HomeMy WebLinkAboutStaff Report 13595
City of Palo Alto (ID # 13595)
City Council Staff Report
Report Type: Action Items Meeting Date: 9/27/2021
City of Palo Alto Page 1
Title: Adopt a Resolution Declaring an Emergency Shelter Crisis, Adoption of
a Resolution Authorizing the City Manager to Apply for California Project
Homekey Funds in Conjunction with LifeMoves, and Related Direction to
Staff Regarding an 88 -132-unit Emergency Shelter Project at a Portion of the
LATP site (1237 North San Antonio Road); Environmental Assessment:
Exempt Pursuant to AB 140 and AB 2553; Alternatively, Exempt under CEQA
Guidelines Section 15269 as an Action to Mitigate an Emergency
From: City Manager
Lead Department: City Manager
Recommendation
Staff recommends that City Council:
1. Adopt a resolution declaring an emergency shelter crisis;
2. Adopt a resolution authorizing the City Manager to apply for California Project
Homekey funds in conjunction with LifeMoves for an 88-132-unit emergency shelter
project at a portion of the LATP site (1237 North San Antonio Road);
3. Direct staff to complete due diligence necessary for the application;
4. Direct staff to return with necessary actions related to capital and operating costs
for the project.
Executive Summary
The State of California released the Notice of Funding Availability for Project Homekey Round 2
in early September 2021. The City of Palo Alto is preparing to make an application to the
program (resolution authorizing application will come in late packet). Moving forward with the
proposed emergency shelter with Project Homekey funds would entail:
1. Adopting a resolution declaring a local emergency shelter crisis, which will help
streamline the process for this and future emergency shelter projects.
2. Completing the due diligence necessary for the application (costs for
geotechnical/survey/etc.).
3. Partnering with LifeMoves for the creation of 88-132 units of interim housing, which will
be reviewed ministerially, with the possibility for a voluntary design review process
4. Leasing a portion of the LATP site to LifeMoves to facilitate the project.
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5. Revising the Community Development Block Grant (CDBG) 5-year plan to allow for
capital funds allocation to be used on this program.
6. Agreeing to the estimated ongoing operating costs associated with running the
program. The first four (4) years of operating costs are anticipated to be covered by
Santa Clara County and Project Homekey (Housing and Community Development
Department). LifeMoves and the City will collectively identify and determine sources to
cover the operating costs in years five (5) and six (6). There is an option for an additional
operating year to be provided by Homekey under the NOFA if projects can demo nstrate
a commitment of four or more years of non-Homekey operating funds for assisted units.
Background
City Council discussed services for unhoused Palo Altans at a study session on April 5, 2021 and
expressed interest in many topics. The City Council heard an action item on this topic on August
9, 2021 and continued the item on August 30, 2021. The action for each meeting is below.
- April 5, 2021 Study Session Report (no action taken) – CMR #12133
- August 9, 2021 (CMR# 13453); Actions taken:
A. Support advancing an application for the Project Homekey Program for an
emergency shelter in a portion of the Former Los Altos Treatment Plant (LATP) site
with specific steps as follows:
i. Pursue partnership with LifeMoves as the nonprofit partner;
ii. Pursue zoning changes necessary to allow for an emergency shelter at the LATP
site;
iii. Direct Staff to identify funding sources and to include that information in the
return report to the City Council;
iv. Return to City Council in September with sufficient time to make an application
and include all application details, including the explanation of all costs; and
B. Continue City Council discussion on the rest of this item to a date uncertain.
- August 30, 2021 (CMR #13521); Actions taken
A. Adopt a Resolution endorsing the Santa Clara County “Community Plan to End
Homelessness 2020-25”; and
B. Direct Staff to return to City Council with a detailed proposal for an outreach
team to the unhoused, which will include case management resources,
additional Police resources, and program coordination staff.
On September 9, 2021, the California Department of Housing and Community Development
(HCD) announced the release of the HomeKey Program Round 2 Notice of Funding Availability
(NOFA) for approximately $1.45 billion. Building on the success of both Project Roomkey and
the first round of Homekey, this investment continues a statewide effort to sust ain and rapidly
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expand housing for persons experiencing homelessness or At Risk of Homelessness, and who
are, thereby, inherently impacted by or at increased risk for medical diseases or conditions due
to the COVID-19 pandemic. Cities, counties, or other local public entities, including housing
authorities or federally recognized tribal governments within California, may apply
independently or jointly as the lead applicant with a non -profit or a for-profit corporation.
