Lafayette council approves exclusive negotiating agreement for affordable housing site with Sunflower Hill and SAHA

The Lafayette City Council voted unanimously March 28 to authorize an exclusive negotiating agreement with Sunflower Hill and SAHA that would give the developers site control needed to apply for state housing funds and could allow the city to convey the site for $1 if the project secures funding.

Council members said the ENA is intended to improve the project’s competitiveness for the Department of Housing and Community Development’s consolidated Notice of Funding Availability (Super NOFA), whose application window staff said was due in mid-April. City staff told the council the ENA would run one year with the possibility of extensions if the parties show progress; the conveyance and any sale would return to the council for separate approval.

The draft agreement arose from recent meetings between city staff, Sunflower Hill and SAHA. City staff said the proposed deal would satisfy HCD site-control requirements for the Super NOFA application and that the recommended disposition would allow the property to be conveyed for $1 conditional on the developer securing funding to build the project. Staff said the donation is intended both to classify the land as exempt surplus land and to provide local match/support that improves state funding scores.

Council discussion focused on the compressed timeline for the Super NOFA application, how scoring works under HCD rules and neighborhood concerns about parking and affordability levels. A resident who submitted an email (Bob McClain) questioned whether the difference in Super NOFA scoring between a discounted sale and a donation was worth giving the property away; staff and other council members replied that, in competitive rounds, a single scoring point can be decisive. Council members repeatedly framed the state process as highly competitive and said maximizing points increases the project’s chance of funding.

Speakers and commenters also raised several technical and program details: staff described the ENA as an initial one-year agreement that could be extended for “good reason” if funding opportunities present themselves; staff said units tied to the city’s housing-element cycle must be completed by 2031 to count toward the sixth cycle; and staff clarified that the city’s budgetary characterization of the property (for example, parking fund vs. housing fund accounting) would be resolved before any final disposition of the property.

Public comments and council questions flagged a number of details for negotiation and later council review: several speakers asked that the agreement or subsequent sale documents lock in a specified percentage of permanently affordable units; another commenter raised concern about the use of the parking fund and urged a public process if the city repurposes parking-dedicated funds. Council members and staff responded that the ENA only grants negotiating rights and site control for the funding application and that final sale documents and any budget or accounting changes would be brought back to the council for approval.

Participants also noted differences in the project description across documents: council discussion recorded several unit counts and density references (see Clarifying details). Staff said the fifth recital of the draft agreement identifies the project as affordable housing (48 units per that recital, as read by a council member), but other materials discussed 38 units and the housing element’s baseline of 23 units for the site (see Clarifying details). Council members said density bonuses and design choices can yield higher unit counts than the housing-element baseline.

Motion and vote: A council member moved to execute the ENA and authorize the city manager to execute it; another council member seconded. The council approved the motion unanimously. The ENA authorizes staff to negotiate the final terms and gives the developers site control needed for the Super NOFA application but does not, by itself, convey the property or change city fund accounting.

Separately, during public comment before the council’s closed session, a resident (Libby Henry) urged the council to resist litigation challenging the city’s housing element; the council noted the city’s housing element certification by HCD was pending and that certification would be finalized when HCD posts its determination.

Next steps: Staff will finalize negotiations, return any proposed sale or disposition documents to the council for approval, and continue to coordinate with Sunflower Hill and SAHA on the Super NOFA submission and related site studies. If the developers secure funding and the council later approves a conveyance, staff said the city would complete budget/accounting decisions prior to disposition.