13-C
TO: Honorable Mayor and Members of the City Council
ATTENTION: Ryan Smoot, City Manager
FROM: Jim DellaLonga, Director of Economic Development
SUBJECT: Consideration and possible action to adopt Resolution No. 25-11 – A Resolution approving a 36-month commitment of HOME
Partnership Community Housing Development Organization
(CHDO) funds and HOME Partnership American Rescue Plan
(HOME-ARP) funds to a potential permanent supportive housing project located at 15804 Lakewood Boulevard ; certifying Wakeland Opportunities for Affordable Housing as a Bellflower CHDO; and authorizing the City Manager to execute future funding agreements and other documents related to these funds and this potential project.
DATE: February 24, 2025
EXECUTIVE SUMMARY
Over the past several years, the City as part of its 5-Year Consolidated Plan and Annual Action Plans accumulated its 15% CHDO set-aside requirement in order to make a meaningful contribution to a proposed affordable housing project in the City. In 2022, through the American Rescue Plan Act, the City received $1,301,749 in HOME -ARP funds. The City Council adopted its HOME-ARP Allocation Plan on March 27, 2023, designating 85%, or $1,106,487, of these funds for developing affordable rental housing, and 15%, or $195,262, to planning and administration of the HOME -ARP plan and activities.
Staff has been working with Wakeland Housing and Development Corporation (Wakeland) to identify a suitable site for a permanent supportive housing project on which to use the HOME-CHDO and HOME-ARP funds. Wakeland is a nonprofit organization dedicated to creating and managing affordable housing communities in California.
Founded in 1998, Wakeland has established itself as a leader in the affordable housing sector, with a strong commitment to providing high-quality, cost-efficient housing solutions. To use the HOME-CHDO funds, the developer of the potential project must be certified as a qualifying CHDO.
The proposed action would: 1) approve a 36-month commitment of the HOME-CHDO and HOME-ARP funds for the potential development of a permanent supportive housing project at 15804 Lakewood Boulevard; 2) certify Wakeland Opportunities for Affordable Housing (WOAH) (a separate nonprofit corporation which constitutes Wakeland’s CHDO affiliate) as a Bellflower CHDO; and 3) authorize the City Manager to execute future funding agreements and other documents with WOAH to implement the project. This action also is desirable in anticipation of WOAH submitting an application to the upcoming County of Los Angeles Notice of Funding Availability (NOFA) for affordable housing projects.
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Staff Report – HOME CHDO and HOME-ARP Funding Commitment and Bellflower CHDO Certification
February 24, 2025
RECOMMENDATION TO CITY COUNCIL
It is recommended that the City Council consider:
1) Adopting Resolution No. 25-11 approving the commitment of $2,056,204 of HOME- CHDO funds and $1,106,487 of HOME-ARP funds to a potential (future) permanent supportive housing project at 15804 Lakewood Boulevard; certify Wakeland Opportunities for Affordable Housing (WOAH) as a Bellflower CHDO as it relates to the potential permanent supportive housing project; authorize the City Manager to provide to WOAH a zoning verification letter, in a form approved by the City Attorney and execute future HOME-CHDO and HOME-ARP funding agreements once conditions are met to implement the potential permanent supportive housing project; or
2) Alternatively, discuss and take other action related to this item.
FISCAL IMPACT
Adopting Resolution No. 25-11 provides a 36-month commitment of the City’s allocation of HOME-ARP funds ($1,106,487) and the City’s allocation of HOME-CHDO funds ($2,056,204), a total of $3,162,691, to this potential permanent supportive housing project. Should such funds not be used by Wakeland, the City will retain the funds for other potential eligible affordable housing projects subject to HUD regulations.
BACKGROUND
The City of Bellflower, with a population that exceeds 50,000 people is an entitlement city and directly receives an annual allocation of HOME Investment Partnership Act (HOME) funds from the United States Department of Housing and Urban Development (HUD) to carry out a wide range of community development activities which benefit low -income residents. As a condition of the receipt of federal grants provided through HUD, a portion must be set aside for designated Community Housing Development Organizations (CHDOs). HUD regulations require CHDOs to meet these criteria to be eligible to receive HOME program funds:
• Demonstrate a minimum of five years of affordable housing experience. • At least three of those five years must be in an executive-level position such as:
- Active owner
- CEO
- Managing agent
- Asset manager
- District/regional manager or equivalent
• Demonstrate capacity for financial management and grant compliance. • Be prepared for site inspections by HUD and/or contract administrators. • Submit management occupancy reports and annual financial statements.
