SR-414-002 (12)
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City Council Meeting: 7/8/86
Santa Monica, California
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FROM:
Mayor and City Council
City staff
Recommendation to Adopt a Resolution Authorizing the
city Manager to Submit Applications and Execute All
Necessary Documents Required for Housing Development
Grants from the u.s. Department of the Housing and
Urban Development in Support of the Ocean Park Re-
placement Housing Project
TO:
SUBJECT:
INTRODUCTION
This report transmits information regarding the u.s. Department
of Housing and Urban Development (HUD) Housing Development Grant
Program. The report recommends that the City Council adopt a
resolution authorizing the city Manager to take the necessary
actions to submit applications and execute contracts and any
necessary documents with HUD to enable the City to receive funds
under this program.
DISCUSSION
The U.S. Department of Housing and Urban Development (HUD) has
issued an invitation to local government entities to submit an
application for Housing Development Grants.
These grants are
awarded to localities to support the construction of residential
rental or cooperative housing in which at least twenty percent
(20%) of the units "Till be occupied by lower income families.
The maximum grant amount per project cannot exceed fifty percent
(50%) of the development costs excluding land and debt service.
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Funds are provided to localities which are then to be provided to
the developer as either a loan or a grant. Applications are due
to HOD by July 21, 1986, and funding decisions will be made by
September 30, 1986.
It is recommended that applications be submitted for Housing
Development Grant funds in support of the two components of the
Ocean Park Replacement Housing Project. Under the HUD rules
requiring that projects have at least twenty (20) units located
in close proximity to each other, one application may be submit-
ted for the forty-three (43) cooperative units in the South Ocean
Park Area. A second application will include the twelve rental
units from the Ocean Park Replacment Housing Project and the ten
units being developed by Community Corporation of Santa Monica
(CCSM) at 2405-07 Fourth street.
CCSM has completed the design phase including Architectural Re-
view Board approval on all the project sites. Preliminary cost
estimates have been made, and an applications for private financ-
ing has been submitted. Bid packages are in preparation for
these projects.
Based on the preliminary cost estimates the construction costs
for the cooperative project are estimated at $3.0 million~ the
anticipated amount of the Housing Development Grant is therefore
approximately $1. 5 million. The construction costs for the
twenty-two units are estimated at $1.5 million~ the anticipated
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amount of the Housing Development Grant is therefore approximate-
ly $750,000. A review of current cost estimates for these proj-
ects indicates that although the receipt of a Housing Development
Grant would probably not allow for the recapture of any Re-
development Agency funds already allocated, it would enable CCSM
to increase the number of units affordable to lower income house-
holds.
It is therefore recommended that the City council au-
thorize the City's participation in the Housing Development Grant
Program.
BUDGETARY/FINANCIAL IMPACT
If the City receives grants from HUD the funds will be awarded
to the city to be allocated to the projects. At that time staff
would submit a contract with HOD for Council approval. There is
no financial or budgetary impact of the recommended action at
this time.
RECOMMENDATION
It is recommended that the city council adopt the attached
resolution authorizing the city Manager to submit an application
for a Housing Development Grant and to execute necessary
documents for the City's participation in the Program.
Prepared by: Candy RuPP, Development Analyst
Department of community & Economic Development
Attachment: city council Resolution
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