Mercy Housing gets green light to redevelop blighted Hacienda development in Richmond

Richmond’s biggest eyesore, the six-story Hacienda development near the downtown BART station, has sat vacant for years. In the wake of extensive reports of mismanagement and disrepair, officials relocated residents in 2015. But a new city resolution could breathe new life into the dilapidated building.

Last Tuesday, city council unanimously approved exclusive rights for Mercy Housing of California (MHC) and the Community Housing Development Corporation (CHDC) of North Richmond to negotiate, plan and eventually rehabilitate the derelict building.

The 150-unit public housing project made headlines in 2014, after the Center for Investigative Reporting chronicled years of neglect, including sewage leaking from one resident’s ceiling. According to Cherise Stuckworth of CHDC, Hacienda’s redevelopment will be an “extensive” project.

Mercy Housing and CHDC will collaborate with the Richmond Housing Authority to begin pre-development tasks, including fundraising, securing permits, paying city fees, and creating drawings and blueprints of the proposed rehabilitation, which could break ground as early as 2019—if all goes according to plan.

Barbara Gualco, director of real estate at Mercy Housing, said that key funding sources serve as a “lynchpin” for Hacienda’s redevelopment. The nonprofit developer said it will apply for California “cap and trade” funds, which redirects 20 percent of the state program’s revenues to affordable housing projects, so long as they improve access to public transit.

The resolution does not authorize “bricks and sticks,” or actual construction, according to Stuckworth. Mercy Housing officials said redevelopment would preserve but revamp the original 150 units of affordable rentals, while also reorienting the main entrance to face the nearby BART station. The plan is also to bring in critical services like financial education, job readiness training and physical activity programs.

Mercy Housing project manager Michael Kaplan estimated the development’s cost between $25 and 30 million. The developer will need to secure funding from a variety of sources to foot the bill, including tax credits and loans.

At last week’s meeting, Mayor Tom Butt raised concerns about a previous pre-development agreement between Mercy Housing and the city, in 2009, which he said never gained significant momentum, largely due to massive cuts in affordable housing programs, including the dissolution of California’s Housing Redevelopment Program. The prior agreement expired in 2013.

A construction start date of 2019 would require swift financing, and Mercy Housing intends to submit an application for “cap and trade” funds in January 2018. Winning projects will be notified in June of next year. But if Mercy Housing is not selected, the project could stall again.

Butt said he valued Mercy Housing as an organization, but that “it’s very frustrating for us to have this Hacienda project strung out for so long. It’s been just a huge problem for the city of Richmond that the rehabilitation has been and continues to be delayed.”

In the meantime, it will fall to Richmond’s general fund to continue to pay for security at the building.

Tia Ingram, a special consultant to the Richmond Housing Authority, said that adequate security measures including installation of steel cages on the second floor of the building, six additional security guards, and added security during the winter months when homeless individuals may use higher floors for shelter — will cost the housing authority approximately $500,000 a year, more than the agency can afford.

“We don’t have any other options other than to find the funds to secure it,” Ingram said at last Tuesday’s meeting.