REPORT TO SHASTA COUNTY BOARD OF SUPERVISORS

BOARD MEETING DATE:  November  7, 2017
CATEGORY:  Regular - Health and Human Services-8.

SUBJECT:

Execution of a Loan Agreement/Promissory Note between Shasta County and Veterans Housing Development Corporation, secured by a Deed of Trust

Supervisorial District No. :  4

DEPARTMENT CONTACT:  Richard Kuhns, Psy.D, Director of Housing/Community Action Programs, (530) 225-5160

STAFF REPORT APPROVED BY:  Richard Kuhns, Psy.D, Director of Housing/Community Action Programs

RECOMMENDATION

Take the following actions regarding the Shasta Lake Veterans Village housing project: (1) Adopt a resolution that (a) finds the project is exempt from the California Environmental Quality Act (CEQA) under State CEQA Guidelines sections 15192 and 15194 (Affordable Housing Exemption) and the proposed project is not subject to any applicable exception, including the “unusual circumstances exception, and (b) finds that approval of a deferred payment loan of $248,000 to the Veterans Housing Development Corporation (VHDC) is needed to carry out the project and programs deemed by the Board of Supervisors to be necessary to meet the social needs of the population of Shasta County and serves purposes that will benefit the City of Shasta Lake; (2) approve and authorize the Auditor-Controller to deposit the loan amount of $248,000 into an approved escrow account set up by Veterans Housing Development Corporation for the purpose of predevelopment expenses; (3) approve and authorize the Chairman to sign a Loan Agreement and Promissory Note with Veterans Housing Development Corporation in the amount of $248,000 for the period date of signing through the end of the Maturity Date; and (4) approve and authorize the Deed of Trust for Shasta Lake City Housing Authority.

SUMMARY

The Shasta Lake Veterans Village, a 30 unit, permanent supportive housing project for very low-income veterans in Shasta Lake City is being developed by Veterans Housing Development Corporation (VHDC).  VHDC is a subsidiary of Veteran Resource Centers of America (VRC) which provides services for veterans of all eras.

DISCUSSION

Veteran Resource Centers of America provides services in Shasta County using the Supportive Services for Veterans and Families Grant funded through U.S. Department of Housing and Urban Development.  In 2013, Assembly Bill 639 restructured the Veteran’s Bond Act of 2008 authorizing $600 million in existing bond authority to fund multifamily housing for veterans, otherwise known as Veterans Housing and Homeless Prevention Program (VHHP).  With the approval of Proposition 41 by California voters on June 3, 2014, the State of California Department of Housing and Community Development, designed, developed and are currently administering a veteran multifamily housing program.

VHDC approached the County to contribute to the predevelopment financing until the project is built.  The Deed of Trust executed between VHDC and Shasta County is being proposed in the amount of $248,000 with a term of 18 months with interest at the current treasury rate.  Once the Deed of Trust is signed by both parties, a three-day rescission will be enforced.  After the Deed of Trust is recorded with the Shasta County Assessor-Recorder, the Auditor-Controller’s office will process a one-time payment into an escrow account set up by VHDC.  Draws made by VHDC will be submitted for approval prior to the escrow company disbursing funds.

Shasta Lake Villages is a housing complex that is comprised of 30 one-bedroom apartments, community space, counseling rooms, laundry facilities, garden and recreation space for those veterans who are homeless in Shasta County.  City of Shasta Lake has donated the parcel located at the corner of Meade and Locust Streets in Shasta Lake and a loan in the amount of $100,000 to fund predevelopment fees.  The loan made between the County and VHDC will cover costs such as surveying, construction manager, permit application fees, and architect fees.  It is the intention of the Shasta County Housing Authority to provide Veterans’ Affairs Supportive Housing vouchers to the project once the project is complete. 

The City of Shasta Lake Housing Authority (“Housing Authority”) currently holds ownership in the parcel that Shasta Lake Villages is being proposed on.  Through the process of the development, the Housing Authority has supported VHDC’s desire to use the property as collateral for security in the County’s loan.  Upon receiving all funding source approvals, the Housing Authority will deed the property to VHDC for final ownership.

ALTERNATIVES

The Board of Supervisors could decline to approve the recommendation.  This alternative is not recommended as this project will provide one of many solutions to decrease the amount of homeless veterans residing in Shasta County.

OTHER AGENCY INVOLVEMENT

This recommendation has been reviewed by County Counsel, the County Auditor-Controller's Office, and the County Administrative Office. Risk Management approved the agreement. County Counsel approved the agreement as to form.

FINANCING

The VHCD is asking the County of Shasta to loan them $248,000 from General Fund for 18 months.  Beyond the County funds, the VHCD will be accessing multiple sources of funds to develop Shasta Lake Veterans Village.  Home Depot Foundation funding ($500,000), City of Shasta Lake ($100,000), City of Shasta Lake land donation ($350,000), Affordable Housing Program through Federal Home Loan Bank of San Francisco ($600,000), Deferred Developers Fees ($231,293), and Exchange Bank Construction Loan ($5,837,170). An appraisal in the amount of $248,000 is being used to determine the value in the property prior to construction.