HomeMy WebLinkAbout2023-05-16; City Council; ; $2.2 Million Forgivable Loan from Housing Funds to Catholic Charities Diocese of San Diego for the Expansion of La Posada de Guadalupe Homeless ShelterCA Review __RK__
Meeting Date: May 16, 2023
To: Mayor and City Council
From: Scott Chadwick, City Manager
Staff Contact: Mandy Mills, Housing & Homeless Services Director
mandy.mills@carlsbadca.gov, 442-339-2907
Subject: $2.2 Million Forgivable Loan from Housing Funds to Catholic Charities
Diocese of San Diego for the Expansion of La Posada de Guadalupe
Homeless Shelter
District: 2
Recommended Action
Adopt a resolution authorizing a commitment of a $2,200,000 forgivable loan ($1,470,621 from
the City of Carlsbad Housing Trust Fund and $729,379 from the Permanent Local Housing
Allocation Fund) to Catholic Charities Diocese of San Diego for the expansion of La Posada de
Guadalupe homeless shelter.
Executive Summary
Catholic Charities Diocese of San Diego operates the La Posada de Guadalupe homeless shelter,
the only shelter in the City of Carlsbad for people experiencing homelessness. The 100-bed
shelter provides emergency and transitional shelter services to homeless men, including a
portion reserved for farmworkers. The City Council has identified the expansion of the shelter
to serve more individuals experiencing homelessness, including space for women and families,
as a priority project in both the City Council adopted Carlsbad Strategic Plan (2023-2027) and
the Homelessness Action Plan.
City staff are recommending the city make a commitment to help support the project with a
$2,200,000 forgivable loan, with funds from the city’s Housing Trust Fund and the state
Permanent Local Housing Allocation Fund, to help bring the project closer to construction and
make it eligible for other matching funds.
City Council Policy No. 90 requires that the City Council make final decisions on such financial
assistance from the Housing Trust Fund.
Explanation & Analysis
Background
La Posada, located at 2478 Impala Drive, first opened in 1992 as a cluster of temporary
buildings as a result of concerns about migrant laborers living in sensitive habitat open spaces
in the city. At that time, the city donated a surplus water district office trailer for shelter
May 16, 2023 Item #9 Page 1 of 10
purposes and contributed $5,300 from a General Fund Contingency Account to cover costs of
all inspection, permit and plan check fees, and the first year’s Mello-Roos tax assessment on the
property. In 1997, the city financially assisted Catholic Charities with $350,000 from the federal
Community Development Block Grant program and the city’s Housing Trust Fund for
predevelopment expenses and to purchase the land.
Construction of the current permanent facility was completed in 2013. Because of the priority
at the time to shelter farmworkers, the city contributed $2 million collected from the
Agricultural Conversion Mitigation Fee, which is, collected when certain coastal agricultural
areas are developed, and the State of California contributed Farmworker Housing Grant funding
to provide 50 beds specifically for farmworkers in addition to 50 beds for homeless men (which
may also include farmworkers).
The existing campus consists of three main buildings:
• The kitchen and dining hall
• The north dormitory with a congregate setting for approximately 50 homeless men
• The south dormitory, which has some staff offices and semi-private sleeping quarters in
a congregate setting for about 50 male farmworkers.
Need
The San Diego region has consistently ranked among the regions in the nation with the highest
numbers of people experiencing homelessness. According to the 2022 Point in Time Count
there were a minimum of 8,427 people experiencing homelessness on a single night in February
2022, with almost half living unsheltered. Of those, 1,442 individuals were in North County. The
2022 Point in Time Count identified 75 unsheltered individuals experiencing homelessness in
Carlsbad.
The 2022 Housing Inventory Count shows limited shelter and housing options within North
County to meet the needs of the North County homeless population. There are only 167 shelter
beds in North County. Of these, 26 beds are only available in the winter through a church
shelter network. This leaves only 141 year-round beds for 1,442 people experiencing
homelessness in North County, with 50 of these beds restricted to single males at La Posada.
Since 2015 the number of permanent shelter beds for the homeless in North County has not
significantly increased.
