To: Contra Costa County Housing Authority Board of Commissioners
From: Joseph Villarreal, Executive Director
Report Title: ACCEPT THE RECOMMENDATION OF THE LAS DELTAS MAIN CAMPUS SELECTION PANEL AND ADOPT RESOLUTION NO. 5270 AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO AN EXCLUSIVE NEGOTIATING AGREEMENT (ENA) WITH THE COMMUNITY HOUSING DEVELOPMENT CORPORATION (CHDC) AND EDEN HOUSING TO ACQUIRE, FOR APPRAISED FAIR MARKET VALUE, THE 11.38-ACRE FORMER LAS DELTAS PUBLIC HOUSING DEVELOPMENT MAIN CAMPUS.
☐Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
Accept the recommendation of the Las Deltas Main Campus Selection Panel and Adopt Resolution No. 5270 authorizing the Executive Director to enter into an Exclusive Negotiating Agreement (ENA) with the Community Housing Development Corporation (CHDC) and Eden Housing to acquire, for appraised fair market value, the 11.38-acre former Las Deltas public housing development main campus subject to approval by the Executive Director and approval as to form by County Counsel.
BACKGROUND:
On December 17, 2013, the Housing Authority Board of Commissioners approved submission of two Rental Assistance Demonstration (RAD) applications for the conversion of 90 vacant public housing units at Las Deltas in North Richmond to RAD project-based voucher (PBV) units that could be used to fund development of affordable housing throughout the County. On March 30, 2015, HUD approved these two applications.
When staff submitted HACCC's RAD application in December 2013, the intention was to also submit a Section 18 Demolition/Disposition (Section 18) application to HUD for the remaining, occupied units at Las Deltas. The primary advantage of a Section 18 application was that it provided a better long-term subsidy stream than the RAD program did. The disadvantages were that HUD had made it very difficult to get a Section 18 application approved, the funding for replacement vouchers under such an application were shrinking (meaning we may not have gotten any) and HUD did not provide replacement funding for vacant units under a Section 18 application.
In discussions with HUD and others it became clear that it would be difficult to get a Section 18 application approved for Las Deltas and HACCC's best option was to submit a RAD application for the remaining 124 units at Las Deltas in order to maximize the chances that the entire property can be converted to project-based assistance that can be used to develop replacement housing elsewhere. As a result, on August 18, 2015, the Board of Commissioners of the Housing Authority of the County of Contra Costa authorized the submission of two more RAD applications to HUD that would increase HACCC's previously approved applications for 90 vacant units to include all 214 units at Las Deltas in North Richmond.
On August 16, 2016, HUD approved the additional two applications for the remaining units to be converted under the RAD program. In an effort to replace the units that would be lost at the Property, HACCC committed 214 units of RAD project-based voucher funding to non-profit housing developers in October of 2015 to 14 properties across Contra Costa County. Unfortunately, the rents associated with the RAD assistance would not be sufficient to support the debt service these properties would incur as part of the RAD rehabilitation process and HACCC had to commit additional regular project-based vouchers to these projects.
Three of the 14 projects withdrew from consideration leaving 107 units of RAD assistance unallocated to replacement projects. HACCC has been exploring other projects that may be able to utilize these 107 RAD vouchers but, to date, no entity has shown interest in the assistance. HACCC approached HUD with the possibility to pursue Demolition and Disposition for the unassigned units and HUD indicated that they were amenable to re-visiting such an application for this property.
In June of 2019, HACCC submitted an application to HUD’s Special Application Center for Demolition and Disposition of 107 units at Las Deltas. HUD approved this application in October of 2019 and initiated a concerted effort to sell the units at Las Deltas. HACCC developed a plan to carry out the demolition and disposition in three phases. The first phase was the issuance of a Request for Qualifications (RFQ) for non-profit developers to purchase up to four scattered-site properties for a $1. Phase 2 would entail the marketing of the remaining scattered properties for sale at Fair Market Value. This phase is currently in motion and being prepared for mass distribution. Phase 3 would be the issuance of a request for qualifications for the selection of a Master Developer to acquire and redevelop the 11.38 acres that make up the main campus of the property that sits vacant today.
