Council authorizes $1.0M+ PLHA/PIP award for downtown affordable housing project

The Crescent City Council voted Monday to authorize the city manager to execute a PLHA–PIP loan agreement with Community Systems Solutions for a proposed downtown mixed-use affordable housing project known as 'Redwood Downtown.' The council approved the agreement after staff and the developer outlined project scope, funding sources and security for the city’s grant.

Staff said the package combines a roughly $650,000 PIP allocation with PLHA funds to total just over $1,000,000. The project as presented is estimated at approximately $11,000,000 and would include about 27 units, with roughly 80% proposed to be restricted to households at or below 80% of area median income and the remaining units up to 120% AMI. The developer told the council construction would realistically not begin before 2027 and that the first phase would use the city funds for land acquisition, engineering and entitlements.

To protect the city and satisfy state requirements, staff described security measures including promissory notes, a deeded interest in the subject property and other investor assurances. Staff said the PLHA/PIP funds must be spent quickly (PIP funds need to be used by February–March timeframes cited) and that if the required four affordable units are not delivered by June 2030 the city may be required to return funds to the state; staff said the grant is secured by real property and promissory notes from investors.

Council members and members of the public asked about worst-case scenarios (contractor bankruptcy, cost escalation) and parking implications; the developer described layered finance including tax credit equity, state grants and construction loan financing and said the team has experience securing similar funds. After questions and public comment the council moved, seconded and approved the loan agreement authorization by voice vote.