In September 1993, the City’s Planning Commission approved CUP-146-93 permitting the operation of a community residential care facility consisting of 14 beds in 12 rooms at the property located at 12781 Josephine Street.

In September 2008, the current facility operator, Veterans First, purchased the property at 12781 Josephine Street with assistance from the Department of Housing and Urban Development (HUD) in the form of an $823,000 forgivable loan, memorialized in an Affordable Housing Agreement that carried with it a 20-year affordability covenant. In June 2015, Veterans First sold the property, but maintained their role as facility operator.

In May 2017, HUD issued a notice stating the property owner at 12781 Josephine was in default of the Affordable Housing Agreement and was actively looking to sell the property. In addition, Veterans First was unable to continue providing care for the 22 veterans residing in the facility, thus placing the residents at risk of becoming homeless. This began a series of collaborative efforts by local agencies to evaluate the housing and medical needs of the residents, including an opportunity to seek grant funding for community-based transitional housing under Senate Bill 837.

Senate Bill 837 was adopted in June 2016, introducing a community-based transitional housing program and grant funding to be administered by the California Department of Finance for transitional housing and community-based services for individuals in the community who may benefit from the program’s services as part of the 2016-2017 State Budget. This program allows cities to request a grant of up to $2 million to fund: 1) a third-party service provider to operate a transitional housing facility, 2) law enforcement services in the vicinity of the facility, and 3) community outreach efforts within one-quarter mile of the facility.

Upon receiving the default notice from HUD, a team of local agencies (The Department of Veteran’s Affairs (VA), HUD, the County of Orange, the City of Garden Grove (CITY), Volunteers of America of Los Angeles (VOALA), and Affordable Housing Clearinghouse (AHC)) formed a task force to ensure the current residents were receiving the highest level of care available to them.

The Department of Veteran’s Affairs (VA), HUD, and the County of Orange collaborated to reevaluate the housing and medical needs of the residents. Their evaluation determined twenty-one (21) of the twenty-two (22) residents are eligible for assistance, and that a portion of the residents require a higher level of care than they are currently receiving.

AHC (in partnership with HEAL Collective) is in negotiations with the current owner to purchase the property. Both organizations have issued letters in support of the project (attached). HUD has issued a Letter of Support (attached) approving the sale and transfer of the affordability loan upon acquisition of the property.

VOALA, as the third-party service provider, will take over facility operations upon AHC’s acquisition of the property. VOALA estimates being able to bring the facility into compliance with regards to the CUP within six (6) months of taking over as operator.

Adoption of the attached Resolution is required to submit a Grant application that confirms a CUP was approved for the operation of a community residential care facility. Staff will present for consideration at a future City Council meeting, a Service Agreement between the City and VOALA to administer services to facility residents over a period of ten (10) years.

If the City is successful and awarded the Grant, the City will receive an amount of $2 million, of which $990,000 will be used to purchase equipment for the Police Department, $10,000 will be used for community outreach, and $1 million will be used to fund the service provider (VOALA) over a period of ten (10) years.

It is recommended that the City Council:

• Adopt the attached Resolution confirming CUP-146-93; and

• Authorize the City Manager or his designee to submit an application for the Department of Finance Transitional Housing Grant.

By:  Nate Robbins, Sr. Program Specialist