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APPROVE A RESOLUTION SUPPORTING THE APPLICATION OF VISIONARY HOME BUILDERS OF CALIFORNIA, INC. FOR THE LOCAL GOVERNMENT MATCHING GRANTS PROGRAM AND APPROVING LA PASSEGGIATA BUDGET FOR THE LOCAL GOVERNMENT MATCHING GRANTS PROGRAM
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution to:
1. Approve a Resolution supporting the Visionary Home Builders of California, Inc. application to the California Department of Housing and Community Development for the Local Government Matching Grants Program funds for the La Passeggiata affordable housing project and approve the project budget and funding sources; and
2. Authorize the City Manager, or designee, to take all necessary and appropriate actions to carry out the purpose and intent of the resolution.
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Summary
Visionary Home Builders of California, Inc. (VHB) applied for gap funding through the State of California Department of Housing and Community Development (HCD) Excess Sites Local Government Matching Grants program (LGMG Program). The LGMG Program requires a funding commitment from the City or other local governing bodies to apply for grant funding. The LGMG Program requires an updated resolution from the City Council to reinforce its commitment to proceed with a Standard Agreement for the grant.
DISCUSSION
Background
On January 15, 2019, Governor Newsom signed an Executive Order N-06-19, which allows the production of affordable housing on state-owned excess sites. The Executive Order authorizes the State's Department of General Services (DGS) to identify and prioritize excess sites for sustainable, cost-effective multifamily affordable housing projects.
On July 29, 2020, DGS and HCD selected VHB to develop affordable housing at 601 East Miner Avenue and 622 East Lindsay Street (La Passeggiata project - located in downtown Stockton within the City's Miner Avenue Complete Streets Project), making it the first excess site to be offered for affordable housing development.
On June 22, 2021, City Council adopted Resolution 2021-06-22-1502 (Attachment A) which authorized the commitment of $600,000 from the City’s HOME Investment Partnerships Program (HOME) Entitlement funds for the construction of La Passeggiata. Additionally, La Passeggiata was granted a $1,393,019 Local Development Impact Fee Waiver on May 23, 2022, from the City of Stockton.
On August 22, 2023, the City Council adopted Resolution 2023-08-22-1209 (Attachment B) supporting the application of Visionary Home Builders for the Local Government Matching Grants Program for a grant of $6,000,000. A short time after, HCD approved the $6 million request for this project.
Present Situation
The La Passeggiata housing project is designed for 94 energy-efficient housing units comprised of one-, two-, and three-bedroom units. The project will be marketed to families and individuals within 30%-50% of the area median income. Resident services, including an onsite daycare, will be available to residents and the public who meet eligibility requirements. The building will also contain solar panels and other energy-efficient designs.
Due to the multiple years of waiting for the cleanup of the site, factors out of VHB’s control have caused a funding gap. Because of the uncertainty of state and federal tax credits, the State of California is working with VHB to fill the gap and is willing to increase the LGMG award from $6 million to $10 million. The added funding is necessary for the project to be eligible for low-income tax credits. The tax credit application deadline is April 23, 2024 and this updated resolution is needed in support of the project’s tax credit application. The increase in LGMG funding and securing of tax credits will ensure that VHB is able to move forward with project development.
The LGMG Program requires a resolution from the City of Stockton pursuant to Health and Safety Code section 50704.82(b)(1)(A) approving the La Passeggiata budget, including all sources, and demonstrating the amount of Local Government Contribution to the Applicant for Predevelopment and Development Costs for La Passeggiata, and the requested amount from the LGMG Program. The passage of this Resolution will facilitate HCD’s award of LGMG Program grant funds to VHB, necessary to secure funding for the construction of the La Passeggiata affordable housing project.
The project’s estimated development cost is $59,416,737 and includes the following permanent financing sources: HCD MPH program $18,914,643; HCD IIG program grant $2,400,000; City of Stockton HOME loan $600,000; County of San Joaquin grant $1,500,000; Tax Credit Equity $26,002,095; and LGMG grant/loan $10,000,000.
FINANCIAL SUMMARY
This Resolution does not commit additional funds to the project other than what was already committed via City Council Resolution No. 2021-06-22-1502. There is no financial impact to the City's General Fund or any other unrestricted fund as a result of taking the recommended action.
Attachment A - Resolution 2021-06-22-1502
Attachment B - Resolution 2023-08-22-1209