SR-414-002 (9)
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CIty CouncIl Meet~ng 5/8/84
ParkIng Author~ty
Redevelopment Agency
Santa MonIca, CalIfornIa
TO:
Cl.ty Counc~l
Parking Authority
Redevelopment Agency
FROM:
C~ty Staff
SUBJECT:
RecommendatIon to Conduct PublIC HearIng,
Approve ResolutIons, Lease Agreement and
Payment Agreement to Effectuate the Renovation
of 175 Ocean Park Boulevard
INTRODUCTION
ThIS report transmIts a proposed resolutIon and a Lease Agreement
for approval by the ParkIng AuthorIty and a Payment Agreement and
authorIzIng resolutIons for approval by the ParkIng AuthorIty and
Redevelopment Agency WhICh are necessary to effectuate the
rehabilItatIon of ParkIng AuthorIty-owned property located at 175
Ocean Park Boulevard, Santa MonIca. A CIty CouncIl resolution
approvIng the expendIture of funds for off-sIte replacement
housing IS also attached for adoptIon. This report reVlews the
background of the proJect, the terms and condItIons of the
proposed lease and payment agreement and recommends approval by
the respectIve CIty agencIes.
Relocatlon assIstance IS also
requested.
PROJECT OVERVIEW
The ParkIng AuthorIty owns the property known as 175 Ocean Park
Boulevard, WhICh IS a 28,00@ square foot parcel Improved by two
structures contaInIng a total of 27 rental unIts.
The structures
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were relocated from the Promenade In Ocean Park to theIr current
sIte In 1963 to provIde 'housIng of last resort' for persons
d1splaced by Urban Renewal actIvItIes. Although InitIally fully
occupIed, the bUIldIngs have been in very poor condItion for
several years and are no longer hab1table.
To provide for the rehabIlItatIon of thIS proJect by the HousIng
AuthorIty of the County of Los Angeles, thIS report proposes that
the ParkIng Author1ty enter Into a lease WIth the Housing
AuthorIty whIch WIll then proceed to renovate and operate the
property. Due to federal fundIng constraInts, the HousIng
AuthorIty does not have suffICIent proJect Income to compensate
the ParkIng AuthorIty for the faIr market value of the leasehold
Interest. ThI S repor t therefore proposes tha t the Redeveloprnent
Agency supplement the HousIng AuthorIty's payment to brIng the
Park1ng AuthorIty's revenues up to the fair market value of the
leasehold as determIned by independent appraIsal of the property.
A Payment Agreement between the Redevelopment Agency and the
ParkIng Author1ty 1S attached for this purpose.
DISCUSSION
On February 16,1977, the Redevelopment Agency obtaIned a
Coastal Perm1t for the development of the Ocean Park
Redevelopment Area. One of the condItions of the origInal
Coastal Development Permit WhICh remaIns to be fulfIlled under
the amended permIt now In effect is the rehabilItatIon of 175
Ocean Park Boulevard. The Coastal Permit specifIes that the
Agency 1S reqUIred to cause the renovatIon and operatIon of the
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property as affordable housing for persons and famIlIes of low to
moderate Income for a perIod of not less than thIrty years.
To aSSIst the Redevelopment Agency In meetIng Its Coastal PermIt
oblIgatIons, the CIty and the CIty'S Housing Authority entered
Into agreements WIth the HOUSIng Authority of the County of Los
Angeles (HACoLA) enablIng It to seek and obtaIn financing for the
renovation and operatIon of the property. In recognitIon of the
fact that thIS site has been used for reSidential purposes since
1963, the Parking AuthorIty adopted ResolutIon 158 whIch declared
the property surplus and authorIzed its transfer to a publIC
agency for the prOVISIon of affordable hOUSing. ResolutIon 158
reqUired that the property be transferred at Its appraised value.
Subsequent to these actions by the varIOUS City agenCIes In 1980,
HACoLA has obtaIned a $990,000 fundIng commItment from the U.S.
