Modesto, Habitat for Humanity ties tested by fee confusion

MODESTO -- Modesto is partnering with Habitat for Humanity Stanislaus to build River Vista, a 21-unit affordable housing subdivision in west Modesto near John Thurman Field.

But that partnership appeared to be put to the test at last week's City Council meeting when staff recommended Habitat pay $225,056 in capital facility fees, which the city uses for roads and other infrastructure to offset the impact of new development.

Habitat officials said those fees would make the project too costly and kill it, a point they said they consistently had made to city staff.

In council discussion, a majority of members supported waiving all of the capital facility fees, or CFFs. And in the end, the council voted 6-0 to waive the CFFs.

But there was a disconnect between what city staff and Habitat officials said before the council vote.

Parks, Recreation and Neighborhoods Director Julie Hannon presented a report in which staff recommended the council waive $70,330 in CFFs for five of the 21 units and defer payment of $225,056 in CFFs for the remaining 16 units.

But Habitat Executive Director Anita Hellam told council members the project could not go forward unless the city waived the CFFs for all 21 units, which total $295,386. Hellam added that Habitat officials had informed the city since the project's start that it could not pay the fees.

There is a precedent for waiving CFFs. Several years ago, Modesto waived all of them for Hope Village, Habitat's 20-unit subdivision in west Modesto.

Modesto is providing $1 million of the $3 million needed to build River Vista. The city's funding is coming through the federal Neighborhood Stabilization Program. If the project fell through, there would be a good chance the city would have to return the $1 million to the federal government.

City and Habitat officials declined to explain after the council vote why staff recommended something Habitat officials said would make the project too expensive. Instead, both focused on the benefits River Vista will provide the community.

Construction is expected to start this month.

Bee staff writer Kevin Valine can be reached at kvaline@modbee.com or (209) 578-2316.