To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Approval of $1,456,343 HOME loan, $1,770,958 in Measure X loan, and $2,250,000 Behavioral Health Grant for the Village of Hope - Pittsburg Project in Pittsburg
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
1. APPROVE loans of (i) HOME Investment Partnerships Program (HOME) funds in the amount of $1,456,343, (ii) Measure X (MX) funds in the amount of $1,770,958, and a grant of (iii) Behavioral Health Services Act (BHSA) funds in the amount of $2,250,000 to Village of Hope - Pittsburg, LLC, a California limited liability corporation (Borrower), for the construction of an affordable housing cottage home development known as Village of Hope - Pittsburg, located at 5305 Kirker Pass Road in the City of Pittsburg.
2. AUTHORIZE the Conservation and Development Director, or designee, to execute loan and grant documents between the County and the Borrower to evidence (i) the $1,456,343 HOME loan, (ii) the $1,770,958 MX loan, and (iii) the $2,250,000 BHSA grant, subject to approval by the County Administrator and approval as to form by County Counsel.
3. FIND, as the responsible agency, that on the basis of the whole record before the County including the California Environmental Quality Act (CEQA) review prepared by the City of Pittsburg, as the lead agency, that the development is exempt under CEQA Guidelines Section 15268; and DIRECT the Conservation and Development Director, or designee, to file a Notice of Exemption for Village of Hope - Pittsburg with the County Clerk, and pay any required fee for the filing.
FISCAL IMPACT:
HOME funds are provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development (HUD) (CDFA #14.239 HOME). The BHSA funds were provided to the County Behavioral Health Services Department by the State of California pursuant to the Behavioral Health Service Act. The County identified the BHSA funds for capital development under the Housing Interventions component of the County’s Integrated Plan for Behavioral Health Services and Outcomes for Fiscal Years 2026-29, which was approved by the Board of Supervisors (Board) on March 17, 2026. Measure X Housing funds are part of the County General fund and derive from a countywide, 20-year, ½ cent sales tax approved by Contra Costa County voters on November 3, 2020. (27% HOME funds, 32% County Measure X, 41% BHSA funds)
BACKGROUND:
Project Description
Contra Costa Interfaith Housing, dba Hope Solutions is proposing the Village of Hope - Pittsburg project located at 5303 Kirker Pass Road in the City of Pittsburg. The City of Pittsburg is in support of the project and will be providing a $500,000 loan towards this development and has approved and recorded a parcel map to create a separate parcel for the development. The building permit has been approved, and the permit will be issued once the project’s loan has closed and permit fees are paid. The development site is a vacant portion of real property owned by the Pittsburg Church of the Nazarene, a California nonprofit religious corporation. Hope Solutions has formed a California limited liability corporation, Village of Hope - Pittsburg, LLC, to develop, own, and manage this development. The real property will remain under the church’s ownership while the housing development will be owned by Village of Hope - Pittsburg, LLC (Borrower). There will be a ground lease between the Church of the Nazarene and the Borrower for a term of 55 years.
The development will include the new construction of a permanent supportive housing prefabricated cottage home community with 15 affordable rental units and one office unit that will serve as a community space and offices to provide services to the tenants. The targeted population preference for these units is for homeless or previously homeless transitional aged youth (aged 18-24). The units will be affordable to households earning between 30 and 50 percent of area median income (AMI). Residents of the development will receive no-cost utilities, which will be subsidized by project-based vouchers and by Hope Solutions. The lead service provider to the residents will be Hope Solutions.
Of the 15 rental units, seven of the two-bedroom units in the development will be designated as County-assisted HOME/Measure X units. For all federally funded projects, a minimum of five percent of the total number of units must be accessible to people with physical disabilities, and an additional two percent of units must be accessible to people with auditory and visual disabilities, as defined in the Uniform Federal Accessibility Standards. This development will require a minimum of one unit constructed to be fully accessible to households with a mobility impaired member and an additional one unit must be constructed to be fully accessible to hearing and/or visually impaired persons. Five of the units in the development will be set aside as County-assisted BHSA units for transitional age youth who are experiencing homelessness and who are diagnosed with a serious behavioral health condition.
