Inter-Departmental Correspondence

Human Services Agency

Office of Housing



November 25, 2003


December 16, 2003



Honorable Board of Supervisors


Maureen Borland, Director, Human Services Agency

Steve Cervantes, Director, Office of Housing



Amendment to the Agreement with National Church Residences (NCR)



Adopt a Resolution authorizing execution of an Amendment to the Agreement with National Church Residences to assist with the development of affordable housing in Pacifica.



In 1993 the County made an interest free loan in the amount of $328,750 to Peninsula Habitat for Humanity ("Habitat") to acquire a parcel of land in Pacifica for the development of 14 affordable housing units. Part of the development was to be built on a vacated city street. Due to political changes and title problems with the underlying fee ownership of the street area, which reduced the size of the project to 10 units, the project, as envisioned, was not able to be built as a Habitat project. Once Habitat made the determination that they could not develop "for sale" units at a price that would be affordable to their targeted buyers they agreed to work with the County to locate another nonprofit housing developer able to develop the property as affordable housing.

Habitat negotiated a deal with NCR to sell the parcel for the amount originally paid in 1993, plus a portion of their A&E investment. In 2002 the County provided $648,250 in new CDBG and HOME funds and let NCR assume the previous CDBG funding of $328,750 the County had originally loaned to Habitat in 1993.



This project is a 10 unit family development consisting of five 2-BR units and five 3-BR units. The units will be targeted toward households earning 30, 40, 50 and 60% of Area Median Income (AMI). One of the units will be fully accessible with a private elevator to provide access since the design constraints require all of the units to be built over individual garages.

The project construction costs came in almost $600,000 higher than the original projection. This is coupled with the extensive infrastructure requirements due to the shape of the parcel (3 of the 4 sides of the parcel require full curb, gutter, sidewalk and street improvements) and the fact that the City of Pacifica was unsuccessful in obtaining HELP funds from the State, which they had originally committed to this project. The City has no other sources from which they could provide any assistance.

The net result is that, as of August, the funding gap was over $770,000. NCR has worked extensively with the architect and project engineer to reduce the project costs and have managed to reduce the construction costs by over $270,000 with commensurate reductions in other costs that hinge on construction hard cost. They have also deferred half of their proposed developer fee. The remaining gap is $365,000 which they are requesting from us at this time.

This project has a Tax Credit commitment, which they stand to loose if they cannot close this funding gap and start construction soon. They hope to have the project completed and leased by the end of 2004.

Risk Management has reviewed and approved the Contractor's insurance.


Vision Alignment

The Agreement with National Church Residences 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 by providing affordable housing and related community services in San Mateo County.


Fiscal Impact

The total County obligation under this agreement is $1,342,000 which is being provided by the CDBG and HOME Programs. The additional funding included in the $1,342,000 is $365,000 of HOME funds. There are no General Funds used in this project.