SR-413-001 (6)
RMD:RDA:TR:F:\RESOURCE\SHARE\STAFFREPORTS\Annual Report 99-00 .doc
Council Meeting: December 19, 2000 Santa Monica, California
To: Mayor and Council Members
Chairperson and Redevelopment Agency Members
From: Redevelopment Agency Staff
Subject: Annual Report for Fiscal Year 1999-2000 for the Redevelopment Agency of
the City of Santa Monica
INTRODUCTION
The California Health & Safety Code requires that the Redevelopment Agency present an
annual report to the City Council and file such annual report with the Controller of the State
of California no later than December 31, 2000. This staff report presents the attached
Santa Monica Redevelopment Agency Annual Report for Fiscal Year 1999-2000, which
includes an independent financial audit, pursuant to Section 33080.1 of the California
Health and Safety Code.
BACKGROUND
The purpose of the Annual Report of the Redevelopment Agency is to provide financial
and housing data to the state legislature and interested parties regarding the Agency and
its activities. The attached report includes the following:
1) Annual Report Summary for Fiscal Year 1999-00, which includes information which
the Agency believes useful to explain its programs and activities (Attachment A);
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2) An independent financial audit report conducted in accordance with generally
accepted auditing standards (Attachment B);
3) A fiscal statement that provides information on the outstanding indebtedness of
and the amount of tax increment revenue generated by the Agency in total and
by each project area (Attachment C); and
4) A description of the Agency?s activities affecting housing and displacement
(Attachment D).
DISCUSSION
The accounting firm of KPMG completed an independent financial audit for the fiscal year
from July 1, 1999 to June 30, 2000, in compliance with standards set out in Section
33080.1 of the California Health and Safety Code. KPMG issued an unqualified audit
report which means that the Agency?s records fairly represent the financial position of the
various funds and account groups of the Redevelopment Agency as of June 30, 2000.
Pursuant to the California Community Redevelopment Law, the Redevelopment Agency is
required to set aside at least 20% of the tax increment it receives each year for purposes
of increasing, improving and preserving the community?s supply of low and moderate
income housing. For fiscal year 1999-2000, a total of $ 3,792,889 of Agency tax increment
funds was set aside for low and moderate income housing to meet the 20% set aside
requirement as follows:
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1999-00 Redevelopment Agency Housing Set-Aside
Ocean Park 1A $ 309,994
Ocean Park 1B $ 44,647
Downtown Project $ 250,341
Earthquake Recovery $3,187,907
$3,792,889
The attached annual report provides specific information on housing and other activities of
the Redevelopment Agency in Fiscal Year 1999-2000. Presentation of the annual report to
the City Council is required prior to its transmittal to the State Controller.
BUDGET/FISCAL IMPACT
There are no budget/fiscal impacts resulting from the approval of the Redevelopment
Agency?s Annual Report of Fiscal Year 1999-2000.
RECOMMENDATIONS
It is recommended that the Redevelopment Agency direct the Executive Director to
transmit the report to the Controller of the State of California.
Prepared by: Jeff Mathieu, Director of Resource Management
Mike Dennis, Director of Finance/Agency Controller
Robert Moncrief, Housing and Redevelopment Manager
Tina Rodriguez, Redevelopment Administrator
Martin Kennerly, Administrative Services Officer
Bill Jias, Senior Accountant
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Attachment A - Annual Report Summary for Fiscal Year 1999-2000
Attachment B - KPMG Independent Auditor?s Report for 1999-2000
Attachment C - State Auditor Controller?s Report of Financial Transactions and
Statement of Indebtedness for Tax Year 1999-2000
Attachment D - State Housing and Community Development Department Annual
Report of Housing Activity of Community Redevelopment Agencies for
Fiscal Year Ended 06/30/00
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Attachment A
ANNUAL REPORT SUMMARY
FOR FISCAL YEAR 1999-2000
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
I. INTRODUCTION
As required by California Health & Safety Code Section 33080.1, the Redevelopment
Agency must file an annual report with the California State Controller within six months of
the end of the Agency?s fiscal year. The annual report must contain:
5) An independently prepared financial audit report conducted in accordance with
generally accepted auditing standards (Independent Auditor?s Report)
6) A fiscal statement that provides information on the outstanding indebtedness of and
the tax increment revenue generated by the Agency and by each project area (State
Controller?s Report of Financial Transactions of Community Redevelopment
Agencies and Statement of Indebtedness)
7) A specific description of the Agency?s activities affecting housing and any
displacement (Annual Report of Housing Activities of Community Redevelopment
Agencies)
8) Any other supplemental information that the Agency believes useful in explaining its
programs and activities.
