Manteca needs to buy 8.04 acres along South Main Street to develop a combination homeless navigation center and mixed use project that could possibly include affordable housing.
They would like to do so without touching general fund money needed to provide day-to-day municipal services such as police and fire.
The solution staff devised is to sell off property the city jointly owns with MidPen Housing on the northeast corner of Airport Way and Woodward Avenue to develop a 141-unit affordable housing complex that no longer pencils out financially.
In doing so, the city will generate $3.625 million. That would allow the city to pay the appraised price for the 8.04 acres and have over $2 million left over to put infrastructure in place at the backside of the property off of Carnegie Court and likely secure a Sprung Structure to get a basic homeless navigation center up and running.
If the city removes the regulatory restrictions on the 9.08 acres they own with MidPen and it is sold for commercial mixed use as it is currently zoned, the appraised value is $6.43 million.
The land was bought in 2005 for $3.5 million using $2.5 million in City of Manteca funds and $1 million from MidPen. The cost MidPen had was actually $1.52 million as they absorbed predevelopment and land holding costs.
Based on the agreement with MidPen the city’s current balance in the property is $3.625 million. The $1.125 million increase is the result of interest accrued at 3 percent per annum as outlined the loan agreement to MidPen.
The original plan by MidPen was to sell 3.5 acres for at-market single family homes to a developer and use the proceeds as part of an overall package to leverage an affordable workforce housing complex similar to Juniper Apartments on Atherton Drive.
But the recession hit. And when the economy started getting better about nine years ago, the tax credits that made the initial project vision pencil out had changed.
The city could opt to stay with the original plan but under prevailing wages and a reduction in tax credulity equity there would be a $36 million funding gap to build 141 units basically rendering an affordable housing project with rents capped at 59 percent of the average Manteca household income.
That makes the project infeasible currently. In order for that option to make sense, the city and MidPen would have to wait until state and federal laws changed regarding tax credits to the point the project pencils out.
The tentative plan
for the South Main site
The 8.04 acres along South Main is sandwiched between Funsten Flooring and Extra Space Storage.
The City Council when they meet Tuesday at 7 p.m. to consider selling the property set aside on Airport Way and Woodward Avenue will also decide whether to proceed with an agreement with LPA for $119,500 for the design and financial analysis of a homeless navigation center and mixed use project.
The council has made it clear they want the homeless navigation center portion at the back of the property and accessible from Carnegie Court.
They also have said they want the homeless facilities portion to be separated from what is developed along South Main Street — and assuming nearby existing uses — by a masonry wall. That would prevent fences from being cut as has happened at the Qualex site during previous temporary homeless operation. Such a wall would further enhance security and provide visual blockage from adjoining properties where businesses and industrial concerns operate.
While LPA will be devising a design for the entire site, the focus is the homeless portion, what type of space is needed for services now and anticipated in the future, the infrastructure and facilities that would require, as well as the costs.
The council’s first choice for the portion of land along South Main Street is some type of affordable housing in the genre of the Juniper Apartments.
But they are not precluded from eventually looking at other options for the land. Possible uses floated in abstract conversations among city leaders have included using it as a site for a new police station to other municipal facilities.
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