Santa Rosa RED Housing Fund 'Nonprofit' Allocating Millions for Board Member's Generation Housing Projects

While serving as a RED Housing Fund Director, Gen H Executive Director Jen Klose appeared to recommend millions of dollars in funding for the developers serving on her board

On July 20, 2021, the City of Santa Rosa’s Council Meeting Minutes stated the following:

BACKGROUND: The Renewal Enterprise District (RED) was created in 2018 as a Joint Powers Authority (JPA) between the City of Santa Rosa (the “City”) and the County of Sonoma (“the County”) to facilitate the development of infill housing. RED has been pursuing a variety of funding options to address the housing development needs of the community. On December 8, 2020, the City Council held a study session on the potential use of one-time PG&E settlement funds for housing investment opportunities. Housing was one of the recurring topics of consideration received through the community outreach process for these funds. Specifically discussed at the study session was the potential for investment into the RED Housing Fund.

On February 19, 2021, at the City Council’s goal setting workshop, the Council directed staff to prepare an allocation of $10 million dollars from the PG&E settlement funds in the form of a loan to the RED Housing Fund. City staff has since developed a draft loan term sheet and has worked collaboratively with RED and County of Sonoma staff on the proposed terms.

In addition to the RED Housing Fund allocation and adoption of terms, City staff is seeking authorization to execute the First Amendment to the RED’s Joint Exercise of Powers Agreement. The amendment addresses the interest of the RED Board to use discretion for admitting new members as opposed to allowing them by right. Lastly, City staff is requesting Council authorization to allocate $50,000 in one-time PG&E settlement funds to the RED for Fiscal Year (FY) 2021-2022 to be used toward the establishment of General Fund Reserve for the RED.

RECOMMENDATION: It is recommended by the Planning and Economic Development Department and Housing and Community Services Department that Council: 1) by resolution, allocate $10 million in one-time PG&E settlement funds to the Renewal Enterprise District Housing Fund in the form of a loan to support infill housing in Santa Rosa and authorize execution of associated loan documents; 2) by separate resolution, allocate $50,000 in one-time PG&E settlement funds to the Renewal Enterprise District to be used toward establishing a RED General Fund Reserve; 3) by separate resolution, approve the First Amendment to the Renewal Enterprise District Agency Joint Exercise of Powers Agreement; and 4) by motion, approve process for appointment to the RED Housing Fund Board to represent the City of Santa Rosa.

The following public comments were provided:

• Luke Lindenbusch, Generation Housing, spoke in support of this project.

• Adrienne Lauby, Co-Founder of Homeless Action, spoke on her concern that building market rate housing does not address the issue on the lack of our housing for low income residents, and made suggestions to the Renewal Enterprise District on monitoring variances and for off-site affordable, workplace housing to be integrated in each project and area of the city.

• Gregory Fearon spoke on his concern that the non-profit was set up to get out of following the Brown Act to hold meetings publicly and in transparency.

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The City of Santa Rosa’s July 20, 2021 Council Meeting Staff Summary Report detailed the following regarding RED Housing Fund appointments:

In addition to the loan terms, it is important to understand the makeup of the RED Housing Fund Board and the ability of the Council to appoint one (1) voting member to that Board. The RED Housing Fund Board of Directors will be comprised of representatives from the public and private sectors.

The Board will have seven (7) voting members:

• one (1) Representative appointed by the County of Sonoma;

• one (1) appointed by the City of Santa Rosa;

• one (1) appointed by the RED Board, and

• four (4) Independent Directors recommended by the RED Board and appointed by RED counsel.

A minimum of three (3) Board members are required to form the 501(c)(3) RED Housing Fund entity. In addition, at all times, the Board must consist of a majority of Independent Directors. The rest of the membership may be added later in the year. If desired, the RED Board may consider adding two (2) non-voting Advisory members to the RED Housing Fund Board, e.g. one advisory member from the City and one advisory member from the County. Like voting members, the Board advisors can contribute to the discussion, voice opinions and indicate their support for business and credit decisions.

The RED Housing Fund appears to have their own Board of Directors and Advisory Board, but the meeting agendas and minutes do not appear anywhere on the current website.

The current roster is as follows:

• Veronica Ferguson, President and Chief Executive Officer - Former Sonoma County Administrator (2010-2017); experience in public administration, economic and community development, law, leadership, and team facilitation.

• Todd Sheffield, Vice President - Former CEO of Community First Credit Union (2003–2021); experience in banking, accounting, credit analysis, multifamily investing, community board volunteer.