This annual report for the Santa Monica Redevelopment Agency contains the information
required by state law and includes a review of the objectives and activities of the
Redevelopment Agency in FY 1999-2000, and previews the Agency?s objectives and work
plan for FY 2000-01.
II. DESCRIPTION OF REDEVELOPMENT PROJECT AREAS
The Santa Monica Redevelopment Agency was established on August 13, 1957, and has
four redevelopment project areas:
Ocean Park Redevelopment Project 1A
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Ocean Park Redevelopment Project 1B
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Downtown Redevelopment Project
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Earthquake Recovery Redevelopment Project
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Ocean Park Redevelopment Projects 1A
The Ocean Park Redevelopment Project was the first project to be undertaken by the
Santa Monica Redevelopment Agency. It was designated for study as a potential
redevelopment project in April 1958 when an application was submitted to the Federal
government for survey and planning funds. With these funds, the Agency commenced
preparation of formal plans for the area encompassing thirty-three acres of land in the
southwest corner of the City.
In October 1959, as a result of reduction in the availability of federal funds for the project,
the Agency divided the proposed thirty-three acre Ocean Park project into two separate
projects so that at least one project could proceed with the funds available to the Agency at
the time.
Ocean Park Redevelopment Project 1A encompasses the northern 25 acres of the
originally proposed 33-acre project. The City Council approved the Redevelopment
Plan for this Project on June 30, 1960, following requisite studies and hearings by the
Planning Commission, Redevelopment Agency, and the City Council. The
Redevelopment Plan was amended on November 14, 1967, principally to change the
permitted land uses in the project area.
Ocean Park Redevelopment Project 1A is bounded by Ocean Park Boulevard on the
north, Neilson Way on the east, Ocean Park Project 1B on the south, and the State
beach parking lots and beach on the west.
Ocean Park Redevelopment Project 1A was completed in May 1987. The project
contains two 17-story high-rise apartment buildings, known as the Santa Monica
Shores, which were completed in 1967. Each tower contains 250 rental apartment
units. This property changed ownership on May 14, 1999. On both sides of the
apartment complex is the Sea Colony condominium project. Sea Colony contains 340
condominium units, which were constructed in two phases. Phase one of the
development was completed in 1980 and Phase two was completed in May 1987.
Ocean View Park is a public park located in the center of Project Area 1A facing the
ocean.
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Ocean Park Redevelopment Project 1B
Ocean Park Redevelopment Project 1B encompasses the southern eight acres of the
originally proposed 33-acre project. The City Council approved the Redevelopment
Plan for this Project on January 24, 1961, following requisite studies and hearings by
the Planning Commission, Redevelopment Agency, and the City Council. The
Redevelopment Plan was amended on January 26,1965, and again on September 12,
1972, principally to change the permitted land uses in the project area. Ocean Park
Redevelopment Project 1B is bounded by Ocean Park Redevelopment Project1A on
the north, Neilson Way on the east, the City limit on the south and the State beach
parking lots and beach on the west.
Ocean Park Redevelopment Project 1B was completed in 1983. The project contains
two senior citizen residential apartment complexes and a former utility building.
Neilson Villas contains 100 rental apartment units and was completed in 1977.
Barnard Park Villas contains 61 units and was completed in 1983. A utility building was
adapted in 1987 to house offices and art storage for the Broad Eli Trust Broad Art
Foundation.
