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services. However, it is likely that this process will not yield any significant advantages over retaining Eden Housing. Further, since Eden was the developer of this property, it has the project experience and knowledge needed to assure efficient operations and financing. Further, Eden has an excellent reputation in the Bay Area affordable housing market and staff is assured that it will continue to provide assistance consistent with opportunities in the industry. Finally, the response to any solicitation by the City would be limited since staff intends for the City to retain control over property management services. Without the financial benefit, as limited as it may be with this project, associated with providing property management services for the development, the interest from non profits would be limited. In the event staff is unable to negotiate acceptable ownership transfer terms, it will report back to the Council with an alternate recommendation on this matter. Also, staff will provide the Council with any subsequent agreements related to this transfer for its review. In addition, staff will involve the Housing Commission with a review of all documents. FISCAL IMPACTS As indicated, staff anticipates the change of ownership, regardless of the option selected, will result in some payment to the limited partner. While the exact amount will not be known until an ownership financial review of the project is completed, this payment is not expected to be significant and will be made with funds available in the from the City Lower Income Housing Fund. Further, any payments to dissolve the current ownership will be needed regardless of future ownership options. It should be noted that in addition to providing initial project financing assistance, the limited partner, through the partnership, paid the City approximately $3,550,000 during the first eight years of the project. This money was used to create the Ridge View Commons Fund used to offset project operating deficits and to provide financing assistance with the project refinancing that took place in 1990. To the extent it remains available, it will be used to pay any asset fee to Eden. As indicated above, regardless of the option selected, the City will continue to assume financial responsibility for the project. As a result, major operating deficits and/or needed property improvements will be met by the City. As a result, continuing to retain the expertise of Eden who can provide assistance with financing opportunities (Eden coordinated the 1998 refinancing process) will be beneficial. As part of staff's ongoing review of project operations, over the last few years, it has begun rent adjustments that continue to move rents to allowable levels that will address project operating expenses. Staff expects this review will be ongoing and it will continue to work with residents to assure they understand all issues related to rent adjustments. Currently, the City's Ridge View Commons Fund has a balance of approximately $368,000. This fund will continue to be used to offset project operating deficits and to make any asset management payments to Eden Housing. While the City has regularly relied on this fund in the past to offset significant operating deficits, recent rent adjustments, (which are still lower than allowable limits) and reduced financing costs resulting from the 1998 refinancing have lessened the draw on this fund. As an example, this past year the draw was approximately $30,000 while SR:04:049 Page 5