Over the past several years, the City (as part of its 5-Year Consolidated Plan and Annual Action Plans) accumulated its 15% CHDO set-aside requirement to make a meaningful contribution to an affordable housing project in the City.
Staff Report – HOME CHDO and HOME-ARP Funding Commitment and Bellflower CHDO Certification
February 24, 2025
BACKGROUND – Continued
Additionally, in 2022, through the American Rescue Plan Act, the City received $1,301,749 in HOME-ARP funds for homelessness assistance and supportive services.
The City Council adopted its HOME-ARP Allocation Plan on March 27, 2023, designating the funds to administration, planning ($195,262), and the development of affordable rental housing ($1,106,487), which could be combined with the HOME-CHDO funding for a significant contribution to an affordable housing project totaling $3,162,691.
Originally, both the HOME-ARP and the HOME-CHDO entitlement had spending deadlines. The City must spend the HOME-ARP funding by September 2030, however HUD has suspended its CHDO spending deadline requirement for years 2017 to 2020.
This will provide flexibility and time to WOAH to apply to various sources to secure funding for the project.
Staff has been working with Wakeland, who has an existing working relationship with Mercy House, the operator of the City’s New Hope Temporary Services Shelter, for over two years to identify a suitable site for a permanent supportive housing project. Although a site on Artesia Boulevard was the initial focus of this potential project, entitlement timing and risk caused Wakeland to look for other potential sites. Wakeland has since identified the site located at 15804 Lakewood Boulevard , an existing used car sales lot, and executed a letter of intent (LOI) with the property owner to purchase the property.
DISCUSSION
WOAH envisions constructing approximately 50 one-bedroom units in a four-story affordable permanent supportive housing project on the 28,565 square foot site. As a permanent supportive housing project, onsite residential services will be provided and include case management, job training, substance use counseling, and employment support. With the LOI in place, WOAH is currently negotiating a purchase and sale agreement with the property owner. Property control is a key condition for competitive funding applications. This is estimated to be a $30 million project with annual operating costs of $600,000.
WOAH intends to utilize newly enacted provisions of California law to facilitate entitlements for this project by allowing for ministerial and California Environmental Quality Act (CEQA) exempt processing, while still closely working with and partnering with the City on design of the project. The ability to expedite the entitlements for the project helps the project rank higher in the competitive funding environment for other funding sources. This is important because the proposed HOME-CHDO and HOME-ARP funding only amounts to approximately 10% of the total project development cost.
To effectuate the use of the HOME-CHDO and HOME-ARP funds for this project by WOAH, staff is recommending the City Council adopt the attached resolution which would approve a 36-month commitment of the City’s HOME-CHDO and HOME-ARP funds in the form of a 3% simple interest loan with a term of 55 -years. The loan will be payable out of the City’s proportionate share of 50% of residual receipts.
Staff Report – HOME CHDO and HOME-ARP Funding Commitment and Bellflower CHDO Certification
February 24, 2025
DISCUSSION – Continued
Additionally, to use the HOME-CHDO funds for the potential project, a qualified developer must be certified as a CHDO by the City. WOAH is a nonprofit organization whose specific purpose is to benefit and support Wakeland by providing affordable, decent, safe, and sanitary housing to low- and moderate-income persons. Avant-Garde, the City’s HOME and CDBG consultant, reviewed the CHDO qualification criteria set by HUD and determined that WOAH satisfies each based upon documentation provided as shown in the attached CHDO Checklist. Accordingly, staff is recommending WOAH be approved as a Bellflower CHDO.
Finally, staff is recommending the City Council authorize the City Manager to provide a zoning verification letter, in a form approved by the City Attorney, to WOAH, specifically for its Notice of Funding Availability (NOFA) application with the County of Los Angeles; and execute future HOME-CHDO and HOME-ARP agreements when appropriate and when conditions are met to implement the permanent supportive housing project.
This overall action also is needed in anticipation of Wakeland submitting a competitive application to the County of Los Angeles Notice of Funding Availability (NOFA) for affordable housing projects in early March, and to begin using the City’s HOME-CHDO funds pursuant to HUD regulations.
