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File Number: 22-705 City Council approved General Plan and Zoning Map Amendments and entered into a Disposition and Development Agreement (DDA) with the Developer for the Shoreline Development on February 24, 2020. The DDA, and its associated agreements, including a Purchase and Sale Agreement (PSA) and Ground Leases, outline key business terms, including the scope of development, schedule of performance, and Developer and City responsibilities. The PSA approves the sale of approximately 15.8 acres of land along the western portion of the existing 9-hole Marina Golf Course for the construction of 144 single family and 62 townhome housing units (Single Family Element). The sale price of approximately $29.88 million is based on an appraisal and the approved number of single-family homes and townhouse lots. As a condition of sale, the Developer must redesign and reconstruct the 9-hole golf course, to be completed prior to the sale of the 133rd home in the Single-Family Element. They must also perform associated public improvements and sea level rise mitigation and reconstruct Monarch Bay Drive with a Class I bicycle lane. On June 21, 2022, the City Council approved planning entitlements, a Second Amendment to the DDA and PSA as well as a Development Agreement for the Project. Planning entitlements included an Addendum to the San Leandro Shoreline Development Project EIR, and Planned Development Project and Site Plan Review for the private elements of the Project. The Development Agreement (DA) provides additional details related to the City and Developer’s obligations, particularly related to construction and implementation of the Project. The DA also details the scope, phasing and procedures for the Developer’s installation of public improvements, with the requirement that overall site preparation be performed during the first phase of the Project. The DA also addresses the implementation of key sustainability measures including sea level rise mitigation, Transportation Demand Management planning, and development of a Community Facilities District. Finally, the DA provides for cooperation moving forward, including coordination of construction of the park and other public elements and timely processing of future permits. The Second Amendment to the DDA and PSA provided further detail on the Project phasing and schedule to ensure that site preparation, public improvements, and the development overall are performed in a continuous and coordinated manner. Changes were also made relating to the timing of certain requirements, the schedule of performance, and interim arrangements for existing leases and agreements on site in order to facilitate a timely sale and leasing of the properties. Analysis In order to facilitate the successful sale and development of the Shoreline Development Project, adjustments to the Disposition and Development Agreement and Purchase and Sale Agreement are recommended at this time. To comply with the California Surplus Lands Act, the close of escrow for the sale of the Single-Family element and commencement of each of the Ground Leases are planned to occur prior to December 31, 2022. Following approval of the planning entitlements, the DA and DDA and PSA Amendments in June of 2022, the Developer began to prepare to purchase and enter into ground leases for the Project. They began the process to obtain financing for the purchase of the Single Family property, hiring financial brokers and entering into term negotiations with multiple institutional lenders for an ‘acquisition and development’ loan, which would fund the purchase of the property and site preparation throughout the Project. However, with interest and inflation rates rising markedly and an uncertain economic outlook, lenders have become more cautious and limited in their lending activity, opting to ‘sit on the sidelines’ for the remainder of 2022. The Developer then began working with private lenders for an acquisition loan; Page 2 City of San Leandro Printed on 12/14/2022