SR-6-A (10)
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MAR - 1 1994
CCS:HS SM JR.opccth sr
Council MeetIng' March 1, 1994
Santa MOnica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT. Recommendation to Authorize the City Manager to Guarantee a Loan for Ocean
Park Community Center's (OpeC) Transitional Housing Project
INTRODUCTION
This report recommends that the Council authorize the City Manager to guarantee a loan for
Ocean Park Community Center's (OpeC) transitIonal housing project.
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BACKGROUND
In March 23, 1993, the City Council unanimously authorized a grant of $380,000 of
matching funds to the Ocean Park Community Center (OpeC) for their new facilIty on 16th
Street In Santa Monica These City funds serve as a direct cash match to a U S Department
of HOUSing and Urban Development award of $2.8 million to assist with the acqUIsition,
rehabilitation and five years of operation of a 55-bed transitIonal hOUSing program and related
facIlities.
DISCUSSION
To date, In additIon to the HUD and City grants, OPCC has received over $550,000 in
pledges to Its bUilding campaign. These pledges are payable to OPCC over a one to fIve-year
period. Based on these pledges, opec has applied for a bridge loan through the Low Income
HOUSing Fund (UHF) to begin project construction by May 1994. The UHF IS a nonprofit
organizatIon dedIcated to prOVide bndge flnancmg to affordable housmg projects such as thiS
one MAR - 1 199't
to-A
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The UHF has requested the City'S endorsement of 80% of the bridge loan of $400,000
requested by opec from this Fund. OPCC staff and board of directors expect to raise the
needed funds to repay the loan within the two and a half year loan-term offered to them.
The loan to the UHF will be the first obligation paid back by OPCC (excluding monthly
mortgage payments).
FISCAL/BUDGET ARY IMPACT
Given the track record of the agency and the $550,000 In pledges, It IS unlikely that the City
would Incur costs from thiS loan However, If opec defaults on the loan to the Low Income
Housing Fund, TORCA Affordable HouslngTrust Funds (Account #14-720-264-20094-8900-
99377) would be responsible for $320,000.
RECOMMENDA TION
ThiS reports recommends the CounCil to authorize the City Manager to guarantee $320,000
of a $400,000 loan for Ocean Park Community Center's (OPCC) transitional housing project
on behalf of the City of Santa Monica. ThiS agreement will stipulate that OPCC will pay back
the loan to the UHF prior to other loan obligations, with the exception of monthly mortgage
payments. ThiS stIpulation will allow City TORCA funds to be utilized for other projects as
qUickly as pOSSible
Prepared by. Julie Rusk, Manager
Human Services DIVIsion
Community and Cultural Services Department
Paula Burner, Manager
Housing and Redevelopment DIVIsion
Resource Management Department
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