Projects Funded by the Ocean Park Redevelopment Projects
The Ocean Park Redevelopment Project Area provided funds for various housing and
other related projects for low and moderate-income individuals and families. In addition,
certain projects found to be of-benefit to the project area were funded by the Agency.
These other projects include:
Renovation and enhancement of the nearby beach parking lot and surrounding
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streets.
Rehabilitation and expansion of the Ocean Park Branch Library.
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Rehabilitation of 22 apartment units targeted to very low-income senior and family
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households at 175 Ocean Park Boulevard.
Construction of 55 rental apartment units for low and moderate-income families, at
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various sites in the Ocean Park neighborhood.
Construction or rehabilitation of 313 rental units at various sites in Santa Monica.
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Purchase of a parking easement for a 40-unit, senior 202 low-income housing
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project.
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Downtown Redevelopment Project
The Downtown Redevelopment Project encompasses about 9.9 acres of property located
in the downtown core of Santa Monica. The Downtown Redevelopment Project is bounded
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by Broadway on the north, 4 Street on the east, Colorado Avenue on the south, and 2
Street on the west. The City Council approved the Redevelopment Plan for the Downtown
Project in January 1976.
The Downtown Redevelopment Project was completed in 1980. It consists of Santa
Monica Place and the adjoining parking structures. The retail portion of the project
contains approximately 570,000 square feet of floor area and includes two major
department store anchors and 160 specialty retail shops and food establishments, all of
which are linked by three level enclosed pedestrian space that extends diagonally across
two City blocks. The project also includes two Agency-owned parking structures
containing 1,956 parking spaces.
Projects funded by the Downtown Project
The Downtown Redevelopment Project Area funded certain projects found to be of-
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benefit to the project area. Various improvements adjacent to the Project at the Third
Street Promenade and Bayside District adjacent to the Downtown Redevelopment
Project were funded by the Agency, but the primary funding for these improvements
came from other sources.
The Downtown Project Area also provided funds for numerous housing projects serving
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low and very low-income persons and families.
Earthquake Recovery Redevelopment Project
The Earthquake Recovery Redevelopment Project was established in 1994. The project
area includes the structures predominantly damaged in the January 1994 Northridge
earthquake. Approximately 90% of all red-tagged and 80% of all yellow-tagged buildings in
the City were in this project area. The project area is bounded on the east by Cloverfield
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and 26 Street, on the west by the Pacific Coast Highway/Beach Promenade, on the south
by approximately Pico Boulevard and on the north by Montana Avenue. The City Council
approved the Redevelopment Plan for the Earthquake Recovery Project Area on June
21,1994.
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Projects funded by the Earthquake Recovery Project
Disaster Prevention and Mitigation
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Seismic retrofit of public parking structures and essential public buildings
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Pacific Bluff Stabilization
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Commercial Revitalization
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Pico Streetscape Commercial Revitalization Project
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Pico Crosswalk Enhancement Program
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Fourth Street parking structure located at 1116-1146 4 Street
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Community Revitalization
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Civic Center Land Acquisition
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Virginia Avenue Park expansion
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Institutional
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Replacement of the earthquake-damaged Municipal Pool on the Santa Monica
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College campus.
III. AGENCY OBJECTIVES AND ACTIVITIES FOR FISCAL YEAR 1999-2000
The Agency?s objectives and activities for the last fiscal year, which implements the 1999
Implementation Plan for Ocean Park1A, Ocean Park 1B, Downtown and the Earthquake
Recovery Redevelopment Project Areas are discussed below.
Non-Housing Objectives and Activities
Financial - On December 14, 1999 the Agency issued a $65,285,000 Tax Allocation
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Bond for the purpose of implementing the goals and objectives of the Earthquake
Recovery Redevelopment Project, including financing the acquisition of 11.3 acres of
property in the Civic Center owned by Rand Corporation, seismic retrofit measures for
the downtown parking structures, and affordable housing.
