(January 6)  The county of San Bernardino is on the verge of leaping into the funding guarantee gap that has come about because of the city of San Bernardino’s financially disadvantaged state, and serve as the guarantor for a federally subsidized improvement project at the Val 9 Apartments in San Bernardino.
On Tuesday, the board of supervisors consiered but held off on a recommendation by Dena Fuentes, the director of the county’s community development and housing division, to approve a “sub-recipient revenue agreement” between the city of San Bernardino and the county of San Bernardino in the amount of $834,999, pursuant to the federal HOME Investment Partnership Program.
Essentially, Fuentes called upon the county to put up an $834,999 loan to the developer that otherwise would have been provided by the city.
“A HOME Investment Partnership Program Sub-Recipient Agreement is a revenue agreement between the city of San Bernardino and the county of San Bernardino,” said Fuentes. “Because the city is in the process of restructuring its financial position, the United States Department of Housing and Urban Development (HUD) asked the county to assist the city in investing its Fiscal Year 14-15 HOME funds towards a project that meets HUD’s national objective of providing low and moderate income housing. The agreement provides the formal mechanism between the county and the city to ensure the continued access of affordable housing funding opportunities will exist for the city’s low and moderate income residents. Per the agreement, the sub-recipient (the county) is designated to carry out all actions necessary to implement the city’s HOME Program objectives, comply with all HOME federal regulations and ensure the funds are invested in a project that results in the development of affordable housing to eligible low and moderate income individuals and households. As a HUD HOME entitlement jurisdiction, the county manages its own HOME affordable housing development program and is familiar with the federal regulations, financing of affordable housing along with the affordable housing monitoring requirements.”
The developer involved in the Val 9 Apartments rehabilitation is National Core Renaissance National Community Renaissance, a non-profit corporation founded by Jeff Burum to provide affordable housing to low and moderate income home buyers. Steve PonTell is currently serving as its president and chief executive officer.
“In October 2014, National Core Renaissance and its development partners received an allocation of $1,139,951 of 9% low income tax credits over a ten-year period from the California Tax Credit Allocation Committee to assist in financing the development of the Val 9 Apartments,” Fuentes said. “The project consists of 70 affordable housing units on 4.65 acres at the corner of Valencia Drive and 9th Street in the city of San Bernardino. This project is the initial phase of the Waterman Gardens revitalization effort sponsored by the Housing Authority of the county of San Bernardino. The total construction budget for this development is $23 million. Currently the developer is securing all funding resources in order to commence construction in February 2015.”
Fuentes said the participation of Community Renaissance in the project could yet fall through.
“The department of community development and housing will be negotiating a HOME Loan agreement between the county and the developer to invest the city’s HOME funds to finance the project. It is anticipated that the HOME Loan agreement between the developer and the county would be considered by the board of supervisors in January 2015. If the county is unsuccessful in the negotiations with the developer for the project, the department of community development and housing would undertake a notice of funds availability to identify other potential multi-family affordable housing developments located in the city of San Bernardino that meet the city, HUD and county objectives. The board of supervisors is being asked to approve the $834,999 HOME investment partnership program subrecipient agreement between the city and the county. This unique solution among HUD, the city, and the county will ensure that limited affordable housing resources are retained in the county and invested in the city, in compliance with the Federal HOME regulations.”
The item was taken off calendar on a motion by supervisor Robert Lovingood. Fuentes’ report indicated the matter will come before the board some time later this month.