SR-414-002 (14)
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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
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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
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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
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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
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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.
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(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.
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(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.
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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
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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.
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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
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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.
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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
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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