PREPARED BY: ELIZABETH LOPEZ DATE OF MEETING: 07/20/2026
SUBJECT:
TITLE
CONSIDER ADOPTING RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF A FOURTH AMENDMENT TO AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT WITH DANCO COMMUNITIES FOR THE SALE AND DEVELOPMENT OF A PORTION OF THE FORMER SAN PABLO CITY HALL LOCATED AT 13831 SAN PABLO AVENUE, SAN PABLO, CALIFORNIA
CEQA: The former City Hall property was the subject of a Historic Resources Assessment Report (www.sanpabloca.gov/DocumentCenter/View/13643/Old-City-Hall---Historic-Report <http://www.sanpabloca.gov/DocumentCenter/View/13643/Old-City-Hall---Historic-Report> ) and a Mitigated Negative Declaration (Attachment No. 4) prepared in connection with the approval of the Specific Plan Amendment/General Plan Amendment that designated the property as SP2-Mixed Use Center City Hall Site on February 20, 2018. As part of that approval, mitigation measures were adopted that must be complied with as part of the development of the project. Those mitigation measures have been incorporated as part of the agreement with the developer. There has been no change in circumstances that would warrant further environmental review at this time. Further, the Project meets the criteria established for the affordable housing exemption set forth in Section 15194 of the Guidelines for Implementation of the California Environmental Quality Act (the “CEQA Guidelines”).
Label
CITY MANAGER RECOMMENDATION
Recommendation
Adopt Resolution
Body
Compliance statements
“Expand Housing Options” is a major policy goal in the City Council’s Priority Workplan effective April 7, 2025. In addition, “Historic Preservation Park for City-owned Buildings” was a priority in a previous City Council’s Priority Workplan.
BACKGROUND
On February 1, 2021, the City Council declared a portion of the former City Hall property to be exempt surplus land under the California Surplus Land Act. The City Council also approved and authorized a Disposition and Development Agreement (the “DDA”) providing the purchase and development of all of the former City Hall property except three of the historical buildings located in the northwest portion of the property (the “Site”). The excluded buildings are the Blume House, the Bunk House and the Teixeira House, which will be retained by the City. The purchase price for the Site is $6,800,000 plus the amount needed to retire the outstanding loan for rooftop and carport photovoltaic systems installed at the Site (the “Solar Loan”) from the Energy Resources Conservation and Development Commission (approximately $579,083.18).
Under the DDA, the Developer is to purchase the Site and develop a mixed-use project containing not less than one hundred (100) units of affordable rental housing and not less than 7,500 square feet of new ground floor commercial space, not including the retention/reuse of the Alvarado Adobe Museum building, together with parking and associated amenities (the ‘Project”).
The DDA was subsequently amended several times as the Developer attempted to obtain tax credit funding for the Project. Then, on September 28, 2022, the Developer was awarded 9% tax credits from the California Tax Credit Allocation Committee (CTCAC). The 9% tax credits funded only half of the Project, requiring the Project to be developed in two phases. As a result, the DDA was fully amended by an Amended and Restated Disposition and Development Agreement dated March 23, 2023 (the “ARDDA”), and Phase 1 of the Project is now completed. Phase 1 is providing 50 residential dwelling units, 52 parking spaces and related amenities on the Phase 1 Parcel (as more particularly described in the ARDDA). Phase 1 of the Project closed escrow on April 28, 2023. Construction commenced on November 7, 2023 and was completed on November 17, 2025.
On March 19, 2024, the City and the Developer amended the ARDDA by the First Amendment to Amended and Restated Disposition and Development Agreement (“ARDDA First Amendment”), which provided a two-year extension to close escrow for Phase 2 and the entire Phase 2 Parcel Purchase Price be made a loan to be repaid from the residual receipts of the Phase 2 Project. In consideration for those changes, the Developer will be obligated to pay a Project Development Fee in the amount of $2,000,000 at the close of escrow for the Phase 2 Parcel. The Project Development Fee will also be treated as a loan and paid over time from the residual receipts of the Phase 2 Project. The ARDDA First Amendment was approved by the City Council on March 18, 2024 via Resolution 2024-040.
On June 20, 2024, the City and the Developer amended the ARDDA by the Second Amendment to Amended and Restated Disposition and Development Agreement (“ARDDA Second Amendment”), which retained the Alvarado Adobe Museum by the City and excluded it from the Phase 2 Parcel/Phase 2 Project and Site. The ARDDA Second Amendment was approved by the City Council on June 10, 2024 via Resolution 2024-070.
On March 23, 2026, the City and the Developer amended the ARDDA by the Third Amendment to Amended and Restated Disposition and Development Agreement (“ARDDA Third Amendment”), which provided an extension to close escrow no later than July 31, 2026 (as used hereinafter, “ARDDA” means and refers to the ARDDA as amended by the ARDDA First Amendment, the ARDDA Second Amendment and the ARDDA Third Amendment.
The Developer is currently in escrow for the purchase of the Phase 2 Parcel and anticipates closing escrow before the end of August 2026.
The ARDDA currently contains a legal description of the Phase 2 Parcel that includes the “Historic Buildings Parcel,” which is to be retained by the City. The Developer is currently in the process of preparing a parcel map separately describing the Phase 2 Parcel and the Historic Buildings Parcel, together with descriptions of the public access easements on the Phase 1 Parcel and the Phase 2 Parcel to be reserved to the City. The parties desire that a copy of the recorded parcel map be attached to the ARDDA.
Further, the ARDDA currently provides that the loans made by the City to the Developer for the “Phase 2 Project” be repaid from 80% of residual receipts from the Phase 2 Project. The Developer has requested that the percentage be reduced to 75% of residual receipts because it is a requirement of the Developer’s lender.
A Fourth Amendment to Amended and Restated Disposition and Development Agreement (the “ARDDA Fourth Amendment”) has been prepared that details these changes for consideration by the City Council.
FISCAL IMPACT
Approval of the ARDDA Fourth Amendment would allow for the loans made by the City to the Developer for the Phase 2 Project to be repaid from 75% residual receipts.
ATTACHMENTS:
Att A. Resolution
Att B. Draft Fourth Amendment to Amended and Restated Disposition and Development Agreement