City of Sacramento
City Council Report
915 I Street, 1st Floor
Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01629 9/20/2022 Consent Item 08.
(City Council) La Mancha Project - Administrative Corrections to Resolution Adopted September 21, 2021
File ID: 2022-01629
Location: 7789 La Mancha Way, District 8
Recommendation: Adopt a City Council Resolution: 1) approving submission of $1.75 million State of California (State) CDBG-CV application for the purpose of rehabilitating a permanent supportive housing for homeless facility, La Mancha (Project); 2) approving the use of State CDBG Program Income for the purpose of a rehabilitating the Project; 3) acknowledging compliance with all state and federal public participation requirements in the development of its application(s); 4) delegating, authorizing and directing Sacramento Housing and Redevelopment Agency (SHRA) to execute and deliver all applications and act on the City’s behalf; 5) if awarded, authorizing SHRA to enter into, execute and deliver the grant agreement (i.e., Standard Agreement) and any and all subsequent amendments; 6) if awarded, authorizing SHRA to sign and submit Funds Requests and all required reporting forms and other documentation, without limitation, including any covenant or regulatory agreement as may be required by the State of California from time to time in connection with the grant; 7) if awarded, authorizing SHRA to enter into, execute and deliver a grant agreement (i.e., subrecipient agreement), related documents, and other documents as approved to form by its Office of the General Counsel, and any and all subsequent amendments thereto with 7789 La Mancha Way LLC (Mercy Housing California) (Developer); and perform other actions required for the CDBG-CV activities and/or CDBG funds; and 8) if awarded, amend the SHRA budget and make related findings.
Contact: Christine Weichert, Director, (916) 440-1353, [email protected], Sacramento Housing and Redevelopment Agency
Presenter: None.
Attachments:
1-Description/Analysis
2-Resolution
Description/Analysis
Issue Detail: On October 13, 2020, City Council (Council) and Housing Authority Board (Board) approved the funding agreements associated with the State Department of Housing and Community Development (HCD) Homekey funds, and other funds for the acquisition, construction and permanent financing of La Mancha permanent supportive housing development located at 7789 La Mancha Way (Project), formerly operating at the Woodsprings Suites motel that was built in 2009. The Housing City of Sacramento Page 1 of 3
File ID: 2022-01629 9/20/2022 Consent Item 08.
Authority of the City of Sacramento was a co-recipient of the Homekey funding award in partnership with 7789 La Mancha Way LLC (Mercy Housing California) (Developer). A vicinity map is included as Attachment 3.
On April 21, 2021, HCD sent Homekey awardees and applicants an invitation to apply for HCD’s set aside of CDBG - Coronavirus Response (CDBG-CV) funds to support Homekey projects. The Developer requested SHRA apply to HCD for $1.75 million in CDBG-CV funds and enter into a grant agreement for the purpose of making additional improvements to the Project.
On September 21, 2021, the Council approved an application for these funds from HCD. In October of 2021, SHRA submitted for the funds and was notified of an award in February 2022. The additional scope of work that will be added to the project includes the installation of solar power carports to reduce operating costs, a new front vehicle gate that secures the property, converting all door locks from the previous hotel card entry system to traditional residential locks, additional recreation area, and an expanded community room with a covered entry. Prior to the disbursement of these funds for the improvements, HCD is requiring that an updated resolution be approved to correct minor administrative issues in the previous version.
Policy Considerations: The recommended actions for the development are consistent with the 2013 -2021 Housing Element, Goals H-2.2.4, in part, Pursue and maximize the use of all appropriate state, federal, local, and private funding for the development of affordable housing for extremely low-, very low-, and low-income households, while maintaining economic competitiveness in the region; H-3.1.1 Promote extremely low-income housing; H-3.2.8 Provide funding and other resources for permanent supportive housing; H-3.2.9, in part, Prioritization of Special Needs Housing, such as chronically homeless individuals or families for available local affordable housing financing as set forth in the City’s Multifamily Lending and Mortgage Revenue Bond Policies administered by SHRA; and H-5.1 to
5.4, in part, Promote and create accessible residential development (Resolution No. 2013- 415).
