SR-414-002 (6)
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C/ED:EDD:EF:MM
Redevelopment Agency Meetl~g 05/08/84
Santa Monlca, Callfornla
To:
Redevelopme~t Agency Board
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HAY - 8 IIN
From: Clty Staff
SubJect: Recomme~datlon to Authorlze the Executive Director to
Negotlate al'!d Execute a Contract for FIpanClal
Consultant and to Retaln the Servlces of Bond Counsel
for the Issuapce of Tax Allocation Bonds
INTRODUCTION
ThiS report requests authorization to retalp a flpanclal
consultant apd bond counsel to deslgn and prepare a tax
allocatlon bOl"'d offerll'~g t:J fll'!anCe the completIon of
lmprovements to the Oceaf' Park Redevelop,ment ProJect. If'
addltlon, the report brlefly summarizes the estimated cost and
sources of funds necessary to undertake these improvements.
Recommerdatlons to authorlze the Executlve Dlrector to pegotiate
and execute COl"tracts for flnanclal consul tal'!t serVlces and for
bond cou~sel are preserted.
BACKGROUND
Or January 24 the Age~cy approved pIal'S for developmel"t :Jf Ol'!-
and off-slte ProJect lmprovemepts; lpcludlng a work program for
the developmert of 55 unlts of affordable housIng apd a beach
lmprovement plan. The plan for the permaner.t Park had beer
approved if' prIor CouPcil/Agepcy actlOl'!s. CounCIl dlrected staff
to proceed with lmplemeptation of the affordable housIng program,
the beach Improvement plan al'!d the on-sIte park. At that tlme
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MAY - 8 19&4
the Councill Agency was advised of the ~eed to bond current tax
Increment proceeds to asslst l~ flna~cll'!g the proJect. Staff IS
proposIng to begIn the process of IssuIng the bond and requests
authorIty to retaIl'! a flrancIal consultant and bond counsel as
the fIrst step In thIS process.
DISCUSSION
Development costs for the on-and off-sIte Improvements are
estlInated to total $8.6 mIllion. Sources of funds to fll'~ance
these Improvements include land sale proceeds ($2.1 mIlllor),
developer payments ($2.0 mIllIon) ard bOI'!d proceeds (est. $4.5 -
$5.5 mIllIon).
Tax allocatloI'! bOI'!ds may be Issued by redevelopme~t ageI'!CleS
under SectIor 33670 of the CalIfornIa Health and Safety Code to
fund redevelopmel'!t actIvItIes. The code provIdes that tax
Increment can be commI tted to repay the bop-ds. These berds may
be Issued by the Agercy WIthout voter approval and do l'!ot have a
lImIt set on the amount that can be borrowed. Current tax
Increment reverues from Phase I of the Ocean Park Project are
$810,000 per year. Prior dIScussIons With finanCIal consulta)"lt,
iI'!dIcate that the Agency could borrow between $4.5 and $5.5
mIllIon on Its current tax II'!Crement reveI'!ue. The actual amount
that could be borrowed IS dependent on the prevalllI'!g II'!terest
rates at the time when bonds are fInally sold.
FIrancIal COPsultant
Agency staff revlewed the qualiflcatlo~s of the following
fll"anCIal corsultll"g fIrms: (1) Call'-:!e, Gressil, MIdgley aI'!d
Slater; Blythe, Eastman, Paire, Webber; (3) Barcroft, QtCOI'!nor,
ChIltel" and Lavell; and (4) Sutro and Company. The fIrms were
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evaluated based on their experlerce with bond Issuarces Involvlrg
redevelopm en t agenc les, quallfl catIons and exper Ience of sta ff ,
serVIces offered and fee arrangemerts.
Staff recommends that the Agency retaIn the financial consulting
fIrm of Blyth, Eastman, PaIne, Webber to deslgr and Issue the
bord offerIng. The Agency has worked with thIS fIrm on other
bard offerIngs; most recently for the ISSUal"!Ce of lease revenue
bonds for the parkIrg structures at Sarta MonIca Place. Staff
has been satIsfIed WIth the qualIty of serVIce provided.
SerVIces to be prOVIded by the cOT'sultant Include InVeStIgatlOl"!
ard evaluatIon of fIr arCIng optIons, a1"!alyslS of proJect reve1"!ues
and debt capaCIty, a plan for admInIstering bord funds prIor to
dIsbursement, preparatIon of ar OffICIal Statement, and fInanCIal
gUIdance corcernlng maturitIes of bonds, tlmirg of sale and
securIty prOVISIons. A proposed scope of serVIces IS attached as
Exhlbl t A.
