Agenda Item   

AGENDA STAFF REPORT

 

                                                                                                                        ASR Control  19-001157

 

MEETING DATE:

11/19/19

legal entity taking action:

Board of Supervisors

board of supervisors district(s):

1

SUBMITTING Agency/Department:

County Executive Office   (Approved)

Department contact person(s):

Thomas A. Miller (714) 834-6019 

 

 

Tim Corbett (714) 834-3046

 

 

Subject:  Yale Transitional Center Lease

 

      ceo CONCUR

County Counsel Review

Clerk of the Board

Concur

Approved Agreement(s) and Resolution(s)

Discussion

 

 

3 Votes Board Majority

 

 

 

    Budgeted: Yes

Current Year Cost: See Financial Impact Section

Annual Cost: See Financial Impact Section

 

 

 

    Staffing Impact:

No

# of Positions:

Sole Source: N/A

    Current Fiscal Year Revenue: N/A

  Funding Source: See Financial Impact Section

County Audit in last 3 years: No

 

 

    Prior Board Action: 11/20/2018 #S41D

 

RECOMMENDED ACTION(S):

 

 

1.

Find that the project is categorically exempt from the California Environmental Quality Act (CEQA), Class 32 (In-Fill Development Project) pursuant to CEQA Guidelines, Section 15332.

 

2.

Find that the County may forgo the competitive bidding process for the construction of improvements on County-owned property located at 2229 South Yale Street, Santa Ana for the Yale Transitional Center for individuals experiencing homelessness, because the process would not result in an economic advantage for the County.

 

3.

Adopt the Resolution making certain findings pursuant to Government Code 26227 related to the approval of a Ground Lease with Shelter Providers of Orange County, Inc. dba HomeAid Orange County for construction of improvements on County-owned property located at 2229 South Yale Street, Santa Ana for the Yale Transitional Center for individuals experiencing homelessness.

 

4.

Approve the Cooperation and Implementation Agreement with Shelter Providers of Orange County, Inc. dba HomeAid Orange County outlining conditions for the Ground Lease for construction of improvements on County-owned property located at 2229 South Yale Street, Santa Ana for the Yale Transitional Center for individuals experiencing homelessness, and authorize the Chief Real Estate Officer or designee to execute the agreement in substantially the form attached, with approval of County Counsel.

 

5.

Approve the Ground Lease with a two-year term, with a one-year option to extend, with Shelter Providers of Orange County, Inc. dba HomeAid Orange County for the construction of improvements on County-owned property located at 2229 South Yale Street, Santa Ana for the Yale Transitional Center for individuals experiencing homelessness, and authorize the Chief Real Estate Officer or designee to execute the Ground Lease in substantially the form attached, with approval of County Counsel.

 

6.

Direct Auditor-Controller, upon notification from Chief Real Estate Officer, or designee, to issue payments to Shelter Providers of Orange County, Inc. dba HomeAid Orange County not to exceed the total amount of $25,275,703 for construction of improvements on County-owned property located at 2229 South Yale Street, Santa Ana for the Yale Transitional Center for individuals experiencing homelessness, in two equal disbursements of $12,637,851 at execution of the Ground Lease and at 50 percent completion of construction, upon notification by Chief Real Estate Officer, or designee.

 

7.

Authorize the Chief Real Estate Officer or designee to sign any and all necessary documents related to the construction of improvements on County-owned property located at 2229 South Yale Street, Santa Ana for the Yale Transitional Center for individuals experiencing homelessness, as set forth in the Ground Lease, including minor modifications and amendments to the Ground Lease that do not materially alter the terms or financial obligations to the County, and perform all activities specified under the terms of the Ground Lease and Cooperation and Implementation Agreement.

 

 

 

 

 

SUMMARY:

 

Approval of the Cooperation and Implementation Agreement and Ground Lease with Shelter Providers of Orange County, Inc. dba HomeAid Orange County will allow for the construction of improvements on County-owned property located at 2229 South Yale Street, Santa Ana for the Yale Transitional Center for individuals experiencing homelessness.

