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DBA 2010-03 and SPR 2010-02 December 13, 2010 Page 2 Project History In 1997 the City's Redevelopment Agency purchased the properties on the northeast corner of Birch and Pine Streets in furtherance of the Agency's requirement to provide new sources of affordable housing. Over the ensuing years the Agency issued a number of Requests for Proposals to develop the properties with single family dwellings, but due to various cycles in the residential development market, no project ever came to fruition. Late in 2009 the Agency issued a new Request for Proposals that encompassed three Agency-owned properties including the subject property, as well as property located at 435 and 437 South Birch Street and 2034 and 2038 North Bush Street. Projects also are proposed for these properties and they will be addressed in separate staff reports. The RFP resulted in the selection of the Developer for the construction of an affordable, multi-family housing project. On September 7, 2010 the Agency approved the Disposition and Development Agreement (DDA) with the Developer. The DDA requires that the 100% of the units be affordable to very low-income households (50% AMI). The beginning rents will be $989 per month for a two-bedroom unit and $1,125 for a three bedroom unit. These income and affordability requirements will be secured through a covenant that must remain in place for at least 55 years. In order to fund the construction, the Developer will apply for tax exempt bonds and tax credits. The DDA also specifies that, at this site, the Developer construct two 2-bedroom units and three 3-bedroom units for a total of five units. During the years following the acquisition, staff, at the Redevelopment Agency's direction, sought to secure an appropriate development project for the site, studying mostly single family products. After considerable time and resources were expended in the pursuit of single family developments, it was determined that the development costs made the project financially infeasible. Staff was then directed to pursue the development of a multi-family project of a scale and design that would be consistent with the neighborhood's character and that would comply with the Heninger Park Specific Development standards. The project proposed by the Developer responds to this direction. A major factor in determining the project's design was the input of Heninger Park neighborhood representatives. The Developer and staff have met with members of the neighborhood's architectural review committee several times over the course of the last year, and have presented the project to the Neighborhood Association. While some members of the neighborhood still expressed a desire to see the site developed with a single-family, rather than a multi-family product, the comments they provided in regards to the design of the multi-family project were incorporated into the final design. Given that the units will be restricted to very-low income families, the construction of these units will assist the City and Agency in meeting the Regional Housing Needs Assessment (RHNA) goals identified in the Housing Element, Consolidated Plan and the Implementation Plan. 39B-4