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Arena Hotel Homekey Transition

At a glance

  • What: The City is taking over the Arena Hotel Homekey project (state-funded housing) and choosing a new development partner: Episcopal Community Services of San Francisco, with Propertyworx LLC as backup.
  • Where it stands: Dropped from the September 22, 2026 agenda, then adopted October 6, 2026 as RES2026-319 (10-0-1, Councilmember Candelas absent) together with a joint memorandum from Mayor Mahan and Councilmember Mulcahy.
  • Next: Staff report back in six months and bring the final amended Homekey Standard Agreement to Council before signing.

What Council approved (October 6, 2026)

  • Three-year Exclusive Negotiation Agreement (two six-month extensions at the City's option) with Episcopal Community Services of San Francisco to convert the Arena Hotel into housing restricted by area median income at rents consistent with the Homekey agreement, and possibly build mixed-income housing (up to 120% of area median income) on the parking lot.
  • A Right of Entry Agreement for due diligence.
  • A backup three-year negotiation agreement with the second-highest scorer, Propertyworx LLC, if Episcopal Community Services cannot sign or fails to perform.
  • An amendment to the Homekey Standard Agreement with the California Department of Housing and Community Development removing A0729 San José L.P., Urban Housing Communities LLC and HomeFirst Services of Santa Clara County as co-applicants, operator and responsible parties, making the City the sole grantee.
  • Documents to unwind or amend project agreements with Urban Housing Communities LLC and A0729 San José L.P. (ground lease, grant agreements, operating agreements).

Joint memorandum (October 2, 2026)

Directs the City Manager to report back in six months on exploring transfer of Homekey units at or below 30% of area median income to other locations, progress with the state housing department on the revised agreement, and any material change in scope, unit mix or timeline; and to return with the final terms before execution.

Public comment

One virtual speaker commented on October 6; no position recorded. Housing Director Soliván and a Housing deputy director presented.

Sources

Log

2026-10-06 - City Council

Adopted RES2026-319 on a motion by Councilmember Mulcahy, seconded by Councilmember Kamei, with the Mayor Mahan-Councilmember Mulcahy memorandum (10-0-1, Councilmember Candelas absent).

2026-09-22 - City Council

Item 8.1 (deferred from September 1) was dropped from the agenda; no action.