To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Approve an additional $8,000 in HOME Funds to the Esperanza Place Project in Walnut Creek to cover additional project-related delivery costs
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE an additional $8,000 in HOME Investment Partnerships Program (HOME) funding to the Esperanza Place project located at 1250 Las Juntas Way in Walnut Creek to cover additional administrative delivery costs, as recommended by the Director of Conservation and Development.
FISCAL IMPACT:
There are no general fund impacts. HOME funds are provided to Contra Costa County (County) on a formula allocation basis through the U.S. Department of Housing and Urban Development (HUD). HOME CFDA #14.256.
BACKGROUND:
On June 11, 2019, the Board of Supervisors (Board) approved the FY 2019/2020 Action Plan, which included the recommendation to fund the Esperanza Place project with HOME funds for the construction of 42 condominiums. The project, originally named Las Juntas, is now known as Esperanza Place. The for-sale units in the development were to be constructed in two phases with 23 units constructed in Phase One and 19 units constructed in Phase Two. All 11 of the HOME-assisted units were to be built in Phase One and were to be sold to homebuyers earning up to 80% Area Median Income (AMI). The condominiums range in size from one to four bedrooms.
On November 16, 2021, the Board approved and authorized loan and related legal documents for $1,605,000 in HOME funds to HEBSV Esperanza Place, LLC, a California limited liability company that is wholly owned and managed by Habitat for Humanity East Bay Silicon Valley (Habitat), for Esperanza Place. The 11 HOME-assisted units were sold to homebuyers earning up to 80% Area Median Income (AMI) at an affordable sales price that does not exceed the published HOME maximum sales price.
The completion of the construction of Phase One was delayed due to unanticipated construction material delays, construction delays, and utility connection delays. Due to the delays, there were increases in project-related delivery costs (administrative activities directly related to the project, including legal costs), and staff is recommending the addition of $8,000 in HOME funds to cover staff and attorney costs incurred by DCD related to delivery. The original amount of HOME funds awarded by the Board to Esperanza Place, which included the loan amount to Habitat ($1,605,000) and the project-related delivery costs ($50,000), was a total of $1,655,000. The recommendation before the Board today is to solely increase the amount awarded for project-related delivery by $8,000 in HOME funds (from $50,000 to $58,000), bringing the total amount of HOME funds awarded to Esparanza to $1,663,000.
This recommendation will not increase the amount of the HOME loan to Habitat. The additional funds will only cover DCD administrative costs and legal costs that exceeded the original anticipated amount and are necessary for DCD to complete and close the project in a timely manner to meet HUD’s expenditure and project completion requirements.
A certificate of occupancy for Phase One of the project was issued on September 24, 2024. Habitat began selling the units to qualified households shortly after the final inspection was issued with the eleventh HOME-assisted unit sold on January 30, 2025. Therefore, the project is in the closeout stage, and with the additional $8,000 in HOME funds, staff will be able to complete all administrative closeout requirements to close the project.
CONSEQUENCE OF NEGATIVE ACTION:
The additional allocation of HOME funds for project delivery will allow staff to administratively close the project. If the project is not closed in a timely manner, the County will not be in compliance with HUD regulations for the timely expenditure and closing of HOME funded projects, which may jeopardize any remaining HOME funds that are yet to be reimbursed for the project and may jeopardize future allocations of HOME funds to the County.