Bond Coursel
The CIty Attorney requested proposals from the followIng three
law firms: (1) Morrlsor> & Foerster, Los Angeles; (2) O'Melveny &
Myers, Los Angeles; ard (3) OrrIck, Herrlngtor & SutclIffe, Sar
Franclsco. Each of these fIrms has exterslve experIence In bard
Issuances Involvlrg redevelopment agenCIes. A careful reVIew was
conducted of each law fIrm'S proposal includIng lrformatlon
regardl.ng fee arrangements, serVices to be prOVided,
quall.flcatlons and experience of each firm's attorneys, OplOl.OnS
or'! valIdation actions filed in conJunctIon wIth bond Issuances,
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and knowledge of pe~dp'g lItIgatIon affectIng bond Issuances by
redevelopment agencIes. The proposals were also dIscussed by
telephone wIth representatIves from each fIrm.
FOlIOWl!"g
evaluatIon of these proposals, a deCIsion was reached to
recommend the fIrm of Horrlsor & Foerester for bond counsel based
upon the followlrg:
1. Assurances that senIor legal staff would be asslgred to the
proJect.
2. DemorstratloP of exte!'slve knowledge regardlrg currel'!t
Issues and lltlgatIor affectIng redevelopment bonds.
3. A proposed fee arrapgement based o~ ar hourly rate SUbject
to a maXImum cap of $30,000, wIth fleXIble payment terms.
AddItIonally, thIS fIrm dId not request an option to
reregotlate theIr fee arrangement-at a future date.
4. The fIrm's excellent past worklP-g relatioY'.shIp wIth Blythe,
Eastman, Paine & Webber, the fu'!ancIal cop-suItIng firm
recommended herelP.
5. MorrIson & Foerster's Los Angeles offIce would be
supervIsing all legal work. It IS antIcipated that by USIng
a local fIrm, out of pocket expenses (e.g., travel and
telephone expenses) could be kept to a mInImum. At the same
tIme, MorrIson & Foerster's San Frapclsco offIce could
eaSIly coordInate wIth Blythe, Eastman, PaIne & Webber's San
FranCISCO off1ce If necessary.
6. WIllIam Kramer, the partner who would superVIse all legal
work by the fIrm, has outsta~dlng credentIals and extensive
experIence as bond counsel. He IS well-Informed on all
pendIng 11 tlgatlol" copcernlPg bapd lssuapces in connectloP
WIth redevelopment agenCIes a~d has already presented us
WIth lnslghts as to the outcome of such lltlgatloP,
H'cludlng practIcal suggestlo~s in the event of an adverse
deCISIOI'!. We belIeve that the flrm of MorrlsoP & Foerster
WIll rerder hIgh qualIty legal services IP thIS matter, hold
legal fees and costs to reasonable lImIts, and keep us fully
Informed on all relevant legal Issues.
Services to be prOVIded by bond counsel Irclude draftIng all
resolutIons, notlces and other legal documents required by
CalIfornIa law for Issuance, sale apd dellvery of the bonds;
adVIce and Instructlor'S to the Agency regardIng such Issuance,
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sale and delivery, 1l"'cludp\g tax advice al"d drafting of the Non-
Arbi tr age Cert 1 fic ate j ass 1 stu'!g Agency sta ff at'!d cOl"'sul tar.ts In
preparatIon al"d reView of the OffIcial Statement to be used It"
cot'!~ection WIth the sale of the bOl"ds; reView of a certIfIed
transcrIpt of legal proceedIngs taker. by the Agency al"d the City
for Issuance and sale of the bot"dsj and issuance of a legal
opInion regardll"g the valIdity of the bonds a1"d exemptIon of
Interest on such bonds from state at"d federal Income taxatIon.