 

 

 

BACKGROUND INFORMATION:

 

On October 25, 2018, the County received a letter from the City of Santa Ana (City) recommending a parcel located at 2229 S. Yale Street, Santa Ana (Property) as a viable site for a full-service shelter (Attachment F) and a replacement for the Courtyard Transitional Center (Courtyard) facility in Santa Ana. The Courtyard facility will cease to operate as the Yale Transitional Center becomes operational. The County and the City previously had negotiated and entered into a Memorandum of Understanding related to the relocation of the Courtyard. This Memorandum of Understanding has been terminated at the request of the City. CEO Real Estate coordinated a collective review of the property with County stakeholder agencies and received a similar recommendation. On November 20, 2018, the Board authorized the Chief Real Estate Officer to execute a Purchase and Sale Agreement with Omega Engineering, Inc. for the purchase of the Property for $12.25 million. The County closed escrow on the Property on January 11, 2019.

 

The Yale Transitional Center will shelter up to 425 individuals experiencing homelessness from the Central Service Planning Area.  Families with minor children will not be served at this location.  The proposed renovation project to permit the operation of the Property as a transitional center will include restrooms, showers and dormitory-style sleeping areas for men, women and couples.  The second floor will consist of a separate dorm for women, couples and transitional living spaces.  Additionally, the renovated Yale Transitional Center will have 24 hour, 7-days per week security, an intake area, full commercial kitchen, dining area, laundry facility, administrative and supportive services offices and storage. To permit the operation of a residential sheltering program on site, all of the major building systems, including plumbing, electrical, HVAC and fire/life safety systems, must be renovated and upgraded.  Exterior upgrades include site security fencing, ADA compliant parking, an area for the mobile medical clinic, outdoor dining patio area and patios adjacent to the building dormitories, improved natural lighting, improved fresh air ventilation, fence screening, seating areas and landscaping and outdoor spaces to provide an area for individuals and their service animals, companion animals and/or pets.  Parking areas will be for staff, program residents, and mobile medical and support services vehicles. Site plans for the Yale Transitional Center are included as Attachment I.

 

As a County-owned property, the Yale Transitional Center is under the jurisdiction of the County and is not subject to the development and operational standards for shelters in the City. Further, pursuant to County Zoning Code Section 7-9-20(i) (Attachment K), land owned in fee by the County is not subject to County land use regulations. Therefore, the site is available for the County’s desired homeless transitional center use regardless of the land use designation and zoning, including development and operational standards.  Nevertheless, according to the City-adopted, land use regulations, the site is zoned Light Industrial (M1) and its General Plan land use designation is Industrial.  Emergency shelters and transitional centers for persons experiencing homelessness are permitted uses on any parcels within the M1 zone.  Additionally, the Property is within the City’s SB-2 zone.

 

Shelter Providers of Orange County, Inc. dba HomeAid Orange County (HomeAid) is a leading non-profit housing developer that works as a liaison between service providers, community volunteers, builders and specialty contractors to build and renovate multi-unit housing developments including emergency shelters, interim/bridge housing and permanent supportive housing for families and individuals experiencing homelessness throughout the United States.  To date, the organization has completed 55 developments with over 20 non-profit homeless services provider partners that serve victims of domestic violence, pregnant women, unaccompanied minors, adults living with HIV/AIDS and families.  HomeAid has proposed collaborating with the County and general contractor, C.W. Driver, to construct the improvements necessary for the Property to be used as a transitional center for individuals experiencing homelessness.  The HomeAid offer letter to the County is included as Attachment G.

 

Open House for the Yale Transitional Center

On October 23, 2019, the County hosted an open house in partnership with Supervisor Do, First District, to discuss the Yale Transitional Center and to solicit input from the public. The open house provided attendees an opportunity to speak one-on-one with County staff at three separate stations to learn about the building design and features, security and good neighbor plan, and the operational plan and wraparound services at the Yale Transitional Center.

