Refuge in the Tenderloin

AFFORDABLE HOUSING FINANCE • August 2008

BY DONNA KIMURA

SAN FRANCISCO - The Salvation Army has built a major housing and community center in the heart of one of the city’s most troubled neighborhoods.

Railton Place is a 113-unit development for many of San Francisco’s neediest residents, including young adults aging out of foster care and chronically homeless adults and veterans. Dedicated in June, the development will provide both permanent and transitional housing.

The residences alone are ambitious, but the project goes far beyond the fully furnished apartments. The Salvation Army has developed the adjacent Ray & Joan Kroc Corps Community Center, featuring a gym with a basketball court, a pool, a dance studio, a computer room, and the group’s traditional worship center.

The organization anticipates serving more than 2,000 people annually at the 135,380-squarefoot center. It is the first of approximately 30 such facilities to open nationwide since 2004, when the estate of Joan Kroc, widow of McDonald’s founder Ray Kroc, donated $1.5 billion to The Salvation Army for the centers. Local chapters competed for a share of those funds and also had to raise their own money. Together, the $30 million Kroc Center and the separately funded $26.7 million Railton Place make up The Salvation Army’s largest redevelopment project in San Francisco.

Wrapping around the gym, Railton Place replaces an aging housing facility that the group operated. The Salvation Army has a long history of working with adults in substance-abuse recovery, said Major Joe Posillico, commander of The Salvation Army’s Golden State Division, adding that the group also saw a need to help foster youths. He said that there are about 10,000 people leaving the fostercare system in California each year, with as many as 60 percent having no place to go.

“It [Railton Place] is going to offer an opportunity to those who don’t currently have opportunities,” he said. Onsite counselors and caseworkers will deliver an array of social services to residents and others in the gritty Tenderloin neighborhood.

The 27 studio apartments for the youths will be on separate floors from the 83 studios for the other residents. There are three staff units.

The financing for the housing included approximately $13 million in tax-exempt bonds and lowincome housing tax credits awarded by the California Debt Limit Allocation Committee and the California Tax Credit Allocation Committee. Enterprise Community Investment, Inc., syndicated the tax credits. Bank of America was the investor. The bond issuer was the California Statewide Communities Development Authority. Silicon Valley Bank purchased the bonds in order to provide a construction loan. The California Department of Housing and Community Development provided a $7 million loan through its Multifamily Housing Program, and the Federal Home Loan Bank of San Francisco awarded $1 million from its Affordable Housing Program through Silicon Valley Bank. The U.S. Department of Veterans Affairs contributed $100,000 from its grant and per diem program. Another $6 million came from private funds raised or allocated by The Salvation Army.

Seventeen units will receive rental assistance through the federal Shelter Plus Care program. The city and county of San Francisco will provide funding through the Transitional Housing Placement Plus program administered by the state for housing and supportive services for former foster-care youths. Hill, Devine & Gong was the financial and development consultant.

Corde