Disposition and Development Agreement (DDA) with Montebello Housing Development Corporation (MHDC) for the Development of Surplus Land Act Site 6 for Affordable Housing (Ward 2) Recommendation: It is recommended that the Mayor and City Council of the City of San Bernardino, California: Approve the Disposition and Development Agreement (DDA) between the City of San Bernardino and Montebello Housing Development Corporation (MHDC), a nonprofit affordable housing developer, for the development of approximately 0.15 acres of city-owned surplus land, identified as site 6 for affordable housing; and Authorize the City Manager or designee to execute the DDA, along with any subsequent amendments, extensions, and other necessary documents to complete the transaction.

The San Bernardino City Council is considering the approval of a Disposition and Development Agreement (DDA) with the Montebello Housing Development Corporation (MHDC) for the development of affordable housing on 0.15 acres of city-owned surplus land located at 1715 N. Arrowhead Avenue (Site 6). This project, which aligns with the Surplus Land Act, involves the construction of two manufactured housing units: a 1,000-square-foot three-bedroom primary residence and a 750-square-foot one-bedroom accessory dwelling unit (ADU).

Key Provisions:

• Affordability: The units must be restricted to lower-income households for 55 years for rentals or 45 years for ownership, including an equity-sharing agreement pursuant to California Government Code Section 65915(c)(2).
• Financials: The estimated project cost is $458,000, to be funded by the developer through private construction financing (East West Bank) and developer equity. There is no impact to the City's General Fund.
• Development: MHDC is required to meet specific construction milestones and adhere to city design standards. The agreement includes a reversionary interest clause allowing the City to reclaim the property in the event of a default.
• Enforcement: The City retains the right to inspect the property and enforce maintenance standards, including graffiti removal. A Declaration of Restrictive Covenants will be recorded to ensure long-term affordability.

Procedural Context:
This site was declared surplus via Resolution No. 2022-234 on November 16, 2022. The California Department of Housing and Community Development (HCD) confirmed compliance with the Surplus Land Act on October 14, 2024. The City is proceeding directly to a DDA without an Exclusive Negotiating Agreement due to MHDC's demonstrated experience.