Turlock Gospel Mission’s plan to use a South Broadway property as a day center for unhoused persons hit another snag Tuesday when the city council failed for the second time in three weeks to approve an amended loan agreement with the non-profit.
By a 5-0 vote, the item was tabled to allow for more discussions between TGM and city staff regarding the proposed day center at 432 S. Broadway.
Originally addressed at the Sept. 24 council meeting, the loan for nearly a half-million dollars consists of $91,053 from the state's HOME fund, and $400,000 in Community Development Block Grants — part of the federal Department of Housing and Urban Development. Coupled with money that was allocated to the project at its 2016 start date, the total cost of the project has reached more than $800,000.
The points of contention on Sept. 24 were the lack of an operating agreement between the city and TGM, and the length of the forgivable loan, with TGM favoring a 10-year term, while councilmembers Pam Franco (District 4) and Rebecka Monez (District 2) lobbied for a longer term, something TGM board president Derik Bakker opposed. Franco pressed for a 17-year term.
All that seemed to have been cleaned up by Tuesday’s council meeting, but TGM board member Chris Kiriakou expressed concern that a 12-year loan term was not the compromise it appeared to be.
“We appreciate the acceptance of the 12 years, but that offer was made in conjunction with separating the loans out,” Kiriakou said. “In other words, what they’ve done is combine the loans.”
According to Kiriakou, the first loan was for $330,000, for a 10-year term. The additional loan for $491,053 was a 12-year term.
“But in the process of combining them, any repayment on the original $330,000 is lost,” said Kiriakou. “Because now it becomes $330,000 plus $491,000 for $821,000 for 12 years, even though three and half years of the other one has already been paid. And that’s about $100,000 in value to us, and that becomes a bit of an issue.”
Early payoff of the loans, when combined, also becomes problematic, according to Kiriakou.
“I would ask (the council) to consider separating out the loans,” he said. “All the paperwork from the $330,000 is already there and signed. It’s the additional $491,000 that is now combined that makes some down-the-road problems for us.”
Kiriakou added, “These are not earth-shaking problems. They can be resolved, but I think we need a little more discussion with city staff.”
According to city development services director Adrienne Werner, outside counsel advised that the loans be combined under one, 12-year umbrella.
Franco was against both options.
“I think everyone can understand that I’m not happy with the 12 years. I wanted 17,” said Franco (District 4). “I don’t think that 12 years is a good compromise. And I also do have a problem with the facility not being open on Saturdays and Sundays. We are paying over $800,000 for this and them not being open two of the seven days just doesn’t sit well with me. So I don’t know how I’m going to be able to support it without some additional compromises.”
City manager Gary Hampton mentioned that he’s had conversations with Franco that produced yet another potential compromise.
“I know that some of the councilmembers’ concern is when (TGM) reaches the committed repayment and they officially own the property, is that when the day center is going to stop?” said Hampton. “So, the option that was discussed was can the agreement outline a process whereby, although the forgivable loan has been met at year 12, there’s an additional five years of operational requirement?”
Hampton then suggested to the council that TGM and city staff have yet another round of dialogue, to which Kiriakou agreed. Hampton seemed to think a resolution could be hammered in time for the next council meeting. However, on Tuesday, the city council appointed Sarah Eddy as acting city manager.
