Housing Authority Memorandum
TO: HONORABLE MAYOR AND HOUSING DATE: SEPTEMBER 1, 2026
AUTHORITY BOARD
FROM: HOUSING AND HUMAN SERVICES WARD: 1 SUBJECT: NOTICED HEARING – APPROVAL OF A DISPOSITION AND DEVELOPMENT AGREEMENT WITH GRAPEVINE DEVELOPMENT, LLC FOR THE SALE OF HOUSING AUTHORITY OF THE CITY OF RIVERSIDE PROPERTY LOCATED AT 2882 MISSION INN AVENUE FOR $1 TO FACILITATE THE DEVELOPMENT OF TEN AFFORDABLE HOUSING UNITS AS PART OF A 64-UNIT MIXED-USED DEVELOPMENT IN COORDINATION WITH THE SUCCESSOR AGENCY AT 2731-2871 UNIVERSITY AVENUE ISSUE:
Conduct a public hearing and approve a Disposition and Development Agreement with Grapevine Development, LLP for the sale of Housing Authority of the City of Riverside property located at 2882 Mission Inn Avenue for $1 to facilitate the development of 10 affordable housing units as part of a 64-unit mixed-use development in coordination with the Successor Agency at 2731-2871 University Avenue.
RECOMMENDATIONS:
That the City Council:
Conduct a public hearing pursuant to California Health and Safety Code Section 34312.3 regarding the proposed conveyance of 2882 Mission Inn Avenue to Grapevine Development, LLC for $1; Approve a Disposition and Development Agreement with Grapevine Development, LLC for the sale of Housing Authority property located at 2882 Mission Inn Avenue for $1 to facilitate the development of a 10-unit affordable housing project; and Authorize the Executive Director, or his designee, to execute the Disposition and Development Agreement with Grapevine Development, LLC, including making minor and non-substantive changes.
BACKGROUND:
In 2006, the former Redevelopment Agency acquired the property located at 2731-2871 University Avenue (Successor Agency Property). The Successor Agency Property consists of seven contiguous parcels of vacant land, identified as Assessor's Parcel Numbers 211-131-021, -022, -023, -024, -026, -031, and -032.
In 2008, the former Redevelopment Agency, on behalf of the Housing Authority, acquired the property located at 2882 Mission Inn Avenue, identified as Assessor's Parcel Number 211-131-001 (Housing Authority Property). The Housing Authority Property contained a single-family dwelling that was subsequently destroyed in a fire and demolished.
The Successor Agency Property consists of approximately 1.9 acres of vacant land zoned Commercial Retail (CR) with a General Plan land use designation of Mixed Use - Neighborhood (MU-N). The Housing Authority Property consists of approximately 0.22 acres of vacant land zoned R-1-7000 with a General Plan land use designation of Medium Density Residential.
On July 18, 2019, the Countywide Oversight Board approved Resolution No. 2019-037 authorizing a Purchase and Development Agreement with Grapevine Economic Development Fund, Inc. for the disposition of the Successor Agency Property and the development of a mixed-use project consisting of retail and multi-family housing. On December 2, 2019, escrow was canceled after Grapevine Economic Development Fund, Inc. failed to submit the required security deposit for acquisition of the Successor Agency Property and Housing Authority Property.
On October 9, 2019, Governor Newsom signed Assembly Bill 1486 (AB 1486), which amended the Surplus Land Act (SLA) to promote the use of publicly owned surplus land for affordable housing development. Among other changes, AB 1486 expanded the definition of “local agency” under the SLA to include land owned by a successor agency to a former redevelopment agency and a housing authority.
Under the SLA, when applicable, a local agency must provide notice of the availability of surplus land to specified public agencies and affordable housing developers registered with the California Department of Housing and Community Development (HCD). For surplus land proposed for residential development, the initial Notice of Availability (NOA) generally requires that at least 25 percent of the residential units be restricted to lower-income households, subject to applicable statutory requirements and exemptions. The SLA also establishes long-term affordability requirements, including a 55-year affordability covenant for qualifying affordable housing developed on surplus land.
DISCUSSION:
On April 29, 2020, pursuant to the SLA, the Successor Agency adopted a resolution declaring various vacant parcels as surplus, including the Successor Agency Property.
On May 26, 2020, staff issued an initial 60-day NOA for the disposition of the Successor Agency Property. The NOA required that at least 25 percent of the proposed residential units be affordable to lower-income households, consistent with the applicable SLA requirements. No interested buyers responded by the NOA deadline.
