One of the challenges in building affordable housing is the availability of development sites. In an effort to address this issue, the legislature adopted the Surplus Lands Act (Sections 54220-54234 of the California Government code) in 2019, which requires that affordable housing be a preferred use for publicly-owned surplus properties.
The City of Rocklin owns a 1.83 acre undeveloped site in the downtown Quarry District, which it has designated as being a surplus site, available for redevelopment. In accordance with the Surplus Lands Act (SLA), the city issued a Notice of Availability (NOA) in October 2021 and received letters of interest from six affordable housing developers.
KMA was retained to advise in the developer selection and negotiation process, pursuant to the requirements of the SLA. KMA assisted the city in preparing a request for proposals from the developers who submitted a letter of interest. The RFP clarified the city’s objective to lease the property, development objectives, and the city’s offer to provide a $2.6 million loan to assist the project. Five proposals were submitted and KMA evaluated the proposals relative to several key factors, including:
- the number and type of affordable units
- the average level of affordability
- the proposed term of the ground lease
- proposed business terms and conditions
- the reasonableness of the proposed financing plan and anticipated sources of funds, including secured funding sources, and probability of being successfu
- the developer’s willingness to execute a ground lease
- developer’s willingness to not subordinate affordability covenants to financing
- the developer’s experience
- the project’s request for city financial assistance and repayment terms
- timeline for starting construction
KMA assisted the City narrow the number of teams to the top three, continue to negotiate business terms, and make a final recommendation to the City Council.
On November 8, 2022 the City Council approved an Affordable Housing Agreement and Ground Lease with Community HousingWorks for a 110-unit low-income family apartment project.
