HomeMy WebLinkAbout1996-11-27 City CouncilCity of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
FROM:CITY MANAGER DEPARTMENT: Planning and
Community Environment
DATE:November 27, 1996 CMR:487:96
SUBJECT:INNOVATIVE HOUSING CLOSURE
RECOMMENDATIONS
This is an informational CMR only. No action is required.
BACKGROUND
City staff have been advised that the Board of Directors of Innovative Housing for
Community, Inc. (IH) has elected to discontinue operations as a nonprofit agency, due to
financial difficulties and a substantial anticipated budget shortfall. They closed their doors
and ceased the provision of services as of November 22, 1996. Innovative Housing is based
in Marin County, but had a presence in sixteen Bay Area communities, including a regional
office in Palo Alto. IH provided affordable housing and supportive services to more than 500
low income families agency-wide. Their closure is abrupt and unexpected, and may create
financial and emotional hardships for many of their clients.
DISCUSSION
The City of Palo Alto has a fiscal year 1996/97 Community Development Block Grant
(CDBG) Agreement with Innovative Housing in the amount of $13,500, to provide
supportive shared housing and transitional housing for approximately 15 families in Palo
Alto, East Palo Alto and Mountain View. Of that grant, $10,125 is unexpended. Four
houses were supported with the funds, includng two supportive shared houses in Palo Alto
and two transitional houses, one in East Palo Alto and one in Mountain View. The
transitional programs serve primarily single mothers, most previously homeless or enrolled
in substance abuse recovery programs, and their children. In addition to the public service
grant, Innovative Housing was awarded a 1996/97 CDBG grant in the amount of $21,000 to
rehabilitate the East Palo Alto transitional house. The renovations had not yet begun, and
none of the grant funds have been expended.
CMR:487:96 Page 1 of 2
Innovative Housing had planned to retain a small transition team in the Marin County Office
to work on the organizational closure, including divesting property, cancelling leases, and
attempting to find other agencies to provide services or assist affected tenants in relocation
efforts. However, due to the fact that their assets were frozen, it was unable to retain staff
after November 22, 1996. City staff will be meeting with other funders in Santa Clara and
San Mateo Counties, HUD, and other nonprofit agencies, to develop strategies to assist those
existing residents who require assistance transitioning from IH supported houses. The City
will be reviewing its options under the existing agreement with IH.
FISCAL IMPACT
CDBG funds not used in the current fiscal year could be assigned to another nonprofit
organization, with the required public notice, or could be reprogrammed in a subsequent
fiscal year.
ATTACHMENTS
November 25, 2996 letter to Innovative Housing Board of Directors
CC: Citizens Advisory Committee
PREPARED BY: Suzanne Bayley, CDBG Coordinator
DEPARTMENT HEAD REVIEW:
KENNETH R. SCHREIBER
Director of Planning and
Community Environment
CITY MANAGER APPROVAL:
City Manager
CMR:487:96 Page 2 of 2
City PaloAlto
Depm~zt of Planning and
Communi~f Environn~t
November 25, 1996
Planning DMsion
Board of Directors
Innovative Housing for Community, Inc.
2171 E. San Francisco Blvd., Suite L
San Rafael, CA 94901
Re: Agreement #C7089552 July 1, 1996 - June 30, 1997
Dear Directors:
Last week television news reports indicated that Innovative Housing was experiencing
financial difficulties, and that the agency was going out of business. On November 20,
these rumors were confirmed in a telephone conversation with Innovative Housing’s
Peninsula Program Director, Diana Linn. The City was informed that Innovative
Housing was planning to close its doors effective November 30, 1996. Subsequently,
the effective date of the closure was changed to November 22, 1996.
As you are aware, your agency has an Agreement in the amount of $13,500 with the
City of Palo Alto for fiscal year 1996-97 to provide programs and services for low
income individuals in transitional housing and shared living environments. The balance
remaining under contract is currently $10,125.
Please confirm or dew the relevant facts regarding the closure, including your plan, if
any, to provide interim or transitional assistance to the program residents. This
information is critical in order for us to review and assess our obligations under the
subject Agreement. If you do not respond within ten (10) days, we will terminate the
Agreement effective November 22, 1996 in accordance with Section 6.7.2 for material
failure to comply with the covenants, terms, conditions and provisions of the
Agreement. You may contact me at (415) 329-2428 should you have any questions.
Very truly yours,
CDBG Coordinator
cc: City Attorney
950 Hamil ton Avenue
P.O. Box 100-50
Palo.Alto, C_A 94203
415.329.2441
415.329.22040 Fax