SR-RA-2 (2)
, R Pr- ;;L
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CED:HD:ML:Jt Santa MonIca, CalIfornIa
ifC.1 J
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TO: Mayor and CIty CouncIl
Redevelopment Agency
FROM: CIty Staff
SUBJECT: RecommendatIon to Adopt Resolutions EstablishIng
the Downtown Redevelopment ProJect Low and Moderate
Income HousIng Trust Fund and to Allocate $3IHl,000
Into the Downtown Redevelopment ProJect HOUSIng Trust
Fundi to Approve Program GUIdelines and AllocatIon of
Funds; and to Authorize the ExecutIve DIrector to
Execute the Documents
IntroductIon
ThIS report transmI ts proposed resolutIons to establIsh the
Downtown Redevelopment Project Low to Moderate Income HOUSIng
Trust Fund. These actIons are necessary to expend the funds
approprIated by the Agency for thIS purpose In the Fiscal Year
1983-84 budget. As Redeve-lopment Law reqUIres that the CIty
CounCIl concur WIth the Agency's fIndIngs that the expendIture of
funds outSIde of the proJect area WIll be of benefIt to the
proJect, a Council resolutIon to thIS effect also accompanIes
thIS report.
In addItIon to establIshIng the legal baSIS for the creatIon of
the Trust Fund, thIS report recommends that the Agency devote
thIS inItIal allocatIon to the fund for site acqUISItIon and
rehabIlItatIon actIVItIes WhIch WIll preserve and expand the
supply of housing affordable to low and moderate income
households, WhICh WIll serve the ProJect area workforce and
thereby benefIt the Downtown Redevelopment ProJect. The
programmatIC mechanIsm recommended for Agency approval IS akIn to
that approved by the CIty CounCIl for the PICa Neighborhood
1 Ie Pr" ~
Dtc 1 3 1983
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HousIng Trust Fund, and wIll Involve the provision of the
predevelopment and long term support for a non-profIt developer.
Because operatIon of thIS program will In~rease staffIng
reqUIrements of the recommended developer, CommunIty Corporation
of Santa MonIca, a grant for salary and related expenses In the
amount of $22,900 IS included In the staff recommenda t 1 on for the
allocatIon of Trust Fund resources.
Background
In the FIscal Year 1983-84 budget the Agency approprIated
$300,000 from the Downtown Redevelopment Project Fund for hOUSIng
actIVItIes. ThIS approprIatIon IS shown In the budget as LIne
Item 16-200-263-126-660 and IS IdentIfIed as "Development of
Replacement/Low-Moderate Income HOUSIng." More recently, the
CIty CounCIl conceptually approved a menu of housing programs
entItled, "Affordable HOUSIng Programs for the City of Santa
MonIca" WhICh Included a programmatIC mechanIsm to assure the
affordabIlltyand avaIlabIlIty of hOUSIng for low to moderate
income households VIa acquiSItIon and rehabilItatIon of existIng
hOUSIng by non-profit development corporatIons. ThIS report
seeks to 'marry' the budgetary and legal authorIty of the Agency
WIth preVIously approved program structures deSIgned to serve the
labor market WhICh forms the maJorIty of the Santa Monica Place
workforce. The fIrst sectIon of thIS report dIscusses the
Agency's authorIty to pursue Its hOUSIng ObJectIves, the second
presents the proposed program structure and gUIdelInes, the third
descrIbes recommended fundIng allocations, and the fourth section
relates to developer selectlon. The report concludes WI th a
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descriptIon of fInancial/budgetary Impacts and a serIes of
recommendatIons for Agency and CouncIl actIon to establIsh the
Downtown Redevelopment ProJect Low to Moderate Income HOUSIng
Trust Fund and to Implement a CltY-Wlde HOUSIng AcqUISItion and
Rehablli tat I on Program.
1) EstablIshment of the Downtown Redevelopment
Pro]ect Housing Trust Fund
The legal authorIty for redevelopment agencies to aSSIst In the
prOVISIon of hOUSIng for households of low to moderate Income IS
contained In Health and Safety Code SectIon 33334.2. State Law
enables the Agency to undertake or fund a varIety of actIVItIes,
inclUdIng the prOVISIon of subsidIes, land, SIte Improvements,
construction, rehabIlItatIon, or fInancing for the benefIt of low
to moderate Income households so long as the Agency determInes
that these actIons WIll be of benefIt to the project area.
AllocatIons to support the prOVISIon of hOUSIng for households of
modest means are mandatory for redevelopment plans adopted or
amended subsequent to January 1, 1977 . For plans amended or
adopted prIor to that date, as IS the case wIth the Downtown
Redevelopment ProJect, the Agency may voluntarIly establish
indebtedness for the development of hOUSIng opportunItIes for
targeted households upon a resolutIon of the Agency that such use
WIll be of benefit to the proJect area.
To provide empIrical support for a finding that IncreaSIng and
imprOVIng the community's supply of low and moderate Income
hOUSIng at affordable cost would be of benefIt to the Downtown
Redevelopment Project, the fIrm of HamIlton, RabInOWItz and
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Szanton was engaged to investIgate the Impact of hOUSIng market
condItIons upon the vIabIlIty of the proJect area. Santa MonIca
Place, located In the Downtown Redevelopment ProJect area,
provIdes employment for approxImately 1,800 peop 1 e. The
consultant was asked to research the Impacts of hOUSIng market
condItIons upon the future accessIbIlIty of the labor force. The
consultant's InvestIgatIons and conclusIons, attached as ExhIbIt
A suggest that hOUSIng market trends do not portend the prOVISIon
of suffICIent hOUSIng resources for those employed In the retaIl
sales sector In that Santa MonIca and In other prOXImate
locatIons. As the consultant's report confIrms, prevaIling wages
In retaIl employment are relatIvely low, such that hIgh commutIng
costs caused by the lack of avaIlable and affordable hOUSIng can
raIse employers' salary and/or recruIting costs and thereby
affect competItive advantage. SInce It 15 estImated that
approxImately one half of all reta i1 Jobs turn-over annually, the
abIlIty to recruit IS crItIcal. As the prOVISIon of hOUSIng
affordable to low and moderate Income households WIll prOVIde
housing resources for the workforce employed In the Downtown
ProJect Area, the Agency's finding of benefit can be
substantiated. The attached resolutIon entitled "A Resolution of
the Redevelopment Agency of the City of Santa MonIca EstablIShIng
the Downtown Redeveloment ProJect Low and Moderate Income HOUSIng
Trust Fund" Includes thIS fIndIng In complIance WIth applIcable
state law.
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Section 33334.2 also reqUIres that the legislatIve body fInd that
support for the provision of affordable hOUSIng wIll be of
benefIt to the proJect area when such hOUSIng is to be provided
off-sIte. SInce Santa MonIca Place occupies the entIre prOJect
area, efforts to address the housing needs of the labor force
must necessarIly occur off-site. A resolution proposed for
adoptIon by the CIty CouncIl Including necessary fIndIngs is also
attached for CouncIl actIon.
The fInal SIgnIfIcant reqUIrement elaborated In the Health and
Safety Code IS that the Agency must approprIate funds for hOUSIng
actIVItIes Into a separate account to be maIntaIned untIl the
approprIatIon IS exhausted. Any Interest earned must be used to
prOVIde affordable hOUSIng, USIng any of the mechanIsms or
programs (SubSIdIes, constructIon, rehabIlItatIon, etc. )
descrIbed above. SInce the Agency IS not reqUIred to undertake
hOUSIng actIVItIes In support of the proJect area, the Agency may
approprIate any amount It deSIres. The attached resolutIon, In
conformance WIth the adopted budget, allocates $300,000 Into the
Downtown Redevelopment ProJect Low and Moderate Income HOUSIng
Trust Fund for the CItY-WIde Housing AcqUIsition and
RehabilItatIon Program, and does not preclude the Agency from
makIng additIonal approprIatIons a t some future date for rent
SubSIdies, new construction, or any other program vehIcle
selected for fundIng.
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2) EstablIshment of the CIty-wIde HousIng Acquisition
and RehabIlItation Program
The prevIously descrIbed actIons, if approved by the Agency, wIll
result in the prOVISl.On of funds for hOUSIng acqUIsItIon and
rehabIlItatIon actIVItIes. This sectIon of the report presents
guidelInes and procedures to implement the program for Agency
approval.
The procedures and gUIdelInes for the CItY-WIde HOUSIng
AcquiSItIon and RehabIlItatIon Program, attached as ExhIbit B,
are almost Identical to those adopted by the CIty Council for the
CDBG funded PICO Neighborhood HOUSIng Trust Fund and conform to
the hOUSIng programs agenda conceptually approved by the CounCIl
on September 20', 1983. The applIcatIon and approval procedures,
underwrItl.ng crIterIa and other aspects of program operatIon are
almost identIcal to those speCIfIed in prIor reports, except that
some reqUIrements have been modIfied to comply wIth state rather
than federal law. For example, references to CommunIty
Development Block Grant (CDBG) regulatIons have been replaced
WI th the reqUIrements contained in SectIon 330'00' et. seq. of the
Government Code, which are the portions of the Health and Safety
Code applIcable to redevelopment activitIes and to the
expendIture of incremental tax revenues.