Phase 1 was completed in August of 2023. Community Housing Development Corporation of North Richmond (CHDC), Richmond Community Foundation (RCF), RichmondLAND (RL) and Richmond Neighborhood Housing Services (RNHS) were selected and given the opportunity to purchase four properties each. This phase is at various points of closing all sales transactions and one has even started rehabilitation of the units.
The marketing of the remaining scattered site properties is on-going and we are in the process of securing appraisals to establish the Fair Market Value sales price for the units. These sales will be on-going until all 25 remaining properties are sold. Each sale will be brought before the Board for approval in the coming months.
On November 4, 2024, HACCC released a Developer Request for Qualifications (RFQ) for the main campus site acquisition and redevelopment It was open for 90 days and closed on February 4, 2025. Three proposals were submitted but only 2 were responsive to the RFQ and moved through the evaluation process. The one proposal was a partnership between the Community Housing Development Corporation of North Richmond and Eden Housing, Inc. and the other proposal was a partnership between Satellite Affordable Housing Associates and Richmond Neighborhood Housing Services.
A panel consisting of community resident leaders, development experts, a member of Supervisor Gioia’s office and HACCC staff convened to evaluate the proposals and conduct a follow up interview session with the two applicants. Each panelist scored the proposals separately and discussed their results collectively with the panel to arrive at the group’s final score for each of the applicants. Three separate scoring rounds were undertaken. The first round was based exclusively on the proposals submitted. The second round of scoring was conducted after interviews were conducted with the bidders to clarify items from their proposals. Bidders were invited to submit their Best and Final proposal after the interviews for final review. The third and final round of scoring was based on a comprehensive review of the proposal, the interviews and the bidders’ Best and Final proposals submitted after the round of interviews.
Each proposal was scored on 8 separate factors including experience, project plan, community partnerships, community engagement and marketing strategy, financial strength, acquisition plan, community goals and unit count. All panelist’s scores were averaged across each category and overall and a total proposal score was arrived at. The overall score is as follows:
|
|
FINAL COMPREHENSIVE SCORES |
|
Bidder |
CHDC/Eden |
SAHA/RNHS |
|
AVERAGE |
76.0 |
70.8 |
CHDC plans to build 125 homeownership units targeted to families between 80 and 120% of area median income (AMI). These proposed units are all over 2,000 square feet. Additionally, CHDC and Eden will partner to develop 115 rental units for seniors with household incomes at or below 60% of AMI. This part of the proposal will take the form of a low-rise apartment building.
HACCC endeavors to enter into an Exclusive Negotiating Agreement (ENA) with CHDC and Eden that will be brought to HUD and this Board for approval prior to transferring the property to them. The ENA will address the terms of the purchase price, timeline of the development activity and the required commitments of the developer as a condition of winning the bid to purchase and develop the former Las Deltas property. Should consensus not be reached with the selected developer on an ENA, HACCC may choose to negotiate with the other development party or re-open the bidding process.
FISCAL IMPACT:
Based on existing appraisals, HACCC will receive approximately $5,500,000 for the sale of the main campus. Closing costs and realtor fees will be paid from these funds. Final proceeds may change in response to market fluctuations and buyer response. All proceeds will be used for affordable housing purposes.
CONSEQUENCE OF NEGATIVE ACTION:
Should the Board of Commissioners elect not to approve the Executive Director to enter into an Exclusive Negotiating Agreement (ENA) with CHDC and Eden to acquire, for appraised fair market value, the 11.38 acre former Las Deltas public housing development main campus, HACCC shall have to reopen the selection process to find a new developer and further delay the transfer of the property to a new owner in order for further development activity to continue for both this site and for HACCC’s public housing properties.