BEGINNINGS OF RCHDC 1974-1977
RCHDC had its beginnings as a program of North Coast Opportunities, Inc. (NCO), the Community Action Agency for Lake and Mendocino Counties. The housing development efforts began in the early 1970s, when Tom MonPere was NCO’s Executive Director. In 1973-74 there was a senior citizens' needs survey of the two counties to determine priority of needs. The survey results revealed that housing was one of the two most important needs. The survey results and plan for senior citizen services were discussed at a board and staff retreat held at Blue Lakes Lodge.
Shortly after, at an NCO Board meeting in 1974, one of the organization’s cherished board members, Lois Anderson, a local realtor in Ukiah, asked what NCO could do about housing for low income senior citizens. A discussion ensued in which Lois explained that there were several seniors who had contacted her about the difficulty of finding affordable housing. She noted that many of them were single women who were supporting themselves on only their retirement income. In response, the NCO Board appointed a committee to review and discuss options. The net result was that NCO decided to use some of its community development funds to hire a staff member who would explore the housing situation in Ukiah and submit options.
Initially the agency explored the possibility of getting the Mendocino County Housing Authority to explore developing affordable housing. There was little interest on the part of the county. Then RCHDC explored the possibility of private developers developing such housing. That also did not lead anywhere. Finally, it was decided to use agency staff to explore the possibility of NCO developing housing projects. NCO staff were able to locate properties in Willits and Ukiah. They also made contact with an architect from Sacramento with experience in developing affordable housing projects, as well as a contractor from Sonoma County that had worked on such projects.
NCO hired Duane Hill in late 1972. In addition to developing a housing strategy for the agency, Duane had responsibility for other programs, including the administration of the Foster Grandparent Program. In the area of housing, he worked with community groups to focus on a housing project for senior citizens in Ukiah and a project for families in Willits. Soon, NCO was able to fund Duane’s position full time as the NCO Housing Developer. He developed a housing advisory board as a precursor to setting up a separate nonprofit agency for housing development. The legal entity of Rural Communities Housing Development Corporation (RCHDC) was organized in November 1975, but the original housing development work was financed under the umbrella of NCO up to 1983. The initial RCHDC Board members included Ukiah City Council member Jack Simpson, Phil Gorny of the Mendocino County Planning Department, Jeff Warner from the Mendocino Coast, as well as John Pateros from Ukiah.
At this time Duane, as well as his Administrative Assistant, Carolyn Tappin, were working as NCO staff. Duane worked with various groups, including the Mendocino County Community Development Commission, to secure State funds to purchase property for projects. Duane also worked with architect Jim Dodd from Sacramento and contractor Jim Collingsworth from Sonoma County. Completing the development team at that time was Dave Kroot from Goldfarb & Lipman, who provided legal assistance to the agency.
In the late 1970s, Duane increasingly worked independently – fostering the development of the RCHDC Board and conducting predevelopment work (all the work prior to the beginning of actual construction) on several projects. Many of these projects required at least three years of predevelopment. Duane spent a good amount of time working with local cities and counties where he was developing projects. He understood that the housing effort needed to be a two-county effort (Lake and Mendocino) with the work focused on the urban centers in each county. Agnes Cooper, the Lake County Public Health nurse, who was a member of the RCHDC Board, did not hesitate to remind Duane that he needed to develop housing in Lake County. Other board members from Lake County included Mae Noble, a realtor from Lake County, Frank Ward from Lucerne and Frank Johnston from Clearlake.
INITIAL PROJECTS 1978-1983
The first RCHDC housing projects were developed and managed while RCHDC was still a program of NCO. This first wave of housing construction, which occurred between 1979 and 1983, included the development of eight housing projects, including:
- Holly Heights—a 26-unit family project in Willits, funded with USDA/RD 515 funds. This first project was completed in early 1979.
- Walnut Village—a 48-unit senior citizen project in Ukiah that was completed late 1979. Walnut Village was financed primarily with HUD 202 funds.
- Cypress Village—a 42-unit senior citizen apartment complex in Fort Bragg was completed in 1981. This was funded with USDA/RD 515 funds, as well as the California Coastal Conservancy funding.
In response to requests coming from Lake County, the initial wave of development included two projects there:
- Sunshine Manor—a 30-unit senior citizen project in Lakeport, completed in 1982 and financed with HUD 202 funds.
- Highlands Village--a 40-unit senior citizen project in Clearlake, also constructed in 1982. This project was also financed with HUD 202 funds.
The final projects of this period were the following:
- McCarty Manor—a 40-unit family project in Ukiah, completed in 1982, funded with USDA/RD 515 funds.
- Creekside Village—a 44-unit senior citizen project in Ukiah adjacent to McCarty Manor, funded with HUD 202 and completed in 1983.
- Holden Street Apartments—a six-unit project in Ukiah for mentally ill residents completed in 1982. Holden Street was financed with HUD 202 demonstration funds.
It is noteworthy that Holden Street was the first housing for the mentally ill in Mendocino County since the closure of the Mendocino State Hospital in 1975.
What is so extraordinary about this period is that NCO/RCHDC did this all with just two staff devoted to the effort: Duane Hill as Executive Director and his Administrative Assistant, Carolyn Tappin, who completed a lot of the paperwork including loan packaging. Property Management was contracted to a private firm, Barcelon and Berger, from 1975 to 1984. It should be emphasized that these projects had stable financing both in development and ongoing tenant subsidies.
