Title
Scotty Station Apartments: Approval of Construction and Permanent Loan Documents between Sacramento Housing and Redevelopment Agency and Chelsea Investment Corporation, Inc. or Related Entity, in the Amount of $4.1 Million
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FileID
File ID: 2026-00677
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Location
Location: 1601 69th Street, District 6
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Recommendation
Recommendation: Adopt a City Council Resolution: 1) approving the $4.1 million Construction and Permanent Loan Agreement utilizing the HOME Investment Partnership Program (HOME), Mixed Income Housing Funds (MIHF), Permanent Local Housing Allocation funds (PLHA), and Housing Trust Fund (HTF), and related documents between Sacramento Housing and Redevelopment Agency (SHRA) and Chelsea Investment Corporation or related entity (Developer) for Scotty Station Apartments formerly River City Apartments (Project); 2) authorizing SHRA to negotiate, enter into, execute, transmit, and amend as needed the Loan Documents to the Developer and perform other actions; 3) authorizing SHRA to amend its budget and lend $4.1 million in HOME, MIHF, PLHA, and HTF funds for construction and permanent financing of the project; and 4) making environmental and other related findings.
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Contact
Contact: Christine Weichert, Director of Development Finance, (916) 440-1353, cweichert@shra.org, Sacramento Housing and Redevelopment Agency
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Presenter
Presenter: None
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Attachments
Attachments:
1-Description/Analysis
2-City Council Resolution - Loan Documents Approval
3-Exhibit A - Construction and Permanent Loan Agreement Documents
4-Vicinity Map
5-Rendering
6-Site Plan
7-Residential Project Summary
8-Project Cash Flow & Pro Forma
9-Maximum Income and Rent Limits
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Description/Analysis
IssueDetail
Issue Detail: In January 2024, Chelsea Investment Corporation, Inc. (Developer) applied to the Sacramento Housing and Redevelopment Agency (Agency) for funding River City Apartments, now renamed to Scotty Station Apartments (Project).
In April 2024, the Housing Authority of the City of Sacramento approved the issuance of up to $42 million in tax-exempt mortgage revenue bonds, and the City Council approved a $2 million loan commitment for the acquisition, construction, and permanent financing of the Project.
The Developer applied for Mortgage Revenue Bonds, and Federal and State Low-Income Housing Tax Credits in April 2024 but was unsuccessful due to decreased availability of State Tax Credits. The lack of State Tax Credits created an $8 million gap for the Project. To fill the gap, in March 2025, the City Council approved an additional $2.1 million in funding, bringing the total loan commitment to $ 4.1 million. The Developer applied for and received nine percent (9%) Low Income Housing Tax Credits (LIHTC) in 2025.
Project Description: Scotty Station Apartments (formerly River City Apartments) will be a new construction development on 0.97 acres of land located at 1601 69th Street. This will be a five-story building with two elevators, comprised of 66 units, which consists of 19 one-bedroom units, 27 two-bedroom units, 19 three-bedroom units, and one two-bedroom manager’s unit. Fifteen units will be reserved for developmentally disabled individuals and families. There will be 19 parking spaces, including one (1) ADA parking space. The units will be restricted to families of 30 percent to 60 percent of Area Median Income (AMI).
All apartments will have Energy Star-rated appliances, an electric stove and range, a dishwasher, and a garbage disposal. All units will have bathtubs or showers with water-efficient toilets, and all flooring throughout will have luxury vinyl planks. The kitchen in every unit will have a stainless-steel sink, microwave shelving, and solid vanity tops.
The common areas and amenities include a fully furnished community room, a BBQ area, a school-age play structure, a laundry room, and an outdoor exercise area. A vicinity map is included in Attachment 4, the project rendering is included in Attachment 5, and the Site Plan in Attachment 6.
Project Developer: Chelsea Investment Corporation (CIC) is the developer for the Project. CIC brings forth a wealth of expertise and experience since its establishment in 1986. As a vertically integrated organization, CIC intertwines development, asset management, construction, and community investment within its framework. CIC has successfully developed over 100 Low-Income Housing Tax Credit communities, providing homes for more than 10,000 individuals.
Property Management: CONAM Management Corporation is the proposed property management company. They are currently managing five properties in the Sacramento area. Established in 1975, CONAM specializes in managing both conventional and affordable housing across 12 states.
Supportive Services: Alta California Regional Center (ACRC) is a non-profit organization operating in collaboration with the State of California, Department of Developmental Services. ACRC provides services to over 30,000 individuals across 10 counties, including Sacramento, and offers comprehensive services to individuals who face developmental disabilities. ACRC will provide supportive services for 15 units reserved for ACRC residents at Scotty Station Apartments.
