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BACKGROUND On November 12, 2013, the City Council approved a Disposition, Development and Loan Agreement ("DDLA") with MidPen Housing which established a scope, timeline and financing commitment for the development of a 103-unit, phased senior housing project proposed by MidPen Housing, referred to as "Kottinger Gardens". On June 16, 2015, City Council approved an increase to the City's loan commitment for the project to ensure its timely commencement. The DDLA anticipated the transfer of the Kottinger Place property from the Pleasanton Housing Authority to the City and the subsequent execution of a ground lease between the City and the Kottinger Gardens owner entity, "Kottinger Gardens Phase 1 Associates, L.P." Approval of the ground lease and City's Low Income Housing Fund loan documents will be brought to Council for consideration at a future meeting. On October 21, 2014, the Pleasanton Housing Authority's Board of Commissioners adopted a resolution to pursue approval of an application to HUD to dispose of the Kottinger Place property to be redeveloped as the first phase of the Kottinger Gardens project. On February 26, 2015, HUD approved disposition of the Kottinger property from the Authority to the City contingent upon the parties executing a Disposition Agreement, Use Agreement and Release of Declaration of Trust. Staff is currently working through the final conditions from HUD to address the relocation requirements and document the commitment of project-based vouchers from the Housing Authority of Alameda County which will provide for the long-term affordability of the residents and ensure that they are able to move back into the new project. DISCUSSION The Disposition Agreement, Use Agreement and Release of Declaration of Trust are standard HUD-form documents which essentially describe the terms and conditions for the use of any proceeds received by the Agency from the property sale and establish restrictions for ongoing use of the property as low-income housing. The City and the Authority would have ongoing compliance monitoring and reporting requirements under the Agreements. In the event that the Authority dissolves as planned, the City, as owner of the property, would assume sole responsibility for compliance monitoring with the project owner entity/lessee. City Council now needs to authorize execution of the agreements, with the final forms to be subsequently approved by the City Attorney and City Manager, and authorize the City Manager to take all steps and execute all of the necessary documents to effectuate the transfer. In accordance with the Kottinger Gardens development timeline, the property disposition is scheduled to take place this month (February), with closing of construction financing and the immediate relocation of tenants anticipated to follow in March. Page 2 of 3