Affordable housing rehab set

A large, national company is looking at doing a multi-million dollar rehabilitation at an affordable housing complex in Tuolumne. And they’re asking Tuolumne County to help them secure some funds for the work.

Michaels Development Company, a for-profit affordable housing developer, has proposed a complete rehab of the Tuolumne Apartments located on Tuolumne Road. The 52-unit complex was built in 1974 and needs major improvements, according to county planners.

The project would include completely renovating the complex, including air systems, plumbing and electrical work, as well as adding a community room.

“It is in need of quite a bit of work,” said Sheila Shanahan, housing program coordinator for the county. “Pretty much everything needs to be redone at the project.” 

Michaels representatives are asking the county to apply, on the company’s behalf, for a loan of up to $5 million for the project. The funds would come from a state low-income housing program administered through the Department of Housing and Community Development.

Shanahan said only public entities can apply. Applications are due this summer. The county receives state funds regularly through the same program, and she said this application would not cut into the $700,000 the county received this year for housing-related programs.

The complex is currently an affordable housing unit and accepts residents participating in the federal Section 8 housing program. It was built with a federal grant.

If the improvements are financed through the state grant, the grant would require it to remain affordable housing.

“We would have these apartments locked up as affordable for another 55 years,” Shanahan said.

One aspect that adds to the project’s cost is relocating the residents during the construction work, said Michaels development coordinator Kathleen Paley.

“The object here is to preserve affordable housing,” she told county leaders on Tuesday during a meeting of the Board of Supervisors.

While the board gave initial support during the meeting, multiple supervisors raised questions about possible financial implications for the county.

“If they go belly up, do we end up holding the bag?” Supervisor Randy Hanvelt asked.

Paley and Shanahan both said that would not happen, though supervisors requested the county’s legal counsel look into the issue before a final agreement is signed.

Paley said that the com- pany is also looking for other financing options for the $3.3 million project if this grant does not come through.