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enhancement. Fannie Mae, the Federal National Mortgage Association is enhancing the credit for the bonds, which is why they are Triple A rated. He mentioned that there were many buyers for these types of bonds, and reported that billions of dollars in these types of loans are done nationally. These types of bonds are continually issued and buyers continue to buy them. He pointed out that this type of bond is a relatively small issue in the overall picture of the tax-exempt bond market. He did not believe there would be an issue of selling the bonds. Currently, the rates are very low for this type of tax-exempt bond. Mayor Pico asked the public for comments. Mark Sweeney, 6150 Stoneridge Mall Road, representing the applicant, stated for the record that Ponderosa is not the investor nor will they receive any tax benefits like an outside corporation would that could use tax credits to offset income. He concurred with the conclusion of the staff report and agreed with the Housing and Planning Commissions who both voted unanimously to support the language in the Inclusionary Ordinance. Both commissions also believed it was appropriate to encourage Council to grant credits to this project. He believed the difference of opinion was philosophical, and was not the value of the credits as mentioned earlier, rather thc cost of the units. The reason for asking for credits is based on the fact that Ponderosa is making a major contribution of additional affordable units. Ms. Ayala believed the reason the applicant asked for the tax credit was so that it could get good financing. Mr. Sweeney stated that was correct. The result in increasing the number of affordable units is so that in the first year, those 51 units would rent for $194,000 less than 51 market units. According to the State's appraiser, the $194,000 translates to $3.2 million. He believed that was why the Inclusionary Zoning Ordinance included a provision to provide credits to a developer. Ms. Ayala asked Mr. Sweeney to equate the dollar amounts quoted to the actual credits. For 51 units, Mr. Sweeney reported it would be approx'unately $63,000 a unit on an appraised basis. Ms. Ayala did not believe this to be tree, especially if it was for sale senior housing. Mr. Sweeney pointed out this was a different exercise. In the past, he had offered to talk about the difference between the duets that are being sold at the moderate rate versus the apa~hnents in order to get a range of values that might illustrate whether the rental unit is contributing as much as the for sale unit. Pleasanton City Council 10 11/4/03 Minutes