Resident Services: The Agency has approved Pacific Southwest Community Development (PSCDC) as the resident service provider. PSCDC has over 26 years of experience in delivering services. This property represents PSCDC's second in Sacramento, reflecting its commitment to expanding its impact and community development efforts in the region. Presently, they oversee operations at 79 properties throughout California. PSCDC will be required to provide a minimum of 15 hours of services per week for the residents, including after-school programs.
Project Financing: The proposed financing of the Project includes an Agency Loan totaling $4.1 million, comprised of HOME Investment Partnership Program, Permanent Local Housing Allocation funds (PLHA), Mixed Income Housing Funds (MIHF), and Housing Trust Funds, nine percent LIHTC, deferred developer fee, conventional loan, and a Community Resource Development loan. The Summary and Proforma are included as Attachments 7 and 8.
|
PROGRAM FUNDS |
AMOUNT |
|
HOME |
$1,150,000 |
|
PLHA |
$850,000 |
|
MIHF |
$1,300,000 |
|
HTF |
$800,000 |
|
Total |
$4,100,000 |
Low-Income Set-Aside Requirements: The Agency requires at least 15 percent of the units to have affordable rents to households with income up to 50 percent AMI, and at least five percent of the units to have rents that are affordable to households with income up to 30 percent AMI, based on financial feasibility. The affordability restrictions will be specified in regulatory agreements between the Agency and the Developer. A schedule of maximum income and rents is included in Attachment 9.
Scotty Station Apartments
|
Affordability Restrictions (55 years) |
Units |
% of Units |
|
Extremely Low Income (30% AMI) |
7 |
11% |
|
Very-Low Income (40% AMI) |
14 |
22% |
|
Very-Low Income (50% AMI) |
20 |
30% |
|
Low Income (60% AMI) |
24 |
36% |
|
Manager Unit (1 Bedroom) |
1 |
1% |
|
Total |
66 |
100% |
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PolicyConsiderations
Policy Considerations: The recommended actions are consistent with 1) Agency’s approved Multifamily Lending and Mortgage Revenue Bond Policies, priority 2 - New Construction, and Priority 2(i), Permanent Supportive Housing and Homeless Housing; and 2) the 2021-2029 Housing Element, which encourages the provision of a variety of quality housing types to create affordable and inclusive housing, and c) the Sacramento Promise Zone Plans and Goals, Sustainably Built Community sub-goal to increase housing types and transit growth to promote livability and connectivity within the Promise Zone.
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EconomicImpacts
Economic Impacts: This multi-family residential project is expected to create 417.93 total jobs (236.83 direct jobs and 181.10 through indirect and induced activities) and create $34,827,720 in total economic output ($21,229,665 of direct output and $13,598,055 indirect output and induced activities).
The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.
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EnvironmentalConsiderations
Environmental Considerations:
California Environmental Quality Act (CEQA): California Environmental Quality Act (CEQA): The City of Sacramento granted the project Ministerial Approval (Record No. PLN23-02769) under the requirements for Infill Housing Development. Pursuant to Public Resources Code section 15268, the project is exempt from CEQA requirements.
National Environmental Policy Act (NEPA): In accordance with 24 C.F.R. 58.40(g)(1), an Environmental Assessment was conducted for this project, resulting in a Finding of No Significant Impact (FONSI) with mitigation.
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Sustainability
Sustainability: The proposed Project has been reviewed for consistency with the goals, policies, and targets of the 2035 General Plan. If approved, this project will advance the following goal, policy, and target of Goal H-1.1.1 Sustainable Housing Practices, specifically by developing housing and neighborhoods to be environmentally sustainable.
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Commission/Committee Action
Commission/Committee Action: Not applicable.
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RationaleforRecommendation
Rationale for Recommendation: The actions recommended in this report support the Agency’s ability to continue to fulfill its mission of providing a range of affordable housing opportunities in the City and are consistent with the Agency’s approved Multifamily Lending and Mortgage Revenue Bond Policies, and the City of Sacramento 2021-2029 Housing Element as part of General Plan Sacramento’s 2035 General Plan.
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FinancialConsiderations
Financial Considerations: The recommended funding for this project is $4.1 million, comprised of $1.15 million in HOME, $850,000 in PLHA, $1.3 million in MIHF, and $800,000 in HTF funds. The loans will all have a term of 42 years and a simple interest rate of three percent, with repayments that achieve a debt service coverage ratio of 1.20. SHRA will collect an annual administrative fee of 0.125 percent (12.5 basis points) of the total SHRA loan amount, plus a fee equal to $100 per SHRA-funded unit per year for monitoring regulatory restrictions and administration of the funds, not to exceed $15,000.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Minority and Women’s Business Enterprise requirements and Section 3 considerations will be applied to all activities to the extent required by the federal funding.
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