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SR-414-002 (14) e e il L/ r t'{)'Z- ~A --2-. SEP 1 0 1985 C/ED:HD:AS:Wp Redevelopment Agency MeetIng 9/10/85 Santa MonIca, CalIfornia TO: ChaIrperson and Redevelopment Agency FROM: Redevelopment Agency Staff SUBJECT: RecommendatIon to EstablIsh Development CrIteria and Select a Developer for the Ocean Park FIfty-Flve UnIt Replacenlent HousIng ProJect INTRODUCTION ThIS report tranSntlts InformatIon and recommendatlons concernIng the establIshment of development crIterIa, and the selectlon of a developer, for the Ocean Park fIfty-five unit replacement housIng proJect. The report recommends that the Redevelopment Agency ap- prove certaIn development crI ter la to be used In plannIng and desIgnIng the unIts. The report al so reconlnlends that the Re- development Agency hold a publIC hearIng, as reqUIred by Callfor- nIa Redevelopment law, concernIng the disposltlon of Agency- acqUIred land, and desIgnate CommunIty Corporation of Santa Moni- ca as the developer of fIfty-fIve units on SItes purchased by the Agency. BACKGROUND In Apr 11, 1983 the Redevelopnlent Agency approved a plan for the completIon of the Ocean Park Redevelopnlent ProJect that Included - 1 - R4-~ SEP 1 0 ,. e e a requlrenlent that the Agency construct fIfty-fIve unIts of af- fordable hOUSIng, for low and nloderate Income persons, WI thIn the Ocean Park area. Between October, 1984 and May, 1985 the Agency purchased seven Sl tes on scattered lots WI thIn the Ocean Park area. In the process of purchasIng these 5i te5 the Agency ap- proved the concept of developIng forty-three unIts located In the Ashland/PIer/MarIne area as a IlnlIted equIty cooperatIve. The Agency also dIrected staff to work wIth the neIghbors of the se- lected SItes to ensure that the desIgn of these unIts IS senSI- tlve to the neIghborhood concerns about densl ty, parkIng and preservatIon of open spaces. After dIScussIons wIth the neIghbors and conSIderatIon of varIOUS deSIgn and plannIng alternatIves, staff recommends that the Agen- cy establI sh the development cr 1 ter la presented In thi s repor t, and select CommunI ty CorporatIon of Santa MonIca as the project developer. The developeI:" WIll then select an archl tect In con- JunctIon WIth CIty staff, prepare specifIC plans for each SIte In consultatIon wIth the neIghbors and CIty staff, obtain the neces- sary Coastal CommISSIon and CIty approvals, obtaIn fIrm construc- tlon cost bIds and select a contractor, and present fInal fInanc- Ing and SIte plans to the Agency. Development CrIteria The reqUIrements of CalifornIa Redevelopment Law and of the Arnen- ded Agreement for Sale of Land for PrIvate Developnlent establIsh the broad outlInes for the development of the fIfty-fIve unIts. Redevelopment law reqUIres that all fIfty-fIve of the unIts be - 2 - e e affordable to low and moderate Income households earning less than one hundred and twenty percent (120%) of nledlan Income. The Anlended Agreement stipulates that a "substantIal portion" of the unIts be made avaIlable for famIly housIng. In addItIon to these requIrements, the Redevelopment Agency has decIded that forty- three of the fIfty-fIve units shall be developed as a llITIlted equIty cooperatIve, and the renlalnlng twelve shall be developed as rental units. In order to proceed wIth thIS development, the Redevelopment Agency must establIsh gUidelInes at thIs tIme for (1) the types of households (eg. elderly, small famIlIes, or large famIlIes) to be housed In the f I fty-f I ve unl ts, (2) the dl str IbutIon of house- hold types and unIt SIzes among the six SItes, and (3) the desIgn standards for the bUIldIngs. These gUIdelInes wIll be the basIs for the plannIng and desIgn work to be completed by the developer, the proJect architect, and the Agency staff over the next several months. Each of these gUidelInes 15 dIscussed In the followIng sectIons. (1) Household