Title
Grant Agreement with Urban Capital, LLC for the Rio Linda Senior Housing HomeKey+ Project
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FileID
File ID: 2026-01536
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Location
Location: 2809-2821 Rio Linda Blvd, District 2
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Recommendation
Recommendation: Pass a Motion authorizing the City Manager or designee to execute a grant agreement with Urban Capital LLC (Urban Capital), developer and co-applicant, in the amount of $786,091 for the development of the Rio Linda Senior HomeKey+ Project at 2809-2821 Rio Linda Blvd. using Homeless Housing, Assistance, and Prevention Round 4 (HHAP-4) Permanent Supportive Housing funding.
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Contact
Contact: Ya-yin Isle, City Housing Manager, (916) 808-1869, yisle@cityofsacramento.org, Department of Economic Development
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-Grant Agreement
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Description/Analysis
IssueDetail
Issue Detail: On May 13, 2025, the Sacramento City Council adopted Resolution No. 2025-0120, authorizing the Interim City Manager or designee to jointly apply for State Homekey+ grant funds for the Rio Linda Senior Housing Project (Project) on behalf of the City of Sacramento and Urban Capital, the developer and co-applicant for the Project, for an amount up to $28.4 million. On May 30, 2025, the application was submitted to the California Department of Housing and Community Development (HCD) for the Project with a proposed 100 units of permanent supportive housing (PSH) for seniors and senior veterans. HCD subsequently issued an amendment to the Homekey+ Notice of Funding Availability (NOFA) on August 7, 2025, due to undersubscription of available Homekey+ funding after the original May 30, 2025, Homekey+ application deadline. The amended NOFA re-opened the Homekey+ NOFA for all project types, with prioritization for awarding projects based on inclusion of veteran units.
Since the City’s initial submission of the Application in May 2025, City staff expanded capacity to serve veterans experiencing homelessness and have forged a partnership with Veterans Affairs (VA), which reshaped the City’s understanding of local veteran needs and ability to address such needs. As a direct result of this partnership, the City’s projected capacity to place veterans into PSH expanded, and on October 1, 2025, an updated Homekey+ application was submitted with a change to increase the number of veteran units from 10 units to 50 units to reflect the urgency and opportunity that exists for supporting unhoused veterans within the Sacramento community. In addition, Alta California Regional Center, an organization serving individuals with specific developmental disabilities and their families in accessing appropriate services, was brought in as a partner organization into the project for 15 units. Alta Regional will fund and provide supportive services for their clients at risk of or experiencing homelessness.
On November 4, 2025, HCD provided the City of Sacramento and Urban Capital with a Threshold Clarification Letter detailing additional feedback, requirements, and points of clarification on the Application. On December 2, 2025, City Council authorized staff to re-submit a joint application with Urban Capital to HCD with an increased award amount of up to $40 million. Additionally, City Council authorized the formal commitment of $3 million of City HHAP funds to the Project for operational costs as a necessary match to maximize the State operational funding award.
On July 23, 2026, the Governor announced the City’s conditional Homekey+ award for the Project, totaling $31.8M in Homekey+ funds to support this project. The City has completed a solicitation for a Lead Service Provider for the project as required as a condition of the funding award and continues to work with HCD on documents and forms required for the Homekey+ funding. As HCD works on completing the Standard Agreement and reviews other required forms and agreements, Urban Capital has begun the design and engineering process to prepare for planning entitlement submittal and are therefore incurring costs. The State’s process for completing the Standard Agreement and transferring funds to the City is expected to take several months before funding will be available for the Project. However, in order to meet the State requirement to have the project begin construction 6 months from the time of Standard Agreement necessitates that the developer begin incurring pre-development costs .
As such, City staff recommends execution of a grant agreement with Urban Capital to support pre-development and operational costs in the amount of $786,091. This grant agreement will be funded by HHAP-4 Permanent Supportive Housing funds that have already been committed to the Project.
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PolicyConsiderations
Policy Considerations: The successful application for the State Homekey+ funding and commitment of HHAP funding to the Project will aid in the development of additional housing in the City, which is supported by the City’s General Plan, specifically Policy H-36: Support Affordable Housing Development in the City of Sacramento Housing Element that speaks to providing support for funding applications and gap financing.
This Project advances the Council-adopted priorities identified at the September 30, 2025, Priority and Goal Setting Workshop of Economic Development and Homelessness. Specifically, this Project implements the following Strategic Initiatives in the City of Sacramento One City, One Future Priorities Strategic Workplan:
• Economic Development, Neighborhood and Commercial Development: Strategic Initiative 7: Activate Vacant and Underutilized Public and Private Properties
• Homelessness, Long-Term Housing Stability, Strategic Initiative 24: Compete for Homekey+ Permanent Supportive Housing Opportunities
In addition, the financing of PSH projects is consistent with the Sacramento Regionally Coordinated Homelessness Action Plan (RCHAP), adopted in March 2024 and updated in August 2025. The Project supports Solution 6 - Permanent Supportive Housing, which seeks to expand housing opportunities and capacity dedicated to meet the housing needs of people experiencing homelessness.
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EconomicImpacts
Economic Impacts: Not applicable.
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EnvironmentalConsiderations
Environmental Considerations: This report concerns actions supporting funding for a PSH project. The action is an administrative activity that would not result in direct or indirect physical changes in the environment and is not a project as defined in the California Environmental Quality Act (CEQA) Guidelines section 15378(b)(4) and is not subject to CEQA (CEQA Guidelines section 15060(c)(3)).
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: The recommendation in this report furthers the City’s objective of providing a range of housing for community needs, including PSH. The Project will assist in the timely development of housing for people experiencing homelessness.
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FinancialConsiderations
Financial Considerations: On December 2, 2025, the City Council approved the allocation of City HHAP-4 and HHAP-5 funding in the amount of $3 million to support operating and pre-development costs for the Rio Linda Homekey+ Project. The $3 million City HHAP funds, budgeted for PSH, includes $1,049,254 in the HHAP-4 Grant Project (G02000980) and $1,950,746 in the HHAP-5 Grant Project (G02000990). Sufficient funding exists in the HHAP-4 Grant Project (G02000980) to support the expenditure of $786,091 under this Grant Agreement.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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