REPORT TO THE CITY COUNCIL
FROM: JENNIFER CLARK, Director
Planning and Development Department
PHIL SKEI, Assistant Director
Planning and development Department
BY: JENNIFER E. DAVIS, Senior Management Analyst
Housing Finance Division
SUBJECT
Title
Actions pertaining to the State of California’s Homekey 3 Program and Quality Inn located at 6051 North Thesta Street (APN 409-200-43), to facilitate the development of permanent affordable housing (District 6)
1. Adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1 and Section 15332/Class 32 of the California Environmental Quality Act (CEQA) guidelines;
2. ***RESOLUTION - Authorizing a joint application to and acceptance of funding from participation in Project Homekey 3.0 to sustain and rapidly expand housing for persons experiencing homelessness or at risk of homelessness, and who are, thereby inherently impacted by or at increased risk for medical diseases or conditions due to the COVID-19 pandemic or other communicable diseases and authorizing the City Manager to sign all required implementing documents (Subject to Mayor’s veto); and
3. ***RESOLUTION - Supporting a future City contribution of funds for rehabilitation expenses in an amount not to exceed $6,000,000 associated with UPholding California, LLC’s Quality Inn Project under funding through the State of California’s Homekey 3 Program (Subject to Mayor’s veto).
Body
RECOMMENDATION
Staff recommends the City Council adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1 and Section 15332/Class 32 of the California Environmental Quality Act (CEQA) guidelines; adopt a resolution authorizing joint application with UPholdings California, LLC and acceptance of funding from participation in the State of California’s Homekey 3 Program to sustain and rapidly expand housing for persons experiencing or at risk of homelessness and authorizing the City Manager to sign all required implementing documents; and adopt a resolution declaring a commitment for a future City contribution of funds for rehabilitation expenses in an amount not to exceed $6,000,000 upon full award of Homekey 3 funding for the Quality Inn Project (Project).
EXECUTIVE SUMMARY
HCD announced the availability of approximately $736 million through a Homekey Notice of Funding Availability, Round 3. UPholdings California, LLC has proposed to apply jointly with the City as Co-Applicants for up to $25,000,000 in financial assistance for a project to redevelop the Quality Inn into permanent affordable housing for families and individuals experiencing or at risk of homelessness. If approved, UPholdings California, LLC will work with City staff to complete the application and administer the grant on behalf of the City. Additionally, if approved, the City will commit up to $6,000,000 from non-general fund Housing Division resources, which may include HOME, HOME-ARP, ARPA, PLHA, or others.
BACKGROUND
The California Department of Housing and Community Development (Department) has issued a Notice of Funding Availability, dated March 29, 2023, announcing the availability of approximately $736 million of Homekey Program grant funding through Round 3, for the purpose of sustaining and rapidly expanding housing for persons experiencing or at risk of homelessness. Homekey 3 builds on the success of Project Roomkey, as well as the first two rounds of Homekey, to continue a statewide effort to rapidly sustain and expand housing for persons experiencing homelessness or at risk of homelessness, and who are, thereby, disproportionately impacted by and at risk for medical diseases or conditions due to the COVID-19 pandemic and other communicable diseases.
Of the $736 million in Homekey funding, $435 million is derived from the Coronavirus State Fiscal Recovery Fund (CSFRF) established by the federal American Rescue Plan Act of 2021 (ARPA) (Public Law 117-2) and $301 million is State General Fund. The $301 million in State General Fund money is intended to supplement the acquisition of, and to provide initial operating subsidies for, Homekey sites to promote project feasibility. Homekey 3 funding is available on a first come, first serve basis until July 28, 2023, or until the available funds are exhausted, whichever occurs first. Projects receiving an award from the state's direct allocation of the federal ARPA must expend the funds within eight months of the date of award. The portion of a project's award associated with State General Fund must be expended by June 30, 2026.
UPholdings California, LLC (UPholdings) has requested to apply jointly with the City for its proposed redevelopment project of the Quality Inn into a permanent affordable housing development for families and individuals experiencing or at risk of homelessness. As the eligible entity, the City would be the Lead Applicant with the understanding that UPholdings will complete the application with the support of City staff. UPholdings is a comprehensive real estate firm that is dedicated to creating, operating, and sustaining quality affordable housing in communities throughout the United States. Of the 40 properties UPholdings manages nationwide, eleven of those properties are in California with four in Fresno County. UPholdings has worked successfully with the City to develop projects for Homekey 2, including The Park at 1309, formerly known as the San Joaquin Hotel, which will provide 69 units of housing targeted to qualified students who are experiencing or at risk of homelessness in Fresno.
The proposed Homekey 3 project at Quality Inn will provide 59 units of housing that target qualified households and individuals who are experiencing or are at risk of homelessness. Approval of the resolutions will authorize submission of the joint application to HCD and declare a future funding commitment. Staff intends to return to council for authority to accept funding and to approve an MOU establishing the roles and responsibilities of the parties in administering the grant.
ENVIRONMENTAL FINDINGS
Staff has performed a preliminary environmental assessment of this Project and has determined it falls within the Categorical Exemption set forth in CEQA Guidelines Sections 15301/Class 1 (existing facilities) and Section 15332/Class 32 (in-fill development). Staff has determined that none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2 apply to this project. Further CEQA analysis will be performed at a future date once this project reaches the building application phase.
LOCAL PREFERENCE
Local preference is not applicable because the resolutions provide support for a state funding application and City acquisition of real property does not involve bidding or awarding.
FISCAL IMPACT
Funding for this agreement will be through the State of California’s Project Homekey award to the City of Fresno for this Project.
Attachments:
- Categorical Exemption (Quality Inn)
- Resolution Authorizing Joint Application to Homekey 3
- Resolution Declaring Funding Commitment