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council Meeting, October 8, 1991
Santa Monica, californi!lC1 8 1S:'j
To:
Mayor and city Council
From:
city staff
Subject:
Recommendation to Adopt Resolution Requesting the
1989-90 Los Angeles County "Aid to cities" Gas
Tax Fund Allocation
Introduction
This report requests that City Council adopt the attached
resolution requesting that the Los Angeles County Board of
supervisors allocate 1989-90 "Aid to citiesU (ATC) Gas Tax funds
in the amount of $111,638.00 to the City of Santa Monica in
accordance with the guidelines for these funds.
Background
The County of Los Angeles appropriates a portion of Gas Tax funds
to cities within the county to implement regional traffic signal
synchronization projects in order to improve traffic mobility.
The total amount of funds currently available to the City for
1989-90 is $111,638.00. These funds are being requested at this
time based on new funding guidelines developed by Los Angeles
County. These requirements include the necessity to go before
city Council and request funds for traffic signal and similar
congestion relief projects. The proposed projects for (ATe)
funding are as follows:
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OCT
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a. Upgrading of the signal controllers and installation of
interconnect hardware on pico Boulevard at 6th street and
18th Court and on Ocean Park Boulevard at 11th street, 14th
street and 28th street.
b. Installation of master control units at the City Hall
and City Yards facilities.
In order to receive the 1989-90 funds from the County, Council
must now formally request these funds by resolution. The County
Board of supervisors did not allocate to any city ATC funds for
FY 1990-91.
BUdget/Financial Impact
Approval of the attached resolution will result in the City
receiving $111,638.00 in "Aid to cities" Gas Tax fund revenue.
This amount is already budgeted in Revenue Account No. 43-500-
401-00000-0090-10000. A new expenditure account has been
established and the Council will need to appropriate these funds
to that account.
Recommendation
It is recommended that the City Council:
1. Adopt the attached resolution requesting the allocation
and payment of County "Aid to cities" Gas Tax fund; and
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2. Appropriate $111,638.00 to CIP account no. 43-770-415-
20092-8900-99214 (Synchronize/Interconnect Signals) from
revenue account no. 43-500-401-00000-0090-10000.
Prepared by:
Paul Berlant, Director of Land Use
& Transportation Management
Ron Fuchiwaki, City Parking & Traffic Engineer
Jamal Rahimi, senior Traffic Engineer
Resolution
Attachment:
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RESOLUTION NUMBER 8303(CCS)
(CITY COUNCIL SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SANTA MONICA REQUESTING AN ALLOCATION AND
PAYMENT OF COUNTY AID TO CITIES FUNDS TO BE
USED IN ACCORDANCE WITH THE GUIDELINES FOR
SAID FUNDS
WHEREAS, the County of Los Angeles has appropriated
certain monies to the City of Santa Monica as county Aid to
Cities; and
WHEREAS, the Los Angeles County Board of supervisors
has adopted policies limiting the use of said monies to regional
traffic signal synchronization projects, transportation system
management (TSM), and congestion management (CM) projects that
improve regional traffic mobility; or the design, acquisition of
right of way, and construction of city streets on the County IS
highway plan which are of general County interest and regional
significance; and
WHEREAS, the City Council desires to expend the amount
of One Hundred Eleven Thousand six Hundred Thirty Eight Dollars
($111,638.00) of County Aid to cities Funds accrued to the city
for the following projects in accordance with said policies;
a. Upgrading of the signal controllers and installation of
interconnect hardware on Pi co Boulevard and Ocean Park
Boulevard.
b. Installation of master control units at the city Hall
and City Yards facilities.
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NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1.
The County of Los Angeles is hereby
requested to allocate One Hundred Eleven Thousand six Hundred
Thirty Eight Dollars ($111,638.00) of the 1989-90 Aid to cities
(ATC) funds apportioned to the city for the projects which will
improve regional traffic mobility in accordance with the Los
Angeles County Board of Supervisors policy regarding the use of
said Aid to City funds.
SECTION 2. After the allocation is approved by the
Board of supervisors and funds are available, the County is
requested to send such allocated amount to the City. The City
will use funds for projects according to the terms of the
allocation.
