Loss of HUD Funds Called Devastating for Project : Camarillo: Some supporters are optimistic that other money can be found for the proposed housing for mentally ill people.

Planners seeking to build an innovative low-income housing project for 150 of Ventura County’s mentally ill and their families have given up on efforts to finance the development with federal funding, officials said Wednesday.

Supporters of the project acknowledged that the failure to obtain $3.9 million in construction funds from the U.S. Department of Housing and Urban Development is a devastating blow to the proposed $4.5-million multiunit project in Camarillo.

The project was designed as an independent living project with 53 three-bedroom units on the grounds of Camarillo State Hospital. The state donated land for the project and the county has earmarked $600,000 for staff offices.

The project has been the goal of a coalition of public and private organizations, headed by the Area Housing Authority of Ventura County. Supporters believe that the housing units would provide much-needed low-cost housing for the mentally ill, some of whom would otherwise live on the streets.

“It’s a terrible disappointment,” Kate Allen, president of the Alliance of the Mentally Ill of Ventura County, said of the failure to obtain federal funding. “This has been several years of hard work.”

She said the coalition of county officials and private groups such as hers has exhibited “exceptional cooperation” in working on the project.

Patricia Sandwall, a past president of the alliance, said, “This is really sad news. You think sometimes: Is this ever going to happen?”

However, Carolyn Briggs, executive director of Area Housing Authority, said she remains optimistic that replacement funds can be found to keep the project alive, but declined to discuss any possible alternative funding sources.

“There is no doubt we want to build housing for a special population on that site,” she said. “The challenge now is to find the appropriate funding source to do that.”

Briggs said her agency had until Wednesday to provide HUD with a clear definition of the types of tenants who could be accepted into the housing project, but decided that there was too much disagreement among the parties to draft any such definition.

Although the project has been in planning stages for nearly three years, Briggs said HUD representatives, county officials and her agency have not been able to agree on who would be accepted into the project and how many family members to include.

“The crux of it was how you deal with a special target population,” she said. “How are you going to house families and the mentally ill and not discriminate against other people?”

The failure to secure HUD funding is the latest in a series of setbacks that the project and its supporters have faced in the past three years.

HUD officials had set aside the $3.9 million to build the project on the condition that construction start by the end of March. After the deadline was missed, HUD officials in Los Angeles rejected a request by the housing authority for an extension, saying local officials have not worked fast enough on the project.

Local housing officials, however, said their efforts to meet the deadline were hampered by several layers of bureaucracy and a 10-month effort to secure a site for the project.

After Supervisor John K. Flynn appealed to HUD representatives in Washington, officials at HUD’s regional office in San Francisco decided to give the Area Housing Authority 60 days to appeal for an extension.

The missed deadline raised more problems: HUD officials began to question whether the project qualified for federal money, since the housing units would not be open to the public.

Dirk Murphy, a spokesman for HUD’s San Francisco office, said that because the project is unique, HUD gave it extra scrutiny.

“With these projects, it’s pretty hard to get authorized without getting it fouled up in some way,” he said.

Despite the latest setback, Marty Shaw-Halloway, a county special projects manager who has worked on the project, said a lot of progress has been made by supporters of the project, who have secured the land, landscaping and some utilities.

“So, we are not quite back to square one,” she said.

Briggs said she hopes that the alternative funding that she will be seeking to replace the HUD money will provide her agency more flexibility in accepting tenants into the housing units.

But she said the loss of HUD funding is a setback that could delay construction of the project indefinitely.

“I’m always disappointed when a lot of work goes into something that is not successful,” she said.