SPIN-OFF FROM NCO: RCHDC Formative Period 1984-1989
In late 1981, Tom MonPere returned to NCO as the Executive Director. The agency was going through a difficult time financially and expenditures needed to be reduced. Tom realized that NCO could not continue to support RCHDC without additional funding. In 1982 a friend of Tom’s in the federal government told him about a national innovative grant program offered through the Washington, D.C. office of the federal Community Services Agency. He thought a proposal to support housing development might be fundable through this program. Duane and Tom prepared an application which was funded for $250,000. These funds were designated for use as seed funding for future housing projects, as well as to pay for staff, enabling RCHDC to officially separate from NCO. Not everyone was happy with this change (including Duane), but it was clear that NCO could no longer financially support RCHDC.
In January 1983, RCHDC became financially and administratively independent of NCO. RCHDC’s mission, as stated in the Articles of Incorporation, is to “provide decent, affordable housing to low and moderate income persons.”
This was a critical period for RCHDC in which the new agency would need to generate administrative funds to support staffing and cover predevelopment costs for new projects. RCHDC had received a small amount of development funds from the previously developed multi family projects, as well as a small amount of property management funds, but these funds would need to be supplemented to cover the organization’s operating expenses.
In 1983, RCHDC submitted a successful application to the USDA/RD program for a Self-Help Housing Grant. This USDA/RD 523 grant allowed the agency to pay for both administrative and program staff to initiate Self-Help Housing projects. The program developed groups of eligible families to help build their houses with assistance from RCHDC in the financing and construction of the houses. The first projects were developed in the mid to late 1980s in Willits, Ukiah, and Clearlake. These projects enabled RCHDC to support home ownership among low income residents, while at the same time generating administrative monies for the agency. It should be noted that Duane was very supportive of this program--he believed in its purpose, and he had personal experience with the program in the late 1970s when he and his wife Ramona built their house in Potter Valley through a Self-Help Program.
During this period—the early 1980s—the State Department of Housing and Community Development approached RCHDC to administer the Section 8 subsidies and single family rehab programs for Lake County. This program was more an income subsidy program than a development program, but it did provide administrative revenue to the agency at a time when it was needed.
In 1987 Duane Hill was contacted by a group from Anderson Valley that wanted to purchase a property for farmworkers. He worked with them to secure financing from California Housing Community Development (HCD) to purchase an old nursing home. RCHDC assisted them in the purchase of the Ray’s Road property in Philo, as well as providing help with property management. In time the local group developed their own nonprofit—Anderson Valley Housing Association—which took over ownership and management of that property.
Additionally, during this period, RCHDC also helped other nonprofits develop senior citizen housing. For example, RCHDC helped the Community Services Agency (CSA) of Washoe County, Nevada, develop two senior citizen projects in downtown Reno. The projects involved two phases of development with 43 units in the first phase and 40 in the second phase, for a total of 83 units funded by HUD 202. The second phase was completed in 1988. This work in Washoe County helped produce some development revenue as well as property management funds. The work was accomplished by Duane and two contracted consultants. Duane had to secure a real estate brokers license in Nevada in order for the organization to engage in property management there.
In these first years of RCHDC’s independence from NCO, development work related to multifamily projects for RCHDC itself was limited. The one exception was:
- Holly Heights II – a 16-unit family project in Willits adjacent to Holly Heights I. Holly Heights II was completed in 1985, and was funded with USDA/RD 515 funds.
To strengthen RCHDC’s housing development capacity, during the mid 1980s Duane and Tom took several classes in Real Estate studies at Mendocino College. Duane completed two years of classes which prepared him for securing his real estate brokers license. Some of these classes were taught by Seiji Sugawara who taught both business and real estate at the college. After the classes, Duane and Tom would get together with Seiji in a local bar, and the discussion would inevitably turn to RCHDC—what it was and projects that were currently underway. Seiji expressed interest in the agency, so Duane invited him to a meeting and shortly thereafter he was appointed to the Board of Directors. Seiji had a varied background—he was a well-educated engineer who had also worked as a real estate broker/developer in the East Bay for several years, prior to moving his family to Ukiah where he taught real estate and business classes at Mendocino College.
During the mid to late 1980s, as resources to support operations increased, RCHDC was able to expand the agency’s staffing. In 1984, a Finance Director was added, and then in 1985 Lois Goforth was hired as a bookkeeper. Lois became Finance Director in 1986 and continued in that position until 2011. In 1984, once Duane had secured his brokers license, RCHDC began to do its own property management. Assisting Duane in this area was Sally LaSalle, from the Mendocino Coast. In 1988, the position of Property Manager was created and Dennis Robey was hired into the position, where he continued until 2002. The Self-Help program was managed by Frank Strong from 1984 until the end of 1988. In 1988, Tom MonPere was hired to oversee a number of tasks, including the coordination of the Self-Help program, assistance with property management, and to take the lead role in project development.
As indicated, the 1980s were a period of consolidation for the agency as well as a time for seeking opportunities for expansion, new programs and new revenue. RCHDC added Self-Help to the development of multi family projects in terms of lines of business. In addition, RCHDC worked with other nonprofits to develop multi family apartment projects. It was also a period of learning what would work and what would not work for RCHDC. By the end of this period, a core staff was in place that would continue with the agency for the next fifteen years, providing the agency with a strong foundation of experience and stability.
During this period, the Board of Directors also became more active in overseeing the agency and in assisting Duane and the staff with some important decisions. The addition of Seiji Sugawara to the Board meant that there was a board member who, in one of his previous lives, had been very involved in developing residential subdivisions in both Alameda and Contra Costa Counties. Over time he became a major resource for the agency in providing guidance regarding real estate purchases and development projects. The Board also included Bill Howland, a local bank executive, who served as Board President for much of this period and was very active in overseeing the finances of the agency. The rumor around RCHDC was that you needed to have worked there at least five years before Bill called you by your right name. Agnes Cooper was a very special Board member to staff--she would bring over walnuts from her trees in Finley where she lived, whispering to staff that they were for staff members …not Duane.
