Previously committed $1.6 million funds to Sierra Vista affordable housing were deobligated by Stockton City Council, and nearly $12 million in new loans were approved to help three developments move forward.
The action came during the Tuesday city council meeting on a single resolution that both pulled back the unused funds and awarded loans to eligible applicants from the city’s 2025 Notice of Funding Availability, or NOFA, a formal process the city uses to invite developers to compete for limited housing dollars.
Stockton Economic Development Director Tina McCarty told council the moved funds involves Sierra Vista Phase 3, a project originally funded in 2019. Phases 1 and 2 have been built, but Phase 3 has not moved.
“The developer recognizes that the project has not moved since the original allocation and does not see it moving in the immediate future,” McCarty said. “So, a responsible developer in our discussion, and has accepted that it makes sense and understands the recommendation to deobligate.”
Releasing the money gave the city extra capacity to fund new projects. Staff recommended three awards totaling about $11.98 million.
McCarty explained the top two scoring applications came from the same developer, Visionary Home Builders. One project, The View at Channel, would create 132 family units at 31 East Channel Street in the old state building. The other, Don Shelby Apartments, would create 108 family units on the former DMV site at 315 North San Joaquin Street. Both target households earning 30 to 80 percent of the area median income.
Because the two projects share the same developer and nearly identical funding packages, staff recommended an “either/or” award of $5 million. Visionary representatives told council they have already decided to move forward first with Don Shelby Apartments.
The other two awards are $2.8 million in gap funding to Mutual Housing California for Fairview Terrace, a 76-unit senior housing project for residents 55 and older at 222 South Airport Way, and $4.179 million to Delta Community Development Corp. for Danny Drive, a 66-unit senior project for residents 62 and older at 6306 Danny Drive.
Fairview Terrace is the furthest along. The city already gave it $7 million last year. That earlier investment helped the project win its tax credits, and it is now set to break ground next month, McCarty said.
McCarty walked the council through the full NOFA review. Eight proposals were submitted. Staff first checked that all met basic requirements. Three separate city raters then scored every proposal using a published matrix that awards points for developer experience, financial capacity, project readiness and other factors.
A consultant reviewed the financial sections, and an artificial intelligence program scored the proposals using the exact same criteria.
“When you added the AI scores to the three existing human rater scores, it did not change the order,” McCarty said. “While there were some variances, from an average perspective, it remained the same order.”
Several council members praised the transparent process. Vice Mayor Jason Lee said the use of AI helped remove any perception of favoritism.
“I just want to speak specific to staff and the work that you all did not just in responding to council’s concerns around how we issue NOFAs and how we rate nofas, because there was lots of concerns on how that happened, adding the AI tool and just modernizing the process through technology to add another optic of fairness,” Lee said “So that way, it removes this perception that we’re picking and choosing who we’re giving projects to .”
Mayor Christina Fugazi raised questions about project readiness and high construction costs, some of which exceed $700,000 per unit. She noted that several projects, including those downtown, serve families at income levels that may not bring much new spending power to local businesses.
“When we look at downtown, one of the biggest issues is that we have businesses that are not being supported, and part of the reason they’re not being supported is because the people that live there don’t have discretionary funds,” the mayor said.
She also asked about timelines. McCarty and staff confirmed Fairview Terrace will break ground first, followed by the Don Shelby project in late 2027 if tax credits are secured.
Visionary Home Builders representatives said the $5 million city loan will strengthen their tax credit applications and help them break ground faster. A Mutual Housing California leader said Fairview Terrace’s plans are already approved and the project can be built in about 14 months once construction starts.
Peter Ragsdale of Delta Community Development Corp. described Danny Drive as senior housing paired with potential on-site services. He noted the broader challenge of building affordable units in the Central Valley, where tax credits are highly competitive.
Council members unanimously supported staff’s recommendation, citing the mix of family and senior housing and the rigorous scoring process that included both human raters and AI.
The resolution deobligates the $1.6 million from Sierra Vista Phase 3 and approves the new loans.