RESOLUTION NO. 2025-XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY
AUTHORIZING THE CITY MANAGER TO EXECUTE THE FIRST
AMENDMENT TO THE DISPOSITION, DEVELOPMENT, AND LOAN
AGREEMENT BETWEEN THE CITY AND MIDPEN HOUSING
CORPORATION AND ADOPTING FINDINGS IN CONNECTION WITH
SUCH AMENDMENT
WHEREAS, the City is the owner of a 1.65-acre block of undeveloped real property bounded by Mission Boulevard, D Street, 2nd Street, and E Street in the City (the “Property”); and
WHEREAS, the Property was acquired by the Redevelopment Agency of the City of Union City in 2002 and 2003 with proceeds from a 1999 bond issue secured by property tax increment, and upon the dissolution of the Redevelopment Agency, the Property was transferred at no cost to the City pursuant to the Long-Range Property Management Plan of the Successor Agency to the Redevelopment Agency of the City of Union City; and
WHEREAS, the City and the MidPen Housing Corporation (“MidPen”) entered into an Exclusive Negotiating Rights Agreement (“ENRA”), dated August 15, 2018, which provides for the parties to negotiate towards a disposition and development agreement for the City’s disposition of the Property to MidPen or its assignee (“Developer”), the Developer’s construction and operation of an affordable housing development thereon with associated community facilities (the “Community Space”), and the City’s provision of financial assistance to the Developer therefor; and WHEREAS, City and MidPen staff have negotiated the terms and conditions under which Developer would lease the Property from the City for a term of ninety-nine (99) years (the “Ground Lease”) to develop, construct, own and operate an eighty-one (81) unit multi-family housing development, a portion of which would be affordable to extremely low, very low and low income households, with associated community facilities (the “Project”); and
WHEREAS, the Project, the Property and the terms and conditions for development, financing and operation of the Project are more particularly described in a Disposition, Development and Loan Agreement between the City and MidPen (the “DDLA”) and the attachments thereto, which was approved by the City Council on July 28, 2020 by adoption of Resolution No. 5632-20; and
WHEREAS, California Health and Safety Code Sections 33430 and 33431 provide that the City may lease property obtained from a redevelopment agency without public bidding, provided the City holds a noticed public hearing; and WHEREAS, California Health and Safety Code Section 33433 provides that prior to the lease of property acquired with tax increment funds, (i) the City must prepare and make available to the public the lease agreement and a report describing the terms of the lease and development of the property (the “Summary Report”), (ii) the City Council must hold a public hearing following notice, and (iii) the City Council must approve the conveyance by a resolution adopting specified findings; and Resolution No. 2025-XXX
Authorizing Execution of First Amendment to Lazuli Landing DDLA
WHEREAS, in 2020, the City caused notice to be published, caused a Summary Report to be prepared, made the DDLA and the Summary Report available for public review, and conducted a public hearing in accordance with all legal requirements; and WHEREAS, the rental payment for the Property will be One Dollar ($1.00) per year due on the commencement date of the lease and on each succeeding anniversary thereafter in advance for the next succeeding lease year; and WHEREAS, the City financing for the Project included in the DDLA as approved on July 28, 2020 by Resolution No. 5632-20 included (i) a loan in the amount of Five Million Thirty-Four Thousand Nine Hundred Twenty-Four Dollars ($5,034,924) (the “Loan”), and (ii) a grant in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000) (the “Grant”) to be used for the costs of construction and installation of the Community Space and tenant improvements for the Community Space; and WHEREAS, the City wishes to amend the City financing for the Project as provided in the First Amendment to the DDLA to include (i) a loan in the amount of Four Million Three Hundred Fifty-Five Thousand Six Hundred Thirteen Dollars ($4,355,613) (the “Loan”), (ii) a grant in the amount of One Million One Hundred Thirty-Five Thousand Six Hundred Sixty-Two Dollars ($1,135,662) (the “2025 Housing Successor Agency Grant”), and (iii) a grant in the amount of One Million Eight Hundred Thousand Dollars ($1,800,000) (the “City Grant”) to be used for the costs of construction and installation of the Community Space and tenant improvements for the Community Space; and
WHEREAS, MidPen has assigned, or will assign, its rights under the DDLA to MP Lazuli Landing Associates, L.P., a California limited partnership (the “Developer”), in which MidPen is the managing general partner; and
