HomeMy WebLinkAboutR-11321 approving funds for Anderson Hotel and THMA for Palm St. StudiosR 11321
RESOLUTION NO. 11321 (2022 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING AFFORDABLE HOUSING FUND
AWARDS TO THE HOUSING AUTHORITY OF SAN LUIS OBISPO FOR
THE ANDERSON INN IN THE AMOUNT OF $1,700,000 AND
TRANSITIONS MENTAL HEALTH ASSOCIATION FOR THE PALM
STREET STUDIOS IN THE AMOUNT OF $300,000
WHEREAS, the City Council of the City of San Luis Obispo met in the Council
Chamber of City Hall, 990 Palm Street, San Luis Obispo , California, on April 19, 2022,
for the purpose of considering request s for Affordable Housing Fund (AHF) assistance;
and
WHEREAS, the proposed projects, The Anderson Inn, by The Housing Authority
of San Luis Obispo (HASLO) and Palm Street Studios by Transitions Mental Health
Association (TMHA) meet the award eligibility criteria established by the City Council;
and
WHEREAS, Housing Element policies and programs encourage and support the
preservation and rehabilitation of affordable housing in the City; and
WHEREAS, the City Council has duly considered all evidence, including the
testimony of the applicant, interested parties, and the evaluation and recommendations
by staff at the said meeting; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. The City Council does hereby make the following findings
in support of the proposed AHF awards:
1. Eligibility: Use of the AHF for the requested purpose s will increase or
improve the City's affordable housing inventory and promote General Plan
policies regarding housing, as follows:
The Anderson Inn is eligible for Affordable Housing Funds because it
improves and preserves the City's affordable housing inventory and
implements several General Plan policies regarding housing. The project will
preserve the supply of affordable housing for extremely low, very low, and
low-income households with the construction of 68 units.
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The Palm Street Studios is eligible for Affordable Housing Funds because it
improves and expands a structure to convert to 6 supportive housing
apartments, add 2 separate on-bedroom accessory dwelling units and
provide affordable housing for low income persons identified as the most
vulnerable homeless individuals in the County and provide them with
behavioral health treatment and services.
2. Need: There exists a substantial or overarching need for the type s of units
to be assisted, as follows:
HASLO’s longest waiting list in terms of unit types is for 1-bedroom or studio
units. The Anderson consists of all 1-bedroom and studio apartments that are
identified as at risk for being lost in the City’s affordable housing inventory.
TMHA houses over 250 clients annually with the goal of creating supported,
permanent housing for adults with mental illness. Once opened, Palm Street
Studios will provide 8 housing units to this population. TMHA receives over
300 applications for their housing units, which demonstrates a clear continued
need for this type of supported housing.
3. Suitability: The projects to be assisted are appropriate for its location both
in terms of land use and design, as follows:
Both proposed housing acquisitions has been chosen for close proximity to
TMHA and County services. The Anderson Inn is in the middle of downtown
SLO. Palm Street Studios is .7 miles from Hope House Wellness Center on
1306 Nipomo Street, 1 mile away from TMHA headquarters on High Street,
1.1 miles from County Behavioral Health on Johnson Avenue, and 2.4 miles
from Growing Grounds Nursery on Orcutt Road. Both projects are near the
Ludwick Community Center and Santa Rosa Street, with easy access to rapid
transit.
4. Timing: The projects would better serve the City's needs if they were built
immediately as opposed to later, as follows:
Both projects provide immediate housing. HASLO units include 68 Section 8
voucher eligible units for clients at or below 60% of the Area Median Income
and long term affordability would be ensured through recording of a new
550year deed restriction.
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TMHA received around 300 applications for the 34 units under construction in
the Bishop Street Studios project, meaning there are approximately 266
community members in need of safe, supportive housing. TMHA knows that
stable housing and recovery go hand-in-hand. Palm Street Studios will bring
TMHA a few steps closer to providing housing for the hundreds of San Luis
Obispo residents living with mental health diagnoses.
5. Financial Effectiveness: But for the requested funding, the projects would
not be economically feasible; or AHF funding "leverages " significant
additional funding from other sources, as follows:
Funding for the Anderson Hotel would constitute 4.6% of project funding,
equivalent to $25,000 per unit (68 units). The project leverages direct
congressional appropriation ($2 million), Cou nty ARPA funds ($2 million) and
low-income housing tax credits ($26.4 million).
TMHA is currently in escrow for a purchase price of $1,185,000. The cost to
convert the house to six (6) one -bedroom units and two (2) one-bedroom
ADUs is approximately $1,815,000. TMHA is applying for $2.03M in No Place
Like Home grant funding from the State of California and they have been
successful in the past two years with an award of $1.49 million to purchase 6
units in the City of San Luis Obispo. While the numbers continue to get clearer,
and relocation fees are an unbudgeted expense of $60,000, THMA anticipates
the financial gap will be $865,000. TMHA will raise a portion of this through a
private capital campaign, and requests $300,000 in housing funds from the
City of San Luis Obispo.
6. Readiness: The projects have all necessary City approvals and is ready to
proceed, as follows:
Both the Anderson Inn and the Palm Street Studios projects do not need to
obtain any City discretionary approvals.
Award of the City will enable HASLO to proceed with a highly competitive
application for state low-Income tax credits in June 2022 and position the
project to move forward with acquisition within the year.
Upon award of the City, THMA plans to immediately close escrow on the
property.
HASLO and THMA will then make improvements to the units as needed and
submit any plans to the City Building division as necessary.
.
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SECTION 2. Environmental Determination. The project to award affordable
housing funds is exempt from environmental review per the California
Environmental Quality Act as it does not apply to the recommended actions in this
report, because the action does not constitute a “Project” under CEQA Guidelines
Sec. 15378.
SECTION 3. AHF Award for The Housing Authority of San Luis Obispo (HASLO)
and Transitions Mental Health Association (TMHA). The City Council does hereby
approve an AHF awards in an amount not to exceed $1,700,000, for HASLO and
$300,000 for THMA subject to the following condition of approval:
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1. Prior to release of any portion of the AHF award, the applicant s shall enter into
an affordability agreement with the City.
• For HASLO’s project for the Anderson Hotel, it shall be for sixty-eight (68)
for-rent affordable housing units located at 965 Monterey Street, for a term
of fifty-five (55) years, which will be recorded against the title of the property.
• For TMHA’s project for Palm Street Studio’s, it shall be for 8 for -rent
affordable housing units located at 1118 Palm Street, for a term of fifty -five
(55) years, which will be recorded against the title of the p roperty.
Upon motion of Vice Mayor Christianson, seconded by Council Member Marx, and
on the following roll call vote:
AYES: Council Member Marx, Pease, Shoresman, and Mayor Stewart
NOES: None
RECUSED: Vice Mayor Christianson
The foregoing resolution was adopted this 19th day of April 2022.
___________________________
Mayor Erica A. Stewart
ATTEST:
_______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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4/21/2022 | 3:27 PM PDT