The city has a state-certified 2021-2029 Housing Element in its General Plan. This is an eight-
year plan that describes how the city will accommodate Carlsbad’s housing needs for residents
at all income levels and those with specialized needs. Expanding the availability of shelter beds
to a number that comes closer to matching the unsheltered population number would meet a
significant need identified in the Housing Element.
Recent support for expansion
The City of Carlsbad has been a collaborative partner with Catholic Charities since La Posada’s
inception. As noted above the City Council has identified expanding La Posada as a priority
project in both the City Council adopted Carlsbad Strategic Plan 2023-2027 and the
Homelessness Action Plan. City staff have been working with Catholic Charities toward that
goal. The City of Carlsbad previously granted approximately $183,000 in Community
May 16, 2023 Item #9 Page 2 of 10
Development Block Grant funding to Catholic Charities to pay for architectural and engineering
costs to examine the feasibility of expanding the overall building square footage.
Proposed Project
The conceptual phase of the predevelopment work is now complete. A conceptual architectural
rendering is attached as Exhibit 2. Two buildings, the kitchen/dining hall and the north dorm,
will increase slightly in square footage and have interior improvements to accommodate
occupancy needs. The south dorm is proposed to be demolished and reconstructed with a
three-story building.
The proposed project has two potential phases:
• The first phase would consist of improvements to the single-story buildings on the north
side and constructing the south building to three stories, but only completing tenant
improvements on the first two floors. Phase one could potentially provide shelter beds
for 100 men and 45 beds for women and families (145 total people). The third story
could be built as a cold or unfinished shell to contain costs in the first phase. The
inclusion of all the tenant improvements on the third floor could be made in a later
phase upon funding availability.
• Phase two could potentially add another 54 beds for men, for a total occupancy of 199
people.
The architect on the project has recently submitted a preliminary review application to the
Community Development Department. The application provides an opportunity to identify
potential project issues before a formal application is submitted. This will help reduce permit
review times and streamline project processing once the application is officially filed. Recent
amendments to the city’s municipal code to meet state law will allow La Posada to expand by
right in the current zone and only a grading and/or building permit will be necessary.1
After any issues are worked out through the preliminary review process, the design team will
be able to complete construction drawings to submit a request for a building permit. At that
point, the team will be able to identify a firmer development budget based on the current
pricing. Based on the preliminary design and current materials and labor costs the project cost
is currently estimated at $11 to $12 million, depending on the level of improvements on the
third floor.
Project funding
City staff have been actively seeking outside funding alternatives to reduce the amount of
capital needed to be raised so that project construction can start shortly after the project is
granted its building permit:
• The city applied for and was awarded $2 million from the County of San Diego, as
described below.
1 A 'use by right' is a use that is permitted in a zoning district and therefore not subject to special review and
approval by a local government.
May 16, 2023 Item #9 Page 3 of 10
• The city also submitted the project to Carlsbad’s state legislators as FY 2023-24 state
budget priority funding request. This funding is not expected this year, but staff will
continue to seek it in future years.
• City staff are also proposing a matching grant application to the State of California for La
Posada. This request is described below and is also on this agenda as a separate item for
consideration by the City Council.
Catholic Charities will still need to mount a significant capital campaign to raise enough funding
before it could begin construction on the project.
If all funding sources below are successfully received for the project, the City of Carlsbad will
have assisted the expansion of La Posada with $5.25 million. Of that amount, $3.05 million
would be funding from other agencies. The remaining $2.2 million would come from the city’s
Housing Trust Fund and a grant from the state’s Permanent Local Housing Allocation program,
not from the city’s General Fund.
Staff are recommending this funding commitment to allow the project to be eligible for state
matching grant funds and to solidify a fundraising goal for Catholic Charities’ capital campaign.
