Fremont City
California

Staff Report
3693

ISLANDER MOTEL TEMPORARY SHELTER – Request For City Council To 1) Authorize the City Manager To Execute an Agreement With RCD For the Implementation Of a Temporary Shelter Occupying 20 Or More Existing Units At the Islander Motel Located At 4101 Mowry Avenue; and 2) appropriate $647,116 in State HEAP and local funds to implement the Temporary Shelter Plan.

Information

Department:Human Services DepartmentSponsors:
Category:Agreements and Contracts

Attachments

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Item Discussion

Executive Summary:  Staff is recommending that the City Council 1) authorize the City Manager to enter into an agreement with Resources for Community Development (“RCD”) for the implementation of a temporary shelter plan that would provide temporary shelter for 20 or more homeless individuals and/or small families within the existing Islander Motel; and 2) appropriate up to $647,116 in State and local funding for the temporary shelter plan.

Body

BACKGROUND: Like other communities in Alameda County, Fremont is experiencing a growing homeless population and has declared a “Shelter Crisis.”  Council has recently approved funding for Resources for Community Development, (RCD) to help convert the Islander Motel into affordable housing (more detail below). Additional time is needed to secure Tax Credit financing and other funding sources to construct the project, and in the interim there remain vacant units in the hotel.

 

Staff believes that the vacant units at the Islander Motel offer an unusual and timely opportunity to provide temporary shelter to homeless individuals and small families up until the time that the building must be vacated for renovation/reconstruction. Accordingly, staff has worked with RCD and its property management partner, the John Stewart Company, to develop a plan to utilize 20 or more units at the Islander Motel to provide temporary shelter and supportive services to homeless individuals and small families at the existing building until construction of the permanent affordable housing project gets underway, which could be 12 to 18 months. The timing of the permanent affordable housing project is discussed below.

 

128-Unit Islander Project: In November 2018, Council approved entitlements for the Islander project to be developed by RCD, which includes the conversion of the Islander Motel building and construction of a new apartment building on two vacant abutting parcels to provide a total of 128 units of affordable permanent housing on approximately two acres of land. The new affordable housing would be accessible to households earning less than 60% of area median income (AMI) with 20% of the units at no more than 20% of AMI, including special needs housing for individuals with disabilities and formerly homeless households. The City Council has appropriated a total of approximately $12.3 million of local affordable housing and CBDG funds to the project for the acquisition of land and predevelopment costs.

 

RCD is currently seeking additional funding from outside sources to construct the project. As part of its financing plan, RCD is pursuing tax credit financing and Multifamily Housing Program (MHP) funds from the state. Given the timing of application and award deadlines for these funding sources, the soonest RCD could begin construction would be March 2020. However, if RCD is unable to secure its planned financing then construction could be further delayed as late as November 2020.

 

The Islander Motel has 70 units. RCD has offered former regular customers at the Islander Motel the option of continuing to stay there on a month-to-month basis until they are given notice that construction will commence. Currently, about 41 of the units at the Islander Motel are occupied by former Islander customers who have remained at the site. Rental revenue is being used by RCD to offset carrying costs and to support the upcoming development of affordable housing. About 29 units are currently vacant. 

 

At the time RCD informed staff that there were vacancies, RCD also indicated that they did not intend to fill the vacant units, since the concern was that new tenants may have to move out in a short time due to the anticipated construction schedule. RCD, however, was receptive to the City’s proposal of collaborating on a temporary shelter plan whereby the City would refer homeless tenants to RCD to use vacant units on a temporary basis.

 

State HEAP Funding: In June 2018, the State approved $500 million in one-time Homeless Emergency Aid Program (HEAP) funding to assist local jurisdictions in addressing their homeless challenges. As required by the State to receive HEAP funding, the City adopted Resolution No. 2018-60 declaring a shelter crisis in September 2018.

 

In December 2018, Alameda County recommended specific HEAP funding allocations to the State for the cities within its jurisdictions, including $2,078,880.00 for Fremont. The State is expected to approve the County’s recommended allocation by the end of February 2019.

 

In February 2019, Alameda County staff confirmed that the City’s proposed temporary shelter plan at the Islander Motel was eligible for HEAP funding reimbursement. However, per HEAP guidelines, the County may not expend HEAP funds prior to receiving them from the State, even if funds are expended for an eligible use under the statute. Retroactive payments are prohibited. Alameda County staff anticipates receiving HEAP funding from the State by the first week of April 2019.

 

Based on these assumptions, staff anticipates the City will incur approximately $34,879 in non-reimbursable expenses during the first month the temporary shelter plan is in place, the period prior to the County receiving its HEAP fund allocation from the State.

