To: Contra Costa County Housing Authority Board of Commissioners
From: Joseph Villarreal, Executive Director
Report Title: AUTHORIZE THE SALE OF TWENTY-FIVE SCATTERED SITE BUILDINGS LOCATED ON EIGHTEEN PARCELS FROM THE FORMER LAS DELTAS PUBLIC HOUSING DEVELOPMENT AT FAIR MARKET VALUE AS DETERMINED BY A CERTIFIED APPRAISAL
☐Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
Adopt Resolution No. 5271 authorizing the sale of twenty-five scattered site buildings located on eighteen parcels from the former Las Deltas public housing development at fair market value as determined by a certified appraisal.
BACKGROUND:
The Housing Authority of the County of Contra Costa (HACCC), in collaboration with both the HUD Office of Recapitalization (RECAP) and the HUD Special Application Center (SAC) agreed on a process to demolish and dispose of the Las Deltas Public Housing development through the combined use of Rental Assistance Demonstration Program (RAD) and Section 18 Demolition and Disposition.
HACCC requested, and HUD approved, the removal of the Declarations of Trust on the properties that make up the entire site. In addition, HUD approved the recording of a new Declaration of Restrictive Covenant (DRC) on all the units and parcels at Las Deltas. A copy of the DRC is included with the Purchase and Sale Agreement attached herein. The DRC required that any scattered sites sold at market rate would need to be substantiated by a certified appraisal and would no longer be subject to the restrictive covenants. The proceeds of the sale would be required to be used for affordable housing purposes, primarily the preservation of development of new affordable housing tied to HACCC’s remaining public housing portfolio.
The sale of Las Deltas was earmarked to give preference to former residents of Las Deltas as the Tier 1 group and residents of, or people working in, North Richmond as the Tier 2 group. Tier 3 would be all other interested buyers.
This Board approved the sale and disposition of seventeen buildings at below market rates on September 12, 2023, to four non-profit housing developers who are refurbishing the units and will then sell them to former Las Deltas residents and residents of North Richmond with incomes at or below 80% of the area median income. This was the first phase of the disposition plan for Las Deltas.
The second phase focused on the sale of the main campus property to a developer(s) who could build a mix of rental and homeownership units at both affordable and market rates. The Board is considering that selection in another item at today’s meeting.
The third phase, covered in this Board order, is to sell the remaining twenty-five buildings on eighteen parcels at Fair Market Value (FMV) based on a certified market appraisal, as required by HUD. HACCC began this phase in March of this year. A certified appraiser was hired to complete market appraisals for these properties which HACCC will use to begin marketing the parcels to the former residents of Las Deltas before proceeding with members of the North Richmond community.
Pursuant to the DRC, we are required to secure HUD approval on a unit-by-unit basis for the FMV sales. Moreover, as custodians of HACCC’s assets, this Board must approve the sale of the properties as well. This action seeks to secure blanket approval by this Board authorizing the Executive Director to proceed with submission of each sale to HUD, as required by the DRC, as they are presented to HACCC by our realtor. In doing so, it provides HACCC and the buyers with an expedited approval process so that the sale is not jeopardized or the buyer becomes discouraged.
The first FMV offer has been received. The offer is for Building 599-600: 1725 - 1727 Fourth Street, Richmond, CA listed as items 146 and 147 in the exhibit to the DRC attached to the Purchase and Sale Agreement.
This offer is included in our request today along with the remaining Las Deltas properties to be sold. These properties are outlined in attachments to this Board Order.
Staff also submitted a request to HUD on April 24, 2025 for the approval to sell Building 599-600: 1725 - 1727 Fourth Street, Richmond, CA at FMV.
If the Board approves this board action, the buyer will be able to purchase the property and the restrictive covenant shall be removed from the parcel. In addition, the Executive Director shall be authorized to proceed with future offers without having to come back to this Board, ensuring a speedier close that is less likely to jeopardize any sales.
FISCAL IMPACT:
Based on existing appraisals, HACCC will receive approximately $7,500,000 for the sale of the twenty-five properties on the eighteen parcels for sale. Closing costs and realtor fees will be paid from these funds. Final proceeds may change in response to market fluctuations and buyer response.
CONSEQUENCE OF NEGATIVE ACTION:
If the Board does not authorize the sale at FMV, as determined by a certified appraisal, of the remaining twenty-five scattered site buildings on eighteen parcels from the former Las Deltas public housing development, HACCC will not be able to proceed with the disposition plan for the former Las Deltas scattered site properties and will continue to incur the costs associated with maintaining these empty units. HACCC may also face sanctions from HUD for not proceeding with the plan approved by HUD in 2019.