Discussion
Since the City Council action on August 9, an interdepartmental team from the City Manager’s
Office, Public Works, Community Services Department, Planning and Development Services,
and the City Attorney’s Office have worked diligently with LifeMoves to do site study of the
LATP site C and prepare materials needed in support of the Homekey application. Upon receipt
of the full NOFA on September 9, 2021, staff and LifeMoves are working to prepare as much
information as possible to share with the City Council by packet printing date of September 16.
Some additional materials, such as the site concept plan, will be shared in late packet on
September 23, 2021.
The proposed project is the rapid deployment of modular housing for the purpose of providing
interim housing opportunities for homeless individuals and families in the City of Palo Alto. The
project location is 1237 North San Antonio Road, in Area C of the Former Los Altos Treatment
Plant (LATP), a 1.16 acre site bordered by other industrial uses.
The LATP site, was previously a treatment facility for the City of Los Altos. The site includes
three different parts: Area A, Area B, and Area C. The northern third of the site, known as Area
A, is approximately 4 acres of conservation land. This section is isolated from the rest of the
FLATP by a berm and fence. The middle third of the site, known as Area B, is approximately 6.64
acres and the location of the former treatment plant. The treatment plant included an
operations building, water tank, and series of treatment ponds. Several of the former
treatment ponds have since been identified as jurisdictional wetlands. The operations building
has been deconstructed, among other changes. Area B is the area Valley Water is working with
the City on for a water purification site. The southern third of the site, known as Area C, is
approximately 2.62 acres. This area is currently used as a contractor rental storage (was a
staging yard related to the bike bridge project) and as Green Waste storage yard and transfer
site, the City’s refuse collector. The specific portion of the site identified for Homekey is within
the LATP Area C, approximately 1.16-acres adjacent to the Green Waste site.
Further information about the LATP site, zoning and comprehensive plan designations, and
what is needed for this Homekey program is explained further in the report.
Alternative Sites Considered
At the April 5, 2021 Study Session on Unhoused Services, the City Council expressed interest in
the Project Homekey Program, should funding become available through the State budget. The
City Council mentioned an interest in any hotels or motels that might be interested in selling
their property to the City for this program. Staff reached out to hotels and motels and received
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very limited interest. The hotels that responded with interest noted high dollar per door costs
associated with the sale of the properties. The few properties that did respond are located
along the El Camino Real corridor. Staff also considered other City -owned land and other sites
were in process for other plans at the City or were dedicated park land. LifeMoves also
explored other private land but none of the options panned out due to a variety of reasons.
Modular Units
The Homekey site will consist of modular units. The modular units are pre -fabricated structures
designed specifically for residential use. The site work would be primarily composed of
demolition, utility connections, grading and hardscape, security fence, preparing site for sea-
level rise, and landscape. Thirty percent of this site will be to accommodate support services
such as offices for case management, employment and housing specialists, dining, community
workshop, family lounge and onsite laundry.
Population to Serve
The focus of the site is for individuals and families based o n Palo Alto’s 2019 Point in Time
count as well as other information shared with the City from the County about those impacted
by the pandemic. As shown in the April 5 Study Session report (page 7) and in the further
detailed Point in Time data, as shown in the August 9 report (page 3), Palo Alto has a mixture of
unhoused individual adults and families, including veterans.
The site would be operated for at least fifteen years as interim housing per the program’s
durational requirement and would include both on-site and off-site/mobile personnel to
operate the project staffed by LifeMoves, including a Program Director, case management, and
the provision of other services. The site would be staffed 24/7 every day of the year.
Number of Units Proposed
The proposed number of units/beds proposed is 88 units in a two-story configuration. The City
can also build a three-story configuration which could increase the number of units up to 132.
Staff proposes the two-story configuration for the application. The proposed number of units
tries to maximize as much density as possible while being sympathetic to the adjacent
neighborhood, parking, and other building heights east of 101.
In an 88-unit Homekey, the preliminary unit composition is for 24 family units and 64 single
units. In an 132-unit Homekey, the preliminary unit composition is for 24 family units and 96
single units. The concept plan will be released in late packet.
