COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Services Agency

Office of Housing

DATE:

June 30, 2003

BOARD MEETING DATE:

July 15, 2003

TO:

Honorable Board of Supervisors

FROM:

Maureen Borland, Director, Human Services Agency

Steve Cervantes, Director, Office of Housing

SUBJECT:

Resolution authorizing acceptance of a Grant Deed from the Community Association for Rehabilitation, Inc. for the real property commonly known as 2101 Oakley Avenue, Menlo Park, California

Recommendation

Adopt a Resolution authorizing acceptance of a Grant Deed from the Community Association for Rehabilitation, Inc for the real property commonly known as 2101 Oakley Avenue, Menlo Park, California.

Background

In 1982, the Board of Supervisors authorized the County of San Mateo to enter into a Development Agreement with the Community Association for Retarded, Inc. ("CAR") to sell to CAR vacant real property located at 2101 Oakley Avenue, Menlo Park, for the development and operation of new rental housing for low and moderate income developmentally disabled adults. The property was surplus County property originally acquired by the Public Works Department for road improvements. The property was sold to Housing & Community Development for a payment of $90,000 from its CDBG funds. The property was then transferred to CAR by a Grant Deed that contained a condition providing for reversion of the property to the County if CAR failed to continue the use of the property for the purposes specified in the Development Agreement. CAR entered into an Agreement with the State of California, which provided a $124,290 loan secured by a deed of trust on the property to pay for the construction of a single family house on the property.

Discussion

Community Association for Rehabilitation, Inc., successor in interest to CAR has notified us that they will discontinue use of the property as a residence for developmentally disabled adults and propose to transfer the property back to the County in accordance with the restriction contained in the Grant Deed. In addition to the State of California Note and Deed of Trust, there is also a Regulatory Agreement recorded against the property requiring its continued use for supportive housing for the developmentally disabled. The State has informed us that they would expect this use to continue and would work with us in the selection of a new provider. It is our intention to issue a Request for Qualifications and Proposals to identify a suitable provider of residential services to the developmentally disabled to operate the home in accordance with the State Regulatory Agreement. If we are unable to identify an acceptable provider, we will negotiate with the State to identify an alternate use of the property.

We anticipate selling the property to a new service provider with a similar reverter clause in the deed for the remaining term of the State Regulatory Agreement. The sale would be at full market value but the Office of Housing would underwrite this cost by providing a low interest deferred payment loan to cover the purchase price except for the State loan, which the provider would assume. The State loan in the amount of $124,290 is deferred with no interest and is not due until August, 2014. A part of the operating costs of the property would be to provide a sinking fund to repay the State loan when it comes due.

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 housing for extremely low income adults with special needs.

Fiscal Impact

This action will have no immediate financial impact. There may be some holding costs until a suitable service provider is found to take title to the property, which can be paid for with CDBG funds.