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
Community Development Block Grant - Disaster Recovery Multifamily Housing Project (CDBG-DR-MHP) Funding Awards to Certain Multifamily Housing Projects
End
Recommended Action:
Recommended action
A) Ratify the Sonoma County Community Development Committee’s recommendations to award Community Development Block Grant-Disaster Recovery Multifamily Housing Project (CDBG-DR-MHP) loans to three projects in the aggregate amount of $4,228,928.
B) Authorize the Executive Director of the Sonoma County Community Development Commission (CDC), or designee, to execute funding agreements and related documents, including promissory notes, deeds of trusts, and other related loan and regulatory documents and subsequent amendments, subordinations, and other modifications to said agreements and loan documents in connection to the CDBG-DR-MHP awards, consistent with the Community Development Commission Loan Policies and as shall be approved by County Counsel.
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Executive Summary:
The California Department of Housing and Community Development (HCD) received Community Development Block Grant Disaster Recovery (CDBG-DR) funds from the federal government to support the state’s unmet recovery needs related to the Federal Emergency Management Agency (FEMA) major disaster declaration DR4344 made in October 2017, which was prompted by the Tubbs and other fires. Funded projects must directly relate to the disaster response.
The county received $4,698,809 to support development of new multifamily housing countywide. Of this amount, $469,881 is set aside for administration costs of the program and therefore a total of $4,228,928 is available to award to developers. A notice of funding availability was released by the Community Development Commission (CDC) staff on April 26, 2021, to solicit housing project proposals for these funds. Six (6) project applications were received.
CDC staff presented the applications and staff analyses to the Community Development (CD) Committee on September 15, 2021. The CD Committee reviewed the 6 proposals and recommended funding for 3 projects in the following amounts:
|
Developer |
Project |
Units |
Amount Recommended |
|
BRJE Housing Partners |
3575 Mendocino Ave, Phase II |
38 |
$2,436,753 |
|
MidPen Housing |
414 Petaluma |
44 |
$1,300,000 |
|
Burbank Housing |
Petaluma River Place |
50 |
$492,175 |
Discussion:
On November 10, 2020, the Board of Supervisors and Board of Commissioners authorized the CDC to receive $4,698,809 in CDBG-DR-MHP funds from the California Department of Housing and Community Development (HCD). This one-time program provides funds to address unmet rental housing needs, including the needs of individuals displaced from rental homes and those who became homeless as a result of the disaster caused by the October 2017 wildfires. The City of Santa Rosa received a separate allocation of $38.4 million in CDBG-DR-MHP funds for this same purpose. The City awarded their funds to assist with financing of 377 units of affordable housing in five developments: 3575 Mendocino Avenue, Phase I (94 units), Caritas Homes, Phase I (64 units), The Cannery at Railroad Square (129 units), Burbank Avenue Apartments (64 units), and Linda Tunis Senior Apartments (26 units). Construction of the City-funded developments is expected to begin in the near future.
CDC staff released a notice of funding availability on April 26, 2021, to solicit affordable housing proposals and six (6) applications were received, requesting a combined total of $10,715,681 for 390 affordable units.
The applications were reviewed and evaluated by staff to determine their eligibility and compliance with HCD’s criteria, as well as consistency with the CDC’s principles and funding priorities for:
1. Projects that demonstrate funds will be leveraged against total development cost at least 7 to 1;
2. Projects that demonstrate advanced readiness via entitlements, financing commitments, and permits;
3. Developers that demonstrate previous success in obtaining federal tax credits and/or state funding to develop housing within the last 7 years;
4. Projects that can demonstrate existing support from other jurisdictions via letters of support, funding commitments, etc.;
5. Projects that assist with meeting housing needs, including the needs of individuals displaced from rental homes and individuals who became homeless as a result of the disaster;
6. Projects that take advantage of the maximum density allowed under the local jurisdiction’s General Plan, Zoning Ordinance, and other relevant regulations; and
7. Readiness to proceed, such as completion of environmental review and site control.
On September 15, 2021, CDC staff presented the applications and staff analyses to the CD Committee, which is comprised of 1 representative of each supervisorial district and 2 tenant representatives of the Sonoma County Housing Authority, who are all appointed by your Board, plus 1 appointee by the Human Services Department Director.
