To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Approval of $1,000,000 Measure X loan for the Esperanza Place Phase 2 Affordable Housing Project in Walnut Creek
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
1. APPROVE a loan of Measure X (MX) funds in the amount of $1,000,000 to HEBSV Esperanza Place, LLC, a California limited liability corporation (Borrower), for the construction of an affordable housing development known as Esperanza Place Phase 2, located at 1250 Las Juntas Way in Walnut Creek.
2. AUTHORIZE the Conservation and Development Director, or designee, to execute legal documents between the County and the Borrower to evidence the $1,000,000 MX loan, subject to approval by the County Administrator and approval as to form by County Counsel.
3. FIND, as the responsible agency, that on the basis of the whole record before the County including the California Environmental Quality Act (CEQA) review prepared by the City of Walnut Creek, as the lead agency, that the development is exempt under CEQA Guidelines Section 15268; and DIRECT the Conservation and Development Director, or designee, to file a Notice of Exemption for Esperanza Place Phase 2 with the County Clerk, and pay any required fee for the filing.
FISCAL IMPACT:
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:
Esperanza Place, formerly named Las Juntas, is a two-phase housing development that includes 42 units of for-sale affordable condominiums in the City of Walnut Creek. The City of Walnut Creek approved various land use entitlements for the development on April 1, 2018. On November 16, 2021, the Board of Supervisors (Board) approved and authorized a loan and related legal documents for $1,605,000 in HOME Investment Partnership Program funds to the Borrower for the construction of Phase 1 of the development, which included the construction of 23 units. All units in Phase 1 have been completed and sold to qualified low-income homebuyers in 2025.
Project Description
Esperanza Place Phase 2 is the second and final phase of the housing development and includes the construction of the remaining 19 units of for-sale affordable condominium units in the development. Phase 2 will include four different unit sizes: one-bedroom, two-bedroom, three-bedroom, and four-bedroom. These units will range in square footage from 612 to 1,412 square feet. Sixteen of the Phase 2 units will be sold to homebuyers with incomes below 80% of Area Median Income (AMI). Three units will be sold to homebuyers with incomes at or below 120% of AMI. The County will deed restrict a total of nine units as MX-assisted units, including two one-bedroom units, two two-bedroom units, and five three-bedroom units. The project is a transit-oriented development and will include community features such as a sport court, children’s play area, central courtyard, benches, and water-wise landscaping. Each unit will have an assigned bicycle storage locker and dedicated automobile parking. Electrical Vehicle charging stations will be available on-site for homeowner use.
Funding
On June 25, 2024, the Board approved an award of $1,000,000 in MX 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 the construction of the Esperanza Place Phase 2 development. The MX funds will be used for construction hard costs. The County MX loan will have the same terms as the County HOME loan that was executed for Phase 1 of the development. The MX loan will be fully deferred during construction and will be partially repaid by the Borrower after the sale of each MX-assisted unit to an eligible first-time homebuyer. The sales of the MX-assisted units must be completed within six months of the date construction is completed on the unit. The purchase prices will be affordable to the applicable target income group and below the market rate value. County staff will work with Habitat to determine the final home sales prices. Habitat will provide homebuyer counseling and will work with the homebuyers to obtain private mortgages.
Other funding sources in this phase of development include additional funding from the City of Walnut Creek, CalHOME, Community Project Funding, AHP/WISH funds, and a Heritage Bank construction loan. The County will need to execute legal documents for the $1,000,000 MX funds previously awarded by the Board to complete their project financing and obtain their construction loan. The County Loan Agreement (Loan Agreement) and related documents are attached in their substantially final form and will be executed in a form approved by County Counsel. Any minor modifications to the documents prior to close will require final approval to execute by the County Administrator and approval as to form from County Counsel.
Through this action, the Director of Conservation and Development, or designee, is authorized to execute subordination agreements and estoppels that are consistent with the subordination terms in the Loan Agreement.
Environmental Review
The County, as a responsible agency under CEQA, concurs with the City of Walnut Creek’s CEQA determination that the development is exempt under CEQA Guidelines 15268 and will file the appropriate notice with the Recorder's Office.
CONSEQUENCE OF NEGATIVE ACTION:
If the County Loan is not approved and legal documents are not executed by the anticipated closing in August 2026, the project will be further delayed, and the Borrower may not be able to construct the project.