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Yuba City planning staff: Merriment Village faces funding gap, HCD grant limits phasing
Summary
City staff told the Planning Commission that Merriment Village, a proposed 217-unit multifamily project by Habitat on Walton Avenue, still has a funding gap and cannot simply be reduced in size without affecting its HCD grant.
The Yuba City Planning Commission heard an update on Merriment Village, a proposed 217-unit multifamily development by Habitat on Walton Avenue, and was told the project still faces a funding gap.
Planning staff member Mr. Libby told commissioners that Habitat is working with banks and other partners to close the gap but that rising construction costs and tariffs have complicated financing. "That project has a funding gap," Libby said. "Habitat's been working to try to close that funding gap, and they continue to do so."
Commissioners asked whether the shortfall applied to the entire project or only an initial phase. Libby replied that the scaled-down Phase 1 also has a funding gap and added that state grant constraints limit flexibility: "Unfortunately, because the grant money that they received from HCD was for development of a certain amount of housing units, and so they don't have the flexibility to say, okay. Well, let's just shave off a certain number of units and and continue to build. Then you would get a reduced grant amount as a result."
The commission and staff noted the City Council has expressed continued support for the project, but that closing the funding gap is the developer's responsibility. No formal action was taken; staff said they will provide updates as negotiations and financing progress.
Habitat and project financing sources were discussed in general terms during the update; specific lenders, funding commitments or a timeline for a final decision were not specified.