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Administrative - On November 16, 1999 the Agency adopted a Five-Year
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Implementation plan for the four redevelopment project areas and the Amended 10-
Year Affordable Housing Compliance Plan.
Disaster Prevention and Mitigation Programs - The Agency committed bond proceeds
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of $1.7 from the Earthquake Project Area 1999/00 Tax Allocation Bond Issue to fund
seismic retrofit work for the public parking structures in the City. In addition, funds were
allocated for a comprehensive parking development strategy for the downtown area to
determine how seismic retrofit work would co-exist with the parking demands.
Commercial Revitalization Programs - In Fiscal Year 1999-00, the Agency fulfilled its
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funding obligation to the Commercial Streetscape Program and Crosswalk
Enhancements on Pico Boulevard. The Agency designated an additional $569,848 to
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the Fourth Street Parking Structure connected with the 4 Street affordable senior
housing project.
Community Revitalization Programs ? The Agency acquired 11.3 acres of
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property in the Civic Center area from the Rand Corporation on April 11, 2000.
The $53 million purchase price was financed through the Agency sale of a tax-
exempt tax allocation bond issue secured by the agency tax increment revenue.
The Agency also fulfilled its obligation to reimburse the City for the costs associated
with the Virginia Park expansion.
Institutional Revitalization - During fiscal 1999-00 the Agency
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contributed
$1 million of redevelopment funds towards the replacement of the earthquake-
damaged Municipal Pool located on the Santa Monica College campus.
Affordable Housing Objectives and Activities
The Agency continued to increase, preserve and improve the supply of affordable housing
in the City in the 1999-00 fiscal year. Consistent with the Five-Year Implementation Plan
for FY 1999-00 through FY 2003-04, the Agency in FY 1999-00 implemented the
acceleration of redevelopment revenue for affordable housing activities. In addition, the
Agency has directed all redevelopment revenues from Ocean Park 1A and 1B and
Downtown Project Areas, net of existing debt service and administrative costs, to fund
housing activities. The following scheduled activities and additional housing activities are
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consistent with the objectives of the Five-Year Implementation Plan.
502 Colorado Avenue - On May 19, 2000 the City of Santa Monica conveyed to
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the Redevelopment Agency ownership of this property for assisting in the
development of 44 affordable housing units. The Agency subsequently entered
into an 87-year Ground Lease with Community Corporation of Santa Monica
(CCSM) as the Lessee.
No Agency funds are designated for this project. The City will be providing $5.3 million
dollars for the construction of 44 single units at very, very-low income rents. CCSM will
also be incorporating energy-efficient elements into the design of the building.
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1011 11 Street (Upward Bound) Project - The Agency provided predevelopment and
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construction funds for this 70-unit, Section 202 low-income senior housing project
developed by Upward Bound. This project was completed in April 2000. Funding
source: Ocean Park 1A and 1B Projects, Downtown Project and Earthquake Recovery
Project.
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1116-1146 4 Street Project- The Agency funded predevelopment costs for this 66-unit,
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Section 202 senior housing development project developed by Menorah Housing
Foundation. This project is ongoing. In fiscal year 1999-00, the parking structure was
under construction. Construction of the residential units is anticipated to commence in
fiscal year 2000-01. Funding Source: Ocean Park Projects 1A and 1B Projects and
Downtown Project.
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1227 9 Street ? The Agency funded a loan to Community Corporation of Santa Monica
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for the acquisition/rehabilitation of this 10-unit apartment building. The project was
completed in November 1999. Funding Source: Downtown Project and Earthquake
Recovery Project.
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1916 10/855 Bay ? The Agency funded a loan to Community Corporation of Santa
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Monica for the acquisition/rehabilitation of this 15-unit project. The project was
completed in October 1999. Funding Source: Downtown Project and Earthquake
Recovery Project.
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1344 14 Street - The Agency funded a loan to Community Corporation of Santa
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Monica for the acquisition/rehabilitation of this 15-unit project . The was completed
in February 2000. Funding Source: Ocean Park 1A and 1B Projects and Downtown
Project.
