To: Board of Supervisors of Sonoma County and Board of Commissioners of the Community Development Commission
Department or Agency Name(s): Community Development Commission
Staff Name and Phone Number: Dave Kiff, (707) 565-7504
Vote Requirement: Majority
Supervisorial District(s): Countywide
Title:
Title
Petaluma River Place Project - Revised Funding Resolutions
End
Recommended Action:
Recommended action
A) Approve amended Resolution for the Petaluma River Place’s No Place Like Home (NPLH) Program Project application.
B) Approve amended Resolution for the Petaluma River Place’s California Housing Accelerator Loan.
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Executive Summary:
The Petaluma River Place permanent supportive housing project includes 15 1-bedroom No Place Like Home affordable units for people coming out of chronic homelessness, with 19 2-bedroom and 15 3-bedroom affordable units and a 2-bedroom unit reserved for the property manager. Sonoma County’s partnership with the developer (Burbank Housing) requires us to have precise authorizing resolutions associated with some of the State funds (and the related applications and standard agreements) that support the construction of this project. This item requests approval of amended resolutions that correct the previous resolutions, per the direction of the California Department of Housing & Community Development.
Discussion:
First Resolution - NPLH Program Project Application:
On July 1, 2016, Governor Jerry Brown signed legislation enacting the No Place Like Home (NPLH) Program to dedicate $2 billion in bond proceeds statewide for the development of permanent supportive housing for persons who need mental health services and are experiencing homelessness, chronic homelessness, or are at-risk of chronic homelessness.
These funds were allocated in “rounds” of funding.
Through the 3rd round of NPLH Competitive Funding, nearly $8 million has been awarded to 2 projects in Sonoma County: Petaluma River Place by Burbank Housing and 414 Petaluma Boulevard North by Mid-Pen Housing. With this NPLH investment, Burbank Housing and Mid-Pen Housing were approved for funding that will provide a combined 30 permanent supportive housing units for NPLH-eligible tenants.
A detailed staff report about the NPLH Program went to the Board on August 6, 2019, with a follow-up item on December 10, 2019. The recommendation to authorize these 2 projects was presented to the Board and approved on January 5, 2021, via Board Resolution No. 21-0006. Resolution 21-0006 specifically named Barbie Robinson, Interim Executive Director of the Community Development Commission (Commission), or designee, as authorized and directed to act on behalf of the County in connection with an award of NPLH Program funds.
The California Department of Housing & Community Development (HCD) has told Commission staff that the County’s Resolution No. 21-0006 (January 5, 2021, Item #6) authorizing participation in the NPLH Program must be approved in a different form. Therefore, this item addresses HCD’s concerns and accordingly authorizes the Executive Director or Interim Executive Director of the Sonoma County Community Development Commission, or designee, to act on behalf of the County in connection with an award of the NPLH Loan and to enter into and administer related documents and obligations.
Second Resolution - California Housing Accelerator Loan
The 2021-22 state budget appropriated $1.75 billion to fund a new HCD program known as the California Housing Accelerator. The Accelerator is funded via the Coronavirus State Fiscal Recovery Fund established by the federal American Rescue Plan Act of 2021 (ARPA).
The intent of this program is to reduce the backlog of projects “stuck” in the funding pipeline to accelerate the development of housing for those most in need. These funds will be used to fill funding gaps in shovel-ready projects that have received funding under other HCD programs and have been unable to access low-income housing tax credits.
On February 28, 2022, HCD announced the availability of approximately $1.05 billion for shovel-ready projects that, despite having received one or more program direct loan awards from HCD multi-family loan programs, are unable to move forward due to funding gaps resulting from the current shortage of tax-exempt bond allocations and low-income housing tax credits. On April 4, 2022, Burbank Housing applied for Accelerator funding to support the affordable housing project known as Petaluma River Place located at 1601 Petaluma Boulevard South, Petaluma, CA. On September 6, 2022, Burbank Housing received a Conditional Award letter for the California Housing Accelerator Tier 2 award. This award was conditional on Sonoma County agreeing to be Co-Applicants on the Accelerator Program Application. On October 26, 2022, Burbank submitted a revised Accelerator application with Sonoma County as Co Applicant. On November 14, 2022, Burbank Housing and Sonoma County received an award letter from the Department of Housing and Community Development Division of Financial Assistance awarding the project $21,795,295.00 in Tier 2 Accelerator funds.
On October 20, 2022, HCD issued a Memorandum announcing the availability of approximately $45 million in supplemental funding for the purposes of supporting previously awarded Tier 1 and Tier 2 California Housing Accelerator projects that have not yet closed on their construction loan and that cannot proceed due to funding gaps resulting from increased costs post Accelerator award. In an effort to address funding gaps, Burbank Housing responded to the October 20, 2022, solicitation by applying for additional accelerator funds on November 14, 2022. If approved, this application will provide additional Accelerator funds to the project to increase the not-to-exceed amount from $21,795,295.00 to $24,000,000.00.
