MWVCAA Bldg Sucks Up More Gov't $$

Revised: January 2019

 

By Sarah Owens and Michael Livingston

 

The Mid Willamette Valley Community Action Agency (MWVCAA) is saying the legislature has allocated $150K toward building out the sobering center in their building at 615 Commercial Street NE, "with a promise secured for another $250K."  See here at page 12.

Last January, the Oregon Housing Department (OHCS) approved the use of a total of $495,856 in State Homeless Assistance Program (SHAP ) and Emergency Housing Assistance (EHA) Phase I, II and III funds for renovations.  With the $487,000 used for the down payment, that's a total of $982,856 in state housing funds that MWVCAA plans to put toward its new building, with zero people housed.

In addition, MWVCAA received $300,000 for renovations from the City of Salem's Community Development Block Grant. 

And, just last week, MWVCAA's Community Resources Program Director Jimmy Jones stated publicly (audio here at about 1:15), that MWVCAA has asked OHCS to approve the use of another $250,000 in EHA Phase III funds to make the balloon payment due in 2018.  That would bring the total SHAP and EHA funds going toward brick and mortar to $1,232,856.  (OHCS does not permit the use of EHA funds for debt service.) (See letter from OHCS, below).

Jones told OHCS last summer the renovations would cost "less than $100K", and be complete by November 2017. 

The "good" news is that a permit to begin Phase I has been pulled.  The bad news is that MWVCAA doesn't yet have a contractor.  Nevertheless, Jones is now saying the "shell" should be complete by May 1, 2018, which will (finally) allow people come in from the weather.

The shelter space before renovation. 

Phase I will not include the installation of laundry, showers, kitchen or sprinklers that the City requires.  That, Jones says, will come in Phase II, for which they plan to pull the permit July 1, 2018, with the certificate of occupancy expected some time in January 2019.

The plan for Phase III is uncertain.  It might involve office space, or  "respite beds" or the sobering center, probably depending on whether the City and Marion County can persuade Salem Health to up the ante to cover the cost of ongoing sobering center operations, which seems doubtful, based on what we've been hearing.

The City and County still need to come up with commitments to cover the anticipated annual operating costs, which the City says will be between $600K to $700K.  The sobering center project is popular with the Marion County Sheriff's Department and the Mayor, and has the support of the Salem City Council.  What's not clear is what makes a sobering station the best use of the considerable resources it will require, especially as no return on investment's been identified.   

Even if the renovations do not  ultimately include a sobering station, there is still a great deal of public money going into this project, and without much to show for it.  The community was promised a day shelter would be open as of June 20, 2017, but that didn't happen.  So, to make that happen, government agencies are sinking more money into it.  But what about debt service?  The purchase was seller financed.  MWVCAA hasn't articulated a viable plan for servicing the debt.  What if MWVCAA defaults on the mortgage?  If MWVCAA were to default (not be able to make, say, one of the balloon payments), the seller could foreclose, and leave MWVCAA out in the cold, where they've left their homeless clients since last June. And all those public funds invested in renovations?  They would inure to the benefit of the seller.