Funding
On May 9, 2023, the Board approved an allocation of $1,770,958 in FY 2024/25 Measure X funds to Hope Solutions for the construction of the Village of Hope - Pittsburg project. On June 24, 2025, the Board approved an allocation of $1,456,343 in FY 2025/26 HOME funds for the construction of the project, plus an additional $50,000 for the County’s project delivery costs. As a result, the total loan contributed by the County is $3,227,301 (the “County Loan”).
The BHSA funds is a result of Proposition 1. As a result, Contra Costa Behavioral Health began preparing for the implementation of the Behavioral Health Services Act and prepared a new 3-year integrated plan that was approved by the Board on March 17, 2026. The preparation of the plan included a community outreach and planning effort, which found a need for additional services for transitional age youth, particularly housing. The BHSA funding of this project meets the identified community needs to establish additional dedicated housing for transitional age youth with serious behavioral health conditions who are also experiencing homelessness.
On June 23, 2026, the Board approved an allocation of $2,250,000 in Behavioral Health Services Act (BHSA) funds to the Borrower for construction costs related to the permanent supportive housing project. As a condition to receiving this grant, the Borrower shall give a preference in the occupancy of five units in the project for transitional age youth who are experiencing homelessness and who are diagnosed with a serious behavioral health condition. No repayment of the grant is required provided that the Borrower completes the construction of the project.
Hope Solutions has all funding for the project and anticipates beginning construction in August 2026 after the execution of legal documents. The County Loan will be secured by a leasehold deed of trust.
The HOME/MX funds will be provided by the County in the form of a 55-year residual receipts loan. The County Loan will bear a three percent simple interest rate. There may be some loan repayments if the project has a surplus cash flow (also known as "residual receipts") during the operation of the development. Affordability and use restrictions are incorporated into the County Loan documents. The County will have a Regulatory Agreement with a 55-year term of affordability. Additional non-County financing for the development includes a City of Pittsburg loan, Bezos Day 1 Family Fund, Hope Solutions Capital Campaign, Foundations - LDS, and John Muir Health. In addition, 15 units in the project will have project-based Section 8 vouchers from the Housing Authority of the City of Pittsburg.
The final loan documents between the County and the Borrower are anticipated to be substantially similar to those that are attached to this report. Through this action, the Director of Conservation and Development, or designee, is authorized to execute subordination agreements and estoppels that are consistent with the subordination terms in the Loan Agreement.
Project Cost Savings and Residual Receipts
Hope Solutions requested the County allow the project’s cost savings from construction to be reinvested 100 percent in the project rather than the typical loan terms requiring any project cost savings to be returned to the County. They also requested the County to allow the project’s residual receipts split to be 50/50 to the County and Borrower, rather than the typical 75/25 to the County and Borrower. County staff recommends the County agree to the two requests given that there are no other lenders sharing in the residual receipts, and the project will have less revenue due to a target of deeper affordability levels of 30% AMI and 50% AMI for the units in the project. This will further assist the Borrower in their operations and maintenance of the site and ensure that the project can maintain a positive cash flow through the first 20 years.
Environmental Review
National Environmental Policy Act (NEPA): HOME projects are subject to NEPA and 24 CFR Part 58 environmental regulations. The NEPA review for this project has been completed by County staff and the required mitigation actions are included in the loan agreement. The County, as a responsible agency under CEQA, concurs with the City of Pittsburg’s CEQA determination and will file the appropriate notice with the Recorder's Office.
CONSEQUENCE OF NEGATIVE ACTION:
If the County Loan is not approved and legal documents not executed by the anticipated closing in August 2026, the project will be delayed, and the Developer may not be able to construct the project within the timeframe and anticipated budget.