On July 8, 2021, the Successor Agency issued a Request for Proposals (RFP) for the development of the Successor Agency Property, with a requirement that 15 percent of the residential units be affordable. By the October 6, 2021 deadline, five proposals were received and evaluated. Following the evaluation process, Grapevine Development, LLC (Grapevine) was selected as the preferred developer.
On April 21, 2022, the Economic Development, Placemaking and Branding/Marketing Committee reviewed Grapevine's proposed development of approximately 1.9 acres of Successor Agency-owned vacant land located at 2731-2871 University Avenue (APNs 211-131-021, -022, -023, -024, -026, -031, and -032) and approximately 0.22 acres of Housing Authority-owned vacant land located at 2882 Mission Inn Avenue (APN 211-131-001). The proposed project consists of a 64-unit mixed-use development, including 10 affordable housing units, representing approximately 15.6 percent of the total residential units. The Committee unanimously authorized staff to negotiate the disposition and development of the properties with Grapevine.
To facilitate the development and enable Grapevine to pursue affordable housing funding opportunities, Grapevine has proposed developing 10 affordable housing units on the Housing Authority Property at 2882 Mission Inn Avenue. The Housing Authority Property will be conveyed to Grapevine pursuant to a Disposition and Development Agreement (DDA) for $1, representing a land write-down of $245,860.76 based on recent comparable property sales. The land write-down will serve as a public investment in the development of the affordable housing units and is intended to be recognized as a HOME Investment Partnerships Program (HOME) match, subject to applicable federal requirements and approval by the HOME Program administrator.
The DDA will require the development of 10 affordable housing units, including two (2) units restricted to households earning at or below 50 percent of Area Median Income (AMI) and eight (8) units restricted to households earning at or below 60 percent of AMI. The DDA will also include provisions requiring the execution and recording of restrictive covenants to maintain the affordability of the units for 55 years.
The overall development will consist of 64 residential units, including 10 affordable housing units to be developed on the Housing Authority Property at 2882 Mission Inn Avenue and the remaining 54 units to be developed on the Successor Agency Property at 2731-2871 University Avenue. The Successor Agency Property will be transferred pursuant to a separate Purchase, Sale, and Development Agreement, which was approved by the Successor Agency to the Redevelopment Agency of the City of Riverside on January 6, 2026, and by the Countywide Oversight Board on January 15, 2026.
The total development cost of the Housing Authority Property is $5,700,365. Grapevine will be pursuing the following funding sources:
Source of Funds
Amount
Private Permanent Loan
$1,858,000
Low Income Housing Tax Credit Equity
$2,264,000
HOME Investment Partnerships Program
$900,000
HCD Permanent Local Housing Allocation - City of Riverside allocation $250,000
Deferred Developer Fee
$250,000
Sponsor Equity - Grapevine Development, LLC
$178,364
TOTAL SOURCES
$5,700,365
On May 8, 2023, the California Department of Housing and Community Development (HCD) notified the Successor Agency that it had acknowledged compliance with the applicable requirements of AB 1486 and the SLA related to the proposed disposition of the property to Grapevine Development, LLC. As part of the AB 1486 compliance requirements, the DDA will require the 10 affordable housing units at 2882 Mission Inn Avenue to be completed and receive Certificates of Occupancy before the remaining units on the Successor Agency Property are completed. The properties may be developed concurrently; however, the affordable housing units must receive Certificates of Occupancy before Certificates of Occupancy are issued for the remaining units on the Successor Agency Property.
Staff is requesting that the City Council approve a Disposition and Development Agreement with Grapevine Development, LLC for the $1 conveyance of the Housing Authority Property at 2882 Mission Inn Avenue to facilitate the development of 10 affordable housing units and enable Grapevine to pursue affordable housing funding resources necessary to finance the project.
FISCAL IMPACT:
The proposed action will result in a $245,860.76 land write-down by the Housing Authority, representing the difference between the value of the Housing Authority Property and the proposed $1 sale price. The land write-down represents a public investment in the development of 10 affordable housing units and is intended to be recognized as HOME match, subject to applicable federal requirements and approval by the HOME Program administrator. The $1 in sale proceeds will be receipted into the Local Affordable Housing Fund, Housing Authority Program Income Account No. 9933900-374200.
Prepared by: Agripina Neubauer, Housing Project Manager Approved by: Michelle Davis, Housing and Human Services Director Certified as to
availability of funds: Julie Nemes, Finance Director
Approved by: Kris Martinez, Assistant City Manager
Approved as to form: James Johnson, City Attorney
Attachment: Disposition and Development Agreement
2882 Mission Inn DDA with Grapevine Development, LLC ● Page 2