Department of HOUSIng and Urban Development (HUD) for the VIrtual
reconstructIon of the Improvements. All necessary City and
Coastal CommISSIon permIts have been obtaIned to enable the
HOUSIng AuthorIty to renovate the complex and prOVIde 22 aSSIsted
unIts. The north bUIldIng WIll provide ten unIts for senIor
CItIzens and the south bUIldIng Will prOVide twelve unIts for
famIlIes. The prOVISIon of large famIly hOUSIng, as reqUired
under the Coastal Permit, necessItated a reductIon In the number
of unIts on the SIte from 27 to 22. FinaliZIng SIte control IS
the last action necessary to permIt HACoLA to put the project out
to bId and execute the documents for permanent fInanCIng. There
is one tenant remaIning on the SIte who WIll be relocated and
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receIve relocatIon benefIts durIng the four months prIor to
constructIon. ThIS issue IS discussed In a later section of this
repor t.
The remaInder of this report reVIews the documents proposed for
approval by the Parking AuthorIty and Redevelopment Agency WhICh
will effect the fulfIllment of Coastal CommISSIon condItIons and
address the terms speCIfIed by the ParkIng Authority to make the
SIte avaIlable for thIS purpose.
Proposed Lease and AuthorIZIng Resolution
The prOVISIons of the attached lease by and between the ParkIng
AuthorIty and the Housing AuthorIty of the County of Los Angeles
are summarIzed as follows:
o Term
As reqUIred by HUD, the term of the lease is 50 years
WIth a 25 year option to extend.
o Rent
A one tIme rental payment WIll be due from the HOUSIng
AuthorIty upon the Issuance of a NotIce to Proceed which In
no event WIll be less than $75,000. The rent payment is
equal to the dIfference between the maximum total development
cost under HUD gUIdelInes and the actual total development
cost of the proJect. Staff estImates that the actual sum to
be paId WIll range between $75,000 and $111,000, dependIng
upon total development costs established at the completIon of
the proJect. The Payment Agreement, descrIbed below,
prOVIdes the ParkIng Authority with compensatIon to make up
the dIfference between the rent paId by the HOUSIng AuthorIty
and the appraIsed value of the leasehold as adJusted by the
Consumer PrIce Index on an annual baSIS.
o Use
The property may only be used for reSIdentIal rental
purposes.
o SubordInatIon
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As the bUIldIngs must be vacant prIor to the start of
constructIon, staff has developed a relocatIon plan InvolvIng
relocatIon and human serVIces consultants to facIlitate this
tenant's transItIon to a new home.
The relocatIon consultant
WIll fInd a replacement unIt, make arrangements for movIng, and
coordInate wIth staff in provIdIng other relocatIon assistance as
required under the UnIform RelocatIon Act.
The Ocean Park
CommunIty Center profesSIonal staff wIll provide counselIng
support and advocacy serVIces to address this IndIVIdual's
per sonal needs.
To allow the reconstructIon of thIS proJect to commence and brIng
22 substantially refurbIshed unI ts onto the market place, staff
is seekIng the follOWIng:
o AuthorIzatIon enablIng Agency Counsel to take legal
actIons necessary, IncludIng filIng an Unlawful DetaIner
actIon to recover possession of the last unIt at 175
Ocean Park Boulevard occupied by a tenant.
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AuthorIzatIon to contract with Port
Incorporated for relocation serVIces
relocatIon payments on behalf of the CIty.
and Flor,
and to make
The Agency/City/ParkIng AuthorIty has receIved the necessary
ExemptIon and Removal PermIts from the Rent Control Board to
proceed In this fashion.
The costs of these relocatIon actiVItIes are projected at
$16,000. Ten thousand dollars ($10,000) IS avaIlable from the FY
1983-84 budget and staff IS requestIng that an addItIonal $6,000
be approprIated during the current fiscal year.