Economic Impacts: None.
Environmental Considerations:
California Environmental Quality Act (CEQA): California Environmental Quality Act (CEQA): Activities authorized in this report have been analyzed in accordance with CEQA and are determined to be exempt from CEQA pursuant to Health & Safety Code, Section 50675.1.2 - Project Homekey.
National Environmental Policy Act (NEPA): An Environmental Assessment (EA) was prepared in order to analyze the Project in accordance with NEPA, and it was determined that the Project would not result in a significant impact on the environment. The addition of new funds to the Project and the change in Project scope required that the findings of the NEPA document be re-evaluated. The Project is being re-evaluated and it is anticipated that the change in scope will not result in a change of findings. The re-evaluation will be completed prior to making any choice limiting action.
Sustainability: The Project has been reviewed for consistency with the goals, policies and targets of the Sustainability Master Plan and the 2030 General Plan. The Project advances the City of Sacramento Page 2 of 3
File ID: 2022-01629 9/20/2022 Consent Item 08.
following goal, policy and target of goal number one - Energy Independence, specifically by reducing the use of fossil fuels and providing long-term affordable and reliable energy.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: The actions recommended in this report enable SHRA to continue to fulfill its mission of providing a range of affordable housing opportunities in the City and are consistent with the City of Sacramento’s 2013-2021 Housing Element as part of Sacramento’s 2035 General Plan, and the Opportunity Zone.
Financial Considerations: The CDBG-CV funds for the La Mancha development will be in the form of a grant with a ten-year regulatory agreement term monitored by HCD.
Local Business Enterprise (LBE): Local Business Enterprise requirements do not apply to this report. Minority and Women’s Business Enterprise requirements and Section 3 apply to all activities to the greatest extent feasible and as required by federal funding and in accordance with the SHRA’s Section 3 Economic Opportunity Plan.
City of Sacramento Page 3 of 3
RESOLUTION NO. 2022 -
Adopted by the Sacramento City Council
on date of
A RESOLUTION APPROVING AN APPLICATION FOR FUNDING AND THE
EXECUTION OF A GRANT AGREEMENT AND ANY AMENDMENTS
THERETO FROM THE 2020 COMMUNITY DEVELOPMENT BLOCK
GRANT PROGRAM – CORONAVIRUS RESPONSE (CDBG-CV) AND/OR
THE 2020-2021 FUNDING YEAR OF THE STATE CDBG PROGRAM
BACKGROUND
A. On October 13, 2020, City Council (Council) and Housing Authority Board (Board) approved the funding agreements associated with each respective funding program, State of California (State) Department of Housing and Community Development (HCD) Homekey funds, Community Development Block Grant Coronavirus (CDBG -CV), Coronavirus Relief Funds (CRF), Homeless Housing Assistance Prevention Program -3 (HHAP -3) Fun ds for the acquisition, construction and permanent financing of La Mancha permanent supportive housing development (Project). The Housing Authority of the City of Sacramento was a co -recipient of the Homekey funding award in partnership with 7789 La Mancha Way LLC (Mercy Housing California) (Developer).
B. On October 20, 2020, the County Board of Supervisors approved an MHSA Loan from Sacramento Housing and Redevelopment Agency (SHRA) to the Developer, and the MHSA Loan Documents for the construction and perm anent financing of the Project.
C. On December 16, 2020, the Developer successfully closed on acquisition, construction and permanent financing and started construction at the Project.
Operations are currently supported by CDBG -CV and CRF. The HHAP -3 funds were awarded in June 2021 and will also support operations at the Project.
D. The Developer has completed approximately 90 percent of the conversion of the 124-room extended stay motel into 100 permanent supportive housing units.