BUDGET/FISCAL IMPACT
The fee for fl1"a1"Clal ccpsultant serVIces IS $27,500. Per the
consultant's proposed contract, fees WIll be paId out of bond
proceeds after receipt of saId proceeds by the Age~cy. In the
event that the bonds are I"'ot actually sold no fee will be
charged. Addltlol"'al costs related to the sale of the bOl"'ds
Including prIntIng of the Offlcal Statement, bond insurance,
ratlPg serVices and other Issuance costs are estImated at
approximately $150,000. These costs can be paId out of bond
proceeds. The fee for bond coursel will be approximately
$30,000. SuffICient funds are avaIlable In account number 18-
200-263-128/129-506 of the Agency's FY 1984-85 budget for bOl"'d
cout'!sel. The fIscal Impact of ISSUIng the tax allocatIon bond
Will be discussed In a separate report to the Board, after the
consul tants have ar.al yzed the Agency' S fH'!a~c lal status al"'d the
proposed bond Issue.
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RECOMMENDATION
Staff respectfully recommends that the Age~cy authorize the
ExecutIve Dlrector to negotlate and execute a contract wIth
Blythe, Eastman, Palne, Webber for a fee p-ct to exceed $27,500
a~d to retain the services of Morrisop- and Foerster for a fee not
to exceed $30,000 for the purpose of designirg and issuing a tax
allocatIon bor.d.
Prepared by:
Robert M. Myers
CIty Attorney
MarJorIe MattuccI
Ocean Park ProJect Manager
Ecoromic Developmert DIVISIon
CommunIty & Ecoromlc Development Departmert
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Part ill
Scope of Services
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Scope of Services
The Public Finance Department of Blyth Eastman Paine Webber is experienced in
undertaking the steps necessary to brmg a tax-exempt bond issue to marl(et a?ld would be
res90ns~ble for the effectI ve coordmatIOn of these steps wIth the various parties - the
Agency and staff, attorneys, underwrIters, engl'1eerS, and consultants - involved In the
financmg process. As the A.gency's financial consultant, we would complete the
prelnnnary steps necessary to develop strong public support so that the Bonds or other
Instruments of indebtedness wIll be sold under optimal market conditions.
As financial consultant to numerous tax-exempt debt issuers, Blyth Eastman Pame
Webber prOVides the full scope of consultmg serVIces. These services would accomplish
the tasLcs inherent to each stage of the fmancing process, from developing the financing
structure through marketing and closmg of the debt issue. Though each of the services
rendered IS discussed m reference to a particular stage, many of the services are
accomplished simultaneously.
The outline '...hlch follows is only a g'..llde of the serVIces to be provided by Blyth
Eastman PaIne Webber. It should not be considered as all-inclusive of the services that
our flrTn would prOVide to the Agency In structurmg a successful refundmg bond program.
PROGRAM DEVELOPMENT:
During thIS phase of the process, Blyth Eastman Pame Webber would:
o Provide the Agency with information about the structure of pertinent
finanCIng programs;
o Develop and recommend a prelimInary financing plan which will lead to a
successful financmg and a coordinated approach to meeting the financing
requirements of the Agency; .
o Prepare debt covenants including the earmngs test, accountmg and reporting
requirements and reserve requirements. Suggest such modificatlOns as may
be necessary to achIeve flexlbllity for the Agency and assure a positive
reception With the ratmg services and investors;
o Establish a list of duties of all partIes involved In the fmancing and develop a
time schedule for the sale of debt Instruments gwmg consideration to cash
needs, market condItions, availability of finanCIal data and engi-
neermg/consultant's prOJections;
o Discuss, at the directlOn of the Agency, the fmancing program With mter-
ested partIes such as lnstItutlOnal and retaIl mvestors, and local dealers; and
o Use our firm's computer capabll1ty to test the economics of the proposed
program through cash flow estimates based on assumptions regardmg SIze,
mterest rates, or relnvestment of funds.
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FINANCING PLAN:
DurIng thIS phase of the process, Blyth Eastman Pame Webber would:
o Prepare an outline regarding the extent of the reports needed to support the
financmg. Such reports ',villmclude cash nov" of the bonds;
o Hold discusSlOns wIth Agency staff concerning cash flow requirements for
proposed financmg;
o Consult WIth the Agency and bond counsel regarding the legal requirements
related to the structure of the debt issue, the overall fmancing objectives,
and the procedures for the debt sale;
o Provide the Agency With recommendations for the type of debt instrument,
the type of sale, its tlmmg and amount m l1ght of the program to be financed
and the market factors likely to affect such timing;
o Compute estlmated debt service and reserve fund requirements; and
o Prepare for the Agency a schedule of recommended investment securities
with approprIate maturity dates for the investment of funds within the
framework of its construction cash flow requirements.
