Kings County approves Homekey interim-housing agreement and service contract after multi‑year stalled project

Kings County's Board of Supervisors on July 14 approved a Homekey standard agreement with the California Department of Housing and Community Development (HCD) to provide interim housing for 18 eligible tenants through Dec. 31, 2030, authorized a sole‑source service contract with King's Community Action Organization (KCAO) to operate the Pathways interim‑housing program, and retroactively approved a property agreement amendment related to the stalled Triangle Courtyard Homekey project at 11360 10th Avenue in Hanford.

The action came after Human Services Agency Director Wendy Osekafo delivered a detailed study‑session update tracing the project's history: a $4,434,614 Homekey grant awarded Nov. 13, 2020; an original design‑build agreement with Green Galaxy Builders (about $4.8 million); partial delivery of 20 of the planned 24 manufactured units; the county's termination of Green Galaxy on Oct. 11, 2022; Cornerstone's takeover and engagement of Prefab Innovations; and subsequent workmanship, funding and lien disputes that stalled completion.

Osekafo told the board HCD had issued a notice of breach for failure to install all 24 units and for unpaid property taxes, mediated unsuccessfully in April 2025, and subsequently offered an option to remove restrictive covenants if Cornerstone sells the property and transfers sale proceeds to the county. Under a settlement agreement dated March 24, 2025, the county took steps to secure site control and facilitate sale of the property. Osekafo said the property is currently in escrow and is expected to close on or before July 25, at which point the county would receive approximately $950,000 in proceeds to support interim housing and related obligations.

Osekafo described prior county disbursements: the board in February 2024 authorized up to $665,000 in Homeless Assistance and Prevention (HAP) funds to help complete the project; the county dispersed $407,000 tied to specific milestones but determined the project was not viable to finish as originally intended. An independent assessment engaged by the county in January 2025 found substantial workmanship issues and projected significantly higher completion costs.

Cornerstone board member David Stanfield (King's Gospel Mission) addressed the board and described the nonprofit's efforts after taking over the project in October 2022. Stanfield said Cornerstone discovered internal financial inconsistencies, removed the prior contracted manager and CEO David Clevenger in late 2024, and has been working with county staff to resolve liens and advance sale of the property.

The board then considered three formal items tied to Osekafo's presentation: (1) approval of HCD Homekey standard agreement 20HK18920 to operate interim housing for 18 participants through Dec. 31, 2030; (2) approval of a sole‑source services agreement with KCAO to provide case management and housing navigation for the Pathways program (July 14–Dec. 31, 2030); and (3) retroactive approval of the county's property agreement amendment (agreement 26‑040) that permits settlement of an EDD lien and establishes repayment terms.

Joey Cox of KCAO explained the organization's existing bridge‑housing operations and said most funds in the proposed contract would pay nightly room charges (KCAO negotiated rates of about $50–$55 per night with local providers) and that KCAO would tap existing staff for case management (approximately 25% of one case manager's time). Cox said KCAO has prior experience with HCD guidelines and multiple similar contracts.

During public comment, an online speaker who identified herself as Ruby urged the board to pause approvals, alleging the project represented a "$4,300,000 bait and switch," citing heavy county motel costs to shelter people while units sat unfinished, and raising concerns about ADA compliance, audits and an alleged criminal investigation tied to Cornerstone's former CEO. Ruby called for stronger oversight and an audit before the board approved multi‑year commitments.

Supervisors asked staff questions about oversight, KCAO's board approval and monitoring options. County staff emphasized that the HCD standard agreement and the KCAO service contract are service‑oriented (the county is not buying a hotel) and that HCD conditions and county contract monitoring will apply.

All three items were moved and approved by the board on July 14. The property agreement amendment includes an accommodation for an Employment Development Department lien of $52,931.44 to be satisfied out of sale proceeds if necessary and establishes a repayment schedule (deadline for full repayment 06/17/2033) and transfer of certain site materials (27 pallets of TruGrid) that could be sold to recoup costs.

The county will use sale proceeds and allowable housing grant funds (including permanent local housing allocation and HAP program funds) to continue interim housing for the 18 Homekey‑eligible tenants through the end of 2030 if HCD and escrow conditions are met. Osekafo said the new HCD standard agreement (20HK18920) and a service agreement with KCAO will follow the presentation as formal agenda items and have been reviewed by county counsel as to form.

The board's approvals were procedural votes to accept the agreements and authorize execution; the project remains the subject of prior litigation, lien resolution and an ongoing requirement to ensure HCD conditions are met. The county will continue monitoring contractor recoveries and any remaining legal actions tied to Green Galaxy or Prefab Innovations. If escrow closes as expected, the property sale proceeds will be used to support interim housing obligations and repayment plans outlined in the amendment.