TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Erik L. Soliván
SUBJECT: See Below DATE: August 10, 2026
Approved Date:
8/21/26
COUNCIL DISTRICT: 4
SUBJECT: Exclusive Negotiation Agreement and Right of Entry with LH Housing and/or Propertyworx LLC for the Development of Affordable Housing at 71 Vista Montana
RECOMMENDATION
Adopt a resolution authorizing the Housing Director, or his designee, to negotiate and execute a:
(a) Three-year Exclusive Negotiation Agreement with the possibility of two six-month extensions, at the City’s discretion, and any ancillary documents with LH Housing or its affiliates for the final proposal of an affordable housing development project on the 71 Vista Montana property;
(b) Right of Entry Agreement with LH Housing or its affiliates to allow access to the 71 Vista Montana property to conduct the due diligence necessary to satisfy the milestones to be set forth in the Exclusive Negotiation Agreement; and
(c) Three-year Exclusive Negotiation Agreement with the possibility of two six-month extensions, at the City’s discretion, and any ancillary documents, including a Right of Entry Agreement with the second highest scoring respondent, Propertyworx LLC or its affiliates for the final proposal of an affordable housing development project on the 71 Vista Montana property, if LH Housing is unable to successfully execute an agreement with the City or does not comply in a timely and diligent manner with any material obligation under the Exclusive Negotiation Agreement.
COUNCIL AGENDA: 9/1/26
FILE: 26-899
ITEM: 8.3
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Exclusive Negotiation Agreement and Right of Entry with LH Housing and/or Propertyworx LLC for the Development of Affordable Housing at 71 Vista Montana
SUMMARY AND OUTCOME
The Housing Department is recommending that the City enter into an Exclusive Negotiation Agreement (ENA) with LH Housing (Developer) to provide assurances that the City will negotiate solely with the Developer for the development of the site. If the City Council approves this action, the Housing Director or his designee will execute the ENA for the final proposal of a potential development of an affordable housing project on the 71 Vista Montana property (Property). The City will also grant the Developer access to the Property through a Right of Entry Agreement to conduct the due diligence activities necessary to satisfy the milestones to be set forth in the ENA. In addition to securing future entitlements, the ENA will require that the Developer pursue the necessary due diligence and funding to bring the future Property to fruition. If negotiations are unsuccessful, or if the Developer cannot move forward with the proposed project, the City may terminate the ENA. Upon the termination, the City will enter into an ENA with the second highest respondent, Propertyworx LLC.
BACKGROUND
In December 2025, the Housing Department issued Request for Proposals CSJ HSG 12-15-2025, inviting qualified developers to submit proposals to design, finance, and construct high-quality workforce/middle-income housing on two City-owned sites: the Arena Hotel (817 The Alameda) and 71 Vista Montana. For 71 Vista Montana, Request for Proposals CSJ HSG 12-15-2025 sought a middle-income for-sale or rental housing proposal that maximizes allowable density, delivers units targeted to households earning up to 80% of area median income, includes substantial parking accommodations, provides for demolition of the existing structure, and reimburses the City for its investment in the Property.
Three proposals received by the February 13, 2026 deadline were scored by a panel against the evaluation criteria, and the developers with the highest preliminary scores for each site were invited to present to the panel at in-person interviews.
ANALYSIS
The Developer was the highest-ranked respondent for the Property based on its combined proposal and oral interview scores. The proposal, Vista Montana Parkside, is a 100% affordable workforce housing community of approximately 572 units, including a mix of studios, one-bedroom, and two-bedroom apartments, serving households earning up to 80% area median income. The plan subdivides the Property into four residential parcels and one centralized 440-space structure parcel, delivered in phases using modular construction following demolition of the existing structure. The proposed
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Exclusive Negotiation Agreement and Right of Entry with LH Housing and/or Propertyworx LLC for the Development of Affordable Housing at 71 Vista Montana
development budget is capitalized with private equity and conventional debt, with no low-income housing tax credits or City cash subsidy requested.
The Developer is a fully integrated affordable and workforce housing development and management company and a wholly owned subsidiary of Genesis Company, a firm with over 20 years of experience. The Developer manages a pipeline of over 3,500 units across California. The team’s relevant experience includes The Logan Apartments in Oakland (204 modular units, completed 2020), Alyx at Echelon Seaport in Boston (a
1.33 million-square-foot, three-tower phased development completed in 2021), and KURVE Wilshire in Los Angeles (a 430-unit, 23-story residential tower completed in 2019).
The Developer’s development team includes Decro Corporation, a nonprofit partner with over 35 years of experience in city-funded affordable housing that will oversee affordability covenant compliance and public reporting, and Cloud Apartments, the modular fabrication partner. The team’s demonstrated record of delivering large-scale projects on public land, together with the proposal’s repayment of the City’s investment, accelerated delivery schedule, and independence from constrained public subsidy sources, forms the basis for the Housing Department’s recommendation.
