REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
February 25, 2025
FROM
CARRIE HARMON, Director, Community Development and Housing Department
SUBJECT
Title
Negotiating Agreement to Commit Funding for the Development of Affordable Housing Units for the Highland Senior Apartments
End
RECOMMENDATION(S)
Recommendation
1. Approve Negotiating Agreement with Wakeland Highland LP committing up to $5,850,000 of Permanent Local Housing Allocation and HOME Investment Partnerships Program funds to develop the Highland Senior Apartments, an affordable housing project in Highland, and $150,000 for project delivery costs for the term of February 25, 2025, through February 25, 2026.
2. Approve the funding commitment letter required to support Wakeland Highland LP’s Low-Income Housing Tax Credit funding application, referencing the $5,850,000 of Permanent Local Housing Allocation and HOME Investment Partnerships Program funding commitment.
(Presenter: Carrie Harmon, Director, 382-3983)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Promote the Countywide Vision.
Create, Maintain and Grow Jobs and Economic Value in the County.
Ensure Development of a Well-Planned, Balanced, and Sustainable County.
Provide for the Safety, Health and Social Service Needs of County Residents.
Pursue County Goals and Objectives by Working with Other Agencies and Stakeholders.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). This item will authorize a funding commitment of $5,850,000; consisting of $3,829,042 in Permanent Local Housing Allocation (PLHA) funds and $2,020,958 in HOME Investment Partnerships Program (HOME) funds; for the Highland Senior Apartments affordable housing project (Project), plus $150,000 for project delivery costs which include project management staff, legal, and escrow fees, which will be retained by County’s Community Development and Housing Department (CDH). Adequate appropriation and revenue have been included in CDH’s 2024-25 budget.
BACKGROUND INFORMATION
CDH seeks approval of a $5,850,000 funding commitment to Wakeland Highland L.P. (Developer) through a Negotiating Agreement (Agreement) for the development of the Highland Senior Apartments. The Agreement has a term of one-year from the effective date with an option to extend for 60-day period. This commitment will strengthen the Developer's competitive position in their upcoming funding application for Round 1 of 9% Low-Income Housing Tax Credits (LIHTC), due March 18, 2025, with award announcements expected in summer 2025.
The proposed Project addresses a critical need in our community. The County currently has 58,846 low-income renter households lacking access to affordable housing, with senior homelessness emerging as a particular concern. Approximately 44% of the unsheltered homeless population is aged 65 and older. The 2024 Point-in-Time Count identified 4,255 homeless individuals countywide, with the City of Highland experiencing a 64% increase in unsheltered persons from 2023 to 2024.
To help address these challenges, the Highland Senior Apartments project will transform a 3.73-acre site in Highland into an affordable housing community for seniors aged 55+. The development is a 90-unit new construction project, with 23 units specifically reserved for seniors in need of supportive services. The project ensures broad accessibility by offering units at affordability levels ranging from 30% to 60% of Area Median Income (AMI). The design includes a mix of two-story and four single-story buildings, connected by courtyards and walkways that encourage outdoor recreation and community interaction. A central community building will house property management offices, resident services, laundry facilities, and a community room equipped with computer stations and kitchen facilities for workshops and social activities.
The Developer brings extensive experience to this Project, having developed 57 affordable and permanent supportive housing developments totaling 6,341 units across California. The Developer has partnered with Mercy House, a respected supportive service provider, to deliver comprehensive case management and support services tailored to help senior residents maintain stable housing and thrive within the community.
The Developer estimates a total development cost of $39,194,123, or $435,490 per unit, which includes all community facilities and reflects current market conditions. This investment will be funded through a combination of sources, with the County's commitment leveraging significant additional resources. The City of Highland has committed $4,577,450 in financing and arranged a below-market Ground Lease valued at $3,000,000, demonstrating strong local support. Additional funding will come from a $2,369,000 permanent loan and an anticipated $23,247,674 in LIHTC equity.
The Project has met all benchmarks for feasibility, impact, readiness, and operational sustainability, while aligning with the Board of Supervisors' (Board) Housing Development Guidelines. If awarded LIHTC funding, construction is expected to begin in fall 2025 with completion projected for fall 2027. The development will maintain affordability restrictions for a minimum of 55 years, ensuring long-term community benefit.
Upon approval of the Agreement, CDH will begin contract negotiations with the Developer. If there is a successful LIHTC allocation, CDH will return to the Board for approval of the PHLA and HOME funding agreements. The PLHA program structure ensures that participating cities, including Highland, receive proportional benefit from these investments in affordable housing initiatives.
This Project represents a strategic opportunity to address our community's pressing affordable housing needs while providing essential support services for vulnerable seniors. The combination of experienced partners, strong local support, and leveraged funding positions this development for success in creating lasting positive impact for San Bernardino County residents.
PROCUREMENT
On May 24, 2024, the County released the Second Amendment to 2024 HOME Funding Notice of Funding Availability (NOFA) on CDH’s website. The PLHA Funding Application was released on December 17, 2024, also on CDH’s website.
CDH received two responses for the HOME Funding NOFA to date, one of which was the Highland Senior Apartments from the Developer. Additionally, CDH received one response for the PLHA Funding Application for the Highland Senior Apartments from the Developer. The Project was evaluated based on the established HOME Funding NOFA and PLHA Funding Application criteria, and CDH determined that it met the benchmarks for feasibility, impact, and project readiness.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Suzanne Bryant, Deputy County Counsel, 387-5455) on February 13, 2025; Purchasing (Ariel Gill, Supervising Buyer, 387-2070) on (February 6, 2025); Finance (Paul Garcia, Administrative Analyst, 386-8392) on February 11, 2025; and County Finance and Administration (Cheryl Adams, Deputy Executive Officer, 388-0238) on February 13, 2025.