Approve agreement with New Hope Community Development Corporation to support its acquisition of real property at 607 11th Street, Davis, Assessor's Parcel Number APN 070-141-003, and authorize staff to negotiate and sign a separate agreement to receive up to $35,000 from NAMI Yolo County for minor property repairs. (Potential general fund impact) (Pistochini/Pogledich)

The County has a long-standing need to support housing for individuals living with mental illnesses.  A privately owned facility known as Pine Tree Gardens - West, currently serves as an adult residential facility. In addition to providing stable housing, services provided at Pine Tree Gardens - West support improving clients' ability to function in the community by educating them about their illness, teaching effective life management skills, and helping them to gain self-awareness. Recently, the property owner provided the County with an opportunity to purchase this property at a discounted value in exchange for the County to continue supporting this facility and its mission. As explained below, County staff seek Board authority to support the acquisition of this property. 

After the opportunity to acquire the property arose, County staff approached New Hope to determine its interest in holding title to the property and performing most maintenance under an intergovernmental agreement (Attachment A) with terms and provisions nearly identical to an agreement signed by the County and New Hope in 2020 in connection with a related property located nearby (Pine Tree Gardens - East). New Hope supports this approach and its Board of Directors is expected to consider the agreement and deed restriction (discussed below) at its meeting on July 24, 2024.

To support the evaluation of these actions, the General Services Department performed a facilities inspection of the property and found the property and buildings are in fair to good condition.  No major deferred maintenance issues have been identified.  Also, the Health & Human Services Agency regularly places clients at Pine Tree Gardens - West and foresees a long-term need for this location.  If the County and New Hope do not collaborate to acquire the property, it will likely be sold or donated to a non-profit or private owner (possibly without any long-term assurances that it will be maintained in its current use).

County staff negotiated a purchase price of $100,000 for this property, consisting of approximately 0.42 acres, and two structures totaling 5,550 square feet.  The current assessed value is $1,352,520, and the estimated unrestricted fair market value is $2.2 to $2.3 million.  Upon purchasing this property with funds provided by the County, a 20-year deed restriction will be placed on the property restricting use of the property to supporting individuals living with mental illness as required by the Mental Health Services Act (MHSA). The deed restriction will have an additional term of 79 years (for a total of 99 years) subject to early termination in certain circumstances set forth in more detail therein. The deed restriction is Exhibit E to the intergovernmental agreement.

To acquire the property with MHSA funding, the County must first revise its existing MHSA Three-Year Plan to allow for acquisition of the property with MHSA funding. Staff support this Plan amendment and the process is underway but, due in part to procedural requirements in state law, cannot be completed for 2-3 months. The property owner, however, would like to transfer the property as soon as reasonably possible and is willing to accept compensation later, after the Board of Supervisors considers an amendment to the MHSA Three-Year Plan. These are the main reasons why the fiscal impact section of this staff report indicates the potential for General Fund exposure:  Board action on the MHSA Plan amendment will occur after the property is acquired by New Hope and, if the Board opts not to approve the MHSA Plan amendment, the County is nonetheless obligated to pay the purchase price.

Otherwise, the only likely General Fund impact is minor closing costs of less than $10,000. Minor maintenance and repair issues are under discussion with New Hope and will likely be covered by the tentative commitment of $35,000 by NAMI-Yolo County for such work, along with MHSA funding available for minor property maintenance (up to $30,000 total for this facility and Pine Tree Gardens - East). 

The intergovernmental agreement included with this staff report is essentially in final form, though minor edits are possible as it proceeds through the New Hope approval process. Staff are therefore seeking authority to make minor edits prior to finalizing the agreement for execution, as indicated in the Recommended Actions. As also indicated, staff seek authority to negotiate and sign an agreement with NAMI-Yolo County to obtain funding for minor maintenance and repairs, as mentioned above.

The General Services Department collaborated with the County Counsel's Office and the Health and Human Services Agency.

Not applicable.