Types to Be Served: The Amended Agreement between the Agency and the redeveloper re- qUires that a "substantIal portIon" of the fIfty-fIve unIts be Intended for famIly occupancy. ThI S 1 S Hl confornlance WI th the housIng needs of the CIty cIted In the adopted HousIng EleITIent, the Southern CalIfornIa AssocIatIon of Government's Regional HousIng AllocatIon Model, and the CIty'S HUD-approved HousIng - 3 - e e AssIstance Plan. AccordIng to the HousIng ASSIstance Plan, elder- ly households comprIse 36% of the lower Income households In need of housIng aSSIstance, whIle small famIlIes (two to four persons) make up 61 %, and large fantll1es (f I ve or more per sons) make up the remaInIng 3%, of the total need for assIsted housIng. It IS recommended that thIS same dIstrIbutIon be applIed to the flfty- fIve unIts, so that twenty (20) unIts are deSIgnated for elderly households, thIrty-three (33) are for small famIlIes, and two (2) are for large famIlIes. ThIS nLlX of household types to be served WIll be used to es- tablIsh the number of one, two and three bedroonl apartments to be bUIlt. In order to make It possIble to use SectIon 8 rent SUbSIdy certIfIcates, or other HUD SubSIdIes If available In the future, it IS recommended that the Agency adopt the HUD SectIon 8 gUIde- lInes for household/unIt SIze dIstrIbutIons. Under these gUlde- lInes, elderly households are usually housed In one-bedroonL unIts, small famIlIes are housed In two or three bedroom unIts, and large faUlllles are housed In three or four bedroonl un I ts. Therefore, It is recommended that the Agency approve the follow- ing dIstrIbutIon of unIt SIzes: Household Type UnIt SIze Number of UnIts Elderly I-Bedroom 20 Small Fanllly 2-Bedroom 17 Small Fan. 11 y 3-Bedroonl 16 Large Fanllly 4-Bedroom 2 - 4 - e e 55 Total (2) DIstrIbutIon of Household Types / UnIts SIzes Among SItes: In recent yeats, In response to condItIons In large publIC hous- Ing proJects where elderly resIdents were beIng vIctImIzed by youths In bUIld lngs where the elderly and famIlIes were ml xed together, housIng planners have tended to separate the elderly from famIlIes In assIsted housIng developments. In some cases In citIes lIke Santa MonIca thIS approach has led to complaInts by elderly resIdents of feelIng Isolated and cut off from a communI- ty that Includes households of all ages. In small developments, such as these bUIldIngs of SIX to fIfteen unIts, community nLem- bers have IndIcated that it would be preferable to provide hous- Ing for a ml X of elder ly and famIly resIdents, rather than to have some SItes be solely elderly housIngt while others are only for familIes. It IS therefore recommended that to the extent feasIble the unI ts desIgnated for elderly and family households be mIxed proportionately on each of the SItes. The actual allocatIon of unIts to specIfIC SItes should be com- pleted after the developer, and the developer's engIneer and ar- ChI tect have rev lewed the developnlen t potent l.al for each Sl te. Therefore, It 1 S recomnlended tha t the Agency approve these stan- dards as gUIdelInes that may be adJusted If necessary to develop the best desIgn for each SIte. - 5 - e e (3) DesIgn Standards: The nLajorlty of the questIons about these developments raIsed by the Ocean Park neIghbors concerns desIgn standards. The neIghbors want to ensure that the unIts WIll have suffICIent parkIng, the desIgns WIll blend Into the neIghborhood, eXIstIng trees WIll be preserved where pOSSIble, and that adequate and approprIate land- scaplng WIll be prOVIded to ensure that the mass and denSIty of the bUIldIngs WIll not adversely affect the neIghborhood. In response to these concerns It 15 recommended that the Agency ap- prove the folloWIng desIgn gUIdelInes: (A) The maXImum number of unIts on each sIte shall be the nunLber allowed under the CI ty I S adopted Land Use Element, WI th the state-mandated