ORGANIZATIONAL DEVELOPMENT, EXPANSION AND CAPACITY BUILDING 1990-2000
The 1990s were a time of agency stabilization, expansion into additional geographic areas, the formation of new partnerships, and the development of the agency’s capacity to utilize multiple new funding opportunities, all the while continuing to develop new senior citizen and family housing projects and significantly expanding the number of Self-Help houses constructed in the area.
In the early 1990s, a number of senior citizen housing developments that had been in the planning stages for a few years came to fruition. These projects included:
- Lakeview Housing-- a 36-unit senior citizen project located in the City of Lakeport, developed in 1990 and funded with HUD 202 monies.
- North Shore Villas—a 30-unit senior citizen project located in the community of Lucerne in Lake County. This project was developed in 1990 and funded with HUD 202 monies.
- Jack Simpson School View Apartments—a 30-unit senior citizen project located in Ukiah adjacent to the Walnut Village development. This project was developed in 1992 and was financed with HUD 202 funds.
- Oak Park Manor Apartments—a 30-unit senior citizen project located in the City of Red Bluff. The project was occupied in 1993 and was financed with HUD 202 funds. With this project tenant subsidies were changed to PRAC (Project Rental Assistance Contract).
Although three of these projects were located in underserved communities in Lake and Mendocino Counties, which are defined as the primary service area by the Articles of Incorporation for RCHDC, one of these new projects was in Red Bluff where RCHDC developed the Oak Park Manor Apartments project. (One can easily understand why Red Bluff was chosen—inasmuch as Duane was born and raised there and has maintained a close connection to that area.)
This project in Red Bluff marked the beginning of the expansion of RCHDC’s service area to encompass several other Northern California counties, including Humboldt County and Del Norte on the North Coast, as well as Tehama and Siskiyou Counties in the inland area of Northern California.
In another divergence from RCHDC’s previous endeavors, in 1990 the Housing Assistance Council (HAC) in Washington, DC, contacted RCHDC with a request to undertake the property management for the Redwood Court family project, a 50-unit complex located in Fortuna in Humboldt County which was financed with tax credits. RCHDC leased up the complex and continued to manage the property. HAC asked RCHDC to replace a local nonprofit, Eel River Housing Associates, as the managing partner. After an extensive investment of staff time in this deal, RCHDC became the managing partner. Once the tax credits expired RCHDC bought out HAC’s start-up loan. RCHDC then bought out the investment group Beech Villa Limited and dissolved the partnership in order to secure ownership of this property. It was a labor-intensive effort, but it also was an introduction to tax credits for Duane and the RCHDC staff. By the early 1990s tax credits were becoming the primary source of financing for affordable housing nationwide.
During the ten-year period from 1990 to 2000, RCHDC supported 205 families in the construction of their homes in three counties. These 205 houses, plus the 86 houses built between 1983 and 1989, brought the total number of Self-Help houses developed by RCHDC to 291.
Self-Help is a transformative project for many of the families that participate. There are many remarkable stories that come from the RCHDC Self-Help program, including this one from one of the projects in Fortuna in Humboldt County:
The construction foreman for the project told the story of a woman--a single parent with one child--who built her house in the first group in Fortuna with the help of her father and members of her church. She had been a waitress in Eureka, but became so inspired by construction work that she became a licensed plumber within two years after the project was completed.
For many Self-Help families, owning their own homes is a critical element in their own social and economic stability.
The 205 RCHDC Self-Help houses constructed between 1990 and 2000 included projects in Fort Bragg and Ukiah (Mendocino County), Clearlake, Lakeport and Middletown (Lake County), and McKinleyville and Fortuna (Humboldt County). The number of houses constructed during this period, by community, was:
- Clearlake 1990-1992 20 families
- McKinleyville 1993-1994 28 families
- Ukiah 1993-1997 41 families
- Lakeport 1995 7 families
- Fort Bragg 1995 10 families
- Fortuna 1996-1998 20 families
- Ukiah 1997 15 families
- Ft. Bragg 1997-2000 27 families
- Ukiah 1999-2000 19 families
- McKinleyville 1999 9 families
- Middletown 2000 9 families
Self-Help housing was quite popular in the coastal communities like Fort Bragg and McKinleyville where single family housing was very expensive.
The financing sources for Self-Help changed in the 1990s. The USDA/RD 502 loans were still the primary source of financing for Self-Help families, but secondary financing grew to include FHLB/AHP, Redevelopment funds, Neighborworks (discussed below), CalHome funding from HCD, and RCHDC’s Revolving Loan Fund. With the cost of housing increasing rapidly, RCHDC had to increase the amount of subsidy for each family.
In the early and mid-1990s RCHDC continued to pursue new lines of business, including working with the cities of Yreka and Weed and the County of Siskiyou to explore the feasibility of purchasing two LIPHRA (Low Income Housing Preservation and Resident Home Ownership Act) projects in Siskiyou County. One was a 76-unit family project in Yreka named Pine Gardens I and II, and the other was Siskiyou Gardens, a 48-unit family project located in Weed. RCHDC could not purchase Pine Gardens I and II due to problems that HUD had with the ownership.
RCHDC ended up purchasing only one of these projects.
- Siskiyou Gardens—a 48-unit family project located in Weed (Siskiyou County), purchased in 1996 using HUD 236 funding and HOME funds from HCD.
