REPORT TO THE CITY COUNCIL, THE CITY IN ITS CAPACITY AS HOUSING SUCCESSOR AND THE FRESNO REVITALIZATION CORPORATION FROM: JENNIFER CLARK, Director Planning & Development Department PHIL SKEI, Assistant Director Planning & Development Department MARLENE MURPHEY, Executive Director Housing Successor Agency to the Redevelopment Agency BY: MAYRA MERINO, Senior Management Analyst Planning & Development Department SUBJECT ..Title Actions pertaining to the Cesar Chavez Apartments affordable rental housing development project, located south of E. Cesar Chavez Blvd between S. Seventh Street and S. Eighth Street (City Council District 5) 1. Adopt a finding of Categorical Exemption pursuant to Section 15332/Class 32 of the California Environmental Quality Act (CEQA) Guidelines; and 2. ***RESOLUTION - Finding good cause and clear and convincing benefit to the public pursuant to Fresno Municipal Code Section 4-204 relating to the lease of surplus real properties identified as Assessor's Parcel Numbers 470-052-01T, 470-052-02T, AND 470-052-03T (Requires 5 Affirmative Votes) (Subject to Mayor's Veto) 3. ***RESOLUTION - Supporting a contribution of City funds in an amount not to exceed $5,000,000 toward the affordable housing development project located on Cesar Chavez Boulevard between Seventh and Eighth Streets (City Action Only) (Subject to Mayor's Veto) 4. Approve an Affordable Housing Agreement with Corporation for Better Housing, or related legal entity, to develop the Cesar Chavez Apartments affordable rental housing development 5. Approve a 55-Year Ground Lease Agreement with Corporation for Better Housing, or related legal entity, to develop and operate the Cesar Chavez Apartments affordable rental housing project ..Body RECOMMENDATION Staff recommends that the City Council (1) adopt the Categorical Exemption pursuant to Section 15332/ Class 32 of the California Environmental Quality Act (CEQA) Guidelines, (2) approve the lease of surplus real properties (Assessor's Parcel Numbers 470-052-01T, 470-052-02T, and 470-052-03T) to the Developer for $1.00 per year, based on substantial community benefit, (3) approve a conditional contribution of City funds in an amount not to exceed $5,000,000, (4) approve an Affordable Housing Agreement with Corporation for Better Housing for the Cesar Chavez Apartments project, and (5) approve a 55-year ground lease agreement for the operation of the Cesar Chavez Apartments project. EXECUTIVE SUMMARY On June 20, 2024, the City Council adopted Resolution No. 2024-125 in support of the Cesar Chavez Apartments (Project), a new mixed-use, mixed-income affordable housing development that will consist of 54 units. The Resolution conditionally committed City funds, City-owned property (APNs 470-052-02T and 470-052-03T), and Housing Successor to the Redevelopment Agency (Agency)-owned property (APN 470-052-01T). The resolution and its associated conditional contributions expired on December 31, 2024. On March 31, 2025 the Project received a $5,000,000 award from the United States Department of Agriculture in support of this Project to provide 54 units of Off-Farm Labor Housing. Staff have analyzed this Project under CEQA and have determined it is Categorically Exempt under Section 15332/Class 32 of the CEQA Guidelines, classifying the project as an in-fill development. Staff recommend that the City Council adopt the CEQA exemption and the proposed resolutions to authorize the lease of surplus properties and approve a conditional City funding contribution of up to $5,000,000, contingent upon the developer demonstrating full project funding by December 31, 2025. Additionally, approval of an Affordable Housing Agreement and a 55-year ground lease with the Corporation for Better Housing will establish site control and support the Corporation for Better Housing's application for funding from the California Tax Credit Allocation Committee. BACKGROUND On November 30, 2022, City staff consulted the State of California Department of Housing and Community Development (HCD) to discuss the history of the property and compliance requirements of Government Code section 37364. On January 19, 2023, City Council and City in its capacity as Housing Successor adopted Resolution No. 2023-019 and No. SA-51 which declared APNs 470-052-02T/-03T and APN 470-052-01T, respectively to be exempt surplus land and directed staff to comply with the open and competitive request for proposal process for the disposition of these parcels for a mixed-use mixed-income affordable housing development. On March 24, 2023, the City of Fresno's Planning and Development Department, alongside the Agency, issued a Request for Proposal (RFP) for the development of a mixed-use, mixed-income project that includes both residential and commercial retail spaces. The development aims to target multi-family housing, workforce housing, and/or senior housing. On June 20, 2024, the City Council adopted Resolution No. 2024-125, which provided a conditional commitment of City funds not to exceed $5,000,000 and the conditional contribution of City-owned parcels (APN 470-052-02T and APN 470-052-03T) and Agency-owned parcels (APN 470-052-01T). These commitments and the Resolution expired on December 31, 2024. On March 31, 2025 the Project received a $5,000,000 award from the United States Department of Agriculture in support of this Project to provide 54 units of Off-Farm Labor Housing. By adopting the proposed funding resolution, the City will conditionally commit funds, not exceeding $5,000,000, subject to the Developer providing evidence that the project is fully funded. The revised commitment will extend the conditional resolution until December 31, 2025. Adopting the resolution for the surplus property lease for $1.00 per year to the Developer, based on findings of substantial community benefit under FMC Section 4-204(d)(4), along with entering into an Affordable Housing Agreement and establishing a 55-year ground lease with the Corporation for Better Housing, will collectively support the development and long-term operation of the Cesar Chavez Apartments and address the critical affordable housing needs in City Council District 5. ENVIRONMENTAL FINDINGS Staff has determined that this project qualifies as infill development consistent with the general plan designation and is exempt from the California Environmental Quality Act(CEQA) under Section 15332/Class 32 of the CEQA Guidelines. LOCAL PREFERENCE Local preference is not applicable, as this action does not involve a bid or award for construction or services contracts. FISCAL IMPACT There is no impact on the City's General Fund as a result of this action. State and/or Federal funding will be utilized. Attachments: California Environmental Quality Act Exemption Letter Resolution Finding Good Cause and Clear and Convincing Benefit to the Public Pursuant to FMC Section 4-204 Resolution $5,000,000 Contribution toward Cesar Chavez Apartments Project Affordable Housing Agreement Cesar Chavez Apartments Project Ground Lease Agreement Cesar Chavez Apartments Project