WHEREAS, concurrently with the commencement of the Ground Lease, the City and Developer will enter into a “Regulatory Agreement” in the form attached to the DDLA, which will restrict residential rents in all of the apartment units in the Project (except one manager’s unit) to very low income and extremely low income residents at affordable levels for a period of ninety-nine (99) years; and WHEREAS, concurrently with the commencement of the Ground Lease, the City and Developer will enter into a “Community Space Sublease” in the form attached to the DDLA, pursuant to which the Developer will sublease approximately 6,000 square feet of office space in the Project to the City to be used for the City’s Youth and Family Services program and/or other City departments and programs, and/or other nonprofit and community organizations as determined by City, and other uses as determined by City; and
WHEREAS, in 2020, the Developer applied to the City for a density bonus and incentives and concessions pursuant to the State Density Bonus Law, Government Code Section 65915, et seq., based on providing a portion of the units on the Property to be affordable to very low income households, and the DDLA and the Regulatory Agreement are intended to implement the requirement for the Project to provide Resolution No. 2025-XXX
Authorizing Execution of First Amendment to Lazuli Landing DDLA
affordable housing units in exchange for receiving the density bonus and incentives and concessions pursuant to the State Density Bonus Law; and WHEREAS, the lease of the Property pursuant to the DDLA and the Ground Lease are subject to the requirements of the Surplus Property Act, Government Code Section 54220, et seq., as it existed on December 31, 2019, because the ENRA between the City and MidPen was entered into prior to September 30, 2019, and the Ground Lease of the Property was expected to occur no later than December 31, 2022; and
WHEREAS, the Project is within the scope of the Initial Study/Mitigated Negative Declaration entitled “Midpen Affordable Housing Project,” dated October 2019, prepared pursuant to the California Environmental Quality Act (CEQA) and adopted by the City Council on February 11, 2020; and
WHEREAS, in the course of arranging financing for the Project, the Developer has made minor changes to the Project and has proposed related minor amendments to the DDLA.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Union City as follows:
1. The City Council finds that the foregoing Recitals are true and correct and are incorporated into this Resolution.
2. The City Council finds that the proposed amendments to the DDLA are exempt from the California Environmental Quality Act (CEQA) under the Common Sense Exemption pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility of a significant environmental impact due to these changes, which include, but are not limited to, changes in financial terms, lease provisions, and the affordable housing regulatory agreement.
3. The City Council hereby finds that the 2020 Summary Report adequately summarizes the proposed project as amended.
4. The City Council finds that the lease of the Property and the provision of the Loan, the 2025 Housing Successor Agency Grant, and the City Grant are in accordance with the DDLA, as amended, and the Ground Lease will assist in the development of housing for extremely-low, very-low, and low-income households.
5. The City Council finds that the consideration to be paid for the lease of the Property pursuant to the Ground Lease is not less than the fair reuse value of the Property, at the use and with the covenants and conditions imposed by the DDLA, as amended, the Ground Lease, and the Regulatory Agreement.
6. The City Council approves the First Amendment to the DDLA, and authorizes the City Manager (or designee), on behalf of the City, to execute the First Amendment to the DDLA, the Ground Lease, the Regulatory Agreement, and the Community Space Sublease substantially in the forms attached to the DDLA, and to Resolution No. 2025-XXX
Authorizing Execution of First Amendment to Lazuli Landing DDLA
make revisions and amendments to such documents, subject to the approval of the City Attorney, so long as such actions do not materially or substantially change the uses or construction permitted on the Property, or materially or substantially add to the costs incurred or to be incurred by the City as specified in the DDLA, Ground Lease, Regulatory Agreement or Community Space Sublease, and such amendments may include extensions of time to perform as specified in the Schedule of Performance.
7. The City Council authorizes the City Manager to disburse the Loan, the 2025 Housing Successor Agency Grant, and the City Grant, to execute such other documents, and to take all other actions as necessary to carry out the DDLA, as amended, the Ground Lease, the Regulatory Agreement, and the Community Space Sublease, and to carry out the intent of this Resolution.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Union City at a regular meeting held on October 28, 2025, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
GARY SINGH
Mayor
ATTESTED: APPROVED AS TO FORM:
THAI NAM N. PHAM
City Clerk
KRISTOPHER J. KOKOTAYLO
City Attorney
Attachments:
1. Exhibit A – First Amendment to the DDLA (Lazuli Landing)