REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, Director Planning and Development Department PHIL SKEI, Assistant Director Planning and Development Department BY: JENNIFER DAVIS, Senior Management Analyst Housing Finance Division SUBJECT ..Title Actions pertaining to a Permanent Local Housing Allocation Agreement between the City of Fresno and Karahunj, LLC for the construction of a multi-family senior affordable rental housing project location at 1514 East Bullard Avenue, Fresno (District 6): 1. Adopt a Categorical Exemption per staff determination pursuant to Section 15332/Class 32 of the California Environmental Quality Act (CEQA) Guidelines 2. Approve a Permanent Local Housing Allocation (PLHA) Agreement with Karahunj, LLC, in the amount of $1,000,000 for the construction of the Solterra Senior Living Affordable Rental Housing Development Phase I, located at 1514 East Bullard Avenue, Fresno, California 93710 ..Body RECOMMENDATION Staff recommends City Council adopt a categorical exemption pursuant to Section 15332/Class 32 (in-fill development) of the CEQA guidelines and approve a $1,000,000 PLHA Agreement with Karahunj, LLC for the predevelopment and construction of Phase I of the Solterra Senior Living Affordable Rental Housing Development, located at 1514 East Bullard Avenue, Fresno, California 93710. EXECUTIVE SUMMARY Karahunj, LLC is constructing 28 senior housing units, 8 of which will be preserved as Low-Income housing for age-restricted eligible households whose incomes are at or below 80% of the Area Median Income (AMI). The estimated Project cost is $5,560,000, of which $1,000,000 is proposed to be funded with Permanent Local Housing Allocation (PLHA) Program funds. Phase I of the Project will consist of 14 units and is planned to break ground in August 2024. Once completed, the entire Project will provide 28 newly constructed units for senior residents. All PLHA-assisted units will be constructed as part of Phase I. BACKGROUND The Solterra Senior Living Affordable Rental Housing Development consists of the construction of 28 total units, on-site and off-site improvements, and amenities. Eight (8) of the 28 units will be PLHA-Assisted units available to Low-Income age restricted eligible households whose incomes are at or below 80% of the area median income (AMI). The project will be located at 1514 East Bullard Avenue, Fresno, California 93710 (APN 409-293-16). The Project site is located within the City's Infill Opportunity Zone and the proposed use is consistent with the entitlements approved through Conditional Use Permit No. C-15-157, Variance No. V-15-004, and the Statement of Covenants Affecting Land Development to Construct a Senior Housing Complex with a Density Bonus at Property Located at 1514 East Bullard Avenue. The PLHA-Assisted units will be comprised of 6 one-bedroom units at 677 square feet each, and 2 two-bedroom units at 1,020 square feet each. PLHA Funds will be made available by the City for payment of PLHA eligible construction costs not to exceed $1,000,000.00 for the 8 PLHA-Assisted Units as determined by the City, as needed, for PLHA eligible Project hard and soft construction costs. The Project has a total estimated cost of $5,560,000 and the Project's funding sources are comprised of: 1) Institutional Construction funding of $3,800,000; 2) City of Fresno PLHA Loan of $1,000,000; and 3) Developer equity of $760,000. Of the Project's development budget, $4,528,000 is allocated to hard costs; $472,000 is allocated to soft costs; and $560,000 is allocated to land value. Phase I of the Project is scheduled to begin construction on August 5, 2024, and the approximate construction completion date is scheduled for September 5, 2025. Once completed, the Solterra Senior Living Affordable Rental Housing Development will offer new, quality affordable rental housing units to senior residents of our community that are often living on a fixed-income and struggling to find housing. The Project's 28 rental housing units will increase the City's housing stock, bringing the City closer to meeting its affordable housing goals and objectives as outlined in the One Fresno Housing Strategy, 2020-2024 Consolidated Plan, and Housing Element of the 2035 General Plan. Further, the Project will make a positive impact on the neighborhood and surrounding area by increasing affordable housing, encouraging neighborhood revitalization, promoting sustainable and equitable development, and improving the overall well-being of the city. The City Attorney's Office has reviewed and approved as to form the attached Permanent Local Housing Allocation (PLHA) Agreement. ENVIRONMENTAL FINDINGS Staff has performed a preliminary environmental assessment and determined that this Project falls within the categorical Exemption set forth in CEQA Guidelines section 15332 as Infill Development because the Project is consistent with applicable general plan and zoning designations, occurs within city limits on a site of less than five acres and is surrounded by urban uses, has no value as a habitat for endangered or threatened species, can be adequately serviced by all utilities and services and approval of the project would not result in any significant effects relating to traffic noise air quality or air quality. Furthermore, staff has determined that none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines Section 15300.2 apply to this Project. LOCAL PREFERENCE Local preference was not considered because the action today does not include a bid or award of a construction or services contract. FISCAL IMPACT This project is located in Council District 6 and will not impact the General Fund. The PLHA Program funds for the proposed Solterra Senior Living Affordable Rental Housing Development are appropriated in the 2025 Planning and Development Department fiscal year Budget. Attachments: CEQA Environmental Assessment - Solterra Senior Living Affordable PLHA Agreement for Solterra Senior Living Affordable Rental Housing Development