EBALDC Property Loan/Sale
Forgiveness
Twima Earley
Housing Development Manger
Asset Management Services
Contents
1. Staff Recommendation
2. Background & Legislative History
3. Analysis & Policy Alternatives
4. Fiscal & Equity Impacts
5. Implementation Timeline
6. Closing
Staff Recommends That The City Council Adopt A 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 Capital Fund II, LP For The Eastlake Property, To Preserve Long-Term Affordability Until 2073 And Facilitate The Property Sale To A New Owner.
Staff Recommendation
• Measure KK (2016) authorized $100M for affordable housing. • Acquisition and Conversion to Affordable Housing (ACAH) Program established 2017; rebranded under Resolution 87876 C.M.S. (2019).
• Eastlake ($5M) and Highland Palms ($3M) were among first ACAH awards. • Both serve residents up to 80% AMI, rents capped at 30% of 80% AMI.
Background & Legislative History
Eastlake (2515 10th Ave)
• 35 units built in 1957; 29 one-bed, 5 two-bed, 1 studio. • $1.1M in repairs including seismic retrofit.
• Deferred maintenance, habitability suits, and
vacancies.
• Working families and individuals earning ≤80% AMI.
Background & Legislative History
Property Overviews
Highland Palms (1810 E. 25th St)
• 23 units built in 1964; 8 one-bed, 14 two-bed, 1 three - bed.
• $3.3M in repairs including seismic retrofit.
• Deferred maintenance.
• Working families and seniors earning ≤80% AMI.
Both properties operate at losses with negative partner equity. 2024 Audit:
• Reserves depleted; EBALDC is currently subsidizing operations.
Background & Legislative History
Financial Conditions
Property Revenue Expenses Difference
Highland Palms $404,827 $427,576 -$22,749
Eastlake $538,987 $585,978 -$46,991
Property sale proceeds are expected to be insufficient to cover first-position debt (Hard Loan). • No residual to City.
• Forgiveness allows sale and preserves affordability through 2073.
Background & Legislative History
Debt Structure & Sale Proceeds Allocation
Property Sale
Proceeds
Hard Loan Net Hard
Loan
City
Investment
City Debt Net City
Debt
Highland
Palms
-$3.1M $4.6M -$1.5M $3M $3.6M -$3.6M
Eastlake -$2.8M $3.7M -$0.9M $5M $6.1M -$6.1M
• Full forgiveness – preserves affordability, avoids foreclosure. • Foreclosure – costly, displaces residents.
• Partial forgiveness – insufficient for stabilization. → Full forgiveness is fiscally responsible and sustains public benefit. • Proposal would preserve affordability through 2073 and prevent displacement. • Avoids foreclosure and ensures portfolio stability.
• Aligns with housing and racial equity goals.
Analysis & Policy Alternatives
Fiscal & Equity Impact(s)
Fiscal Impact(s)
If not approved
• Both properties face risk of foreclosure, leading to loss of 58 affordable homes and displacement of long-term residents.
If approved
• The City enables a stabilized transfer to a new qualified owner who will rehabilitate, preserve, and continue affordability through 2073.
• Safeguards the City’s original Measure KK investment and avoids a precedent-setting foreclosure in Oakland’s affordable housing portfolio.
• Prevents the potential loss of $8 million in City-secured affordability and keeps 58 families housed at below- market rents in East Oakland.
Equity Impact(s)
• 71% of residents are Black or African American.
• Average household income ~$45,000.
• Prevents displacement in East Oakland.
• Aligns with City racial equity and anti-displacement goals.
Implementation Timeline
1. December 2nd – Council consideration
2. December 3-5th – Execute forgiveness & reconveyance
3. Within 15 days of approval – Execution of the purchase and sale contract
4. January 2026 – Recordation of reconveyance & update to regulatory agreements
5. Q1-2026 – City will begin KPI oversite and monitoring Staff Recommends That The City Council Adopt A 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 Capital Fund II, LP For The Eastlake Property, To Preserve Long-Term Affordability Until 2073 And Facilitate The Property Sale To A New Owner.
Staff Recommendation
THANK YOU
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