ATTACHMENTS
Resolution No. 25-11....................................................................................................... 5 CHDO Checklist .............................................................................................................. 8 Wakeland Example Projects ......................................................................................... 13 Commitment Letter ........................................................................................................ 16
CITY OF BELLFLOWER
RESOLUTION NO. 25-11
A RESOLUTION APPROVING A 36-MONTH COMMITMENT OF HOME
PARTNERSHIP COMMUNITY HOUSING DEVELOPMENT
ORGANIZATION (CHDO) FUNDS AND HOME PARTNERSHIP AMERICAN
RESCUE PLAN (HOME-ARP) FUNDS TO A POTENTIAL PERMANENT
SUPPORTIVE HOUSING PROJECT LOCATED AT 15804 LAKEWOOD
BOULEVARD; CERTIFYING WAKELAND OPPORTUNITIES FOR
AFFORDABLE HOUSING AS A BELLFLOWER CHDO; AND
AUTHORIZING THE CITY MANAGER TO EXECUTE FUTURE FUNDING
AGREEMENTS AND OTHER DOCUMENTS RELATED TO THESE FUNDS
AND THIS POTENTIAL PROJECT
THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1. The City Council finds and declares as follows:
A. The City participates in the Department of Housing and Urban Development's (HUD) Consolidated Plan Process and receives both Community Development Block Grant (CDBG) and Home Investment Partnership s (HOME) funds;
B. Pursuant to Title 24 of the Code of Federal Regulations, the City is required to submit an Action Plan to HUD detailing the City's proposed uses of its Fiscal Year 2024-2025 CDBG and HOME allocations;
C. The City’s 2024-2025 Annual Action Plan was adopted on May 13, 2024 and designates $2,056,204 to a Community Development Housing Organization (CHDO) project for the development of affordable housing;
D. HUD guidelines and regulations require CHDOs to meet certain criteria and qualifications, and to be certified by a participating jurisdiction as a CHDO to be eligible to receive HOME funds;
E. Pursuant to its corporate by-laws, Wakeland Opportunities for Affordable Housing (WOAH) is a nonprofit organization that operates to benefit and support the affordable housing activities of Wakeland Housing and Development Corporation, a California nonprofit corporation, and its organizational purpose is to provide decent, safe, and affordable housing to low-and-moderate income individuals and families as a community-based developer, owner, and manager of affordable housing ;
F. During the period from January 17, 2025 through January 30, 2025, WOAH submitted the required documentation and evidence to the City to allow certification of its status as a nonprofit organization and qualification as a CHDO. This documentation includes without limitation: articles of incorporation, IRS 501(c)(3) determination letter, by-laws, staff resumes, project descriptions, signed statements documenting history of experience, audited financials, board resolution, operating budgets, and board member certification forms;
City of Bellflower
Resolution No. 25-11
G. In 2022, The City was allocated $1,301,749 in American Rescue Plan funds for homelessness assistance and supportive services through the HOME program (HOME-ARP);
H. On March 27, 2023, the City adopted its HOME-ARP Allocation Plan through a Substantial Amendment to the Fiscal Year 2021-2022 Annual Action Plan pursuant to the HUD guidance, allocating 85% of its HOME-ARP funds towards the development of affordable rental housing and 15% towards administration and planning of HOME-ARP activities; and
I. HUD approved the City’s HOME-ARP Allocation Plan on May 17, 2023.
SECTION 2. Approvals. The City Council approves the following:
A. 36-month residual receipts loan commitment of $2,056,204 of HOME-CHDO funds and $1,106,487 of HOME-ARP funds to the potential permanent supportive housing project located at 15804 Lakewood Boulevard; and
B. Designation and certification of Wakeland Opportunities for Affordable Housing as a qualified Bellflower Community Housing Development Organization under the guidelines and regulations of the HOME Program for the purpose of increasing the supply of decent, safe, and affordable housing within the City.
SECTION 3. Authorizations. The City Manager, or designee, is authorized to take reasonable action needed to implement this Resolution, including providing a 36-month HOME-CHDO and HOME-ARP funding commitment letter to WOAH for the potential permanent supportive housing project. The City Manager, or designee, is further authorized to provide a zoning verification letter, in a form approved by the City Attorney, to WOAH for its County of Los Angeles Notice of Funding Availability application; and execute funding agreements with WOAH for the potential project when appropriate to implement the project.
The City Clerk is authorized to transmit this Resolution and supporting documentation to HUD as evidence of the certification of WOAH as a CHDO.
SECTION 4. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.
SECTION 5. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.