SECTION 3. The city parking and Traffic Engineer shall
forward a certified copy of this Resolution to the Los Angeles
County Director of Public Works for processing.
SECTION 4 .
The City Clerk shall certify to the
adoption of this ReSOlution, and thenceforth and thereafter the
same shall be in full force and effect.
APPROVED AS TO FORM:
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ROBERT M. MYERS
City Attorney
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Adopted and approved this 8th day of October, 1991.
(] d~
'" Mayor
I hereby certify that the foregoing Resolution No. 8303(CCS)
was duly adopted by the city Council of the City of Santa Monica
at a meeting thereof held on October 8th, 1991 by the following
Council vote:
Ayes: Councilmembers: Genser, Holbrook, Katz, Olsen,
Vazquez, Zane, Abdo
Noes: Councilmembers: None
Abstain: councilmembers: None
Absent: Councilmembers: None
ATTEST:
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city Clerk /
areas has been delivered to the unit or a tenant
occupying the unit.
3} That, for each tenant occupied unit, a copy of
the complete building inspection report has been
delivered to the unit or a tenant occupying the
unit.
4) No eviction has occurred pursuant to Government
Code Section 7060 et seq. (the Ellis Act) within
a five (5) year period prior to the filing of an
application for Tenant-participating Conversion.
5) No eviction has occurred pursuant to Section 1806
(h) of the Charter (relating to eviction for pur-
poses of owner occupancy or occupancy by relative
of the owner) within a two (2) year period prior
to the filing of an application for Tenant-
Participating Conversion.
6) In obtaining the signatures of cosigning tenants
and intending to purchase tenants, Ijwe, as
owner ( 5) 0 f the building described in this ap-
plication, neither offered nor agreed to pay mon-
ey or other financial consideration to par-
ticipating tenants if the tenants would release
all rights that they had to purchase a rental
unit in the building.
(e) That the form of tenant ownership for which the
application is submitted will be a Condominium.
(f) Is signed by cosigning tenants occupying 75% (not less
than two-thirds) of all the residential units in the
building. (If there is more than one tenant in a
unit, the signature of only one tenant is required.)
(g) Identifies the cosigning tenants and the units occu-
pied by such tenants and lists all other tenants known
to the owner in the building and the units they
occupy.
(h)
Contains a declaration that
cosigning tenant was obtained
in writing, to such tenant of
in subsections (a) (b) (c)
Section.
the signature of each
only after the delivery,
the information required
(d) and (e) of this
(i) Contains a declaration that all lawful notices have
been given of the application for conversion.
(j) Has attached to the application statements of Tenant
Intent to Purchase, was signed by Intending to Pur-
chase Tenants occupying 63% (not less than fifty per-
cent) of the total number of residential units in the
building at the time of filing of the original ap-
plication. (If there is more than one tenant in a
unit, the signature of only one tenant is required.)
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on the following four sites:
1747 15th street 9 units
1828 17th street 7 Units
1968 19th street 7 units
1544 Berkeley 7 Units
The project is being financed through a combination of
conventional loans, a loan from the state Rental Housing
construction Program, private investor equity (attracted by the
syndication of Federal Low Income Housing Tax Credits which the
project received) and a loan from a City-administered developer
agreement payment made to the City in connection with the Colorado
Place development. A total of 24 of the 30 units at Garcia
Apartments will be affordable to households making no more than
60 percent of area median income (This 60 percent figure for a
family of four currently is $25,200). The remaining six
units will be affordable to households making no more than 80%
of area median income ($33,600 for a family of four).
Pro;ect Financina:
On April 17, 1989, the city Council approved a permanent loan of
$1,400,000 for the project. Approximately $1,100,000 of this
has been utilized by the project so far, almost exclusively for
land costs. On June 18, 1991, the City Council approved three
additional transactions:
1. Approved a three-year, zero interest, "bridge" loan for
$537,531. These funds are to be repaid as the equity investors
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make their scheduled payments to the project over a three year
period.
2. Approved the transfer of the 15th street site from the
Redevelopment Agency to Garcia Apartments Partnership with CCSM as
its general partner. In payment, the city would accept a $281,000
deferred payment Promissory Note secured by a Deed of Trust on the
property.
