Jessica Cejnar Andrews / Tuesday, Oct. 31 @ 4:30 p.m. / Community
Crescent City Loans RDA Housing Dollars to Developer Rehabbing Valhalla Apartments
Valhalla Townhomes in Crescent City.
Crescent City is tapping into Redevelopment Agency housing dollars to loan $300,000 to a Southern California-based developer seeking to rehab a 45-unit apartment building for low-income and workforce housing.
Raymond Junior, founder and CEO of GreenShoots Communities LLC, said he’s preparing to make $3.5 million in improvements to Valhalla Townhomes at 911 Pacific Avenue once he acquires the complex from Synergy Development.
Improvements include new roof and gutters, parking lot and sidewalk repairs, replacing cabinets, counters, appliances, interior lighting, heaters and hot water heaters as well as adding mobility and communication aids for those who need them, according to the city’s staff report.
“Twenty-five of the units will be restricted to families earning 50 percent of the area median income and 19 units will be restricted to families making 80 percent or less than the area median income,” Junior told Councilors at a special meeting Monday. “I think at the end of the renovation project we’re going to have a very nice — not addition to the community because it already sits there — it’ll be an upgrade to what is there currently.”
GreenShoots answered a request for proposals from the city in the spring to receive non-competitive Permanent Local Housing Allocation Program dollars. But because Crescent City did not have a Housing Element that was in “substantial compliance” with the California Department of Housing and Community Development, it lost out on those dollars, according to City Attorney Martha Rice.
That’s when city staff realized that it had $300,000 in a low- and moderate-income housing fund that is accumulating following the dissolution of the Crescent City Redevelopment Agency in 2012, Rice said. After California dissolved RDAs statewide, Crescent City retained the agency’s assets and affordable housing functions.
According to Rice, those low- and moderate-income housing fund dollars can only be used toward developing and preserving affordable housing.
City Councilors on Monday approved GreenShoots’ proposal for a 20-year $300,000 loan that would be accruing three percent interest annually with payments due from 50 percent of the rents residents pay, according to Rice.
The City Attorney added that GreenShoots is also pursuing $1.5 million in HOME Program dollars next spring as well as Low-income Housing Tax Credits. If the developer receives funds from either of those programs, he will pay off the $300,000 loan from the city, according to Rice.
Though Councilors approved extending the loan to Junior and GreenShoots on Monday, they have yet to sign off on the actual loan documentation, according to Rice. They will be expected to that at a regular meeting in November.
“This is the first step of what would be a two-step process,” Rice said.
The city’s $300,000 loan to GreenShoots isn’t a “pre-development loan,” Junior told Councilors. That funding will kick either “simultaneously-with” or after closing the purchase with Synergy Developments, he said.
According to City Manager Eric Wier, once GreenShoots acquires Valhalla Townhomes, Synergy will be moving forward on its 162-unit senior housing development, Battery Point Apartments.
Wier said GreenShoots has already submitted its plans to the city and paid those fees.
Meanwhile, Crescent City has been working with Housing and Community Development on its 6th Cycle Housing Element since September 2022, Wier told the Wild Rivers Outpost on Tuesday.
This document provides an assessment of the current and future housing needs projected through 2030. According to the city’s Housing Element, which it prepared with help from SHN Consulting, Crescent City needs to plan for 189 units between 2022 and 2030.
Though DANCO Community Partners won a $5 million Permanent Local Housing Allocation grant for its Harbor Point Senior Housing Project at 655 H Street in Crescent City, the city itself lost out on non-competitive PLHA dollars because its Housing Element wasn’t yet approved by the state, Wier said. This was frustrating, he said, because the city had modeled its Housing Element on those from other rural communities that had been approved.
“We had projects in the pipeline that could have utilized these funding (sources) to build housing,” Wier said. “Instead they were in jeopardy because we didn’t have a plan for how to build housing.”
On Monday, Wier told Councilors that he met with HCD staff and is hopeful the state would approve the Housing Element by Nov. 13.
Along with receiving its $5 million PLHA grant, DANCO stands a good chance of receiving tax credits, which means Harbor Point Senior Apartments will be fully funded, Wier said. He said he anticipates that project to go before the Crescent City Planning Commission on Nov. 9.