Committee advances master leases, property‑management agreements and Homekey funding for multiple PSH projects

The Budget & Finance Committee spent the bulk of its meeting on a package of HSH items that authorize master lease and property management agreements for recently acquired permanent supportive housing (PSH) sites and an associated Homekey grant award.

Deputy Director Emily Cohen described four properties: 333 Twelfth Street (City Gardens, 200 family units; Abode Services as manager), 3061 Sixteenth Street (Casa Esperanza, 25 units for young adults), 5630 Mission Street (Mission Inn, 52 units for 18–24 year‑olds), and 835 Turk Street (114 adult PSH units; 5 Keys Schools & Programs as manager). HSH said most projects have Homekey awards and that the agreements are five‑year leases with a $1‑per‑year rent and not‑to‑exceed budgets to fund predevelopment, rehabilitation and operating reserves.

The Budget Legislative Analyst recommended two changes: (1) insert lease language clarifying HSH’s role in oversight of contractor solicitation and selection, and (2) reduce contingency levels above a 15% threshold to preserve Board oversight. HSH Deputy Director Gigi Whitley defended higher contingencies (20–30%) for some sites because many buildings were converted hotels with unknown conditions; HSH argued higher contingencies protect nonprofit providers that lack large capital reserves and allow immediate repairs to ensure tenant health and safety.

Supervisors pressed for policy clarity and oversight. After reviewing numbers on the record, committee members and HSH agreed to add the BLA‑recommended oversight language to the lease agreements and to reduce contingency percentages on two items (amending not‑to‑exceed amounts read into the record). The committee unanimously approved forwarding Item 5 and Item 7 and later unanimously amended and forwarded Items 3 and 4 with BLA‑read revised not‑to‑exceed amounts.

Separately, the committee approved an accept‑and‑expend Homekey resolution for City Gardens (333 Twelfth Street) authorizing HSH to accept $56.6M in Homekey funds and commit approximately $98.8M in matching acquisition and operating funds; BLA noted the project likely will not meet a Homekey bonus deadline because of existing tenants and non‑displacement commitments.

Nonprofit partners (Dolores Street Community Services, Abode Services, 5 Keys) spoke in support of the agreements and said contingencies were necessary for buildings not originally developed as permanent housing. A public caller urged audits of HSH operations; supervisors asked staff to return with refined scopes and further documentation as projects move into construction.