By Ashly McGlone

SAN LEANDRO -- A multimillion-dollar affordable housing project years in the making is moving forward in the city, despite a legal dispute with the state over some of its funding.

Nonprofit BRIDGE Housing Corporation will proceed with revised plans to build the portion of San Leandro Crossings that includes a 200-unit affordable rental housing complex near the San Leandro BART station and a replacement BART parking lot.

More than $9 million in redevelopment low- and moderate-income housing funds and $22 million in state grants will help pay for the complex, estimated to cost $50 million in phase one, to construct 115 units and the parking lot, city officials said. The 85 units to be built in phase two will be reserved for seniors.

But a tug of war over $3.9 million of the housing funds is underway in court, with the state Department of Finance on one side and the city and its redevelopment successor agency on the other.

The city and successor agency, tasked with winding down redevelopment operations after the agency's demise last year, sued the state after it repeatedly demanded the money. The suit argues the money was committed to BRIDGE in a 2009 loan agreement, and the state's demand puts the project's grant money and the entire project in jeopardy.

Further, a threat from the state to withhold tax revenue as a penalty for not paying up could result in an improper downgrade of the city's credit rating, the case states.


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The threat is one being lobbed at cities up and down the state who refuse to comply with the state's demands, but the legality of the penalty, known as a "clawback," is the subject of an ongoing lawsuit filed by the League of California Cities.

San Leandro has decided to move ahead with the project before the matter is resolved. City Attorney Richard Pio Roda said in an email, "BRIDGE Housing and City staff remain committed to this (transit-oriented development) affordable housing project," adding, "The quality of the design and development will be an asset to the City."

BRIDGE officials declined to comment.

The San Leandro Crossings development was substantially changed last spring to offer fewer units, and a plan to offer some units at market rates was scrapped. Sample income rates that could be used to determine eligibility for the housing units include $39,300 for a one-person home, $44,880 for two people, $50,520 for three and $56,100 for four, according to a city presentation last year.

Also added was the OSIsoft tech campus to be built by Westlake Development Partnership west of the BART station with private funding.

Construction of the new BART parking lot and OSIsoft tech campus with leasable office space is scheduled to begin this summer. Construction of the first phase of the housing complex is scheduled to begin in January 2014 and finish by August 2015, city officials estimate.

Ashly McGlone covers San Leandro, San Lorenzo and the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/AshlyReports.

TO FIND OUT MORE
Plans for the San Leandro Crossings project will be the subject of a presentation to the City Council at 7 p.m. Monday at City Hall, 835 E. 14th St.