The most SIgnifIcant change In the program from a POlICY
perspective, is that low to moderate Income households are
defIned dIfferently In state and federal legiSlatIon. Under
sta te law, low and moderate Income households are those haVIng
Incomes up to 120/% of the area medIan Income whereas for federal
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programs, the comparable fIgure IS 80%. Under federal law, 51%
of those dIrectly benefittIng from funds provIded must be income
elIgIble, and the Incomes of the remaIning beneficiarIes need not
be scrutInIzed. Under redevlopment law, hOUSIng proJects
developed off-SIte must serve low and moderate income households
(I.e., households havIng incomes of up to 120% of the area median
InCOme) over the long term. According to Agency Counsel, the law
fIrm of Welser Kane Ballmer and Berkman, not all reSIdents at the
tIme of acqUISItion must qua Ii fy based on Income, but the
percentage of elIgIbles must be predomInant. Agency Counsel also
advIses that all unIts should be affordable to eligIble
households, and upon vacancy be made available and rented to such
households. To reflect these factors, the attached program
gUIdelInes reqUIre that 85% of the reSIdents In place at the tIme
of acqUISItIon shall be Income elIgIble and that all vacant l.mi ts
sha 11 be rented to qualIfYIng households. The gUIdelInes
addItIonally speCIfy that post acquiSItIon rents for all units be
affordable to elIgIble householdsl and that a mInImum of one
thIrd of the unIts be rented to households haVIng Incomes less
than or equal to 80% of the area median at an affordable price.
Income l1mi ts and affordable rents are IndIcated In ExhIbIt D to
the attached CItY-WIde HOUSIng AcqUISItIon and RehabIlItatIon
Program GUIdelines.
Another ObVIOUS deVIatIon from the PICO Neighborhood Housing
Trust Fund Program IS that funds from this program can be
expended to acqUIre and Improve property any where In the CIty.
The broader boundarIes of program operatIon reflect the fact that
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the Downtown Redevelopment Project labor market IS CItY-WIde at
least and that there are affordable housIng resources to be
preserved and allocated to households of modest means In all of
the CI ty's neIghborhoods. AvaIlable data IndIcates that the
hIghest InCIdence of rehabilItation needs and low Incomes occur
in the PICO NeIghborhood, Downtown, and in Southeast Ocean Park,
such that program activitIes are most likely to occur In these
areas.
The proJected capacIty of the CIty-WIde AcqUIsitIon and
RehabilItatIon program WIll be the acqUISItIon and rehabIlItation
of approXImately 30 unIts WhIch WIll serve the workforce of the
Downtown Redevelopment ProJect and other low to moderate Income
persons and households. The program WIll leverage more than
$900,000 in prIvate fInanCIng.
3) AllocatIon of Program Funds
The types of allocations recommended here parallel those approved
for the PICO NeIghborhood HOUSIng Trust Fund, except that for
incremental staffIng costs recognized WIthin the program rather
than funded separately. The purpose and amount of each
allocatIon is as follows:
0 Earnest Money/DepOSIts: $l5,000
These funds would be provided to a non-profit developer
I n a lump sum to be depOSIted Into an Interest bearIng
account and used to InItiate transactIons. In thIS case,
CommunIty CorporatIon of Santa Monica, a non-profit
development corporatIon, is the recommended receIplent.
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0 Predeve10pment Funds: $15,000
The predevelopment set aSIde would be used to fund necessary
predevelopment expenses including archItectural fees,
Inspections, and other serVIces which cannot be obtaIned on
a contIngent baSiS. Predevelopment Funds WIll be advanced
upon approval of a prelImInary applIcatIon as described In
the attached guidelInes. These funds WIll be encorporated
Into the long term program loan upon clOSIng.
o Long Term Deferred Payment Subordinate Loans: $247,100
These funds will be provIded at the close of escrow to
make up the dIfference between total development costs
and the debt service capacity of the project folloWIng
the submISSIon of a permanent lender's comm 1 tmen t.
o Staff Support for Community CorporatIOn: $22,900
As CIty and Agency support for housing actIVItIes expands,
both In dollar amount and compleXIty, correspondIng support
must be prOVIded for staff to Implement programs. Therefore
a grant In the amount of $22,900 to Community CorporatIon of
Santa MonIca (CCSM) IS recommended for Agency approval.
ThIS recommendatIon IS more thoroughly dIscussed in the
following sectIon.
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4) Developer SelectIon
CommunIty Co~poratlon of Santa Monica (CCSM) is the non-profit
developer recommended by staff to undertake housing development
actIvitIes pursuant to the CIty-WIde Housing AcquisItIon and
RehabIlItatIon Program for the remaInder of the fIscal yea~.
ThIS recommenda t 1 on IS based upon a technIcal assessment of the
CorporatIon's skill and capaCIty and the need for ImplementIng
InstItutIons to achIeve suffIcIent scale to operate and manage
projects in an effICIent manner.
Attached for Agency approval is a standa~d grantee contract
modIfIed to reflect appropriate proviSIonS of state law
applIcable to redevelopment agency actIVItIes. Standard federal
and local requIrements regarding grants management, equal
employment opportunltYJ polItIcal actIVItIes etc. , have been
retaIned. The attached Agreement would prOVIde CommunIty
Corporation with $22,900 for operating expenses and $15,00'0 for
deposits to InItiate transactlons.* The allocation for operatIng
expenses IS almost exclusively for staff and frInge benefits,
although a small amount IS requested for the development of
accountIng systems necessary for ongOIng proJect ma nag emen t. The
proposed budget will increase pOSItIons currently funded on a
part time baSIS to full time is such that suffICIent personnel
will be avaIlable to carry out the CIty WIde HOUSIng AcquiSItIon
and RehabIlItatIon program.
*The proposed operatIng budget Includes FICA expenses for all
employees, regardless of funding source. Please refer to a
report prepared by the CommunIty and NeIghborhood SerVIces
DIVISIon dated December 13, 1983, for a thorough explanatIon of
changes In federal law regardIng non-profIt organIzatIons.
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FInanCIal and Budgetary Impact
No budgetary action IS requIred to establish the Trust Fund. The
tItle of the eXIsting approprIatIon shown In account number 16-
200-263-126-660 WIll be changed to "Downtown Redevelopment
ProJect Low and Moderate Income HOUSIng Trust Fund". To comply
wIth applIcable law, the treasurer WIll treat thIS account as a
fund, i . e., will separately account for any Interest or
Investment earnings.
To effect the Implementation of the CIty WIde HOUSIng AcqUIsition
and RehabIlitatIon Program, funds will be transferred Into new
lIne items WIthin the Downtown Redevelopment Project Improvement
Account SerIes, and will account for the program components as
summarIzed below:
0 CIty WIde HOUSIng AcqUISItIon and RehabIlItatIon Program
-- Deferred loans -- $247,100.
0 CIty WIde HOUSIng AcqUISItIon and RehabIlitatIon Program
-- Predevelopment Account -- $15,000.
0 CIty WIde HOUSIng AcqUISItIon and RehabIlltatlonProgram
-- CommunIty CorporatIon -- $37,900.
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AddItIonally, followIng approval of IndIvidual proJects, funds
w!ll be transferred from the deferred loan allocatl.on to new lIne
Items to reflect each approved program loan. CommunIty
CorporatIon WIll also execute a note for earnest money funds
advanced. This actIon IS needed to reflect this revolVIng
account accurately In the Agency's records.
Recommendation
It IS recommended that the Redevelopment Agency:
l. Approve the attached ResolutIon of the Reaevelopment
Agency of the CIty of Santa MonIca EstablIshIng the Downtown
Redevelopment Project Low and Moderate Income Housing Trust
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Fund.
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2. Approve the attached ResolutIon of the Redevelopment
Agency of the CIty of Santa MonIca allocatIng $30'~/000
Into the Downtown Redevelopment ProJect Low and Moderate
Income HOUSIng Trust Funa.
3. Approve the attached gUIdelInes for operation of the
Clty-Wlde HOUSIng AcqulsItl.On and RehabIl!tatlon Program.
4. Approve the allocatIon of funds as set forth In the
Budget/~inancial Impact section ~f this report.
5. Apl?rove the attached Agreement by and between the
Redevelopment Agency of the City of Santa MonIca and
Community CorporatIon of Santa MonIca and authorIze the
Executl.ve DIrector to execute the document.
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It IS recommended that the City CouncIl:
Approve the attached ResolutIon of the CIty CouncIl of the CIty
of Santa Monica Approving the EstablIshment of the Downtown
Redevelopment proJect Low and Moderate Income HOUSIng Trust Fund
and FIndIng.
