RECOMMENDATION(S): (CONT'D)
3. APPROVE the assignment of Rubicon’s obligations under the 2008 MHSA Revocable Grant Agreement, and related documents, from Rubicon to HCEB as part of the transfer of ownership of the Virginia Avenue property.
4. APPROVE and AUTHORIZE the Director of Health Services to execute the necessary legal documents to effect the above actions.
FISCAL IMPACT:
No impact to the General Fund. The County received $1,736,694 in SNHP (formerly a component of MHSA known as MHSA Housing Program) funds from the State of California in December 2016 ($1,735,224) and May 2017 ($1,470). These funds were sent from the California Housing Finance Agency to counties that wanted direct fund management. The funds are restricted and must be used to support affordable housing for persons meeting the MHSA eligibility criteria.
BACKGROUND:
Rubicon Programs, Inc. (Rubicon) is selling its residential properties and is focusing on providing services to the homeless. Housing Consortium of the East Bay (HCEB) entered into a purchase and sale agreement with Rubicon to purchase two of Rubicon’s properties in Richmond, one at 903-919 Virginia Avenue and one at 360-366 South 9th Street. Together these properties provide ten units of housing affordable to extremely low-income households with special needs.
On March 12, 2008, the County entered into a Revocable Grant Agreement with Rubicon through which the County granted Rubicon $564,332 in MHSA funds to Rubicon to pay for the renovation of the 6-unit residential building located at 903-919 Virginia Avenue. In consideration for the grant, the Virginia Avenue property is subject to a Regulatory Agreement that restricts the occupancy of the apartments to low income households that have a member who are MHSA eligible. Rubicon’s obligations under the Revocable Grant Agreement and the Regulatory Agreement are secured by a Deed of Trust. The Regulatory Agreement, and the revocability of the 2008 grant, expire in March 2028.
The County’s MHSA Three Year Program and Expenditure Plan Update (MHSA 3-year Plan) includes the use of $1.72 million of SNHP funds to support permanent supportive housing. This proposed use of funds is consistent with the MHSA 3-year Plan.
Staff requests that the Board of Supervisors approve the attached documents in their substantially final form. The SNHP funds will be deposited into an escrow account with Old Republic Title that the buyer opened for this transaction. Escrow is expected to close no later than December 31, 2019.
CONSEQUENCE OF NEGATIVE ACTION:
Rubicon Programs, Inc. no longer includes housing in its core organizational mission. Failure to transfer the properties and grant to HCEB may result in diminished services to tenants residing in these properties.