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EDEN HOUSING INC. JAN 13 2004 a non profit housing development corporation January 12, 2004 Steve Bocian Deputy City Manager City of Pleasanton 123 Main Street Pleasanton, CA 94566 RE: Ridgeview Commons Dear Steve: I am writing to follow up on our meeting with respect to the ownership of Ridgeview Commons after the expiration of the 15 -year Tax Credit Compliance period. Per our discussion, there are three options for ownership of the property: Eden continues to own the property; the City owns the property through the Housing Authority or another non profit; or a hybrid ownership entity, where the Eden forms a non profit (or likely restructures the current general partner), to include seats on the Board for City- appointed members. Option I: Eden Continues as Owner Per my letter of December 16` Eden's continued ownership of the property provides the city with several advantages, including: access to Eden's asset management capacity, protection from liability, continued capacity to access the welfare exemption, "political" cover from tenant related issues such as evictions and rent increases, and possible protection from paying prevailing wages. Per our previous discussion, Eden also has property management and services capacity that could benefit this building. Even if we were not to have the property management contracts, we offer the property with the safety net of a fallback should something happen to Barcelon. As we discussed, Eden would require some sort of compensation to continue in the ownership role. Typically on a project of this size, we charge an asset management fee of approximately $20,000 in addition to the accounting fee we are already charging. This fee allows us to dedicate staff to the refinancing and renovation efforts that aging buildings typically require. We would consider reducing this fee if we were to hold the property management contracts. Although we would not require the management contracts to continue in the ownership role, we would like the opportunity to bid on the contracts should Barcelon be terminated. Option II: Eden Transfers the Property to the City Eden could exercise its option and transfer the property to the City or a City- affiliate such as the Housing Authority. As I noted in the previous paragraph, the key issue of concern for the City is likely to be liability. As the owner, the City will hold liability for all the issues associated with the building. Option III: Hybrid Ownership: A third option would be for Eden to acquire the property and modify the current ownership entity to allow the City to have seats on the board of the non profit that owns the building. In this case, we would suggest a five- member board with three seats for Eden and two seats that could be appointed by the City. This would leave Eden with 409 Jackson Street Hayward, CA 94544 510.582.1460 FAX 510.582.6523 www.edenhousing.org EHI does not discriminate against any person because of Race, Color, Gender, Disability, Familial Status, of National Origin