Prepared by: MIndy LeIterman, HOUSIng DIVISIOn
Department of Community and Economic Development
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RETAIL DEVELOPMENT IN SANTA MONICA: THE MUNICIPAL HOUSING IMPACT
This reVIew, conducted for the Redevelopment Agency of the
CIty of Santa Monica by HamIlton, RabInovitz & Szanton Inc., is
designed to generate informatlon about the housing impact of
retaIl development, particularly of Santa MonIca Place, on the
City and to assess the impact of current housing market condi-
tions In the City on the future avaIlabilIty of a labor force to
Santa Monica Place.
As indicated below in the sectIon profilIng the nature of
retail employment, the Place relIes for its employees prImarily
on a low Income labor force, more than half of which reSIdes
WIthin the CIty limits. The reta1l Industry does not draw SIg-
nificant numbers of its workers from among those who expect long
term employment at a salary adequate for a household head. A
large group of women and youths has emerged who WIll accept
part-tIme retail work at the minimum wage, and they are generally
the basis for the retaIl mall's use of labor. The Place IS unu-
sual in that more than the average number of its employees are
persons over the age of 5S and more than the average number of
stores are local rather than chaIn stores.
As Indicated below 1n the sectIon on the Santa MonIca Hous-
Ing market, the CIty'S hOUSIng market for affordable housing, In
WhIch persons employed in the Place could reSIde, 1S extremely
tight. Existing trends suggest that whIle the supply of low cost
hOUSIng is adequate to fulfIll the needs of the eXIstIng low
Income population, it is not currently occupIed by this popula-
tIon. Indeed, low and moderate income famIlies are declInIng In
number in the CIty, suggesting that they do not fare well In the
competitIon for space.
These two realities, when combIned, mean that the prIvate
hOUSIng market is unlIkely to prOVIde suffIcient housing for
those employed in the retail sector. Unless the CIty Increases
the supply of housing available to low Income workers, the Place
is lIkely to be requIred to draw its workforce from communitles
outside the City, with attendant higher costs for the Place to
cover the increased cost of commuting and Increases In traffIC,
as well as air pOllution and parking pressures on the CIty It-
self. An addItIonal problem could also be created for the Place
by the attenuation of an avaIlable labor force. The major lImIts
on ItS success today relate to Inadequate parkIng for customers
In peak shoppIng perIods, a problem which is exacerbated to the
extent that employees must commute by car rather than bus to
reach their Jobs and dIsplace consumer parkIng by so dOIng.
A Profile of Retail Employment
No profile of retail employees In large scale malls is avaI-
lable nationally, nor does the Place have such a descriptIon of
Itself. Therefore, a composite profIle of the probable character
of employees In such projects has been constructed through the
aggregation of a varIety of sources. This profile was then
revIewed by the management of Santa MonIca Place, who provided
affIrmatIon of major trends and IndicatIons of where the Place
has specialized characteristics that distinguish It from other
simIlar bUSInesses In the natIon as a whole. The sources of
profiling i nformat ion include:
Ian Alexander and John Dawson, "Employment In RetaIlIng: A
Case study of Employment in Suburban Shopping Centers," Geoforum,
vol. lO, pp. 407-425, 1979.
Barry Bluestone, Hanna, Kuhn and Moore, The Retail Revolu-
tIon: Market Transformation, Investment and Labor In the Modern
Department Store (Boston: Auburn House, 1981).
E. LIon, ShoppIng Centers (New York: John WIley and Sons,
1976) .
George Sternlleb and James Hughes, ShoppIng Centre USA (Rut-
gers: UnIverSIty Press, 1981) .
The WhIte House and the PresIdents Interagency CoordInatIng
Council, Federal Programs for Urban BUSIness, (Government Print-
Ing office, Washington DC: 1979) .
Any generalIzed portraIt of the retail labor force must
start wi th the fact that retaIl workers are heaVIly In part-time
employment. This trend toward part-time employment IS a recent
one. Before the rise of the dIscount chain, department and small
retaIl stores employed a much hIgher proportIon of sk illed fu11-
time sales people. Since the 1960's, however, there has been a
steady movement toward part-tIme employment In the retaIl industry.
Seasonal labor provIdes for further f lexlbIlI ty in schedul-
ing the retailing workforce. On a natIonal basis, seasonality
IS now as pronounced in retaIlIng as In agricultural employment,
with part-year workers beIng used to meet peak season demands.
As a result of these two trends, only about one-thIrd of
retaIl employees work year round. The most lImited schedules are
concentrated among younger workers, WIth two-thirds of all those
under age 25 employed for no more than three months during the
year. In contrast, only about one-fifth of the employees In the
25- 34 age group work thI s 11 ttle, and only 15% of those over 35.
It is crItIcal to the retail industry to ha ve a large work-
force of this type avaIlable to it, since the turnover rate in
retail employment IS staggering. Retail experience gives 1 ts
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young workers a starting point for the i r careers; for older work-
ers and particularly for women, it is often a supp lement to an-
other full-tIme Job. Thus, in one study of the industry only one
in 12 workers present In 1975 had been In the retaIl workforce ten
years earlIer. With fewer than one new hIre in three remaInIng for
more than a year, retailers must hIre at a frantic pace even in
off-season and receSSIon perIods. Retailing IS an industry in
which the labor market is constantly churnIng with workers coming
in and out of the sector.
Employees in the food-oriented sector of the retaIl malls,
including the Place, have a profIle very similar to those In the
non-food retaIl stores. In general, abou t one-fifth of the work
force comes to retailIng eIther WIth no work experience or as
returnees to the workforce after an employment hiatus. Another
fifth comes from jobs In the prImary sector where employment IS
declinIng -- such as durable manufacturIng. Three-fIfths come
from the secondary sector -- low wage serVIce Industries and
nondurable manufacturing. About a quarter of the workforce In
retaIl stores comes from employment In food stores, restaurants,
ta verns and bars where the employment pattern IS simIlar to that
in branches of the retail trade. The movement between food
stores and department stores is particularly common for men.
Sales clerks leave to become waiters, workers in grocery stores
to become sales clerks.
The very low employment tenure IS tolerable for the retaIl em-
ployer only If the sk 111 reqUIrements for many Jobs are small
and, more Important for Santa MonIca's SItuation, a large work-
force IS Immediately accessIble. SInce retaIlers as a group look
at the prospect of replacing up to half of theIr workforce per
year, they must keep their costs for recruitIng and traInIng
relatIvely low. To the extent that retaIl employment becomes
less attractIve because commutIng distances are Increased by the
unavailabIlity of housing near the place of work, and the concom-
itant cost of transportat ion to the Job rises, the industry IS
forced to pay more either to recru 1 t labor or for the actual
labor itself.
GIven these general patterns, we ha ve attempted to draw a
statistical portraIt of the probable characterl.stics of the Place
workforce in somewhat more detaIl. Figure 1 on the following page
illustrates the age, income and hours worked for male and female
employees of large shoppIng centers or malls. Note that:
(1) The probable distributIon of employment by sex 1.S 70%
female and 30% male. Overall It IS estImated that 50% of the
jobs are full-time, 35% part-tIme and l5% casual employment. The
estimated distributIon by sex and type of employment IS shown
below:
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FIGURE 1:
NATIONAL RETAIL WORKFORCE CHARACTERISTICS: 1978
10' 20 30 40 50 60 70 80 90 100
.
.
LESS THAN 25 'ill 35 35 TO 40 OVER
25 YRS YRS OF AGE YRS OF AGE 50
OF AGE YRS
F
E
M
A IESS THAN
r.:: $3000 ANNUAL $3000 TO $5000 ANNUAL
E (1978 OOT.TARS) OVER
$5000 - ~
ANNUAL
70%
.
FULL-TIME PART-TIME CAS-
UAL
YEAR IaJND SEASONAL CASUAL
PI' AND PT FT AND PT YEAR RaJND
L... 25 YRS 25 TO 35 YRS 35 'ill 40 YRS 50+
M IESS 'I'HA1 ?-ORE THAN
A $3000 $3000 - $5000 $5000 TO $15000 $15000
L
E FULIr-TlME PART-TIME bs
30% YEAR ROUND PT & FT SEASONAL PT & FT CASUAL YR RD.
. I . . . . . . l
10 20 30 40 50 60 70 80 90 100
ESTIMATED RETAIL EMPLOYMENT, BY SEX
Male 30%
Full-Time * 72%
Part-Time ** 22
Casual *** 6
Female 70%
Full-Time 48%
Part-Time 42
Casual 10
* Full-TIme = 40 hours per week. About half the jobs in the
average mall are believed to be full-time. Note that indus-
try sources In New England suggest tha t as much as 75% of all
department store employees are now employed part-time. One
large regIonally based dIscount chaIn in New England indI-
cated that only 15% of its labor force was employed on a
full-tIme schedule.
** Part-time = More than 22.5 hours per week, less than 40.
About 35% of the Jobs In the average mall are part-time.
*** Casual = EvenIngs, weekends, at about 10 hours per week.
About 15% of the Jobs in the average mall are casual.
(2) Employment natIonally ln retail stores IS evenly dIS-
tributed among age groups, with a SlIghtly larger proportion in
the 35-50 age group. At Santa MonIca Place there IS a larger than
average elderly workforce compared to natIonal patterns. Thus
whereas natIonally the workforce over aged 50 is estimated at
about 10%, at Santa Monica Place it may be twice that.