Costs to Apply
There is no grant application fee. However, in order to prepare the materials for application, it
is staff time as well as some due diligence costs (such as geotechnical, architectural, survey,
etc.). Staff and LifeMoves anticipate these costs to be approximately $120,000 up front. The
costs should be reimbursable by the Homekey grant but still need to be covered in the
meantime between LifeMoves and the City.
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Capital Costs
Homekey will fund a maximum grant amount per door which includes both the acquisition cost
and any needed Rehabilitation or new construction. The Department will contribute a baseline
amount per door, as outlined here. This baseline contribution does not require a local match.
Unit Size -- Baseline Capital Amounts: 1) Studio or one-bedroom units will receive a baseline
amount of $150,000 per door. 2) Two-bedroom units will receive a baseline amount of
$175,000 per door. 3) Three-bedroom or larger units will receive a baseline amount of
$200,000 per door.
For the Palo Alto Homekey program, the preliminary estimated capital cost based on the
proposed number of units is $17.6 million. Further details on capital investment expenses and
the projected funding sources are outlined below in the Resource Impact section of this report.
Operating Costs
Based on consultation with LifeMoves, given the proposed number of units (a range of 88-132
units) the total operating costs are estimated to be $2.6-4 million per year. The Homekey grant
includes two (2) years of operating costs in the grant award with a potential third year if certain
points are met in the rating criteria. Additionally, Santa Clara County has pledged to cover an
additional two (2) years of operating costs on top of the funding from the Homekey grant. The
Board of Supervisors will further discuss Homekey at their October 5 Board meeting. There is an
option for an additional operating year to be provided by Homekey under the NOFA if projects
can demonstrate a commitment of four or more years of non-Homekey operating funds for
assisted units.
The City of Palo Alto, as part of the grant application, would need to commit to at least one
year of operating funding and LifeMoves would also commit to at least one year of funding. For
the City, this commitment would be for either year 5 or 6 of the program operation from the
program launch date. City’s funding source would be identified at a later date.
It is expected that the City would continue ownership of the land and would pursue a lease
agreement with LifeMoves as part of this partnership. Staff is still exploring options for this and
discussing draft partnership terms for the operation and maintenance of the facility.
Planning, Land-Use, CEQA, and Site-Specifics for LATP
Land-Use Streamlining – Comprehensive Plan and Zoning Ordinance Consistency
LifeMoves, in coordination with the City of Palo Alto, is currently exploring two potential site
designs. Under one option, the project site would have a split land use designation of Major
Institution Special Facilities (MISP) and Conservation Land. An alternative option would loca te
the project entirely on land designated as MISP. The site is zoned Public Facilities (PF) with a
Site and Design (D) combining district. The MISP land use designation allows for government
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uses and lands that are either publicly owned or operated as non-profit organizations.
Therefore, the proposed use is consistent with that land use designation. However, the
proposed use is not consistent with the Conservation Land designation, which only allows for
“resource management, recreation and educational activities compatible with resource
conservation.” Therefore, development of a project within this land use designation would
typically require an amendment to the Comprehensive Plan Land Use Map (Map L -6). Similarly,
the project’s proposed use is consistent with the allowed uses for public facility land, which
include uses on land owned or leased by a public agency to another party. However, the project
may not comply with all of the applicable development standards within the PF Zone. Typically,
Site and Design review is required for a new use or a new building within the PF(D) Zone District
and the project would be evaluated for consistency with the zoning code as part of that
process. These discretionary acts (legislative amendment and design review) would also require
analysis in accordance with the California Environmental Quality Act (CEQA).
However, for projects funded under AB 140 (Homekey), the project is automatically deemed
consistent with all local requirements and no discretionary approvals can be required. This is
outlined in Health and Safety Code section 50675.1.3, subsection (i), which states “Any project
that uses funds received for any of the purposes specified in subdivision (a) shall be deemed
consistent and in conformity with any applicable local plan, standard, or requirement, and any
applicable coastal plan, local or otherwise, and allowed as a permitted use, within the zone in
which the structure is located, and shall not be subject to a conditional use permit,
discretionary permit, or any other discretionary reviews or approvals.” Therefore, neither a
Comprehensive Plan Land Use Map Amendment or Site and Design review are required; under
state law the project must be ministerially approved. In addition, because there are no
discretionary approvals, CEQA does not apply to approval of the proposed development.
