COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Services Agency

Office of Housing

DATE:

February 21, 2002

BOARD MEETING DATE:

February 26, 2002

TO:

Honorable Board of Supervisors

FROM:

Maureen Borland, Director, Human Services Agency

FROM:

Steve Cervantes, Director, Office of Housing

SUBJECT:

RESOLUTION AUTHORIZING EXECUTION OF AMENDED AGREEMENT BETWEEN COUNTY OF SAN MATEO AND EAST PALO ALTO COMMUNITY ALLIANCE AND NEIGHBORHOOD DEVELOPMENT ORGANIZATION (EPA CAN DO) TO ASSIST WITH THE DEVELOPMENT OF AFFORDABLE RENTAL HOUSING

Recommendation

Adopt a resolution authorizing execution of an amended agreement with East Palo Alto Community Alliance and Neighborhood Development Organization (EPA CAN DO) providing additional HOME and CDBG funds for its Nugent Square Affordable Rental Housing Project.

Background

Between April 1994 and November 1995, the County entered into a series of agreements with EPA CAN DO which enabled them to acquire three parcels of land adjacent to their existing office in East Palo Alto. The combined parcels now include the entire University Avenue frontage between Sacramento Street and Weeks Street containing approximately 0.9 acres. These parcels presently contain EPA CAN DO's administrative office, a single family residence and a triplex. At the time of the acquisition of the vacant lot (1995), additional County funds were allocated toward the Nugent Square project. Due to pending state required revisions to its General Plan and Housing Element, the City of East Palo Alto was not willing to approve the proposed development plan at that time. The funding agreement was allowed to lapse with the intention of entering into a new contract when the General Plan/Housing Element issue was resolved. The new General Plan and Housing Element for the city have now been completed and identify this area for high density housing. The project is now ready to move forward.

On June 6, 2000, the County entered into an agreement to provide EPA CAN DO with the funds remaining in the original project account ($178,137) to assist with pre-development expenses. That agreement was subsequently amended on November 14, 2001, to provide an additional $705,000 of HOME and CDBG funding toward the project.

Discussion

EPA CAN DO applied for additional funding from Fiscal Year 2001 CDBG and HOME funds to assist with other project expenses including additional pre-development expenses, infrastructure improvements, off-site improvements and unit construction costs. The project has been redesigned to increase the unit count to 32 units. EPA CAN DO has purchased an additional parcel to accommodate the necessary parking. Through its Community Development and HOME funding process, the Board awarded an additional $845,000 toward this project: $195,000 of FY 01/02 HOME funds; $300,000 pre-commitment of FY 02/03 HOME funds; and $350,000 of FY 01/02 CDBG funds.

This amended agreement adds all of the above funds with a provision that the 2002-03 funds will not be available to reimburse EPA CAN DO until after July 1, 2002. The total contract is now $1,728,137. The funds will be provided in the form of a loan secured by a deed of trust against the entire property. Included in the Note and Deed of Trust will be the funds previously provided in 1994 and 1995. The total amount of the Note will be for $2,108,395 plus any interest accrued on the earlier loans. The amendment also provides for the increased project size and includes all the current contract requirements.

This agreement has been approved by the County Counsel's Office as to form, and meets HUD regulations. Risk Management has reviewed and approved the contractor's insurance coverage.

Vision Alignment

The Agreement with EPA CAN DO keeps the commitment of Offering a Full Range of Housing Choices and goal number 9: Housing exists for people at all income levels and for all generations of families. This agreement contributes to this commitment and goal in that it assists with the production of 32 affordable rental units serving low income families in East Palo Alto.

Fiscal Impact

The total new County obligation under this Agreement is $845,000 which is being provided by the CDBG and HOME Programs. This project is included in the current Housing & Community Development budget. There are no General Funds used in this project.