Salvation Army's Bold Housing, Social Services Proposal Goes Before City Council

Published : Monday, November 25, 2019 | 4:49 AM

The Pasadena City Council will discuss Monday a proposal by the Salvation Army to develop a 66-unit permanent supportive housing project within its proposed Hope Center, which will offer housing to low-income and formerly homeless Pasadena residents, along with supportive social services.

The Salvation Army Hope Center would be a four-story complex located at 1000 E. Walnut Street on the southwest corner of Catalina Ave.

Monday’s discussion will focus specifically on the Salvation Army’s request for $1 million in funding assistance from the City, submitted in September, which would be used towards developing the permanent supportive housing component of the Hope Center project.

The assistance will be in the form of a loan which would be repaid out of the project’s annual residual receipts, an Agenda Report by the City Council’s Economic, Development and Technology (EDTech) Committee showed.

The EDTech Committee is recommending that the City Council approve a budget amendment appropriating $1 million from the Housing Successor Low Income Housing Asset Fund unappropriated fund balance to fund the proposed City loan through the Housing Department’s fiscal year 2020 Operating Budget for the Hope Center project.

The committee is also recommending approval of the key business terms of an Affordable Housing Loan Agreement with the Salvation Army, and authorization for the City Manager to execute, and the City Clerk to attest, the documents required to finalize the loan.

According to the Salvation Army’s proposal, a two-story office building that is currently on-site will be demolished to give way to the four-story Hope Center complex. Permanent Supportive Housing units will be on the second, third and fourth floors, and the ground floor will be operated as an expanded social services center for the building’s would-be residents and low- or moderate-income people in the community who are currently served by the Salvation Army.

The project site is immediately adjacent to The Salvation Army Pasadena Tabernacle Corps Community Center and half a block away from the 75-unit Salvation Army Pasadena Silvercrest Residence, an affordable housing project for very low-income elderly people.

The report also showed the Salvation Army is targeting single adults whose incomes are at or below 30 percent of median income in the area to occupy 40 units of the housing complex, and those with incomes of 40 percent or below the median income to get 25 units. The target beneficiaries should also meet the U. S. Department of Housing and Urban Development’s definition of homeless.

Certain units would be restricted to VA service-eligible homeless veterans, the report showed.

The estimated total development cost of the Hope Center is about $31.8 million, of which $7 million would be attributed to the first-floor social services center and $24.8 million to the PSH component. The Salvation Army will exclusively fund development of the first-floor social services center primarily through a capital fundraising campaign. No City funding would be used for the development of the social services center, the report said.

The Housing Department has evaluated the proposal and determined it is a “feasible and cost-effective way to address the City’s critical affordable housing shortage.” The proposal was also reviewed by the Internal Housing Loan Committee, which serves the Housing Department and is comprised of staff in the City Manager, Housing, Human Services, Public Works, and Finance departments, the Agenda Report showed.

According to the report, the City’s direct funding subsidy would be $15,384 per unit. In comparison, the City’s direct funding subsidy for the 70-unit Heritage Square senior apartments development was $23,214 per unit.

Regarding the proposed loan’s fiscal impact, Pasadena Housing Director William Huang said approving it will increase the Housing Department’s fiscal year 2020 budget by $1,000,000, to be transferred from the Housing Successor Low Income Housing Asset Fund unappropriated fund balance.

Huang said the scheduled annual debt service on the City loan would be $37,149.24.

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