SECTION 6. The Mayor, or presiding officer, is hereby authorized to affix his signature to this Resolution signifying its adoption and the City Clerk, or her duly appointed deputy, is directed to attest thereto.
City of Bellflower
Resolution No. 25-11
SECTION 7. This Resolution will become effective immediately upon adoption.
PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF BELLFLOWER THIS 24th DAY OF FEBRUARY 2025.
________________________________
Ray Dunton, Mayor
ATTEST:
________________________________
Mayra Ochiqui, City Clerk
APPROVED AS TO FORM:
________________________________
Karl H. Berger, City Attorney
February 3, 2025
RE: Community Housing Development Organization (CHDO) Certification
Avant-Garde, Inc., the City of Bellflower’s HOME and CDBG consultant, reviewed the Community Housing Development Organization (CHDO) qualification criteria set by the US Department of Housing and Urban Development (HUD) including relevant guidelines, regulations, and policies.
A CHDO Checklist was developed to establish if organizations comply with HUD’s requirements and meet the established criteria to qualify as a CHDO.
The attached CHDO Checklist was completed by Avant-Garde during our review of the documentation provided by Wakeland Opportunities for Affordable Housing (WOAH), which included the organization's Articles of Incorporation, By-laws, staff resumes, board member certification forms, and other documents.
The support documentation provided by WOAH allowed Avant-Garde to complete the CHDO Checklist and determine that WOAH meets the CHDO eligibility and qualification requirements and can be certified as a CHDO for Bellflower.
Please do not hesitate to contact me with any questions at [email protected] or (909) 816- 5126.
Sincerely,
Megan LeNoue
Megan LeNoue
Program Manager
Avant-Garde, Inc.
1 CHDO CHECKLIST
Completed for Wakeland Opportunities for Affordable Housing (WOAH)
The information contained in this checklist refers to the definition of Community Housing Development Organization (CHDO) in Subpart A, Section 92.2 of the HOME Final Rule.
I. LEGAL STATUS
A. The nonprofit organization is organized under State or local laws, as evidenced by:
_____ A Charter, OR
X Articles of Incorporation
B. No part of its net earnings inure to the benefit of any member, founder, contributor, or individual, as evidenced by:
_____ A Charter, OR
X Articles of Incorporation
C. Has a tax exemption ruling from the Internal Revenue Service (IRS) under Section 501(c) (3) or (4) of the Internal Revenue Code of 1986, as evidenced by:
X A 501(c) (3) or (4) Certificate from the IRS; OR _____ A group exemption letter under Section 905 from the IRS that includes the CHDO.
D. Has among its purposes the provision of decent housing that is affordable to low and moderate-income people, as evidenced by a statement in the organization's:
_____ Charter,
Articles of Incorporation, OR
X By-laws
II. CAPACITY
A. Conforms to the financial accountability standards of 24 CFR 84.21, "Standards for Financial Management Systems," as evidenced by:
X A notarized statement by the president or chief financial officer of the organization;
_____ A certification from a Certified Public Accountant; OR _____ A HUD approved audit summary
2 B. Has a demonstrated capacity for carrying out activities assisted with HOME funds, as evidenced by:
X Resumes and/or statements that describe the experience of key staff members who have successfully completed projects similar to those to be assisted with HOME funds, OR
_____ Contract(s) with consulting firms or individuals who have housing experience similar to projects to be assisted with HOME funds to train appropriate key staff of the organization.
C. Has a history of serving the community within which housing to be assisted with HOME funds is to be located, as evidenced by:
X Statement that documents at least one year of experience in serving the community, OR
For newly created organizations formed by local churches, service, or community organizations, a statement that documents that its parent organization has at least one year of experience in serving the community.
NOTE: The CHDO or its parent organization must be able to show one year of serving the community from the date the participating jurisdiction provides HOME funds to the organization. In the statement, the organization must describe its history (or its parent organization's history) of serving the community by describing activities which it provided (or its parent organization provided), such as developing new housing, rehabilitating existing stock, and managing housing stock, or delivering non-housing services that have had lasting benefits for the community, such as counseling, food relief, or childcare facilities. The statement must be signed by the president or other official of the organization.
