Report Prepared by: Leah Brown, Management Analyst, Development Services
Title
SUBJECT: Adoption of a Modified Resolution Authorizing the Previously Approved Homekey+ Grant Application with Up Holdings California, LLC and UP Mercy Village LP and Rescinding Resolution 2025-06
REPORT IN BRIEF
Considers adopting a modified resolution due to changes desired by the Housing and Community Development Department (HCD) authorizing the submittal of a joint application for participation in HCD Homekey+ Grant Program with Up Holdings California, LLC and UP Mercy Village LP and Rescinding Resolution 2025-06.
RECOMMENDATION
City Council - Adopt a motion:
A. Rescinding previously approved Resolution 2025-06; and,
B. Adopting Resolution 2025-15, a Resolution of the City Council of the City of Merced, California, rescinding Resolution No. 2025-06 and authorizing a Joint Application and Participation in the Homekey Program; the execution of a standard agreement if selected for such funding and any amendments thereto; and any related documents necessary to participate in the Homekey Program; and,
C. Authorizing the City Manager to execute the Standard Agreements if selected for such funding and any amendments thereto, and any related documents necessary to participate in the Homekey+ Grant Program
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, with modifications; or,
3. Deny the request completely; or,
4. Refer to staff for reconsideration of specific items as requested by Council; or,
5. Continue to a future City Council meeting (date and time to be specified in the motion).
AUTHORITY
Charter of the City of Merced, Section 200.
CITY COUNCIL PRIORITIES
As provided for in the 2024-2025 Adopted Budget and the City Council’s Pro-Housing Policies.
DISCUSSION
On January 21, 2025, City Council approved Resolution 2025-06, authorizing the submittal of a joint application for participation in HCD Homekey+ Grant Program with Up Holdings California, LLC and UP Mercy Village LP for an amount not to exceed $30,000,000.
At that time, the information received was that the program was highly competitive and that awards were going to be based on a first come, first serve basis. Applications were being accepted until funds were exhausted and awards to be expected in the summer. The Developer and staff rushed to get a Resolution on the agenda.
As you were approving the Homekey + application and Resolution 2025-06, Los Angeles was experiencing significant destructive wildfires destroying whole urban communities, over 27 deaths, and more than 18,189 structures destroyed. Due to this significant change in the state’s needs, HCD changed the first come, first serve nature of this grant and sent out a template for the preferred resolutions. There were changes from the original resolution therefore the revised resolution needed to come back to you for approval and the original resolution must be rescinded. The intent of the grant and resolution remains the same.
As a reminder, the project, called Mercy Village, includes 65 affordable permanent supportive housing units, a manager’s unit, and a community/office area within a three-story building on a 1.54-arce parcel, generally located on the west side of Park Avenue, between Olive Avenue and Alexander Avenue. The parcel is at 3015 Park Avenue in North Merced near Merced High School, in the City’s Infill Development Opportunity Zone (development fees), close to shopping, services, and bus transit lines. The target population that Homekey+ will serve are veterans, homeless, chronic homelessness or those at risk of homelessness, and those with a behavioral health challenge. The goals of the program fit with the intended projects uses and audience for the Mercy Village project on Park Avenue.
IMPACT ON CITY RESOURCES
Homekey+ funding is currently not included in the Fiscal Year 2024-2025 adopted City Budget. The approval actions by the City Council provides authorization to apply for the grant. The grant application will be for an amount up to $30,000,000. If awarded, staff will come to back to Council to accept and appropriate the funding.
ATTACHMENTS
1. Homekey+ NOFA
2. City Council Resolution 2025-06
3. City Council Resolution 2025-15