 

Management and Operations Plan

The Yale Transitional Center is intended to provide shelter, meals, sanitary facilities and access to case management, employment and housing assistance, healthcare, mental health services and substance abuse treatment among other supportive services and assistance to individuals experiencing homelessness. The program will serve up to 425 individuals experiencing homelessness currently accessing shelter and supportive services at the Courtyard Transitional Center in Santa Ana. Providing emergency shelter and access to wrap around supportive services will assist individuals experiencing homelessness in the Central Service Planning Area in accessing the appropriate resources to improve their overall health and stability. Establishing the Yale Transitional Center will meet a critical need for individuals experiencing homelessness as well as the broader community, while also addressing a pressing social issue that is deeply affecting local businesses and neighborhoods. The overall purpose of the program is to connect individuals experiencing homelessness to supportive services and to achieve permanent housing and self-sufficiency. 

 

The Management and Operations Plan (MOPS) for the Yale Transitional Center will identify core emergency shelter services, establish policies and procedures and promote the use of best practices and evidenced-based approaches to maintain a safe and healthy environment for those who access the shelter resources and the community at large.  A summary of the MOPS is included as Attachment D. The full version of the MOPS will be presented to the Board for approval along with the Yale Transition Center operator agreement.

 

Construction Costs and Schedule

The HomeAid proposal offers a project cost at $25,275,703 with a 12-month construction period. Conversely, the project engineer estimate of cost is $29,234,623 with a 21-month period for bid and construction. Comparatively, the HomeAid offer avoids$3,958,920 in direct construction costs and delivers the project nine months in advance of the County’s traditional public solicitation and design build schedule. The reduction in overall schedule carries a subsequent value in reduced cost of funding at $1,644,447 for the nine-month term assuming a 7.5 percent escalation. Through the effective use of HomeAid as a non-profit partner, the County will realize an overall cost avoidance of $5,603,367 and save nine months in completing this critical project.  Additionally, HomeAid plans to leverage community partners to solicit in-kind donations as well as the donation of materials. The Cooperation and Implementation Agreement (Attachment C) with HomeAid outlines the partnership between the County, HomeAid and C.W. Driver that will set the stage for the Yale Transitional Center.  The agreement also provides for the efforts that HomeAid plans to make to obtain donations of in-kind labor and materials or cash donations for construction and operations, as well as for the indemnification of HomeAid by the County for the County’s approval of the agreements and the County permitted use of the property.

 

Under normal circumstances, the County would follow the public works competitive bidding processes found in the Public Contract Code when procuring construction services.  Generally, competitive bidding is mandatory when required by statute. The purpose of the public bidding statutes are to “guard against favoritism, improvidence, extravagance, fraud and corruption; to prevent the waste of public funds and to obtain the best economic result for the public.” Graydon v. Pasadena Redevelopment Agency, 104 Cal.App.3d 631, 636 (1980). “One exception is where the nature of the subject of the contract is such that competitive proposals would be unavailing or would not produce an advantage, and the advertisement for competitive bid would thus be undesirable, impractical, or impossible.”  Id.  Here the proposed construction for the facility will be done pursuant to the attached Ground Lease (Lease) with HomeAid, a nonprofit whose purpose is facilitating the construction of this type of facility.  HomeAid is able to leverage their status to obtain various services at lower cost or by donation. Because of this and the participation of HomeAid, the cost avoidance to the County on the total design and construction cost will be in excess of $5.6 million. Thus, the competitive bidding of this project will not result in any advantage to the County or the public.  Additionally, as mentioned previously, HomeAid will work during the Lease term to further leverage donations and in-kind services to achieve further cost avoidance. 

