Advisory Board: Affordable Housing Finance Committee
Meeting Date: April 29, 2026
Subject: Approve Recapture CDBG Funds and Modifications to Contingencies - The Riveter-Supportive, Richmond
Contact: Kristin Sherk, Affordable Housing Program Manager, (925) 655-2889
Recommendations:
1. APPROVE recapture of FY 2024/25 Community Development Block Grant (CDBG) funding recommendation of $2,000,000 made to The Riveter - Supportive project in Richmond, co-developed by Community Housing Development Corporation of North Richmond (CHDC) and Eden Development, Inc. (Eden).
2. APPROVE allocation and reprogramming of the recaptured CDBG funds to other projects that are capable of expending the CDBG funds by the federal deadline.
3. APPROVE modifications to the contingency deadline of FY 2023/24 Permanent Local Housing Allocation (PLHA), HOME-ARP, FY 2025/26 Measure X, and FY 2025/26 CDBG funding for The Riveter - Supportive project in Richmond, as recommended by staff:
a. All financing commitments, including an award of tax credits or tax credits/tax-exempt bonds secured by December 31, 2027. The HOME-ARP and PLHA funds will be recaptured by December 31, 2027, if the project does not receive an award of tax credits by 2027.
b. All funds committed as evidenced by an executed loan and construction commencement, by July 1, 2028.
c. HOME-ARP and PLHA funds will require construction completion, unit occupancy, and all required reporting information to be submitted for the HOME-ARP and PLHA units by April 30, 2030 to meet the two program reporting deadlines to the State of California and HUD.
d. Confirmation that the project’s financials are compliant with the County’s Affordable Housing Program Guidelines.
Background:
CDBG Recapture
The CDBG program’s federal regulations require timely expenditure of CDBG funds. This means compliances with the requirements that the County, as the CDBG Entitlement Grantee, must carry out its program in a timely manner, as measured by the rate of expenditure of funds from CDBG Grantee Line of Credit. A CDBG Entitlement grantee, in accordance with the CDBG regulations at 24 CFR 570.902, must have a balance no greater than one and one-half (1.5) times its annual grant remaining in the Line of Credit, 60 days prior to the end of the program year. HUD has a longstanding policy of reducing the next year's grant allocation of a grantee that continues to be untimely.
Staff recommends recapturing the FY 2024/25 CDBG funds previously awarded to The Riveter - Supportive project. Approval of this recommendation to recapture would make the recaptured funds available to be reprogrammed to another CDBG-eligible application submitted in the 2026/27 Request for Proposal process.
The Riveter - Supportive
On June 7, 2022, Contra Costa County Board of Supervisors (BOS) awarded Eden Development, Inc. (Eden) and Community Housing Development Corporation of N. Richmond (CHDC) $500,000 in FY 2022/23 PLHA funds for The Riveter-Supportive project in the City of Richmond. The project is for the adaptive-reuse and conversion of the former Richmond Health Building into 58 affordable permanent supportive housing rental units. The project’s primary objective is to serve homeless individuals at the lowest income levels who need additional supportive services not offered in traditional affordable housing developments.
The allocation of FY 2022/23 PLHA funds was contingent upon the following:
• All other financing commitments by December 31, 2023.
• PLHA funds committed, as evidenced by an executed loan, by August 31, 2024.
• Confirmation that the project’s financials are compliant with the County’s Affordable Housing Program Guidelines.
On June 25, 2024, the BOS awarded Eden and CHDC $2,000,000 in CDBG funds an additional financing source for the project. The allocation of FY 2024/25 CDBG funds was contingent upon the following:
• All other financing commitments secured by June 30, 2025, and FY 2024/25 CDBG funds committed as evidenced by an executed loan, by December 31, 2025. CDBG funds will be recaptured by July 2025 if significant progress is not being made to meet the May 2026 CDBG expenditure deadline.
• Confirmation that the project’s financials are compliant with the County’s Affordable Housing Program Guidelines.
On June 24, 2025, the BOS approved modifications to the FY 2023/24 PLHA and FY 2024/25 CDBG allocation contingencies. $236,000 in FY 2025/26 CDBG, $2,568,115 in HOME-ARP, and $1,714,000 in FY 2025/26 as additional financing to the project at the same BOS meeting. The modified contingencies for all funding were approved as follows:
• All other financing commitments secured by December 31, 2025, and FY 2025/26 CDBG, Measure X, and HOME-ARP funds committed, as evidenced by an executed loan, by August 31, 2026. CDBG and Measure X funds will be recaptured by December 1, 2025, if the project does not receive an award of tax credits in 2025.
• The CDBG, HOME-ARP, Measure X and PLHA funds committed, as evidenced by an executed loan, by July 1, 2026.
• Confirmation that the project’s financials are compliant with the County’s Affordable Housing Program Guidelines.
Federal regulations require the timely commitment and expenditure of CDBG funds. Additionally, the HOME-ARP funds must be expended by September 2030. If the HOME-ARP funds are not fully expended by then, the HOME-ARP funds will be recaptured by HUD. Full expenditure for purposes of the HOME-ARP program mean construction of the HOME-ARP project is complete, the HOME-ARP units are occupied, and all HOME-ARP reporting documentation has been submitted to HUD by the 2030 deadline. Project milestones must be included in 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.
State regulations require timely commitment and expenditure of PLHA funds and project occupancy. The PLHA program has similar expenditure requirements to the HOME-ARP program where the project construction must be complete, the PLHA units occupied, and all PLHA reporting documentation has been submitted to the State by June 2030. Project milestones are required to be included within the executed PLHA development loan agreement. Typical milestone include but are not limited to, building permit approval, bid packing advertising, the commencement of construction, completion of construction, and occupancy of the units.
Eden and CHDC have been diligently seeking funding from various sources since 2022 but have not been successful in securing additional financing commitments. The 2024/25 CDBG award of $2,000,000 to the project is at risk of recapture by HUD if the County does not transfer the funds to another viable project that can begin construction in 2026. Committed financing sources include a congressional earmark award as a sponsor loan, Affordable Housing Program funds as well as an award of 25 project-based rental vouchers from the County Housing Authority. An application for State Housing and Community Development’s SuperNOFA was submitted spring 2025, but the project was not chosen for an award of funding from the State of California Housing and Community Development.