To: Timothy Rood, Community Development Director CITY OF HERCULES From: Mark Sawicki, Director RSG, INC. Date: July 8, 2026 SUBJECT: REVIEW OF DEVELOPMENT PROPOSALS: HERCULES HOUSING SUCCESSOR AGENCY NOFA (2026) The City of Hercules (“City”) serves as the Housing Successor Agency (“Housing Successor”) to the former Hercules Redevelopment Agency (“Redevelopment Agency”). The Housing Successor’s Low and Moderate Income Housing Asset Fund (“Housing Asset Fund”) had a $6.2 million cash balance as of June 30, 2025. The balance is primarily from loan repayments related to homeowner and developer loans issued by the former Redevelopment Agency. The City issued a Notice of Funding Availability (“NOFA”) in October 2025 inviting developers to submit proposals to develop affordable housing utilizing up to $5 million in Housing Asset Funds. Three developers submitted proposals as shown in Table 1. Table 1: Developer Proposals Developer Community Housing Works (“CHW”) Satellite Affordable Housing Associates (“SAHA”) Eden Housing (“EDEN”) Project Name Bayline Apartments Sycamore Crossing Victoria Green # of Units 83 100 66 new units 198 new + rehab City staff and RSG, Inc. (“RSG”) evaluated each proposal based on the following criteria, as descried in the NOFA: • developer qualifications and experience, • financial capacity, • alignment with community and Housing Element goals, • project readiness and economic viability, and • project eligibility and affordability. RSG reviewed full proposals and development pro formas from each developer submitted in January 2026, as well as requested updated submissions received on June 29, 2026. RSG found Timothy Rood, Community Development Director CITY OF HERCULES July 13, 2026 Page 2
all proposals and pro formas have reasonable cost assumptions that comply with California Tax Credit Allocation Committee guidelines such as rent limits, operating expense minimums, and reserve requirements. All proposals comply with the Housing Asset Fund requirements as well. Notably, as compared to the original submissions, the most recent updates result in having three competitive project proposals with much narrower differences between them. Depending on which criteria the City Council prioritizes, they could consider either of the three project proposals to be marginally preferable. City staff and RSG continue to recommend funding just one project, versus splitting the $5 million award between multiple projects. This approach better ensures that the funded project will be more competitive for attracting other key funding sources and may then have a higher chance of successful and timely development. Table 2 distills the most salient differences among the three proposals for Council consideration: Table 2: Developer Proposals Key Differences Developer/Project CHW/Bayline SAHA/Sycamore EDEN/Victoria* new new + rehab Affordable Units 82 99 65 196 Deeply Affordable (30% AMI) Units 29 25 20 34 Weighted Average Affordability Level 49.9% AMI 49.9% AMI 48.0% AMI 52.3% AMI # of residents served (per BR count) 223 261 92 508 Units for Special Needs Population
21 for Persons with Intellectual and Development Disabilities (IDD) TBD 33 for Seniors Potential RHNA credit 82 99 65 110* City funding per unit $60,241 $50,000 $75,758 $25,253 * Note that the EDEN/Victoria Green proposal includes both new construction and the rehabilitation of an existing 132 unit project, with extension of its affordability covenants. The combined project is not directly comparable to the other proposals. However, if a certain portion of City funds are allocated towards rehabilitated units serving households under 45% AMI, the City may be able to receive RHNA credit. Table 3, which follows on subsequent pages, presents further detail on key components of each development proposal for City Council’s consideration.
Timothy Rood, Community Development Director CITY OF HERCULES July 13, 2026 Page 3
Table 3 Developer Proposals Expanded Summary Comparison Developer CHW SAHA Eden Project Name Bayline Apartments Sycamore Crossing Victoria Green Location Bayfront Boulevard Sycamore Ave. & San Pablo Ave. Paradise Drive (near Victoria Crescent W) APN 404-490-102-5 404-490-101-7 404-020-098 404-020-099 404-030-050 Population Served
Individuals and families (61 units) Persons with Intellectual and Developmental Disabilities (IDD) (21 units) Individuals and families (99 units)
Individuals, including 50% Seniors* (65 new units) *Reserve the right to change if it conflicts with existing regulatory agreements Individuals and families (131 existing units)
Building Size and Other Project Details: Total Building Square Footage 95,980 102,660 46,681 Number of New Buildings 2 1 1 Number of Stories 4 5 3 Site Control Yes, owns site Yes, with execution of Purchase & Sale Agreement Yes, owns site Other Project Notes Previously submitted an SB 35 development application Simultaneous re-syndication and rehabilitation of existing project to leverage tax credits in support of new construction Approx. 16% of construction budget for rehab; 84% of budget for new units Developer Qualifications and Experience: Years of Experience Nearly 40 years Over 50 years 58 years Development Portfolio Developed over 5,100 apartments in 53 communities, with 1,500 units in the pipeline Completed 75 affordable communities in the Bay Area. House over 4,000 residents Developed or rehabilitated over 12,930 units statewide
