To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: APPROVE Modifications to Contingencies related to an award of Measure X and PLHA Funds for the Choice in Aging Senior Housing Project in Pleasant Hill
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE modifications to contingencies related to an award of FY 2022/23 Permanent Local Housing Allocation (PLHA) funds and FY 2024/25 Measure X funds for the Choice in Aging Senior Housing Project located at 490 Golf Club Road in Pleasant Hill, as recommended by the Conservation and Development Director.
FISCAL IMPACT:
No General Fund Impact. PLHA funds are provided to the County as a grant on a formula application basis through the State’s Department of Housing and Community Development. 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.
BACKGROUND:
On June 7, 2022, the Board of Supervisors (Board) awarded Satellite Affordable Housing Associates (SAHA) $1,000,000 in Fiscal Year 2022/2023 Permanent Local Housing Allocation (PLHA) funds for the Choice in Aging Senior Housing project located at 490 Golf Club Road in Pleasant Hill, CA. The project is for the new construction of 82 units, including one manager’s unit, of permanent supportive housing for seniors 62 years of age and over. The project will include set-aside units for homeless veterans and chronically homeless veterans and will provide onsite supportive services for tenants.
The allocation of FY 2022/2024 PLHA funds was contingent upon the following:
1. PLHA funds committed, as evidenced by an executed loan, by August 31, 2024.
2. Confirmation that the project's financials are in compliance with the County's Affordable Housing Program Guidelines.
State regulations require timely commitment and expenditure of PLHA funds and project occupancy. Project milestones will be required to be included within the executed development loan agreement. Typical milestones include but are not limited to building permit approval, bid package advertising, commencement of construction, completion of construction, and occupancy of the units.
On June 25, 2024, the Board awarded SAHA $7,931,542 in Fiscal Year 2024/2025 Measure X Housing Funds as the final amount of funding needed prior to applying for tax credits. The project applied for tax credits in August 2025 but was unsuccessful in obtaining an award.
The allocation of Measure X funds was contingent upon the following:
1. All other financing commitments secured by December 31, 2024.
2. FY 2024/25 Measure X funds committed, as evidenced by an executed loan, by August 31, 2025. Measure X funds will be recaptured by January 2025 if significant progress is not being made to meet the August 31, 2025, commitment deadline.
3. An award of $7,931,542 in MX funds will require 40 Measure X units (as further specified).
4. Confirmation that the project’s financials are compliant with the County’s Affordable Housing Program Guidelines.
SAHA has been diligently seeking funding from various sources and has been submitting applications for various State of California (State) funding sources. They were successful in obtaining funding awards from the State Housing and Community Development’s Veterans Housing and Homelessness Program (VHHP), City of Pleasant Hill, and has an award of 51 HUD project-based vouchers. Unfortunately, SAHA learned in February that they were unsuccessful in obtaining an award of HUD 202 funds. They will be applying for additional funds from the State’s SuperNOFA which has an application deadline of April 15, 2025.
Modified Contingencies:
SAHA had requested legal documents to execute the PLHA predevelopment loan with the County prior to the contingency deadline. However, since they had filed their tax credit application after the County’s award of Measure X Housing funds, the County determined it would be more efficient to wait for the tax credit award prior to preparing legal documents because it would be administratively inefficient to prepare two sets of loan documents in succession. As tax credits were not awarded to the project in 2024, SAHA could not meet the contingency deadlines for both PLHA and Measure X awards.
SAHA has requested modifications to the Measure X contingencies as additional financing commitments are being sought to fill the financing gap to be eligible for an award of tax credits in 2025.
The County’s Department of Conservation (DCD) staff recommends the following revised contingencies to give the developer more time to seek additional funding:
1. All other financing commitments are secured by December 31, 2025.
2. Measure X and PLHA funds committed, as evidenced by an executed loan, by August 31, 2026. Measure X and PLHA funds will be recaptured by September 1, 2026, if significant progress is not being made to meet the August 31, 2025, commitment deadline.
3. Confirmation that the project's financials are in compliance with the County's Affordable Housing Program Guidelines.
Recommendations related to the Measure X Housing fund and PLHA funds are typically made by the Affordable Housing Finance Committee (AHFC) with a recommendation to the Board for approval. The AHFC usually meets once or twice each year or as needed to review other off-cycle items. Due to the timing needs of the proposed project as well as the upcoming deadlines for State SuperNOFA applications, (DCD) staff is bringing this recommendation directly to the Board.
CONSEQUENCE OF NEGATIVE ACTION:
If the modifications to the contingencies are not approved, it would jeopardize the award of Measure X Housing and PLHA funds to the Choice in Aging project and possibly delay or prevent the development of the project if they are unable to successfully apply for State funds and tax credits in 2025. The extension of the contingency to obtain all funding for the project by the end of 2025 will allow staff time to find an additional viable affordable housing project to award the Measure X Housing and PLHA funds to expend the funds in another project and to meet the PLHA program’s expenditure and unit occupancy timeline.