Title
a. Approve a subordination agreement that will place the County’s loan in a lower collateral position behind a loan from the California Department of Housing & Community Development HOME ARP program; and
b. Authorize the Assistant Director of Housing and Community Development to sign the Subordination Agreement.
Body
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Approve a subordination agreement that will place the County’s loan in a lower collateral position behind a loan from the California Department of Housing & Community Development HOME ARP program; and
b. Authorize the Assistant Director of Housing and Community Development to sign the Subordination Agreement.
SUMMARY:
On June 23, 2026, the Board of Supervisors approved a Subordination Agreement (agenda item 26-238) for a County loan to Interim, Inc. for their Shelter Cove transitional housing development. After the Board’s action, Interim, Inc. and the State Department of Housing and Community Development determined that Interim, Inc. did not need all the proposed funding that the County loan was being subordinated to and a new Subordination Agreement is required.
DISCUSSION:
Interim, Inc. gained control of five buildings on Bayonet Circle in Marina through the McKinney Act in 1996. Since then, Interim has developed several residential treatment programs and community facilities. The County has supported these projects with loans to Sandy Shores and Shelter Cove. Cumulatively, these developments provide 32 bedrooms of transitional housing for homeless individuals with psychological disabilities. In 2018, Interim obtained approval from the U.S. Department of Health and Human Services (HHS) to operate under a “health facility designation” rather that the U.S. Department of Housing and Urban Development (HUD) definition, allowing a broader range of eligibility for these transitional units. The change in designation allows Interim to house formally homeless ...
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