 

Project Funding 

Upon execution of the Lease, the County will fund $12,637,851 as the initial funding for the completion of the Yale Transitional Center.  Upon completion of 50 percent of the Yale Transitional Center, as evidenced by a written verification by the Project’s architect and verified by the County, the County will fund the additional $12,637,851 to complete the County’s full financial contribution. The County’s financial contribution will be applied by HomeAid only towards the Yale Transitional Center.  If additional cost avoidance is realized during the Lease term, the funds will be applied towards furniture, fixtures and equipment for the operation of the Yale Transitional Center.  If any funds remain at the end of the Lease term, the funds will be returned to the County.

 

Ground Lease

CEO Real Estate has worked closely with HomeAid to finalize the terms of the Lease. Per the terms of the Lease (Attachment B), the County would lease the Property to HomeAid for the purposes of entitling, permitting and constructing the Yale Transitional Center. The Lease term is 24 months or upon receipt of Certificate of Occupancy. One option to extend the term for one additional 12-month period. The annual rent will be $1 which takes into consideration the public benefit afforded by the Project and HomeAid’s construction of the Yale Transitional Center.  The findings in the attached resolution, pursuant to Government Code Section 26227 (Attachment J), permit the approval of the Lease with the reduced annual rent and allows the Board to dedicate County resources to the support of HomeAid and the Yale Transitional Center.  The resolution also includes the project as a program under the County Sponsorship Program Marketing Plan to permit the pursuit of marketing, sponsorship or fundraising partnerships to further support the Yale Transitional Center. 

 

During the Lease term, construction and operating costs and any possessory interest taxes will be paid by HomeAid. The County shall be responsible for the cost of the utilities for the Property, including any and all applicable taxes, assessments or similar impositions related to the utilities.

 

CEQA COMPLIANCE 

The proposed Project is Categorically Exempt (Class 32) from the provisions of CEQA pursuant to Section 15332, because it involves an infill development project located within city limits, on a site of less than 5 acres that is substantially surrounded by urban uses and can be adequately served by all required utilities and public services.  The Project is consistent with all applicable General Plan and zoning regulations and would not result in any significant effects relating to traffic, noise, air quality or water. In addition, the project site has no value as habitat for endangered, rare or threatened species.

 

 

 

FINANCIAL IMPACT:

 

Total Project Cost for the County:  $25,275,703

Appropriations for the initial funding of $12,637,851 are included in Budget Control 036 FY 2019-20 Budget. FY 2019-20 cost for this project will be funded by $2.5 million one-time revenue from Single Family Housing Fund 15B, $5.9 million revenue from California Homeless Housing, Assistance and Prevention Program (HHAP), and the County General Fund.  Appropriations for the remaining $12,637,851 million will be requested and included as an Expand Augmentation for the FY 2020-21 Budget, which may receive some offsetting revenue from HHAP and other funding sources. 

 

Yale Transitional Center Project Funding:

Amount ($)

Funding Source

$  2,500,000

Single Family Housing Fund 15B

$  5,900,000

HHAP

$  4,237,851

County General Fund

$12,637,851

FY 2019-20 Funding

 

 

$12,637,851

FY 2020-21 Expand Augmentation 100-036*

 

 

$25,275,702

Total Yale Transitional Center Project Cost

*May receive some offsetting revenue from HHAP or other funding sources.

 

 

 

STAFFING IMPACT:

 

N/A

 

 

 

REVIEWING AGENCIES:

 

OC Community Resources
Health Care Agency

 

ATTACHMENT(S):

 

Attachment A - Location Map and Aerial View
Attachment B - Ground Lease
Attachment C - Cooperation and Implementation Agreement
Attachment D- Summary of the Management and Operations Plan
Attachment E - Yale Board Resolution
Attachment F - City of Santa Ana Yale Recommendation Letter
Attachment G - HomeAid Offer Letter
Attachment H - County A&E Estimation of Project Schedule and Cost
Attachment I - Site Plans
Attachment J - Government Code 26227
Attachment K - County Zoning Code Section 7-9-20(i)