ESTIMATED RETAIL EMPLOYMENT, BY AGE
Age Group
18-25 20%
26-35 30
36-50 30
Over 50 20
(3) Two-thIrds of retail employment IS ln the sales category
and 80% In the combIned sa les, clerical and manual categorIes.
ESTIMATED RETAIL EMPLOYMENT, BY TYPE
OccupatIon:
Management/Owner 14%
Sales 60
Clerical 10
UnskIlled Manual 6
SkIlled Manual 4
Other 7
4
------- ---- -- -
(4 ) For 30% of the workforce, employment in the market
retaIl center IS lIkely to be the sole source of famIly income.
The household Income status of otheI: workers depends on the in-
come of other members of theIr household, on whlch It lS not
possIble to make any estimate. However, were these employees to
be tak en alone, most wou Id clearly be eligible for affordable
housing.
ESTIMATED WAGE STRUCTURE OF RETAIL EMPLOYMENT
Average Wage: $4.50 peI: hour (Annual salaI:Y - $9,360)
Entry Wage: 3.80 per hour
Management: $18,000 - 21,000 per year.
FIgure 2 illustrates the lIkely commutIng pattern of retaIl
employees for Intown, suburban and regIonal centers. In general,
employees of large shoppIng centers tend to orIgInate more from
lInmed 1 a te residential areas than do workers in of fi ce or Indus-
trial employment. This figure reflects our est ima tI on that:
(5) It IS lIkely that from a natIonal perspectIve, about
one-half of the employees in a maJor retaIl market place wlll be
local reSIdents, wh i Ie the remainder will reSIde In adJacent
communltles. The more compact the area, the greater the propor-
tion commutIng under fI ve mIles.
The 50% mark IS reached at two mIles for intown centers, three
mIles for suburban centeI:S and seven mIles for a regIonal center
located near a freeway JunctIon. Santa MonIca Place managers
believe that the extent of local employment may be even hIgher
there than elsewhere, and that up to 70% of the labor force is
recI:ulted from withIn the CIty of Santa Monica.
ESTIMATED RESI DENT I AL LOCATION OF RETAIL EMPLOYEES
Wlthin a five mIle radIUS 50%
" a 10 mIle radius 40
Beyond a 10 mile radIUS 10%
(6 ) The socio-economic prOfIle of the employees of a retail
center IS to a large extent reflectIve of the profile of the
lImnediate residentIal area ar ou nd it, to the extent that one
eXIsts. Average wages are too low to Justify long commutes and
flexible part-time schedules and employee dIscounts encourage
local reSIdents to work in the retaIl trades prImarIly fOI: secon-
dary income or job experience.
5
---- ---------
FIGURE 2:
RETAIL EMPLOYEE COMMUTING PATTERNS FOR
IN TOtVN, SUBURBAN, AND REGIONAL CENTERS
-
25 -=- - - ----- 100
ADDITIONAL ~ ------ 90 CUMLlIATIVE
PERCENTAGE ~ -- -- .
CF 20 CS\:.-............. /~ ; . .. " . PERCENTI\.GE
EMPLOYRRC; , .-/ 61'-'" s . 80 OF
AT ........ - 70 EMP:IDYF:P.S
GIVEN 15 ./' ~;s.~..... 60
DISTANCE I cY'. .. . 50
r ./ .-..
10 /' - . 40
// '.
. .
,/ . ..- 30
, / '.
S ~ . . . .'. . 20
, .
... .
.... ~ 10
0 1 2 ? 4 S 6 7 B 9 10
_. ,
DISTANCE FID1 SHQPP~ CEN'l'lili IN MIIR~
:
-----------
The Santa Monica Housing Market
1980 Census data indicates that the proportIon of households
In Santa Monica able to buy the median priced home has decli ned
to less than 20% of the resident populatIon. WhIle new housing
is beIng produced in the private market in the CIty, prIces are
so high that new unIts are affordable only to those with hIgh in-
comes, or to those who have funds avaIlable through the sale of a
prevIous home.
Rents have also Increased substantially. Even with rent
control, rent increases have outpaced median income Increases.
These changes are shown below.
COMPARISON OF CHANGES IN SANTA MONICA HOUSING COSTS, PRICES
AND INCOME
1970 1980 % Change
Median FamIly Income $10,793 22,263 106.3%
Median Sales Price 36,300 189,800 423
Median Rent 132 297 125
Although prIce Increases in rental hOUSIng have been less
than those In the single family market, the 1980 Census suggests
that one-thIrd of Santa Monica's tenant populatIon already pays
In excess of 35% of Its income for rent. The dIsparIty between
abi Ii ty to pay levels and existIng prIce levels is IndIcated
below.
RENTER INCOME AND GROSS RENT: 1980
Income Level ProportIon PaYIng Over 35% of Income
Under $5,000 35%
$5,000-9,999 72
$10-14,999 32
$15-19,999 9
In addition to these rISIng costs, the City has historIcally had
very low vacancy rates. The vacancy rate throughout the Southern
California regIon is itself only 1.8% for rental housing; well
below the 5% which IS generally regarded as indicatIve of a vi-
able hOUSIng market.
The problem may, however, be in part a matter of distnbutlon.
The City estimates that the population 1 i VI ng in the City and
elIgible for affordable hOUSIng in 1980 is lower than that in
1970, while at the same time the number of housing units In the
affordable range has increased. These figures are shown below:
6
----- -
,
AFFORDABLE HOUSING NEED AND SUPPLY
FamilIes Eligible * Existing Affordable Units
1970 1980 1970 1980
7,300 5 , 900 12,545 17,185
* Income is below 80% of County medIan income.
Obviously elIgible families suffer in the competitIon for space
and are progressIvely displaced even as the stock of affordable
un i ts grows.
7
- .
The Nexus Between Retail Employment and the Housing Market
It is not possIble to derIve an exact estimate of the number
of unIts ne ed ed to support the retaIl environment because many of
the retaIl employees live In households with others and thus may
or may not need affordable housing on a famIly, as opposed to an
indlvidual, basis.
Nevertheless, when added together these statIstIcs suggest
several more general conclUSIons. First, from the vieWpoInt of
the labor force, for the 30% of the retaIl labor force whose
income represents the sole source of support for a household, the
provision of affordable housing is extremely important because it
15 di fficult to secure and retaIn In the Santa MonIca hous i ng
market. Of the seventy percent of retaIl employees who are part
of famll ies in which there are other wage earners, or other
sources of income, most retaIl employees are likely to be young
people. This suggests the importance of a nearby supply of fami ly-
orIented housing as oppos ed to that WhICh might be SUItable
for SIngle IndiVIduals and couples.
Second, from the viewpoint of the retaIler, if the nearby
residentIal area ceases to prOVIde an adequate labor supply, re-
taIlers at the Place WIll probably be faced with a series of
unpalatable prospects from a competItIve point of view. One
alternatIve would be to Increase dependency on hIgher cost labor;
another would be to abandon the fleXIbIlIty thIS existing labor
force structure prOVIdes and make a commItment to employees who
demand more than perIodIC work. Since most other competing re-
taIlers have not had to resort to such strategems, thIS presumably
would harm the pOSItion of any retail center forced to adopt this
posture by the nature of ItS adjacent labor market. The Place's
positIon is also complIcated by any increase In the tendency of
ItS workers to commute by car. Management belIeves that at peak
shoppIng periods the park Ing avaIlable to Place customers is
already inadequate; to the extent that employees come from longer
dIstances and commute by car rather than bus, theIr parking needs
may place pressure on already strained parking res ou rces.
Third, from the viewpOInt of the City, declInIng avaIlabIl-
Ity of a SUItable labor force means that the retaIler WIll re-
cruit from greater distances, increaSIng the traffic and air
pollutIon concomItants of operating the regIonal mall.
Thus, from a number of different pOInts of view the
Interests of both CIty reSIdents and Place bUSInesses would be
served by the use of CIty funds to improve the supply of
affordable housing In the Downtown area.
8
. ..
CITY-WIDE HOUSING ACQUISITION AND REHABILITATION
PROGRAM GUIDELINES
INTRODUCTION
On December l3, 1983 the Redevelopment Agency of the CIty of
Santa MonIca allocated funds to support the acqUIsItIon and
rehabIlItatIon of housing. A total of $270,000 In tax Increment
funds from the Downtown Redevelopment proJect has been allocated
for fIscal year 1983-84 to provide supplementary fInanCIng for
the acqUISItIon and Improvement of propertIes to preserve and
Increase affordable hOUSIng opportunItIes for low and moderate
Income households throughout the City.
The Agency has establIshed operatIng pOliCIes and procedures for
the admInistratIon of the CItY-WIde HOUSIng AcqUISItIon and
RehabIlItation Program as follows.
DEFINITIONS
DC/ED: Department of CommunIty and EconomIC Development, CIty of
Santa MonIca. ThIS Department WIll admInIster the Program for
the Redevelopment Agency under the dIrectIon of the ExecutIve
DIrector.
