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developer) will take control of the development and form a new ownership entity with perhaps new financing to maintain the development. As is typical of these processes, the limited partner (the corporate tax credit investor) also has an option to retain its ownership role. However, due to the financial liability of affordable housing projects, this option is not typically financially desirable and the option is rarely exercised. However, the limited partner may require some amount of payment to not exercise its option. In affordable housing developments occurring more recently, the partnership documents may contain language outlining withdrawal terms and as a result this matter is addressed early in the process. While the ownership agreements and transfer processes for Ridge View Commons is consistent with typical tax credit arrangements, our Ground Lease gives the City the right to obtain ownership of the project after the 15 year term provided it is allowable by HUD and provided the project adheres to all rent affordability requirements. While a final determination would not be made by HUD until later in the process, there is a general understanding by all parties, that if requested, City ownership would be approved. In response to the available ownership options (basically some form involving either /or Eden or the City), staff has met with Eden Housing to discuss alternatives and process. Based on these discussions, the following three ownership options have emerged. Potential Ridge View Commons Ownership Options Option I Eden Housing Continues as Owner This option is most similar to the current arrangement except that Eden will most likely form a new ownership entity controlled by Eden, that would operate the development in accordance with the Ground Lease and other regulatory requirements. The City would continue its role of overseeing property management and providing project financial support. This option provides a number of advantages including access to Eden's property management capacity, some protection from liability, "political" distance from major resident issues, and Eden's overall experience in managing and financing the development. This option would require an annual fee to be paid to Eden for its services. Option II Develop a Hybrid Ownership with the City and Eden Acting as Joint Owners With this option, Eden would acquire the property and modify the current ownership structure so that the City would have representation on the board of the non profit owning the development. This option has many of the advantages noted in Option I, with the additional benefit of the City having a role with the non -profit board. However, due to the limited role of the non profit overseeing this development, this role would be somewhat limited and in a practical sense, Eden's role would be similar to Option I. Further, staff is concerned that this board's role may conflict with the role of the City Housing Commission. SR:04:049 Page 3