Affordable farmworker housing takes slow step: 555 Kelly project intended to house seniors; Half Moon Bay working on legal agreements

Since then, housing and farmworker advocates, and at one point, Gov. Gavin Newsom, have asked that the development move forward, citing a dire and obvious need for more farmworker housing. That push comes even as some residents voiced anger and frustration that the project’s scope may cause traffic and safety problems downtown. 

Many of those farmworker advocates came out en masse during a study session March 18 on legal agreements between the city and developer Mercy Housing to advocate for the project in an existential capacity and to urge councilmembers to move the project forward. 

“Here we are, still with the same faith, the same hope as day one,” resident Rocio Avila said through a translator. “They are not asking for luxury, they are not asking for privilege, they are asking for something basic — a dignified home.” 

The large majority of the City Council’s discussion revolved around technical and legal elements of the development, however. It took action only on an extension approval of the exclusive negotiating agreement between Mercy Housing and Half Moon Bay. 

The 40-unit project, which will include three studios, 34 one-bedrooms, three two-bedroom units, a manager’s unit and a community resource space, is slated to cost $43 million and has $21 million in committed funds. The extension of the negotiating agreement, which will last until Dec. 31, will allow Mercy Housing to hold onto its existing funds and continue to apply for county funding and state tax credits. 

Councilmembers continued to question the finances of the project and request a full operating budget for how the development will function once it’s built. 

“You have what you expect to spend on things, but you don’t show where that cash is coming from,” Mayor Debbie Ruddock said. “To pay those bills, we need to see both sides of the operating budget.” 

The City Council will only formally approve the ground lease for the project when Mercy Housing is construction-ready and all funding sources have been identified. It’s important for the city to work through the major details of the document now, however, City Manager Matthew Chidester said. 

Currently, the ground lease agreement allows for a 99-year lease at $1 per year for the tenant, Mercy Housing, which is standard for an affordable development of this nature, city staff said. The lease range was changed from 65 years to 99 at Mercy’s request, a topic that Ruddock said she would like to discuss further at a later meeting. 

“We need to have the base established now, so everybody knows what we’re heading towards,” Chidester said. 

Another legal element between the city and Mercy that’s still not formalized is an agreement that would formalize 100% affordability requirements and priority residency for senior farmworkers living in Half Moon Bay. Senior farmworkers living on the coastside at large would be given second priority, and senior San Mateo County farmworkers would be given third priority. 

Councilmember Paul Nagengast said that the documents should include definitions on terms like “agricultural worker,” “senior,” “retired,” “spouse” and “head of household” to avoid any confusion around who would be residing in the development. 

“I know things can always happen,” he said. “I’m trying to minimize the potential of ‘that’s not what we meant.’” 

Nagengast had previously filed an appeal against the project before he was on the City Council, but said before discussion began that he was being objective around the development and judging it as he would any other proposal. He pushed back on the accusation that the City Council was delaying the project. 

“I don’t believe I’m delaying this project. I’m trying to process and go through this,” he said. 

Although the council did not discuss complaints around the project in detail, some community members at the meeting continued to voice concerns that the downtown location was the wrong place for a five-story building and suggested the development would cause parking and traffic concerns.

“It’s squeezed into the wrong place,” resident Sandy Vela said. “It’s not that the farmworkers don’t deserve it, they do, but just put the people in the right spot.” 

It’s possible that the council’s future vote on the lease agreement could be eligible for referendum, sending it to the voters for approval if detractors gather the required signatures. 

For now, city staff and Mercy Housing will continue work on the development proposal and lease agreements, likely to be funded by $2 million in state money earmarked by state Sen. Josh Becker, D-Menlo Park. 

Community members made clear that the continued length of the approval and development process was a frustration to them. 

“You have made commitments to the state via your housing element — which is three years overdue, by the way — to advance this project,” housing advocate Jordan Grimes said. “Your delay and other actions have already invited significant scrutiny from the governor and attorney general, and I would advise you not to test them further.”