It is important to note that HOME funding was a federal source of funding for affordable housing. It was channeled through the State Housing and Community Development Department (HCD) to both local governments and Community Housing Development Organizations (CHDO’s). RCHDC had to apply to HCD to qualify as a CHDO. Tom MonPere, working with Lois Goforth, did the initial application to HCD. It was approved for a five-year period. This allowed RCHDC to apply for HOME monies to assist with both multifamily projects as well as Self-Help. HOME monies became an important resource for RCHDC.
In late 1990s RCHDC was approached by RCAC (Rural Community Assistance Corporation) in Sacramento to help them with Sunset View—a mobile home park north of Ukiah. The residents wanted to purchase this park, but they needed some assistance to complete the purchase. RCHDC assisted them in the purchase process to become a resident-owned park, and provided property management for several years afterwards. This was a period in which RCHDC expanded its property management staff and increased its training. Dennis Robey was the Director of Property Management and Mary Leupp was the Assistant Director.
RCHDC was contacted in 1994 by Northern Valley Catholic Social Services about assisting them in preparing their HUD 811 application for a 17-unit project in Redding serving the developmentally disabled. This project went into construction in January, 1995. RCHDC staff served as the consultant in preparing the HUD application, as well as carrying out due diligence and entitlement work. RCHDC also assisted this same group to secure a Fund Reservation from HUD for a similar 20-unit project in Chico, which started construction in 1996.
In the mid-1990s RCHDC came to the conclusion that the agency needed to terminate two endeavors in Lake County—the Section 8 contract, as well as the contract for Single Family Rehab. RCHDC realized that these programs did not fit into the primary focus of the agency, which was the development and management of multifamily housing projects. In this context "multifamily housing projects" refers to apartment rental projects—both family and senior citizen.
With this awareness, RCHDC facilitated the transfer of the Section 8 and Single Family Rehab programs to the newly created Lake County Housing Authority.
The mid-1990s were another period of rapid changes in financing for affordable housing, both at the state and federal levels. Programs like HOME (Home Investment Partnership Act), SHOP (Self Help Program Ownership Program), FHLB/AHP (Federal Home Loan Bank/Affordable Housing Program), and tax credits were expanding at the federal level. At the state and local levels there were Redevelopment Agency funds, CalHome, CSSHP (California Self Help Housing Program) funds, MHP (Multifamily Housing Program) funds, etc. This represented a major change from the simple HUD 202-funded projects, making funding for affordable housing projects much more complex.
The other education in financing came with local redevelopment agencies. Thanks to Goldfarb and Lipman, RCHDC’s legal counsel, RCHDC got a good introduction to redevelopment funds and how they could be used with various housing projects.
These funding sources opened up possibilities for new projects, but also created increased demand on the agency’s small development staff. RCHDC used consultants like Craig Meltzner, Chuck Gallo, Danny Fred, and others to supplement staff.
In 1998 RCHDC was contacted by a field representative from Neighborworks to invite RCHDC to consider becoming a part of their network. Neighborworks is a nationwide nonprofit that helps housing nonprofits with funding, training, and technical assistance. At first Duane was cautious about joining the network, but Seiji Sugawara and Tom MonPere advocated joining Neighborworks. The process of completing the application and going through an on-site review involved a significant investment of staff time, but once approved, participation in Neighborworks has provided an ongoing source of funding and training for RCHDC. Additionally, it has opened up other major sources of capital funding--for example, Neighborhood Capital.
During this period, the agency was also working on the development and construction of several smaller multifamily apartments projects, including:
- Lenore Senior Housing— a 12-unit senior citizen housing project in Willits that was completed in 2001.
- Washington Court Senior Housing—an 11-unit senior citizen housing project located adjacent to Oak Park Manor in Red Bluff, completed in 2002.
- North Pine Street Senior Housing—a 10-unit senior citizen housing project located adjacent to Walnut Village in Ukiah, completed in 2002.
These projects were all funded with HUD 202 funds and PRAC tenant subsidies.
Throughout this period, the RCHDC offices were located at 237 East Gobbi Street in a building that felt like home to many of the employees who had worked for the agency for an extended period. It was a small physical space that had originally been a home for the McCarty family. There was a front office for the public entrance to RCHDC from the street. This was Carolyn Tappin’s domain. She greeted the public and the mailman each day when he delivered the mail. Another large office fronting the street was Lois Goforth’s office. There was also a large open area in the front where Lois’s bookkeeping staff was located. The rest of the staff, including Duane and Tom, worked in the middle to back part of the building in an area referred to as “the labyrinth” by some staff and board members. Down the hall was a meeting room, and in the back of the building were two additional offices—one for the property management staff and one for the Self-Help staff. Of course there were bathrooms, one in front and one in back. As RCHDC grew, most of these spaces were remodeled at least two or three times. One last remodel involved enclosing a patio area, which became a “new space” for the development staff. By 2002 there were probably 20 staff members located in the Gobbi St. office.
On this same piece of property was a small house, resided in by Howard Carter and his three-legged dog, Jake. Jake had become the agency mascot. Howard and Jake contributed to making this a special place. Over time Howard became good friends with many of the staff, including Lois Goforth and Tom MonPere.
RCHDC had an exceptional Board of Directors during this period--committed, experienced, and knowledgeable community members who came to meetings and devoted hours to ensuring the success of RCHDC. The late 1990s and early 2000s were a period of transition and change for board members. Both Olga Hudson and Agnes Cooper died in the mid 1990s, along with other Lake County members—including Frank Ward and Frank Johnston. Seiji Sugawara himself died in 2003. All of these members were a major loss to the agency.
