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The Dublin City Council this month agreed to loan $5 million to developer Sunflower Grace LP to carry out a 59-unit affordable housing project for adults with intellectual and developmental disabilities.
On the off-chance the developer — nonprofit Sunflower Hill, in partnership with Satellite Affordable Housing Associates — slashes the number of affordable units to 29, the city would immediately take back half the loan due to an edit in the agreement pushed by Councilmember Jean Josey at the Nov. 5 meeting.
But after the meeting, Sunflower Hill founder Susan Houghton confirmed that there will not be any market-rate units.
“In our particular case, that’s not going to be an issue because Sunflower Hill only builds affordable housing for individuals with intellectual and developmental disabilities. So we would never build anything that is not affordable housing,” Houghton said.
Slated for a 1.83-acre site at Dublin Centre, the Sunflower Hill at Grace Pointe project is set to join hundreds of other housing units and 265,000 square feet of retail and commercial space already included in The DC development plans.
In addition to the 59 affordable rentals, there will be one unit for a manager, according to the agreement.
The loan is being covered by the city’s affordable housing funds.
“I think this project is fantastic. I think we’ve all been looking forward to it coming forward,” Josey said after pulling the consent item for discussion on Election Night.
But during the meeting, Josey also suggested there was a hole in the drafted loan agreement.
If the project does not receive funding to qualify it for exemption from a California constitutional provision, usually requiring voter approval for public housing projects, then Sunflower Grace could maintain the full amount of the loan while only offering 29 affordable-rate units, the draft said.
“That gives me slight pause because $5 million of our affordable housing fund for only 29 units would be a pretty hefty per-unit subsidy from us,” Josey said during the meeting. “I don’t think that’s going to happen, but that is a clause that is within the deal terms.”
In response, the council decided to add language to the loan agreement to ensure the developer would only maintain $2.5 million if it offered 29 affordable units.
“I think the City Council just wanted to be able to have that as a stop-gap measure that, should something happen with the project, they would be able to retain at least $2.5 million of the funds that were allocated back,” Houghton said.
During the meeting, the council also reviewed other terms of the loan like its usage: $3 million will go toward predevelopment costs like engineering and design and $2 million will go toward construction. Additionally, the developer — including its contractors and agents — is required to pay prevailing wages for the project creation, according to the agreement.
The loan has a 3% interest rate, which kicks off as soon as the money is taken out. Once construction is completed, payments are set to begin and they will continue for the following 30 years.
As for the next steps, Sunflower Grace will complete predevelopment work over the next couple of years, Houghton said. The developer will then submit its plan to the Dublin Planning Commission and City Council for approval. Next it will seek out additional funding.
“We appreciate the dedication of the city of Dublin to support individuals with intellectual and developmental disability and their housing needs,” Houghton said. “This is a great opportunity for those who need affordable housing to be able to have a potential place to live at Sunflower Hill at Grace Pointe.”
