Reso 23-142 HCEB Lease & Agreement for 555 Lewelling

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IN THE CITY COUNCIL OF THE CITY OF SAN LEANDRO RESOLUTION NO. 2023-142 RESOLUTION OF THE CITY OF SAN LEANDRO CITY COUNCIL APPROVING A GROUND LEASE WITH REHABILITATION GRANT AND OPERATING SUBSIDY AGREEMENT WITH HOUSING CONSORTIUM OF THE EAST BAY, INC. TO DEVELOP AND OPERATE 555 LEWELLING BOULEVARD AS AN INTERIM HOMELESS SHELTER AND NAVIGATION CENTER WHEREAS, the City previously entered into a purchase and sale agreement to acquire the Nimitz Motel located at 555 Lewelling Boulevard (the “Property”) in order to facilitate the development of an interim navigation center and shelter thereon; and WHEREAS, the City anticipates closing escrow on the purchase of the Property on or around October 30, 2023; and WHEREAS, the Property requires renovations so that it will be suitable for use as an interim navigation center and shelter; and WHEREAS, the City and Housing Consortium of the East Bay, Inc., (HCEB) have partnered to jointly apply for funding from State Project HomeKey Round 3 to support the proposed project; and WHEREAS, HCEB has experience developing a variety of types of shelter and affordable housing types, and is qualified to manage the renovation of 555 Lewelling; and WHEREAS, the City desires to lease the Property to HCEB for the purpose of HCEB developing the interim navigation center and shelter thereon; and WHEREAS, the ground lease will be for a term of 5 years, with the possibility of up to 5 one-year extensions, for a maximum term of 10 years, with an annual rent of $1 per year; and WHEREAS, as part of the ground lease agreement, the City desires to provide HCEB with a rehabilitation grant for an amount of up to $5.2 million in order to partially finance the predevelopment costs, as well as hard and soft costs, of developing the interim navigation center and shelter on the Property; and WHEREAS, HCEB will contract directly with the local homeless and domestic violence services nonprofit Cornerstone Community Development Corporation, also known as Building Futures, to be the on-site supportive services provider, along with any other needed nonprofit service providers; and WHEREAS, the City and HCEB desire to enter into an Operating Subsidy Agreement with a term of 5 years in order for the City to provide financial support for the operation of the interim navigation center and shelter; and WHEREAS, pursuant to the Operating Subsidy Agreement, the City will provide HCEB with a grant to cover the costs of operating the interim navigation center and shelter, including providing related services; and