Pinole Housing Development

The Pinole Housing affordable housing development (formerly known as 811 San Pablo) will include the new construction of a four-story building with 32 affordable rental units (a mix of one- and two-bedroom units) that will be affordable to households between 30 and 60 percent area median income, and one manager’s unit, on a vacant parcel located at 811 San Pablo Avenue in the City of Pinole. The development will provide 32 units to veteran households in total, of which eight units will be for chronically homeless veterans and seven units for disabled veterans. Fifteen of the units of the development will be designated as County-assisted HOME units, five of which will be reserved and accessible for persons who are physically disabled, and four of which will be reserved and accessible for persons who are hearing and vision impaired. The development's amenities will include a first-floor community room with computer stations, resident services office, manager’s office, a case manager’s office, and a community garden.  
  
Funding Sources

On June 21, 2022, the Board of Supervisors (Board) approved the allocation of $2,636,280 of FY 2022/23 HOME Funds as part of the FY 2022/23 HOME Program Annual Action Plan, to Satellite Affordable Housing Associates (SAHA) for the Pinole Housing development (formerly known as 811 San Pablo). SAHA has formed a limited partnership, Pinole Housing, L.P, to develop and own this development.  
  
The HOME funds will be provided by the County in the form of a 55-year residual receipts loan. The HOME loan will bear a three percent simple interest rate. There may be some loan repayments payments if the project has a surplus cash flow (surplus cash is also known as "residual receipts") during the operation of the development. Affordability and use restrictions are incorporated into the HOME loan documents. The County will have a HOME Regulatory Agreement with a 20-year HOME term of affordability, as well as a County Regulatory Agreement that will maintain affordability of the units following the expiration of the HOME term for a total term of 55 years.

  
Additional non-County financing for the development includes a City of Pinole loan, State Infill Infrastructure Grant, State Veterans Housing and Homelessness Prevention Program loan, a private construction loan, and 4% tax credits.  
  
Through this action, the Director of Conservation and Development, or designee, is authorized to execute subordination agreements and estoppels that are consistent with the subordination terms in the Loan Agreement.  
  
Due to the high construction costs and limited revenue from the restricted rents, the total amount of the financing provided to the project will likely exceed the value of the completed project. Even though the proposed equity investment from low-income housing tax credits is substantial compared to the amount of long-term debt, the partnership agreement will have numerous safeguards of the investor's equity. These safeguards essentially subordinate the County’s debt to the investor’s equity. Therefore, the County HOME funds may not be fully secured through the value of the property. However, the HOME program funds are granted, not loaned, to the County, so the County general fund will not have any exposure as a result of this loan. The County structures its HOME investments as loans rather than grants in order to maintain involvement in the financial team in the event the project experiences any serious issues over the 55-year term.  
  
Environmental Review

National Environmental Policy Act (NEPA): HOME projects are subject to NEPA and 24 CFR Part 58 environmental regulations. The NEPA review for this project is complete and the required mitigation actions are included in the loan agreement. The County, as a responsible agency under CEQA, concurs with the City of Pinole’s CEQA determination and will file the appropriate notice with the Recorder's Office.