It also was a period in which housing development in California was becoming more difficult and expensive by the day. A good example is the extension by the State Legislature of prevailing wage requirements to affordable housing projects—thereby increasing the cost of projects by somewhere between 25% and 35%. Additionally, California expanded the environmental and CEQA (California Environmental Quality Act) requirements for all housing projects. Again, this increased the cost, development time, and feasibility of many RCHDC projects.
With RCHDC’s expansion into other counties, new partnerships and the diversification of its programs, this period represented a time in which RCHDC was incrementally becoming a more and more important player in the world of providing affordable housing in rural Northern California.
CONTINUING ORGANIZATIONAL DEVELOPMENT AND NEW LINES OF BUSINESS 1999-2008
The RCHDC Board in 2002 realized that the staff was outgrowing the existing office space, leading to an extended discussion about what RCHDC should do. Should the agency build a new office building on that property? Or, should RCHDC purchase another property and remodel it for agency use? Board member Seiji Sugawara took the lead and located an office space behind the Ukiah Senior Center at 499 Leslie Street. Duane and the staff had mixed feelings about leaving 237 East Gobbi. It had been the office for so long and many of the staff were attached to it, but the decision was made to go forward with the move. The purchase was financed with a USDA/RD Community Facilities loan. The move to 499 Leslie marked the end of an era in terms of office space, but it also was symbolic of a major change in focus in terms of specific programs.
In 1999, Paul Rice, the USDA/RD Regional Director, contacted RCHDC and made the agency aware of Expiring Use Projects. These were USDA/RD-financed affordable housing projects that were owned by private for-profit entities and had been in existence for approximately 20 years, a time span that fulfilled their commitment to maintain them as affordable. At that point the owners/investors could sell the projects or convert them to market rate rentals. There was a caveat that if they were to be sold, they first had to offer them to a nonprofit housing agency that would maintain them as affordable housing. With three of these expiring use projects available in Mendocino County, RCHDC made the decision to move forward with the purchase of these properties. This was an entirely new line of business for the agency and required a major investment of time, money, and expertise to pursue the initial three projects. The first expiring use transactions for RCHDC involved the following three projects:
- Orchard Manor—a 64-unit family project located in Ukiah.
- Orchard Village—a 48-unit family project also in Ukiah.
- River Gardens—a 48-unit family project in Fort Bragg.
The purchase of these three projects was RCHDC’s “baptism by fire” in dealing with expiring use and tax credit projects; the endeavor represented the beginning of a significant learning curve for the agency. This involved creating a partnership with investors which was both complicated and time limited. The two staff persons dealing with these projects in development were Sandy Harris and Tom MonPere. One of the critical concerns was making sure that there were enough units in the deal to justify the investors. That explains why RCHDC included the Ft. Bragg project with the two Ukiah projects in one partnership. It is also important to note that there was common ownership for all three projects. Probably the critical element in assisting RCHDC in this initial tax credit deal was expertise provided by Dave Kroot from Goldfarb Lipman. His legal advice guided us through the minefield of this deal.
The Ukiah/Ft. Bragg projects were followed two years later in 2003 with the purchase of three expiring use projects in Crescent City. This deal was complicated by the fact that a family partnership was selling the projects. Not all of the siblings were in agreement to the terms of the sale. It came down to just a few days left to make the deal. Again, it was the assistance of Dave Kroot from Goldfarb Lipman that finally sealed the deal. The three Crescent City projects were:
- Totem Village—a 38-unit family project.
- Seabreeze-- a 56-unit family project.
- Seagull Villa—a 50-unit senior citizen project.
In both Ukiah and Crescent City, the purchase of these projects and maintaining them as affordable housing were important. These were large apartment complexes, centrally located in terms of services and available transportation. In both cases the Redevelopment Agencies of the cities of Ukiah and Crescent City, and of Mendocino County, helped RCHDC with redevelopment funds to cover some of the predevelopment costs. These predevelopment funds were the initial monies RCHDC received in order to continue pursuing these projects. Also, RCHDC applied to the Cowell Foundation for funding. They provided approximately $75,000 (to be matched by the cities of Ukiah and Fort Bragg) for the acquisition of the three Mendocino County projects.
During this same period RCHDC started working to develop Supportive Housing Projects. These were projects designed to provide permanent housing for the chronically mentally ill. RCHDC had some experience in this field--the Holden Street Apartments in Ukiah were built in 1982 specifically to house mentally ill community members. These CMI projects were designed to be joint ventures with local mental health departments. County Mental Health would provide the referrals of prospective tenants as well as ongoing support of them while RCHDC would be the owner and property manager of the projects.
The Gibson Court project was a particularly difficult project. HUD would only fund 12 units at the site. The project had been designed for 16 units. Finally, after much back and forth between RCHDC and the funding sources, it was decided that there would be a 12-unit HUD project, and a 4-unit non-HUD project. All of the units served mentally ill clients, but had to be administered separately. RCHDC had to do a lot split for the two projects.
CMI housing projects that were developed during this period included:
- Gibson Court—a 16-unit project in Ukiah that was developed in 2002. It was funded with City of Ukiah Redevelopment funds, HCD Home monies, and HUD 811 funds. Mendocino County Community Development Commission provided vouchers for the 4 non-HUD units.
- Bevins Court---a 10-unit project for mentally ill adults in Lakeport that was developed in 2004. It was funded with HUD 811 funds, AHP monies, and HCD HOME funds.