Timothy Rood, Community Development Director CITY OF HERCULES July 13, 2026 Page 4
Table 3 Developer Proposal Summary Developer CHW SAHA Eden Project Name Bayline Apartments Sycamore Crossing Victoria Green Number of Units by Income Level: New Units New + Rehab 30% AMI 29 25 20 34 50% AMI 16 25 18 58 60% AMI 27 49 27 81 80% AMI 10 0 0 23 Manager 1 1 1 2 # of Units 83 100 66 198 Percentage of Units by Income Level: 30% AMI 35% 25% 30% 17% 50% AMI 19% 25% 27% 29% 60% AMI 33% 49% 20% 41% 80% AMI 12% 0% 0% 12% Manager 1% 1% 1% 1% Weighted Average Affordability Level 49.9% AMI 49.9% AMI 48.0% AMI 52.3% AMI Unit Sizes: Bedroom Type 1, 2, & 3 BR Studio, 1, 2, & 3 BR Studio & 1 BR Studio, 1, 2, & 3 BR Weighted Average Bedroom Size 1.72 1.70 0.71 1.69 Est. Resident Count 223 261 92 508 Timothy Rood, Community Development Director CITY OF HERCULES July 13, 2026 Page 5
Table 3 Developer Proposal Summary Developer CHW SAHA Eden Project Name Bayline Apartments Sycamore Crossing Victoria Green Development Cost: New Units New + Rehab Total Development Cost (net of land) $60,161,999 $78,620,509 $44,778,036 $53,307,186 Total Development Cost per Unit (net of land) $724,843 $786,205 $678,455 $269,228 Development Costs Include Prevailing Wage Yes Yes Yes Total Developer Fee $2,800,000 $10,515,813 $7,547,677 Total Developer Fee per unit $33,735 $105,158 $38,120 Sources of Funding: Permanent Loan $8,134,000 $4,392,055 $12,701,552 Deferred Developer Fee $1,400,000 $6,231,876 $3,437,532 Developer Carryback Loan $15,731,079 FHLB Aff Hous Prog (AHP) $1,500,000 HCD: Aff Housing and Sustainable Comm. ("AHSC") $17,487,831 $29,641,702* HCD: Multifamily Housing Program ("MHP") $13,982,481 Contra Costa Co. (HOME) $2,529,197 $2,161,143 Contra Costa Co. (Measure X) $1,958,865 $3,216,020 East Bay Regional Center $1,500,000 City of Hercules $5,000,000 $5,000,000 $5,000,000 Federal LIHTC Equity (4%) $32,185,856 $28,984,555 Federal LIHTC Equity (9%) $24,357,564 Income from Operations $925,246 GP Capital Contribution $100 Total Sources $62,367,457 $82,167,509 $82,923,688 * If SAHA is unable to secure AHSC funding allocation, its alternate plan is HCD MHP funding. To be competitive for MHP projects on public land, SAHA asks the City to purchase the development site and lease it to SAHA to shield the City from property responsibilities before closing. City Funding as % of Total 8% 6% 6% City Funding per Unit $60,241 $50,000 $75,758 $25,253 Timothy Rood, Community Development Director CITY OF HERCULES July 13, 2026 Page 6
Cash Flow Projections: Long Term NOI Positive Positive Positive Debt Service Coverage Maintains 1.15x coverage that increases each year Maintains 1.15x coverage that increases each year thru Yr 15 Maintains 1.15x coverage that increases each year thru Yr 25 Potential Soft Loan Repayment May begin in Year 11 Not until Year 31 May begin in Year 11 * Per Gov Code Section 64500, only substantial rehabilitated units with affordability of 45% AMI or less, that receive more than $60,000 per unit of City funding, can be included for RHNA reporting. If the City and Eden agreed to apportion City funding for rehab and new construction, then the $5 million NOFA funding could allow the City to take credit for more units under RHNA.
Table 3 Developer Proposal Summary Developer CHW SAHA Eden Project Name Bayline Apartments Sycamore Crossing Victoria Green RHNA Fulfillment: # of Units That Fulfill Remaining RHNA Need (2025 remaining need) New Units New + Rehab Very Low or 50% AMI (343 Units) 45 50 38 83* Low or 80% AMI (196 Units) 37 49 27 27 Moderate or 120% AMI (125 Units) 0 0 0 0 Above Moderate (309 Units) 0 0 0 0 Total (973 Units) 82 99 65 110 Timothy Rood, Community Development Director CITY OF HERCULES July 13, 2026 Page 7
Table 3 Developer Proposal Summary Developer CHW SAHA Eden Project Name Bayline Apartments Sycamore Crossing Victoria Green Housing Successor Compliance: Minimum 30% @ 30% AMI, Maximum 20% @ 60-80% AMI New Units New + Rehab Number of 30% AMI Units 29 25 20 34 Housing Asset Fund Subsidy Per 30% AMI Unit $172,414 $200,000 $250,000 $147,059 Can Allocate Full Request to 30% AMI (Per Unit Funding Less than Total Dev Cost) Yes Yes Yes Yes Percent Senior Units 0% 0% 50% 17% SB 341 Compliance by Age Yes Yes Yes Alignment with Community Goals / Housing Element Needs: Housing Choice Vouchers (Program H1-3) no no no Senior Housing Project (Program H2-3) no no yes Alternative Housing Model (Program H2-5) no no no Housing for Persons with Special Needs (Program H4-1) yes no yes Policy 1.5 Encourage development of new special needs housing for seniors, single parents, families, large families, people with disabilities, including those with developmental disabilities, and extremely low-income households yes yes yes
Policy 1.6. Use density bonuses and other incentives to facilitate the development of new housing for extremely low, very low- and low-income households in conformity with State law yes yes yes Policy H4.5 Encourage housing serving special needs such as elderly and disabled yes no yes