MEETING DATE:
April 28, 2026
SUBJECT:
Title
RESOLUTION NO. 2026-9574- APPROVAL OF AN EXCLUSIVE NEGOTIATING AGREEMENT FOR AFFORDABLE HOUSING DEVELOPMENT
Body
Recommendation
Recommendation
APPROVE an Exclusive Negotiating Agreement (ENA) with Affirmed Housing Group, Inc for the development of affordable housing on City-owned sites identified as APNs 219-270-67 and 221-051-38 in the San Marcos Creek District Specific Plan area; and AUTHORIZE the City Manager or designee to execute all necessary documents.
Body
Board or Commission Action
Resolution No. SHA 2018-034 on September 25, 2018 authorizing retention of certain properties by the City in its capacity as the Successor Housing Agency (SHA)
Executive Summary
The City of San Marcos, acting in its capacity as the Successor Housing Agency to the former San Marcos Redevelopment Agency, owns APNs 219-270-67 (“Creekside” parcel) and 221-051-38 (“Truss” parcel) within the San Marcos Creek Specific Plan area.
The Creekside Parcel totals approximately 0.83 acres and is currently vacant and undeveloped. Prior to its reconfiguration in 2011, the Creekside Parcel Site was part of the parcels formerly identified by APNs 219-270-12, 13, 34, and 55. The Truss Parcel Site is approximately 2.91 acres and is currently vacant and undeveloped.
These parcels have been designated for affordable housing development since the dissolution of redevelopment, as documented in the Redevelopment Agency’s 2012 Housing Assets List submitted to the State. In 2018, the City Council approved an extension to retain these properties for the continued development of housing affordable to low- and moderate-income households. Additionally, on February 10, 2026 the Department of Housing and Community Development (HCD) confirmed the City Council’s January 9, 2026 determination that the properties collectively qualify as “exempt surplus land.”.
On December 23, 2024, the City released a Notice of Funding Availability (NOFA/NOA) for the development of these two parcels. The highest-ranking proposal is being recommended for award of an ENA.
Discussion
The Housing and Neighborhood Services Department worked with Procurement staff to issue a NOFA/NOA. The goal was to support the development of affordable housing while making use of City-owned land and available funding resources.
The NOFA/NOA was advertised in the Union-Tribune newspaper and published on the PlanetBids website. A total of six proposals were received from the following developers:
• Affirmed Housing Group
• Bridge Housing Corporation
• Chelsea Investment Corporation
• Cypress Equity Investments
• Jamboree Housing Corporation
• Sea Breeze Properties
An evaluation team reviewed each development proposal. The team included City staff from the Economic Development, Housing and Neighborhood Services, and Planning departments, along with the City’s housing financial consultant, Keyser Marston Associates (KMA). Proposals were evaluated based on the established criteria, including project concept and approach, financial feasibility, developer experience, and past performance.
Exclusive Negotiation Agreement
After a thorough review of each development proposal, financial evaluations, and developer interviews, staff recommend authorizing the City Manager to enter an ENA with Affirmed Housing for both sites. An ENA is a legally binding contract between two parties that restricts both parties from negotiating with third parties for a stated period to allow for dedicated negotiations.
The proposed developer, Affirmed Housing, presented the strongest proposal with the highest value to the City with no local or state funding, and payment to the City for the land. Affirmed Housing’s proposal includes a scattered-site development consisting of:
• Approximately 260 units in three- and four-story buildings
• Mix of one- to three-bedroom units
• Approximately 325 parking spaces
• Affordability restrictions between 30% and 70% of Area Median Income, with an average of 59%, for a minimum of 55 years
• No direct City funding currently anticipated; developer to purchase land, currently estimated to be approximately $5 million dollars.
This project would support the City in meeting its Regional Housing Needs Assessment (RHNA) and would support the City Council’s goals. The proposed ENA, which is included as Attachment 2, establishes a framework for negotiating future Affordable Housing and Regulatory agreements and includes the following key terms:
• Negotiating Period: Through April 28, 2027, with potential extension to October 29, 2027, at the City Manager’s discretion
• Property Disposition: Anticipated sale of the sites
• Due Diligence: Developer responsible for site investigations, insurance, and associated costs
• Project Refinement: Developer to provide detailed design, financing plan, and development schedule during the ENA period
Environmental Review
The proposed action is not a project under CEQA (Section 15378). Future project approvals will be subject to CEQA review.
Fiscal Impact
There is no immediate fiscal impact to the budget at this time. Proceeds from any future property sale would be deposited into the Successor Housing Agency Fund for affordable housing purposes.
Attachment(s)
1. Resolution
2. HCD Concurrence Finding Concerning Exempt Surplus Land Status
2. Exclusive Negotiating Agreement
3. Attachment A - Creekside and Truss Parcels Exhibit
Submitted by: Beth Herzog, Administrative Services Manager
Reviewed by: Sylvia Solis Daniels, Housing and Neighborhood Services Director
Approved by: Michelle Bender, City Manager