To: Contra Costa County Housing Authority Board of Commissioners
From: Joseph Villarreal, Executive Director
Report Title: APPROVAL OF REQUEST FOR ATTORNEY CONFLICT WAIVER UNDER CERTAIN CIRCUMSTANCES
☐Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
Acting as the governing body for the Housing Authority of the County of Contra Costa AUTHORIZE the Executive Director, or his designee, to consent to an actual conflict of interest that arises due to an existing and continued relationship that a law firm has with the Housing Authority and another party, and a proposed joint representation of both parties in connection with the conversion of the Las Deltas Public Housing Scattered Sites project into affordable homeownership units.
BACKGROUND:
Affordable housing is a specialized area of law practiced by a limited number of attorneys. The local affordable housing development community is also small. As a result, participants in local affordable housing projects tend to know one another and to work together in varying capacities over time. For that reason, it is not uncommon for the firm representing the Housing Authority of the County of Contra Costa (Housing Authority) on a particular affordable housing project to have an existing or prior relationship with the non-profit developer working on a project or the city in which the project is situated. When that happens, there is the potential for a conflict of interest and, in accordance with the rules of professional conduct established by the State Bar of California, the firm must obtain the informed written consent of the Housing Authority and the current or former client before it can represent both parties.
When evaluating a request from outside counsel that the Housing Authority waive actual conflicts of interest in the circumstances described above, a number of factors are considered. Of primary importance is the nature of the transaction and the potential risk associated with the law firm’s relationship with the other party. Because all the parties in an affordable housing transaction have the same ultimate goal - making affordable housing available in a responsible manner - affordable housing transactions tend to be less adversarial and more cooperative than many other transactions. For that reason and given the limited number of legal resources available to the Housing Authority in this specialized field, and the fact that outside counsel’s work is reviewed by attorneys in the County Counsel’s Office, waiver of an actual conflict does not create risk for the Housing Authority.
Goldfarb & Lipman LLP (“Goldfarb”) has existing and continued relationships with the Housing Authority and the Community Housing Development Corporation of North Richmond (“CHDC”). Both CHDC and the Housing Authority requested Goldfarb’s assistance in connection with the purchase and sale agreements related to the conversion of the Las Deltas Public Housing Scattered Sites project into affordable homeownership units (“Project”). The Housing Authority is currently the owner of the Las Deltas Public Housing Scattered Sites, located in unincorporated County of Contra Costa (APN(S) 409-120-005, 409-110-007, 409-291-009, and 409-282-019) ("Property"). CHDC intends to convert the Property into single family homes for first time homebuyer purchase.
Although different Goldfarb attorneys represent CHDC and the Housing Authority on the Project, such representation is still considered joint representation. Attached is a letter from Goldfarb that asks the Housing Authority to acknowledge and waive the actual conflict that exists.
FISCAL IMPACT:
There is no financial impact.
CONSEQUENCE OF NEGATIVE ACTION:
If the Housing Authority does not consent to the potential conflicts that arise as a result of Goldfarb representing the Housing Authority on the Project, Goldfarb would not be able to represent the Housing Authority, or anyone else, in connection with this Project. The result would likely be increased costs for the Housing Authority and a delay in the completion of the Project.