• Amanda Ruch, Treasurer - Assistant Auditor-Controller-Treasurer-Tax Collector, County of Sonoma.

• Michelle Whitman, Secretary - Executive Director, Sonoma County Community Development Commission, April 2023 – present; Executive Director, Renewal Enterprise District, July 2019-Sept 2023; Member, Sonoma County Agricultural Preservation & Open Space District Advisory Committee.

• Betzy Chavez - Education specialist, advocate for equity and social justice, 15 years’ experience leading youth and family-centered academic and social service programs. Former Member/Co-Chair Sonoma County Community Development Committee (2016 – present), and Mental Health Board (2020-present).

• David Gouin - Dave brings 30 years of public service experience with the County of Sonoma, City of Vacaville, and City of Santa Rosa, where at the time of his retirement he served as Director of Housing and Community Services. Dave is a Board member for Redwood Credit Union, serves on the Board for Burbank Housing, and has been involved in several local organizations such as Petaluma Ecumenical Properties, the Santa Rosa Chamber of Commerce, and Leadership Santa Rosa.

• Jen Klose - Executive Director of Generation Housing. Former Trustee, Clerk, or President of Santa Rosa City Schools Board of Education (2012-2020). Former attorney with real estate, lending and permanent supportive housing experience.

Advisory Board Members

• Chris Coursey - Sonoma County Board of Supervisors; Chairperson, Renewal Enterprise District

• Victoria Fleming - Santa Rosa City Council; Board member, Renewal Enterprise District

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Because the Housing Fund Board is appointed, they should be legally subject to the Brown Act’s open meeting laws and considered as designated filers with the Fair Political Practices Commission (FPPC).

On September 7, 2022, I reported Ms. Jenni Klose for failing to complete a leaving office Form 700 as outgoing Board President of Santa Rosa City Schools.

Although violations were found, no action was taken, and the case was closed. I received the following response from the FPPC:

After conducting our investigation and review of the case, the alleged non-disclosure of pertinent economic interests has been disproven. The alleged violations were for late filing of the 2019 Annual and Leaving Office Statement of Economic Interests (“SEI”). Mitigating factors in this case include the fact that while Jenni Klose served as a Board Member with Santa Rosa City Schools (“SRCS”), Klose also served as a Board Member with Renewal Enterprise District Housing Fund (“REDHF”) and filed all the required SEIs while serving on REDHF. The two violations found for late filing are being closed in accordance with the Enforcement Division Policy Directives formally adopted by the Commission on January 26, 2023, which requires the Enforcement Division to take all appropriate actions within their discretion to decrease the Division’s annual carryover caseload, the Enforcement Division is closing this case with a No Action Closure Letter. Discretion was used based upon mitigating or aggravating circumstances and the totality of the circumstances. This resolution may not be used as a comparable case for the other enforcement matters.

I emailed RED to request all Form 700’s on file for Ms. Klose, and exchanged the following emails with RED Executive Director Robin Stephani:

Good Afternoon,

I am requesting the following:

• All form 700's for Ms. Jenni Klose, RED Housing Fund Board (*please note that SEI's are not subject to PRA timelines and should be made digitally available within the same business day)

• All emails, text messages and other communications exchanged between Ms. Jenni Klose and the following parties from 2020-present:

  • Santa Rosa Council

  • Santa Rosa City Staff

  • Santa Rosa City Schools Board

  • Gen H Board & Staff

• All emails, text messages and other communications sent by Ms. Jenni Klose from 2020 - present which mention my name (Adina, or Adina Flores)

• All agendas & minutes for the RED Housing Fund Board Meetings and Advisory Committee Meetings from 2019-present

Thank you!

Dear Ms. Flores:

This is in response to your email directed to the Renewal Enterprise District (RED) requesting forms 700 for Jenni Klose and emails, text messages and other communications sent by Ms. Klose or exchanged between Ms. Klose and various public agencies. 

Ms. Klose is not a member of the RED Board of Directors, and is not a consultant or staff to RED; therefore, we have none of the requested forms or documents listed in your request.

Sincerely,

Robin Stephani, Executive Director

Good Morning Ms. Stephani,

This conflicts entirely with the information provided by the FPPC. Could you kindly advise? You are listed as the point of contact for the Housing Fund.

Thank you.

-Adina

I have not yet received a response to my most recent email.

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While serving on the RED Housing Fund Board, Ms. Jenni Klose has simultaneously served as the Executive Director to Generation Housing (Gen H).

Generation Housing supposedly champions opportunities to increase the supply, affordability, and diversity of homes throughout the North Bay. We promote effective policy, sustainable funding resources, and collaborative efforts to create an equitable, healthy, and resilient community for everyone.

