HANCSM Letter of Support for MidPen

April 16, 2018

Dear San Mateo Council Members,

On behalf of the HANCSM Board of Directors we wish to express our strong support of MidPen for the Downtown Opportunity Site. As elected officials you are entrusted with an important decision to ensure that public land is used to provide the greatest public benefit. We believe that MidPen is the best developer to maximize public benefit for the following reasons:

MidPen is proposing 100% affordable units for low and moderate income levels.

• Net +81 (81) low income units compared to 0 from Raintree and 0 from Domicile
• Net +24 (81) moderate income units compared to 57 from Raintree and 58 from Domicile

The creation of very-low, low and moderate income level units is a critical unmet need. The City has only created 6% (75 units to date) of the very-low and low income units allocated by the 2022 RENA target (1195 units). In stark contrast, the City is building sufficient market rate housing (1267 target units, 904 units to date, and only 363 units remaining) completing 71% of the 2022 RENA target allocation. MidPen is proposing that 50% of the total units target the “missing middle” to serve families and City workforce earning too much to qualify for conventional affordable housing programs but still not enough to rent at market rate.

MidPen offers greater diversity of unit sizes ranging from studio to 3 bedroom (+39 3-bedroom units). We’ve seen several recent developments include a limited range of sizes (1 and 2 bedrooms). There’s a clear need for more studios and 3 bedroom units in our community to serve the millennial and senior population as well as the growing number of families with young children.

MidPen is the clear choice from a sustainability perspective. All of their projects meet a minimum LEED Gold Standard. They have several projects including a LEED Platinum building in Menlo Park and a Net Zero Energy building in Sunnyvale.

MidPen is providing a conservative and realistic budget underwriting assumptions for funding sources, construction costs and parking revenue. They have deep expertise and an exceptional track record financing affordable housing projects. The only competitive funding source is San Mateo County and MidPen has successful won 5 contracts with the County. We see a greater risk associated with the other market rate development proposals which rely on top of the market rents, and are vulnerable to rising interest rates and a softening rental market. Unlike Raintree, MidPen’s financing plan does not rely on any of the future parking revenue. Other than the $5M that the City committed to provide for the public parking, 100% of the future parking revenue is returned to the City.

We are confident in MidPen’s commitment to work with HANCSM and community-based organizations to do local marketing that will ensure North Central residents and San Mateo community members and City workforce will benefit. Their two existing projects in the City, Delaware (former police station) and Peninsula Station, were extremely successful in local marketing approaches: 66% and 100% of current tenants either worked or lived in our City. MidPen’s ownership model and in-house property management will ensure that San Mateo City residents and workforce will reap the benefits of this project in the long-term.

MidPen is unmatched in their level of accountability to the community. MidPen is local mission-based nonprofit affordable housing developer with 48 years of history serving our county. MidPen is uniquely qualified to collaborate with the City and local organizations at every phase of the development and over the long-run.

In summary, we ask the City Council members to support MidPen and ensure that 100% affordable housing is built on our public land. North Central is one of the oldest, most economically and ethnically diverse neighborhoods in the City. We have some of the highest concentration of vulnerable community members with insecure housing. North Central is experiencing significant displacement among our low-income, senior, Latino and African American communities. Many proposal factors being equal (# of units, # of parking spaces, prevailing wage requirement, commercial space sq ft), HANCSM is convinced of the comparative advantages that MidPen offers our City and community. This is a clear choice that will preserve the socio-economic diversity that our City values and champions.

Respectfully,

HANCSM Board of Directors 2018

(The City Council will be choosing a developer today, Monday April, 16th. Please contact your representatives to share your opinion.)