After careful review of the applications, the CD Committee recommended $4,228,928 in CDBG-DR-MHP funding for a total of 132 affordable units in the 3 projects shown below. These 3 developments were selected as they appear to be the most shovel-ready projects that comply with HCD’s criteria and the most likely to be approved by HCD based on the information contained in their respective proposals.
|
Project Name / Developer |
Location |
Requested Amount |
Recommended Amount |
Description |
|
3575 Mendocino Avenue, Phase II / BRJE Housing Partners |
Santa Rosa |
$2,436,753 |
$2,436,753 |
- 38 units - < 60% AMI - Seniors |
|
414 Petaluma / MidPenHousing |
Petaluma |
$1,300,000 |
$1,300,000 |
- 44-units - 30% - 60% AMI |
|
Petaluma River Place / Burbank Housing |
Petaluma |
$1,000,000 |
$492,175 |
- 50 units - < 60% AMI - Farmworkers - Homeless or at-risk of homelessness - Families |
The 3 projects for which the CD Committee did not recommend funding are Caritas Homes and Burbank Avenue Apartments, both in Santa Rosa, for which Burbank Housing requested $1 million and $750,000, respectively, and Meridian at Corona Station in Petaluma, for which Danco Communities requested $4,228,928.
On December 20, 2021, CDC staff submitted the individual project applications for the 3 recommended proposals to HCD for final approval. Upon receiving the Notice to Proceed from HCD, CDC staff will work with the applicants to comply with all applicable HCD requirements and the CDC Loan Policies to execute funding agreements and related loan and regulatory documents.
The Board’s approval of this agenda item will authorize the Executive Director of the CDC, or designee, to execute funding agreements for the HCD-approved projects in the aggregate amount of $4,228,928 and related documents including promissory notes, deeds of trusts, and other related loan and regulatory documents and subsequent amendments, subordinations, and other modifications to said agreements and documents in connection to the CDBG-DR-MHP awards, consistent with the CDC Loan Policies and approval by County Counsel.
Strategic Plan:
This item directly supports the County’s Five-year Strategic Plan because it leverages competitive resources such as the CDBG-DR program to increase the supply of affordable and supportive housing locally. More specifically, it is aligned with the following pillar, goal, and objective.
Pillar: Healthy and Safe Communities
Goal: Goal 3: In collaboration with cities, increase affordable housing development near public transportation and easy access to services.
Objective: Objective 2: Identify and leverage grant funding sources for permanent supportive and affordable housing development.
Prior Board Actions:
On November 10, 2020, the Board adopted 1) a resolution authorizing the acceptance of CDBG-DR-MHP funds in the amount of $4,698,809 to be used for a multifamily housing program, in response to the 2017 Sonoma Complex Fires, and authorized the CDC’s Executive Director to enter into a grant agreement with California HCD for the CDBG-DR-MHP funds; and 2) a resolution adjusting the fiscal year 2020-2021 adopted budget to facilitate use of the CDBG-DR-MHP funds.
Fiscal Summary
|
Expenditures |
FY 21-22 Adopted |
FY22-23 Projected |
FY 23-24 Projected |
|
Budgeted Expenses |
$4,698,809 |
|
|
|
Additional Appropriation Requested |
|
|
|
|
Total Expenditures |
$4,698,809 |
0 |
0 |
|
Funding Sources |
|
|
|
|
General Fund/WA GF |
|
|
|
|
State/Federal (CA HCD) |
$4,698,809 |
|
|
|
Fees/Other |
|
|
|
|
Use of Fund Balance |
|
|
|
|
Contingencies |
|
|
|
|
Total Sources |
$4,698,809 |
0 |
0 |
Narrative Explanation of Fiscal Impacts:
Ten percent of the CDBG-DR-MHP funds ($469,881) will be used by CDC to pay administrative costs and the remaining $4,228,928 will be loaned to the developers of the 3 multifamily projects. Revenue and Expense appropriations are already included in the FY 2021-22 Budget.
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Staffing Impacts: |
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Position Title (Payroll Classification) |
Monthly Salary Range (A-I Step) |
Additions (Number) |
Deletions (Number) |
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Narrative Explanation of Staffing Impacts (If Required):
None
Attachments:
None
Related Items “On File” with the Clerk of the Board:
N/A