Community space and site work is in progress. The Project is nearly at full occupancy.
E. On April 21, 2021 and amended on May 21, 2021, HCD sent Homekey awardees and eligible local jurisdiction applicants an invitation to apply for HCD’s set aside of CDBG – Coronavirus Response (CDBG-CV) funds to support Homekey projects pursuant to the State’s FY 2019 -2020 Annual Action Plan Second Substantial Amendment. The Developer requested SHRA to apply to HCD for $1.75 million in CDBG-CV funds for additional improvements to the Project (HCD CDBG -CV Invitation).
F. The City of Sacramento (“City” or “Applicant”) is an el igible local jurisdiction. The Applicant, through its related entity and agent, the Sacramento Housing and Redevelopment Agency (SHRA), wishes to submit an application to HCD in the amount of $1.75 million in CDBG -CV funds for additional improvements to th e Project.
G. A public hearing was held by the City Council on September 21, 2021, following duly published notice thereof, and all persons desiring to be heard have been heard.
H. Activities authorized in this report have been analyzed in accordance with the California Environmental Quality Act (CEQA) and are determined to be exempt from CEQA pursuant to Health & Safety Code, Section 50675.1.2 – Project Homekey.
I. An Environmental Assessment (EA) was prepared in order to analyze the project in accordance with the National Environmental Policy Act (NEPA) and it was determined that the project would not result in a significant impact on the environment. The addition of new funds to th e project and the change in project scope required that the findings of the NEPA document be re -evaluated. The project is being re-evaluated and it is anticipated that the change in scope will not result in a change of findings. The re-evaluation will be completed prior to making any choice limiting action.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1: The City has reviewed and hereby approves the submission to the State of California of one or more application(s) in the aggregate amount of, not to exceed, $1,750,000 for (i) the following CDBG-CV activities, pursuant to the CDBG Method of Distribution as described in the State of California 2019-2020 Annual Action Plan August 2020 Second Substantial Amendment, and/or (ii) the following CDBG activities, pursuant to the CDBG Method of Distribution as described in the State of California 2020-2021 Annual Action Plan January 2021 Substantial Amendment:
List activities and amounts
La Mancha Permanent Sup portive Housing for Homeless Facility Rehabilitation $1.75 million.
SECTION 2: The City hereby approves the use of Program Income in an amount not to exceed $1,750,000 for the CDBG-CV activities and/or CDBG activities described in Section 1.
SECTION 3: The City acknowledges compliance with all state and federal public participation requirements in the development of its application.
SECTION 4: The City hereby authorizes and directs the Executive Director of the Sacramento Housing and Redevelopment Agency, or designee, to execute and deliver all applications and act on the City’s behalf in all matters pertaining to all such applications.
SECTION 5: If an application is approved, the Executive Director of the Sacramento Housing and Redevelopment Agency or designee, is authorized to enter into, execute and deliver the grant agreement (i.e., Standard Agreement) and any and all subsequent amendments thereto with the State of California for the purposes of the grant.
SECTION 6: If an application is approved, the Executive Director of the Sacramento Housing and Redevelopment Agency or designee, is authorized to sign and submit Funds Requests and all required reporting forms and other documentation, without limitation, including any covenant or regulatory
agreement as may be required by the State of California from time to time in connection with the grant.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Sacramento held on September 20, 2022 by the following vote:
AYES: Enter # of votes and names of members
NOES: Enter # of votes and names of members
ABSENT: Enter # of absences and names of members
ABSTAIN: Enter # of abstentions and names of members
____________________________________________
Darrell Steinberg, Mayor
City Council of the City of Sacramento
STATE OF CALIFORNIA
City of Sacramento
I, Mindy Cuppy, City Clerk of the City of Sacramento, State of California, hereby certify the above and foregoing to be a full, true and correct copy of a resolution adopted by said City Council on this 13th day of September, 2022
______________________________________
Mindy Cuppy, Clerk of the City of Sacramento