Prospects appear to have brightened for a project that could launch Rancho Cordova's long-sought transformation of properties along Folsom Boulevard.

The City Council, in its role as the Community Redevelopment Agency board, agreed July 7 to enter into exclusive negotiations with Urban Housing Communities LLC, an affordable-housing developer interested a project that would incorporate the former Stagger Inn property.

"This is a touchstone in Rancho Cordova," Councilman David Sander said of the parcel on the north side of Folsom Boulevard, near Mills Park Drive, that for many years was home to a problem-plagued tavern.

Constituents, he said, constantly ask council members why they haven't done something about the abandoned building that for many is a symbol of the problems they hoped cityhood would solve.

"In its current state, it's not reflecting very positively on the city," Sander said.

Reed Flory, housing services administrator, said Urban Housing Communities is interested in purchasing the Stagger Inn property and five other parcels to the north and east, and crafting a financing plan for development.

Improving the Stagger Inn site alone, he said, "doesn't really address some of the issues we see behind that property."

Flory described Urban Housing Communities as an experienced infill developer that has the capacity to perform.

The firm has developed two apartment complexes in Elk Grove – Crossings at Elk Grove and Stoneridge at Elk Grove – both on Elk Grove Florin Road.

Steve Meyers, counsel for the redevelopment agency, said it is customary to enter into exclusive negotiations with a prospective developer for properties that are difficult to develop.

Because of the nature of these properties and the difficulty of bringing together several parcels for a single project, he said, staff members thought it best to present an agreement to the Redevelopment Agency board for approval.

The agreement is basically an expression of the board's good faith to discuss the feasibility of assembling the parcels and development financing, Meyers said.

He said Urban Housing Communities would try to acquire as much of the property as possible through purchase and sale agreements.

If the firm decided not to proceed with the development, it would assign those purchase and sale agreements to the redevelopment agency.

Some of the targeted parcels contain residential units that would have to be removed for redevelopment, but that housing would be replaced, said Mayor Linda Budge.

Meyers said the agency is obligated to replace any housing removed for redevelopment and to provide residents of the affected units with relocation funds.

"The goal is to combine enough parcels to create commercial housing opportunities," said Curt Haven, city economic development director.

He said the city is looking for a mixed- income housing project in the area.

Some residents said they were uncertain about the implications of redevelopment, however.

Sherry Lautsbaugh of the advocacy group Citizens for One Rancho Cordova/Affordable for All, said she was concerned that low-income housing might not be included in the project.

Nearby resident Barbara Douglas wanted to know what effect such a project would have on single-family homes north of the site.

"I've never been able to get a good answer about eminent domain," she said.

Meyers said the agency does not have the power to condemn single-family homes for redevelopment purposes.

Haven said the agency is not talking about eminent domain, adding that he expects the parcels to be acquired through "friendly purchases."

Call The Bee's Cathy Locke, (916) 608-7451.