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Agenda San Francisco Housing Authority Board of Commissioners

Date:

October 14, 2010

To:

SAN FRANCISCO HOUSING AUTHORITY COMMISSIONERS

Presented By: Barbara Smith, Housing Development & Modernization Administrator SUBJECT: RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO: (1) NEGOTIATE AND EXECUTE AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT; (2) NEGOTIATE A DISPOSITION AND DEVELOPMENT AGREEMENT, GROUND LEASE, AND RELATED DEVELOPMENT AGREEMENTS; AND (3) APPLY FOR AND PURSUE FUNDING OPPORTUNITIES WITH CP DEVELOPMENT CO., LP, A DELAWARE LIMITED PARTNERSHIP (MASTER DEVELOPER) AND MCCORMACK BARON SALAZAR, INC., A MISSOURI CORPORATION, FOR REVITALIZATION OF THE CAL 1-18(4) ALICE GRIFFITH PUBLIC HOUSING SITE

BACKGROUND The Alice Griffith buildings and infrastructure are obsolete, poorly configured and deteriorating with age. The Authority desires to address this situation and improve the living conditions for Alice Griffith residents by collaborating with the City and developer partners for redevelopment of the site as part of the larger mixed-use Candlestick Point-Hunters Point Shipyard Phase 2 Development. The ultimate goal is to transform this impoverished area into a viable mixedincome neighborhood with access to economic opportunities through investment and leveraging of investments in well-functioning services, effective schools and education programs, public assets, public transportation and improved access to jobs Rebuilding the 256 Alice Griffith public housing units and adding additional affordable housing will be the centerpiece of this effort. Since February 2010, when HUD approved the sole source procurement for HPS Development, LP and CP Development Co., LP (Master Developer) to rebuild the Alice Griffith site, the Master Developer has selected McCormack Baron Salazar, Inc. (MBS) to provide affordable housing development services. This selection is consistent with HUD’s Mixed-Finance Statutes, 24 CFR 941, Part F, authorizing approved developer affiliates to engage development team partners. The Master Developer and MBS (the Developer) are now prepared to negotiate and enter into an Exclusive Negotiating Rights Agreement with the Authority and move forward with plans for revitalization of Alice Griffith and the surrounding area.

ANALYSIS The purpose of this Agreement is to establish procedures and standards for the negotiations between the Authority and the Developer for a Disposition and Development Agreement, Ground Lease and related development documents. If preconditions are satisfied, The Developer


will develop and construct improvements both on and off the Alice Griffith site that include one for one replacement of the existing 256 public housing units. The Authority will convey a portion of the site and lease the remaining portions of the site to the Developer at a purchase price and lease payment amounts to be negotiated. Negotiations will also include a right of first refusal and option to purchase the affordable rental housing improvements for the Authority after the tax credit compliance period. By execution of the ENRA, the Authority and the Developer are agreeing to good faith negotiations, exclusive negotiations and a 24 month schedule, with provisions for extensions to accomplish the following: 1. Site and Architectural Plans. 2. Purchase Price and Lease for the Property in each Phase. 3. Master Development Agreement (MDA) to govern the entire project as well as an initial Development and Disposition Agreement (DDA) and /or Ground Lease for the first phase of the project. 4. Use, Configuration and Phases of the Project. 5. Schedule of Performance. 6. Reports, studies, analyses, correspondence, and similar documents will be provided to the Authority 7. Planning Approvals and Entitlements 8. Environmental Review 9. Subdivision Map 10. Financial Proforma Analysis 11. Organizational Documents 12. Revitalization Plan 13. Utilities 14. Progress Reports 15. Relocation Plan 16. Demolition of Existing Units 17. Resident Hiring 18. HUD Approvals With the ENRA in place, the Authority, the Developer, and City, will also be able to pursue funding opportunities as co-applicant and/or through collaborative agreements, including the recently released HUD Choice Neighborhoods Notice of Funding Availability, State of California grants and/or loans, tax-exempt bonds, low income housing tax credits, tax increment generated from the development of the Hunters Point Naval Shipyard and Candlestick Point, and private investment. RESIDENT EMPLOYMENT Members of the development team, recognizing the compelling need to involve residents in the planning and development process and to provide employment opportunities to residents of the Alice Griffith community, have agreed to comply with the SFHA’s requirements. The development team members have a strong track record of hiring residents for the development and construction of their projects. The development team achieved the goals established by the


