To: Sonoma County Board of Supervisors
Department or Agency Name(s): General Services
Staff Name and Phone Number: Caroline Judy, 565-8058
Vote Requirement: 4/5th
Supervisorial District(s): All
Title:
Title
Extension of Ground Lease for Veterans Village at 665 Russell Avenue, Santa Rosa
End
Recommended Action:
Recommended action
A) Authorize the General Services Director to execute an Amendment to Ground Lease for premises at 665 Russell Avenue, Santa Rosa, for provision of housing and support services to homeless veterans for an extended term of twenty (20) years expiring July 31, 2041.
B) County finds that the market value of the Premises is approximately Eight Thousand Five Hundred Dollars ($8,500) per month. County agrees to waive collection of fair market value of the ground rent and enter into this First Amendment containing a long term lease extension conditioned upon Tenant’s obligation to maintain and operate the Premises for homeless veterans consistent with the lease terms and provide reasonable support services and necessary amenities at Tenant’s cost.
C) Authorize the General Services Director to execute any and all documents and instruments necessary and appropriate to carry out the transaction on form approved by County Counsel.
D) Make finding that: (i) the County does not need the premises for County purposes for the initial term of the lease extension; and (ii) that the premises will be used to meet the social needs of the population by providing housing for people who would otherwise be homeless pursuant to Gov’t Code Section 26227.
(4/5th Vote Required)
end
Executive Summary:
The existing Ground Lease at 665 Russell Ave., Santa Rosa for the Community Development Commission’s Tiny Houses Pilot Project is due to expire on July 31, 2021. The Ground Lease dated July 11, 2017, provided for the design and construction of 14 temporary tiny houses to be built and occupied by qualified low income veterans for three years. The original intent of the Pilot Project launched by the Board of Supervisors in 2015 was to demonstrate the viability of developing non-standard housing to address homelessness. At the time there were over 200 veterans among the 3000 individuals living without shelter in the County. Occupancy began in February 2019 after design and construction was complete under a temporary use permit issued by the City of Santa Rosa for a five year term ending July 31, 2023.
Given the success of the program being operated on the premises and the need to provide critical supportive housing for vulnerable veterans, staff is recommending that the lease be extended for 20 years. Tenant is not currently obligated to pay rent under the original Lease terms. The proposed extension will not require the Tenant to pay rent. Instead, the proposed extension waives collection of fair market value of the ground rent conditioned upon Tenant continuing to paying all costs to operate, maintain and repair the premises and pay all utilities, taxes and assessments (including the City imposed fees payment) and Tenant providing reasonable support services. In order for the extension to occur, Tenant will be obligated to obtain any and all permits or other approvals required by the City of Santa Rosa and pay all fees associated with all existing and new permits or approvals.
Discussion:
The County executed a Ground Lease with a nonprofit, Community Housing Sonoma County, (“Tenant”) for the construction and operation of a temporary homeless housing pilot project on County-owned land at 665 Russell Ave., Santa Rosa APN: 173-030-029 (the “Property”). The Property subject to the Ground Lease contains approximately 34,000 sq ft. and is adjacent to the County Fleet Building and is across the street from the soon-to-be-constructed County Adult Detention and Behavioral Health Unit.
In May 2017, the Board authorized execution of the lease to initiate a 3 year Pilot Project to safely house homeless veterans in 14 small, non-traditional temporary residential structures (also known as tiny homes) containing approximately 350 sq ft. (the “Temporary Structures”). The intention of the Board of Supervisor’s direction was for the Community Development Commission (CDC) to conduct a "trial run" and assessment of this project model and examine the feasibility of this Pilot Project, including its ability to be adequately financed and analyzing its operational cash flows. The Pilot Project launched in 2017 was to conduct this assessment for use in evaluating and pursuing other policies to encourage and facilitate replication of the Pilot Project model on private sites in the County or elsewhere.
In January of 2016, the Board authorized CDC to release a Request for Proposals (RFP) for use of County property as a Pilot Project to evaluate use of non-traditional structures combined with homeless services program management to address homelessness. Pursuant to that RFP, a nonprofit entity was chosen to lease the Property at no rental cost, and to develop the site with prebuilt, modular structures, which units would be transported to another location owned by the nonprofit on West Hearn Avenue at the end of the lease term. Community Housing Sonoma County was chosen based on its RFP response. Under the original Agreement, Tenant is required to remove the Temporary Structures and return the premises to their original condition at the end of the lease current term. The CDC loaned $1.9 million in Community Fund for Housing funds to the nonprofit Tenant for the design, engineering, and construction of the Temporary Structures. The viability assessment of this Pilot Project, as required in the Board’s May 2017 project approval, has not yet been prepared by CDC. The viability assessment is in progress and will be included in the next County Fund for Housing update.