City staff are recommending a combination of funding sources to contribute to the project:
Funder Funding Source Amount Status
County of San Diego
County of San Diego Capital
Emergency Housing
Solutions Grant
$2,000,000 Approved
City of Carlsbad
(received from state)
Permanent Local Housing
Allocation program $729,379 Recommended
City of Carlsbad Housing Trust fund $1,470,621 Recommended
State of California State Local Housing Trust
Fund grant $1,050,000
Recommended in
separate agenda
item
Potential funding $5,250,000
County of San Diego Capital Emergency Housing Solutions Grant - The city has been awarded a
grant of $2 million from the County of San Diego for the expansion of La Posada through the
Capital Emergency Housing Solutions Grant program. The funding is restricted to capital
expenses. The City Council approved acceptance of the funds as well as authorized an
agreement with Catholic Charities Diocese of San Diego in February 2023. This funding will be
provided from the City of Carlsbad as a pass-through agency to Catholic Charities.
Permanent Local Housing Allocation - This state program was established in 2017 to provide
funding for affordable housing. It is funded by a $75 fee levied on certain real-estate
transactions and is expected to generate an ongoing revenue source for jurisdictions
throughout the state. Annual allocations to the city will vary depending on the number of
May 16, 2023 Item #9 Page 4 of 10
annual real estate transactions, but the city is anticipating receiving on-going revenue of
approximately $375,000 annually. On Oct. 18, 2022, the Carlsbad City Council approved the
PLHA Program Funding Plan and Application for Funds, which allocates all funding to the eligible
activity of assisting persons who are experiencing homelessness or at-risk of becoming
homeless. City staff are recommending the city commit approximately two years of PLHA
funding, or $729,379, toward the capital needs of La Posada.
Housing Trust Fund - This fund receives fees that all residential developments greater than six
units must pay the city to satisfy their obligation to provide affordable housing, as well as some
funding from other sources. The funds are to be applied only to the affordable housing needs of
lower-income households. City Council Policy No. 90 - Administration of the Housing Trust Fund
identifies six affordable housing priorities in descending order. The fourth priority is homelessness
programs, which include short term shelter. Since this fund is intended to increase the supply of
housing, city staff find that this funding for the capital needs of expanding shelter is appropriate.
As of June 2022, the Housing Trust Fund had an available fund balance of $10,680,198. City staff
are recommending the city commit $1,470,621 from the Housing Trust Fund toward the capital
needs of La Posada.
State Local Housing Trust Fund Local Housing Trust Fund grant - The state Housing and
Community Development Department has made approximately $53 million from the Local
Housing Trust Fund to provide matching funds to eligible applicants for the creation of
affordable housing and homeless shelters. The City of Carlsbad is an eligible applicant based on
several affordable housing and emergency shelter projects that have received, or are being
considered for, local funding investments from the city’s Housing Trust Fund.
The City Council is being asked in another item on this City Council agenda to authorize a Local
Housing Trust Fund grant application and include La Posada on the list of eligible projects to
receive a state matching grant. If the City Council votes affirmatively to provide $1,470,621
from the city’s Housing Trust Fund to La Posada, the project can be included in the list of
eligible projects in the matching grant application to the state. The city would be requesting
$1,050,000 in state funds to match the $1.47 million in funding the city is considering
contributing from the HTF to the project.
The matching funds requested from the state are only based on the city’s contribution from its
Housing Trust Fund. If that contribution is not made at this time, the La Posada expansion
project will not be eligible to be on the list of projects for state matching funds. The application
period for these state funds is only once a year. If the City Council declines to approve a
Housing Trust Fund contribution to La Posada at this time, the potential to be competitive for
the remaining state Local Housing Trust Fund funding is greatly diminished.
Additional review
City Council Policy No. 90 requires that the City Council make final decisions on Housing Trust
Fund financial assistance after review and recommendation by the Housing Policy Team and the
Housing Commission. The city’s Housing Policy Team, composed of staff representatives from
Finance, Community Development, Housing & Homeless Services, and the City Attorney’s
Office, recommended the Housing Trust Fund commitment on May 1, 2023.
May 16, 2023 Item #9 Page 5 of 10
The Housing Commission was scheduled to review the financial request for a recommendation
to the City Council on May. 11, 2023. Its recommendation was not complete by the date this
report was published. City staff will report on the Housing Commission’s recommendation in
our presentation to the City Council. (Staff were unable to schedule the agenda item for review
and recommendation by the Housing Commission in time to include its final approved
resolution because of the state’s grant application deadline of May 17, 2023.)