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821 11 Street ? The Agency funded a loan to Community Corporation of Santa
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Monica for the acquisition/rehabilitation of this 10-unit project. The project was
completed in June 2000. Funding Source: Ocean Park 1A and 1B Projects and
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Earthquake Recovery Project.
225 San Vicente Blvd. Project- The Agency provided funding to Community
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Corporation of Santa Monica for the acquisition/rehabilitation of this 36-unit apartment
building. Funding Source: Earthquake Recovery Project.
420 Pico Blvd. Project- The Agency provided funding to Community Corporation of
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Santa Monica for the acquisition/rehabilitation of this 25-unit apartment building.
Funding Source: Earthquake Recovery Project.
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2028 14 Street Project- The Agency provided a commitment of funds to Community
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Corporation of Santa Monica for the acquisition/rehabilitation of this 22-unit apartment
building. Funding Source: Earthquake Recovery Project.
2112 Delaware Avenue Project- The Agency provided a commitment of funds to
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Community Corporation of Santa Monica for the acquisition/rehabilitation of this 38-
unit apartment building. Funding Source: Earthquake Recovery Project.
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2120 4 Street Project- The Agency provided a funding commitment to Community
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Corporation of Santa Monica for the acquisition/rehabilitation of this 27-unit
apartment building. Funding Source: Ocean Park 1A and 1B Projects, Downtown
Project, and the Earthquake Recovery Project.
175 Ocean Park Boulevard - The Ocean Park Housing Trust Fund paid $120,000 to
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subsidize 22 units of housing for very low income senior and family households through
the lease payment made by the Agency on behalf of the 175 Ocean Park Boulevard
public housing development operated by the County of Los Angeles. This has been an
ongoing activity of the Redevelopment Agency for many years. Source: Ocean Park
1A Project.
IV. AGENCY OBJECTIVES FOR FISCAL YEAR 2000-2001
Non-Housing Objectives and Activities
Civic Center Acquisition ? In Fiscal year 2000-01, the Agency will implement and
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monitor the terms of the Owner Participation Agreement with Rand.
As part of the Civic Center Specific Plan amendment process, the Agency will
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commence the investigation of options for affordable housing to be developed on the
civic center property.
Disaster Prevention and Mitigation Programs - The Agency will pursue the seismic
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retrofit work for the public parking structures in the City. Additional funds may be
allocated in the 2000-01 fiscal year for further seismic retrofit design studies for the
public parking structures, essential facilities and stabilization of the Palisades Bluffs.
Community Revitalization Programs ? The Agency will fulfill its obligation to provide
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$101,911 of funds for design work on the Virginia Park expansion project. The 1116-
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1146 4 Street Parking Structure is anticipated to be completed during FY 2000/01.
Funding Source: Earthquake Recovery Project (unrestricted funds).
Financial/Administrative ? In Fiscal year 2000-01, the Agency will evaluate the
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potential for a second tax allocation bond issue.
Affordable Housing Objectives and Activities
The Agency will continue to increase, preserve and improve the supply of affordable
housing in the City in the 2000-01 fiscal year. Consistent with the Five-Year
Implementation Plan for FY 1999-00 through FY 2003-04, the Agency in FY 2000-01 will
continue to implement a funding plan to accelerate funds for affordable housing by
considering a Tax Allocation Bond Sale for the Earthquake Redevelopment Project Area,
and pursuing other funding strategies. In addition, the Agency will continue to direct all
redevelopment revenues from Ocean Park 1A and 1B and Downtown Project Areas, net of
existing debt service and administrative costs, to fund housing activities as well as
capturing tax increment funds in excess of projections. The following scheduled activities,
and additional housing activities that will be added, are consistent with the objectives of
the Five-Year Implementation Plan.
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1116-1146 4 Street Project ? The Agency funded predevelopment costs for this 66-
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unit, Section 202 senior housing development project developed by Menorah Housing
Foundation. The parking structure is anticipated to be completed by March 2001.
Construction on the residential units is anticipated to be completed by December 2001.
