HomeMy WebLinkAboutItem 5d - Amendment 1 to Amended and Restates ENA with Smart Share Housing Solutions Item 5d
Department: Administration
Cost Center: 1005
For Agenda of: 2/3/2026
Placement: Consent
Estimated Time: N/A
FROM: Greg Hermann, Deputy City Manager
Prepared By: Robert Hill, Sustainability & Natural Resources Official
SUBJECT: AMENDMENT NO. 1 TO AMENDED AND RESTATED EXCLUSIVE
NEGOTIATING AGREEMENT WITH SMART SHARE HOUSING
SOLUTIONS
RECOMMENDATION
Approve the draft Amendment No. 1 to Amended and Restated Exclusive Negotiating
Agreement with Smart Share Housing Solutions, in a final form satisfactory to the City
Attorney (Attachment A).
POLICY CONTEXT
The City’s Financial Management Manual (Section 475 -C) allows exclusive negotiations
for long-term leases of City property, as well as provisions for leases to non -profit
organizations, where there is a clear link between the proposal and accomplishment of
significant City goals, plans or policies and where the proposal has clear and measurable
community benefits.
Smart Share Housing Solution’s (“Smart Share”) Waterman Village project (the “Project”)
entails rehabilitation and adaptive re-use of the City-owned Rosa Butron Adobe together
with installation of a “tiny home” village that will provide 20 affordable housing units. These
activities are in the public interest by implementing the City's historic preservation goals,
the Conservation and Open Space Element of the General Plan that provides policy
regarding adaptive re-use of the City’s historic structures, the Downtown Concept Plan,
and the Housing Element of the General Plan.
Accordingly, the Project meets the basic policy framework and parameters for an
Exclusive Negotiating Agreement (ENA) in accordance with the Financial Management
Manual and its implementation would advance General Plan goals and policies .
DISCUSSION
Background – Property History
The City of San Luis Obispo has owned the Rosa Butron Adobe located at 466 Dana
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Item 5d
Street since 1989. The City Council adopted a Resolution of Acceptance at that time and
agreed to acquire the property as a life estate gift from Ms. Mary Gail Black. The Rosa
Butron Adobe is listed as a historic residence on the City’s Master List of Historical
Resources and was constructed circa. 1845.
Project Status and Current Request
Smart Share has been diligently working to complete required conditions necessary to
enter into lease agreement negotiations with the City and move towards implementation
of the Project. At this time, the project is now fully entitled, with City Council having
approved the project and environmental determination in 2025. Smart Share has
expended over $600,000 on planning, architecture, and required studies necessary to
complete the environmental review, as well as preparing construction plans and
specifications suitable for a building permit.
At this time, Smart Share estimates that they have appr oximately 40% of the funds
necessary to complete the Project. The ENA states that Smart Share shall have 50% of
the funds prior to entering into lease agreement negotiations with the City (and shall have
100% of funds plus contingency prior to beginning co nstruction). One impediment to
securing additional funding is that most housing-oriented funding sources require that
applicants demonstrate “project readiness” and/or evidence of site control.
Due to the duration of the extensive planning and entitlement phase (the Project was
reviewed by the Cultural Heritage Committee, the Architectural Review Commission, the
Planning Commission, and by the City Council on appeal), as well as project delays
associated with an active litigation challenge to the Project, an extension of the ENA for
an additional one-year term has been requested. The term of the current ENA lapses on
February 16, 2026. Staff also recommend that the ENA be amended to allow lease
negotiations to begin with evidence of 40% of necessary funding because Smart Share
is more likely to be competitive for implementation funding if they can demonstrate project
readiness and site control. The draft Amendment No. 1 to Amended and Restated
Exclusive Negotiating Agreement with Smart Share Housing Solutions provided in
Attachment A would accomplish both recommended changes:
1. Extend the term by one year to end on February 16, 2027; and
2. Revise paragraph 5(b)(ii) to state that "… prior to commencement of lease
negotiations, demonstrate to the City Finance Director's reasonable satisfaction
that Smart Share has available at least 40% of all the funds necessary to design
and construct the project…"
Smart Share has submitted a letter requesting the ENA extension and providing a Project
update, which is included as Attachment B.
Previous Council and Advisory Body Actions
On September 21, 2021, the City Council approved an Exclusive Negotiating Agreement
for Rosa Butron de Canet Adobe with both Smart Share Housing Solutions and the Peace
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Item 5d
Project following prior direction to issue a Request for Information seeking community
partners in March 2020.
