Board balks at transfer plan for Foothill Terrace grant, orders staff to re-open funding
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Summary
After a lengthy public and staff exchange, Calaveras County supervisors declined to amend a subaward that would have treated a 2017 property acquisition as eligible for REAP reimbursement, and directed staff to pursue alternatives including termination of the existing subaward and reissuing a notice of funding availability.
Calaveras County supervisors on Feb. 10 declined to approve an amendment that would have let Stanislaus Regional Housing Authority (SRHA) transfer ownership of the Foothill Terrace property into a limited partnership and thereby qualify a 2017 acquisition for reimbursement from a regional REAP (REIT) grant. Instead the board instructed staff to return with options to terminate the current subaward and reissue a competitive notice of funding availability.
Kathy Gallino, economic and community development director, told the board the county executed a REAP agreement worth $1,747,972.21 in September 2024 to support predevelopment costs for workforce housing and had previously subawarded funds to SRHA in June 2025. Gallino said SRHA later proposed a limited partnership with Great Valley Housing Development Corporation to permit reimbursement for acquisition costs incurred in 2017; she said she sought and received a legal determination from the state Department of Housing and Community Development (HCD) that the transaction could be eligible under the grant.
Kim Ryan, speaking for SRHA, said creating a limited partnership and transferring the property would allow the acquisition cost to meet the grant parameters and enable reimbursement for predevelopment expenses. "The REIT funding is essential to the project, and without it, this affordable housing project would be put on hold," Ryan said. She estimated more than $4.5 million in predevelopment costs are ready for reimbursement and that, depending on timing, roughly $700,000 in acquisition costs could be eligible within two to three weeks.
Supervisors and members of the public pushed back on the proposed administrative workaround. One supervisor summarized the concern as a potentially complicated route that reclaimed funds for a property already purchased years earlier rather than delivering immediate housing in Calaveras County. "It seems pretty complicated to me for us to do a shell game so someone can get their money back for a piece of property," the supervisor said, urging the board to favor simpler paths to housing delivery.
Habitat for Humanity Calaveras and other local advocates urged the board to consider awarding funds to shovel-ready projects in the county. Peter Mauer of Habitat (board member) said his organization has a ready-to-build Eureka Oaks project in Angels Camp and asked the board to allow other applicants to compete if the county reopens the funding. "This is not a one-off project," Mauer said of Habitat's work, and he asked staff to put the funds back out for competitive proposals.
County counsel explained the existing contract can be terminated on 15 days' notice, and staff recommended bringing back options at the next substantive meeting. The board ultimately signaled consensus not to approve the amendment allowing the transfer and directed staff to prepare materials to either terminate the current subaward and reissue a notice of funding availability or otherwise bring forward alternative partnership models and timelines for how to allocate the REAP funds.
Planning staff noted that any change in subaward could affect regional housing credits (RHNA) and that negotiating swaps with the City of Angels Camp could be a path if the board selects a local nonprofit whose project is not within the county's RHNA geography. Gallino said there are several projects queued for predevelopment funding, including proposals in San Andreas, Valley Springs and Arnold.
The board asked staff to return with a clear timeline so the county can meet the REAP expenditure deadline. No final contract termination vote occurred at the Feb. 10 meeting; the board instead gave direction so staff can return with actionable options for formal consideration.
What's next: staff will return with a proposed timeline and options for terminating the current subaward and reissuing the grant opportunity, as well as potential avenues to preserve RHNA credit if the board selects a subrecipient outside the county's RHNA jurisdiction.
