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MINUTES Page 4 City of San Leandro City Council and San Leandro Redevelopment Agency Joint Meeting-June 5, 2006 9. ITEMS REMOVED FROM CONSENT CALENDAR Public comments are limited to 3 minutes per speaker per item, subject to adjustment by the Mayor. None. 10. ACTION ITEMS Public comments are limited to 3 minutes per speaker per item, subject to adjustment by the Mayor. A. Resolution No. 2006-002 RDA, Resolution of the Redevelopment Agency of the City of San Leandro Authorizing a Predevelopment Loan with Mercy Housing California XXXIII, and Authorizing Execution of Documents in Connection with Such Financing [approves a short-term predevelopment loan agreement to allocate $727,000 to Mercy Housing California (MHC) for predevelopment activities necessary for MHC to receive its planning/entitlement approvals from the City and financing commitments for the rehabilitation of 2398 East 14th Street, formerly the Islander Motel, into 68 units of affordable rental housing]. Funding: Redevelopment Housing Set-Aside Fund. (1485/3059) City Manager Jermanis gave background on the item and introduced Housing and CDBG Manager Tom Liao. Mr. Liao gave a short PowerPoint presentation providing an overview of the project; outlining the purpose for, and benefits of, its development; and providing information on the Predevelopment Loan Agreement, Disposition and Development Agreement and project timeline. Councilmember Santos asked about the City's progress in meeting its affordable housing objectives. Mr. Liao stated that the Islander project will contribute 68 units toward the City's affordable housing production goals and the Inclusionary Housing ordinance may add an additional nine units. Community Development Director Hanson Hom indicated that the ABAG affordable housing goal is approximately 200 units for very low and extremely low-income residents, and this project will contribute significantly toward meeting the ABAG goal. Mr. Jermanis commented on the complexity of the transaction and the long-term benefits of the project to the City and community. City and Mercy Housing staff responded to questions from the Council regarding the project, including the loan terms and repayment, tax credits, property ownership, project costs and financing, unit affordability, and community outreach. Vice Mayor Grant commented that she would prefer to see the building fayade be a neutral color rather than yellow.