Report Prepared by: Leah Brown, Management Analyst, Development Services Department
Title
SUBJECT: Authorization to Submit a Joint Application with CC915 Merced to the Central Valley Opportunity Fund for a $150,000 Matching Grant and Authorization to Accept, Execute, and Appropriate that Grant, If Awarded, to the 73 South R Street Affordable Veterans Container Home Project
REPORT IN BRIEF
Considers authorizing the joint application with CC915 Merced and grant agreement to the Central Valley Opportunity Fund (CVOF) for a $150,000 matching grant. Authority to accept, execute, and appropriate that grant, if awarded, to the 73 South R Street affordable veterans container home project.
RECOMMENDATION
City Council - Adopt a motion:
A. Approving the submission of a joint application with CC915 Merced to the CVOF for a matching grant of $150,000 towards a 100% affordable housing project at 73 South R Street; and,
If awarded,
B. Authorizing to accept, increase revenue, and appropriate grant funds up to $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 from the grant is received if awarded; 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 project consists of container units, each are 40 feet by 8 feet, which are split to allow for two studio units in each container. The Homekey grant funds projects based on doors; each unit has multiple doors. They are clustered into multiple units similar in scale to a house but will accommodate four to six residents in each cluster. The site will provide room for approximately 20 doors. Additionally, one unit will provide for onsite management and other common facilities to provide services and support other community activities. It will open ready for permanent supportive services. The 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. See attached photos.
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 Veteran’s Administration, with several units reserved with VASH Vouchers for veterans.
The Council approved the sale of the land to the project, which was considered in kind support and had a vacant appraised value of $110,000.
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 money. The HCD Standard Agreement was fully executed on April 21, 2022. The project forfeited $200,000 of this award early on by not meeting an early Bonus Award deadline for early project completion.
Site work began in September 2022, in order to prepare the land and underground utilities. The containers were acquired, and preparations began in Texas at the offsite affiliated company operated by Mr. John Glavin of CC915 Merced, Inc. Various milestones required of the Homekey grant were reached and submitted to HCD, including their Nondiscrimination Policy and Supportive Services Plan submitted in October 2022.
In January 2023, the City experienced an exceptionally wet winter, significant flooding occurred, and a State of Emergency was declared. This caused a significant pause in site work until the ground could dry out enough to continue. HCD allowed grant deadline extensions to accommodate the effects of the flooding.
On July 28, 2023, the founder and President of CC915, Merced Inc., Mr. John Glavin, passed away unexpectedly. This led to a temporary pause in the project’s leadership and decision-making process. Mr. Glavin was instrumental in championing the project and leading his team, his presence was missed. Within months, the project was resumed with board member and now-President, Christine Ettore of Florida as lead. Ms. Ettore was the initial grant writer and had been a key, behind-the-scenes, although out of state lead in the project.
Some issues were discovered that caused further delay and increased expenses, such as lack of response from their architectural partners, which lead to various iterations of plans that had to go through repeated approval processes. The final plan set was completed by the architect in October 2023. The containers were not able to start being manufactured for living units until then; however, during this time, site work continued.
The certifying company that needed to approve the containers in Texas before they could be completed and shipped also experienced delays. They inspected and gave the stamp of approval in April 2024.
Once all containers were approved, shipping was scheduled, the earliest this could be arranged was late summer, 2024. The containers arrived in partial shipments at two-week intervals to accommodate the necessary site work and limited space on the parcel. All containers were on site and in place by September 2024.
Once on site, there have been a few change orders from the general contractor needed to complete the construction of the exterior and interior finishes. Some containers were damaged during the shipment from Texas, that added to the cost. These repairs, change orders, and delays have led to additional costs.
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 fund-raising effort to make sure that the project is completed, and its doors open this year.
Earlier this year 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, so that the project opens with a lesser burden of debt, two outside agencies are interested in granting $150,000 each in matching funds. One agency is the Merced County Continuum of Care and the other is CVOF. Each agency is requesting that the City work as a pass through or partner on the grant. As soon as documents have been prepared by the County, an action will come before City Council on the Continuum of Care funds. This will likely be presented for City Council approval in the coming months.
The CVOF is a trusted leader in local philanthropy for nearly 60 years. It is a private, donor-advised fund dedicated to improving the lives of residents of the greater Merced community. Housing and Homelessness are one of the top priorities that the CVOF seeks to invest in. They seek to utilize the power of collective impact philanthropy by serving as a catalyst to draw in additional public and private resources, and establishing regional partnerships to pursue strategic, research-driven investments aimed at equitable, lasting, and systemic change. The City has partnered with the CVOF during COVID when they sponsored a small business voucher program to encourage community support for small, local businesses to help sustain them and recover from the lockdown restrictions. Additionally, they funded the TwelveThirteen project, the Merced Rescue Mission, and Restore Merced, to name just some of their past projects.
The preferred method to secure CVOF funding is via an authorization from City Council to pursue the $150,000 grant and authorization to appropriate the funds to the project once awarded. The CVOF board meets only monthly and therefore needs an approval before agreeing to consider the grant of funds.
Currently, the 73 South R Street project is nearly finished with an expected completion this year.
IMPACT ON CITY RESOURCES
This request does not involve City Funds. If awarded, the funds received would need to be appropriated for this project.
This item requires five votes from Council for approval.
ATTACHMENTS
None.