HDC: A neIghborhood based non-profIt HOUSIng Development
CorporatIon.
Low and Moderate Income Households: Households wi th Incomes
below 1219% of the Los Angeles Standard MetropolItan StatIstIcal
Area medIan, adjusted for famIly SIze, as publIshed by the state
legIslature from tIme to tIme.
1
---------------- --- ------- --------- -- ---
~ ~-- - ~
,
FaIr Market Rents: Maximum rents as publi shed by HUD for the
SectIon 8 programs for the Los Angeles area, adJusted for unIt
SIze.
MaXImum Allowable Rent: The legal rent for the unIt under Santa
Monica Rent Control Charter Amendment, adJusted by the Rent
Control Board for annual expenses Increases or for capItal
Improvements.
Progr~m: The CIty-WIde HOUSIng AcqUISItIon and RehabIlItatIon
Program.
RehabIlItatIon: CorrectIon of local code VIolatIons and removal
of health and safety hazardsi upgradIng of hOUSIng unIts to
decent, safe and sanItary condItIons to comply WIth the HOUSIng
QualIty Standards promulgated by HUD, and wIth local standards;
and repaIr or replaceMent of maJor bUIldIng systems or components
In danger of faIlure. EligIble rehabIlItation work may Include
alteratIons, additions and Improvements needed to improve the
baSIC lIvabIlIty, energy effICIency, acceSSIbIlIty for the
dIsabled, securIty of the property, and to reduce overcrowdIng.
PROGRAM REQUIREMENTS
Program Funds shall be dIsbursed to elIgIble borrowers as
deferred loans to make up the finanCIal gap between avaIlable
non-program resources, IncludIng the borrower's eqUIty and
prIvate fInanCIng, and the costs of acqUIrIng and rehabilItating
affordable multI-famIly hOUSIng.
2
-------------- ------
, ..
EligIbIlIty ReqUIrements
ElIgIble Borrowers
ElIgIble borrowers are neIghborhood based non-profIt hOUSIng
development corporatIons duly organized to promote and undertake
communIty development activItIes on a not-for-proflt baSIS.
ElIgIble Properties
ElIgIble properties WIll: ( 1) have flve* or more apartment
unIts; ( 2) have at least 85% of the unIts occupIed by, low and
moderate Income tenants at the tlme of acqulsltioni ( 3) need
moderate or substantIal rehabIlItatIon; (4 ) be located In the
CIty of Santa Monlca and be free from signIficant adverse
envIronmental impacts except those that can be mitIgated through
rehabIlitatIon, (5) and not reqUIre permanent tenant dIsplacement
to carry out the program.
ElIgIble Uses of the Fund
Funds can be used to make deferred loans to elIgIble borrowers
for the acqUISItIon and rehabilItatIon of eligible propertIes to
prOVIde affordable hOUSIng, prInCIpally for low and moderate
Income households. Funds can also be used for related
predevelopment actIVItIes, lncludlng profeSSIonal serVIces which
cannot be obtaIned on a contIngency baSIS.
*Appllcatlons for properties comprIsed of fewer than fIve unIts
may be accepted at the dIscretIon of DC/ED.
3
--------------------------------- ---------------- ---- ---- - ----- -- - -- ---------------------------
",
Fund Use AllocatIons
Funds are allocated to predevelopment and acquisitlon/
rehabIlItatIon actIvities as follows:
Predevelopment Funds-Total $30,000
$15,01313 shall be avaIlable for the purchase of optIons and
"earnest money" depOSIts. This fund wIll be released to the HDC
prIor to approval of speCIfIc proJects. The funds shall be held
In a separate, Interest-bearIng account by the HDC and used only
for these purposes. Each optIon or purchase agreement acqUIred
WIth funds shall contaIn the prOVIsIons lIsted In ExhIbIt A2.
The remainIng $15,0013 shall be set aSIde for predevelopment
expenses of projects that receIve prelImInary funding commItments
from the Agency. These expenses shall be lImIted to serVIces
that cannot be obtained on a contIngency baSIS and may Include
archItectural and engIneerIng fees, tItle reports, legal and
organizational fees, and mortgage applIcatIon fees. PrelIminary
market or feaSIbIlIty studIes, or organIzatIonal operatIng
expenses shall not be elIgIble. These predevelopment funds shall
be dIsbursed to elIgIble borrowers as deferred loans at the tIme
of the Agency's prelimInary approval of speCIfic projects. The
amount of predevelopment funds dIsbursed to each proJect shall be
Included in the calculatIon of the maXImum deferred loans from
the program and shall be conSIdered as part of the prInCIpal.
AcqUISItIon and RehabIlItatIon - $2413,131313
The remaInIng $247,000 shall be used for deferred paymen t,
subordInate loans for acqUISItIon and rehabilItation.
4
-------------------- -----------------------------------------------------
---------- -
,
ElIgIble uses Include:
l. The purchase of eXIstIng multIfamIly buildIngs
consIsting of fIve or more unIts for rent to low and
moderate income households. ElIgIble development costs
Include SIte acquIsition and preparation; rehabIlItation of
dwellIng units, common areas and related structures;
carrying charges and fInancIng fees, archItectural, legal
and organIzatIonal fees, and temporary relocation costs. No
permanent dlsplacement of tenants WIll be permitted. Pre-
payment of certain fInancIng fees, e.g. , bond Issuance costs
by the Agency, 15 an elIgIble cost If requested by the HDC
as necessary to make favorable fInancIng avaIlable.
2. The purchase or lease of land and/or bUIldings for new
constructIon or substantIal rehabIlItatIon of low and
moderate Income hOUSIng in tandem wIth the SectIon 8 New
ConstructIon or SubstantIal RehabilItatIon programs, the
SectIon 202 dIrect loan program, and/or the development of
Incluslonary hOUSIng through an "80/20" tax-exempt bond
fInanCIng. EligIble development costs are the same as
above.
Loan Terms
The Trust Fund loans shall have the following terms and
conditIons:
Term: Loans shall be deferred for the twenty-five (25) year
term of the Regulatory Agreement.
5
---------------------- -------------------------------------- -------------------------------
Interest Rate and Payments: The Interest rate shall be set
In accordance wIth the needs of IndivIdual proJects.
Payments shall be made as follows:
A. If the Borrower elects to extend the term of the
Regulatory Agreement for a mInImum of ten (l0 )
years and does not VIolate this Agreement, the
CIty shall waIve payments of prinCIpal and
Interest, and the entIre debt shall be
forgIven at the end of the extensIon term.
B. If the Borrower elects to pay the PromIssory Note
prIor to, or at the end of, the term of the
Regulatory Agreement the entIre amount of the
unpaId prInCIpal plus simple accrued Interest
shall become due. The Regulatory Agreement shall
remain In full force and effect for 1 ts term
regardless of any prepayment.
c. If the Borrower VIolates the terms of the
Regulatory Agreement such that the City declares
the Promi ssory Note In defaul t, the entIre amount
of unpaId prInCIpal plus Interest, added to the
prInCIpal accrued, and compounded annually shall
become due.
6
----------------------------------------~------------------------------------
-,
S.ecur 1 ty: The loan shall be secured by a Deed of Trust and
promIssory note WhIch may be subordInated to Deeds of Trust
securIng other federal or state agency loans, or loans from
conventIonal fInancIng InstItutIons IncludIng seller take-
back fInanCIng, used in conJunctIon wIth the Trust Fund
Loan on the same property. The DC/ED must approve all requests
for subordInatIon. The loan shall be further secured by a
Regulatory Agreement to assure that Trust Fund Program funds are
used to prOVIde long-term affordable hOUSIng opportunItIes for
low and moderate income households. The HDC and Agency shall
execute an Agreement regulatIng project rents, tenant selectIon
procedures, use of proJect income and changes in proJect
ownershIp or use. The Regulatory Agreement shall be recorded wIth
the Deed of Trust and Note.
MaXImum Loan Amount: The maXImum Trust Fund loan per
proJect shall be $15,000 per unIt. However, loans should
average no more than $10,1300 per uni t. The $15,000 per
unlt ceilIng may be waived by the Agency If there WIll be a
signIfIcant benefIt to low Income tenants or to the
affordable hOUSIng stock.
7
---------- ------ ------------------------------------------------
UnderwrItIng GUIdelInes
Loan To Value RatIo
The Agency shall reVIew each loan to ensure that the borrower has
adequate eqUIty, In-kInd or In cash, In the project to guarantee
security for the Trust Fund. As a general rule, the total loan
(Program plus non-Program Fund loans) to value (total development
cost) ratio should not exceed 95%.
ThIS reqUIrement may be waIved by DC/ED only to the extent
necessary to facilItate partIcIpatIon by new HDC(s) WIthout
suffICIent capItal reserves.
DetermInation of Reasonable Costs and Expenses
DC/ED shall reVIew borrower's estImates and prOJectIons of
rents, expenses, reserves and development costs. If necessary,
the Agency may request background documentatIon from the borrower
and may adJust fIgures as approprIate.
