SR-414-002 (7)
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C/ED:EDD:SW:lw
Agency/Council MeetIng 09/11/84
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Santa Monlca, CalifornIa
11- :e
TO:
Redevelopment Agency Boa~d/City CouncIl
sep 11 1984
FROM:
Cl ty Sta ff
~
SUBJECT: Recommend atlon to Adopt an Ocean Park Flnanc ing PI an
and Necessary ResolutIons to Authorize the Issuance of
Tax Allocation Bonds to Finance project Improvements.
INTRODUCTION
ThlS repo!"'t transmIts 1) a fl'1anclng plan for the flnal phase of
the Ocean Park Redevelopment ProJect; 2)
a resol utlon
authorizIng the Issuance of $5,700,000 of tax allocatIon bonds to
assIst In fInancIng necessary p!"'oJect Improvements; and 3) a
re sol ut ion and suppor t doc uments author 1 Zl ng the In v Ita tion of
proposals for the pu!"'chase of Ocean Park Tax AllocatIon Bonds.
BACKGROUND
The fInal phase of the Ocean Park ProJect requI!"es the
development of market rate housIng, an on-sIte park, off-site
beach Improvements and affordable housIng.
On J a n u a r y 24, 1 9 84 I
the Agency/CouncIl was advIsed by staff of the need to bond
eXIstIng tax lnc~ements from the Ocean Park Project to assist In
fInanCIng necessary proJect Improvements.
At Its May 8, 1984
meetIng, the Agency/CouncIl approved a contract for bond consel
WIth MorrIson & Foerster and a contract for fInanCIal consultant
serVIces WIth PaIne Webber.
Slnce that tlme staff has been
receiving aSSIstance from these firms 10 preparIng the attached
tax allocatIon bond offerIng for Agency/Councll conslde!"'ation.
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SEP 11 194
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DISCUSSION
Land sale proceeds, developer payments, and bond proceeds from
tax increment revenue are available to finance the flnal phase of
Ocean Park Redevelopment proJect. Agency fInanCIal consul tants
have est1mated that there 1S suffiCIent tax Increment avaIlable
from the Ocean Park project to finance a Tax Allocatlon Bond of
$5,700 J 000. Once necessary fees, reserves and re 1 ated expenses
have been paId, the Agency should net $4,049,750 to fInance
necessary pr-oJ ect Impr ov emen ts. Thl s estImate IS lower than the
or1gInal estimate of $5,000,000 of net bond revenue WhICh was
presented to the Agency/Council on January 24, 1984. The
or1gInal est1matlon was performed WIthout the benefit of a
detaIled fInancial consultant analysls. ThIS decrease in net
bond p"'oceeds w1II not have a negatlve effect on the
implementation of the Ocean Park PrOject as there are suffIcient
funds ava1lable 1n the Ocean Park Fund Balance from WhICh to
supplement the existIng sources of funds.
The follOWing fInanCing plan detalls the projected revenues and
expenses necessary for ImplementIng the final phase of the Ocean
Park Redevelopment ProJect. It should be noted that each of
these Items, With the exceptIon of the revised bond proceeds
amount, has been previously adopted by the Agency/Councll as part
of the FY 1984-85 budget.
