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Mr. Sweeney noted that Ponderosa Homes decided early on that it might want to sell this project to a non-profit developer. He indicated that Bridge Housing might wish to purchase this project if Ponderosa Homes gives them six acres of Pleasanton land free of charge and $7,700,000 in cash. Ms, Ayala was concerned about the option to the School District, Mr. Sweeney pointed out that the Inclusionary Unit Credits have a term of five- years. He believed the option began on May 1, 2003 and expires on May 1, 2008. When Ponderosa Homes increased the affordability of this project, it notified the neighbors by conducting a series of meetings. Ms. Ayala indicated that she did not object to increasing the affordability of this project. She asked Mr. Sweeney to review the rent rates. Mr. Sweeney mentioned that there is a fair amount of vacancy in apartments in the Tri-Vailey because of the downturn in the economy, and rents on the market rate houses were much lower than in the past. He surveyed some units last week and believed the average difference between what Ponderosa Homes will be charging and what a one or a two-bedroom apartment in similar type units averages is approximately $400 per month. Mr. Bocian pointed out that page two of the staff report provides a chart depicting the rental rates for the senior apartment complex for this project. He noted that 23 units are at 50 percent of the area median income, and 55 units are at 60 percent, which will be priced at a household of one person. Typically, these units are priced for a household of two people, which actually lowers the rent. Mr. Brozosky noted that a previous Council approved this plan. Mayor Pico closed the public comments. Mr. Brozosky noted that the City has been trying to obtain more school space due to crowded schools and significant traffic problems around the schools. He was concerned that if the School District does not build the tenth elementary school, there will be different problems in the City with traffic congestion. He would like Council to consider the option that these inclusionary unit credits can only be used on the Busch property once a tenth elementary school is under construction. Mayor Pico pointed out that most of these credits will be for senior housing and will not impact the School District for providing more schools. The City does not have the ability to tell the School District when to build a school. Linking these credits to another elementary school does not have any real nexus particularly because these are senior units. Mr. Brozosky noted that previously, the School District purchased land in Pleasanton and sold it at a profit. The School District did not use the land to build the facilities that are needed in this community. Because these credits are worth a significant amount of money to Ponderosa Homes, he was concerned that Ponderosa would try to buy out this option and give the School District a significant cash windfall. If Pleasanton City Council 7 11/02/04 Minutes