SHRA - Investing in Communities

The Transformation of Phoenix Park 

The transformation of the troubled Franklin Villa condominiums in south Sacramento to Phoenix Park, a safe, affordable housing community is an exceptional tale of revitalization. In 1998, the City of Sacramento and the Sacramento Housing and Redevelopment Agency adopted strategies aimed at stabilizing and improving the quality of life in Franklin Villa and embarked on a multi-year initiative to truly redevelop one of Sacramento’s more problem plagued neighborhoods.

The former Franklin Villa community was originally conceived as a senior or retirement community with 943 individually-owned condominiums organized into five separate homeowner associations. By the 1980’s, this concept had not taken hold and the area quickly deteriorated. As a result, the City and SHRA began investing substantial public resources in this community through increased police presence and social services to the community. Yet the outcomes fell short of the goal to make Franklin Villa community a safe place for families.

When the City Council adopted the Franklin Villa Revitalization Strategy in 1998, most of the units were tenant-occupied. The community lost a significant amount of the original owners and the properties were sold to investors who were mostly absent or out of town landlords. The five homeowner associations were near defunct, unable to effectively manage common spaces and collect member dues. With the development lacking unified property management and effective tenant screening, the neighborhoods common areas began to deteriorate. Nearly half of the small clustered four-plexes were substandard, boarded or otherwise in need of repair. The lack of exterior maintenance on the properties compounded the substandard conditions since any given owner of a unit did not have the right to fix the roof, doors, windows, etc., without incurring both legal and financial liabilities. Needless to say, the area was one of the most crime-ridden areas in the entire city of Sacramento with a disproportionate level of violent crime, gangs, drug activity, poverty and high unemployment. Forty percent of its residents were under 14, and 71 percent of its families were extremely low-income (below 30 percent of the area median). The community was home to approximately 200 juvenile and adult probationers and parolees.

With rampant crime proving to be intractable despite numerous efforts of intervention, it became clear that nothing would change until the hundreds of absentee investor owners, who were largely unresponsive to any City initiatives designed to improve tenant screening and property management, were eliminated. Consequently, the Franklin Villa Strategy was followed by a bold decision of the City Council in 2001 to adopt implementation measures to reverse the social and physical deterioration of Franklin Villa and promote neighborhood stabilization through, 1) an aggressive acquisition and rehabilitation initiative of 464 units utilizing SHRA’s power of eminent domain through its Housing Authority division, 2) implementation of crime prevention measures utilizing Crime Prevention Through Environmental Design (CPTED), and 3) enhanced coordination of social services including office space for various providers in some of the SHRA-owned units.

SHRA embarked on a dual process of acquisition of properties and planning for the redevelopment of Franklin Villa. Numerous community meetings were held with residents to develop a vision for the future Franklin Villa that identified three main goals: 1) create a safe and secure community, 2) address physical blight and overcrowding, 3) provide an array of social services targeted to the residents in a new facility.

The plan for a new Franklin Villa, renamed Phoenix Park, addressed those goals by remodeling units and demolition of 104 units to create more open space. Alleys that were a haven for criminal activity were eliminated with the redesign of site and buildings to create defensible space. Lighting and security systems were designed to deter loitering and criminal activity through the control of access to the site as well as traffic calming. A Resident Activity Center was planned to serve as a community gathering place for resident services.

Two of the largest obstacles facing the project were the acquisition of 464 units within the project area, and the financing for such a large project. The project team that was assembled for the project understood that these items were the key to a successful project and were able to come to solutions. Acquiring the unprecedented number of units proved to be an enormous task with SHRA staff and consultants negotiating with many different owners, in some cases four different owners for one four-plex, in order to voluntarily acquire as many units as possible.

The redevelopment and revitalization of Franklin Villa to Phoenix Park would not come at a cheap price tag, and it required extraordinary financial creativity and flexibility. To address the enormous cost of approximately $84 million that would be required to revitalize the community, teams of experts from SHRA, the City, and financial and legal consultants were retained to develop the financing plans. The project financing and reconstruction began with the recognition that it did not fit anyone’s financing program. Due to the size and cost, the reconstruction had to be divided into two phases and financed separately as Phoenix Park 1 and Phoenix Park 2. The project used and coordinated 13 different local, state, federal, and private financing sources. Some of the funding sources included Tax Credit Equity, Mortgage Revenue Bonds, SHRA subsidies, grants, and loans. The Sacramento City Council also approved aggregation of three separate redevelopment area Low/Mod funds totaling $7 million to finance the project.

The funding sources for Phoenix Park 1 included $26 million in Tax Credits.. Other funding sources included $7 million in conventional loans, $2.5 million in a ten-year Section 8 loan, a $4 million loan comprised of SHRA HOME Cal HFA, and other agency subsidies, $500,000 in deferred developer fee, $85,000 in accrued ground lease payments, $300,000 in grants (EDI and CDBG), and $1,000,000 from the Federal Home Loan Bank affordable housing program.

