22645 Grand Street | Hayward, CA 94541 | Tel: 510-582-1460 | edenhousing.org Broker License No. 872400
December 5, 2022
Ms. Nell Selander
Director
City of South San Francisco
Economic & Community Development Department
PO Box 711
South San Francisco, CA 94083-0711
Dear Ms. Selander:
Please accept this letter as Eden Housing’s request for an administrative waiver of the closing conditions specified in the DDLA dated November 2021 between Eden Housing and the City of South San Francisco for the proposed development at 201 Baden Avenue, currently being used as a public parking lot. The attached draft resolution details the conditions of the DDLA that we seek to waive to effectuate the closing of 201 Baden Avenue.
The proposed development envisioned Eden Housing having site control in the form of an executed Purchase and Sale Agreement, of the neighboring KFC at 199 Airport Boulevard. Late last year, Eden and Harman Management negotiated a PSA that was ready for execution upon Harman taking title to the property. Despite Harman’s best efforts to take title to the property, they have been unable to do so, and the PSA remains unexecuted.
Should Harman remain unsuccessful in their negotiations with the current title holder, Harman has shared with us a lease agreement in which Harman has the option to purchase the property in 2035 or upon the title holder’s passing. Harman has indicated that they will exercise this option and we have requested this in writing.
Eden Housing remains hopeful that we will gain site control of the KFC and move forward with the highest and best use of this highly visible corner in downtown – the originally envisioned 82-unit senior housing property with a ground floor restaurant with drive-thru. However, we are aware of the City’s requirement to comply with the Surplus Lands Act and close on the city-owned site by year-end 2022, as per the DDLA.
Upon your agreement of this joint waiver, we will work with the City to close on the property.
Upon closing the property at 201 Baden Avenue, Eden will lease the parcel back to the City at the cost of actual third-party expenses incurred by Eden for the City’s continued use as a paved surface public parking lot until the commencement of the housing project on the parcel(s). This structure is similar to the agreement Eden has with the City of Livermore, the lease is attached as an example.
To effectuate the purchase of 201 Baden Avenue, Eden proposes a new performance schedule as follows:
City Funding Application Completed
County Funding Application Completed
City Land Commitment Completed
Close on City Land 12/31/2022
KFC Land Commitment (signed PSA)
12/31/2023
or earlier
Select Consultants
12/31/2023
or earlier
Entitlement and Planning App Submittal 5/1/2023
Receive Approvals from City 2/1/2024
Submit Construction Design 7/1/2024
Apply for funding sources
Apply for tax credits 8/1/2025
Close on KFC parcel, Start Construction 2/1/2026
Should an executed PSA for the KFC be obtained by 12/31/2023, Eden will move forward with the predevelopment of the original 82 1-bedroom unit building with structured parking and KFC with drive-thru on the ground floor. Eden has secured $6.9 million for an estimated $68 million project ($830k per unit).
Initial conversations with the San Mateo Department of Housing indicates there is no expiration date to the AHF 9.0 funds.
Per HCD’s LHTF program regulations (section 109), the City’s LHTF funds ($2.3 million) must be encumbered by a loan commitment to a developer (Eden) within 60 months of the date of the executed state Standard Agreement. The LHTF was awarded to the City in January 2022, giving the City until January 2027 to encumber the funds. Under the proposed schedule, Eden hopes to be able to encumber the funds in early 2024.
Financing Sources Amount Status
4% LIHTC $35,000,000
Perm loan tranche A $1,000,000
FHLB $810,000
City soft loan $2,362,500 Committed (LHTF)
County soft loan $1,200,000 Committed (AHF 9.0)
Land Donation $1,440,000 Committed
City soft loan $1,890,000 Committed (City affordable housing trust fund) Deferred fee $440,000
County soft loan $3,267,437
Gap $21,000,000
TDC $68,409,937
Should site control of the KFC not be obtained by 12/31/2023, Eden will reconvey the parcel to the City or we will move forward with the predevelopment of 50-60 1- bedrooms 100% affordable rental building for seniors at 201 Baden Avenue. We envision the project would be on a similar footprint to that proposed by Group 4 Architecture in 2017 on the City-owned lot. We will review preliminary site plans with the City to ensure the project meets the City’s needs. On a per unit basis, the cost for this project would be between $41 million and $50 million. We would seek funds from the same sources as proposed in the larger project.
Please let me know if you have any questions or would like more information to process this request.
Best
Tami Strauss
Associate Director of Real Estate Development