3. Authorized funding of an internal interest reserve of
$151,830 to satisfy a requirement made by the conventional
construction lender. This reserve is to be funded only in the
unlikely event that the below-market loan commitment received by
the project from the permanent lender is not funded.
Need for Additional Three Month Interim Loan:
The allocation of Low Income Housing Tax Credits is administered by
the Tax Credit Allocation Committee of the state of California
(TCAC). CCSM has obtained an allocation of tax credits. TCAC
regulations require that the project must close its construction
loans no later than October 18th or lose the tax credits.
In order to meet this TCAC deadline, CCSM has proposed that all
loan funds be deposited into an escrow account and that all loan
documents and security instruments be executed and recorded. The
escrow agent would be instructed to hold all funds until it has
received confirmation that the tax credits have been sold and that
the first investor payment is available. This threshold is
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expected to occur on or before January 15, 1992. In the event that
the tax credits are not sold by January 15, 1992, funds will be
returned to the respective lenders, reconveyances and other
documents releasing the property from all encumbrances will be
filed, and the project will not go forward.
One of the construction lenders, the state of California, has
refused to close its construction loan unless all of the sources of
funds, including funds related to the sale of tax credits, are put
into escrow. We believe that the state will agree to the October
18, 1991 construction loan closing provided that the City commit to
a three month interim loan in an amount equal to the first investor
payment for the tax credits ($425,000). Investor payments are made
over a mUlti-year period, generally ranging from three to eight
years, depending upon the investor. This interim loan commitment,
together with the City financing, the private construction loan,
and the state loan, will enable the project to have 100 percent of
its sources of funds available to be put into escrow. Funds would
not be drawn out of escrow, however, until the tax credit
syndication is completed. Because the new interim loan from the
city will be repaid from the first investor payment, these
additional funds will never be drawn.
CCSM is currently negotiating with two investors to purchase the
tax credits. Progressive Asset Management (PAM), which has been
working with CCSM to market the credits for the past several
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months, is offering the more attractive deal for the project.
PAM believes that 90 - 100% of the tax credits can be sold by
January l5, 1992. Under this scenario, the city's interim loan
will be "paid off" with the proceeds of the initial investor
payment. The city's previously approved three-year bridge loan of
$537,531 will be repaid by subsequent investor payments. PAM's
equity syndication provides an initial payment of $650,000 at the
time of the funding the construction loans and two additional
payments of $350,000 in the following two years.
In order to have an alternative investor in the event that PAM is
unable to sell a sufficient amount of tax credits, CCSM has secured
a commitment to purchase the tax credits from a second investor,
Chevron corporation. The Chevron transaction is much less
advantageous to the project, would require an extension of the
City's $537,531 bridge loan from three years to eight years and
would further require the developer to secure an additional
$425,000 conventional bridge loan to be paid back over eight years.
In the event that CCSM chooses to accept the Chevron offer, City
staff will return to the City Council with a request to extend the
City's $537,531 bridge loan commitment to eight years.
In order to meet TCAC's required deadline, the conventional lender
and the City have already agreed to close the construction loans.
The staff believes that the state will agree, if the City agrees to
make this three month $425,000 bridge loan. If this additional
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interim loan is not provided and the construction loans do not
close on or before October 18, 1991, the tax credit allocation will
have to be returned. This will make the project economically
infeasible in its present configuration.
FINANCIAL/BUDGETARY IMPACT
The $425,000 interim loan will be committed from the following
Citywide Housing Acquisition and Rehabilitation Program accounts:
18-720-264-22892-8920-99049 $223,345.00
18-720-264-22891-8920-99049 $201,655.00
$425,000.00
These funds will be needed for other affordable housing projects
that are scheduled to begin construction in 1992. Therefore, these
funds must be returned no later than January 15th in order to
recycle these trust fund dollars.
RECOMMENDATION
Staff recommends approval of an additional bridge loan not
exceed three months to the developer, Community Corporation of
Santa Monica (CCSM) in an amount not to exceed $425,000.00,
based upon the terms and conditions outlined in this report.
Prepared by:
Peggy Curran, Director
Charles Elsesser, Housing Program Manager
Denise Altay, Senior Development Analyst
Community Development Department
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