Council approves amended loan and land transfer plan to boost Thornton Avenue affordable housing bid

The Newark City Council voted to approve a first amendment to a previously authorized $12 million loan to Satellite Affordable Housing Associates (SAHA) to support the Thornton Avenue Apartments, a proposed 59‑unit family affordable housing development at parcels on Thornton Avenue. The amendment authorizes the city manager to acquire the project site and enter into a long-term lease back arrangement anticipated to boost the project’s scoring for state funding programs.

City staff explained that moving the project site onto public land and leasing it back to the developer for a nominal fee can generate extra points in state funding rubrics, particularly for the California Department of Housing and Community Development’s Multifamily Housing Program (MHP). Housing Policy and Programs Manager Michael Coolum said the city-owned‑land approach could raise the project’s MHP score to a level that makes it competitive with projects elsewhere in the Bay Area. “If the city owns the land, the project can be eligible for up to 94–95 points under the MHP rubric,” Coolum said in the presentation.

The proposal before the council authorizes the city to acquire the three‑parcel site at 6347, 6361 and 6375 Thornton Avenue for the amount SAHA paid in 2023, record a lease‑option agreement and a short-term lease while final financing is secured, and execute an amended and restated promissory note and related documents. Staff said SAHA’s construction timeline expects ground‑breaking in 2026 and completion in 2028 if financing is secured.

The project would provide 59 homes (including one manager’s unit) with a mix of one-, two- and three-bedroom apartments, and 10 units set aside for individuals with intellectual and developmental disabilities who will receive services through the Regional Center of the East Bay. The plan includes 42 parking stalls and family‑friendly shared spaces. Predevelopment funding of up to $4.3 million from the city loan was previously used to support site acquisition and early expenses; the remainder is intended for construction financing.

City staff noted that competition for state funds is intense and that projects on public land receive scoring advantages under MHP and similar programs. The staff presentation described technical financing steps, a 99‑year lease option at $1 per year to Thornton LP (the project entity), and provisions that would allow SAHA to extend deadlines to secure funding through June 30, 2027, with two optional one‑year extensions at the city’s discretion.

Council discussion recognized the project’s role in meeting the city’s 2023–2031 Housing Element goals for new affordable housing, and several council members praised the plan’s affordability mix and the dedication of units for residents with developmental disabilities. The item was approved on a 4-0 vote with Councilmember Matthew Jorgens recusing himself because of a real‑property leasehold interest.

Staff recommended — and the council adopted — two resolutions: (1) authorizing the first amendment to the affordable housing loan agreement, including the purchase and sale agreement, lease option, reconveyance and other documents; and (2) declaring the Thornton Avenue parcels exempt surplus land under the California Surplus Land Act so the site can be leased for affordable housing. The council’s action directs the city manager to finalize the agreements and to notify HCD of the exempt‑surplus determination to support SAHA’s April 2025 MHP application.

Votes at a glance: The council approved the amendment to the affordable housing loan agreement and declared the parcels at 6347–6375 Thornton Avenue exempt surplus land for affordable housing, 4-0 (1 recusal).