Project Financial Summary
Project Costs Revenues Operating Costs
Prior Actual 500,000 - -
2024-25 14,033,000 - -
2025-26 - -
2026-27 - - -
2027-28 - - -
2028-29 - - -
2029-30 - - -
2030-31 - - -
2031-32 - - -
2032-33 - - -
2033-34 - - -
2034-35 - - -
2035-36 - - -
2036-37 - - -
2037-38 - - -
2038-39 - - -
2039-40 - - -
2040-41 - - -
2041-42 - - -
2042-43 - - -
2043-44 - - -
2044-45 - - -
20 Year Total - - -
Grand Total 14,533,000 - -
Project Description/Scope/Purpose
1171 Sonora Court is a proposed 172-unit affordable rental housing project developed by MidPen Housing. 170 units will be affordable to lower-income households with 34 of those units designated for formerly unhoused residents. Two units will be unrestricted manager's units. The total development cost for the project is estimated to be approximately $183 million.
In 2022, City Council approved a $500,000 funding award for predevelopment activities through the City's 2022 Notice of Funding Availability (NOFA) (RTC 22-0973). The City funded this award using Permanent Local Housing Allocation (PLHA) funds. These funds were used to begin architectural plans for planning entitlements.
In 2024, City Council approved an additional funding award to purchase the 1.3-acre 1171 Sonora Court property for $12,500,000 and to provide additional predevelopment funds in the amount of $1,533,000 as part of the City's 2024 NOFA (RTC 24-0863).
The City will purchase the property from MidPen and enter into a long-term ground lease with MidPen upon construction commencement. Predevelopment funds will be used to complete architectural and design drawings and to fund property holding costs. These funds will allow MidPen to pursue additional financing for the project and secure planning entitlements.
Project Evaluation and Analysis
The project is in the predevelopment stage. The City's 2022 award of $500,000 in predevelopment funds was used to reimburse MidPen for soft costs such as engineering and design/architecture. MidPen submitted a formal application for planning entitlements in December 2023.
The City's 2024 award is used to acquire the property for $12,500,000 from MidPen in December 2024. There is also a Disposition and Development Agreement which sets the terms of the development of the project and provides a loan of $1,533,000 in predevelopment funds. These funds will be disbursed to MidPen as a loan upon the City's acquisition of the property. Additional architectural and design work will be completed with these funds to finalize planning entitlements. Planning entitlements are expected to be secured by Summer 2025. The City will enter into a long-term ground lease with MidPen upon construction commencement, which is expected by spring 2028. Construction would be completed within approximately two years.
Fiscal Impact
Council approved $500,000 in predevelopment funding in RTC 22-0973. Permanent Local Housing Allocation (PLHA) funds were used in place of Housing Mitigation Funds (HMF) per RTC 24-0467. Funds were disbursed as a loan to MidPen in June 2024.
Council also approved a total of $14,033,000 in funding in RTC 24-0863. Housing Mitigation Funds is the funding source for this award. The total award includes $12,500,000 for acquisition of the property and a loan of $1,533,000 for predevelopment work.
Funds are disbursed in December 2024.
Funding Sources
Permanent Local Housing Allocation (PLHA), Housing Mitigation Fund (HMF) Plans and Goals
HE - Housing Element - HE-1: Adequate Housing
LT - Land Use and Transportation - LT-7: Diverse Housing Opportunities 836490 - 1171 Sonora Court Predevelopment of Affordable Housing Originating Year: 2023 Project Type: Housing Department: 150 - Community Development Planned Completion Year: 2030/31 Category: Special Project Manager: Ryan Dyson Project Financial Summary
Project Costs Revenues Operating Costs
Prior Actual - - -
2024-25 225,000 - -
2025-26 - -
2026-27 - - -
2027-28 - - -
2028-29 - - -
2029-30 - - -
2030-31 - - -
2031-32 - - -
2032-33 - - -
2033-34 - - -
2034-35 - - -
2035-36 - - -
2036-37 - - -
2037-38 - - -
2038-39 - - -
2039-40 - - -
2040-41 - - -
2041-42 - - -
2042-43 - - -
2043-44 - - -
2044-45 - - -
20 Year Total - - -
Grand Total 225,000 - -
Project Description/Scope/Purpose
Study Issue CDD 23-01. This study issues features a feasibility study that will be prepared to identify whether increasing the City’s inclusionary housing requirement from 15% to 20% for both for-sale and rental housing will allow the City to capture additional affordable units and make progress towards meeting the Regional Housing Needs Allocation. This study will also analyze in-lieu fee amounts. Depending on the outcome of the feasibility study, an updated ordinance would be prepared to increase residential inclusionary percentages as identified. The City would ensure adequate legal review is included in this ordinance revision because of the new level of review by the State.
Project Evaluation and Analysis
A consultant will be hired to prepare the feasibility study and fee analysis. Pending the consultant study, a study session with the Council will be held. The City's Inclusionary Ordinances and Fee Schedules will be updated accordingly based on final action.
Study is anticipated to be completed in summer 2025.
Fiscal Impact
$225,000 in General Funds has been approved to cover the cost of the Consultant for this work effort. Should affordable housing in-lieu fees be increased based on the study, additional housing revenue is anticipated.
Funding Sources
General Fund
Plans and Goals
HE - Housing Element - HE-5: Equal Housing Opportunities HE - Housing Element - HE-1: Adequate Housing
HE - Housing Element - HE-2: Enhanced Housing Conditions and Affordability 836540 - Consider Increasing Inclusionary Housing Requirement to 20% in New Residential Developments
Originating Year: 2023 Project Type: Housing Department: 150 - Community Development Planned Completion Year: 2025/26 Category: Special Project Manager: Ryan Dyson Attachment 2
1 of 1