APPROVED AS TO FORM AND LEGALITY
________________________
CITY ATTORNEY’S OFFICE
OAKLAND CITY COUNCIL
RESOLUTION NO. ______________ C.M.S.
Resolution Authorizing The City Administrator To Forgive $3,000,000 In Outstanding Principal And All Accrued And Unpaid Interest Owed By East Bay Highland Palms II, LP For The Highland Palms Property, And $5,000,000 In Outstanding Principal And All Accrued And Unpaid Interest Owed By East Bay Capita l Fund II, LP For The Eastlake Property, To Preserve Long-Term Affordability Until 2073 And Facilitate The Property Sale To A New Owner.
WHEREAS, the City of Oakland (City)has is sued over one hundred affordable housing loans over the past several decades to support the development and preservation of affordable housing units; and
WHEREAS, preserving the long-term affordability of properties such as Eastlake and Highland Palms, which were among the first awards under the Acquisition and Conversion to Affordable Housing (ACAH) Program in 2017 with $5 million and $3 million respectively from Measure KK bonds, remains a cr itical priority to combat gentrification and support low-income communities; and
WHEREAS, the City’s ongoing partnership with East Bay Asian Local Development Corporation (EBA LDC), which manages approxima tely 18% of the City’s affordable housing portfolio, underscores th e importance of supporting this nonprofit’s sustainability to maintain over 2,100 existing homes for more than 4,000 residents;
WHEREAS, EBALDC has determined that selling the Eastlake and Highland Palms properties is necessary to address ongoing operational and fina ncial challenges, including high vacancies, deferred maintena nce, and insufficient revenue from limited Housing Choice Voucher participation which ha ve strained the organization's resources and hindered its ability to sustain these assets while fulfilling affordability commitments; and
WHEREAS, The Highland Palms and Eastlake properties are owned by affiliates of EBALDC, namely East Bay Highland Palms II, LP and East Bay Capital Fund II, LP, respectively; and
WHEREAS, East Bay Highland Palms II, LP has an outstanding loan from the City for the Highland Palms property in the amount of $3,000,000 in outstanding principal and $662,522 in accrued and unpaid interest as of September 25, 2025; and
WHEREAS, East Bay Capital Fund II, LP has an outstanding loan from the City for the Eastlake property in the amount of $5,000,000 in outstanding principal and $1,096,956 in accrued and unpaid interest as of September 25, 2025; and
WHEREAS, EBALDC requested forgiveness of the outstanding City loans to facilitate the sale of these properties at a below-market price to a new, mission-aligned buyer, as the accumulated debt, including prin cipal and accrued interest, exceeds the projected sale proceeds and would otherwise prevent the transaction, risking foreclosure, resident displacement, and loss of affordability; and
WHEREAS, staff recommends this forgiveness as being in the best interest of the City because it preserves 58 affordable units serving households at 80% Area Median Income until 2073, avoids the hi gher costs and disruptions of foreclosure proceedings, strengthens EBALDC as a long-term part ner by enabling portfo lio stabilization, and incorporates enhanced performance covenants—including quarterly reporting, a minimum debt coverage ratio of 1.15, reserve require ments at 5% of operating expenses, and KPI monitoring—to ensure fiscal health and prev ent recurrence of similar challenges; now, therefore, be it
RESOLVED: That, in connection with the loan from the City to East Bay Highland Palms II, LP for the Highland Palms property, the City Administrator is authorized to forgive $3,000,000 in principal and all accrued and unpaid interest as of the date of the sale of the Highland Palms property by East Bay Highland Palms II, LP, to preserve long-term affordability until 2073 and facilitate the sale to a new owner; and be it
FURTHER RESOLVED: That, in connection with the loan from the City to East Bay Capital Fund II, LP for the Eastlake propert y, the City Administrator is authorized to forgive $5,000,000 in principal and all accrued and unpaid interest as of the date of the sale of the Eastlake property by East Bay Capi tal Fund II, LP, to preserve long-term affordability until 2073 and facilitate the sale to a new owner; and be it
FURTHER RESOLVED: That appropriate due diligence, in accordance with current City policies and practices, shall be performed prior to the execution of any such forgiveness, extensions, or amendments, and the City Administrator shall retain discretion to carry out such actions based on the performance and good standing of each project; and be it
FURTHER RESOLVED: That all documents shall be reviewed and approved as to form and legality by the City Attorney’s Office prior to execution; and be it
FURTHER RESOLVED: That the City Administrato r is hereby authorized to conduct negotiations, execute documents, and ta ke any other action with respect to the loans consistent with this Resolution and its basic purpose.
IN COUNCIL, OAKLAND, CALIFORNIA,
PASSED BY THE FOLLOWING VOTE:
AYES - BROWN, FIFE, GALLO, HOUSTON, RAMACHANDRAN, UNGER, WANG, AND
PRESIDENT JENKINS
NOES –
ABSENT –
ABSTENTION –
ATTEST:
ASHA REED
City Clerk and Clerk of the Council of the
City of Oakland, California