Authority Commission for both the Hayes Valley and Plaza East HOPE VI revitalization projects. MBE/WBE STATUS The development team is committed to meeting or exceeding the 20% MBE/WBE participation goals of the Authority. The firms have a diverse workforce and have provided an Affirmative Action Acknowledgement form that meets the requirements of Executive Order 11246. BUDGET CONSIDERATIONS There is no Authority expenditure for this action. Authorizing execution of an ENRA with the development team provides an opportunity for the Authority to develop a financially feasible way to revitalization the Alice Griffith development using the Authority’s land and the developer’s expertise to leverage other public and private financing. DEPARTMENT’S REQUESTED ACTION Staff recommends approval of this Resolution. EXECUTIVE DIRECTOR’S RECOMMENDATION I concur with the requested action.


RESOLUTION NO._______________ DATE ADOPTED: _______________ RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO: (1) NEGOTIATE AND EXECUTE AN EXCLUSIVE NEGOTIATING RIGHTS AGREEMENT; (2) NEGOTIATE A DISPOSITION AND DEVELOPMENT AGREEMENT, GROUND LEASE, AND RELATED DEVELOPMENT AGREEMENTS; AND (3) APPLY FOR AND PURSUE FUNDING OPPORTUNITIES WITH CP DEVELOPMENT CO., LP, A DELAWARE LIMITED PARTNERSHIP (MASTER DEVELOPER) AND MCCORMACK BARON SALAZAR, INC., A MISSOURI CORPORATION, FOR REVITALIZATION OF THE CAL 1-18(4) ALICE GRIFFITH PUBLIC HOUSING SITE

WHEREAS, the 2007 Mayor’s HOPE SF Task Force identified Alice Griffith as a public housing development that is in need of revitalization with over $57 million of immediate capital improvement needs; and WHEREAS, all of the HOPE SF goals, including ensuring no loss of public housing, will be incorporated into the redevelopment plans for Alice Griffith; and WHEREAS, following Commission authorization to request sole source approval with Resolution #5462, on February 24, 2010, HUD approved sole source procurement for HPS Development., LP and CP Development Co., LP (Lennar) to rebuild the Alice Griffith site; and WHEREAS, consistent with HUD’s Mixed-Finance Statutes, 24 CFR 941, Part F, authorizing approved developer affiliates to engage development team partners in accordance with the provisions therein, Lennar entered into an agreement with McCormack Baron Salazar, Inc. to provide development services; and WHEREAS, on July 8, 2010, the Commission adopted Resolution #5501 authorizing the Executive Director to execute a Memorandum of Understanding for the redevelopment of Alice Griffith with the Mayor’s Office of Workforce Development and the Redevelopment Agency; and WHEREAS, following Commission approval, Authority staff will negotiate an ENRA and establish such material terms and conditions for the negotiation of a DDA, a Ground Lease, and related development agreements; and WHEREAS, execution of the ENRA will enable the Authority to begin negotiations for the development agreements and provide eligibility for funding opportunities as co-applicant and through collaborative agreements, including but not limited application for the HUD Choice Neighborhoods funding; and WHEREAS, when satisfactorily negotiated, the Executive Director will return to the Commission to request authorization to execute the development agreements. NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE HOUSING AUTHORITY OF THE CITY AND COUNTY OF SAN FRANCISCO THAT: 1. The Executive Director is authorized to: (1) negotiate and execute an Exclusive Negotiating Rights Agreement; (2) negotiate a Disposition and Development agreement, Ground Lease, and related development agreements; and (3) apply for and pursue funding opportunities with CP Development Co., LP, A Delaware Limited Partnership (Master Developer) and McCormack Baron Salazar, Inc., a Missouri Corporation, for revitalization of the CAL 1-18(4) Alice Griffith Public Housing site.


2. This Resolution shall take effect immediately. APPROVED AS TO FORM AND LEGALITY:

REVIEWED BY:

Tim Larsen, Assistant General Counsel

Henry A. Alvarez III, Executive Director

Date:

Date:

Resolution- Alice Griffith  

ANALYSIS The purpose of this Agreement is to establish procedures and standards for the negotiations between the Authority and the Developer...