DATE: OCTOBER 10, 2023
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
THROUGH: ROD POWELL, ASSISTANT DIRECTOR
BY: LUIS OCHOA, SR. COMMUNITY DEVELOPMENT ANALYST
TITLE: STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT HOMEKEY PROJECTS CHANGE OF OWNERSHIP RECOMMENDED MOTION:
A motion to approve:
a City of Salinas Resolution concurring with Homekey project partners, Shangri-La Industries LLC and Step Up on Second Street, Inc., on the change of ownership executed on each of its Homekey project properties and authorizing the City Manager or designee to execute any required amendments or documents deemed necessary by the State to incorporate the change of ownership, as officially recorded, on each applicable Homekey property; and the submission of a State of California Department of Housing and Community Development Resolution concurring with the change of ownership for the Step Up in Salinas Homekey project to the officially recorded owner, 545 Work Street, LP, a Delaware Limited Partnership, and allowing its inclusion in the HCD Standard Agreement as a project partner as required by HCD regulations; and the submission of a State of California Department of Housing and Community Development Resolution concurring with the change of ownership for the Step Up on Fairview Homekey project to the officially recorded owner, 1030 Fairview LP, a Delaware Limited Partnership, and allowing its inclusion in the HCD Standard Agreement as a project partner as required by HCD regulations; and the submission of a State of California Department of Housing and Community Development Resolution concurring with the change of ownership to the officially recorded owner, 180 Sanborn LP, a Delaware Limited Partnership, and allowing its inclusion in the HCD Standard Agreement as a project partner as required by HCD regulations.
EXECUTIVE SUMMARY:
The City is currently a project partner on three (3) California Department of Housing and Community Development (HCD) Homekey program Standard Agreements. Homekey Project sites include 545 Work Street, 180 S. Sanborn Road, and 1030 Fairview Avenue. Recently, HCD informed the City and its Homekey project partners, Shangri-La Industries LLC (SLI) and Step Up on Second Street, Inc. (Step Up), of a previously unrecognized issue related to the need for appropriate ownership designation on each of the awarded Homekey project agreements. Compliant resolution of the issue requires the City to provide a new State resolution for each Homekey project authorizing the inclusion of the correct ownership entity as officially recorded by the Monterey County Clerk-Recorder.
BACKGROUND:
On July 16, 2020, HCD released a Notice of Funding Availability (NOFA) for the Homekey Program Round 1 funds. On August 13, 2020, the City and its project partners submitted an application to purchase and convert a hotel property located at 545 Work Street to immediate interim housing and eventual conversion to permanent supportive housing thereafter. The City and its project partners, SLI and Step Up, were awarded a Round 1 project for the project on September 17, 2020. Shortly thereafter, on November 30, 2020, the City, Step Up, SLI, and HCD entered into Standard Agreement 20-HK-001320 for the Step Up in Salinas project.
On September 9, 2021, HCD released a subsequent NOFA for its Homekey Program Round 2 funds. The City of Salinas along with Step Up and SLI submitted two additional applications to purchase and convert two properties located at 1030 Fairview Avenue and 180 South Sanborn Road to permanent supportive housing projects. On February 16, 2022, HCD notified the project partners of their successful award for both projects. On March 16, 2022, the City, Step Up, SLI, and HCD entered into a Standard Agreement 21-HK-17097 for the Step Up on Fairview project. Subsequently, on March 17, 2022, the City, Step Up, SLI, and HCD entered into a Standard Agreement 21-HK-17100 for the Step Up on Sanborn project.
DISCUSSION
For each of the City’s Homekey project acquisitions, project partner and property owner SLI, created a unique Limited Partnership ownership entity that was subsequently recorded as the officially recorded owner of record. Recorded ownership for each project is as follows:
Step Up in Salinas - 545 Work Street, LP, a Delaware Limited Partnership Step Up on Fairview - 1030 Fairview LP, a Delaware Limited Partnership Step Up on Sanborn - 180 Sanborn LP, a Delaware Limited Partnership To compliantly resolve the noted issue of recorded ownership not matching that listed on the approved application, HCD is requesting that each project partner officially acknowledge the discrepancy by providing an appropriate State resolution from each applicable governing body authorizing the inclusion of each recorded ownership entity on each applicable project agreement.
DEPARMENT COORDINATION:
The Community Development Department’s Housing and Community Development Division currently oversees and monitors each of the awarded Homekey projects in coordination with the City Attorney and the Finance Department..
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).
STRATEGIC PLAN INITIATIVE:
The proposed project and action support the City of Salinas Strategic Plan 2022-2025 Goals and Strategies of Housing/Affordable Housing and Effective and Culturally Responsive Government through the provision of housing and wrap around services to those experiencing chronic homelessness.
FISCAL AND SUSTAINABILITY IMPACT:
Approval of the proposed resolutions has no financial impact as each involves a non-monetary administrative correction as requested by HCD.
ATTACHMENTS:
Resolution – City
Resolution – State – Step Up in Salinas
Resolution – State – Step Up on Fairview
Resolution – State – Step Up on Sanborn
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