These projects were a new line of business for RCHDC and presented challenges. They were also a harbinger of RCHDC’s future involvement in developing these types of projects in other counties outside of Lake and Mendocino Counties. It is important to note that the expansion into both acquiring expiring use projects and Supportive Housing Projects placed an increasing burden on Property Management personnel. Tax credit projects, in particular, required an extensive amount of monitoring and reporting. Also, Supportive Housing Projects were multi-funded projects, which meant that Property Management was reporting to several different funding agencies. Duane Hill expanded staff in Property Management in order to cope with the increased demand.
This decade was also a period of significant expansion for RCHDC’s Self Help Program. Projects included the following:
- Ukiah - Doolan Creek 2001-2003 23 families
- McKinleyville - Kirkwood 2002-2005 22 families
- Upper Lake - Harmony 2003-2006 30 families
- Fort Bragg - East Oak 2006 7 families
- Clearlake - Bay Street 2007-2008 9 families
The 97 houses built during this period brought the total number of Self-Help houses built by RCHDC to 388. It is interesting to note that in the Doolan Creek project in Ukiah, Harmony Park project in Upper Lake, and the East Oak Street project in Ft. Bragg, RCHDC had to build the infrastructure for this property, i.e., streets, water, and sewer lines. The era of purchasing improved lots was coming to an end.
For several years RCHDC had explored locating property to construct a farmworker housing project in Lake County. The agency got good support from local farmers, but each time RCHDC would locate a property the community would oppose it. Finally, after much work, RCHDC located a parcel in Kelseyville to develop farmworker housing. There was some opposition to it, but both the Lake County Planning Commission and the County Supervisors approved the site.
The last new construction project during this period represented an expansion into the area of Farmworker Housing complexes:
- Oak Hill Apartments—a 40-unit farmworker housing project in Kelseyvillle. Completed in 2006, this project was funded by USDA/RD 514 funds, as well as HOME monies and AHP funds.
This was the first rental housing RCHDC provided to farmworkers. In early 2007 RCHDC was contacted by Rob Weiner from California Coalition for Rural Housing (CCRH) about purchasing a 14-unit senior citizens housing project in the community of McCloud in Siskiyou County. Rob wanted a nonprofit housing group to purchase it in order to preserve it as affordable housing. Duane was able to secure a loan from HAC to purchase the property for RCHDC.
In the period from 2000 to 2004, RCHDC purchased several undeveloped properties that it planned to develop in the future, including:
- North State Street--a four-acre parcel just north of Ukiah was purchased in 2000 intended for the development of Self-Help housing.
- Orr Creek—eight acres on Orr Creek just north of Ukiah city limits was purchased in 2004, intended for multifamily apartments.
- Lakewood- a ten-acre parcel north of Ukiah was purchased in 2003 for the development of Self-Help housing.
- Collier— a six-acre parcel in Nice (Lake County) was purchased in 2004 for the development of multifamily housing.
This was a period in which available property for development was becoming very scarce—particularly properties already zoned for housing. This was very true in Ukiah and Ukiah Valley. Duane Hill felt the need for RCHDC to secure property for Self-Help, as well as multifamily projects. By purchasing these properties, RCHDC assumed a great deal of debt as well as challenges in developing them, but those were the risks of the development business. In 2004 Cowell Foundation provided $250,000 in funding to assist with the development of Orr Creek property.
The holding periods for property over the past twenty years had increased substantially. In the past, RCHDC could keep the holding period down to a year or two on improved properties, but that period was over. With RCHDC carrying out its own development, there were now holding periods of five years or more before a project was ready to close the loans and move into construction. These new timelines not only increased the carrying cost of projects, but also increased risk over time. After investing so much money in a project, there is a point of no return in which there is little choice but to continue to completion.
Another major variable that confronted RCHDC during this period was the increasing complexity of development. Along with an increasing amount of regulation from the federal, state and local authorities, at times there appeared to be a lack of knowledge or capability within these governmental agencies regarding how to implement and manage these regulations.
These issues were compounded by the increased need for new or upgraded infrastructure that confronted local communities. For example, in Upper Lake RCHDC had a Self-Help project of 30 lots but the local community service district said it did not have the capacity to serve the project. The solution was that RCHDC, working with the County of Lake, applied for Community Development Block Grant funds (CDBG) to support the expansion of its water and sewer capacity. This was successful, but it delayed the project for at least two years. In addition, RCHDC had to build roads for the subdivision—which the county required RCHDC to prepay for future maintenance costs.
So, as RCHDC moved into the 21st century, a pattern developed in which each RCHDC project has been challenged with a whole infrastructure component, which means additional capital, coordination, and time.
This period was one of expansion and development for RCHDC, extending its service area to include Humboldt, Del Norte, and Tehama Counties while undertaking new lines of business. By 2008 the agency had over 1000 rental units in its portfolio and had assisted families in building almost 400 units of Self-Help housing. Fortunately, it also was a period of stability for the agency in terms of both board and staff members.
The world of affordable housing finance had changed drastically from the early days. Redevelopment funds through individual cities and counties had become the major source of predevelopment funds. These were critical for determining the feasibility of pursuing projects. The major change in terms of permanent financing was that tax credits were now the primary source of financing, and it became essential to combine other financing with the tax credits in order to create a package that made a project feasible. The State of California had expanded its funding for affordable housing—HOME funding through HCD, MFH, CalHome, CHSSP (California Self Help Housing Program), Redevelopment Agency funding, etc.—providing new opportunities along with new challenges. It is important to note that the redevelopment funds, particularly the predevelopment grants, were critical to the development of many projects. In the office it was referred to as “seed monies” or “first in, first out funds.”
