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More than a decade after it first approached Crescent City officials, DANCO Communities expected to finalize the purchase of the former El Patio Motel site Wednesday and start construction on a new housing project next week.

When it’s finished, Harbor Point Apartments at 655 H Street in Crescent City will house 27 units, 26 of which will be affordable housing for low-income seniors. Construction is expected to be finished by October 2025, Project Manager McKenzie Dibble told councilors on Monday.

Noting that they became aware of this project in 2013, councilors praised DANCO for sticking with it.

“Everybody seemed to try everything to make this happen, but the reality is nobody ever said, ‘We’re done,’” Crescent City Mayor Blake Inscore said. “Now we’re here and if construction starts in a week, then I think that says something about the fact that you just don’t give up on something you know is good for your community.”

Inscore and his colleagues authorized City Manager Eric Wier to sign an Estoppel certificate, amendment and assignment and assumption agreement. This updates an earlier agreement to DANCO’s new limited partnership.

Councilors approved financing documents for a $910,000 carry back loan from the city to DANCO, which represents the $160,000 purchase price and $750,000 in developer fees. According to City Attorney Martha Rice, DANCO’s limited partnership, Crescent City H Street LLP will pay that loan back to the city over 55 years at 3 percent interest.

Councilors also authorized Wier to sign a promissory note and a deed of trust, which finalizes the terms and serves as security for a $4.75 million Competitive Permanent Local Housing Allocation (CPLHA) loan.

According to Rice, the $4.75 million loan has the same terms as the $910,000 carry back loan.

“This is a state grant to the city and we are making a loan to DANCO,” she said. “It will not cause us any cash flow issues because when the loan closes we’ll get the funding. We’re not going to have to front any money.”

Harbor Point Apartments is one of a handful of housing projects in various stages of development within Crescent City limits. The Crescent City Redevelopment Agency acquired the property the apartments will sit on in 2011 after the former El Patio Motel fell into disrepair.

When California dissolved redevelopment agencies statewide in 2012, Crescent City assumed control of the parcel with the goal of developing affordable housing.

Crescent City entered in its first disposition and development agreement with DANCO in 2015 and in 2017 as the Housing Authority committed 26 project-based vouchers to the development.

Under the terms of the original agreement, DANCO was responsible for building the housing project if it received financing. However, the company was unsuccessful at applying for tax credits.

Five years later, Crescent City and DANCO received $5 million state CPLHA grant dollars and the Housing Authority reissued the 26 housing vouchers. In fall 2023, DANCO received the approval it needed for tax credit financing.

Harbor Point Apartments will be rented to seniors who are at or below 60 percent of the area median income for Del Norte County.
Earlier on Monday, the City Council, acting as the Housing Authority, approved an agreement to housing assistance payments (AHAP) contract with Crescent City H Street LP, DANCO’s limited partnership.

Under this agreement, the Crescent City Housing Authority is committed to offering assistance to Harbor Point Apartments residents, Director Megan Miller said. It’s also a necessary step for DANCO to conclude the escrow process.

“We desperately need more housing in our community, I think everybody can agree to that, especially [for] seniors,” she said. “They’re in a vulnerable population, so I think this is a good option to give them brand new construction housing that they can afford.”

Another housing project, Synergy Community Development Corporation’s Battery Point Apartments, is being developed for Gary and E streets in Crescent City. That project will offer 40 units for seniors and should be ready for occupancy in January, Wier said.

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