In actuality, it appears that they endorse projects and advocate for housing bonds, development fee waivers and funding for the developers serving on their Board.

On December 21, 2021, RED Housing Fund published the following notice of funding availability:

The RED Housing Fund (RHF) is pleased to announce the release of a Notice of Funding Availability (NOFA) for approximately $20,000,000 in subordinate loans to developers in Sonoma County that have projects meeting the RED Criteria: located on an infill site, mid to high density development, residential or mixed-use residential, and located within a transit-rich or planned area (see NOFA Terms and Conditions). With this funding, RHF intends to offer flexible financing in order to support and catalyze the development of housing across income levels, and in a way that protects the environment, supports economic renewal, builds disaster resiliency and improves the well-being of Sonoma County residents.

Loans are available to projects at all income levels: affordable (units primarily restricted to incomes up to 80% AMI), middle income (units primarily restricted to incomes up 80-120% AMI), and market rate; or a mix of income levels. Consideration of projects will be based on RHF’s funding availability for projects that meet the requirements set forth in this NOFA.

Qualified developers/project sponsors (“Applicants”) that meet the NOFA requirements are encouraged to submit proposals. Eligible Applicants include for-profit or non-profit corporations, individuals, general or limited partnerships, or limited liability companies.

The developments recommended for funding by the Fund’s Board and receiving preliminary loan commitments were:

• Acme Family Apartments, located at 1885 Roseland Avenue, featuring 77 one-, two-, and three-bedroom units affordable to households earning between 30-60% of the Area Median Income (AMI), $800,000. Loan targeted to close in late August.

• Aviara, located at 1385 West College Avenue, featuring 136 units of two- and three-bedroom units affordable to households earning between 30-60% of AMI, $2,400,000. Loan closed on June 9, 2022.

• Casa Roseland, located at 665 Sebastopol Road, featuring 75 one-, two-, and three-bedroom units affordable to households earning between 30-60% of AMI, $3,471,289.

• 420 Mendocino Avenue Apartments, located at 420 Mendocino Avenue, featuring 163 studio, one- and two-bedroom units in the heart of downtown Santa Rosa, $7,000,000.

• Pullman Lofts, located at 701 Wilson Street, featuring a total of 114 one- and two-bedroom workforce-attainable units across three phases of development, $2,300,000 (decreased to $1,300,000 based on senior lender requirements). Loan targeted to close in August.

• South Park Commons, located at 702 Bennett Valley Road, featuring 62 studio, one-, two-, and three-bedroom units affordable to households earning between 15-50% of AMI, $4,000,000.

On October 21, 2024 at 12:00 pm, the RED Housing Fund Board will be hosting an informational meeting regarding the HCD Local Housing Trust Fund (LHTF) Award & Casa Roseland project selection.

Casa Roseland is an endorsed project included within Generation Housing’s portfolio.

Casa Roseland / Tierra de Rosas is a MidPen housing development.

Ms. Ali Gaylord, Director of Housing Development, North Bay, MidPen Housing, served on the Generation Housing Board while these dealings were being finalized.

On April 12, 2022, Santa Rosa Councilwoman Victoria Fleming gave the following RED report:

Councilmember Fleming reported the RED Housing Fund Board has made preliminary recommendations, noting they are subject to change, for Acme Family Apartments located at 1885 Roseland Avenue, Aviara Apartments located at 1385 W. College Avenue, Casa Roseland located at 665 Sebastopol Road, 420 Mendocino Ave., Pullman Lofts located at 701 Wilson Street, and South Park Commons located at 702 Bennett Valley Road.

Generation Housing is a client of Ms. Fleming’s campaign consultant, Mr. Leo Buc, Breakaway Political. He was hired as an Electoral Advisor for the Bay Area Housing Bond. Additionally, Mr. Buc is a current campaign consultant for Santa Rosa Councilman Chris Rogers’s Assembly run.

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As Roseland business owners express dismay with the ‘affordable’ housing projects coming to their community, Gen H has refused to listen to their feedback.

Will any of the locals truly be able to afford the proposed ‘low-income’ units? The market-rate homes which will compose the bulk of the housing are astronomically priced for the average Roseland resident. It appears that wealthy developers from outside of the area are solely focused on financial profit and gentrifying Latino neighborhoods.

“I’m for truth, no matter who tells it. I’m for justice, no matter who it is for or against. I’m a human being, first and foremost, and as such I’m for whoever and whatever benefits humanity as a whole.” -Malcolm X