That said, leasing the land to LifeMoves would be a discretionary action that may be subject to
CEQA. If Council adopts the attached resolution declaring an emergency shelter crisis
(Attachment A), a specific statutory exemption would apply to the lease . Government Code
section 8698.4, subsection (a)(4) states “The California Environmental Quality Act (Division 13
(commencing with Section 21000) of the Public Resources Code) shall not apply to actions
taken by a state agency or a city, county, or city and county, to lease, convey, or encumber land
owned by a city, county, or city and county, or to facilitate the lease, conveyance, or
encumbrance of land owned by the local government for, or to provide financial assistance to, a
homeless shelter constructed or allowed by this section.” The declaration of an emergency
shelter crisis also permits cities to suspend local procedures for emergency shelter projects;
while this is not necessary for projects funded by Homekey, as discussed above, it could
streamline future shelter projects that may not be funded by Homekey.
Site Concept Plan
The site concept plan mockup will be included in the late packet distributed on September 23,
2021. The plan will take into account necessary Fire Apparatus access needs as well as utility
line easement areas.
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Site Specifics
The LATP Area C site is located in the Baylands Master Plan area as well as the Sea -Level Rise
Policy area. As such, the modulars would need to fit the intent of those policies. For the Sea-
level rise policy, the site needs to be raised at least 3.5 feet above the current grade. The site
access currently is from an access road off North San Antonio. The proposed design would
include direct access to North San Antonio which would require raising the site grade.
There are currently some utilities on site and staff is verifying which utility operators own each
(water, electricity, fiber, sewer, refuse collection). The site will be all electric and not use gas.
There was previous hazmat on this site. Staff is verifying necessary next steps for that.
Site neighbors: the adjacent parcel usage is Green Waste as well as Valley Water (in the future).
Green Waste operationally, arrives on site as early as 4am, Monday-Friday. This allows them to
prepare for commercial bin pull outs and container exchanges, roll-off trucks picking-up debris
boxes, and containers being wiped down or set up (add lids and wheels) to drop off to
customers. This could be a sound impact to the Homekey program. Thus, the modular design
will consider sound mitigation needs.
Timeline, Resource Impact, Policy Implications
Staff and LifeMoves anticipate application costs to be approximately $120,000 up front. The
costs should be reimbursable by the Homekey grant but will need to be covered in the
meantime between LifeMoves and City financial support.
As described above, the capital costs of the Homekey program for 88 units is preliminarily
estimated to be $17.6 million with $14.4 million that could be covered by the grant. Early
provisional commitments from the philanthropic community could cover the remaining $3.2
million gap funding. For 132 units, the preliminary estimated capital costs are estimated to be
$26.4 million with $19.2 million that could be covered by the grant, leaving a much higher gap
funding of $7.2 million to close. The City and LifeMoves would partner to minimize the gap
funding in either scenario, with the intent of mitigating unforeseen financial imp acts specifically
to the City of Palo Alto to the extent possible.
The preliminary estimated operating costs for Homekey would be $2.6 - $4 million annually
(preliminarily estimated around $2.6 million for the 88-unit site). For 132 units, it is estimated
preliminarily to be $4 million annually; these costs may escalate up to $4.8 million. The first 2
years would be covered by the Homekey grant, the 3rd and 4th year are pledged to be covered
by Santa Clara County. The City and LifeMoves would collectively identify and determine
sources to cover at least one year of operating expenses starting in year 5 or 6 after program
launch. The City would continue ownership of the land and would pursue a lease agreement
with LifeMoves as part of this partnership.
Staff is still exploring options for this and discussing draft partnership terms for the operation
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and maintenance of the facility; any of these costs are not currently factored into the financial
impacts outlined in this report. The City will lose rental revenue generated from this portion of
the LATP site through various leases for either City or private use . Staff will gather more
information and share with the City Council in the late packet memo.
Timeline
The grant timeline is as follows: Homekey funds will be available to Eligible Applicants on a
continuous, Over-the-Counter (OTC) basis, rather than on a competitive basis. The following
table summarizes the anticipated Homekey Program timeline. If Project HomeKey is funded,
there will be a very ambitious timeline to deliver the project per State requirements to expend
the funds within 8 months.