twenty-fIve percent denSIty bonus for the pro- VISIon of low and moderate Income hOUSIng. However, the SIte at 6th and Ashland shall be developed WIth no nLore than eIght unIts. (B) The number of parkIng spaces for each buildIng shall confornl to eXIstIng CIty standards, and shall be approved by the Coastal CommISSIon. (C) MeetIngs shall be held WI th the development team and interested neIghbors to reVIew the proposed proJect deSIgn as plans are prepared. WI thIn the cost constraInts of the pro] ect, the Conll1lents and concerns of the neIghbors shall be taken Into account In the preparatIon of plans for submISSIon to the Ar- chitectural ReVIew Board. Staff shall also mall notIces of the Archl tectural ReVIew Board meetings on these developments to the neIghbors of each SIte, InVItIng public review and con@ent. - 6 - e e (D) The hIstory of the sIte at 6th and Ashland as a comnluni- ty open space shall be consIdered In the preparatIon of the plans. To the greatest extent possIble, vIsual open space shall be prov Ided on that 51 te for the neIghborhood. As requested by the neIghbors, Clty staff wIll work wIth the development team to examIne the feaslblity of provIdIng some usable opeD space for the neighborhood on the sIte, whlle preserVIng the prIvate open space and the sense of "defensIble space" of the resIdents of the new units. (E) Some of the neIghbors of the cooperatIve sItes have sug- gested that the landscapIng plan for the bUIldIngs Include the use of "green wall" treatments of each bUIldIng to compensate for the densIty and mass of the new developments. These green wall treatments may consIst of clIngIng plants that grow dIrectly up the exter ior walls of the bUIld lngs, or nlay conSl st of pI an tlngs along fences. The use of these green wall treatments shall be incorporated where appropr la te and flnanc Ia lly feas Ible. These trea tnlents should not Increase the costs or maIntenance of the unIts, and should not be used to completely screen the sItes from the street such that the landscaping has a deleterIOUS effect on the security of the bUIldIngs. (F) Wherever feasIble, the eXIstIng trees on each sIte shall be preserved and Incorporated Into the landscapIng plan. AgaIn, 1 tIS reconlITlended that the Agency adopt the above as gUIdelInes that may be adJusted as necessary to produce the best desIgn for all of the SItes. - 7 - e e Developer SelectIon After dISCUSSIon WI th Interested neIghbors and consIderation of the history and needs of the replacenlent hOUSIng proJect It 15 recommended that the Agency d lrec tly desig na te a spec Ifl c non- profIt developer rather than Issue a Request for Proposals. In preparIng thIS reconlmendatlon, staff have consIdered the cost savIngs lousIng a oon-profl t developer, and the advantages to the neIghborhood and the CI ty In workIng WI th a communI ty-based non-profIt developnlent corporatIon. One of the prImary concerns of the neIghbors that have been workIng wIth staff has been that the developer be responSIve and senSI tl ve to the neIghborhood' s concerns about the design of these bUIldIngs. The selectIon of a developer that IS experIenced In workIng wIth neIghborhood groups, and commItted to an open design process IS crItIcal to the success of thIS proJect. The selectIon of a developer wIth a commItment to the Ocean Park area, and wIth an understandIng of the hIstory of thIS proJect, IS also important In ensurIng that the developer has the confIdence and support of the neIghbors. It appears from dISCUSSIons wIth hath for-profIt and non-profit developers that the use of a non-profIt developer WIll result In cost savlngs to the proJect. The hard constructIon costs of the unIts WIll be IdentIcal whether a non-profIt or for-profIt developer were selected for thIS proJect. However, a for-profIt developer would usually add a profl t and overhead allowance of approxImately eIght to ten