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Sale of Town Owned Property Rue IvyAGENDA ITEM MEETING DATE: January14, 2020 TO: Honorable Mayor and Council Members FROM: Andrew Morris, Town Attorney SUBJECT: Potential sale of Town -owned property located on Rue Ivy APPROVED BY %L 6_E/ (X Jeff Loux, Town Manager RECOMMENDATION: That the Town Council direct staff to make the Town -owned property on Rue Ivy for sale via a competitive bidding process, for the purpose of developing affordable housing. DISCUSSION: In 2006 the Town sold real property located on Rue Ivy to Pacific West Communities, Inc. for the purpose of developing rental housing affordable to low-income and moderate -income occupants. The resulting project is known as Frishman Hollow, and it has been well-run and continues to benefit the community. The Town still owns approximately 4.87 acres adjacent to the Frishman Hollow site, and had discussions with Pacific West Communities in 2019 about potentially selling that land for the development of another affordable housing project. New laws have taken effect in 2020 which regulate how the Town can sell Town -owned property. The Town can no longer simply identify a buyer and sell property to that buyer. The new laws are intended to encourage surplus public property to be sold forthe development of affordable housing, and they provide the Town with two options. The first option is for the Town to engage in an open, competitive bidding process, seeking bids from buyers who will commit to developing affordable housing on the property. In this context, the affordability requirement is that at least 75% of the units would be restricted to "lower-income" households (i.e. those with incomes not exceeding 80% of the area median income), and the remainder restricted to households of "moderate -income" (i.e. those with incomes not exceeding 120% of the area median income) or below. Under this option, we would notify Pacific West Communities of the bid process, as well as any other housing sponsors that have notified the Department of Housing and Community Development of their interest in surplus land. The second option is to send a notice of availability of the Town's property to housing sponsors (for the purpose of developing affordable housing), to the Truckee Donner Recreation and Park District and State Resources Agency (for open space purposes), and to the Tahoe Truckee Unified School District (for school construction or open space purposes). Under this option, we would be required to give each recipient of the notice of availability 60 days to respond. After that, we would engage in good faith negotiations with any respondents, which could take additional time. Page 1 of 2 Staff believe that engaging in a competitive bidding process for the development of affordable housing on the property is the best way to serve the needs of the community. The Town acquired the property with the intention of developing affordable housing, and the development of housing has been identified by the Town Council as a top priority for the Town. The property is zoned for housing, is adjacent to affordable housing, is within walking distance of the middle school and the community recreation center, and is generally well suited for affordable housing. Also, a competitive bidding process could be concluded sooner than the notice of availability process, which could potentially allow construction of a project to commence in 2020. Under this option, staff would develop eligibility criteria for bidders, which would be designed to advance the interests of the Town and the community. These might include experience with developing affordable housing projects in California, availability of project financing, a commitment to commencing vertical construction in 2020, and a commitment to developing a certain range of units deemed appropriate for the property. If the Town Council selects this option, staff anticipate having the competitive bidding process run for 30 days, in the interest of giving the successful bidder time to commence construction in 2020. Town Council Staff Report Page 2 of 2