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In response to an inquh'y by Ms. A yala, Mr. Sweeney confirmed there would be a <br />value for the credits for the 51 units. He also confirmed that there is a value to the 38 <br />units that were not sold at affordable housing rates. The overall project is 38 percent <br />affordable, which is far in excess of the Inclusionary Zoning Ordinance obligations, and <br />is the reason Ponderosa is asking for credits. The Pleasanton Unified School District's <br />option takes into consideration the highest and best use. At the time the gchool District <br />exercised its option, the property was appraised. There is an agreement between <br />Ponderosa and the School District to make certain that the appraisal is not hurt by the fact <br />that credits are being granted to the site. The School District is satisfied with the <br />language in the agreement, which would be signed by both parties pending the outcome <br />of tonight's meeting. The School District has eight years to pay for the property. When <br />the School District does pay, it is paying 80 cents on the dollar based on the appraisal. <br />For the 51 units, approximately fiRy eight hundred dollars per unit in fee waivers was <br />received. The grant by the City was $205,000. Ponderosa learned that the grant, if given, <br />was considered ord'mary income and would require it to pay taxes on that amount. It was <br />Ponderosa's idea to change the grant to a loan. The City effectively granted $238,000 in <br />fee waivers on the 51 units, and Ponderosa is agreeing to repay $205,000 to the City. He <br />would like some certainty on the Busch property. Even if the Council granted the credits <br />on the Busch property, he did not believe Ponderosa would come back with a project <br />much over 100 units. Assuming the project was I00 units, he believed the overall project <br />would be 25 percent affordable. He also believed the level of affordability should not be <br />overlooked. He mentioned that 138 units would be rented at 50-60 percent of the median <br />income for perpetuity. There is no other project development in Pleasanton that was able <br />to achieve that level of affordability. Effective January l, 2004, he noted a potential <br />change for projects that have to pay prevailing wages, which will result in a rush for these <br />types of projects. Had Ponderosa been able to get its application in for the first round in <br />January 2003, it would have been finanead with 87 affordable units, but because the <br />competition was fierce later in the year, the only th'mg that could have been done to <br />improve this project's chance to get a State allocation was to improve its affordability. <br />He stated that Ponderosa would build the project with or without the credits. He believed <br />it was fair and reasonable for Council to grant the credits. <br /> <br /> Given the language changes she proposed, Ms. Host~m~an wondered if it would <br />meet Ponderosa's needs? <br /> <br /> Based on his understanding of Ms. Hosterman's proposal, Mr. Sweeney stated <br />that he would take Ms. Hosterman's proposal over the other option mentioned, which <br />was to let future Councils decide whether or not this project would be deserving of <br />credits. There is certainty with the Busch property because the School District is <br />protected in the appraisal process. If the School District does not buy the property, <br />Ponderosa could come back with another project. <br /> <br /> In response to an inquiry by Ms. Ayala, Mr. Sweeney reported that the contract <br />with the School District was a five-year option and did not start until Ponderosa bought <br />the property. Ponderosa signed the agreement two and a half years ago but the option <br />period started on May 6, 2003. The reason the option is ultimately eight years is because <br /> <br />Pleasanton City Council 11 11/4/03 <br />Minutes <br /> <br /> <br />