On February 6, 2024, the City Council approved an Amended and Restated Exclusive
Negotiating Agreement with Smart Share Housing Solutions, only, after the Peace Project
withdrew from the Project.
On October 24, 2024, the Cultural Heritage Committee reviewed the Project as to
consistency with the City’s Historic Preservation Ordinance and with the Cultural
Resources and Tribal Resources sections of the Initial Study conducted for environmental
review pursuant to the California Environmental Quality Act (CEQA), and recommended
the Project to the Planning Commission; and
On November 18, 2024, the Architectural Review Commission reviewed the Project as to
consistency with the City’s Community Design Guidelines and applicable City standards
and recommended the Project to the Planning Commission; and
On December 11, 2024, the Planning Commission reviewed the Project as to affordable
housing density bonus law and other planning and zoning standards, rehabilitation of the
Master List Rosa Butron Adobe, tree removals and compensatory replacement planting,
the Initial Study / Mitigated Negative Declaration, and General Plan Conformity. The
Planning Commission voted to adopt the Initial Study / Mitigated Negative Declaration
pursuant to CEQA and approve the Project; and
On March 3, 2025, the City Council reviewed an appeal of the Planning Commission’s
decision to approve the Project and voted to deny the appeal.
Public Engagement
Significant public engagement opportunities have occurred as Sm art Share Housing
Solutions’ Waterman Village project has moved through the exclusive negotiating
agreement, planning entitlement, environmental review, and project approval phases.
The recommended action contained in this Council Agenda Report is administrative,
however, any member of the public may provide comments or testimony either in person
or in writing prior to the City Council meeting.
CONCURRENCE
The Community Development Department is supportive of this action as the Waterman
Village represents a 100% low- and very-low-income affordable housing project and also
advances other General Plan and historic preservation goals.
ENVIRONMENTAL REVIEW
On December 11, 2024, the Planning Commission reviewed and approved the adoption
of the Initial Study / Mitigated Negative Declaration of Environmental Impact prepared
pursuant to the California Environmental Quality Act (CEQA).
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Item 5d
FISCAL IMPACT
Budgeted: No Budget Year: 2025-26
Funding Identified: No
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund N/A N/A
State
Federal
Fees
Other:
Total N/A N/A
The recommended action does not have a new fiscal impact. Modest staff time will be
required to oversee the terms of the Exclusive Negotiating Agreement and attend to any
subsequent steps that arise out of that process.
ALTERNATIVES
1. Council could request additional information or request that staff address any
questions that it may have prior to acting.
2. Council could decide to approve the recommendation with changes. This could
entail electing to only approve a one-year extension of the term and to not change the
requirement for 50% of funds necessary to complete the Project to be obtained before
negotiating the long-term lease.
3. Council could deny the recommendation. Should this alternative be selected, the
ENA will expire on February 16, 2026, and in the absence of any other Council action
or direction, no long-term lease will be negotiated with Smart Share for the site, and
the Project will not be able to proceed to construction. It should be noted that the
Council has no obligation to move forward with subsequent steps in the future should
circumstances change.
ATTACHMENTS
A - Draft Amendment No. 1 to Amended and Restated Exclusive Negotiating Agreement.
B - Letter Request from Smart Share Housing Solution, January 6, 2026.
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AMENDMENT NO. 1
TO AMENDED AND RESTRATED EXCLUSIVE NEGOTIATING AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED EXCLUSIVE NEGOTIATING
AGREEMENT is made and entered in the City of San Luis Obispo on ___________________by
and between the CITY OF SAN LUIS OBISPO, a municipal corporation, herein after referred to
as City, and Smart Share Housing Solutions, a non-profit corporation, hereinafter referred to as
Smart Share.
