SR 05:080 - Laserfiche WebLink

Honorable Mayor and Members of the City Council: BACKGROUND At your meeting of January 20, 2004, the City Council authorized staff to meet with EAH, a non-profit housing corporation, (EAH) to explore the potential for developing a 2.76-acre site located on Vineyard Avenue (next to Birch Creek) (ATTACHMENT l) with an affordable senior rental housing development. This project was also included as part of the Housing Commission's priorities for new affordable housing projects. Staff met several times during 2004 with representatives from EAH and the property owner. Over the course of these meetings, EAH indicated that the development of a 100% below- market rental senior project on the site would require a significant level of financial contribution from the City (e.g., $4 million or more). In response staff noted that this level of financial involvement would have a significant impact on the amount of uncommitted funds in the Lower Income Housing Fund and as such, no commitment of financials could be made without further review. The developer also felt that the City's financial assistance would be needed to secure ownership of the land and to conduct predevelopment activities. This matter raised concem regarding providing funding to a project without going through the City's competitive bid process and being involved with a development process without first conducting a public review. Therefore, staff recommended to Mr. Auf der Maur that he directly secure the services of a nonprofit developer (such as EAH) and then submit a preliminary application for review by the City. In the most recent meetings, as a means of potentially reducing the amount of City financial support for the project, staff and the owner discussed the concept of creating a "charitable remainder trust" to transfer ownership of the property. A charitable remainder trust is a special tax-exempt irrevocable trust arrangement written to comply with federal tax laws and regulations. The owner (Mr. Auf der Maur) would transfer cash or assets (in this case, the 2.76 acre vacant parcel on Vineyard Avenue) to the trust and would receive a stream of income for life or, if the owner chooses, a specified term of years (not to exceed twenty). The income can be paid over the life of the owner, that of his/her spouse, or even over the lives of his/her children and grandchildren. Charitable remainder trusts are one of the most efficient estate planning tools available to anyone holding assets that experience significant appreciation, such as land. Mr. Auf der Maur explored this option with his legal counsel and tentatively determined not to pursue the establishment of a charitable remainder trust at this time. As discussed in the January 20, 2004 staff report, in addition to activities related to EAH, the Kottinger Place Task Force has been seeking a plan that will address the issue of relocating residents of Kottinger Place senior apartments (and potentially the residents of the adjacent Pleasanton Gardens development) during the time that the project may be redeveloped. As a result, they have expressed an interest in working closely with the City or a developer of the property to assure this option remains open. SR:05:080 Page 2