This solicitation incorporates by reference the requirements, standards, and rules (“guidelines”) as set forth in the prior Tier 1 and Tier 2 Accelerator Project Solicitations. The HCD’s authority is set forth in HSC section 50672.3, which states, “In order to expedite the development of qualified rental housing developments that are ready to proceed to construction except for obtaining tax credit or bond allocations from the California Tax Credit Allocation Committee and the California Debt Limit Allocation Committee, the HCD may adopt guidelines to administer this chapter. Guidelines adopted pursuant to this chapter shall not be subject to the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with §11340) of Part 1 of Division 3 of Title 2 of the Government Code).” This solicitation does not set forth new guidelines, but its offering of funds is circumscribed to Tier 1 and Tier 2 California Housing Accelerator projects that must have both not yet closed on their construction loan and cannot proceed due to funding gaps resulting from increased costs post Accelerator award.
Funding available is derived from the Coronavirus State Fiscal Recovery Fund (CSFRF), established by the federal American Rescue Plan Act of 2021 (ARPA) (Public Law 117-2), as well as the State’s General Fund. Through the 2021-22 and 2022-23 California state budgets, funds have been allocated to this program.
Strategic Plan:
This project improves our region’s affordable housing supply for persons coming out of homelessness and therefore directly supports the County’s Five-year Strategic Plan and is aligned with the following pillar, goal, and objective:
Pillar: Healthy and Safe Communities
Goal: Goal 4: Reduce the County’s overall homeless population by 10% each year by enhancing services through improved coordination and collaboration.
Objective: Increase investment in programs that treat underlying causes of homelessness, including substance abuse, mental illness, poverty, and lack of affordable housing.
Prior Board Actions:
10/25/2022, Item 3: Adopted a resolution authorizing and directing the County of Sonoma (“Public Entity”) to submit an application in response to the Solicitation in the California Housing Accelerator Program and that in connection with the California Housing Accelerator Loan, the Public Entity is authorized and directed to enter into, execute, and deliver an STD 213, Standard Agreement in an amount not to exceed $21,795,295.00, and any and all other documents required or deemed necessary or appropriate to secure the California Housing Accelerator Loan from the Department and to participate in the California Housing Accelerator program, and all amendments thereto (collectively, the “California Housing Accelerator Loan Documents”). That the Interim Executive Director, or designee, of the Sonoma County Community Development Commission is hereby authorized to execute the Application and the California Housing Accelerator Loan Documents on behalf of the Public Entity.
03/01/2022, Item 58: Adopted a resolution rescinding resolution 21-0006 and that the Sonoma County Community Development Commission is authorized and directed to apply accept the NPLH Program funds, for the project located at 414 Petaluma Boulevard South, Petaluma, CA; and that the Interim Executive Director or the Executive Director of the Sonoma County Community Development Commission, or their designee, is hereby authorized and directed to act on behalf of County in connection with an award of NPLH Program funds.
01/05/2021, Item 6: Adopted a resolution authorizing to participate in the No Place Like Home program and acceptance of No Place Like Home Round 3 loan funds for Petaluma River Place and 414 Petaluma Boulevard projects.
12/10/2019, Item 3A): Adopted a resolution of the Sonoma County Community Development Commission to change designated signatories for the conduct of the Commission’s banking business; and B) Rescinded and Adopted Amended resolutions for approval of California Emergency Solutions and Housing, NPLH and Emergency Solutions Grant funding enabling Geoffrey Ross to approve acceptance of funding.
8/6/2019, Item 24A): Accepted the No Place Like Home Plan, a required submission for acceptance of the No Place Like Home Non-Competitive Allocation; and B) Adopted a resolution authorizing the Interim Executive Director of the Commission, or his designee, to enter into, execute, and deliver any and all documents required or deemed necessary or appropriate to be awarded the No Place Like Home (NPLH) Noncompetitive Allocation award, and all amendments thereto (collectively, the “NPLH Noncompetitive Allocation Award Documents”).
12/11/2018, Item 58: Authorized Commission to execute all documents necessary to evidence the loan of NPLH competitive funds in Sonoma County.
9/19/2017, Item 2: Authorized Commission to apply for and accept NPLH Technical Assistance Grant funds.
Fiscal Summary
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Narrative Explanation of Fiscal Impacts:
This agenda item solely improves and re-adopts resolutions for projects that are already committed.
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Narrative Explanation of Staffing Impacts (If Required):
None
Attachments:
Attachment 1 - Revised Resolution - No Place Like Home
Attachment 2 - No Place Like Home Award Letter
Attachment 3 - Revised Resolution - Accelerator
Related Items “On File” with the Clerk of the Board:
None