Special Notice / Hearing: None
Vote Required: Majority
To: Honorable Board of Supervisors
From: Mike Callagy, County Executive
Subject: Memorandum of Understanding with South San Francisco Regarding Supportive Housing Project
RECOMMENDATION:
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Adopt a resolution:
A) Approving a Memorandum of Understanding with the City of South San Francisco regarding the County’s supportive housing project at 721 Airport Boulevard under which the County agrees to pay the City an amount not to exceed $1,190,000 and to take certain actions in furtherance of the project until December 31, 2030; and
B) Approving the taking of all necessary actions by the County Executive, or designee(s), in connection with the Memorandum of Understanding.
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BACKGROUND:
The County applied for and received an award under Round 3 of the State’s Project Homekey program (“Homekey”) to fund the purchase of the real property formerly occupied by the Ramada Limited San Francisco Airport North located at 721 Airport Boulevard, South San Francisco (the “Property”) for use as permanent supportive housing for individuals and families experiencing or at risk of homelessness (the “Project”). The Project will be operated by Episcopal Community Services (“ECS”) and its affiliate entities (“Operator”).
The City of South San Francisco (“City”) has expressed concerns about implementation of the Project, including: (a) loss of Transit Occupancy Tax (“TOT”) revenues to the City due to conversion of the Property from a hotel to a residential use; (b) the County’s service provisions and management plans for the Project; and (c) exterior improvements, ongoing maintenance, and repairs of the Property.
DISCUSSION:
In response to the City’s expressed concerns, the County and City have negotiated and entered into the attached Memorandum of Understanding regarding the Project (“MOU”), which, by its terms, takes effect upon approval by both the Board of Supervisors and the City Council. The City Council approved the MOU on May 28, 2025, and staff now recommends approval by the Board.
The material terms of the MOU, which remain in effect until December 31, 2030, are as follows:
• To address the City’s projected loss of TOT revenue from conversion of the Property from a hotel to residential use, the County agrees to allocate and authorize a single one-time lump-sum payment to the City in the amount of $190,000; and
• The County agrees to allocate and authorize an additional one-time lump-sum payment to the City of $1,000,000 in full satisfaction of any and all applicable or potentially applicable Impact Fees (including, without limitation, the City’s Transportation Impact Fee, Parks and Recreation Fee, Childcare Fee, Library Impact Fee, and Public Safety Impact Fee) relating to the Project; and
• The County agrees that it and/or its Operator will conduct community outreach and make reasonable efforts to engage with the City in an attempt to incorporate aesthetics and design feedback into exterior building improvements for the Project; and
• The County agrees to maintain an appropriate level of supportive services, staffing, and security for the Project, as determined in the County’s reasonable discretion consistent with Homekey requirements, so long as the Project remains in operation and use as a permanent supportive housing project; and
• To the extent permitted under applicable law and subject to eligibility requirements, 20% of the units at the Project will be assigned through the County’s homeless referral system to individuals living or working within the City’s limits; and
• The County agrees to provide the City with a reasonable opportunity to review and comment on the Operator’s management plan for the Project; and
• The County and/or its Operator will implement necessary measures as required by law to address fire prevention and evacuation issues at the Project site, and Project tenants shall be expected to comply with all applicable laws and regulations; and
• The Parties will each establish ad hoc subcommittees (which, for the County, will be composed of two Members of the Board of Supervisors and administered by two County staff liaisons) that will meet with a group consisting of representatives from the Operator, business owners and residents of the City, and residents of the Project to discuss any concerns and issues regarding the Project; and
• The County agrees it will be responsible for performing, or ensuring the performance by Operator, of all maintenance, landscaping, and upkeep of the Property.
The County Attorney has reviewed and approved as to form the MOU and accompanying Resolution.
COMMUNITY IMPACT
Approval of the MOU is consistent with the County’s ongoing commitment to the development of affordable housing for San Mateo County residents and achieving the goal of reaching functional zero homelessness.
FISCAL IMPACT:
The County’s maximum fiscal obligation under the MOU shall not exceed $1,190,000 and such funds are available in the County’s Non-Departmental Services General Fund. The County may also incur administrative expenses, in an amount presently unknown, to ensure compliance with the additional material terms of the MOU set forth above.