REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, Director Planning and Development Department PHILIP SKEI, Assistant Director Planning and Development Department BY: JENNIFER DAVIS, Sr. Management Analyst Housing Finance Division SUBJECT ..Title Actions pertaining to the California Department of Toxic Control Substances Equitable Community Revitalization Grant, Round 2 (Council District 3): 1. ***RESOLUTION - Authorizing and directing submission of a grant application to the California Department of Toxic Control Substances Equitable Community Revitalization Grant, Round 2, for up to $10,000,000 in a funding request for the remediation of 1457 H Street; and authorizing the City Manager, or designee, to sign all required applying documents. (Subject to Mayor's Veto) 2. Approve the Standard Voluntary Agreement between the City of Fresno and the California Department of Toxic Control Substances in the amount of $143,750 for voluntary oversight of the remediation of 1457 H Street. ..Body RECOMMENDATIONS It is recommended that Council approve a resolution authorizing and directing submission of a grant application to the California Department of Toxic Control Substances Equitable Community Revitalization Grant, Round 2, for up to $10,000,000 in a request for funding for the remediation of 1457 H Street; authorize the City Manager, or designee, to sign all required application documents; and approve the Standard Voluntary Agreement between the City of Fresno and the California Department of Toxic Control Substances in the amount of $143,750 for voluntary oversight of the remediation of 1457 H Street. EXECUTIVE SUMMARY On August 14, 2023, the California Department of Toxic Substances Control (DTSC) issued an Equitable Community Revitalization Grant (ECRG) Round 2 Guidelines soliciting applications for grant funding. The City of Fresno (City) is eligible and intends to apply for ECRG Round 2 funding, by no later than October 9, 2023. Staff requests authorization to finalize and submit an ECRG application to DTSC for grant funding in an amount up to $10,000,000. If awarded, the ECRG grant funds will be used for the remediation of City-owned property located at 1457 H Street (Site) with the intent of developing a future affordable micro housing project at the location. Regulatory oversight is a requirement for applications to ECRG for grant funding. DTSC has agreed to provide regulatory oversight, should the City be awarded grant funding, during the Site remediation and associated tasks and has provided the Standard Voluntary Agreement between the City and DTSC. If approved, the Standard Voluntary Agreement would allow for $143,750 to be spent to obtain the regulatory oversight from DTSC that is necessary for the City to submit an application for ECRG funding. BACKGROUND The California Department of Toxic Substances Control (DTSC) issued an Equitable Community Revitalization Grant (ECRG) Round 2 Guidelines soliciting applications on August 14, 2023, to implement the Cleanup in Vulnerable Communities Initiative under Senate Bill 158 (Chapter 73, Statutes of 2021) allocating $500 million to DTSC to expedite the cleanup and beneficial reuse of contaminated properties, with priority given to properties in historically vulnerable and disadvantaged communities. There is approximately $85 million available for funding through Round 2 of the ECRG application, which closes on October 9, 2023. The City of Fresno (City) is an eligible entity and intends to apply for up to $10 million to facilitate the remediation of City-owned property located at 1457 H Street (Site), to allow for a revitalizing reuse of the Site. The Site is located within the Fulton Corridor and is bordered by Stanislaus Street to the northwest, H Street to the northeast, Tuolumne Street to the southeast, and railroad tracks to the southwest. The Site consists of approximately 2.98 acres of primarily vacant land with a communications transmission facility located on the northeast corner. Historically, the Site was part of the central rail corridor and was owned by the Southern Pacific Railroad. From about 1898 through 1987, the Site was occupied by railroad tracks and associated facilities, such as storage buildings, loading platforms, and freight structures. From at least 1918 until 1970, the Site contained 12 tracks/spurs and during this timeframe it was a common practice to treat the tracks/spurs with environmentally persistent metal-containing pesticides and herbicides to maintain track integrity. Additional adverse impacts may have resulted during this time due to the extended presence of diesel fuels and lubricants from spills and/or accumulated engine drip-related releases, diesel fuel exhaust, and contaminants derived from the presence of rail ties treated with creosote. The Site meets the federal definition of a "brownfield site" - real property, the reuse of which may be complicated by the presence or potential presence of hazardous substances, pollutants, or contaminants. Further, the Site is located within a census tract area with the highest pollution burden (97 percentile) and disproportionate exposure to cumulative impacts, including socioeconomic factors and environmental effects. The Site, if left in its current state, has the potential to negatively affect the health and quality of life for this already vulnerable community. In 2002, City Council adopted Resolution No. 2002-10, determining the existence of an immediate need to acquire the subject property for public purposes and having the power of eminent domain in accordance with Article I, Section 19 of the California Constitution and Code of Civil Procedure Section 1240.010, deemed it necessary and in the public interest and the greatest public good to acquire the Site. On December 23, 2002, the City was granted title to and ownership of the Site by a Quitclaim Deed from Union Pacific Railroad Company and recorded in the Fresno County Recorder's Office as Instrument No. 2002-0231709. The Site is located within the Fulton Corridor and the Fulton Corridor Specific Plan (FCSP) for Downtown Fresno. As part of the vision for the revitalization of the area, a substantial objective of the FCSP is to add 6,300 residential units through various high-density housing options, including infill development of vacant land. The City's purpose of applying for ECRG funding is to facilitate the assessment, investigation, and implementation of the remediation of the Site for a revitalizing reuse that will include 100% Extremely Low-Income housing (30% AMI or below). This application is an opportunity for the future development of this under-utilized and vacant land into affordable housing for the most vulnerable members of our community, thereby improving neighborhood quality and advancing the health and overall well-being of the community in this disadvantaged area. Pending approval, staff intends to apply for up to $10,000,000 in ECRG Round 2 funding, by no later than October 9, 2023, to be used for the remediation of 1457 H Street. The City Attorney has reviewed the resolution and agreement and approved both as to form. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this item does not qualify as a "project" and is therefore exempt from the California Environmental Quality Act Requirements. LOCAL PREFERENCE Local preference is not applicable because this item does not involve public contracting or bidding with the City of Fresno. FISCAL IMPACT There is no impact on the City's General Fund as a result of this action. Attachments: Resolution Authorizing Application to ECRG Standard Voluntary Agreement with DTSC