SUPPORTING DOCUMENTS:
Durmg thIS phase of the process, Blyth Eastman Pame Webber would:
o
Work with the Agency. Bond Counsel and other advisors to prel?are reports
and documents necessary to support the ISsuance of debt, including the
development of cash flow and debt serVlce projections and redemption
features and suggest other techmcal fInancmg features as deemed
approprIate to enhance marketabIlity of the debt;
o
Consul t and assist the Agency and Bond Counsel in the preparatIon of the
legal documentatIon necessary to support the debt issue;
o In cooperation with the Agency, prepare the text or the Official Statement
describing the debt, the revenues, security features, proposed construction,
and other information deslgned to pravlde analysts, mvestors and the rating
serVIces WIth adequate disclosure of a material nature;
o Work with the Agency, Bond Counsel, and other related parties, to finalize
the OffiCIal Statement; and
o
ASSIst t."e Agency In prmtmg and dIstrIbuting the Official Statement to
prospectIve under'.'oJTIters and mvestors.
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llARKET DEVELOPMENT:
During this phase of the process, i31yt!l Eastman Paine Webber 'Nould:
o ProvIde the debt ratmg servIces with information necessary for them to
analyze the fI:1ancIal soundness of the Agencyrs proposed financmg pro~am,
and discuss the security of t1'1e debt Issue with their analyst in order to obtaIn
the highest possibLe credIt ratmg;
o Arrange and attend meetmgs mvolving appropriate representatIves from
Agency staff, Bond Counsel and the ratmg agencIes;
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Arrange and conduct pre~ale information meetings for prospective under-
wrIters and institutional/retaIl investors in principal financial centers as
approved by the Agency;
o Provide trade publications '.'lIth mformatlOn regardIng the Agencyrs financmg
schedule and proposed debt sale cates:
o Answer questions from potentIal Investors and underwriters regardIng the
debt issue;
o Arrange for the printing and maIlmg of debt sale documents to a compre-
henSive 11st of underWriters, InstitutIOnal investors and investment adVisors;
o Fallowing consultation 'Nith the Agency's Bond Counsel and other consultants,
arrange to prmt and distribute the OffiCIal Statement.
DEBT SALE:
During this phase of the process, Blyth Eastman Pame Webber would:
o Analyze market climate in the p.erIod preceding the debt sale;
o Determme the best method for' marketing the debt under mar'<et conditions
eXISting at the time of the sale; and
o Provide mformatlOn to the Agency concerning the market climate, active
investors in the munici;?al market during the sale period, and other tax-
exempt issues scheduled for sale durmg such peri.od.
FOLLOW-UP:
DUring the perIod after the sale of the Agency's bonds, Blyth Eastman Paine
Webber would:
o Prepare a schedule of recommended Investment securIties for the Investment
of funds wlthm the fram ework of the Agencyts reqUlrem ents and assist the
Agency in the placement of such funds;
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o AsSIst t;,e _-\gency 1'1 establls'll'1g fmanclal a.nd o!?eratlng systems :::-l'ch 'nil
help insure complIance ''11th the resolution of Issuance requIrements, I.R.S.
regulations and program goals;
o Adv1se the Agency of ne'.'1/ financing techniques as they are developed; and
o Provide perIOdIc analysis of market conditrons as they relate to future sales
and keep the Agency mformed of current market prtces on its outstanding
debt issues.
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Monitor finanCIal operations of the Agency and adVIse the Agency of ways to
'j?rotect and/or Improve its credit rating.
:\1arket permitting, we estimate that development of a VIable bond program could
be accomplIShed WIthin 60 days and that a bond sale and delivery of funds could be held
wIthm 90 days follOWIng final approval of the financing plan.
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CM:JHA:JJ:mmm
City Counc11/Redeve~ment Agency:
Santa~n1ca. Cal1fornia
4/6/82 ..
TO:
Redevelopment Agency
1/ t/ r' () CJz
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FROM:
SUBJECT:
City Staff
Proposed Settlement Agreement wlth Llncoln Property
Company
Introduction
This report transm1ts a proposal for a settlement agreement w1th
Lincoln Property Company and recommends that the Agency authorlze
the staff to enter 1nto a settlement agree~ent and fl1e for an
amended Coastal Development Perm1t.
The report also recommends
that Staff in conjunction with commun1ty representat10n begln
plann1ng for the construction of affordable housing and the
des1gn of parks and other neighborhood fac1l1t1es.
