beginning on January 18, 2024. Proposals will be due by February 26, 2024. Staff will evaluate the responses received and will report back to the City Council with a recommendation in April 2024.
FISCAL IMPACT
Release of the RFP does not have any direct fiscal impact. The fiscal impact of proposals received in response to the RFP will be evaluated by staff once received, and an analysis will be presented to the City Council prior to execution of an ERN with the selected developer.
STAFF COMMUNICATION WITH THE PUBLIC
Staff presented the draft RFP to the Housing Committee on August 2, 2023, to obtain feedback on the homeownership concept and evaluation criteria. The Housing Committee was in favor of the homeownership concept and also recommended that any sustainability, energy efficiency or universal design elements be identified as optional requirements eligible for bonus points in the evaluation process.
CONFLICT OF INTEREST
None.
CONCLUSION
Staff recommends that the City Council adopt the two attached resolutions to facilitate the redevelopment of the Adeline Sites. First, staff recommends the City Council adopt a resolution declaring the Adeline Sites as Exempt Surplus Land pursuant to Government Code Section 54221(f)(1)(B). Second, staff recommends that the City Council adopt a resolution authorizing the release of the RFP for the Redevelopment of the Adeline Sites.
PREPARED BY: Valerie Bernardo, Community & Economic Development Coordinator II
APPROVED AND FORWARDED TO THE
CITY COUNCIL OF THE CITY OF EMERYVILLE:
Paul Buddenhagen, City Manager
ATTACHMENTS:
Draft Resolution Declaring Adeline Sites Exempt Surplus Land, including Exhibit A, Assessor Parcel Map Draft Resolution Authorizing Release of RFP, including Exhibit A: Draft RFP for Redevelopment of the Adeline Sites Adeline Avenue Sites – Exempt Surplus Land Determination and RFP Release City Council Meeting | January 16, 2024
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City of Emeryville
CALIFORNIA
MEMORANDUM