To: Board of Supervisors
From: Warren Lai, Public Works Director/Chief Engineer
Report Title: Lease of El Portal Place to Hope Solutions for the Operation of Permanent Supportive Housing
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE and AUTHORIZE the Public Works Director, or designee, to execute a lease between the County and Contra Costa Interfaith Transitional Housing Inc. (dba Hope Solutions) (Lessee) under which the County will lease the County-owned property located at 2555 El Portal Drive in San Pablo, to Lessee in exchange for Lessee’s operation of a permanent supportive housing facility at the site pursuant to a service contract between the County and Lessee, for an initial term of three years, which term may be shortened or extended to correspond to the term of the service contract.
FISCAL IMPACT:
Approval of the lease will not generate revenue for the County; the Lessee will operate a County program at the site on behalf of Health Services. Health Services estimates the cost of operating the program will be funded 90% by Federal funds and 10% by State funds.
BACKGROUND:
Property Acquisition
On December 14, 2021, this Board authorized the Health Services Director to apply to the California Department of Health Care Services (HCD) for up to $32,400,000 of grant funding from the Homekey Program to purchase the property located at 2555 El Portal Drive in San Pablo (Property). The County’s application to HCD proposed the acquisition of the Property and the renovation of the existing two-story building on the Property to create 54 studio apartments to use as permanent supportive housing for persons experiencing, or at risk of experiencing, homelessness.
On February 1, 2022, in support of the County’s application to HCD for Homekey funding, this Board authorized the Public Works Director to enter into a lease with the Property owner, under which the owner would construct tenant improvements specified by the County to renovate the building. At the same time, the Board authorized the Public Works Director to enter into a purchase and sale agreement governing the County’s purchase of the Property.
On November 21, 2023, the County received a letter from HCD notifying the County that it had been awarded Homekey Program grant funds in the amount $16,000,000 to be applied to the $21,320,000 purchase price of the Property. The balance of the purchase price was paid using Measure X funds, which had been allocated to the project on November 16, 2021.
On May 14, 2024, the Board approved the purchase of the Property. The purchase was consummated on July 11, 2024. The facility at the site has been named El Portal Place.
Operation of El Portal Place
Through a separate Staff Report, the Health Services Director is recommending that the County contract with Hope Solutions to operate El Portal Place. The lease and the service contract will have the same term. If the service contract is terminated for any reason, the lease will terminate on the same day. Under the terms of the lease, Hope Solutions is responsible for maintaining the building and grounds. All costs incurred by Hope Solutions in maintaining the building and grounds will be reimbursed by the County under the reimbursement mechanism established in the service contract.
Under the service contract, Hope Solutions will operate El Portal Place as permanent supportive housing for eligible tenants. Hope Solutions’ responsibilities include qualifying the tenants, collecting rents, maintaining records, and making support services available to those tenants who choose to use them. All services performed by Hope Solutions under the service contract are governed by applicable law, which includes the County’s Continuum of Care Program.
If the lease and the service contract are approved as requested, it is anticipated that residents will be able to begin to move into El Portal Place as soon as October 15, 2024.
CONSEQUENCE OF NEGATIVE ACTION:
Failure to approve the lease and, separately, the service contract, will result in a delay in the opening of El Portal Place to residents.