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P\ojected Revenues and Expenses:
PrOJect Revenues:
Land sale proceeds
Develope~ payments
Tax allocat1on bond net proceeds
Traff1c grant (Hazard ElimInatIon
a~d Safety Grant)
Ocean Park Fund Balance (Contrlbut1on)
Total Revenue
PrOject Expenses:
Percent for the A~ts
On-SIte Permanent Park construction
Beach Plan constructIon (Includes
ContIngency)
Affordable HOUSIng (Agency ContrIbutIon)
Total Expense
$ 2,139,000
2,000,000
4,049,750
49,500*
340,650
$ 8,578,900
$ 10,000**
544,500
4,524,400
3l500,OOO
$ 8,578,900
* App~oprIated 1n Cap1tal Project 416-908 (M1scellaneous Grants
Fund)
** Part of $46,300 app~oprIated In Capital prOject 560-902
(Redevelopment Fund)
The Ag e n c y I S f 1 n an c 1 a 1 bon d con s u 1 tan t , Pal neW ebb e r , has
formulated a schedule for the Issuance of the Ocean Park Tax
Allocation Bonds. Thls schedule reqUIres that the Agency/CounCIl
take certaIn actions on September 11, 1984 and complete
addltIonal actlon on October 9, 1984. The bond documents wh1ch
and 1n c 1 ud e :
reqU1re Agency actlon at thIS tIme are attached to thIS report
1) a resolut1on WhICh author1zes the 1ssuance of
$5.7 m1ll1on 1n bonds and sets the procedure and cr1terIa to
affect the placement and subsequent retirement of the bonds; 2) a
resolutIon whlch sets the tIme and place for rece1pt of proposals
to purchase bonds and authorIzes the Sec~etar-y of the Agency to
take r-equ1red actIons prIor to the receIpt of bond purchase
p~oposals; 3) an OffICIal Statement WhICh outlInes pertinent bond
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InformatIon to p"'ospectIve bond buyers; and 4) wrItten consent
by the Agency to the fInancial consultant (PaIne Webber,
Incorporated) allowIng them to bId on the bonds. The Official
Statement IS a supplemental document and IS offIcially approved
by the fo~mal adoptIon of the attached bond resolutIons.
At the October 9, 1984 meetIng, the Agency/City Council WIll be
requested to accept the most economical bId proposal to pu~chase
the Ocean Park Tax AllocatIon Bonds. Agency/City Council
acceptance of the bId Will complete the offIcIal actIons reqUIred
to place the Ocean Park Tax AllocatIon Bonds. The net bond
proceeds WIll then be depOSIted In the app~opriate Agency
accounts and WIll be made avaIlable to assIst In financIng the
necessary p~oJect Improvements.
FISCAL IMPACT
AdoptIon of the attached bond resolutIons IS WIthIn the
approprIation authorIty granted the Redevelopment Agency as part
of the FY 1984-85 budget. Funds for the conStructIon of the
Beach Plan have been budgeted In account numbers 18-720-263-000-
906, 01-720-263-000-910, and 15-720-253-725-902. Addl tlonal
funds for the Off-SIte HOUSIng have been budgeted in account
number 18-720-253-000-905 and 01-720-263-000-910. Necessary
funds to develop the On-SIte Permanent Park have been budgeted In
account numbe!"' 18-720-263-000-904. It WIll be necessary,
however, to reduce revenue account number 18-934-252-000-000 by
$950,250 to reflect the antICIpated decrease ln net bond
proceeds.
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RECOMMENDATIONS
Staff recommends that the Agency:
1. Adopt a Resolution of the Redevelopment Agency of the CIty
of Santa Monica autho~lzlng the lssuance of $5,700,000 of
bonds to flnance portlons of the cost of Ocean Pa~k ProJects
No.1 (a) and No.1 (b);
2. Adopt a Resolution of the Redevelopment Agency of the CIty
of Santa Monica auhtorlZng the InVltation of proposals for
the purchase of tax allocation bonds; and
3. Dlrect the Secreta~y of the Agency to execute and de11Ver to
PaIne Webber Incorporated a WrItten Consent pursuant to
general Government Code Sub-Sectlon 53691 (c)(2) 1n
substantlally the form attached hereto.
4. Reduce revenue account number 18-934-252-000-000 to
$4,049,750.
Staff recommends that the CIty Councll reduce revenue account
number 18-934-252-000-000 to $4,049,750.
Prepared by: Ernesto R. Flores, Manager
SIdney L. White, PrOJect Manager
~onomlc Development Dlvlslon
CommunIty & Economlc Development Department
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LIST OF ATTACHMENTS
A. A Resolutlon of the Redevelopment Agency of the City of
Santa Monlca authorlZlng the lssuance of $5,700,000 bonds of
sald Agency to flnance portlons of the cost of redevelopment
projects known as Ocean Park P~oJects No. 1(a) and No. 1(b).
B. A Resolut1.on of the Redevelopment Agency of the City of
Sa~ta MonIca autho~lzlng the lnvitation of p~oposals for the
purchase of tax allocation bonds of sald Agency.
C. OfflCla1 Statement relatlng to $5,700,000 Ocean Park
Redevelopment Project Tax Allocatlon Bonds, SerleS 1984.
D. Wrltten Consent pu~suant to Government Code Sub-Sectlon
53691 (c)(2).
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