Report Prepared by: Leah Brown, Management Analyst, Development Services Department
Title
SUBJECT: Authorization to Enter into a Memorandum of Understanding with Merced County to Manage the Distribution of a $150,000 Matching Grant from the Continuum of Care to the 73 South R Street - Veterans Village Project and Authorization to Accept, Execute, and Appropriate that Grant
REPORT IN BRIEF
Considers authorizing a Memorandum of Understanding (MOU) with Merced County to manage the distribution of a $150,000 matching grant from the Continuum of Care to the 73 South R Street - Veterans Village Project. Authority to accept, execute, and appropriate that grant.
RECOMMENDATION
City Council - Adopt a motion:
A. Authorizing an MOU with Merced County for the City to manage the distribution of matching funds in the amount of $150,000 for the 73 South R Street - Veterans Village project; and,
B. Authorizing to accept, increase revenue, and appropriate funds of $150,000 in Fund 2016-Homekey CC915 for the 73 South R Street affordable housing project; and,
C. Approving the use of pooled cash until reimbursement of funding is received; and,
D. Authorizing the City Manager to execute necessary agreements upon City Attorney’s Approval as to Form.
Body
ALTERNATIVES
1. Approve, as recommended by Staff; or,
2. Approve, subject to conditions other than recommended by Staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
Fiscal Year 2025-2026 Adopted Goals and Priorities, Housing & Homelessness.
DISCUSSION
On January 18, 2022, City Council approved a joint Homekey grant application between CC915 Merced, Inc. and the City of Merced. The 21-unit container home project is deed restricted to residents that are at 30% or below the average median income (AMI); it will serve homeless veterans, and those chronically homeless.
CC915 Merced, Inc. has been working with other partners to provide services once the complex is open. Those include Merced County Rescue Mission, as well as the Veterans Administration.
In March 2022, the California Department of Housing and Community Development (HCD) announced that the City of Merced and CC915 Merced, Inc. was awarded $4,420,000 of Homekey Program grant funds. The project had considerable delays causing the construction time and cost to expand.
In 2024, CC915 Merced, Inc, became affiliated with local veteran and affordable housing developer, Adam Conour. Mr. Conour is leading the team locally. Additionally, he is heading up a fundraising effort to make sure that the project was completed, and doors opened in November 2025 to formerly unhoused veterans and homeless.
When Council approved the sale of the land for this project it was considered in kind support and had a vacant appraised value of $110,000. In 2025, the City of Merced contributed $200,000 from Fund 2513 - Low Moderate Income Housing fund. At the time, other outside financing was still being pursued. The other funding is an outside long-term bank loan of about $800,000. To assist with paying down that loan, two outside agencies are interested in granting $150,000 each in funds. One agency is the Merced County Continuum of Care and the other is Central Valley Opportunity Fund (CVOF). Each agency requested that the City work as a pass-through or partner on the grant. In July 2025, Council approved the joint application, authorization to accept and appropriate the grant from CVOF.
The Continuum of Care funds are managed via the County of Merced. The County drafted an MOU for the City to fiscally manage the $150,000 match of funds. The Deputy City Attorney met with staff of the City and County to discuss and make small modifications to the draft MOU.
IMPACT ON CITY RESOURCES
This request does not involve City Funds. The City would be a pass-through for the funds and would manage the distribution of those funds to our project partner CC915 Merced, Inc.
This item requires five votes from Council for approval.
ATTACHMENTS
1. MOU between the City and County of Merced