To our friends and allies in Fairfax, San Geronimo Valley, and the greater Marin community,
For the past several months, our team has been working towards the purchase of Brookside Apartments, a multifamily residential property in Fairfax, to preserve as permanent affordable housing. Today, we are deeply saddened to share with you that we could not complete the purchase.
This was not the outcome we expected. The past six months have been dedicated to making this project a reality; it went from a dream– an urgent inkling of affordable family housing in Fairfax – to something very much real. Now it’s time to grieve this project, learn from it, and then try again.
Here’s what happened:
During the escrow period, our organization conducted an extensive site review of the property that projected that, in the next 10 years, there would be in excess of $900,000 needed for deferred maintenance and repairs and for replacements of outdated and broken appliances, sinks, plumbing, electricity, and so on. In order for us to complete the purchase, we needed to secure sufficient funding to assure that the immediate required repairs could be made and the property could be well maintained over the long term. Those funds would come from grants and fundraising.
It was going to be a challenge, but we believed we could put together a complete funding package.
We did our due diligence every step of the way, holding in mind the immense responsibility we have of making sure our organization is financially sustainable – to ensure both that our current tenants and homeowners can remain in their homes and that we can continue to pursue new opportunities to create affordable homes in the future.
It looked like we were on track to purchase the property, when our application for a key funding source – HUD’s Community Development Block Grant (CDBG) – was denied. We were shocked. We had been encouraged to apply for CDBG by the Marin County staff that manages the application and allocation process of the funds. CDBG funding is made available annually and, typically, a non-profit housing agency like SGVAHA should be able to count on CDBG funding to fill a substantial portion of the funding gap. Access to this stream of funding was key in SGVAHA’s financial analysis for the acquisition and long term management of the property.
To be denied access to these funds for the foreseeable future put the breaks on the project.
Our application was denied because FEMA maps of the area used by HUD in their decision-making process show that the property was located in a floodway. However, it is possible that a channelization project done on the adjacent Fairfax Creek by the Town of Fairfax and the seller in 2008 mitigated the risk of flooding to the property.
Our hope and intent was to appeal that federal decision, but the time frame for escrow closing had run out. We requested a 90-day extension, which would give us time to put together our next steps (the COVID-19 pandemic had begun to impact us locally at this point), but the seller did not agree to extend the closing date. This was a deep disappointment. We made a last ditch attempt to save the project by offering the seller a management agreement with the option to purchase down the road. We would take over management of Brookside Apartments with the intent to purchase once we had put together a complete funding package. The seller was not interested in our offer.
So here we are.
We know that you share our deep disappointment that this property, which provides affordable rental homes for 10 families, could not be purchased by our nonprofit organization. The purchase would have assured that the existing and future tenants would have housing security and protection. We have offered to return donations to folks who gave to this worthy cause.
While the Brookside purchase did not succeed because it was not financially viable, we learned a great deal in the discovery and planning process about what it takes to fulfill our mission of creating, preserving and managing affordable housing in today’s challenging environment.
We are looking to the future and other possibilities of sustainable projects to enable SGVAHA to fulfill its vision of a culturally diverse and vibrant San Geronimo Valley community that retains its unique rural and natural qualities while offering housing opportunities for people of all income levels and walks of life.
We thank the entire community for your trust and support.
SGVAHA Board and Staff