Phoenix Park 2 funding sources included $11.8 million in Tax Credits, $10 million in tax exempt Mortgage Revenue Bond proceeds, $9 million in Multifamily Housing Program loan funding from the Department of Housing and Community Development, $4.5 million in loan funding compromised of SHRA HOME Cal HFA and other agency subsidies, $2 million in deferred development fee, $260,000 in deferred interest and $60,000 in deferred ground lease.

From late 2001 to 2006 the project began to take shape with properties being acquired and families leaving their dilapidated units or being permanently relocated to other communities. Phoenix Park now provides a safe community for its low-income families, professional property management, security, resident services, and an array of activities for children. Many activities take place in the new Resident Activity Center which was completed in February 2006. A Community Empowerment Center sponsored by Magic Johnson opened in March 2007 in partnership with SHRA and the Sacramento Employment Training Center (SETA). The center provides opportunities for youth and adults to develop and improve their technology skills, provide convenient access to job training and employment resources, and provide local businesses with more qualified applicants to support their workforce.

Phoenix Park has become a new community families can feel safe while enjoying a greatly improved quality of life.

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Preservation of the Town of Locke

The Town of Locke is a story of an unprecedented effort to preserve an entire historic town, rather than just a building.

Locke is the last remaining rural Chinatown in the United States. It was built at the turn of the century, at a time when California law prohibited Chinese from owning property. The town was built on land owned by a local farmer named George Locke. Although the Alien Land Act law was repealed in 1952, the underlying land was never subdivided by subsequent owners. As a result, the residents who owned their buildings (many passed down from the original Chinese families) never had an opportunity to own the land on which their homes and businesses stood. Without land ownership, they could not borrow conventional mortgages to preserve their buildings.

In 2000, the Sacramento Housing and Redevelopment Agency bought the underlying land from the Hong Kong based company that owned it. SHRA then began a four year process to turn the town back to its inhabitants. The most threatened buildings were stabilized, and the failed septic system was replaced with a new sewer system (assisted by a grant from the US Department of Agriculture). Since all of the buildings are wood and at extreme risk of fire, the State Historic Preservation Office required the installation of a fire suppression sprinkler system which has been completed.

In total, more than $3 million in federal Community Development Block Grant (CDBG) and Economic Development Initiative (EDI) funds were spent on these activities. Additional financial assistance was provided by the California Department of Parks and Recreation and the Save America’s Treasures program, each of which provided a grant to begin the rehabilitation of the town’s historic Boarding House into a Visitor and Cultural Center. The Center was completed in 2008 and serves to tell the history of Chinese immigrants in California and the Sacramento River Delta.

The most difficult part of the project, however, was the effort to create an ongoing town governance structure that would balance the needs of the building owners and residents, the Chinese cultural and historic groups, governmental entities, and the historic preservation community. All of these groups had intense interest in the outcome, and many had different goals and objectives. SHRA, with the use of outside consultants, architects, historic preservationists and others, developed a plan that would manage these competing interests.

In the end, a non-profit organization, the Locke Management Association (LMA) was created. The membership of the board was balanced between building owners, government representatives, and representatives of local Chinese cultural groups, with no group having a majority. All of the common area land in the town was granted by the Agency to the LMA for their future use and control. As a condition of receiving land from the SHRA, all of the buyers signed various documents limiting the use of the buildings, imposing historic architectural requirements, instituting a right of first refusal for descendants of the original settlers to purchase buildings as they become available, and agreeing to a set of by-laws and CCR’s governing the future management of the Town.

On December 14, 2004, the Agency turned over ownership of the now subdivided land to the building owners in an emotional ceremony that received widespread publicity. After nearly 100 years, the wrong that had been done to these Chinese citizens by the Alien Land Act was finally made right. With this action, the Historic Town of Locke, listed on the National Register of Historic Places and a National Historic Landmark, now has a chance to be saved for future generations.

In 2008 the Locke Boarding House, a national historic landmark, opened as a Visitor and Cultural Center to retain and interpret the rich history of Chinese immigrants in California and the Sacramento River Delta for future generations.

The Locke Boarding House Historic Rehabilitation Project is part of a continuing collaborative effort between the California State Department of Parks and Recreation, the Sacramento County Board of Supervisors, SHRA, the Locke Management Association/Locke Foundation, residents and building owners, representatives of the Chinese community groups and historical preservation interests to preserve the town’s legacy.

Funding for the project was provided by the Department of Housing and Urban Development, Community Development Block Grant (CDBG), the National Park Service’s Save America’s Treasures grant, and the State of California, Department of Parks and Recreation 2002 Resources Bond Act.