SenIor FInanCIng
If the Trust Fund loan IS subordInate to a variable payment loan
the HDC must submit projected cash flows for the terms of the
loan, shOWIng the maXImum pOSSIble Increases In debt serVIce
perIods per year, the prOJected rent and expense Increases, and
the means of makIng up any defICIts.
8
------------------------------------- -~---
Use of AlternatIve Favorable FInanCIng Terms
The Borrower must attempt to use all other resources such as tax
exempt fInanCIng, hOUSIng SubSIdIes, etc. to mlnlmi ze the amount
of the Program loan. The Agency may, at its sole dIscretIon,
calculate the mortgage amount at the terms and rates of avaIlable
fInanCIng programs other than that proposed by the HDC, 1 f the
alternative terms and rates would reduce the amount of Agency
SUbSIdy reqUIred and otherWIse conform to the Program
reqUIrements.
Reflnancln9 of PrImary Loan
If the Borrower re-flnances the prImary debt, or borrows
additional funds from a non-Program source after the InItial
closing, theAgency must reVIew and approve the terms and
condItIons, and the proposed use of proceeds. ElIgIble uses of
cash from refInanCIng or new debt are:
1. The malntainence, operation, or Improvement of the
secured propertYi
2. The purchase of addItIonal propertIes subject to the
Program elIgibIlIty and operating reqUIrements;
3. The prepayment of the principal and Interest on the
Program loan.
Compliance WIth State RegulatIons
All proJects must comply WIth all applicable state reqUIrements
for the expendIture of the HOUSIng Trust Fund established In
accordance WIth Health and Safety Code SectIon 33334.2.
9
--------------------------- ------------------------------------------------------------~---------~--
--------
MarketIng and Tenant SelectIon
The Borrower and the Agency shall establIsh an affIrmatIve
marketIng and tenant selectIon plan as an attachment to the fInal
loan package for the project. The plan shall descrIbe the
marketIng efforts and tenant selectIon procedures the Borrower
wIll use to maIntaIn and, where feaSIble, to Increase low and
moderate-Income housing opportunItIes In the proJect. Borrower
shall specIfIcally market avaIlable unIts to persons employed In
the Downtown Redevelopment Project area and other households who
work In but do not lIve In the CI ty of Santa Monica.
Project Management Plan
The Borrower shall prepare a Project Management Plan for the
Agency's reVIew and approval. The Plan shall be an attachment to
the Regulatory Agreement. The Plan shall descrIbe the Borrower's
pOlIcies and procedures concernIng:
1. Management/tenant relatIons and aSSIstance to tenant
organIzatIons.
2. Tenant selectIon and orIentatIon.
3. Procedures for determln~ng tenant elIgIbIlIty and
certIfyIng incomes.
4. MaIntenance and repaIr services.
5. On-SIte management faCIlItIes.
6. Rent collectIon.
7. Records and reportIng requirements.
8. Personnel and staffIng.
9. ComplIance WIth all tenant protectIon laws, IncludIng
rent control law and bUIldIng Health and Safety Codes.
10
-------- --- ---------------------- - ------------ ------------------
PROPOSAL EVALUATION CRITERIA
The proposal evaluatIon crIterIa are divlded Into mInimum
elIgibIlIty reqUIrements for all proJects, and competitive
crIterIa to be applIed In selectIng amont elIgIble proJects, as
necessary.
MInImum ReqUIrements
A. FInancial FeaSIbilIty: Each proJect must meet two
feaSIbIlIty tests:
1. The Program loan shall not exceed the total amount of
the gap between the maXImum affordable mortgage amount
avaIlable from non-Program sources and the Total Development
Costs as defIned In the program applIcatIon. The maXImum
Program loan shall average $l0,000 per unIt per proJect and
may not exceed $15,000 per unIt per proJect WIthout DC/ED
determInation of speCIal benefit to the neighborhood and
elIgIble tenants.
2. The total Program request shall not exceed 33% of the
Total Development Cost (TDC} of the project WIthout DC/ED
determInatIon of speCIal benefIt WIthout DC/ED determinatIon
of special benefIt.
The maXImum affordable mortgage amount shall be calculated USIng:
(l} SectIon 8 Fair Market Rents for the subsidized unI ts, (2) the
maXImum allowable rent for the unsubsidlzed unIts, (3) the
proposed Interest rate and terms of the prImary loan (s},
reasonable operatIng allowances and reserves IncludIng a reserve
to amortIze a varIable rate mortgage as needed, and (4 ) the
11
------------------------- --------------------- ---------------------------------------------------
-.
equIty contrIbutIon of the HDC and Its partners other than the
Program Funds. The HOC's estimate of total development costs wIll
be reviewed by DC/ED, which may adjust costs as approprIate gIven
market InformatIon. No proJect shall receIve a greater deferred
loan than IS required to meet the gap between the maXImum
affordable mortgage amount and the total development costs.
B. Low and Moderate Income Benefit: Each proJect must meet the
mlnlmum reqUIrements for benefIt to low and moderate Income
persons at the tIme of acqUIsItIon by the HDC. One thIrd of the
unIts must be affordable and avaIlable to very low and low
Income households. All unIts after acqUIsItIon and
rehabIlitation must rent at levels affordable to low-moderate
Income persons, as defIned ln sectIon 50093 of the CalIfornIa
Health and Safety Code. The current rent and Income lImIts are
shown In ExhIbIt D attached hereto.
C. ProJect LocatIon: All proJects must be located In the CIty
of Santa MonIca. ProJect SItes must be free from adverse
envIronmental impacts, e.g. , noise, or the rehabIlltation
actiVItIes must successfully mItIgate these impacts.
D. Tenant PartIcipatIon: At least 51% of the eXIstIng tenants
In a proposed proJect must affIrm Interest by signIng letters to
the HDC, In partICIpatIng In the program.
12
-------- ----------- ---------------------------------
..
CompetItIve SelectIon Criteria
Priority shall be given to proJects that:
A. significantly Increase affordable housIng opportunItIes for
households who have dIffIculty fInding hOUSIng In the prIvate
Santa MonIca market IncludIng large famil ies, famIlIes, and the
dIsabled.
B. Use bargaIn sale or seller-fInancIng technIques, and/or use
of equIty syndIcatIon proceeds to reduce total acqUIsitIon costs.
C. SIgnIfIcantly Improve the hOUSIng stock by rehabIlItatIng
bUIldings with health and safety problems, local code vIolatIons
or IncipIent danger of failure of major bUIldIng systems.
D. Leverage other federal or state hOUSIng subSIdy programs.
E. BenefIt high percentage of very low and low Income
households.
F. Have a borrower's equIty contribution In excess of 10%.
13
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"
APPLICATION SUBMITTAL AND REVIEW PROCEDURES
ElIgIble borrowers shall submIt applIcatIons for Program Funds as
follows:
"Earnest Money" Fund
1. The HCD shall submIt a request for earnest money fundIng and a
standard Grantee Agreement to be approved by the Agency. The HCD
shall submIt eVIdence of the followIng:
a. The HDC IS a duly organized neIghborhood based non-
profIt development corporatIon;
b. The HDC can demonstrate capacity to successfully carry
out acqUIsItIon and rehabIlItatIon actIVItIes;
c. The HDC certifies that all funds shall be used for
elIgible actIVItIes under the CIty-Wide HOUSIng AcqUISItIon
and RehabIlItatIon program.
2. If the HCD's qualIfIcatIons are acceptable, DC/ED shall
recommend that the Agency approve the executIon of the Grantee
Agreement .
3. Upon Such approval the Agency shall dIsburse the funds to the
HDC.
4. The HDC shall depOSIt the funds In an Interest-bearing
account. The funds shall "revolve" ; as loans are closed the HDC
sha 11 return the amount of the earnest money depOSIt to the
account for use In other acquIsitions.
14
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-.
5. At the end of the term of the Grantee Agreement the Agency
shall review the "earnest money" fund actIvIty and determIne
that:
a. TheHDC may retaIn the funds In the account for another
year; or
b. The HDC shall return all or part of the funds to the
CIty-WIde HousIng AcquisItIon Program.
ApplIcatIons for Deferred Loans
1. The HDC shall negotiate WIth potentIal Sellers to secure a
SIgned Purchase Agreement on a speCIfIC property. The HDC may
use the "ReSIdentIal Purchase Agreement and DepOSIt ReceIpt" form
attached as ExhibIt Al. Before executIng the purchase agreement
the HDC shall Include the condItions attached as ExhIbit A2.
2. The HOC shall complete the ApplIcatIon for Program Funds and
prepare all required attachments. ApplIcations may be submitted
at any tIme during the program year and WIll be considered in the
order submItted to DC/ED. The HDC shall submit a copy of the
signed purchase agreement and three copIes of the ApplIcatIon for
PrelImInary Commitment to the Housing DiVISIon of DC/ED.
