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APPROVE BY MOTION AMENDMENT NO. 2 TO VISIONARY HOME BUILDERS OF CALIFORNIA’S GRANT AGREEMENT FOR THE VILLA D’FLORE HOMEKEY PROJECT
recommended action
RECOMMENDATION
It is recommended that the City Council, by motion:
1. Approve Amendment No. 2 to Visionary Home Builders of California’s Grant Agreement for the Villa D’ Flore Homekey project, in the amount of up to $407,500 for final project development costs, for a total grant amount not to exceed $6,479,780.
2. Authorize an appropriation of up to $407,500 of Homeless, Housing and Prevention (HHAP) Round 4 grant funding to Visionary Home Builders for the Villa d’Flore Homekey project.
3. 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
In 2022, with Motion 2022-06-21-1202, the City Council authorized the submission of a revised joint application, submitted by the City of Stockton, in collaboration with Visionary Home Builders (VHB) of California (Co-Applicant), to the California Department of Housing and Community Development (HCD). The joint application to HCD requested up to $3.713 million of Homekey grant funding for the acquisition, rehabilitation, and operation of the Villa d’Flore domestic violence project for homeless individuals and families located in Stockton. The project successfully secured $4,072,280 of Homekey funds. In addition, and under the same Council action, the City allocated $2,000,000 of Housing Homeless and Prevention Round 2 (HHAP 2) funding to the project for a combined total of $6,072,280.
The City and VHB entered into a Grant Agreement on February 28, 2023 for the acquisition, rehabilitation, and operation of the Villa d’Flore project utilizing the Homekey and HHAP Round 2 funds (Attachment A). However, the Grant Agreement was erroneously entered into for the amount of $6,072,000. Therefore, administrative Amendment No. 1 (Attachment B) was entered into on October 25, 2024, to add the remaining $280.00, updating the Grant Agreement to a combined total to $6,072,280.
Staff now recommends Council approval of Amendment No. 2 (Attachment C) to support final construction expenses and completion of this project.
DISCUSSION
Background
On September 9, 2021, HCD issued a Notice of Funding Availability (NOFA) for local public entities within California to purchase and rehabilitate housing, including hotels, motels, vacant apartment buildings, and other buildings to convert them into interim or permanent, long-term housing. Of the $1.45 billion in Homekey grant funds, $1.2 billion is derived from the Coronavirus State Fiscal Recovery Fund (CSFRF) established by the federal American Rescue Plan Act of 2021 (ARPA) and $250 million in State General Funds. The Homekey program’s primary objective is to provide housing for individuals and families experiencing homelessness or at risk of experiencing homelessness.
On December 14, 2021, Council approved Motion 2021-12-14-1503, authorizing City staff to submit a joint application in collaboration with VHB for Homekey funding, and the City was subsequently awarded funds by HCD. The Villa d’Flore site has thirteen (13) one-bedroom units and two (2) two-bedroom units. At full capacity, the project will support 14 households plus one unit reserved for an onsite property manager. The facility totals approximately 9,950 square feet of living space. Individual unit sizes are 650 sq. ft. for one-bedroom units and 750 sq. ft. for the two-bedroom units. There is an on-site parking garage with 13 parking spaces and additional on-street parking available along the adjacent streets.
The Women’s Center Youth & Family Services (WCYFS) will deliver critical services to keep individuals housed. Services provided will include case management, parenting classes, individual peer counseling, support groups for battered women and linkages of residents to specialized services such as health care, mental health care, substance abuse support and others.
Present Situation
Through the course of construction, the Villa d’Flore project encountered several challenges during the rehabilitation process that led to multiple construction change orders and cost overruns. Despite being able to secure additional funding sources from other entities, the project costs have exceeded available grant funding under the City’s current contract.
Through due diligence during project review, including site visits to perform invoice verification, staff were able to confirm significant challenges in rehabilitation of the building that would have been impossible to foresee. Some challenges include replacing a key load-bearing support beam that was severely damaged in a previous fire, compliance with PG&E electrical requirements regarding unidentified underground utilities, and installation of a new fire hydrant. In addition, Americans with Disabilities Act (ADA) improvements were made to meet building compliance requirements and provide better ease of access for all.
FINANCIAL SUMMARY
Approval of the recommendations will not impact to City’s General Fund or any other unrestricted fund. There is sufficient budget in the Special Grants Fund, Community Services Program, Housing Division, in the HHAP4 project, to support the recommended amendment.
Attachment A - VHB, Villa d’Flore, Project Homekey & HHAP2 Grant Agreement
Attachment B - VHB, Villa d’Flore, Amendment No. 1
Attachment C - VHB, Villa d’Flore, Amendment No. 2