SuffiCIent funds
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The lease, other than the ParkIng AuthorIty's
reversionary right to the property, IS subordInate to the
federal fInanCIng contract and HUD regulations regardIng the
management and operation of the property.
The lease also contaIns prOVISIons to hold the ParkIng AuthorIty
harmless against claIms arISIng from the management or operation
of the property.
A resolutIon approving the lease and
authorIZIng Its execution by the ExecutIve Director IS attached
for approval by the ParkIng AuthorIty.
Payment A9reement
As ParkIng Authority Resolution 158 reqUIres that the SIte be
transferred at Its appraIsed value, an appraIsal of the SIte was
conducted by an MAl appraIs~r.
The value IndIcated from reVIew
of comparable propertIes and economic analYSIS was $770,000 for
the purpose of sale, and $77,000 for the conveyance of a
leasehold interest.
The Payment Agreement proposed for approval
by the Redevelopment Agency and ParkIng AuthorIty IS structured
to prOVIde compensatIon to the ParkIng AuthorIty for the
appraIsed leasehold value of the SIte.
The terms of the Payment Agreement are descrlbed brIefly as
follows:
o Term
The term of the payment IS concurrent WIth that of the
lease WIth the HOUSIng Authority.
o Payment
The Redevelopment Agency WIll make annual payments to the
Parklng AuthorIty equal to the difference between the
appraIsed leasehold value adjusted by the annual change In
the Consumer PrIce Index and any rental income received from
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the HousIng AuthorIty. SInce payment from the Housing
AuthorIty IS antIcIpated for the fIrst year only, it IS
lIkely that all subsequent payments wIll be made In full by
the Redevelopment Agency.
ResolutIons approvIng and authorIzIng executIon of the Payment
Agreement are attached for Redevelopment Agency and ParkIng
AuthorIty approval.
To enable the Agency to expend funds
pursuant to the Payment Agreement, resolutIons fInding that the
prOVISIon of off-sIte replacement housing is of benefIt to the
Redevelopment Project are attached for Agency approval. Two
resolutIons are requIred because the Ocean Park Redevelopment
ProJect IS comprIsed of two separate tax allocatIon areas. As
Council concurrence is requIred when hOUSIng IS to be provIded
off-site, Council ResolutIons to thIS effect are also attached
for approval.
RelocatIon of RemainIn9 Tenant
PrIor to the start of relocatIon actIvItIes, four tenants reSIded
at 175 Ocean Park Boulevard.
Three of these reSIdents have
vOluntarIly vacated over the past eIghteen months and have
receIved relocatIon benefIts, rental assIstance, movIng
assIstance, and have moved to new quarters.
Port and Flor, Inc.,
relocatIon consultants to the Agency, have not had sImilar
success wIth the last remaInIng tenant and belIeve that it IS
lIkely that It WIll be necessary to fIle an Unlawful DetaIner to
Induce thIS tenant to accept assIstance In fIndIng and In movIng
to a new reSIdence.
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from the FY 1983-84 Agency budget are avaIlable for thIS purpose.
SIdewalk ConstructIon
The CIty tYPIcally requIres developers to provIde sIdewalks In
conJunctIon wIth maJor constructIon proJects, and sidewalks have
been deSIgned for thIS partIcular project.
However, the
CooperatIon Agreement between the CIty and HousIng AuthorIty
provIdes that the HousIng AuthorIty may elect to have the CIty
undertake sidewalk constructIon and compensate the CIty for thIS
serVIce. HOD and HACoLA have recently notIfIed staff that CIty
constructIon of the SIdewalk WIll be necessary.
As prIor
dISCUSSIon on the Lease payment indIcates, suffIcient federal
fundIng may not be avaIlable for thIS purpose.
Staff WIll
therefore propose InclusIon of $6,000 In the FIscal year 1984-85
Redevelopment Budget for SIdewalk constructIon.