In 2005, RCHDC entered a period of significant shifts in staffing. Tom MonPere left the agency in 2005. Eric Enriquez and Diann Simmons took over the development of projects at that time. More change came in 2008 with Duane’s departure. The organization’s founder and extraordinary developer of affordable housing on the North Coast decided it was time to leave. Lois Goforth, Chief Fiscal Officer, and Carolyn Tappin, Administrative Assistant, were the only remaining members of the agency’s early staffing.
Duane Hill’s departure in 2008 marked the end of an era. Duane had been the founding Executive Director and had guided the agency for approximately 33 years, continually demonstrating his extraordinary creativity, tenacity, patience and ability to find capable folks to work with successfully.
2008 TO 2016
RDHDC hired Bruce Alfano in 2008 as Chief Executive Officer to succeed Duane Hill. This was the beginning of a very difficult period for RCHDC. The organization had a large number of undeveloped properties with major carrying costs and limited options for new revenue. It was also the time of the Great Recession, a financial crisis that caused a large number of housing foreclosures and reductions in funding for affordable housing programs. The only multifamily new construction project completed during this period was in 2010.
- This project was Duane Hill Apartments in Ukiah, a 32-unit family project that had been delayed by a series of environmental issues. It was financed with tax credits, HOME funds, and redevelopment monies.
The only Self-Help Projects completed from 2009 to 2011 were the following:
- McKinleyville- Habitat Lane 2008-2009 6 families
- Lake Mendocino—I Ukiah Dec. 2010 8 families
- Lake Mendocino—II Ukiah July 2011 5 families
The Self-Help project in McKinleyville was named Habitat Lane because the six lots involved were owned by Humboldt County Habitat for Humanity. The organization was unable to develop the property, so it approached RCHDC and requested that the Self-Help program purchase the lots for a project in McKinleyville. This is how the project came to be known as Habitat Lane.
The Lakewood Self-Help Project on Lake Mendocino Drive was the largest and most complex Self-Help project that RCHDC got involved with. It was composed of two parcels—the front parcel needed to be purchased due to the back parcel being landlocked. Years were spent working with the county and the owner of an adjacent parcel in order to get clear title to the property. The county presented many requirements, including preserving an oak tree. Also, RCHDC had to agree to set aside four improved lots for the previous owner. It took 9 years from the time of the purchase until RCHDC could start working on the infrastructure. With 59 lots this was clearly the largest Self-Help project RCHDC had undertaken.
During this time, there was a great deal of concern about the viability of RCHDC due to the diminishing revenue base and the lack of new projects on the horizon. There was a high rate of staff turnover, as well as many board members who left the organization during this period. In November, 2011 Bruce Alfano left RCHDC and Lois Goforth replaced him as the Chief Executive Officer. Bruce Alfano had hired Chuck Lange as Chief Operating Officer on Dec. 13, 2010. Lois had recommended Chuck for this position. Working with Chuck, Lois realized the need to generate more revenue for the organization. Chuck had a great deal of experience in developing private market housing – so he developed a plan to refinance older RCHDC housing projects. Over a 2 to 3 year period this produced a substantial amount of financing to rehab existing projects, as well as produce developer fees that increased revenue for the agency’s administration. It should be noted that Mike Pallesen was hired by Lois to be Development Director on November 15, 2012.
By early 2013 the agency was starting to focus on new multifamily projects. RCHDC had been contacted about an Expiring Use Project--Autumn Village, a 40-unit senior citizens project located in the city of Clearlake. This was, again, a 9% tax credit project which required a lot of relearning because there had been a great deal of turnover in the RCHDC Development staff. Chuck Lange learned quickly and had help from the consultant Danny Fred. Mike Pallesen had a major role in the acquisition of Autumn Village as well. This project was closed in early 2016. It produced property management funds for the organization, as well as some limited developer fees.
Mike Pallesen spearheaded the solar addition to Autumn Village. This was the beginning of a major initiative to add solar power to existing RCHDC projects as a source of revenue for the agency. Thanks to Mike Pallesen it has become an ongoing project that continues to save energy, as well as generate income for RCHDC.
In addition to Autumn Leaves, RCHDC began discussions with Humboldt Bay Housing in 2013 to create a Supportive Housing Project named Arcata Bay Crossing. The Promissory Note between RCHDC and Humboldt Housing for the predevelopment loan was signed in January 2014. It was both a rehab of an old hotel and the creation of new construction units for mentally ill adults. The total number of units was 32. It was a joint development between RCHDC and Humboldt Bay Housing Agency and involved Humboldt County Mental Health Agency as well. RCHDC handled property management for the project, which was completed and occupied in late 2016. Mike Pallesen together with Chuck Lange completed much of the development work on this project.
In June, 2014 Mike Pallesen submitted a HOME application to California HCD to rehab and refinance the McCloud senior citizen housing project. It was an important project, because RCHDC had not been eligible to apply for these monies for several years. RCHDC renewed its CHDO status with HCD and Mike’s HOME application was funded. This helped produce some developer fees for the agency, as well as rehab the units.
Lois Goforth notified the RCHDC Board in mid-2015 that she intended to retire from the agency. The board, with assistance from Neighborworks, started a recruitment process for the position of Chief Executive Officer of RCHDC. The hiring process took several months. In November, 2015 the Board selected Brad McDonald as the next Chief Executive Officer for RCHDC. Brad had an extensive background working with Fetzer Corporation in various management roles. He also was the CEO for the Coyote Valley Tribe for three years. Lois had hired Brad as the Director of RCHDC Self-Help Program in late 2014. He held this position with RCHDC prior to being hired as CEO.
