City of Sacramento
City Council - 2PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2024-00370 4/9/2024 Consent Item 2.
(City Council) La Mancha Project - Approving an Application for Additional Funding and Execution of Grant Agreement and Amendments
File ID: 2024-00370
Location: 7789 La Mancha Way, District 5, Represented by Councilmember Maple Recommendation: Adopt a City Council Resolution: 1) approving submission of a request for additional Community Development Block Grant - Coronavirus Response (CDBG-CV) funds to the State of California Department of Housing and Community Development (State) for the La Mancha Project, 2) acknowledging compliance with all state and federal public participation requirements with respect to the proposed amendments to the Standard Agreement, 3) authorizing and directing the Sacramento Housing and Redevelopment Agency to execute and deliver all application and amendments to the Standard Agreement and to act on the City’s behalf in all matters pertaining to all such application, 4) authorizing the Sacramento Housing and Redevelopment Agency to enter into, execute, and deliver an amendment to the Standard Agreement and any and all other documentation which may be required by the State from time to time for the purposes of this grant, and ) authorizing the Sacramento Housing and Redevelopment Agency to sign and submit funds requests and all required reporting forms and other documentation as may be required by the State of California from time to time in connection with this grant if the amendment is approved, and 2) a City Council Resolution: 1) making related findings 2) approving an amendment the Sacramento Housing and Redevelopment Agency (SHRA) budget should grant funding be received, and 3) authorizing SHRA to enter into a grant agreement and related documents with Mercy Housing for the purposes of the grant; and perform other actions required for the CDBG-CV activities and/or CDBG funds consistent with HCD’s CDBG-CV Invitation.
Contact: Christine Weichert, Director, (916) 440-1353, Sacramento Housing and Redevelopment Agency
Presenter: Not applicable.
Attachments:
1-Description/Analysis
2-City Resolution-State CDBG-CV Funds
3-City Resolution - SHRA Grant Agreement
File ID: 2024-00370 4/9/2024 Consent Item 2.
4-Vicinity Map
Description/Analysis
Issue Detail: On October 13, 2020, City Council (Council) and the City Housing Authority Board (Board) approved the funding agreements associated with the State Department of Housing and Community Development (HCD) Homekey funds, City funds, and other funds, for the acquisition, construction, and permanent financing of the La Mancha Project (Project). The Housing Authority was a co-recipient of the Homekey funding award in partnership with Mercy Housing California (Developer). The Project includes 100 permanent supportive housing units affordable to homeless individuals at or below 30% of the Area Median Income. A vicinity map is included as Attachment 3.
The Project was completed in 2021, and the units are at full occupancy.
On April 21, 2021, HCD sent Homekey awardees and applicants an invitation to apply for HCD’s set aside of Community Development Block Grant - Coronavirus Response (CDBG-CV) funds to support Homekey projects. The Sacramento Housing and Redevelopment Agency (SHRA) applied to HCD and was awarded an additional $1.75 million in CDBG-CV funds for the purpose of making additional improvements to the Project. Final improvements included a new community room, new foyer with increased security for staff, updated security systems, new waiting area, new landscape area with seating and recreational areas, garden beds, and exterior paint.
In December of 2023, HCD sent Homekey awardees and applicants a second invitation to apply for additional CDBG-CV funds to support Homekey projects. Awardees were invited to apply for an additional 25 percent above the amount of the original award of $1,750,000 for the La Mancha Project. Applications are due on April 15, 2024.
SHRA staff consulted with Mercy Housing, who desired to apply for an additional $437,500. The funds will be used to purchase a new water heating system to assure reduced utility costs at the Project. SHRA is required to have Council approval to apply for the funds and to amend the current standard agreement.
La Mancha Development
The La Mancha Development includes 100 permanent supportive housing units restricted to individuals at or below 30% of Area Median Income which has been operating successfully since 2021. All of the units are furnished and have a kitchenette with a full-size refrigerator, sink, two-burner stove top, and a built-in microwave. Also included are ten units that meet Americans with Disabilities Act (ADA) standards. The initial rehabilitation included new paint, window blinds, baseboards, bathroom sinks, solid surface kitchen countertops, and upgraded flooring. The Project also includes 5,000 square feet of lobby and reception space, eight case management offices, two property management offices, two meeting rooms, and common area restrooms. Residents are individuals and families who are experiencing homelessness or who are at risk of homelessness. As discussed above, in 2023, the community room was expanded, security systems installed, and other upgrades
File ID: 2024-00370 4/9/2024 Consent Item 2.
and amenities at the Project completed using CDBG-CV funding. The additional CDBG-CV funds are proposed to be used for a new water heating system which will assist with containing costs at the Project.
