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File Number: 23-149 o Policy 58.11 Service Enriched Housing - Promote social services and programs in affordable housing projects that assist lower-income households in obtaining the financial resources needed to increase and stabilize their housing choices in the City. Environmental Review The proposed project for Project Homekey 3.0 application is exempt from the provisions of the California Environmental Quality Act ("CEQA"), pursuant to the Affordable Housing Exemption of Section 15194 of the CEQA Guidelines for a project consisting of the construction, conversion, or use of residential housing consisting of 100 or fewer units that are affordable to low-income households, and pursuant to the Class 1 Exemption of Section 15301 of the CEQA Guidelines for the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. City staff must file a notice of exemption as required by Section 21152.1 of the Public Resources Code, pursuant to Section 15062 of the CEQA Guidelines. Prior to close of escrow in late Summer/Fall 2023, the City will complete required federal National Environmental Protection Act (NEPA) environmental review for the acquisition and rehabilitation of the Property. Summary of Public Outreach Efforts ·May 24, 2022 - City, along with its nonprofit partners Building Futures and Eden Housing, Inc., conducted a community meeting at the Main Library to present and receive public feedback/comments on the State Homekey 2.0 application, and the proposed interim homeless navigation center/shelter to permanent supportive housing project for the Nimitz Motel. The meeting was conducted in person at the Main Library and online via Zoom. Legal Analysis The City Attorney’s Office reviewed and approved as to form this staff report and resolution and drafted the purchase and sale agreement, including all amendments. Financial Impacts City Council should consider approving a $7,100,000 operating/services subsidy guaranty over five years (or approx. $1,420,000 per year) from General Fund monies. Previously, City Council approved up to $5,600,000 over five years as a subsidy commitment guaranty. The annual pro-rata share of the $5,600,000 is included in the two year FY2023-2025 City Budget that City Council approved on May 15, 2023. The additional $1,500,000 in subsidy guaranty is based on a more thorough budget analysis completed by the Homekey 3.0 project team to meet the mandatory five-year operating requirement for the State Homekey Interim Shelter category. Staff anticipates there will be public funding (e.g., County, State) in the coming years for homeless services operations and shelter to reduce the $7,100,000, such that the additional subsidy gap funding would not be needed at all, or until Year 5, assuming the City is awarded Homekey Page 6 City of San Leandro Printed on 5/31/2023