Brad took the position of CEO effective Feb. 1, 2015. He and Lois shared the position for the month of February, 2015. Then Lois took a part-time position in Property Management until mid-December, 2015 at which time she retired completely.
It is important to note that during Lois Goforth’s tenure as CEO she assisted RCHDC in stabilizing its financial situation with major assistance from Chuck Lange. She also hired Mike Pallesen in Development which helped the development unit become a more focused and capable group. Finally, she helped the board believe in the organization and its future. It is difficult to detail Lois’s contributions to RCHDC—there were so many. For many years under Duane Hill’s leadership she handled the agency’s finances, as well as working with other staff to develop new projects. She was invaluable to Duane Hill, and once she became CEO she clearly played a major role in rebuilding the organization. She had exceptional management skills, and worked well with other employees.
In addition to developing Autumn Village, Arcata Bay Crossing and the HCD/HOME-financed McCloud project, Lois also oversaw the revival of Self-Help during this period, which included the following projects:
- Lake Mendocino Dr. III August 2012 5 families
- Lake Mendocino Dr. IV May 2015 5 families
- Lake Mendocino Dr. V August 2016 6 families
Early in 2015 Brad asked Ryan Larue if he would be interested in a position in the Development Department. Brad then connected Ryan and Mike Pallesen, resulting in Ryan joining the RCHDC Development team on April 7, 2015. On July 1, 2016 Ryan Larue was promoted to Director of the Development Department. Mike continued part-time as the Special Projects Coordinator. It was a perfect title for him—he wanted to retire, but he continued to make major contributions to RCHDC’s future development plans. 2016 was an important year for RCHDC. Brad was learning the role of the CEO and the agency was adjusting to the reality of not having Lois Goforth available to answer questions. Chuck Lange left the agency at the end of 2016. Both of these individuals had made major contributions to the agency in terms of maintaining RCHDC as a viable entity.
One of Brad’s skills is his ability to hire good staff and provide them with positive direction. In January 2017 he hired Dan McIntyre to be Director of Property Management. Dan had been hired originally by Lois on Jan. 20, 2015 as Maintenance Superintendent. With Tom Simms, the Chief Financial Officer, and the rest of the management staff in place, Brad had the core of an effective senior staff. Brad has learned quickly that in the affordable housing business one has to stay ahead of the curve—adjusting to changes in funding and realizing that one has to adjust to a changing future.
During the history of RCHDC, there were many individuals who made significant contributions at various points in time. One of these was Mike Pallesen. Mike provided the computing services through Mervine and Pallesen from the early days when RCHDC was still part of NCO. When Mervine and Pallesen made the decision to not provide such services, Mike designed and set up RCHDC’s first PC system, overseeing the installation of the MIP accounting software. Mike continued to provide hardware maintenance on his days off. Mike did this for many years until he recruited Jacob Turner to take this task. Mike continued to remain in contact with Duane and others in the organization. At one point Duane missed the opportunity to hire Mike for Development. This error was corrected by Lois Goforth who hired him for Development in 2012.
Since its inception in 1975 up to December 31, 2016, RCHDC had a major impact on the supply of affordable housing on the North Coast. In terms of Self-Help there were 401 families who were able to build their own houses over that period of time. These projects are located in McKinleyville and Fortuna in Humboldt County; Clearlake, Lucerne, and Lakeport in Lake County; and Ft. Bragg, Willits, and Ukiah in Mendocino County.
In terms of multifamily rental units, RCHDC has provided decent and affordable housing throughout the North Coast. The following is detail on how many units were produced of various types:
- 15 Senior Citizen projects--468 units
- 10 Family projects--476 units
- 4 Chronically Mentally Ill projects --- 64 units
- 1 Farmworker Housing project --- 40 units
30 Developments 1048 units
It is significant to note that among the 10 family projects–6 were acquisition/rehab projects—this amounted to 362 units. Of the 15 senior citizen projects—only three were acquisition/rehab projects—this amounted to 104 units. Almost one-half of the total units owned by RCHDC were acquisition/rehab—rather than new construction.
Without a doubt, developing and funding a project today is far more complicated than it was in the 1980s and 1990s, but without the groundwork carried out by early staff and Board members, prospects today would be far less viable. Any building is only as strong as its foundation and the same can be said for any organization. RCHDC was built with a strong foundation and has withstood the test of time. If current Board and staff members continue this in the future, the agency will continue to play an important role in providing affordable housing in many rural communities in Northern California.
RCHDC Board Members
This list of board members was put together by Lois Goforth. It was a major research effort that Lois was well-prepared for. To many people, nonprofit agencies are somewhat of a mystery. Who really runs the agency—board or staff? What are they about? RCHDC is one of those nonprofit agencies where the Board played a major role in both its development and success. Board members were in many cases selected for their expertise in some aspect of housing. They brought their knowledge to Board and committee meetings. Yes, Duane Hill and Lois Goforth and other staff members played major roles in the day to day operation of the agency, but the Board members were always present in the oversight of the agency. Board member input included Mae Noble helping the agency locate an appropriate parcel of land to develop for a project. It also included Seiji Sugawara helping Duane structure an offer to purchase a property. Agnes Cooper, Lake County Public Health nurse, always would help recruit needy senior citizens for the various apartments the agency developed in Lake County. There were so many board members that did so much for the agency at various points in its history. We thank them all!!
Original Board members listed on Articles of Incorporation 1975
Frank Marlino Jr.
Board Members as of 2019
Gary L. Mirata
Past Board members
Prepared by Tom MonPere with assistance of Sharon Kiichli, Lois Goforth, and Duane Hill.
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