Funding Source: Ocean Park Projects 1A and 1B Projects and Downtown Project.
225 San Vicente Blvd. Project- The Agency provided funding commitment to
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Community Corporation of Santa Monica for the acquisition/rehabilitation of this 36-
unit apartment building. The rehabilitation work is anticipated to be completed by
May 2002. Funding Source: Earthquake Recovery Project.
420 Pico Blvd. Project- The Agency provided a funding commitment to Community
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Corporation of Santa Monica for the acquisition/rehabilitation of this 25-unit
apartment building. The rehabilitation work is anticipated to be completed by June
2001. Funding Source: Earthquake Recovery Project.
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2028 14 Street Project- The Agency provided a funding commitment of to
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Community Corporation of Santa Monica for the acquisition/rehabilitation of this 22-
unit apartment building. The rehabilitation work is anticipated to be completed by
July 2001. Funding Source: Earthquake Recovery Project.
2112 Delaware Avenue Project- The Agency provided a funding commitment to
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Community Corporation of Santa Monica for the acquisition/rehabilitation of this 38-
unit apartment building. The rehabilitation work is anticipated to be completed by
June 2001. Funding Source: Earthquake Recovery Project.
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2120 4 Street Project- The Agency provided a funding commitment to Community
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Corporation of Santa Monica for the acquisition/rehabilitation of this 27-unit
apartment building. The rehabilitation work is anticipated to be completed by July
2001. Funding Source: Ocean Park 1A and 1B Projects, Downtown Project, and
the Earthquake Recovery Project.
175 Ocean Park Boulevard - This has been an ongoing activity of the Redevelopment
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Agency for many years and will continue for the 2000-01 fiscal year from the Ocean
Park 1A Project.
V. AGENCY ACTIVITIES AFFECTING HOUSING SET ASIDE FUNDS
The Santa Monica Redevelopment Agency did not participate in any activities that resulted
in the displacement, relocation or demolition of housing. The Agency also did not conduct
relocation, demolition, or displacement activities outside of the project areas in FY 1999-00
and no such activity is expected to occur in FY 2000-01.
The Agency contributed $3,792,889 into its Low & Moderate Housing Fund, reflecting 20%
of the tax increment revenues received by the Agency in FY 1999-00. These funds will be
used in support of low and moderate income housing in future years. The following
represents the project breakdown of these contributions:
Ocean Park Redevelopment Projects 1A and 1B
In FY 1999-00, the Ocean Park 1A and 1B Redevelopment Projects received a combined
$1,418,564 in tax increment revenue and $354,641 in housing set-aside revenues. These
funds were expended on debt service, associated administrative costs, and deposited into
the affordable housing fund.
Downtown Redevelopment Project
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In FY 1999-00, the Downtown Redevelopment Project received $1,001,365 in tax
increment revenue and $250,341 in housing set-aside funds. These funds were
appropriated for debt service, associated administrative costs, and deposited into the
affordable housing fund.
Earthquake Recovery Redevelopment Project
In FY 1999-00, the Earthquake Recovery Redevelopment Project received $ 12,751,627
in tax increment revenue and $3,187,907 in housing set-aside revenues. AB1290
payments of $3,250,427 will be distributed to other taxing entities including the City of
Santa Monica from tax increment revenues.
Prepared by: Jeff Mathieu, Director of Resource Management
Robert Moncrief, Housing and Redevelopment Manager
Tina Rodriguez, Redevelopment Administrator
Martin Kennerly, Administrative Services Officer
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Attachment B
KPMG Independent Auditor?s Report
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ELECTRONICALLY. ITEM AVAILABLE
IN THE
CITY CLERK?S OFFICE.
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Attachment C
State Auditor Controller?s Annual Report of Financial
Transactions and
Statement of Indebtedness for Tax Year 1999-00
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IN THE
CITY CLERK?S OFFICE.
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Attachment D
State Housing and Community Development
Department - Annual Report of Housing Activities
THIS ITEM IS NOT AVAILABLE
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IN THE
CITY CLERK?S OFFICE.
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