Governor's Recall of Funds Threatens Housing for Needy

Times Staff Writer

Sister Alicia Martin has devoted most of her life to helping the needy. Over the last five years, much of her energy has focused on a project scheduled to be the largest low-income housing in the history of Santa Barbara.

The project has had the support of city and county officials, with groundbreaking likely for early summer on 170 units, 75 for families and 95 for senior citizens.

But the project is in jeopardy because Gov. Gray Davis wants all uncommitted state redevelopment funds held by local communities returned to the state to help reduce the budget deficit.

Martin is executive director of St. Vincent's Institution, a Catholic charitable organization that is donating about 20 acres for the project.

The overall cost would be $40 million, $10.6 million of that in state redevelopment money pledged by the city of Santa Barbara.

Her first response to the governor's decision was shock.

"It's kind of devastating that the people who need the money the most are the ones who lose it first," she said. "I think everyone in Santa Barbara was shocked when we first heard about this."

That reaction, however, quickly turned into a determined drive to keep the St. Vincent's project alive. Martin has helped organize a letter-writing campaign involving an array of Santa Barbara churches. And she has support from state and local leaders who view the project as essential.

"Everybody's on bended knees," she said. "If it's God's will that we have housing here, it will happen. We'll tell the governor that we have God on our side."

The St. Vincent's Institution, established 145 years ago by the Daughters of Charity of St. Vincent de Paul, is one of two major partners in the planned project. The Sisters of Mercy in San Francisco and Mercy Housing California, a nonprofit acting as the primary development corporation, have been deeply involved.

But from the start of planning in 1997, the project has also required close cooperation between the county and city of Santa Barbara. The land for the project was in unincorporated Santa Barbara County until it was annexed by the city in October so state development funds could be used. In addition to the state funds, an additional $10.8 million has been promised in federal housing money. The county will add $2.5 million, but the rest of the project money is yet to be raised.

Martin has been only one of several key leaders in the project. But it has a special significance for her. A nun since the age of 18, she has spent most of her years in the Daughters of Charity at St. Vincent's.

She arrived in 1962, when it was a home for developmentally disabled children, she said. She spent 13 years there, then served as a teacher and principal in other locations. She returned in 1993, earning two master's degrees along the way.

St. Vincent's, meanwhile, was undergoing its own changes. Over the years, the focus shifted from the developmentally disabled to young women in trouble with the law, then single mothers and their children. The institution is on 120 acres, only a small part used for the cottages that house 23 mothers and 35 children.

"In this area, affordable housing of any kind is desperately needed," Martin said. "The governor himself has urged cities to provide more affordable housing, and the irony is that many of them don't want to. But this has been a marriage made in heaven for us. Everybody here has recognized the need."

Santa Barbara Mayor Marty Blum and Assemblywoman Hannah-Beth Jackson (D-Santa Barbara), are moving cautiously, choosing diplomacy as their best chance for success.

City redevelopment officials have been contacting their counterparts throughout the state to mount a joint effort to get the governor to alter his plan.

"We have done a great job here on providing affordable housing. and we want to be able to keep doing it," Blum said. "I understand the state's dilemma on this. The budget deficit" -- $34.8 billion -- "is tremendous. But we are hopeful the governor will see how committed we have been to this project. We are proceeding as if it's still going to be built."

According to state officials, Davis' call for a return of redevelopment funds applies to all money that wasn't contractually committed for construction projects as of Dec. 1. Santa Barbara officials say they were about a month away from the actual signing of contracts when the issue surfaced.

In addition to the St. Vincent's project, which would be the most expensive in Santa Barbara history, city officials are concerned about the possible impact of the governor's move on a 20-unit affordable-housing project known as the South Voluntario development. That has been in the planning for two years. It received $640,000 from the city last year and a $980,000 development loan from the Santa Barbara Redevelopment Agency on Dec. 17, a week after the governor's call for a return of uncommitted funds.

Anita Gore, spokeswoman for the state Department of Finance, estimated that there could be about $500 million in uncommitted state redevelopment funds that would help bridge the state budget gap.

But there is still a chance for Santa Barbara, she said.

"The process includes legislative approval of the governor's plan," Gore said. "He has asked for a special session this month to deal with the budget crisis."

Jackson said it's too early to tell how much sympathy there might be for making an exception for Santa Barbara.

"A lot of communities haven't been using their development funds for affordable housing," she said. "Santa Barbara already has 12% of its housing stock in affordable housing, so it has shown its dedication. This project had been moving forward steadily. So I think this is a unique situation. I'm not sure this was what was intended by the governor."

A member of the Assembly Budget Committee, Jackson said her focus is going to be on an overall look at areas where cuts are proposed or need to be made. There has to be agreement on a total approach by members of the Legislature, she said.

In Martin's view, the outcome will say a lot about social priorities in California.

The St. Vincent's project is aimed at the very poor -- for example, four-member families with incomes no greater than $28,400, and single senior citizens earning no more than $19,900.

"There are many great needs," she said. "I already see the single mothers here struggling to raise their children. They get $529 a month and $120 a month in food stamps. There is never enough to last the entire month, and they all run out of food and diapers."

It's been her dream to see a community on the St. Vincent's property where the single mothers could be joined by more low-income families and a community of the elderly.

"We have come so far," she said. "This is the kind of decision that can show the strength of a society, one that cares for both its old people and its children."

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