percent to the hard constructIon costs. In exchange, the for-pro fl t developer would Invest hI s or her own funds In the proJect as equIty, in antICIpatIon of cash - 8 - e e flow and tax savIngs In the future. An analysIs of the proJected eqUI ty value of thIS proJect, based on the cash flows and the possIble tax saVIngs to Investors, shows that a developer could be expected to make an eqUIty contrIbutIon of approxImately three percent of the constructIon costs. ThIS fIgure IS low because the developer could expect only 11ml ted cash flows due to the re- qUlrement that the units remaIn affordable for a long perIod, and would only be able to synd Ica te the tax benefl ts on the twelve rental unIts, not on the cooperatIve units WhICh wIll be owned and operated by the cooperatIve nlembers. Therefore, by uSIng a non-profIt developer the Agency could save the dIfference between the overhead and profIt allowance and the eqUIty contrIbutIon that could reasonably be expected of a for-profIt developer. The determlnatlon that the developer should be a non-prof 1 t conl- munlty-based housIng developer provIdes the baSIS for the recom- mendatlon that the Agency select Communi ty CorporatIon of Santa Monlca as the developer of the fIfty-fIve unIt replacement hous- lng proJect. Conlfilunl ty Corporatlon IS the only non-proflt developer specIfically created to develop housing In Santa MonI- ca. Communlty CorporatIon has worked WIth the Agency for the past year In locatlng and purchasing the SIX SItes for thIs project, and has been very successful 10 brIngIng affordable SItes to the Agency. In thls process, Communi ty Corporation has gained the confIdence of the neighbors and Clty staff as a development entI- ty COITIllII tted to the neIghborhood and open to resIdent t s Input In the deSIgn process. - 9 - e e In addItIon to its experIence and hIstory wIth thIS proJect, Com- munity CorporatIon has the necessary SkIlls and experIence to develop both rental and cooperatIve housIng. In It's fIrst three years of operatIon, ConLTIIUnl ty CorporatIon completed the substan- tIal rehabIlItatIon of five apartment bUIldings, and IS workIng on four more. The corporatIon IS also working on several new developnlent proJects. CommunI ty CorporatIon staff also have con- SIderable exper lence IndIVIdually In non-profl t development of rental and cooperatIve hOUSIng. The developer of these unIts WIll be responSIble for overseeIng the constructIon of all fIfty-fIve unIts, and the formatIon of a new cooperatIve that WIll eventually own and manage forty-three of the units. The developer WIll also be the long-term owner and manager of the renlaInlng twelve rental unl ts. SInce thIS fl fty- fIve unl t proj ect IS one 0 f the largest hOUSIng effor ts 0 f the Agency, coordInatIon WIth other Agency or CIty programs and goals was conSIdered In reconLmendlng the selectIon of CommunIty Cor- poratlon as the developer. The Agency and the CIty have made SIgnIfIcant Investments, In the fornl of long-ternl loans to CommunIty CorporatIon, In prOVIdIng affordable houslng through a VIable, establIshed and on-gOIng non-profIt organIzatIon. One of the goals of the Agency's hOUSIng programs 1 s therefore to Increase Conlffiun I ty CorporatIon 1 s Inven- tory of unl ts to the pOInt where the corporatIon can be self- suffICIent WIthout on-gOIng Agency or CIty support. In order to meet thIS goal In thIS tIme of lImIted federal or state resources for hOUSIng, the use of local resources must be targeted as much - 10 - e e as possIble. The desIgnatIon of ConlfilUnlty CorporatIon as the developer of these unl ts WIll allow the Agency to use the COItlIlU t- ment of these funds to achIeve other housIng goals as well. Call fornla Redevelopnlent Law requI res that the Redevelopment Agency hold a publIC hear Ing before any property acquIred WI th tax Increnlent moneys IS sold or leased for development WI thout