RESOLUTION NO. 2025-XXX
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UNION CITY AMENDING THE FY 2025-2026 BUDGET IN ACCORDANCE WITH THE
DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT BETWEEN
THE CITY AND MIDPEN HOUSING CORPORATION FOR THE LAZULI
LANDING PROJECT
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 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 a Budget Allocation in Accordance with DDLA for Lazuli Landing
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 proposed in 2020 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 from the City, in its capacity as successor to the housing functions of the Community Redevelopment Agency of the City of Union City, 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, 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 eighty (80) apartment units in the Project to very low income and extremely low income residents at affordable levels for a period of ninetynine (99) years, an increase from the thirty-nine (39) apartments units to be restricted in the 2020 DDLA; 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 affordable housing units in exchange for receiving the density bonus and incentives and concessions pursuant to the State Density Bonus Law; and
Resolution No. 2025-XXX
Authorizing a Budget Allocation in Accordance with DDLA for Lazuli Landing
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 some minor changes to the Project and the Developer has proposed related minor amendments to the DDLA and requested additional financial assistance; and WHEREAS, the Project with the proposed minor amendments to the DDLA 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, the City Council approved the First Amendment to the DDLA on October 28, 2025, by adoption of Resolution 2025-XXX.
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 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.
BE IT FURTHER RESOLVED that the City Council of the City of Union City hereby approves an allocation of funding for the $4,355,613 Loan to the Lazuli Landing Project pursuant to the terms of the DDLA, as amended, with allocations from the following sources for the Lazuli Landing “Loan” as follows:
a. $1,850,399 already expended from the Housing In-Lieu Fund (including funds from the sale of the 11th Street lot) (Account Number 23300000-11101) b. $2,505,214 from the RDA Low/Mod Income Housing Fund (Account Number 20100000-11101)
BE IT FURTHER RESOLVED that the City Council of the City of Union City hereby amends the FY 2025-2026 Budget by appropriating $1,135,662 to account number 27500000-XXXXX (Affordable Housing 2010 Bonds) for the “2025 Housing Successor Resolution No. 2025-XXX
Authorizing a Budget Allocation in Accordance with DDLA for Lazuli Landing
Agency Grant” to the Lazuli Landing Project pursuant to the terms of the DDLA, as amended, as follows:
$1,135,662 from the Affordable Housing 2010 Bonds (Account Number 27500000-56703) (Affordable Housing 2010 TAB Fund - Project Grants) for the Lazuli Landing “2025 Housing Successor Agency Grant.” BE IT FURTHER RESOLVED that the City Council of the City of Union City hereby confirms the allocation of funding currently included in the Five-Year Capital Improvement Plan for Fiscal Years 2025-2026 to 2029-2030 for the $1,800,000 “City Grant” to the Lazuli Landing Project pursuant to the terms of the DDLA, as amended, as follows:
$1,800,000 from the Capital Facilities Improvement Development Impact Fee Fund (Account Number 41192544-56703) (Capital Facilities Improvement Development Impact Fee Fund – Project Grants) for the Lazuli Landing “City Grant.”
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