To: Honorable Mayor and Members of City Council
From: Steve Potter, City Manager
Prepared By: Molly Rattigan, Deputy City Manager and Stephanie Gaul, Housing Manager
TITLE:
Title
Application for Homekey+ Funds for Permanent Supportive Housing at 1415 Fourth Street and 1443 Division Street
LABEL
RECOMMENDED ACTION:
Recommendation
1. Adopt a resolution authorizing a joint application to and participation in the Homekey+ Program; and
2. Adopt a resolution authorizing a reservation of Affordable Housing Impact Fee Funds in an amount up to $600,000 as match for the Homekey+ for the acquisition and rehabilitation of 1415 Fourth Street and 1443 Division Street in Napa, if alternative funds cannot be identified; and determining that the actions authorized by this resolution are exempt from CEQA.
Body
DISCUSSION:
The State of California has released a $2.2 Billion Notice of Available Funding under the Homekey+ program. Homekey+ is funded by Proposition 1 dollars and is intended to create Permanent Supportive Housing opportunities for individuals exiting homelessness that are either diagnosed with or are suspected to have behavioral health some form of a behavioral health disorder.
On February 4, 2025, the City Council authorized the City Manager to negotiate and enter into a Purchase and Sale Agreement with the property owner of 1415 Fourth Street and 1443 Division Street as part of an application under Homekey+ to deepen the affordability of these units and convert to permanent supportive housing with little to no impact to the current tenants. Additionally, the City Council authorized the reservation of $2.5 million in matching funds from the Affordable Housing Fund.
Since January, the City has entered into the Purchase and Sale Agreements and has been working with the State of California, Housing and Community Development program to complete the necessary studies and site plans to complete the Homekey+ application. The City also completed a Request for Qualifications process and has identified Burbank Housing as the partner agency that will own and manage this project. The application is ready for submittal pending City Council approval of these two items.
First, Housing and Community Development requires a resolution in a specific format to be approved by the City Council authorizing submission of the application and the identification of the Co-Applicant, Burbank Housing. Today’s action seeks adoption of that resolution.
Second, the project budget currently has an identified funding gap of up to $600,000. This gap assumes the maximum costs for all rehabilitation, ADA upgrades and any desired relocation, but staff believes this gap may not come to fruition. Staff is also working on identifying alternative funding sources including working with the County, establishing the funding nexus to available opioid settlement funds, and working with local philanthropy that provides funding to close project gaps. The Homekey+ application does not allow for an application to be submitted with an identified gap. Therefore, staff is requesting adoption of a resolution that authorizes up to $600,000 in additional funds from the Affordable Housing Fund as match to the Homekey+ grant only if funds are required for the project and alternative funding sources cannot be secured. Staff will return to City Council if Homekey+ funds are awarded and funds are needed to close the gap.
FINANCIAL IMPACTS:
Today’s action seeks a commitment of an additional $600,000 in Affordable Housing Funds only if funding is needed to close a project financing gap and alternative funding sources cannot be secured.
CEQA:
The City Manager has determined that the actions authorized by this action are exempt from the requirements of CEQA pursuant to CEQA Guidelines Sections 15378 (government fiscal activities without any commitment to any specific project) and 15301 (minor alterations to existing structures involving negligible expansion of use). Both would apply on a separate and independent basis with 15378 applicable because this is a City financial activity with a plan to spend the funds to purchase the properties and 15301 is applicable to the extent that the funds are used to purchase and improve the properties with minor alterations.
DOCUMENTS ATTACHED:
ATCH 1 - Resolution Authorizing Homekey+ Application
ATCH 2 - Resolution-Affordable Housing Funds
NOTIFICATION:
None.