To the members of the:
CITY COUNCIL
Date 3/27/25 CA /CC V City of
CM LACM I DCM (3) L
Carlsbad
Memo ID# 2025026
Council Memorandum
March 27, 2025
To: Honorable Mayor Blackburn and Members of the City Council From: Gary Barberio, Deputy City Manager, Community Services Mandy Mills, Director of Housing and Homeless Services
Chris Shilling, Homeless Services Manager
Via: Sheila Cobian, Assistant City Manager DR
Re: Update on La Posada Potential Expansion Funding (District 2) This memorandum provides a status on the funding for potential expansion and current use of the La Posada de Guadalupe homeless shelter.
Background
The Catholic Charities Diocese of San Diego operates the La Posada de Guadalupe homeless shelter (La Posada) in the City of Carlsbad. The shelter provides emergency and transitional shelter services to a total of 100 homeless men, including a portion reserved for 50 farm workers. The City of Carlsbad has been a cooperative partner with Catholic Charities for many years, helping to identify a location for the shelter, providing funding for the development and expansion of the shelter, and providing ongoing support of operational costs.
The City Council has identified the expansion of the shelter to serve more individuals experiencing homelessness, including space for women and families, as a priority project in both the City Council adopted Carlsbad Strategic Plan (2023-2027) and the Homelessness Action Plan. City staff have been working with Catholic Charities to examine the feasibility of expanding the footprint of the shelter building to include additional shelter capacity as well as permanent or seasonal relief from the requirement to only serve farmworkers in 50 of the 100 beds. The City of Carlsbad previously granted Community Development Block Grant (CDBG) funding to Catholic Charities to pay for architectural and engineering costs to examine the feasibility of expanding the overall building square footage. The conceptual phase of the predevelopment work was completed in early 2023.
The proposed project consisted of improvements to the single-story buildings on the north side and reconstructing the south building to two or three stories. The building expansion would allow for the shelter to serve more individuals, including potentially a separate building for women/families while continuing to reserve 50 beds for farmworkers, as required by an existing loan agreement between Catholic Charities and the State of California. The expansion project has been on hold for two main reasons, funding and lack of approval by the State of California.
Community Services Branch
Housing & Homeless Services Department
1200 Carlsbad Village Drive | Carlsbad, CA 92008 | 442-339-2810 t Council Memo - Update on La Posada Potential Expansion Funding (District 2) March 27, 2025
Discussion
Project Delay
Based on the preliminary design and current materials and labor costs the project was estimated to cost $12 million. Catholic Charities would need to mount a significant capital campaign to raise enough funding before the project could begin construction. Traditional loans from the private market are not feasible as a homeless shelter does not receive revenue and is reliant on grants and donations for annual operating costs. City staff actively sought outside funding alternatives to reduce the amount of capital needed to be raised. The city submitted the project for funding through a fiscal year 2023-24 State Budget Priority Funding Request and a matching grant application to the State of California but were unsuccessful in both requests.
The City of Carlsbad City Council approved a funding commitment of $2,200,000 from the Housing Trust Fund (HTF) and Permanent Local Housing Allocation (PLHA) Fund, which are both reserved for affordable housing and programs serving people experiencing homelessness. The city was also successful in obtaining a grant commitment of $2 million from the County of San Diego for the expansion of La Posada through the Capital Emergency Housing Solutions Grant program. The City Council authorized a grant agreement and acceptance of the funds as a pass-through agency to Catholic Charities in February 2023. All funding was expected to be expended for the intended purpose within 24 months. However, city staff did not execute the agreement or receive any funds related to this grant because the State of California expressed an unwillingness to consent to the project.
City staff and Catholic Charities met multiple times over the last two years with state officials to discuss needs for the project. The State of California Department of Housing and Community Development must consent to any change on the property due to a Deed of Trust and Regulatory Agreement recorded against the property as a result of an $867,352 State of California loan towards the construction of the existing permanent La Posada facility in 2011. The State loan is from the Joe Serna Farmworker Housing program which restricts use for farmworkers. Unfortunately, staff from the State of California Department of Housing and Community Development are not supportive of demolition and reconstruction of a larger building to serve more people. They explained they do not allow whole or partial demolition of projects, except in rare cases of severe dilapidation, but not for a building only 10 years old.
Without this consent, Catholic Charities has been unable to begin a capital campaign to raise the remaining funding needed for an expansion project.
While the city has worked diligently to help the expansion project, the project cannot move forward without support from the State of California Housing and Community Development Department to demolish and rebuild one of the buildings. The County of San Diego has been very patient as we tried to work out these issues. However, because the project is not likely to come to fruition in the near future, the County of San Diego intends to rescind its $2 million funding commitment to utilize the funds for other purposes that can address other current needs. They have notified the city verbally and will be sending out a letter to that effect next Council Memo - Update on La Posada Potential Expansion Funding (District 2) March 27, 2025
week. City staff have not signed any agreement or received any funds that need to be repaid, so just the commitment will be rescinded.
Serving more people
Catholic Charities and city staff have been engaged in conversations with the State of California Department of Housing and Community Development and with State Senator Catherine Blakespear to discuss alternatives. If expansion was not feasible, city staff have discussed flexibility within the regulatory agreement for the 50 farmworker beds due to the reduced need for serving that specific population. Currently, the shelter is required to reserve half of the beds (50) year-round for farmworkers due to restrictions from the funding source used by the State of California towards the development of La Posada. The shelter was originally built because of a significant need to shelter farmworkers who were living in canyons and other open spaces at that time.
However, since agricultural uses in the North County Coastal area, and Carlsbad, in particular, have significantly decreased since the inception of the shelter in 1992, many of the 50 farmworker shelter beds at La Posada go empty, particularly outside of the limited farm picking season. The State of California recently authorized a temporary waiver of the requirement to serve only farmworkers during winter months in order to serve more of the general homeless population. The temporary waiver was authorized in November 2024 and will be in effect through May 31, 2025. Catholic Charities is conducting outreach to farmworkers to collect data for State of California Department of Housing and Community Development staff to consider if a permanent waiver of the requirement to serve only farmworkers is warranted. If allowed, this regulatory relief could increase the capacity to serve more general homeless men but would not provide additional space for single women or families.
Next Steps
At this time, the ability to expand La Posada to serve women and families is unlikely due to the barriers identified in this memorandum. As city staff did not execute an agreement or receive any funds related to the County of San Diego grant there is no action required by the city. The city's funding commitment to the expansion project from the HTF and PLHA funding can be cancelled, and the funding reallocated to other uses by the City Council. City staff will place this consideration on a future City Council agenda.
City staff will continue to work on ways to increase shelter space for single women and families as this continues to be an area of need in the north county area and may explore alternative options at the City Council's direction.
Catholic Charities and city staff will continue to work with the State of California Department of Housing and Community Development to see if the regulatory flexibility can be authorized permanently to serve more men experiencing homelessness. If approved, Catholic Charities will need to identify a staffing plan to accommodate such a change as the supportive services needs of the general homeless population are different than that of farmworkers.
Council Memo - Update on La Posada Potential Expansion Funding (District 2) March 27, 2025
CC: Geoff Patnoe, City Manager
Cindie McMahon, City Attorney
Paz Gomez, Deputy City Manager, Public Works
Laura Rocha, Deputy City Manager, Administrative Services Jason Haber, Intergovernmental Affairs Director