The Project is owned and operated by Mercy Housing California which is a nonprofit public benefit corporation dedicated to providing quality affordable housing with supportive programs to low-income individuals in California. Mercy Housing has developed more than 11,000 affordable homes, including over 8,000 rental and 3,000 homeownership units. Their portfolio includes 20 properties with over 1,400 units in Sacramento County.
Mercy Housing California has over 20 years of experience providing safe and affordable housing to homeless and chronically homeless individuals and families. Mercy has a successful history of creating partnerships with service providers who provide intensive case management and connect residents to resources including mental health services, healthcare services, substance abuse services, life skills programs, employment services, and crisis management.
Policy Considerations: The recommended actions for the development are consistent with the 2021 -2029 Housing Element, Goal H-2.1 Provide Opportunities for Affordable Housing Throughout the City.
Economic Impacts: Not applicable.
Environmental Considerations: California Environmental Quality Act (CEQA):
Activities have been analyzed in accordance with CEQA and 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 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 to the Project scope required that the findings of the NEPA document be re-evaluated. The re-evaluation did not result in a change of findings.
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 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: Sacramento Housing and Redevelopment Commission: At its April 3, 2024, meeting, it is anticipated that the Sacramento Housing and Redevelopment Commission will approve the staff recommendation for this item.
Staff will notify the Council in the event this does not occur.
File ID: 2024-00370 4/9/2024 Consent Item 2.
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 2021-29 Housing Element as part of Sacramento’s 2035 General Plan.
Financial Considerations: If received, 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.
RESOLUTION NO. 2024 -
Adopted by the Sacramento City Council
April 9, 2024
LA MANCHA PROJECT: A RESOLUTION APPROVING AN
AMENDMENT TO THE STANDARD AGREEMENT ISSUED UNDER
THE 2020 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
CORONAVIRUS RESPONSE (CDBG-CV)
BE IT RESOLVED by the City Council of the City of Sacramento as follows:
SECTION 1:
The City Council has reviewed and hereby approves the submission to the State of California (“State”) of a Request for Additional Funds to fill gaps created by documented unanticipated cost increases for the La Mancha Project. The funds would be added to its existing CDBG -CV Standard Agreement (s) with the State numbered 21-CDBG-HK-- 00009 (the “Standard Agreement (s)”) pursuant to the State’s June 2020 CDBG -CV1 Notice of Funding Availability ; December 2020 CDBG-CV2 and CV3 Notice of Funding Availability (NOFA); and/or the CDBG Method of Distribution as described in the State of California 2019-2020 Annual Action Plan August 2020 Second Substantial Amendm ent and the CDBG -CV Method of Distribution as described in the State of California 2019 - 2020 Annual Action Plan August 2020 Fifth Substantial Amendment.
The City Council previously approved the use of $ 1,750,000 for this CDBG-CV activity which was included in the Standard Agreement(s) and by this resolution will use an additional amount no t-to-exceed $ 437,500 for a total commitment of $ 2,187,500 of CDBG-CV.
List of Activity Funding:
Current Authorized amount(s) under Standard Agreement # 21-CDBG-HK--00009 CDBG-CV: $1,750,000
Program Income: 0
Total: $1,750,000
Amount of new CDBG -CV funds to be added to Standard Agreement # 21-CDBG-HK-- 00009
CDBG Not to exceed $437,500
Program Income: 0
Total: $437,500
Total amount of amended Standard Agreement # 21-CDBG-HK--00009 CDBG Grant Not to exceed $2,187,500
Program Income: 0
Total: 2,187,500
SECTION 2:
The City Council acknowledges compliance with all state and federal public participation requirements with respect to the proposed amendments to the Standard Agreement described in Sections 1 above.
SECTION 3:
The City Council hereby authorizes and directs the Sacramento Housing and Redevelopment Agency Executive Director , or designee, to execute and deliver all application(s), “Request(s) for Additional Funds ,” and/or amendments to the Standard Agreement and act on the City’s behalf in all matters pertaining to all such application(s), “Request(s) for Additional Funds,” and/or amendments.