3. The HOUSIng DIVISIon staff shall reVIew the applicatIon to:
a. determine that the mInimum program reqUIrements are
met;
b. ensure that the estImated development costs are
reasonable;
c. reVIew the estImated mortgage amount and HDC eqUIty
contributIon In accordance WIth the program's underwrItIng
gUIdelines.
15
----------- -------- - ---------------------------------- - ----------
..
4. WIthIn thIrty days of the applicatIon submission the HOUSIng
DIVIsIon shall determIne that the proposal IS approvable for
PrelImInary CommItment (WIth or without conditIons), or IS not
approvable for speCIfIC reasons.
5. A Preliminary CommItment Letter shall be prepared by the
Housing DIVIsion, revIewed by the DIrector of DC/ED, and SIgned
by the ExecutIve Director. The letter shall state the maXImum
amount of Program Funds reserved for the project and list all the
addItIonal condItIons, documents and steps that must be taken by
the HDC to obtaIn a fIrm commItment of Program Funds.
6. Upon Issuing a PrelImInary Commitment Letter the ExecutIve
DIrector shall authorize release of the predevelopment funds
approved for the project.
7. The HDC shall complete the loan approval process with the
pri mary lender and sha 11 obtaIn all other required approvals such
as the Section 8 Moderate RehabIlItatIon Agreement and local
bUIldIng permIts. When the lender has glven final approval of
the loan package,whlch may be contIngent upon a fInal fundIng
commitment by the city, the HDC shall submit the fInal loan
clOSIng documents package to the DC/ED for reVIew.
8. The DC/ED's HOUSIng DIVISIon sha 11 reVIew the fInal loan
package using the crIterIa detaIled above, and If acceptable
shall prepare a flnal commitment letter and the clOSIng documents
for the Program loan. The DIrector of DC/ED shall reVIew, and
the ExecutIve Director shall SIgn the fInal letter and package.
16
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"
9. The ExecutIve DIrector shall authorIze release of the
deferred loan funds Into the escrow account established for the
loan closing wIth InstructIons for disbursement. If the Program
loan proceeds wIll not be entIrely drawn in the InItIal
dIsbursement foracquisltlon costs, the prImary lender or other
agent selected by the Agency shall disburse the funds durIng
rehabIlitatIon. ImmedIately upon loan clOSIng the HOC shall
submIt one copy of the loan clOSIng package (ExhIbIt "E") to the
Housing DIVISIOn for the proJect files.
10. The Housl.ng DIVl.SIOn shall monItor the proJect durIng
rehabilItatIon as needed to ensure complIance WIth state
regulatIons. The HOUSIng DIVIsion shall request notifIcatIon of
the fInal inspectIon and fInal constructIon release from the
prImary lender, and shall reVIew management practIces and
reportIng procedures with the HOC and proJect management agent at
that tIme to ensure full understandIng of program reqUIrements.
11. Thereafter the HDC shall submIt reports and maintaIn records
as speCIfIed in the Regulatory Agreement. The HOUSIng DIviSIon
shall monItor complIance WIth the Regulatory Agreement on an
annual baSIS.
17
----------- -------- -------------------------- ~-- ----------------
'.
LISt of ExhIbIts
Al: ReSIdental Purchase Agreement and De{losIt Recel(lt
A2 : Sample ConditIons for InclUSIon In a Purchase Agreement
B: ChecklIst of Items to be submItted prIor to release of
"Earnest Money" Funds
c: Deferred Loan ApplIcatIon for AcqUIsitIon/RehabIlitatIon
D: Regulatory Agreement -(Reserved)
1. Section 8 Rents
2. Income LImIts
3. Management Plan
4. Affordable Rent Levels
E: Contents of ClOSIng Document Package
l8
------------------------
RESOLUTION NUMBER 3i8
(Redevelopment Agency Series)
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA INVOKING THE PROVISIONS OF HEALTH AND SAFETY
CODE SECTION 33334.2 AND ESTABLISHING THE DOWNTOWN
REDEVELOPMENT PROJECT LOW AND MODERATE INCOME HOUSING TRUST
FUND.
WHEREAS, the Redevelopment Plan for the Downtown
Redevelopment Project was adopted by Ordinance Number 1921 of the
Council of the City of Santa Monica on January 13, 1976; and
WHEREAS, the Santa Monica Place Shopping Center has been
developed in implementation of the Redevelopment Plan for the
Downtown Redevelopment Project within the Downtown Redevelopment
Project area and has created approximately 1,890' new jobS,
resulting in an increase in the demand for affordable housing for
the employees of the development and other persons employed or i
residing in the City of Santa Honica; and I
I
WHEREAS, the Redevelopment Agency desires to assist in the
development of an adequate supply of low and moderate income
housing available at affordable costs for such employees and
other pe~sons and families of low and moderate income; and
WHEREAS, the Redevelopment Agency desires to make applicable
the provisions of Health and Safety Code Section 33334.2 to the
Downtown Redevelopment Project,
NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF
S~NTA MONICA DOES RESOLVE AS FOLLOWS:
~
SECTION l. The Redevelopment Agency does hereby establish
the Downtown Redevelopment Project Low and Moderate Income
HousIng Trust Fund (the "Hous i ng Trust Fund") into which funds
may be appropriated by the Agency from time to ti me and expended
to increase and improve the supply of low and moderate income
housing available at affordable costs within the City of Santa
Monica.
SECTION 2. The Redevelopment Agency hereby elects to make
part of the requirements of Health and Safety Code Section
33334.2 (tax increment expenditure for low and moderate income
housing) applicable to the Downtown Redevelopment Project,
subject to indebtedness incurred to implement the Project, and
only to the extent provided for in each specific implementing
resolution tha t may be adopted from time to time by the
Redevelopment Agency appropriating funds into the Housing Trust
Fund and providing for their expenditure.
SECTION 3. Subject to the availability of funds to be
provided at the discretion of the Redevelopment Agency from time
to time in specific implementing resolutions, the Redevelopment
Agency shall use funds expended from the Housing Trust Fund
pursuant to Health and Safety Code Section 33334.2 to increasing
and expanding the supply of low and moderate income housing
available at affordable costs within the City of Santa Monica for
employees of Santa Monica Place Shopping Center and other low and
moderate income persons and families. Each specific implementing
resolution of the Redevelopment Agency shall be deemed to be a
determination of the Redevelopment Agency that the provision of
such housing will increase and improve the supply of low and
2
moderate income housing available at affordable costs within the
City of Santa Monica, that the provision of such housing is of
benefit to the Downtown Redevelopment Project, and that the
Redevelopment Agency is indebted to the Housing Trust Fund to the
extent necessary to provide such housing, subject to indebtedness
incurred to implement the Downtown Redevelopment Project, and
only to the extent provided for in each specific implementing
resolution that may be adopted from time to time by the
Redevelopment Agency appropriating funds into the Housing Trust
Fund and providing for their expenditure. In increasing and
improving the supply of low and moderate income housing available
at affordable cost wi th monies appropriated into the Housing
Trust Fund, the Redevelopment Agency may exercise any or all of
its powers including those set forth in Health and Safety Code
Section 33334.2(d).
SECTION 4. Each specific implementing resolution of the
Redevelopment Agency appropriating funds into the Housing Trust
Fund and providing for their expenditure, shall be deemed to be,
to the extent provlded therein, an election by the Redevelopment
Agency to make part of the requirements of Health and Safety Code
Section 33334.2 appllcable to the Downtown Redevelopment Project
and an obligation of the Redevelopment Agency to meet such
requirements to the extent provided therein, and shall constitute
an Indebtedness of the Redevelopment Agency for the Downtown
Redevelopment Project to the extent of the funds appropriated
lnto the Housing Trust Fund pursuant to Health and Safety Code
33334.2.
3
.
SECTION S. Funds appropriated into the Housing Trust Fund
by speclfic implementing resolutions shall be held thereln until
used for the purposes described hereinabove. Any interest earned
by the Housing Trust Fund shall accrue to the fund and may only
be used for the purposes of the Fund as described hereinabove.
SECTION 6. The Agency secretary shall certlfy to the
adoption of this Resolution. and thenceforth and thereafter the
same shall be in full force and effect.
Approved as to form:
- _~""'+_-i'.LOt;;'::>';
"
Robert H. Hyers
Agency Attorney
4
...
ADOPTED AND APPROVED THIS 13th DAY
OF December , 1983.