Fiscal Analysis
Staff are requesting that the City Council authorize the reservation of $1,470,621 from the
Housing Trust Fund and $729,379 from the city’s Permanent Local Housing Allocation fund. If
the City Council approves the funding recommendation, the funding to the project will be
allocated for a period up to 24 months. As of June 2022, the Housing Trust Fund, which is
restricted to affordable housing and homelessness-related projects, programs and services, had
an available fund balance of $10,680,198. The Permanent Local Housing Allocation fund is a
new funding source for the city. This amount is available in the first allocation from the state,
which is expected to be received in the early part of fiscal year 2023-24.
Options
Staff provide the following options for the City Council’s consideration:
1. Approve the loan commitment of $2,200,000 as presented.
Pros
• This option allows for the La Posada project to be included in the list of eligible
projects for State Local Housing Trust Fund matching grant funds.
• This allocation of city funds reduces the balance of funding needed to complete
the project.
• The city’s Housing Trust Fund has a sufficient balance to cover this project as well
as pending application requests for assistance.
Cons
• None identified.
2. Do not approve funding for this project.
Pros
• Maintains the current balance of the Housing Trust Fund.
Cons
• The La Posada expansion project would not be eligible to receive the state Local
Housing Trust Fund matching grant funds.
• Significantly increases the funding gap for the project, jeopardizing its viability.
Catholic Charities will have to evaluate and restructure the project for an
alternate funding plan.
Next Steps
If Option 1 is approved, staff will prepare a letter of intent to Catholic Charities, outlining the
funding commitment upon successful award of other funding necessary to build the project.
The La Posada expansion project is in the early stages and requires additional permit approvals
and funding. The timeline for potential expansion is dependent on a successful capital
May 16, 2023 Item #9 Page 6 of 10
fundraising campaign, and city staff are unable to estimate when this can be accomplished. The
goal is to begin construction in 2024. City staff will periodically update the City Council on the
progress of the project and other funding recommendations and awards.
Environmental Evaluation
La Posada is what the state refers to as a low barrier housing navigation center, a service-
enriched shelter that provides temporary living facilities while focusing on moving people into
permanent housing. That makes its expansion a ministerial project, meaning the city
cannot impose conditions or exercise discretionary approval over the project if certain
operational standards are met. The project is therefore exempt from the California
Environmental Quality Act, in accordance with California Public Resources Code Section 15268.
Exhibits
1. City Council resolution
2. Architectural rendering
May 16, 2023 Item #9 Page 7 of 10
RESOLUTION NO. 2023-132
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING A COMMITMENT OF A $2,200,000 FORGIVABLE
LOAN ($1,470,621 FROM THE CITY OF CARLSBAD HOUSING TRUST FUND
AND $729,379 FROM THE PERMANENT LOCAL HOUSING ALLOCATION
FUND) TO CATHOLIC CHARITIES DIOCESE OF SAN DIEGO FOR THE
EXPANSION OF LA POSADA DE GUADALUPE HOMELESS SHELTER
WHEREAS, Catholic Charities Diocese of San Diego (Catholic Charities) owns and operates the
city's only homeless shelter, La Posada de Guadalupe (La Posada), located at 2478 Impala Drive,
currently serving approximately 100 men; and
WHEREAS, Catholic Charities is interested in expanding the shelter to increase capacity to serve
more people, particularly women and families; and
WHEREAS, expanding La Posada is consistent with the goals and objectives of the City of
Carlsbad's Housing Element, and the General Plan; and
WHEREAS, expanding La Posada is identified as a priority project in the City Council adopted
Carlsbad Strategic Plan -2023-2027; and
WHEREAS, expanding La Posada is identified as a priority in the Homelessness Action Plan
approved by the City Council; and
WHEREAS, the funding assistance was submitted to the City of Carlsbad's Housing Commission
for review and consideration at their public meeting on May 11, 2023, on which date said Commission
recommended that the City Council approve the financial assistance in the amount of $2,200,000; and
WHEREAS, sufficient funds will be available in the Housing Trust Fund and in the Permanent
Local Housing Allocation Fund; and
WHEREAS, expansion of emergency shelter is an eligible expense for both the Housing Trust
Fund and the Permanent Local Housing Allocation Fund.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1.That the above recitations are true and correct.
