03 - Laserfiche WebLink

Option III Eden Transfers Ownership of the Development to the City With this option, the City would use its housing authority or establish a local non profit to own the development. The City would be directly involved with all project activities and would be directly responsible for meeting all regulatory requirements and addressing all tenant issues. As with the other two options, the City would assume all financial responsibility for the project. The advantage of this option is the City has direct control over all project related activities. After reviewing the above options, staff recommends the Council authorize staff to meet with Eden Housing for the purpose of developing the agreements required to implement Option I. Staff is recommending this option based on the following assumptions that will be discussed with Eden: Eden's asset management fee will be reasonable (current estimate is approximately $20,000 annually plus an accounting fee of $15,000). Staff intends to negotiate this fee to determine an amount appropriate for the required services. Eden will agree to City ownership or other ownership structure approved by the City if requested in the future by the City. Eden and the City will further clarify the City's role in property management to assure the City retains the flexibility needed to hire the property manager to assure the development operates in accordance with City standards, requirements and interests. Eden will continue to meet regularly with City staff and the property manager to discuss property and financial related issues Eden would agree to provide property management services in the future if requested by the City to address an emergency or other need. While staff finds value in Option II and III, they do not offer any significant advantages over the current arrangement which has been satisfactory. In fact, staff has maintained that City supported affordable developments are better served if owned by entities that are fully experienced and active in this field, considering this preference, this project as well as other City funded affordable projects, include agreements providing the City with maximum policy setting flexibility with limited liability exposure. Further, none of the options provides any financial advantage to the City or the development and as a result, there is no financial incentive to offset the potential issues with an expanded ownership role for the City. To carry out Option I or II above, staff could circulate a RFQ for the purpose of identifying a non profit housing organization to act as the property owner providing asset management SR:04:049 Page 4