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BACKGROUND Irby Ranch project To meet the City's Inclusionary Zoning Ordinance (IZO) requirements, the developer of the market -rate portion of Irby Ranch is required to dedicate the subject 1.64 -acre property to the City as well as contribute $1,000,000 to the City to support the development of affordable housing on-site as outlined within the previously approved Development Agreement and Affordable Housing Agreement (AHA) for Irby Ranch / PUD -110. Consistent with the City Council's goal and priority to support Sunflower Hill, the City Council also approved an Exclusive Negotiating Rights Agreement (ENRA) between the City and Sunflower Hill which established procedures, milestones and standards for the development of the affordable project. The ENRA provides for $250,000 in pre - development funding, the use of the $1,000,000 to be paid by the developer of Irby Ranch to support affordable housing, and an additional $1,000,000 from the City (for a cumulative total City financial contribution of $2,250,000 from the lower-income housing fund), plus the use of the 1.64 acre parcel. When the City uses lower income housing fees (LIHF) generated by the IZO, such use must be consistent with the Housing Element ( per Pleasanton Municipal Code §17.40.090). The proposed Sunflower Hill project is consistent with the Housing Element and a discussion of the Element policies is included in the attached Housing Commission agenda report (January 25, 2018). DISCUSSION Satellite Affordable Housing Associates (SAHA) is in the process of securing commitments for financing the construction of the Sunflower Hill development. With the total cost estimated as $19.2 million, SAHA will be submitting a tax credit application on February 28, 2018 in an effort to secure tax credit financing from the Tax Credit Allocation Committee (TCAC) for the project. SAHA will only be able to submit its project application for tax credit financing prior to the February 28, 2018 TCAC's submittal deadline pending approval of the Planned Unit Development (PUD -129) application, and dependent on SAHA securing the following financing commitments: $2,250,000 LIHF loan from the City and the allocation of up to $7,195,844 of the City's share of the County's Measure Al funding, administered by the Alameda County Housing & Community Development Department (County HCD). $2,250,000 LIHF Loan Agreements will need to be executed between the City, SAHA, and Sunflower Hill to provide for the City's $2,250,000 in LIHF financial support for this project, as well as the use of the 1.64 acre parcel via a long term lease. The form agreements are attached to the Resolution (Attachment 1 of this report). Major provisions of the agreements for Council's consideration are summarized as follows: Disposition Development and Loan Agreement (DDLA): • Sets forth the overall parameters of the approved project that is being funded, all of the funding sources, and particularly the City's LIHF $2,250,000 loan. Page2of6