The Staff ;s recommendlng this settlement because It would
provide for a project with reduced denslty. lower build1ng
height, greater setback, on-site affordable housing, and $7
million dollars to be used for a varlety of ne1ghborhood
improvements.
The Staff 1S fully cognizant of the concerns of
Agency Members and the communlty about the impact of thlS proJect
on its surround1ng neighborhood. Aspects of this project. eve~
1n thlS substant1a1ly mod1fled verslon, do 1n fact raise
d1fflcult and complex questlons. Absent pressure of an eX1st1~g
contract and the resulting lawsuit, lt lS unl1kely that staff
would be recommending that th1S proposed development proceed in
the form currently under conslderation.
Howevery 1n review1ng
the recommendat1on of staff, 1t lS lmportant to consider:
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1. ThlS recommended settlement represents compromlse on the part
of Lincoln Property Company and on the part of the
Redevelopment Agency.
2. This compromise is the result of dlff;cult and lntense
negot1atlons. Addltional open space, less denslty or
malntenance of the golf course, can only be pursued through
sustalned, costly and dangerous litlgatlon.
3. The compromlse has been developed wlthin the restraints of the
Coastal Commission pertaining to housing, beach access and
recreatlon facillties.
4. The prlmary alternative to thlS settlement is lltigat1on.
Glven the serious flnancial r1sks, staff recommends aga1nst
th1S possible alternat1ve. Also, fallure to prevail 1n the
courts could result 1n the project belng bUllt 1n accord w1th
the current contract, an eventuallty not in the best interest
of the Agency, the City, or the neighborhood.
5. Members of the C1ty Counc1l and the Agency have expressed a
strong abld1ng commltment to affordable housing 1n an altered
economlC and regulatory environment. Th1S settlement
maintains and enhances the Cit~ Councll.s commltment by
providlng access to the site to households of dlvergent
economic means.
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Background
In 1958 the City Council appointed the Redevelopment Agency and
entered into agreement with the Federal government to provlde
urban renewal assistance for the Ocean Park redevelopment
project.
In 1960 the Agency approved a redevelopment plan consisting of
high density-high rise resldential, office and hotel uses; and
proceeded with acquisition, relocatlon, demol,tion and site
lmprovement activ1tles.
In 1962 the Agency entered into a land Dispos1tion Agreement with
Kern County Land Company.
In 1965 the developers, Kern County
construction on the first installment, a
Santa Monica Shores Towers.
and Del Webb commenced
5 acre parcel known as
After four years of delays 1n develop1ng the balance of the
project, the Agency approved the transfer of Kern County's
1nterest to Crescent Bay Propertles 1n 1969. Followlng three
additional years of project inactlvity, the Agency declined to
renew Crescent Bay's contract and executed a new land D1Sposition
Agreement 1n 1972 with a Substltute developer, HFH Ltd. to
construct 1400 un1ts of rental housing.
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In 1973 the South Coast Reglonal CommiSS1on denled HFH1s Coastal
Development Perm1t. Upon appeal, the State Coastal Comm1ss1on,
by an unanimous vote, upheld the Regional Commission1s decis1on.
The Commission recommended that the Agency reduce the number of
housing un1ts from 1400 to 400, prov1de a min1mum 6 acre on-s1te
publ1C park, and construct 100 un1ts of low and moderate lncome
senior c1t1zen hous1ng. HFH was unable to comply and filed a
SU1t against the Coastal Comm1ss1on.
In 1975 the Agency approved a $415,000 settlement agreement to
remove HFH as project developer thereby ending two years of
litigat1on. (By 1975 the proJects indebtedness to the Federal
government exceeded $6 mill10n dollars and resulted 10 annual
interest cost to the Agency of $400,000). The Agency then, using
the Coastal Commission development standards of 400 maximum
housing un1ts and a 6 acre public park, solicited proposals from
Qualif1ed developers. The campet1tive process resulted 1n t~e
selection of the hlghest bidder, Lincoln Property Company, from
among seven developers. Lincoln's proposal included a land
purchase pr1ce of $4.6 million dollars. The Agency applied to
the South Coast Reglonal Commisslon In 1976 and rece1ved
condit1onal approval for construct1on of 397 condaminimum un1ts.
