Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Mike Callagy, County Executive
Subject: WeHope Financial Assistance
RECOMMENDATION:
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Adopt a resolution:
A) Approving an agreement with WeHope under which the County will loan WeHope the principal amount of $1,000,000 with interest to be repaid at the rate of 3.85% per annum, for a term of 15 years, and authorizing and directing the County Executive, or designee(s), to execute and deliver such agreement; and
B) Approving the form of a Promissory Note evidencing WeHope’s obligation to repay the loan; and
C) Approving the form of a Deed of Trust in favor of the County securing the loan to WeHope, which shall be recorded as a lien against WeHope property; and
D) Approving the taking of all necessary actions by the County Executive, or designee(s), in connection with the loan transaction.
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BACKGROUND:
WeHope is a California nonprofit public benefit organization that operates shelter facilities and provides community-based services in East Palo Alto, including mobile homeless services, emergency food and shelter, and job training and life skills programs. WeHope’s mission is to help people become healthy, employed, and housed.
WeHope owns and operates a 100-bed shelter facility serving individuals experiencing or at risk of homelessness located at 1836 and 1854 Bay Road, East Palo Alto, CA 94303 (the “Property”), and receives payment for providing such services pursuant to the terms and conditions of an agreement with the County, through the County’s Human Services Agency.
WeHope acquired the Property in 2018, in part with financing provided by the County in the amount of $490,673 and, as a condition of such financing, agreed to record a Declaration of Restrictive Covenant on the Property requiring that the Property, for a period of 30 years, remain continuously available by the County for use as an emergency shelter and for housing-focused case management services.
In addition to the 2018 loan from the County, WeHope has existing commercial loans entered in connection with the acquisition of the Property as well as a line of credit, all secured by and recorded against the Property.
DISCUSSION:
WeHope now seeks financial assistance from the County to support payment of operating expenses for the emergency shelter facility located on the Property, capital expenses to improve the Property and to discharge or prepay existing indebtedness which encumbers the Property, and/or for other such lawful purposes. Such financial assistance is consistent with the County’s goals to support persons experiencing or at risk of homelessness and, therefore, serves a public purpose.
Thus, in furtherance of the County’s efforts to facilitate the community’s continued access to critical public benefits and services, staff recommends that the County enter into an agreement to loan WeHope the principal amount of $1,000,000, with interest accruing on the unpaid principal amount at the fixed rate of 3.85% per annum, for a term of 15 years.
WeHope’s obligation to repay the loan will be evidenced by a Promissory Note secured by a Deed of Trust in favor of the County recorded as a lien against the Property.
The County Attorney’s Office has reviewed and approved as to form the proposed Agreement, Promissory Note, Deed of Trust, and resolution.
FISCAL IMPACT:
The County’s maximum fiscal obligation under the Agreement shall not exceed $1,000,000 and such funds are available in the County’s Non-Departmental Services General Fund. The loan payments from the WeHope, including interest at a fixed rate of 3.85% per annum, will total approximately $1,317,948 over the 15-year term of the loan, if not repaid earlier. The loan payments will be deposited into the County’s Non-Departmental Services General Fund.