2.That the financial assistance to La Posada is consistent with the goals and objectives of
the City of Carlsbad's Housing Element, General Plan, City Council adopted Carlsbad
Strategic Plan -2023-2027 and the Homelessness Action Plan.
Exhibit 1
May 16, 2023 Item #9 Page 8 of 10
3.That financial assistance will assist Catholic Charities in expanding the La Posada shelter
to increase capacity to serve an additional 99 people (45 women and/or families in the
first phase). The project, therefore, can effectively serve to meet the city's housing
needs and priorities expressed in the Housing Element.
4.That the Deputy City Manager, Administrative Services, is authorized to assign and
appropriate funds to provide a cash assistance loan in the combined amount of
$2,200,000 ($1,470,621 from the Housing Trust Fund and $729,379 from Permanent
Local Housing Allocation) to Catholic Charities for the La Posada expansion project once
all other and necessary project funding is secured.
5.That the City Council authorizes the City Manager, or designee, to prepare and execute
all documents related to the city loan commitment, subject to review and approval
by the City Attorney.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 16th day of May, 2023, by the following vote, to wit:
AYES:
NAYS:
ABSTAIN:
ABSENT:
Blackburn, Bhat-Patel, Acosta, Luna.
Burkholder.
None.
None.
KEITH BLACKBURN, Mayor
� SHERRY FREISINGER, City Clerk
(SEAL)
May 16, 2023 Item #9 Page 9 of 10
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La Posada de Guadalupe
3D Rendering
Preliminary Planning Application
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~ Catholic
Charities
DIOCESE OF SAN DIEGO
SG DA ARCHITECTURE rK AND PLANNING
fl
Expansion of La Posada de Guadalupe
Homeless Shelter
Christian Gutierrez, Housing Services Manager
Housing & Homeless Services
May 16, 2023
{ City of
Carlsbad
TODAY’S PRESENTATION
•Background
•La Posada Expansion
•Housing Trust Fund & Permanent Local Housing Allocation
•Proposed Project
•Staff Recommendation
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
Background: La Posada Shelter
La Posada Expansion:
•Carlsbad Strategic Plan•City of Carlsbad 2021-2029 Housing Element •Homelessness Action Plan
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
La Posada Expansion
Progress:
•City granted $183,000 in CDBG funding
to Catholic Charities for architectural and engineering•San Diego County funding grant award•Pre-development application
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
Expansion Fiscal Analysis:
•Permanent Local Housing Allocation
(PLHA)
•Housing Trust Fund•County of San Diego Capital Emergency Housing Solutions Grant
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
Housing Trust Fund
Purpose: Allocation for housing needs of lower-
income households
Funding Sources:
•Inclusionary housing in-lieu fees
•Affordable housing credits fees collected
•Other revenue streams:
•Interest from loans
•Housing impact fees
•Interest earned
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
Permanent Local Housing Allocation
(PLHA)
•California's PLHA program was established to
provide funding for affordable housing.
•The PLHA program is expected to generate ongoing
revenue for jurisdictions across the state.
•The funding plan allocates all funding to assist
persons experiencing homelessness or at-risk of
becoming homeless.
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
City Initiated Funding Sources:
Funder Funding Source Amount Status
County of San Diego
County of San Diego Capital
Emergency Housing
Solutions Grant
$2,000,000 Approved
City of Carlsbad
(received from state)
Permanent Local Housing
Allocation program $729,379 Recommended
City of Carlsbad Housing Trust fund $1,470,621 Recommended
State of California State Local Housing Trust
Fund grant $1,050,000
Recommended in
separate agenda
item
Potential funding $5,250,000
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
Proposed Project:
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
Next Steps
•State Funding application submittal
•Catholic Charities board
•Explore potential sources such as grants,
sponsorships, and partnerships
•City staff presentation of the financing
package
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad
Staff Recommendation
•Adopt the Resolution approving the commitment
of $2,200,000 for a forgivable loan to Catholic
Charities Diocese of San Diego for the expansion
of La Posada de Guadalupe homeless shelter
ITEM NO.9: LA POSADA EXPANSION
{ City of
Carlsbad