D. Conforms to financial accountability standards of 2 CFR 200.302, “Financial Management,” and 2 CFR 200.303, “Internal Controls,” as evidenced by:
X An independent audit; OR
_____ A certification from a Certified Public Accountant
3 III. ORGANIZATIONAL STRUCTURE
A. Maintains at least one-third of its governing board's membership for residents of low income neighborhoods, other low-income community residents, or elected representatives of low-income neighborhood organizations, as evidenced by the organization's:
X By-Laws,
_____ Charter, OR
_____ Articles of Incorporation
Under the HOME Program, for urban areas, the term "community" is defined as one or several neighborhoods, a city, county, or metropolitan area. For rural areas, "community" is defined as one or several neighborhoods, a town, village, county, or multi-county area (but not the whole state).
B. Provides a formal process for low-income, program beneficiaries to advise the organization in all of its decisions regarding the design, siting, development, and management of all HOME-assisted affordable housing projects, as evidenced by:
_____ The organization's By-laws,
X Resolutions, OR
A written statement of operating procedures approved by the governing body
C. A CHDO may be chartered by a State or local government, however, the State or local government may not appoint: (1) more than one-third of the membership of the organization's governing body; (2) the board members appointed by the State or local government may not, in turn, appoint the remaining two-thirds of the board members; and (3) no more than one-third of the governing board members are public officials, as evidenced by the organization's:
NOT APPLICABLE – WOAH is not chartered by a State or local government.
By-Laws,
_____ Charter, OR
_____ Articles of Incorporation
4 D. If the CHDO is sponsored or created by a for-profit entity, the for-profit entity may not appoint more than one-third of the membership of the CHDO's governing body and the board members appointed by the for-profit entity may not, in turn, appoint the remaining two-thirds of the board members, as evidenced by the CHDO's:
NOT APPLICABLE - WOAH is not sponsored or created by a for-profit entity.
_____ By-Laws,
_____ Charter, OR
_____ Articles of Incorporation
IV. RELATIONSHIP WITH FOR-PROFIT ENTITIES
A. CHDO is not controlled, nor receives directions from individuals or entities seeking profit from the organization, as evidenced by:
X The organization's By-laws, OR
_____ A Memorandum of Understanding (MOU).
B. A CHDO may be sponsored or created by a for-profit entity, however:
NOT APPLICABLE – WOAH is not sponsored or created by a for-profit entity.
(1) The for-profit entity's primary purpose does not include the development or management of housing, as evidenced:
_____ In the for-profit organization's By-laws; AND
(2) The CHDO is free to contract for goods and services from vendor(s) of its own choosing, as evidenced by the CHDO's:
_____ By-Laws,
_____ Charter, OR
_____ Articles of Incorporation
Wakeland Example Projects
La Entrada – 64 units
Riverside, CA
The Grove – 81 units
Vista, CA
+ + +
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I 4.\ —i —
P ‘ . ‘
Talmadge Gateway - 60 units
San Diego, CA
The Quincy - 54 units
Los Angeles, CA Page 15 of 16
1628\01\3871459.2
[City of Bellflower Letterhead]
November ___, 2024
David Hetherington
Director of Development
Wakeland Housing and Development Corporation
1230 Columbia Street, Ste. 950
San Diego, CA 92101
Re: _________ Project, _________ Avenue, Bellflower, CA HOME ARP and CHDO Funds
Dear Mr. Hetherington:
Please be aware that the City Council for the City of Bellflower (the "City") commited the following funding to Wakeland Housing and Development Corporation (or Wakeland Opportunities For Affordable Housing, its CHDO affiliate) in connection with the ____________ Project (“Project”):
1. A loan from the City in the original principal amount of $3.1 Million, consistent of HOME- ARP and HOME-CHDO funds (the City Loan").
2. In connection with the City Loan, the City will require a certain units in the Project meet the affordability and target population requirements of HOME-ARP and HOME-CHDO funding.
3. The City Loan will bear interest at a rate of 3% simple interest, have a 55-year term and is payable out of the City's proportionate share of 50% of residual receipts.
4. This commitment remains in effect for 36 months from the date of this letter.
5. The City Loan is conditioned on standard underwriting criteria and loan processing, including executing loan documents in forms provided by the City.
Note that the commitment and City Loan are conditioned upon compliance with applicable law including, without limitation, the California Environmental Quality Act ("CEQA") and the National Environmental Protection Act (“NEPA”). Nothing in this letter requires the City to make any particular findings or approvals with respect to CEQA and NEPA nor does it require the City to approve any particular development proposal.
Please contact me with any additional questions you may have. We look forward to working with you to develop affordable housing opportunities in the City of Bellflower.
Sincerely,
__________________
City Manager, City of Bellflower