COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Services Agency

Office of Housing

 

DATE:

August 6, 2002

BOARD MEETING DATE:

August 20, 2002

 

TO:

Honorable Board of Supervisors

FROM:

Maureen Borland, Director, Human Services Agency

Steve Cervantes, Director, Office of Housing

SUBJECT:

Agreement with the City of East Palo Alto to provide funding assistance for the acquisition of a single family residence to be used for supportive housing, and authorizing the Director of the Human Services Agency to execute subsequent amendments and minor modifications not to exceed $25,000 per funding source

 

Recommendation

1. Adopt a Resolution:

a.

Authorizing the execution of an Agreement with the City of East Palo Alto to provide $148,000 of CDBG funding assistance for the acquisition of a single family residence to be used for supportive housing for a term of 30 years; and

   

b.

Authorizing the Director of the Human Services Agency to execute subsequent amendments and minor modifications not to exceed $25,000 per funding source.

   

2. To approve the transfer of $48,000 from the Housing Development set-aside fund to the EPA Supportive Housing Project.

 

Background

On May 7, 2002, the Board of Supervisors approved the CDBG Annual Action Plan, which included $100,000 to assist the City of East Palo Alto to acquire a new single family residence to be used for supportive housing purposes. As a part of the Annual Action Plan, the Board also approved a set-aside of funds to support off-cycle and supplemental funding applications.

When this project was first approved, the City was planning to assist a nonprofit service provider to acquire a unit on McNair Street for approximately $273,000, created under its Below Market Rate (BMR) ordinance using $100,000 of CDBG funds plus settlement funds from a dispute with the developer of the new housing adjacent to the Ravenswood 101 Center. This dispute resulted from the developer selling a BMR unit to a buyer who did not qualify under the ordinance. That buyer subsequently backed out of the purchase, thereby negating the need for the settlement and allowing the developer to sell the unit on McNair at full market value. The City is now proposing to use the $100,000 CDBG funds to purchase the original BMR unit on Baines Street. While the price is considerably lower, the City does not have the cash available to close the deal. They have subsequently requested an additional $48,000 to complete the purchase.

 

Discussion

This Agreement provides $148,000 to acquire the property on Baines Street. The funds will be provided in the form of two loans; $100,000 for 30 years with an equity share provision and $48,000 for one year. The Agreement requires the City to identify a reliable and stable nonprofit service provider to acquire the property from the City and provide supportive housing to individuals or households with special needs. This could include people with drug and alcohol dependency issues, abused spouses, people with mental illness or people at risk of becoming homeless. It is expected that the nonprofit service provider will obtain financing to repay the $48,000 loan to the County while assuming the $100,000 loan.

The County Counsel has reviewed and approved the Agreement as to form. Risk Management has reviewed and approved the insurance coverage of the City.

 

Vision Alignment

This action keeps the commitment to: Offer a full range of housing choices and goal number 9: Housing exists for people at all income levels and for all generations of families. The action contributes to this commitment and goal by providing or the acquisition of a house to be used to provide supportive housing to those people needing support services to assist them in transitioning into independence.

 

Fiscal Impact

The total County obligation under this Agreement is $148,000 which is being provided by the CDBG program. There are no General Funds used in this project.