Agda Pkt 2025.11.24 Joint SA PFA

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Page 2 of 3 IQHQ and HSR also plan to utilize the City’s Affordable Housing Incentive Program, once adopted and in effect, to further streamline the path to construction. We appreciate the City’s collaboration and creative problem-solving in addressing current economic realities while maintaining community interests and the original intent of the entitled project. The following is a summary of the proposed modifications: . 1. Changing Commercial Obligation from providing affordable units to providing a combination of affordable units and paying an affordable housing impact fee: At the time the project was originally approved, market conditions supported delivering the commercial obligation as on-site affordable units on Parcel A, D and F, which was an alternative means of compliance to the payment of an impact fee. The affordable housing project on Parcel F was completed and 16 of those units satisfy a portion of the commercial obligation. Given the changed economic environment that has the delayed the start of Parcel A and D, HSR and IQHQ propose reverting to paying an impact fee of $5,822,001 to satisfy the remaining commercial requirement, which is an option allowed under the City’s Affordable Housing Ordinance. The economic rationale for this approach is that a one-time impact fee is less of an impact on ongoing project financials. The impact fee further provides the City with immediate resources to invest in other affordable housing initiatives. The fee would be paid to prior to obtaining the final certificate of occupancy for commercial Building C, which is anticipated by February 1, 2026. 2. Revised State Density Bonus Request: We propose revisions to the State Density Bonus Law Request, originally approved at the City Council in November 2020. These revisions involve the redistribution of land areas to more optimally allocate density bonuses between Parcels A and D. The modifications also include satisfying State Density Bonus Law with Very-Low Income units (a lower level of affordability than previously proposed) and reclassifying prior concessions as waivers to allow additional concessions. HSR will request new concessions to reduce the private open space requirement on Parcel D from 125 sq. ft to 104 sq. ft. per unit, and modification of the City’s requirement that affordable units be of comparable square footage to market rate units. The attached proposed revision of the original State Density Bonus Request provides detailed information on the proposed changes. The Project will continue to deliver a total of 540 units, 39 of which have been completed off site. Parcel A will provide 252 units and Parcel D will provide 249 units, as originally envisioned. 3. Revised Affordable Housing Plan: The Affordable Housing Plan would be updated to reflect the new number of affordable units in Parcels A and D, as modified by the requested modifications summarized in #1 and #2. HSR is also seeking approval to use Alternative 2 of the Concurrent Occupancy options to satisfy the City’s concurrent construction requirements. HSR is planning to stagger the construction starts of Parcels A and D by a few months to more efficiently mobilize construction crews between the two sites. The Affordable Housing Plan will also be updated to include the City’s Local Preference Program, which will grant residents and workers preference for the new affordable units to prevent displacement. 4. Façade Revisions: HSR is committed to delivering the residential buildings with the same high-quality design and aesthetic appeal as originally envisioned. Through collaborative discussions with general contractors and design consultants, HSR has identified several opportunities to enhance construction efficiencies related to the building façades. HSR then coordinated closely with City Staff to ensure that any proposed revisions would maintain the original design intent from the public perspective. As a result, the Project architect, WRNS, has prepared a comprehensive package, included in this submission, detailing these proposed minor revisions. These revisions are specifically designed to identify similar but more cost-effective materials and construction methods, without compromising the original design intent, quality, or visual appeal. HSR intends to retain WRNS, the design architect for both the commercial and residential buildings, throughout the construction phase, ensuring design continuity and a seamless transition. We have attached the following supporting exhibits to supplement the request: 1. WRNS Façade Revision Package 8.B. - Page 23 of 120 186