Resolution 2024-### Page 1
RESOLUTION 2024-###
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN PABLO APPROVING
AND AUTHORIZING EXECUTION OF A SECOND AMENDMENT TO AMENDED AND
RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT WITH DANCO
COMMUNITIES FOR THE SALE AND DEVELOPMENT OF A PORTION OF THE FORMER SAN PABLO CITY HALL LOCATED AT 13831 SAN PABLO AVENUE, SAN
PABLO, CALIFORNIA
WHEREAS, “Expand Housing Options” is a major policy goal in the City Council’s Priority Workplan effective March 15, 2021 and most recently amended on November 7, 2022. In addition, “Historic Preservation Park for City-owned Buildings” is a priority in the City Council’s Priority Workplan;
WHEREAS, on February 1, 2021, the City Council declared a portion of the former City Hall property to be exempt surplus land under the California Surplus Act;
WHEREAS, on February 1, 2021, the City Council approved and authorized a Disposition and Development Agreement (the “DDA”) with Danco Communities providing for the purchase and development of all of the former City Hall property except three of the historical buildings located in the northwest portion of the property (the “Site”). The excluded buildings are the Blume House, the Bunk House and the Teixeira House, which will be retained by the City;
WHEREAS, under the DDA, the purchase price for the Site is $6,800,000 plus the amount needed to retire the outstanding loan for rooftop and carport photovoltaic systems installed at the Site (the “Solar Loan”) from the Energy Resources Conservation and Development Commission (approximately $579,083.18);
WHEREAS, under the DDA, the Developer is to purchase the Site and develop a mixed-use project containing not less than one hundred (100) units of affordable rental housing and not less than 7,500 square feet of new ground floor commercial space, not including the retention/reuse of the Alvarado Adobe Museum building, together with parking and associated amenities (the “Project”);
WHEREAS, the City Manager executed a total of three (3) amendments to the DDA in his capacity authorized in the DDA, to approve minor, non- monetary amendments. These amendments were for extensions to the time for close of escrow and amending the schedule of performance;
WHEREAS, on September 28, 2022, the Developer was awarded 9% tax credits from TCAC;
WHEREAS, the 9% tax credits only funded half of the Project, requiring the Project to be developed in two (2) phases;
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WHEREAS, on March 23, 2023, the Developer and the City entered into an Amended and Restated DDA (the “ARDDA”) for that purpose;
WHEREAS, under the ARDDA, the purchase price for the Phase 1 Parcel is $2,867,738 plus the amount needed to retire the outstanding Solar Loan installed at the Site from the Energy Resources Conservation and Development Commission. The purchase price for the Phase 2 Parcel is $ 3,932,262, which also includes the Alvarado Adobe Museum;
WHEREAS, under the ARDDA, the Developer will develop 50 residential dwelling units and 52 parking spaces, plus amenities on the Phase 1 Parcel, which development is currently underway . The remaining 50 residential units , 83 parking spaces and amenities and commercial space will be developed on the Phase 2 Parcel;
WHEREAS, since entering into the ARDDA, the Developer has not been successful in obtaining tax credit funding for Phase 2, and th e Developer requested additional time to obtain funding for Phase 2 and, in order to increase the likelihood of obtaining tax credit funding for the Phase 2 Project, requested that the City provide additional funding assistance;
WHEREAS, specifically the Developer asked for a two- year extension of the time to close escrow for the Phase 2 Parcel and that the entire Phase 2 Parcel Purchase Price be made a loan to be repaid from the residual receipts of the Phase 2 Project (currently only $500,000 of the $3,932,262 Phase 2 Parcel Purchase Price is a loan);
WHEREAS, as co nsideration for these changes, the Developer agreed to pay a Project Development Fee in the amount of $2,000,000 at the close of escrow for the Phase 2 Parcel which will compensate the City for costs associated with the continued delay of the Phase 2 Project, including holding costs such as property maintenance and insurance, opportunity costs, delayed receipt of tax revenues from a completed project, inflationary effects, and similar factors; the Project Development Fee will also be treated as a loan and paid over time from the residual receipts of the Phase 2 Project;
WHEREAS, a First Amendment to Amended and Restated Disposition and Development Agreement (the “ARDDA First Amendment”) detailing these changes was approved by the City Council on March 18, 2024; and
WHEREAS, City staff is now recommending that the Alvarado Adobe Museum be retained by the City and excluded from the Phase 2 Parcel/Phase 2 Project. The Alvarado Adobe Museum is already on a separate parcel and easily excluded. The exclusion of the Alvarado Adobe Museum from the Phase 2 Parcel does not change the Purchase Price for the Phase 2 Parcel or other financial terms, but does mean that the Developer will no longer be obligated to renovate/repurpose the approximately 3,500 square feet of that building for commercial uses. A Second Amendment to the ARDDA has been prepared to reflect this change.
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NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Pablo as follows:
Section 1. Recitals. The Recitals set forth above are true and correct and incorporated herein.
Section 2. Approval of ARDDA Second Amendment. The City Council hereby approves and authorizes the City Manager to execute the Second Amendment to Amended and Restated Disposition and Development Agreement, substantially in the form attached to the staff report accompanying this resolution, on behalf of the City. The City Manager is further authorized to execute such other documents and take such other actions as are necessary to carry out and implement the obligations of the City under the ARDDA, as amended by the ARDDA Second Amendment, and, with the consent of the City Attorney, to approve minor, non-monetary amendments to the ARDDA, as amended by the ARDDA Second Amendment.
* * * * * * *
ADOPTED this 10TH day of June, 2024, by the following votes:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
ATTEST: APPROVED:
_________________________________ _________________________________ Dorothy Gantt, City Clerk Patricia Ponce, Mayor