publIC bId. Although the Agency IS not sellIng or leaSIng these sItes at thIS time, by desIgnatIng a developer for the proJect it IS takIng the fIrst step towards dOIng so at a later date. There- fore, the requ Ired publIC notIce (At tachmen t "All) has been publIshed In the EvenIng Outlook, IndIcatIng that the Redevelop- nlent Agency WIll hold a publIC hearIng on thIS 1 tell! prIor to act- Ing on the staff reconlnlendatlon. It IS therefore reconlmended that the Redevelopnlent Agency hold a publIC hear lng, and deSIgnate CommunI ty CorporatIon of Santa MonIca as the developer of the Ocean Park Replacement HOUSIng ProJect. It IS also recommended that the Agency authorIze the ExecutIve DIrector to dIsburse up to $100,000 to CommunIty Cor- poratlon as necessary to cover archl tectural, engIneer lng and related predevelopment costs. Upon completion of the deSIgn and plannIng process as described In thIS report, COITilllunlty CorporatIon shall submIt the fInal SIte plans and a finanCIng plan to the Agency. The fInancIng plan WIll descrIbe the sources and terms of loans from prIvate sector 1 ender s, who WIll provIde funds to make up the the dIfference between the Agency's contrIbutIon and the total development cost. - 11 - e e At that tIme, sta ff WIll al so present for approval a tenant selec tI on POlICY, a schedule 0 f the Income ranges and rents or cooperatIve paynLents for the rental unIts and the cooperative, and the necessary legal documents to transfer tI tIe of the SIX SItes to ConlllLun 1 ty CorporatIon prIor to the start of constructIon. FINANCIAL / BUDGETARY IMPACT Funds for costs In preparatIon for the developnlent of the re- placement hOUSIng unIts have been approprIated In the FY1984-85 budget, and reappropriated In the FY1985-86 budget, as Account 18-720-263-535-905. No addItIonal budgetary actIon IS reqUIred. RECOMMENDATIONS It 15 recommended that the Redevelopment Agency: 1. Approve the development gUIdelInes as set forth In thIS report; 2. Conduct a publIC hearIng on the transfer of the SItes for thIS project without publiC bId, and deSIgnate CommunIty Corporation as the developer of the fIfty-fIve replacenlent hOUSIng unIts; and 3. AuthorIze the EXecutIve DIrector to dIsburse funds for pre- development costs as descrIbed In thIS report. Prepared By: Ann SeWlll, HOUSIng Program Manager - 12 - . . tit .chment "A" NOTICE OF A PUBLIC HEARING TO BE HELD BY THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA ON THE PROPOSED SALE WITHOUT PUBLIC BIDDING OF REDEVELOPMENT AGENCY OWNED LAND FOR DEVELOPMENT OF HOUSING OFFICIAL NOTICE IS hereby gIven that the Redevelopnlent Agency of the CIty of Santa MonIca wIll hold a publIC hear I ng on Tuesday, Septenlber 10, 1985 to consIder en- terIng Into an Agreement for Sale, wlthout publlc bId- ding, WIth CorlLrTlUnIty Corporatlon of Santa MonIca, a non-profl t hOUSIng development corporatlon, for the developnlent of fIfty-fIve houslng unIts on the follow- Ing SItes: 3005 2400 2207 518-20 642 504 SWC HIghland Avenue Flfth Street SIxth Street PIer Avenue MarIne Street Ashland Street SIxth Street and Ashland Street TIME and PLACE of the PUBLIC HEARING IS as follows: TIME: PLACE: TUESDAY, SEPTEMBER 10, 1985 at 7:30PM COUNCIL CHAMBER, CITY HALL, ROOM 213 1685 MAIN STREET, SANTA MONICA, CALIF. Any Interested person Illay appear in person or by agent and be heard. WrItten comments may be addressed to the HOUSIng DIVISIon at the above address. If deslred, further InformatIon regardIng thIS matter nlay be ob- taIned by callIng the HOUSIng DIvlSlon, Department of CommunI ty and EcononllC Deve10pnlen t, telephone (213) 485-87131. MeetIng faCIlIty IS acceSSIble. If you have any spe- CIal needs such as sIgn-langugage interpreting, please contact OffIce of DIsabled at (213) 458-8701. REDEVELOPMENT AGENCY of the CITY OF SANTA MONICA BY: ANN SHORE, Secretary PublISh TWIce: August 27, 1985 September 3, 1985