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Elk Grove reaches agreement with developers of controversial Old Town apartment project

The City of Elk Grove announced today that it had reached an agreement with the developers of the Oak Rose apartment project. The city had originally declined to approve the project in 2022. That led to the developer, Excelerate Housing Group, suing the city. The state of California also sued the city for denying the project, saying Elk Grove violated SB 35.

The city has agreed to pay the developer $2.3 million including legal fees, damages, and other costs incurred by the developer. In addition to that, the city will also provide a $5 million grant that it has set aside for affordable housing.

The city will also buy the old town property from Excelerate Housing and transfer a city-owned parcel located at 8484 Elk Grove – Florin Road to the developer. The city will pay the appraised value for the old town property.

Total costs for the city could exceed $9 million.

City of Elk Grove Resolves Legal Dispute with Oak Rose Apartments Project Developers

February 23, 2024

The City of Elk Grove and the developers of the Oak Rose Apartments Project have finalized the terms of a legal settlement agreement that will relocate the permanent supportive housing project out of Elk Grove’s historic district to other city-owned property. The settlement marks a positive step toward addressing critical housing needs.

Under the terms of the agreement, the City will purchase the historic district property located at 9252 Elk Grove Blvd. at the appraised value. Simultaneously, the City will transfer ownership of the City-owned property located at 8484 Elk Grove-Florin Road to the Oak Rose developer (or its affiliated entity) at no cost for the development of permanent supportive housing. This property was purchased by the City specifically for affordable housing and is included on the City’s Regional Housing Needs Allocation list, which the City previously designated for affordable housing.

In a statement, Elk Grove’s Mayor, Bobbie Singh-Allen, emphasized the importance of working together with Excelerate Housing Group – the project developers.

“This settlement underscores our dedication to fostering a partnership with Excelerate, addressing the concerns of our community, and positioning this project for success. We recognize the importance of permanent supportive housing in our region and this resolution reflects the City’s commitment to providing a compassionate and effective solution. This new, larger site will allow for an improved design with larger units that align well with the city’s vision for responsible and inclusive development. Through this collaboration, we are confident that the project will contribute positively to the well-being of our residents and the vibrancy of Elk Grove as a whole.”

“After months of negotiations with the City of Elk Grove, we are grateful to have reached a compromise that allows us to move forward with developing affordable housing for those experiencing homelessness in the City,” said Dana Trujillo, President and CEO of Excelerate Housing Group. “The 8484 Elk Grove-Florin Road site allows us to increase the size and number of units in the project and provide additional amenities to future residents compared to the Elk Grove Boulevard site. We appreciate the time and effort the Mayor and key staff put into these discussions to come to a mutually beneficial resolution. This agreement results in positive outcomes for those most in need, which continues to be the goal of our work in Elk Grove and the Sacramento region.”

Excelerate (or its affiliate) will submit development applications for the Elk Grove-Florin site. The City has until June 30, 2024, to approve or disapprove the project at that site. Additionally, the City will provide the project with a $5,000,000 grant, using funds designated for the support of affordable housing, for the Elk Grove-Florin site development, distributed in phases based on the completion of various milestones.

To address costs incurred at the Old Town site, the City will reimburse the developer $850,000. Furthermore, the City will pay damages totaling $860,000 and reimburse the developer’s attorneys’ fees in the amount of $600,000 related to the Oak Rose project.

In the event that the City does not approve the Elk Grove-Florin project by June 30, 2024, the developer has the option to terminate the agreement. In such a scenario, the City will pay $2,200,000 to the developer, and both the Old Town and Elk Grove-Florin sites will remain with the City, relieving it of any additional outstanding grant payments.

The settlement includes mutual releases of claims by both parties, with no admissions of liability.

Litigation against the City filed by the State of California related to the Oak Rose Apartments Project remains pending and is not part of this settlement. City officials are hopeful, however, that this settlement with the private developer will also prompt a swift and reasonable resolution with the State.

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