SECTION 4:
If an amendment to the Standard Agreement is approved as contemplated above, the Sacramento Housing and Redevelopment Agency Executive Director, or designee, is authorized to enter into, execute, and deliver an amendment to the Standard Agreement and any and all other documentation wh ich may be required by the State from time to time for the purposes of this grant.
SECTION 5:
If an amendment to the Standard Agreement is approved, the Sacramento Housing and Redevelopment Agency Executive Director, is authorized to sign and submit Funds Requests and all required reporting forms and other documentation as may be required by the State of California from time to time in connection with this grant.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Sacramento held on
April 9, 2024 by the following vote:
AYES: _______ NOES: _______
ABSENT: _______ ABSTAIN: _______
____________________________________
Darrell Steinberg, Mayor
STATE OF CALIFORNIA
City of Sacramento
“I, Mindy Cuppy, City Clerk of the City of Sacramento, State of California, hereby certify that (i) the above and foregoing is a full, true, and correct copy of a resolution duly adopted by said City Council on this 9th day of April, 20 24; (ii) such resolution has not been amended, modified, repealed or rescinded since the date of its adoption; and (iii) such resolution remains in full force and effect.”
___________________________________________
Mindy Cuppy, City Clerk of the City of Sacramento
State of California
By: _____________________________
Mindy Cuppy, City Clerk
RESOLUTION NO. 2024 -
Adopted by the Sacramento City Council
on date of
LA MANCHA PROJECT: AUTHORIZATION TO EXECUTE
GRANT AGREEMENT WITH MERCY HOUSING AND TO AMEND
SACRAMENTO HOUSING AND REDEVELOPMENT AGENCY BUDGET
BACKGROUND
A. On October 13, 2020, City Council (Council) and the City Housing Authority Board (Board) approved the funding agreements associated with the State Department of Housing and Community Development (HCD) Homekey funds, City funds, and other funds, for the acquisition, construction and permanent financing of the La Mancha Project (Project), now known as Los Molinos. The Housing Authority was a co-recipient of the Homekey funding award i n partnership with Mercy Housing California (Developer). The Project includes 100 permanent supportive housing units.
B. On April 21, 20 21, HCD sent Homekey awardees and applicants an invitation to apply for HCD’s set aside of Community Development Block Grant – Coronavirus Response (CDBG-CV) funds to support Homekey projects pursuant to the State’s FY 2019 -2020 Annual Action Plan Second Substantial Amendment . The Sacramento Housing and Redevelopment Agency ( SHRA), on behalf of the City of Sacramento and with the support of Mercy Housing California (Developer) , applied for and was awarded $1.75 million in CDBG -CV funds for additional improvements to the Project (HCD CDBG-CV Invitation).
C. In December of 2023, HCD sent Homekey awardees and applicants a second invitation to apply for additional CDBG -CV funds to support Homekey projects.
Awardees were invited to apply for an additional 25 percent above the amount of the original award of $1,750,000 for the La Mancha Project. Appl ications are due on April 15, 2024.
D. SHRA staff consulted with Mercy Housing, who desired to apply for an additional $437,500 to be used to on a new water heating system to help ensure lower utility bills at the La Mancha Project. SHRA is required to have Council approval to apply for the funds and to amend the current standard agreement.
E. The proposed additional improvements to upgrade the water heating system were reviewed in 2024 related to the required California Environmental Quality Act and National Environmental Policy Act requirements and were found to be exempt due to no significant impact on the environment.
BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:
SECTION 1 All evidence presented having been duly considered, the findings, including environmental findings regarding this action, as stated above, are found to be true and accurate and are hereby approved adopted.
SECTION 2 If funds are awarded from HCD, t he Sacramento Housing and Redevelopment Agency (SHRA) is authorized to amend its budget to accept up to $437,500 in CDBG-CV funds.
SECTION 3 If funds are awarded from HCD, SHRA is authorized to negotiate, enter into, execute and deliver a grant agreemen t, related documents, and other documents as approved to form by its Office of the General Counsel, and any and all subsequent amendments thereto with Mercy Housing for the purposes of the grant; and perform other actions required for the CDBG-CV activities and/or CDBG funds consistent with HCD’s CDBG-CV Invitation.
Attachment 4