REQUEST FOR HOUSING AUTHORITY ACTION
SUBMITTED TO: Honorable Chair and Board Members
SUBMITTED BY: Eric G. Parra, Interim City Manager
VIA: Travis K. Hopkins, Assistant City Manager
PREPARED BY: Steve Holtz, Deputy Director of Community Development
Jessica Kelley, Homeless and Behavioral Health Manager
Brian Smith, Lieutenant, Police Department Community Outreach Bureau
Subject:
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Approve and authorize execution of an 18-month extension to the Exclusive Negotiations Agreement with Jamboree Housing to continue planning and secure funding for the Pathways Project
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Statement of Issue:
On June 7, 2022, the Housing Authority Board authorized the Executive Director to execute an Exclusive Negotiations Agreement (the “Agreement”) with Jamboree Housing to explore the development of the Navigation Center site (“Site) for a multi-use Healing Center development (see Attachment 1). Since July 18, 2023, the development evolved into the Pathways Project consisting of permanent supportive housing and a Navigation Center. Staff continued working with Jamboree to further develop a conceptual project and return to Council with additional project details, including potential funding sources and renderings.
The original Agreement with Jamboree Housing expired in December 2023. Staff recommends the Housing Authority approve another 18-month Exclusive Negotiations Agreement to allow Jamboree to continue planning and secure funding for the development (see Attachment 2).
Jamboree Housing has identified potential funding sources that may cover the development costs of the Pathways Project (see Attachment 3). To enable timely application for these funds, staff requests that the Housing Authority authorize the Executive Director to approve Jamboree Housing’s submission of funding applications. Once all available funding sources are secured, staff will return with the final project financing plan for Housing Authority approval.
Financial Impact:
This action does not require any commitment of funding.
Recommended Action:
recommendation
A) Approve and authorize the Chair, Authority Clerk and Executive Director to enter into an agreement with Jamboree Housing, extending the Exclusive Negotiations Agreement between the Housing Authority and Jamboree Housing; and
B) Approve and authorize the Chair, Authority Clerk and Executive Director to approve Jamboree Housing’s submission of funding applications for the Pathways Project.
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Alternative Action(s):
Provide alternative direction to staff.
Analysis:
In 2011, the dissolution of redevelopment agencies in California led to the establishment of successor agencies. Among these was the Huntington Beach Housing Authority (“Housing Authority”) tasked with managing housing assets, enforcing housing covenants, and carrying out other responsibilities related to affordable housing. To fund these efforts, a restricted fund called the Low- and Moderate-Income Housing Asset Fund (“LMIHAF”) was created. This fund collects repayments from past Redevelopment Agency loans and must be used to meet certain obligations, including the development of affordable housing.
Any unencumbered funds in the LMIHAF that exceeds the greater of $1M or the aggregate amount deposited into the fund during the preceding four fiscal years results in “excess surplus.” Any excess surplus in the LMIHAF, identified in its Annual Report, must be allocated within three fiscal years. If not, the Housing Authority has two options: transferring the excess surplus to another eligible jurisdiction or to the Department of Housing and Community Development.
In fiscal year 2019-20 a substantial repayment of a former Redevelopment Agency loan was received of over $6.5M, leading to an anticipated excess surplus of over $3M if not used by fiscal year 2020-21. To avoid losing the funds, the City invested in property for future affordable housing, resolving the excess surplus issue.
The City initially began exploring locations to establish a Navigation Center that would provide shelter and services to individuals experiencing homelessness in Huntington Beach in 2018. The selected Site, acquired using $6,094,847 of LMIHAF funds on August 19, 2020 and January 5, 2021, was meant for temporary use until affordable housing could be developed. The understanding was that affordable housing must be developed on the Site in the near future, or the $6,094,847 used for its acquisition must be reimbursed to the LMIHAF.
On March 22, 2022, a Request for Qualifications (RFQ) was released seeking a developer to build, finance, and manage a new mixed-use project, consisting of a homeless shelter, a sobering center, support services, and transitional and affordable housing at various income levels. On June 7, 2022, the City Council authorized the Executive Director to engage Jamboree Housing for the development.
After exploring options, on July 18, 2023, the Housing Authority approved the Pathways Project Development Concept, a multi-use facility consisting of Permanent Supportive Housing and a Navigation Center. Since then, staff has continued to work with Jamboree Housing to identify potential funding sources and refine project renderings.
Securing funding for the development remains a crucial task for Jamboree Housing. To accomplish this, they will need to promptly submit applications for funding opportunities, many of which have strict deadlines. Given that the original Agreement with Jamboree Housing has expired, extending it by 18 months is recommended. This extension would authorize the Executive Director to review and approve funding applications for the Pathways Project, minimizing potential delays in the process. Once all available funding sources are secured, staff will present the final project financing plan for Housing Authority approval.
Currently, the City has made no fiscal commitments beyond the initial property purchase.
Alternatively, the Housing Authority could choose to not extend the Agreement and provide additional guidance. However, any long-term use of the Site for purposes other than a qualifying affordable housing development would necessitate repayment of the LMIHAF account, triggering excess surplus. Consequently, the Housing Authority would need to allocate or transfer the funds within three fiscal years.
Furthermore, instead of delegating authority to the Executive Director to approve funding applications, the Housing Authority could require staff to bring forward each application for review. However, this approach could potentially delay application submissions, putting project funding at risk.
Environmental Status:
This action is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical changes to the environment, directly or indirectly.
Strategic Plan Goal:
Goal 4 - Homelessness, Strategy B - Feasibly transition the Navigation Center to include shelter and supportive housing.
For details, visit www.huntingtonbeachca.gov/strategicplan <http://www.huntingtonbeachca.gov/strategicplan>.
Attachment(s):
1. 2022 Exclusive Negotiations Agreement
2. Proposed Exclusive Negotiations Agreement Extension
3. Potential Pathways Project Funding Sources
4. PowerPoint Presentation