To: Board of Supervisors
From: John Kopchik, Director, Conservation and Development
Report Title: Approval of Modifications to Contingencies Related to an award of CDBG and PLHA Funds for The Riveter-Supportive project in Richmond
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
APPROVE modifications to contingencies related to an award of FY 2023/24 Permanent Local Housing Allocation (PLHA) and FY 2024/25 Community Development Block Grant (CDBG) funds for The Riveter-Supportive project, co-developed by Eden Development, Inc., and Community Development Housing Corporation of North Richmond located at 100 38th Street in Richmond, to extend the deadlines for securing all financial commitments to December 31, 2025 and for securing the necessary CDBG and PLHA loans to July 1, 2026.
FISCAL IMPACT:
No General Fund Impact. CDBG funds are provided to Contra Costa County on a formula basis through the U.S. Department of Housing and Urban Development (HUD). PLHA funds are provided to the County as a grant on a formula application basis through the State of California’s Department of Housing and Community Development.
BACKGROUND:
On June 7, 2022, the Contra Costa County Board of Supervisors (Board) awarded Eden Development, Inc. (Eden) and Community Housing Development Corporation of North 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 necessary to perform the project in place 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.
State regulations require timely commitment and expenditure of PLHA funds and project occupancy. Project milestones are required to be included within the executed PLHA development loan agreement. Typical milestones include but are not limited to, building permit approval, bid package advertising, the commencement of construction, completion of construction, and occupancy of the units.
On June 25, 2024, the Board awarded Eden and CHDC $2,000,000 in CDBG funds as an additional financing source for The Riveter-Supportive 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.
Federal regulations require the timely commitment and expenditure of CDBG funds. 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.
Eden and CHDC have been diligently seeking funding from various sources since 2022. 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 April 15, 2025. Awards for the State’s SuperNOFA are anticipated to be announced by August 2025. If awarded funds, the project will be set up to apply for tax credits and tax-exempt bonds in the third round of 2025. Tax credit awards are expected to be announced by end of November 2025.
Modified Contingencies:
Eden and CHDC have requested modifications to the CDBG and PLHA contingencies as additional financing commitments are sought to fill the financing gap and be eligible for an award of tax credits in 2025. Staff is recommending the following revised contingencies:
• All other financing commitments, including an award of either tax credits or tax credits/tax-exempt bonds, secured by December 31, 2025. CDBG funds will be recaptured by December 1, 2025, if an award of tax credits is not approved for the project.
• The CDBG 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
Recommendations related to the CDBG and PLHA programs are typically made by the Affordable Housing Finance Committee (AHFC) and forwarded to the Board for approval. A meeting of the AFHC was scheduled for Tuesday May 20, 2025; however, the meeting was unable to be held due to lack of quorum of committee members. Due to the timing of needs of the proposed project as well as expenditure timelines associated with the CDBG program, staff is bringing its recommendation to modify the contingencies directly to the Board for approval.
CONSEQUENCE OF NEGATIVE ACTION:
If the modifications to the contingencies are not approved, it would jeopardize the award of CDBG and PLHA funds to The Riveter-Supportive project and possibly delay or prevent the development of the project if they are unable to successfully apply for State funds and tax credits in 2025. The extension of the contingency to obtain all funding for the project by the end of 2025 will allow staff time to find an additional viable affordable housing project, if necessary, to award the CDBG and PLHA funds to expend the funds in another project and to meet the CDBG and PLHA program’s expenditure and unit occupancy timeline.