 

The County is requiring cities to contractually obligate 50 percent of their HEAP funds by January 1, 2020 and the State require full expenditure of funds by June 30, 2021.

 

DISCUSSION/ANALYSIS:

 

Proposed Temporary Shelter Plan

In light of the shelter crisis being faced by Fremont and HEAP’s timeliness requirements, staff is recommending that the City Council approve an agreement with RCD for a temporary shelter plan. Staff is moving this plan forward as quickly as possible to maximize the number of bed-nights that can be provided to those experiencing homelessness, and to coordinate with the closure of the City’s Winter shelter on March 15, 2019, as some participants may be able to transition into this new sheltering opportunity. If approved, RCD and their property manager, John Stewart Company, will make 20 or more vacant units available at the Islander Motel to City to referred homeless individuals and/or small families (e.g., a single parent with two children or two adults with a child).

 

Housing Navigation and support services will be provided to persons selected for placement in this program. It is anticipated that half of the participants will be selected through the Coordinated Entry System (CES) which identifies the 125 most vulnerable homeless in the Tri-City area on a By-Name List. These participants will have already been assigned to housing navigators from Abode Services, who will continue to work with them. The remainder of participants will be selected through the Human Services Department from homeless participants at the Winter Shelter, or from referrals from other City Departments who have contact with unhoused residents. Support Services for these participants will be provided through the Human Services Department. It is proposed that Human Service and Abode service staff will work collaboratively together and with the John Stewart on site property manager, to ensure participant needs are met and that they can fully benefit from this period of housing stability.

 

If the City Council approves the request, the City will enter into an agreement with RCD that will include the terms for the temporary shelter plan. The following summary highlights the major terms of an agreement staff is finalizing with RCD:

 

1.     The City will select and refer all potential tenants to RCD for units covered by the executed agreement based on mutually agreed upon tenant selection criteria.

 

2.     Upon a City-referred applicant entering into a lease with RCD, the City agrees to pay RCD $1,000/month per unit occupied (initially 20 units will be made available).

 

3.     The City will determine the amount of rent charged to the tenant for each unit collected by RCD/John Stewart Company to be transmitted to City for City’s use.

 

4.     The City-determined rent will be based upon the tenant’s ability to pay rent (e.g., no more than 30% of the individuals or families income).

 

5.     City Human Services staff in collaboration with Abode will provide and social service linkages and supports to individuals and families referred for participation in this program.

 

6.     RCD and its property manager agent, John Stewart Company, will be responsible for carry out all the leasing and property management activities (including collecting rents determined by and passed through to City), enforcing the tenant leases, and providing tenants all notices.

 

7.     RCD will be responsible for all repairs, maintenance, and upkeep of property to ensure that all units are habitable.

 

8.     If additional units become available, the City has the ability to rent out additional units in accordance with agreed upon terms and conditions of the executed agreement.

 

9.     The term of the executed agreement shall be not less than 8-10 months and can be mutually extended.

 

FISCAL IMPACT:  Staff estimates the cost of the proposed temporary shelter plan will not exceed $647,116 for a period of up to 18 months, assuming the outside construction start date is delayed to no later than November 2020. Staff anticipates that HEAP funds will be available as soon as the County receives the State funds, with an estimated date of April 1, 2019.

 

Based on these assumptions, staff is recommending the City Council appropriate 1) $34,879 in City Affordable Housing funds (Fund 112) to cover the first month’s operating costs and expenses; and 2) $612,237 in State HEAP funding immediately upon receipt to operate the temporary shelter plan for up to 17 additional months or until construction of the Islander project commences, whichever occurs first.

 

Temporary Shelter Plan Sources and Uses

 

 

March

2019

April 2019 -

Aug. 2020

18-Month

Budget

Funding Source:

City

Affordable Housing

State

HEAP

Allocation

 

Unit Subsidy:

23,000

473,800

$496,800

Support Services:

11,879

138,437

$150,316

Total:

   34,879

612,237

$647,116

 

ENVIRONMENTAL REVIEW:  The proposed temporary shelter plan is not subject to the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines 15061 in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

Document Comments

RECOMMENDATIONS:

1.              Find pursuant to CEQA Guidelines Section 15061 that the proposed activity is not subject to CEQA and that this action reflects the independent judgment of the City of Fremont.

2.              Authorize the City Manager or his designee to execute an agreement with Resources for Community Development for the implementation of a temporary shelter for 20 or more existing units at the Islander Motel located at 4101 Mowry Avenue.

3.              Authorize the City Manager or his designee to appropriate up to $647,116 to implement the proposed temporary shelter plan at the Islander Motel, including $34,879 in City Affordable Housing Funds (Fund 112) and $612,237 in HEAP funds.