$11.4M OK'd for homeless site

Funding will help turn property in Larkspur into housing for 43

Marin County will pay $11.4 million to help renovate a Project Homekey site in Larkspur.

The Board of Supervisors approved an agreement and other covenants on Tuesday outlining requirements for Episcopal Community Services to receive yearly subsidies from the county to operate the site. The project will provide permanent supportive housing for 43 currently homeless disabled people.

“These are important steps we're taking today,” said Supervisor Katie Rice, who spearheaded the effort to gain approval for the project at 1251 S. Eliseo Drive.

Supervisors accepted a $15.49 million state Project Homekey grant to help fund the new housing in February. Of that amount, $12.9 million will go to Episcopal Community Services.

Gary Naja-Riese, director of the county's division of homelessness and whole person care, said the nonprofit will use $11 million of that to purchase the property and will combine the remaining $1.9 million with the county's $11.4 million to pay for rehabilitation of the former skilled nursing center.

The county plans to use federal COVID-19 relief funds and state grants to help compensate

it for its $11.4 million expenditure. The county has applied for $6 million in state No Place Like Home grant funds.

“We should hear in June whether we've been successfully awarded or not,” Naja-Reese said.

By accepting the Homekey grant money, the county has also assumed responsibility to cover $1.6 million in ongoing annual operating costs to provide supportive services to the residents.

The county gets to use $2.5 million from the state Homekey grant to cover some of those costs. It also expects to use $910,000 in annual income from federal housing vouchers to help offset the expense. Nevertheless, by year five, when all of the Homekey grant money has been exhausted, the ongoing, annual operating shortfall is estimated to be $850,000.

During a budget workshop in March, County Administrator Matthew Hymel said he will recommend that supervisors allocate $7 million in American Rescue Plan Act funds next year to homelessness and permanent supportive housing.

The Larkspur Homekey project faced stiff opposition from neighbors. More than 2,900 people signed a Change.org petition voicing their displeasure.

After supervisors accepted the Homekey grant, the South Eliseo Neighborhood Alliance filed a lawsuit in an effort to block the project. The alliance asserted that county officials failed to meet all of the requirements for deciding that the site is statutorily exempt from the California Environmental Quality Act.

On Tuesday, only three members of the public raised objections, however.

James Holmes of Larkspur pointed out that the agreement approved by supervisors was not with Episcopal Community Services but with 1251 S. Eliseo LLC, a California limited liability company with Episcopal Community Services as its sole member.

“I am concerned about this,” Holmes said. “A limited liability company is a well-known legal structure for a venture to wall off its assets from the liability arising from a new venture. Setting up a separate LLC seems to suggest a certain reluctance on the part of ECS to put its assets where its ask is.”

Kevin Kitchingham, director of housing development for Episcopal Community Services, said a limited liability company is a “very traditional, real estate structure.” Kitchingham said use of the LLC will make it easier for the nonprofit to seek tax credits for the project.

Under the terms of the agreements approved by the county, use of the 1251 S. Eliseo Drive is limited to housing at least 43 lowincome people. The agreements also specify that the county can purchase the property back from the nonprofit at any time for $1, plus the assumption of any outstanding secured debt encumbering the property.

Holmes said the agreements, however, fail to define the responsibilities of Episcopal Community Services toward the project's neighbors.

“For instance, there is no provision for eviction for causing problems or making threats in the neighborhood,” Holmes said. “There are tenant protections but not community protections.”

Naja-Riese said closer to the facility's opening date in the spring of 2023 the county and Episcopal Community Services will amend their operating agreement to include more details about required clinical support for residents and a community services safety team.

Naja-Riese said there may also be additional input from an 18-member community advisory group that has already been formed. The group's members include five Greenbrae residents, two Larkspur residents and two Kentfield residents who submitted applications to serve on the committee.

The advisory group has representatives from the Kentfield School District, the Marin County Sheriff's Office, the Central Marin Police Authority, the city of Larkspur, and Marin County Parks. Larkspur Councilman Scot Candell, who was candid in his skepticism regarding the project, is a member of the group.

Several members of the public praised supervisors on Tuesday for approving the project.

“I just really want to thank the board for taking this courageous step,” said Joan Brown of Kentfield. “Our community will be enriched by this.”