Placer County rejects $10.8 million loan pledge for Hope Way Apartments after fiscal and legal concerns

The Placer County Board of Supervisors voted down a staff‑recommended loan and funding agreement that would have committed up to $10.8 million to the Hope Way Apartments project, concluding a contentious second item that brought dozens of public commenters back to the podium.

Economic Development and Housing staff presented the loan terms: a proposed residual‑receipts construction loan to Penryn 7 21 LP (the special‑purpose entity formed for the project), with a 55‑year term and 3% simple interest. Staff said the county currently holds approximately $1.7 million in eligible Low and Moderate Income Housing Asset and collected Bickford Ranch in‑lieu funds available for immediate distribution; the remainder of the pledged $10.8 million would rely on future Bickford Ranch in‑lieu fee collections, which the applicant would bridge with private financing until those future fees materialize.

Housing staff and the applicant’s counsel described the loan as a soft, residual‑receipts financing instrument intended to strengthen the project’s tax‑credit competitiveness and close a financing gap. Marie Maniscalco, the county housing project planner, said the $10.8 million represents roughly $45,000 per unit and about 9% of the project’s estimated $117 million total cost.

Public commenters and several supervisors raised fiscal and policy concerns. Opponents argued that pledging an entire in‑lieu revenue stream to a single large project would exhaust funds that smaller affordable projects need for gap financing and leave the county unable to support future shovel‑ready proposals. Local lenders and a longtime loan officer questioned the county’s decision to underwrite a long‑term residual loan at 3% interest and asked whether the loan was secured by the real property; several speakers urged the county to require stronger collateral or to negotiate a smaller commitment.

Proponents — including Housing Trust Placer, USA Properties Fund and the building trades — said the proposed loan follows the county’s housing action plan and housing‑trust guidelines and argued in‑lieu fees are an intended mechanism to support off‑site affordable housing when on‑site construction is not feasible. Robin Van Ecklenberg, CEO of Housing Trust Placer, noted the county had identified the site in the housing element process and said HTP had invested predevelopment funds and time to reach the financing stage.

Board members debated the allocation risk and whether the county would be contractually obligated if Bickford Ranch fees do not materialize. Staff clarified the county would not disburse future in‑lieu fees until those funds are collected and that the developer would provide bridge financing in the interim; the developer would remain responsible for the bridge amount if future fees did not arrive. Legal counsel confirmed the loan agreement requires the developer to notify the county of proceedings that could affect their ability to perform; any such change would trigger staff evaluation under the contract.

When the Board took roll-call on the loan package, the motion failed: Supervisors Gore and Gustafson voted yes; Supervisors Dimitay, Jones and Chair Landon voted no. After the vote, supervisors discussed options for revising the proposal or asking the applicant to return with a smaller or amended funding request.

Staff said applicants may return with revised financing requests and that county procedural protections in the proposed agreement would prevent any disbursement until the county confirms the developer’s overall financing package meets requirements. The Board adjourned with direction that applicants seeking county funds could reapply with alternate proposals.