Sacramento's aging Marshall Hotel, now home to more than 100 of the city's poorest residents, may soon be converted to a boutique inn. If so, its tenants will need to be relocated -- perhaps to a solar- and wind-powered urban oasis designed by UC Davis MBA students.

The students' detailed plan won the 17th annual Bank of America Low-Income Housing Challenge in May, and will be incorporated into a proposal that Mercy Housing -- a national leader in the development of low-income housing -- expects to deliver to the Sacramento Housing and Redevelopment Agency in August.

The redevelopment agency is seeking proposals for low-income housing at 7th and H streets in Sacramento, to help make up for the anticipated Marshall Hotel renovation.

"We tried to really focus on the people who will be living in this new building, and on what we could do to help them turn around their lives and become a part of the community," said Amy Barr, leader of the UC Davis MBA student team.

The result is a 132-page plan that would create 160 single-room occupancy units on the city-owned half-acre site across from the Sacramento County Jail. Twenty units would be set aside for chronically homeless tenants.

Residents would enjoy a rooftop patio, a ground-floor parking garage and a mural on the theme of growth and renewal. An on-site social services agency office would help address their psychosocial needs; a 24-hour security guard would keep them safe.

In a first for low-income housing in the Central Valley, the complex would also incorporate commercial space, including medical offices and a café, to help generate income and integrate the project into the surrounding downtown area.

The complex would be designed to qualify for "silver" certification under the U.S. Green Building Council's Leadership in Environmental and Energy Design, or LEED, standards for new construction. Sustainable features would include solar panels and concealed wind turbines on the roof and natural daylighting and ventilation inside. A gray-water system would irrigate the drought-resistant landscape.

"I think we brought a lot of idealism to the project," said Barr, who ran four community service programs for homeless and low-income families while still in high school. "But we were also solid on the financing."

The UC Davis team, calling itself the SEED Group (for Sustainable, Economical and Equitable Development), proposed a stack of financing sources to develop and operate the project, from grants to tax credits.

Mercy Housing, based in Denver, signed on as the proposed project's developer.

"We provided them with introductions, feedback and guidance, but they did all the work," said Chris Glaudel, vice president of asset management for Mercy Housing and a 1996 UC Davis MBA. "The concept and approach that they came up with is really at the forefront of practices today. Everything they did will be relevant to us as we finalize our response to the Sacramento Housing and Redevelopment Agency's request for proposals for this project. They've given us a big head start."

A panel of housing industry professionals -- including project managers from nonprofit developers, advocacy and trade organizations, tax-credit investors, lenders and architects judged this year's competition. The UC Davis team's proposal came in first overall, beating out proposals from Stanford, UC Berkeley and California Polytechnic State University, San Luis Obispo. The UC Davis proposal also won the category award for financial feasibility.

Each team spent four months preparing project proposals that addressed real-world planning and development challenges, such as identifying a neighborhood with sufficient market demand for affordable housing, locating a viable site for the project, identifying a developer-partner and other service providers, earning the endorsements of neighborhood activists and political leaders, and obtaining sources of funds through lenders, investors and grantmakers.

The competition of Northern and Central California universities is designed to spark innovative approaches to affordable housing development and expose aspiring professionals to the real estate industry. Bank of America has sponsored the competition since 1992.