Upon appeal of the Reglonal Comm1ss1on's Conditlonal Approval,
the State Coastal Commission in 1977 unan1mously approved a
Coastal Development Permit for the construct1on of a two-phase
condomlnlum project and required that a publlC park lncluding
beach accessway be installed; that a hOUslnq ass1stance and
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rehabilitatlon program be provided; that the 27 unit City-owned
apartments at 175 Ocean Park Boulevard be rehabl11tated; and that
other public improvements including 1andscaplng of beach parklng
lots be undertaken. A copy of the Coastal Development Permit 15
included as Attachment I.
Followlng the Coastal Comm1s51on's approval, the project rece1ved
prelimlnary plan approval from the Santa Monica Arch1tectura1
Review Board and the Plann1ng Comm1ss1on, and tentative and final
tract map approval from the City Counc11. A land sales agreement
encompasslng Phase I and II of the proJect was executed and
construction of Phase I cons1sting of 187 condominimum units
began in 1978. The Agency then, using a combination of land sale
proceeds, Federal funds and a loan from the City reduced the
project debt to the Federal government to the current level of
$1.5 million dollars.
On February 24, 1981, the L1ncoln Property Company, 1n order to
proceed w1th the development of Phase II of the proJect,
requested the Redevelopment Agency to join Lincoln Property
Company in subm1tting an amendment to the Coastal Development
Permlt. The essence of the proposed amendment was to lncrease
the number of low and moderate lncome houslng unlts to be
provided by the developer, and to uncouple the remaining
obligations of the developer from those of the CltyfAgency.
Lincoln's letter was considered by the Agency on March 10, 1981
and August 25,1981. The Agency, however, because of substantlal
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community oppos1t10n to the project under contract~ did not
support Lincoln Property Company's amendment.
On April 3~ 1981, Lincoln Property Company filed a monetary cla1m
against the Redevelopment Agency and the C1ty 1n the amount of
$20 mlllion dollars. Lincoln's c1a1m was followed by a $23
m11110n dollar laWsu1t ag1nst the C1ty and the Agency ln
September, 1981, claim1ng that the C1tyjAgency falled to comply
wlth earl1er agreements and made 1t lmposs1ble for Llncoln
Property Company to proceed wlth the second and f1nal phase of
ltS development. On September 8, 1981, the Agency retalned the
flrm of OrMelveny and Myers to examlne the C1ty and Agency's
legal positlon with respect to cancellatlon of the contract with
Lincoln Property Company. After reviewing O'Melveny's report, lt
was the opinion of the staff, concurred by the Agency, that
negotiations rather than l1t1gation was in the best lnterest of
the Agency. The City/Agency therefore directed 1ts staff to
commence negotiations w1th L1ncoln Property Company and seek
concessions to modify the proJect and respond to many community
concerns expressed at various publ1C meetings.
The Agency staff, follow1ng numerous meetlngs with Llncoln
Property Company and some sixteen meetings w1th var10US community
groups over a four month period has reached a tenat1ve settlement
agreement.
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PrOject Revisions
Following is a llst of proposed revislons tentatlvely agreed upon
by the Staff and llncoln Property Company and graphically shown
on the accompanYlng attachments.
1. The total number of units is 150 (124 mldrlse condominlums
and 26 townhomes). ThlS is 8 units (or 5%) less than the
158 provlded for in the original contract project.
2. All lofts have been ellmlnated from the uppermost mldrlse
project and the entire midrise portion of the project has
been reconfigured to three and four story bUl1dings. The
north building along Ocean Park Boulevard 1S three stor1es
and the south two build1ngs are four storles. There are six
loft unlts that remain along the Barnard Way elevation;
however, because of the lnternal stepping of the project;
the roof of these lofts does not vlolate the helght
reduction noted above.
3. The mldrise project has been moved ndownhill" toward Barnard
Way and the effective helght is reduced by one add1tlonal
story.
4. The overall height as noted 1n paragraphs 12 and #3 has been
reduced by 27 feet at the north building and 18 feet at the
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four story buildings. Th1S is a 43% - 29% reduct10n from
the approved contract project as viewed from Neilson Way.
5. The corner of the three story north bU11ding located at
Ocean Park Boulevard and Barnard Way 1S further reduced to
two stories. This will provlde a transition from the
eX7sting one and two story nelghborhood to t~e north. The
south corner of the south building will be reduced to three
stories (from four storles), providing a slmilar transit10n
to the two and three story townhomes.