FINANCIAL/BUDGETARY IMPACT
ParkIng AuthorIty approval of the attached documents WIll have
the follOWIng budgetary Impacts:
o ReceIpt of rental revenues from the HOUSIng Authority of
County of Los Angeles ranging from $75,000 to $111,000
In FY 1984-85; and
o Receipt of payment from the Redevelopment Agency rangIng
from $0 to $2,000 In FIscal Year 1984-85, and annual
payments equal to the full appraIsed value of the
leaseho ld thereafter.
The DIrector of FInance WIll deSIgnate a revenue account number
for these receIpts.
Redevelopment Agency approval of the Payment Agreement WIll have
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the budgetary Impact IndIcated below:
ExpendIture of funds in an amount rangIng from $13 to
$2990 In Fiscal Year 1984-85, and annual payments to the
ParkIng AuthorIty equal to the appraIsed value of
the leasehold adJusted by the CPI thereafter for the
term of the Payment Agreement.
The DIrector of FInance WIll aSSIgn a lIne Item WIthIn the 18
Fund (Ocean Park Redevelopment Project) for thIS expendIture.
In addItIon the completIon of the project wIll Involve the
follOWIng expendItures:
o Increase In approprIatIon authorIty for the current
fIscal year in LIne Item 18-21313-263-128/9-607
(RelocatIon) from $10,0139 to $16,900 and decrease In
approprIatIon authorIty in the amount of $6,13139 from
LIne Item 18-2130-263-128/9-741 (ContIngency).
o InclUSIon of $6,131313 In the fIscal year 1984-85
Redevelopment Agency budget for sIdewalk constructIon In
LIne Item 18-200-263-128/9-761 (SIte Improvements).
RECOMMENDATION
It IS recommended that the CIty Council, ParkIng AuthorIty, and
Redevelopment Agency hold a publIC hearing as reqUIred under
Health and Safety Code SectIon 33679 to receIve pUblic comments
on the Lease between the ParkIng AuthorIty and the Housing
AuthorIty of the County of Los Angeles and the proposed Payment
Agreement between the Redevelopment Agency and ParkIng AuthorIty.
Staff recommends that the Redevelopment Agency:
o Approve the attached Resolutions InvokIng Health and
Safety code sectIons 33334.2 and fIndIng the prOVISIon of
replacement hOUSIng to be of benefit to Ocean Park Redevelopment
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ProJects 1 (a) and 1 (b).
o Approve the attached Resolution approving a Payment
Agreement by and between the Redevelopment Agency of the CIty of
Santa MonIca and the ParkIng Authority of the CIty of Santa
MonIca and authorizIng the ExecutIve DIrector to execute the
documen t.
o Increase approprIatIon authorIty In lIne Item 18-200-263-
128/96@7 by $6,@00 and decrease approprIat1on authorIty 1n lIne
Item 18-200-263-128/9-774 by an eqUIvalent amount.
It is recommended that the City Council then:
o Approve the attached ResolutIons fIndIng that the
prOVISIon of replacement hOUSIng wIll be of benefIt to the Ocean
Park Redevelopment Project 1 (a) and 1 (b).
Staff recommends that the ParkIng AuthorIty then:
o Approve the attached ResolutIon apprOVIng the Lease
Agreement by and between the ParkIng AuthorIty of the CIty of
Santa MonIca and the Housing AuthorIty of the County of Los
Angeles and authorIZIng the ExecutIve DIrector to execute the
document.
o Approve the attached ResolutIon apprOVIng a Payment
Agreement by and between the Redevelopment Agency of the CIty
of Santa MonIca and the ParkIng AuthorIty of the CIty of Santa
Monica and Authorize the ExecutIve DIrector to execute the
document.
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o AuthorIze Agency Counsel/CIty Attorney to fIle laWsuIts
as necessary to recover possesSIon of 175 Ocean Park Boulevard,
Apartment No. 7 and dIrect staff to Implement the above descrIbed
reloca t Ion pI an.
Prepared by: MIndy LeIterman
HousIng Manager
CommunIty Development UnIt
Department of CommunIty and Economic Development
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