Fresno County staffer charged with felony. It may derail affordable housing project
In the midst of a housing crisis, an affordable housing project in Fresno could be in jeopardy because of conflict of interest allegations.
The Fresno City Council on Wednesday voted 6-0 to revoke an agreement to regulate the affordable housing component of a project that would convert the long-abandoned University Medical Center hospital into apartments.
City Council Vice President Nelson Esparza said he supported the project shortly after he took office, but on Wednesday he called the project “tainted” because a county employee who “spearheaded” the agreement was arrested and charged with a felony conflict of interest.
In October, the Fresno County District Attorney’s Office charged Steven Rapada, former chief of staff to Fresno County Supervisor Sal Quintero, with one count of felony conflict of interest for allegedly having a personal financial interest in a county-negotiated contract. Rapada pleaded not guilty. The criminal case is set for a preliminary hearing in May, court records show.
A spokesperson with the District Attorney’s Office confirmed to The Bee that Rapada’s case is the only conflict of interest case pending against current or former government employees or staffers.
It remains unclear what role, if any, Rapada played in the UMC agreement.
Affordable housing project
The Fresno County Board of Supervisors in September 2019 approved the $4 million sale agreement of the UMC property to Fresno-based CMG Construction Management, Inc. The county, city and CMG also entered into a regulatory agreement in which the city agreed to ensure the housing remained affordable.
The hospital existed in some form at the location on Cedar Avenue and Kings Canyon Road since the 1800s, with numerous expansions, upgrades and demolitions over the years, according to a county staff report. Hospital operations there ended in 2007, and the building remained vacant since then.
CMG planned to convert the hospital into 800 housing units, with at least 75% of them being affordable, including some senior housing. The project also included commercial use such as a grocery story, multiple outdoor plazas, a senior center and community center. CMG estimated the project, called Huntington Heights, would be complete in 2024.
The Bee reached out to CMG for comment and will update this story if representatives reply.
Project future uncertain
Without the city’s regulatory agreement, the sale can’t legally proceed, County Administrative Officer Jean Rousseau said in a statement.
Since the city agreed to regulate the affordable housing component of the project, the county used an exception in the Surplus Land Act to sell the property to CMG.
“The county of Fresno does not handle the development of affordable housing and lacks the staffing and infrastructure to impose and monitor the necessary regulatory agreement required for this exception,” Rousseau said in the statement. “Affordable housing projects in the unincorporated areas are handled primarily by the Fresno Housing Authority.”
City officials were “very enthusiastic” about the project and encouraged the county to move forward with the sale, Rousseau said. Since then, “various financing difficulties, the COVID-19 pandemic, and the complexity of the possible conversion of some of the VMC buildings” required numerous extensions and amendments to the sale agreements, he said.
Esparza said in the special meeting Wednesday that city officials were under the impression the agreement expired, but when they found out otherwise they rushed to schedule a vote to revoke the deal before escrow closed on April 1.
Council President Luis Chavez recused himself from the vote because his District 5 home is near the hospital site.
Esparza, who represents the area where the hospital is located, said he’s not completely writing off the project.
“(I’m) not giving up on this property,” he said. “I’m simply saying that, under the circumstances, we can’t in good conscience just look the other way on these unresolved allegations and issues and how this project potentially came to life in the first place.”
Housing crisis
Fresno housing advocates for years have sounded the alarm about a housing shortage and growing crisis in Fresno County.
The crisis is particularly bad when it comes to affordable housing, in which supply pales in comparison to demand.
Multiple jurisdictions have been called to act through lawsuits.
Last year, a judge ordered Fresno County to comply with housing rules after residents in rural communities sued, calling the county’s inaction on affordable housing issues discriminatory.
The city of Clovis also faces a lawsuit for its lack of affordable housing.
The uncertainty about the Huntington Heights project is another disappointment for housing advocates and Fresno residents, said Mariah Thompson, an attorney with California Rural Legal Assistance.
“Fresno residents and housing advocates were cautiously optimistic when this deal was first announced, and now it appears that once again that optimism was misplaced,” Thompson said. “It is well known at this point that the housing crisis in Fresno is past the point of being urgent; it is an absolute emergency. People in our community literally lose their lives as a result of our housing crisis.”
Now, city and county officials must work together to find a solution, she said.
“These jurisdictions should be asking: ‘How can we work together to make sure this project succeeds?’” Thompson said. “It would be a shame if one of the very few projects that could bring even a small number of affordable units to our area fell apart, especially if it is a result of politics.”
This story was originally published March 31, 2021 at 6:07 PM.