6. The Neilson Way. property llne for the mldrise project is
moved 165 feet toward Barnard Way. The resulting area is
being proposed for the new construction of affordable
hous1ng. The parceT area is approximately 165 feet x 400
feet, or 1.5 acres.
7. The building setback along Ocean Park Boulevard is increased
to 18 feet from the approved contract scheme of 10 feet.
This area wilT be devoted to landscap1ng to further enhpnce
the environment. The mlnlmum bUllding setback along Barnard
Way 1S 18 feet and will vary up to 28 feet. The setback at
the Ocean Park Boulevard/Barnard Way corner 1S 24 feet.
8. The south bU1lding 1S reversed (or flipped). This will
minimize the "walT" effect on the southern slde of the
midrise project WhlCh is apparent in the contract scheme.
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9. The main entrance/exit to the project wl11 be off Barnard
Way. It 1S the Clty'S 1ntent to close Barnard Way and
reduce the street to two lanes where it accesses Sea Colony
3. If this plan 1S not completed, an access across the
existing meridian strip will be requlred. There wl1l be a
secondary entry/exlt off Ocean Park Boulevard. There wl11
be no vehlcular access off Neilson Way as provided for 1n
the contract scheme.
10. The resulting public park to the south of the townhomes is
approxlmate1y 360 feet x 250 feet (about 2.06 acres). Th15
1S in addition to 1.5 acres of open space w1thin the project
area. A tennlS complex 1S proposed for th1S area which
relates to the east/west pedestr1an accessway. There 15
suffic1ent area for four north/south orlented tennls courts
and four paddle tenn15 courts or flve tennis courts and no
paddle tennlS courts.
11. Solar asslst will be provlded for the domestic hot water and
swimming pool of the rnidrise bUl1ding. The solar panels
located on the roof will be archltecturally screened.
12. The garage for the m1dr1se bui1d1ngs w111 be naturally
ventl1ated wherever possible to further provlde signlflcant
energy savings.
13. There ;s minimal shadowlng effect from the mldrise bUlldlng
on the homeowners to the north of the project under the
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settlement scheme. Durlng the summer, there is no shadowlng
at 7 a.m. (P.S.T.). Durlng the spring and fall, only
three units are shadowed at 7 a.m. (P.S.T.) and those units
are in full sun at 7:30 a.m. In the wlnter, on the
shortest day of the year, only two units are 1n shadow at 9
a.~. (P.S.T.). They are in full sun by 9:30 a.m. prior to 9
a.m.t the north tower of Santa Mon1ca Shores shadows
everyone.
Financial Conslderatlons
The proposed settlement would 1nclude a payment of $7 m1llion
w1th $2.25 mlll10n to the Clty at the start of construct10n and
$4.75 m1llion to be pa1d by Lincoln Property Company w1th1n nlne
months after a certificate of occupancy 1S 1ssued. These mon1es
can be used for housing, parks, street and parking lmprovements,
and a wide ranqe of related neighborhood needs. The Clty wlll
rece1ve approxlmately $500,000 in condomlnlum permit fees. The
Agency will rece1ve $2.1 mllllon for the land. Tax 1ncrements
generated by the total proJect wll1 Y1eld an est1mated $1 ml1lion
a year. Debt repayments for the proJect amount to $2.3 mlll1on.
In addition, the proJect will contrlbute $12,200,000 mlllion 1n
constructlon payroll. See Attachment II for a more detailed
flnanclal analysls. The proposed beach parklng lot improvements
shown on the accompanying concept slte plan merely lllustrate one
example of how the beach lots can be lmproved. The staff lntends
to work very closely wlth the commun1ty groups to develop
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speclfic plans for all off-slte lmprovements includlng park
developments, landscaping and parklng and traffic clrculation
plans. The affordable houslng component of the proJect wll1 also
require addltional Community lnput.
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Recommendatlon
Staff recommends the Clty Councll and Agency authorize the Clty
Attorney/Agency Counsel and the Clty Manager/Executlve Director
to enter lnto a settlement agreement wlth Llncoln Property
Company; file for and obtaln an amended Coastal Development
Permlt; and commence worklng wlth the communlty groups to develop
speclflC
plans for all off-slte lmprovements and for the
affordable houslng program.
PREPARED BY:
John H. Alschuler
City Manager
JOHN JALILI
Assistant Clty Manager
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