Success of the Program
According to the latest Community Development Commission 2020 Point-In-Time Count, there are 139 homeless veterans in Sonoma County. Veterans receive rental assistance, case management, and clinical support provided by the Santa Rosa Veteran’s Affairs clinic. Veterans also participate in tenant engagement activities. Veterans receive supportive services from HUD-VASH social workers, and property management is provided by two on-site Peer Managers and Eugene Burger Management Corp. The peer groups promote self-sufficiency and sustainability. CHSC reports that the cost to treat a homeless veteran at an emergency room or in a longer hospital stay ($4000 per stay), or the cost of an overnight stay in jail ($138 per night) exceeds the cost per day $14.50 to provide independent housing and support. CHSC reports that the program costs $10,473 per person, per year.
Each veteran living at Zane Wolff Veterans Village has a case manager through the HUD-VASH program of the Veterans Administration. Supportive services vary depending upon individual veteran needs and can include in-home support for activities of daily living, medical care on site and through the Santa Rosa VA Clinic, weekly delivery of food from the Sonoma County Food Bank, as well as frequent food deliveries through Sonoma Food Runners. The HUD-VASH Peer Support Case Manager also supports veterans at the Village.
Given the success of the program to date, as well as the significant demand for much needed supportive housing for vulnerable veterans, staff is recommending the Board extend the term of the lease.
Assuming the Board agrees with staff’s recommendation, the Board needs to make the findings as required under California Government Code 26227, then authorize the Director of General Services to execute the amendment to Ground Lease, in the form included in this Board Item. The Lease amendment includes a provision that if the County determines that it needs the Premises for other County purposes during the extended term, it may terminate the lease and relocate the project’s occupants at County’s cost and expense. Eligibility for certain federal housing program funding requires evidence that the applicant has secure title. Although the Ground Lease provides certain rights to the Tenant, future modifications to the lease may be necessary in order for the Tenant to obtain federal funding. In such circumstances, staff will work with the Tenant to prepare a modification and bring it to the Board for consideration.
CEQA Compliance. The development of the 14 temporary modular structures was deemed to be a “Project” exempt from review under the California Environmental Quality Act pursuant to California Environmental Quality Act Guidelines Section 15332 as an urban in-fill development site.
City of Santa Rosa Fees
Under certain deferred fee agreements executed by the City, the County and Tenant, the City requires the impact fees to be paid if the Tiny Houses use continues after expiration of the Temporary Use Permit or Tenant seeks to convert the use to a permanent one, and in those deferred fee agreements Tenant agreed to pay said fees if Tenant remained on the premises after expiration of the current lease term. The amount of the deferred fees will be recalculated at the time the Tiny Houses use becomes permanent and may be subject to increase.
Prior Board Actions:
05/23/17- Board approved the execution of the 3 year ground lease and directed the General Services Director to execute the lease. Agenda Item 6.
11/15/16 -The Board approved County Fund for Housing awards in the aggregate amount of $3,916,351, including an award to Community Housing Sonoma County for Veterans Village development in the amount of $1,868,851 for construction of 12 small studio units and predevelopment costs for preparing a site for relocation of those units.
06/21/16 - The Board authorized the Sonoma County Community Development Commission and the General Services Department to negotiate and bring back to the Board for consideration a Development and Professional Services Agreement and lease with Community Housing of Sonoma County for a Pilot Project using 12 small, non-traditional residential structures to safely house homeless people.
01/05/16 - Board directed staff to release a Request for Proposals for the Pilot Project
11/03/15 - Board directed staff to complete analysis of County property to be used for a Pilot Project and prepare Request for Proposals to solicit developer interest.
08/25/15 - Board adopted 'A Policy Maker's Toolbox for Ending Homelessness ("Toolbox") to build on the County's 10 Year Homeless Action Plan. As an element of the "Housing First Approach" to serve people experience homelessness the concept of a Tiny House Pilot Project was suggested as a demonstration project to assess the potential viability of this alternative housing type.
07/28/15 - Board approved a minute order directing the County Administrator to convene a multi- departmental team to consider the merits of providing county-owned property for a housing pilot project that harnesses the communities' interest to address homelessness with non- traditional structures or "tiny homes."
12/02/14 - Board approved the 2014 General Plan Housing Element (County-wide) including Housing Element Program 41.
Fiscal Summary
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Narrative Explanation of Fiscal Impacts:
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Narrative Explanation of Staffing Impacts (If Required):
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Attachments:
Attachment 1 - Lease Amendment
Attachment 2 - Zane-Wolff Veterans Village Project Overview
Attachment 3 - Zane-Wolff Veterans Village Peer Management
Related Items “On File” with the Clerk of the Board:
None