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AUTHORIZE THE CITY OF STOCKTON TO BE A JOINT APPLICANT AND TO ACCEPT AN INFILL INFRASTRUCTURE GRANT IN THE AMOUNT OF $2,538,787 FROM THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR THE HUNTER HOUSE PROJECT, AND AUTHORIZING THE EXECUTION OF THE STANDARD AGREEMENT WITH SERVICE FIRST OF NORTHERN CALIFORNIA, AS JOINT AWARDEES
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Authorize the City of Stockton to be a joint applicant and to accept a joint grant award under the California Infill Infrastructure Grant Program (Program) with Service First of Northern California from the California Department of Housing and Community (HCD) Development for The Hunter House project;
2. Authorize the City of Stockton to accept and incur an obligation in the amount of $2,538,787 (Program Award).
3. Authorize the City to enter into, execute, and deliver a STD 213, Standard Agreement in the amount not to exceed $2,538,787, and any and all other documents required or deemed necessary or appropriate to secure the Program Award from HCD and to participate in the Program, and all amendments thereto (collectively, the Program Award Documents)
4. Authorize the execution of a joint Disbursement Agreement between the City of Stockton and Service First of Northern California for grant funding under the Infill Infrastructure Grant Program for The Hunter House project; and,
5. It is further recommended that the City Manager, or designee, be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.
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Summary
On May 12, 2021, HCD issued a Notice of Funding Availability (NOFA) of approximately $160 million in funding for the Infill Infrastructure Grant Program Round 7. The primary objective of the Program is to promote infill housing development by providing financial assistance for capital improvement projects that are an integral part of or necessary to facilitate the development of infill housing. Eligible improvements include but are not limited to construction, rehabilitation, or other physical improvements of parks or open space, transit facilities, water, sewer, or other utility service improvements, streets, and sidewalks.
Service First of Northern California, a non-profit public benefit corporation (Service First), submitted an application to HCD for the Hunter House affordable housing project (Project) and was determined to be an eligible grant recipient. Based on the application, HCD made an award of Program funds in the amount of $2,538,787 to the Project.
As a condition of the Program Award, HCD requires that the City of Stockton be party to the Program Standard Agreement and as such, the City must pass a resolution to accept the award as a joint recipient with Service First.
Through this item, Council is being asked to accept a joint grant award under the Program for Hunter House Apartments in partnership with Service First and submit a resolution to HCD accepting the award. Service First will be the payee of the award, and responsible for the management and administration of these funds.
DISCUSSION
Background
Service First submitted an application for the Hunter House affordable housing project and was awarded $2,538,787 pursuant to a conditional award letter dated December 2, 2021. The award letter was subsequently revised on January 4, 2023 to include the City as applicant number two/awardee as a condition of the award (Attachment - B).
The Project, to be located at 610 North Hunter Street and 619 San Joaquin Street (Attachment A - Vicinity Map), will bring much-needed affordable housing to an underutilized area of Downtown Stockton. The project will consist of 120 units of new construction affordable housing targeting low-income individuals or households experiencing behavioral health challenges and experiencing homelessness or at risk of homelessness including youth, veterans and other disabled individuals.
Service First and the City anticipate that Program Award proceeds will be used for eligible infrastructure improvements tied to the development of the Project including but not limited to water, sewer, and other utility service improvements, sidewalk and streetscape improvements such as resurfacing of sidewalks and streets, and the installation of lighting, signage, and landscaping.
Present Situation
The Program Award is one of several sources of funding in the Project’s financing plan. In April 2025, the City and Service First also submitted an HCD Homekey-plus (Homekey+) Program application for up to $36 million. If the Project is awarded Homekey+ funding, it is expected that it will secure the required funding to proceed with Project construction, thereby completing the Project’s financing plan. Service First is currently awaiting the results of the Homekey+ application.
Since the Program Award announcement in HCD’s January 2023 letter, execution of the Program Standard Agreement between the State of California, the City, and Service First has been on hold until the Project fully secures its financing plan for Project development. However, in recent communications, HCD has requested that City staff proceed with the preparation of a City resolution to accept the Program Award so that the Program Standard Agreement can be executed shortly after the Homekey+ award, if/when awarded, given anticipated deadlines.
Service First will take overall responsibility in completing the Project and offsite infrastructure improvements using Program Award funds. The City’s responsibility will be limited to issuing appropriate permits, inspecting the improvements, and providing written certification that the work for the public infrastructure improvements associated with the Project has been completed in accordance with City standards.
Staff recommends that Council approve a resolution authorizing the City Manager, or designee, to accept the Program Award and authorize the execution of the Standard Agreement between Service First and the State of California for Project. Any funds awarded by the Program will be used to assist in constructing eligible infrastructure improvements.
FINANCIAL SUMMARY
Program Award funds to the Hunter House project will be provided in the form of a grant. There is no impact to the City’s General Fund or to any other unrestricted fund as a result of taking the recommended action. Service First will be the payee and be responsible for the management and administration of these funds.
Attachment A - Vicinity Map
Attachment B - Program Award Letter