~
B '5
--
I HEREBY CERTIFY THAT THE FOREGOING RESOLUTION
NO. 378(RAS) WAS DULY ADOPTED BY THE RE~EVELOPMENT
AGENCY OF THE CITY OF SANTA MO~ICA AT A MEETING
THEREOF HELD ON Deceraber 13 . 1983 BY THE FOLLOWING
AGENCY VOTE:
AYES: AGENCY t1EMBERS: Conn, JennIngs, Press, Zane and
\layar Edwards
riDES: AGENCY MH1BERS: Epstein and Reed
ABSENT: AGErlCY MEr~BERS: .'Jone
ABSTAIil: AGE1ICY ~'nlBERS: .'Jane
ATTEST:
/'
it ~/) 1 .1
BY c.-1G-11 /u.d.I0;~
A!lN M. SHORE - SECRETA1(Y
--- --- ---- --
- . ,
RESOLUTION NUMBER 379
(Redevelopment Agency Series)
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA ALLOCATING $300,000 INTO THE DOWNTOWN
REDEVELOPMENT PROJECT LOW AND MODERATE INCOME HOUSING TRUST
FUND TO PROVIDE FINANCING FOR THE CITY WIDE HOUSING
ACQUISITION AND REHABILITATION PROGRAM AND FINDING THE
PROVISION OF SUCH HOUSING TO BE OF BENEFIT TO THE DOWNTOWN
REDEVELOPMENT PROJECT
WHEREAS, the Redevelopment Agency has adopted Resolution
Number 378 (RAS) establishing the Downtown Redevelopment
ProJect Low and Moderate Income Housing Trust Fundi and
WHEREAS, in accordance with Resolution Number 378
(RAS) , the Redevelopment Agency desires to allocate money to the
Housing Trust Fund,
NOW THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION l. Pursuant to Resolution Number ~7a (RAS) ,
the Redevelopment Agency does hereby allocate the sum of $399,90"
into the Housing Trust Fund to be paid into the Housing Trust
Fund from property taxes allocated to the Redevelopment Agency
pursuant to Health and Safety Code Section 33679 and the
Redevelopment Plan for the Downtown Redevelopment Project.
SECTION 2. The funds so allocated shall be held in the
Housing Trust Fund until expended by the Agency for the purposes
set forth in Resolution Number 378 (RAS) .
SECTION 3. The Redevelopment Agency herer.y elects t,-, make
part of the requirements of HE'alth and Safety Code Section
33334.2 applicable tc the Downtown Redevelopment Project to the
extent provided for in this resolution.
SECTION 4. By adopting this resolution, the Redevelopment
1
-------- -
.... - ~
~ Agency obligates itself to meet part of the legal requirements of
Section 33334.2 to the extent set forth herein. The payment of
funds into the HousIng Trust Fund as required by the Resolutlon
pursuant to said Health and Safety Code Section 33334.2 shall
constltute an obligation and inJebtF~~~&g ~f the Rede~elop~-r-
Agency for the Downtown Redevelopl'!!:,lt ~'I~ject.
SECTION 5. Pursuant to Resolution Number 378 (RAS) , the
Redevelopment Agency hereby finds, determines and resolves that
the use of Housing Trust Funds outside of the Downtown
Redevelopment Project is of benefit to the Downtown Redevelopment
Project.
SECTION 6. The Controller of the Redevelopment Agency is
hereby authorized to retain or pay all interest income earned on
this allocation into the Housing Trust Fund. The Controller of
the Redevelopment Agency is further authorized to pay all other
inccme or loan repayments or revenues received by the
Redevelopment Agency arising f1:om the expenditure of the funds
allocated by this Resolution into the Housing Trust Fund and to
use those funds to the extent available to supplement Downtown
Redevelopment Project Funds needed to fund the allocation
descrIbed in Section l.
SECTION 7. The Agency secretary sha 11 certify to the
adoption of this Resolution, and thenceforth and thereafter the
same shall be in full force and effect.
Approved as to form:
Rober H. Hyers /' .
k
Agency Attorney
:2
--
'- --.
ADOPTED AND APPROVED THIS 13th DAY
OF DecePlber , 198 3.
.~'~ -1
( ~
By,_hA/l~~
~AIRPER~N ~
I HEREBY CERTIFY THAT THE FOREGOING RESOLUTION
NO. 379(RAS) WAS DULY ADOPTED BY THE ~EDEVELOPHEHT
AGENCY OF THE CITY OF SANTA HO~ICA AT A MEETING
THEREOF HELD ON December 13 , 1983 BY THE FOLLOWING
AG nlC Y VOTE:
AYES: AGENCY MEMBERS: Conn, Jennlngs, Press, Zane and
Mayor Edwards
llOES: AGENCY MEMBERS: Epsteln and Reed
ABSENT: AGENCY MEMBERS: None
ABSTAIfI: AGENCY MEMBERS: None
ATTEST:
f2 ~
,,/ lJ if
BY , Vj{ ll~
ANN M. SHORE - SECRETARY
~~ ---
RESOLUTION NUMBER 6787
(CIty CouncIl SerIes)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA
APPROVING THE ESTABLISHMENT OF THE DOWNTOWN REDEVELOI?HENT
PROJECT LOW .lI.ND MODERATE INCOME HOUSING TRUST FUND AND
FINDING THAT SUCH EXPENDITURE WILL BE OF BENEF IT TO THE
DOWNTOWN REDEVELOPMENT PROJECT.
WHEREAS, It IS the POlICY of this localIty to assure an
adequate supply of standard hOUSIng affordable to low and
moderate Income persons and families; and
WFEREAS, the Downtown Redevelopment ProJect has been
establIshed In the CIty of Santa MonIca In the area bordered by
Broadway, Fourth Street, Colorado, and Second Street; and
v-JHEREAS, the Downtown Redevelopment ProJect has been fully
developed WIth a commercIal facilIty; and
~';HEREASr the Redevelopment Agency of the CIty of Santa
Monica seeks to establIsh a Downtown Redevelopment ProJect Low
and '1oderate Income HOUSIng Trust Fund pursuant to Health and
Safety Code Section 33334.2 for the purpose of IncreaSIng and
ImprovIng the supply of low and moderate income housing avaIlable
a1: affordable costs WIthin the City of Santa MonIca; and
I-lHEREAS, Health and Safety Code Section 33334.2 requires
that the CIty CouncIl concur WIth the Redevelopment Agency's
fIndIng that the use of the funds will be of benefIt to the
redevelopment proJect area when the funds WIll be expended
outSIde the boundarIes of the redevelopment proJect area;
5
-
DATE January 17, 1984
TO: Mindy Lelterman, Houslng Division
FROM: Ann M. Shore, CIty Clerk
SUBJECT: DOWNTOWN REDEVELOPMENT PROJECT LOW AND
MODERATE INCOME HOUSING - CITY COUNCIL/REDEVELOPMENT
AGENCY AGENDA OF DECEMBER 13, 1983, RESOLUTION
NO. 379 (RAS) .
Thank you very much for returning the Res01utlons
of the December 13, 1983 meeting to us. Please
advise us the Redevelopment Agency Resolution
No. that should be inserted in the second paragraph
of Resolution No. 379(RAS) In order that we may
process the resolutIon.
Please see attachment.
AMS' . . (' ) Y11. -1.i _ J. ~
. J J l ~'--Y" II IJ t.. "<)../1 L(f!./"(j.!... ,~
Attachment
/ I
/
" RESOLUTION NUMBER 379
I <
(Redevelopment Agency Series)
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SANTA MONICA ALLOCATING $399,IHJIJ INTO THE DOWNTOWN
REDEVELOPMENT PROJECT LOW AND MODERATE INCOME HOUSING TRUST
FUND TO PROVIDE FINANCING FOR THE CITY WIDE HOUSING
ACQUISITION AND REHABILITATION PROGRAM AND FINDING THE
PROVISION OF SUCH HOUSING TO BE OF BENEFIT TO THE DOWNTOWN
REDEVELOPMENT PROJECT
WHEREAS, the Redevelopment Agency has adopted Resolution
Number 378 (RAS) establishing the Downtown Redevelopment
Project Low and Moderate Income Housing Trust Fund; an
WHEREAS, in accordance with Resolution Numb r
(RAS) , the Redevelopment Agency desires to allocate III
Housing Trust Fund,
NOW THEREFOIlE, THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1. Pursuant to Resolution Number 378 (RAS),
the Redevelopment Agency does hereby allocate the sum of $399,999
into the Housing Trust Pund to be paid into the Housing Trust
Fund from property taxes allocated to the Redevelopment Agency
pursuant to Health and Safety Code Section 3367' and the
Redevelopment Plan for the Downtown Redevelopment Project.
SECTION 2. The funds 80 allocated shall be held in the
Housing Trust Fund until expended by the Agency for the purposes
set forth in Resolution Number 378 (RAS) .
SECTION 3. The Redevelopment Agency hereby elects to make
part of the requi:rements of Health and Safety Code Section
33334.2 applicable to the Downtown Redevelopment Project to the
extent provided for in this resolution.
SECTION 4. By adopting this resolution, the Redevelopment
1
--
- ------ --
OAT!::' January 3, 1983
TO- }hndy LeIterman, Housing Dlvls10n
FROH: Ann Shore, C1 tv Clerk
SUBJECT- DOWNTOWN REDFVELOP~ENT PROJECT 101': A)lD
HODEfi,ATE I NCmU: HOUSING - CITY C()UNCIL/~EDEVELOPHE~T
AGENCY AGENDA OF DECEMBER 13, 1983
Attached IS a memo we sent to vour office on
December 14, 1983. ThIS 1S a follow-u~ regarding
the resolut1ons of December 13, 1983 meeting.
Please advIse of the status of these resolutions.
a<--,.-1 A~
At tacPJT1ent
---- -- --------