County staff reports ARPA childcare loans; supervisors press to protect funding for large Le Petit Alphonse nursery

County staff told the Board of Supervisors on Feb. 25 that $3.8 million in American Rescue Plan Act funds allocated to expand child-care capacity has been largely committed to a set of local projects and that $508,323 remained unspent. Staff summarized the programs forgivable loans and status of each award and highlighted the largest project, Le Petit Alphonse (LPE), a purchased facility projected to add the countys single largest number of infant and child-care slots.

Daniel Sanchez of the CEOs office and Celeste Gonzalez presented the ARPA childcare items and individual project status. Sanchez described six principal grants and loans: Natures Way Montessori (purchase, $1,100,000); a large purchase for Le Petit Alphonse (reported in staff remarks as $1,200,000); Little Ivy (major renovation, about $300,000 remaining); and three smaller home-based provider awards (Children's Adventure, Bohan Family Child Care and Navarre). Sanchez said Le Petit Alphonse closed escrow Dec. 17, 2024, and the owner plans to renovate, secure required permits and open later in 2025, but litigation by neighbors is pending and has affected financing options.

Le Petit Alphonse founder Neli Pentacci described closing escrow on the facility and said a pending lawsuit prevented access to a more favorable federal (SBA) loan; she said she instead used a private bridge loan that reduced her scholarship fund and increased her costs by about $428,728. Pentacci said she has roughly $2.9 million in grants for the project but needs additional short-term funding to proceed with permits and construction. "They closed escrow on December seventeenth of last year," Sanchez told the board; "she does currently possess the facility. It is hers."

Supervisors said they supported the program and expressed concern that lawsuits or delays could jeopardize a major addition of infant slots. Supervisor Alessio described Le Petit Alphonse as a nearly 20,000-square-foot former church with about 191 spots planned and called neighbors' CEQA litigation a potential barrier to a high-impact public-private project. Multiple supervisors asked staff to tighten verification and reporting for ARPA-funded childcare slots, to ensure the county can confirm promised capacity and guard against clawback risk from the Treasury.

Board members gave informal direction to the CEO's office to look for additional ways to protect the county's ARPA investments in childcare, including considering options to shore up the Le Petit project should litigation risk imperil the openings. Staff said they would tighten invoicing and sign-in sheet requirements for providers and that the countys auditor-controller is engaged in oversight.