Stakeholder Engagement
Further stakeholder engagement will occur if the City is awarded the grant. Thus far, the
engagement has been with partner agencies such as LifeMoves, Santa Clara County Office of
Supportive Housing, and the Housing Authority. Staff has engaged with GreenWaste and will be
in further touch with Valley Water, both are neighbors of the project site.
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Environmental Review
Numerous state laws, including but not limited to AB 140 (2021) and AB 2553 (2020) have
exempted emergency shelter projects, and specifically projects funded by the Project Homekey
program, from the requirements of the California Environmental Quality Act. To the extent an y
of the actions contemplated by the City Council in relation to this project are not covered by
these statutory exemptions, they are exempt pursuant to CEQA Guidelines Section 15269 as
actions to mitigate an emergency related to the unhoused population in Palo Alto, as further
detailed in Attachment A.
Attachments:
• Attachment10.a: Attachment A: Resolution of the Council of the City of Palo Alto
Declaring a Shelter Crisis
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*NOT YET ADOPTED*
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0160053_20210916_ay16
Resolution No. ___
Resolution of the Council of the City of Palo Alto Declaring a Shelter Crisis
R E C I T A L S
A. The County of Santa Clara (the “County”) conducts a biannual census of the homeless
population in the County, which includes sheltered and unsheltered homeless persons
living in the City of Palo Alto (the “City”). This count serves as a baseline for understanding
the homeless population in the region, capturing individuals and families sleeping in
emergency shelters, transitional housing, as well as people living on the streets, in
vehicles, abandoned properties, or other places not meant for human habitation.
B. The County’s last count of the homeless population in Palo Alto was conducted in 2019.
It showed that the population of homeless persons in Palo Alto had increased by 13%
from 2017, from 276 to 313. In the same time span, proportion of unsheltered homeless
Palo Altans grew. In 2017, 8% of homeless Palo Altans were sheltered. In 2019, only 4%
of homeless Palo Altans were sheltered.
C. A number of community-based organizations in Palo Alto provide food, financial
assistance, and other services to those in need. These organizations include Destination
Home, Dignity on Wheels, the Heart and Home Collaborative, and the LifeMoves
Opportunity Services Center. Despite these efforts, a significant number of persons within
Palo Alto are without the ability to obtain shelter.
D. People experiencing homelessness are at a higher risk of injury, illness, and harm due to
weather exposure and are likely to have inadequate access to other basic human services,
such as utilities, sanitary waste facilities, and garbage services, which can have adverse
consequences for themselves and their communities. This is especially true for
unsheltered homeless persons.
E. National analysis from the Journal of the American Medical Association noted that people
experiencing homelessness bear a disproportionate burden of chronic illnesses and have
been unable to consistently practice social isolation, causing them to be
disproportionately affected by COVID-19. Studies from the early months of the pandemic
in the United States demonstrated infection rates were substantially higher among
homeless populations than among those with stable housing.
F. Section 8698.2 of the Government Code of the State of California authorizes the City of
Palo Alto to declare the existence of a shelter crisis upon finding that a significant number
of residents are without the ability to obtain shelter, resulting in a threat to their health
and safety.
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*NOT YET ADOPTED*
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0160053_20210916_ay16
G. Section 8698.1 of the Government Code of the State of California provides limited
immunity for ordinary negligence in the provision of emergency housing by opening
public facilities to homeless persons and suspends strict compliance with housing, health,
or safety standards to the extent that strict compliance would hinder the mitigation of
the effects of the shelter crisis. Moreover, the City may, in place of such standards, enact
health and safety standards to operate during the housing emergency consistent with
ensuring minimal public health and safety.
NOW, THEREFORE, the Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. The Council finds that a shelter crisis exists within the City of Palo Alto because a
significant number of Palo Alto residents are without the ability to obtain stable housing or
shelter, resulting in threats to their health and safety and for the reasons stated in the Recitals
above.
SECTION 2. The Council hereby declares a shelter crisis within the City of Palo Alto.
SECTION 3. The Council finds that the adoption of this resolution does not meet the definition of
a project under Public Resources Code Section 21065, thus, no environmental assessment under
the California Environmental Quality Act is required at present. Individual upgrades or changes
at utility facilities, if needed as a result of the City’s implementation of the Plan, will be analyzed
under CEQA.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
__________________________ _____________________________
Assistant City Attorney City Manager
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