REPORT TO COUNCIL
SUBJECT
Title
Approve the Purchase and Sale Agreement Between the City of Sunnyvale and MP Land Holdings LLC (MidPen Housing) for the Purchase of 1178 Sonora Court, and Approve a Disposition and Development Agreement, to Construct a new Affordable Housing Development, and Adopt the Resolution to Authorize the Ground Lease (Continued from the meeting of May 12, 2020)
Report
BACKGROUND
On November 15, 2019, a Notice of Funding Availability ("NOFA") was issued for the construction or rehabilitation of affordable housing developments to be funded with the City's Housing Mitigation Funds ("HMF"), Below Market Rate In-Lieu Funds ("BMR"), and Low Mod Income Housing Asset Funds ("LMI"). A total of $26 million in HMF, BMR, and LMI funds was made available. Three applicants applied for the funding, and Council approved awards to all three applicants on February 25, 2020. One of the HMF recipients was MidPen Housing ("MidPen") for construction of a new approximately 147-unit affordable housing development located at 1178 Sonora Court; a $14 million HMF loan was approved for this development. The loan would be used to offset the cost of the land and remainder used for pre-development.
During the Council meeting, Councilmembers requested that staff work with MidPen to consider City ownership of the property. Since then, the City and MidPen have been in negotiations for the City to purchase the property and to enter into a Disposition and Development Agreement ("DDA") for MidPen to hold a long-term ground lease with the City for development and operation of affordable housing.
Council met in closed session on April 7, 2020 to provide staff general direction and feedback regarding price and terms for the proposed transaction.
Staff was not able to complete the negotiations regarding the purchase of the property to keep the original hearing date of May 12, 2020. In order to comply with Sunnyvale Municipal Code Section 2.07.060 and to avoid the need to r...
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