RECITALS
WHEREAS, on September 21, 2021, the City Council approved an Exclusive Negotiating
Agreement (“ENA”) for Rosa Butron de Canet Adobe (the “Adobe”) with both Smart Share
Housing Solutions and the Peace Project following prior direction to issue a Request for
Information seeking community partners to work the City towards rehabilitation and adaptive
reuse of the Adobe in March 2020; and
WHEREAS, on February 6, 2024, the City Council approved an Amended and Restated
Exclusive Negotiating Agreement with Smart Share Housing Solutions, only, after the Peace
Project withdrew from the project; and
WHEREAS, Smart Share has responsibly and diligently completed tasks pursuant to the
approved Amended ENA during its two-year term, including planning, architecture, site design,
environmental review, and project entitlements, as well as significant fundraising efforts; and
WHEREAS, on March 3, 2025, the City Council reviewed and voted to deny an appeal of the
Planning Commission’s decision to approve the project, including planning entitlements and the
Initial Study / Mitigated Negative Declaration pursuant to the California Environmental Quality
Act; and
WHEREAS, on January 6, 2026, Smart Share issued a letter to the City Council requesting an
additional one-year extension of the term of the Amended ENA citing the long duration of the
planning and entitlement process associated with the project, while also noting that
approximately 40% of necessary funds to complete the project have been secured and that Smart
Share desires to move forward with the project as soon as possible.
NOW THEREFORE, in consideration of their mutual promises, obligations and covenants
hereinafter contained, the parties hereto agree as follows:
1. The Amended ENA is hereby further amended to extend the term until February 16, 2027
to allow Smart Share additional time to complete the remaining tasks set forth in the
Amended ENA and paragraph 5(b)(ii) shall be further amended to state that “… prior to
commencement of lease negotiations, demonstrate to the City Finance Director’s
reasonable satisfaction that Smart Share has available at least 40% of all the funds
necessary to design and construct the project…”
2. All other terms and conditions of the Amended ENA shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed the
day and year first written above.
CITY OF SAN LUIS OBISPO
By: ____________________________________
Mayor
By:_____________________________________
City Attorney
By:_____________________________________
City Clerk
SMART SHARE HOUSING SOLUTIONS, INC.
By: _____________________________________
President
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Creating housing solutions by connecting people
and homes
Board of Directors:
Joanna Balsamo-Lilien
(Chair)
Lisa Gonzalez, EA, MBA
(Financial Officer)
Celeste Goyer (Secretary)
Marianne Kennedy
(Past Chair)
Grace Crittenden, MD
Erik Berg-Johansen
Ashley Gastineaux
Monique Grajeda
Elaine Simer
Advisory Council:
Marcy Adams
Sky Bergman
Tina Metzger
Jim Patterson
Pavlo Rudakevych
Scott Smith-Cooke
Tim Waag
Janice Fong Wolf
Staff:
Anne Wyatt
Executive Director
Vicki van den Eikhof
Deputy Director
Mavis Wong
Client Services Manager
Adam Clark
Development Director
Smart Share Housing Solutions, Inc., with
3 programs–HomeShareSLO, ADU-SLO &
Co-Living Collaborative– is a tax-exempt,
501(c)(3) nonprofit public benefit
corporation. Federal tax I.D. is
82-3151265. Your donation is
tax-deductible.
P.O. Box 15034, San Luis Obispo, CA 93406
www.smartsharehousingsolutions.org
805-215-5474
January 6, 2026
Dear Mayor Stewart and Councilmembers via Mr. Hill:
On behalf of Smart Share’s Waterman Village development team, I
write to respectfully request a one year extension of the current
exclusive negotiating agreement (ENA) for Smart Share’s project to
develop the Waterman Village– 20 affordable homes, rehab of the
historic Rosa Butron de Canet Adobe and creation of a
neighborhood park on City property at 466 Dana St.
As you well know, development is challenging in San Luis Obispo,
at best. Beyond that, the level of constraint associated with this site
pushes general constraints up a few notches, not by chance this
beautiful central publicly owned site empty now for over 35 years.
Finally, the Waterman Village’s innovative small homes and adobe
retrofit don’t easily fit any pattern book and have taken extra time to
work through rules written for much larger homes and structures
built out of things other than old mud.
Our team of skilled design and development professionals,
volunteers, and community member donors now has a thoughtfully
crafted, beautifully designed, safe, seismically retrofitted, fire
resistant, flood resistant, low energy consumptive community
serving project in for building permit. Upwards of $600,000 has
already been expended by our team. The Waterman Village has
broad community support, and speaking to the urgency of need, our
office receives calls weekly from people hoping to move into the
Village soon.
As we have been for nearly 6 years now, we’re tackling issues one
by one and finding creative workable solutions.
We appreciate working with the City and the community and look
forward to continuing to lease negotiations and soon together
constructing an innovative hub that we can all be proud to be a part
of.
As always, please do not hesitate to reach out with any questions or
concerns.
Warmly,
Anne Wyatt, Executive Director
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