The ENA will contain a detailed schedule of performance that outlines the milestones and submittals required by the Developer during the ENA period. Concurrently with the ENA, the City will execute a Right of Entry Agreement granting the Developer and its consultants access to the Property to conduct the due diligence activities necessary to satisfy the milestones to be set forth in the ENA. These predevelopment activities may include site surveys, geotechnical investigations, environmental assessments, and other studies required to support entitlement applications and environmental review. The Right of Entry Agreement will require the Developer to maintain insurance, indemnify the City, and restore the Property to its original condition following any site investigations. Access under the agreement does not convey any interest in the Property.
An ENA is not a commitment to develop or to convey interests in land to a developer, it is an agreement to negotiate only with a specific developer for a determined period of time.
As stated in the Request for Proposals, if the Developer is unable to successfully execute an agreement with the City or does not comply in a timely and diligent manner with any material obligation under the ENA, the City may terminate negotiations and commence negotiations with the second-ranked respondent, Propertyworx LLC.
Propertyworx LLC proposes a 100% affordable rental community of 426 apartments in two phases: 250 apartments in Phase I and 176 apartments in Phase II. All apartments will serve households that earn 80% of Area Median Income or below, at an average of
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Exclusive Negotiation Agreement and Right of Entry with LH Housing and/or Propertyworx LLC for the Development of Affordable Housing at 71 Vista Montana
approximately 60% AMI. Propertyworx LLC will use the ministerial approval and does not require a General Plan amendment. Propertyworx LLC proposes modular construction to reduce cost, schedule, and delivery risk. The preliminary financing structure includes tax-exempt private activity bonds, low-income housing tax credits, potential City financing, and private capital.
EVALUATION AND FOLLOW-UP
Upon approval of the ENA agreement and fulfillment of the associated ENA requirements, which include entitlement and environmental review, staff will return to the City Council for approval of the next actions.
The project is required to comply with the Progress Milestone Schedule, consistent with the performance milestones included in the Request for Proposal and the Developer's proposal. Any changes to the milestones will be subject to the Director's evaluation and are not guaranteed to be approved. Substantial failure to execute these milestones, as determined by the Housing Department, will result in rescission of the land commitment.
The Schedule of Performance will include the following milestones in Table 1 below.
Table 1: Key Project Milestones
Key Project Milestones Date
1 Developer’s Consultant
Selection
Within 30 days of the execution of
the Agreement
3 Initial Financing Proposal Within three months of the execution of the Agreement
2 Developer Due Diligence
Completion
Within six months of the execution of
the Agreement
4 Preliminary Planning Review
Application
Within six months of the execution of
the Agreement. If a rezoning or
general plan change is going to be
pursued, an alternate timeline will be
issued by the Housing Department.
5 Financing Commitments
Secured
Within 24 months of the execution of
the Agreement
6 Start Construction Within 36 months of the execution of the Agreement
Prior to the disposition of any City-owned site, the City must comply with the Surplus Lands Act and the proceedings and findings required under that act. Additionally, because the Property was acquired with Low- and Moderate-Income Housing Asset Funds, prior to the lease or disposition of the Property, the City Council must approve
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Exclusive Negotiation Agreement and Right of Entry with LH Housing and/or Propertyworx LLC for the Development of Affordable Housing at 71 Vista Montana
the disposition agreement at a noticed public hearing, supported by a Health and Safety Code Section 33433 Report summarizing the value of the Property and the terms of the disposition.
The Developer has not requested City construction or permanent financing or other cash subsidy; the proposed development will be capitalized with private equity and conventional debt. Final transaction terms, including the structure and security for repayment of the City’s investment, will be negotiated during the ENA period and implemented after the City Council approval.
FISCAL IMPACTS
No expenses will be incurred in connection with pursuing an ENA and Right of Entry with the Developer and/or Propertyworx LLC. Any potential expenditures for financing the development of the Property will be subject to future City Council appropriations approval.
COORDINATION
The preparation of this memorandum was coordinated with the City Attorney’s Office and the City Manager’s Budget Office.
PUBLIC OUTREACH
This memorandum will be posted on the City Council Agenda website for the September 1, 2026 City Council meeting.
BOARD, COMMISSION, COMMITTEE RECOMMENDATION AND INPUT
No board, commission, or committee recommendation or input is associated with this action
CEQA
Not a Project, File No. PP17-003, Agreements/Contracts (New or Amended) resulting in no physical changes to the environment.
HONORABLE MAYOR AND CITY COUNCIL
August 10, 2026
Subject: Exclusive Negotiation Agreement and Right of Entry with LH Housing and/or Propertyworx LLC for the Development of Affordable Housing at 71 Vista Montana
PUBLIC SUBSIDY REPORTING
This item does not include a public subsidy as defined in section 53083 or 53083.1 of the California Government Code or the City’s Open Government Resolution.
/s/
Erik L. Soliván
Housing Director
For questions, please contact Banu San, Deputy Director, Housing Department, at [email protected].