Special Notice / Hearing: Publication (3 weeks)
Vote Required: 4/5ths
To: Honorable Board of Supervisors
From: Raymond Hodges, Director of Department of Housing
Subject: Real Estate Purchase and Sale Agreement and Escrow Instructions for the acquisition of 0.37 acres of real property identified as Assessor’s Parcel Number 008-082-200 located at 493 Eastmoor Avenue, Daly City (the “Property”), and for the Ground Lease of the Property to Eastmoor Multi-family, L.P. for the development and long-term operation of a 72-unit affordable housing project on the Property.
RECOMMENDATION:
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Measure K: Adopt a resolution:
A) Declaring the Board of Supervisors’ intent to purchase the real property described as 493 Eastmoor Avenue, a 0.37-acre parcel identified as Assessor’s Parcel Number 008-082-200, located at 493 Eastmoor Avenue, Daly City, San Mateo County (“the Property”), for a total purchase price of $4,440,000 to be satisfied through application of previously disbursed County loan funds and reduction in loan principal; and
B) Authorizing and directing the President of the Board of Supervisors to execute a Real Estate Purchase and Sale Agreement and Escrow Instructions (“Agreement”) between Eastmoor Multifamily, L.P., a California Limited Partnership (“Seller”) and the County of San Mateo, a political subdivision of the State of California (“Buyer” or “County”), for the County’s acquisition of the Property; and
C) Authorizing and directing the Director of the Department of Housing or their designee to execute a Ground Lease (“Lease”) with Eastmoor Multifamily, L.P., for development and operation of a 72-unit affordable housing project (the “Project”) on the Property, which Project is to be restricted at income levels required under a County regulatory agreement; and
D) Authorizing and directing the Director of the Department of Housing, or their designee, to execute a Certificate of Acceptance upon satisfaction of certain conditions in escrow, to be recorded concurrently with the Grant Deed conveying title from Eastmoor Multifamily, L.P., the current property owner, to the County, as well as any and all notices, escrow instructions, and documents required to facilitate the purposes of the Agreement and the Lease; and
E) Authorizing and directing the Director of the Department of Housing, or their designee, to execute, on behalf of the County, and in consultation with the County Attorney, any amendments to the Predevelopment Loan Agreement and Note between the County and Eastmoor Multifamily, L.P., dated November 29, 2022 under No. 79000-23-R078476A, and the associated Promissory Note, Deed of Trust and regulatory agreement, as necessary to implement the transaction contemplated by the Agreement and the Lease; and
F) Authorizing and directing the Director of the Department of Housing, or their designee, to execute, on behalf of the County, all amendments, extensions, notices, options, consents, approvals, terminations, and documents associated with the Agreement and the Lease, including modifications to the form thereof, in consultation with the County Attorney, and the taking of all necessary actions in connection therewith to effectuate the purposes of this resolution.
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BACKGROUND:
There is a critical shortage of affordable housing for extremely low- and very low-income residents throughout San Mateo County. San Mateo County’s Regional Housing Needs Assessment (RHNA) for the 2023-2031 cycle requires the development of a total of 2,833 units across all income categories, including 811 units affordable to Extremely Low- and Very Low-Income households (0-50% of Area Median Income), which represents approximately 29% of the County’s total RHNA allocation.
The County has a strong public interest in, and serves a public purpose by, addressing this shortage and demonstrating its commitment by supporting the development of affordable housing for its most vulnerable households and families.
Eastmoor Multifamily, L.P. currently owns the Property in Daly City, which is currently a vacant parcel, and proposes to construct a 72-unit 100-percent affordable housing project consisting of 71 income-restricted units and one manager’s unit, featuring resident amenities such as a courtyard, community room, reading room, fitness room, and structured parking (the “Project”). The Project will serve households earning between 20% and 50% of the Area Median Income (AMI), with an average affordability level of approximately 33% of AMI, including 39 units designated for high-need households supported through County programs consisting of 16 units designated under the Housing for a Healthy California (HHC) program for people experiencing homelessness with high health care needs, 11 units designated under the Mental Health Services Act (MHSA) program for people experiencing homelessness with a significant mental illness, and 12 units designated under the Former Foster Youth (FFY) program to aid the transition of young people from foster care to independent living.
Because the Project addresses the affordable housing needs of the general population and also provides housing for vulnerable populations in the North County where it is most needed, the County has previously committed funds from its Affordable Housing Fund (AHF) for the development of the Project, including $7,289,400 in Measure K funds, $3,008,000 in HHC funds, $2,200,000 in MHSA funds, and $865,000 in Measure K for Former Foster Youth. The Housing Authority of the County of San Mateo (HACSM) has committed 36 Project-Based Vouchers and awarded a loan commitment of $8,648,046 from its Moving to Work reserves to enhance the feasibility of providing housing for the high-need households who will live at the Project. The City of Daly City has also committed more than $7.7 million in loans to the Project.
