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AUTHORIZE THE CITY OF STOCKTON AND SERVICE FIRST OF NORTHERN CALIFORNIA TO SUBMIT A JOINT APPLICATION FOR GRANT FUNDING UNDER THE CALIFORNIA INFILL INFRASTRUCTURE GRANT PROGRAM FOR THE HUNTER HOUSE APARTMENTS
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve and authorize the submission of a joint application with Service First of Northern California to the California Department of Housing and Community Development for grant funding under the Infill Infrastructure Grant Program for The Hunter House project;
2. If awarded, approve and authorize Service First of Northern California and the California Department of Housing and Community Development to enter into a Standard Agreement for grant funding as specified in the resolution;
3. If awarded, approve and authorize the execution of a joint Disbursement Agreement for grant funding under the Infill Infrastructure Grant Program for the Hunter House project;
4. If awarded, authorize acceptance of the grant and execution of the Project Funding, Project Completion, and Indemnification Agreement with 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 October 30, 2019, the California Department of Housing and Community Development (HCD) announced the availability of approximately $194 million in funding for the Infill Infrastructure Grant (IIG) Program. The program funds will be used to provide grants for infrastructure improvements in support of higher-density affordable and mixed-income housing, and mixed-use infill development projects. Eligible improvements include construction, rehabilitation, or other physical improvement of parks or open space, transit facilities, streets, and sidewalks.
Service First is proposing to construct 120 units of affordable housing targeting low-income veterans, disabled, chronically homeless, and at risk of homelessness individuals and small families. The development is known as “The Hunter House” project located at 610 North Hunter Street and 619 San Joaquin Street and will provide on-site amenities, such as a community room and social service office space. As part of the joint application, Service First is requesting a total of $3 million in grant proceeds for the public infrastructure improvements along Hunter Street. The total application request is $3 million in IIG funds.
Council is being asked to approve Service First of Northern CA’s request to submit a joint application after the submission date because of the following two factors: 1) Service First decided to apply for the IIG Grant a week before its deadline to HCD of March 3, 2020; and 2) The short time frame did not allow staff adequate time to prepare the staff report and resolution for placement on the Council Agenda for authorization prior to the application deadline. However, we were informed by Service First that HCD is allowing the submittal of their IIG application without the authorizing City resolution and that HCD has agreed to allow up to 30 days from the date Service First submitted its application to provide Council’s authorizing resolution.
As such, staff recommends that Council adopt a resolution authorizing the City Manager, or designee, to submit a joint application and authorize Service First, if awarded funding, to execute a Standard Agreement with the State for The Hunter House affordable housing project.
DISCUSSION
Background
The State of California Department of Housing and Community Development issued a Notice of Funding Availability for IIG established under Assembly Bill 101 (Chapter 159, Statutes of 2019) and Part 12.5 (commencing with section 53559) of Division 31 of the Health and Safety Code, which authorizes the Department to approve funding allocations utilizing monies made available by the State Legislature, subject to the terms and conditions of the statute and the IIG Guidelines implemented October 30, 2019; which establishes the Infill Infrastructure Grant Program of 2019, referred to as IIG.
The Program’s primary objective is to promote infill housing development. The Program seeks to accomplish this objective by providing financial assistance for infrastructure improvements necessary to facilitate new infill housing development. Under the program, grants are available as gap funding for infrastructure improvements necessary for specific residential or mixed-use infill development projects. Infill projects must have either been previously developed or be largely surrounded by development.
On October 30, 2019, HCD issued a Notice of Funding Availability (NOFA) for approximately $194 million in funding from the IIG Program for 2019-2020. The IIG Program provides grants to projects for infrastructure improvements in support of higher-density affordable and mixed-income housing, and mixed-use infill development projects.
The Hunter House project located at 610 North Hunter Street and 619 San Joaquin Street 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 with underground parking targeting disabled persons, veterans, chronically homeless, and at risk of homelessness individuals and small families. The project is expected to include new off-site improvements, including the installation of more than 35 street trees, bike lanes, striping and signage to encourage active transportation, as well as new sidewalk, curb gutters and transit stop amenities.
Under the IIG Program, a joint application with a public agency scores much better than a single application. As part of the joint application, Service First is requesting approximately $3 million for the development of The Hunter House affordable housing infrastructure project costs.
Present Situation
Upon Council approval, Service First will submit The Hunter House IIG authorizing resolution to the State indicating the City’s approval as a joint applicant to acquire funding. The IIG strongly encourages joint applications between private and non-profits with local agencies to show a strong partnership and increase the total score an application receives.
If awarded IIG funds, and in accordance with the Standard Agreement, Service First and the City agree that the IIG grant funds may be used for 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. It’s also agreed that the IIG grant funds of up to $3 million shall be disbursed directly to Service First for development of The Hunter House project.
Service First will take overall responsibility in completing the Hunter House project and offsite infrastructure improvements using IIG grant funds. The City’s responsibility shall 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. The City is not be required to be party to the Standard Agreement.
Staff recommends that Council approve a resolution authorizing the City Manager, or designee, to submit a joint application and authorize the execution of the Standard Agreement between Service First and the State for The Hunter House project. Any funds awarded by the IIG Program will be used to assist in constructing eligible street improvements, water, sewer or utility service, and other offsite improvements.
FINANCIAL SUMMARY
If IIG awards funds to the City and Service First, the funds for the infrastructure improvements will be provided in the form of a grant. The grant does not require any matching funds from the City. There is no impact to the City’s General Fund or to any other unrestricted fund as a result of taking the recommended action.
Attachment A - Vicinity Map