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BACKGROUND In February 2010, the Council approved the Principles of Agreement with Pleasanton Gardens setting forth the parameters for continuing the Kottinger Place development process. Two important steps in this process include selecting a not-for-profit developer to direct the development process and a more detailed review of the potential for rehabbing existing Kottinger Place units prior to beginning work on a new development. Staff circulated the RFP for the not-for-profit developer but has not yet begun the interview process pending further review of project options and the acquisition of 4138 Vineyard. At its meeting of September 10, 2011, the Kottinger Place Task Force approved a revised project scope of work that takes into account development opportunities utilizing 4138 Vineyard and as a result, developer interviews are anticipated in the next 30 days. In anticipation of moving forward with the project, staff conducted its analysis of 4138 Vineyard and determined it's best that it be demolished at this time. Property inspection indicates that significant rehabilitation/remodeling work would be required to make the property suitable for occupancy. Required work would include, complete recarpeting, painting, window coverings, electrical upgrades, and complete kitchen and bath remodeling. In addition the back yard shed would need to be removed, landscaping requires upgrading, there is no irrigation/sprinkler system, and the home's exterior requires staining/painting. Staff estimates the cost of the remodeling to be approximately $100,000. The City Council may recall that the City previously used acquired residential property for rental purposes and determined that the City assuming a landlord role was difficult in terms of ongoing maintenance, addressing tenant issues and rent collection. Further, because the purpose of acquiring 4138 Vineyard is to accommodate the Kottinger Place project, staff doubts that it would recoup additional investment in the property. DISCUSSION The demolition of the property involves acquiring a J-Permit for the BAACQ to remove the asbestos ducting, installing fencing in the front and sides of the property, all disposal of material including patio bricks, driveway, the large storage shed on the property and shrubs and landscaping. Support Services will assume responsibility for future weed abatement. The City currently has a vacant lot on Vervais Avenue and maintenance has not proven to be a significant issue. Submitted by: Finance Approved y: Steven Bocian Emily Wagner Nelson Fialho Assistant City Manager Director of Finance City Manager Page 2 of 2