The Project is fully entitled and has received final plan approvals from the City of Daly City, with construction anticipated to begin in early 2026. The City of Daly City, acting as the lead agency under the California Environmental Quality Act (CEQA), determined that the Project is exempt as an infill development. Pursuant to recent amendments to CEQA codified in Public Resources Code Section 21080.1(a), a lead agency’s exemption determination is final and conclusive as to any responsible agency’s subsequent project approval, unless challenged through litigation under CEQA Section 21167. Because Daly City’s exemption determination remains unchallenged, the County, as a responsible agency, may rely on the exemption determination in approving the Agreement and Lease.
Allocating a portion of the County’s existing funding commitment to the purchase of the land will provide the County as landowner and ground lessor with greater control over the long-term use of the Property.
The purchase price of $4,440,000 reflects the fair market value of the Property, as determined under an appraisal by Joseph I. Napoliello, MAI, commissioned by the County Department of Real Property, dated September 24, 2025.
DISCUSSION:
The County and Eastmoor Multifamily, L.P. have negotiated a Real Estate Purchase and Sale Agreement and Escrow Instructions (the “Agreement”) and a Ground Lease (the “Lease”) providing for the County’s acquisition of the Property and the concurrent lease of the Property back to Eastmoor Multifamily, L.P. for the development and operation of the Project, and subject to specified contingencies and conditions, including that the Project receive an award of Low Income Housing Tax Credits and satisfy conditions for closing on other funding for the construction of the Project.
No new County funding will be required by this transaction. The purchase price paid will be applied to reduce Eastmoor Multifamily, L.P.’s indebtedness to the County by $4,440,000 under an existing Loan Agreement 79000-23-R078476A (the “Loan Agreement”) which is for a total loan amount of $5,299,622, together with an outstanding HHC loan, leaving a balance of $3,868,058 due.
Upon acquisition, the County will concurrently lease the Property back to Eastmoor Multifamily, L.P. under a 55-year Lease, with one 44-year extension at the option of the ground lessee, for the development and operation of the Project. The Lease will be recorded concurrently with the Grant Deed, ensuring that affordability covenants remain enforceable throughout the Lease term. Under the Lease, the Tenant (Eastmoor Multifamily, L.P.) will be solely responsible for all site maintenance, operations, and management at its own expense, while the County retains oversight and compliance rights as landlord. The Lease also provides for a portion of the Project’s Residual Receipts to be paid to the County to help offset the reduction in the principal amount due to the County under the Loan Agreement.
Under the proposed Agreement, the County’s purchase of the Property and execution of the Lease are contingent upon completion of the County’s Due Diligence Period, during which the County may terminate the transaction in its sole discretion based upon the results of its investigations and reviews. The purchase is further conditioned on confirmation that the Project has received an award of low-income housing tax credits and tax-exempt bonds from the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee, and satisfaction of all other financing and readiness conditions necessary for construction to begin not later than May 19, 2026.
The County’s acquisition of the Property and concurrent execution of the Lease allows the County to convert a portion of its prior predevelopment loan funding into a publicly owned asset without increasing its total financial commitment or its operational or maintenance obligations.
Pursuant to Government Code Section 25539.4, the County may lease property below fair market value when doing so serves a significant public benefit. The County’s ownership and long-term ground lease structure will not increase the County’s total financial commitment.
At the same time, County ownership will ensure long-term protection of a critical affordable housing asset for the duration of the Lease and beyond, consistent with the County’s housing goals to preserve affordability, safeguard public investment, and expand permanent housing opportunities for extremely low- and very low-income households.
Closing is expected to occur after Board approval in connection with the construction finance close of escrow, which is anticipated to take place in May 2026 to implement the financing that will result from the expected award of low-income housing tax credits and bonds on November 19, 2025.
Acquisition of this Property was evaluated for sea level rise impacts in accordance with the 2019 San Mateo County Sea Level Rise Policy for County Assets which requires evaluation of sea level rise risk at least 50 years beyond the date of acquisition. Based on a review of inundation maps during this time horizon, this property is not at risk, screening has been completed, and no further action is needed.
Notices pursuant to California Government Code section 25350 of the intention of the Board of Supervisors to make this purchase were published in compliance with Government Code section 6063, including a description of the property to be purchased, the price, the vendor, and a statement of the time this Board would meet to adopt this Resolution and consummate the purchase, and inviting interested persons to attend and be heard on the subject.
The County Attorney’s Office has reviewed and approved the Agreement, Lease and resolution as to form.
COMMUNITY IMPACT:
The County is dedicated to ensuring safe affordable housing options for all San Mateo County residents, especially the most vulnerable extremely low-income, very low-income and special-needs households. More than half of the homes created by the Project are targeted to populations supported through County programs who, without deeply affordable housing and coordinated supportive services, experience significant barriers to housing stability. These special needs units will house individuals with serious mental illness, individuals with significant health care needs, and former foster youth seeking affordable housing to avoid displacement from San Mateo County.
FISCAL IMPACT:
The approval of the proposed purchase and ground lease transaction has No Net County Cost because the purchase price of the Property in the amount of $4,440,000, will be paid by reducing the principal amount of an existing Measure K loan of $5,299,622 under the Loan Agreement, together with an outstanding HHC loan. A corresponding portion of the Tenant’s Residual Receipts payments which would otherwise have been due to the County under the Loan Agreement will be paid to the County as additional rent under the Lease.