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, by Adding Self Help Enterprises as a Co-Applicant and Rescinding Resolution 2025-15
REPORT IN BRIEF
Considers adopting a modified resolution due to changes required 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 to include adding Self Help Enterprises as a co-applicant and Rescinding Resolution 2025-15.
RECOMMENDATION
City Council - Adopt a motion:
A. Rescinding previously approved Resolution 2025-15; and,
B. Adopting Resolution 2026-08, a Resolution of the City Council of the City of Merced, California, rescinding Resolution No. 2025-15 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, 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 2025-26 Adopted Budget and the City Council’s Pro-Housing Policies.
DISCUSSION
On January 21, 2025, City Council authorized the submission of a joint application and participation in the State of California Housing and Community Development (HCD) Homekey+ Grant Program with Up Holdings for the Mercy Village project.
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, close to shopping, services, and bus transit lines.
In November 2021, the developer requested Permanent Local Housing Allocation (PLHA) funding for the project, as well as a Density Bonus. In January 2022, the City Council of the City of Merced authorized the funding commitment of the 2019 and 2020 PLHA funds of $1,324,969 and approved the Density Bonus. That same month, the project received a commitment letter from the Housing Authority of the County of Merced setting aside 65 project-based vouchers (PBV) for the project. PBVs subsidize the rent for qualifying individuals, so that they will pay no more than 30% of their income towards rent.
In 2023, the developer closed escrow on the land and submitted building permits. They also established the Limited Partnership for this project called UP Mercy Village, L.P. In January 2024, the City Council took action to authorize the Regulatory Agreement with UP Mercy Village, LP setting up terms of affordability in support of the PLHA loan, which was used for the purchase and predevelopment costs.
In January 2025, Council adopted Resolution 2025-06, a Resolution of the City Council of the City of Merced, California, authorizing a joint application and participation in the Homekey+ Program.
Following the significant destructive wildfires in Los Angeles in late January 2025, HCD made changes to their original resolution requirements, therefore a revised resolution (Resolution 2025-15) was presented and approved by Council, and the original resolution was rescinded. The intent of the grant and resolution remained the same.
In November 2025, the City was sent the attached Conditional Award Commitment and Acceptance of Terms and Conditions Homekey+ program.
On January 20, 2026, City Council gave authority to accept and appropriate the Homekey+ Conditional grant award of $28,257,013. Approval included increasing the revenue and appropriating the same in Fund 2017- Homekey Fund, approving the use of pooled cash until reimbursement of the grant was received, and authorization for the City Manager to execute any necessary agreements, to accept the award with HCD’s stipulations, upon City Attorney’s approval as to form.
HCD requested that we add the supportive services partner, Self Help Enterprises, to the City Council’s Resolution authorizing the application and participation in the program. In past Homekey awards, the support services partner was not considered a co-applicant, this time they are including all entities identified in the project as co-applicants and co-recipients in the grant for the Standard Agreement. Per HCD’s request, before they issue the Standard Agreement, they would like the City to authorize the inclusion of Self-Help Enterprises as a co-applicant. The City had a past partnership with Self Help Enterprises, as they were a managing administrator on the CalHome 2021 grant. Staff and HCD are confident in this partnership and that it will be a good fit for the Mercy Village project.
Attached is the previously approved resolution to be rescinded, and the modified resolution for your authorization that includes listing Self Help Enterprises as a co-applicant in this Homekey+ grant. The intent of the grant and award amount remain the same.
IMPACT ON CITY RESOURCES
There is no impact on City resources.
ATTACHMENTS
1. City Council Resolution 2025-15
2. Conditional Award Commitment and Acceptance of Terms and Conditions Homekey+ Program
3. City Council Resolution 2026-08