Loading...
SR-6-I (111) {;; -I RMD:JPM:HR:KL:kf Clty Councll Meetlng: August 8, 1995 Santa Monlca, Callfornla AUG 0 8 1995 To: Mayor and Clty Counc~l From: Clty Staff SubJect: Recommendatlon to establlsh a Comrnerclal Streetscape Flnanclng Program and authorlze Clty Manager to accept two (2 ) grants from the U.S EconomlC Development Admlnlstratlon and execute documents necessary to recelve grant proceeds. Introductlon ThlS staff report recommends the establlshment of a Commercial Street.scape Flnanclng Program (CSFP) and suggests a financlng mechanlsm for upcomlng commerclal streetscape lmprovement proJects. ThlS report also recommends that Clty Councll authorlze Clty Manager to accept two ( 2 ) grants from the u.s. EconomlC Development Admlnlstratlon (EDA) WhlCh would provlde partlal fundlng for the CSFP, and to execute documents necessary to be ellglble to recelve the EDA fundlng. The obJectlve of the CSFP would be to lmprove streetscapes and buslness cllmates In the Clty'S commerclal d~strlcts by provldlng a f~nanclal catalyst to encourage property owners and merchants to voluntarlly assess themselves to pay for such streetscape lmprovements. ro -1 1 AUG 0 8 1995 --- -- ------ - ---- Backaround Based largely on the success of the Bays~de D~str~ct, other maJor commerc~al dlstr~cts In the Clty have requested assistance ~n obta~n~ng s~m~lar phys~cal ~mprovements ln thelr areas. The C~ty CounC11 has responded by supportlng communlty-based deC1.Sl0n- maklng processes and streetscape design work for such proJects. The Maln Street Dlstr1.ct has expressed a w~lllngness to establ~sh an assessment d1.str~ct to fund new improvements. The P1CO Boulevard area is movlng toward a des~gn consensus and the Montana Dlstr1.ct has been work~ng on a conceptual plan and 1S currently awaltlng the results of the 6 -mon th trafflc management pllot program Other dlstrlcts, such as the Downtown area and wilshlre Boulevard, may also come forward w1.th s~m1lar requests. Staff has been worklng w1.th the commerclal dlstrlcts, In some cases for several years, to develop streetscape deslgn plans whlle also searchlng for potentlal fundlng sources. Shortly after the January 1994 Northrldge Earthquake, the Clty was not1.fled of ellglbillty to recelve an $84,300 plann1.ng Grant to support plannlng efforts for econom1.C recovery proJects, and a subsequent notlflcatlon of ellg~bil1.ty to rece1.ve a $3,118,915 Implementation Grant to fund long-term econom1C recovery programs. The EDA grants are to be pa1.d on a relmbursernent baS1S. 2 D1Scusslon Fund~ng The proposed CSFP would help stlmulate physlcal streetscape ~mprovements In the Clty'S commerclal dlstricts, Staff recommends that the CSFP be funded wlth the $3,118,915 EDA Implementation Grant. CSFP grants to the ~nd~vldual commerclal d~str~cts would be cont~ngent on the establlshment of assessment d~strlcts. The $84,300 Plannlng Grant wlll be used to fund efforts necessary for the establ~shment of assessment d~strl.cts assocl.ated wlth each streetscape l.mprovement plan and related economl.C recovery actlvltles. The establlshment of a CSFP would accompllsh several lmportant tasks: . Ach~eves a fundlng mechanlsm to support the C~ty's commerClal dlstrlcts, wlthout uSlng General Fund monles. . Creates a flnanelng mechanlsm for commerclal streetscape lmprovements WhlCh protects the Clty'S bond ratlng and hlghly leverages the EDA grant. It lS antlclpated that wlthln the next few years, several of the Clty'S commerclal dlstrlcts wlll agree to partic~pate 10 a streetscape lmprovement plan as contemplated In this proposal. The CSFP wlll be funded by up to $3,118,915 In EDA monles, WhlCh would contrlbute up to 20 % of total project costs, wlch the balance cOlllng from bonds supported by assessment dlstrlct revenues. 3 Streetscape Improvement Flnanclng Varlous mechanlsms for lssuing bonds to fund the proposed capltal lmprovements have been analyzed. Upon conslderatlon of the varlOUS flnanclng optlons, Staff recommends a structure simllar to that used In flnanclng the Bayslde Dlstrlct publlc lmprovements, the sale of Certlflcates of Partlclpatlon, combined wlth an assessment dlstrlct deslgned to pay the annual debt serVlce related to the Certlflcates. The CSFP would be used to leverage the buslness communlty's contrlbutlon to each proJect. The overall prOJect fundlng mechanlsm would work In two parts: Part 1 - CommerClal Streetscape Flnanclng Program (CSFP) : Commerclal Dlstrlcts wlshlng to pursue streetscape lmprovements proJects wlll work wlth Clty Staff to deslgn thelr proposed 011 and the establlshment of dlstrlcts for lmprovements Assessment thelr areas. Upon approprlate proJect and flnanclng approvals, the Clty could contrlbute a percentage of total proJect costs wlth monles from the EDA Implementatlon Grant. In thls way, the Clty contrlbutlon could be leveraged wlth a 5:1 contrlbutlon from Dlstrlct property owners and merchants, who wlll beneflt most dlrectly from the streetscape lmprovements. An early appllcant to the CSFP may be the Naln Street Dlstr1ct. Staff 15 plannlng to present the spec1flc streetscape deslgn plans and a detalled flnanclng structure to the City CounC11 In the Fall of 1995. CSFP monles could be applied to elther "brlcks and mortar" components or flnanclal asslstance components (e. g. , assessment fee walver durlng constructlon, lnterest rate buy-down, etc. ) of the speclflc 4 commerclal streetscape lmprovement plan, dependlng on the lndlvldual needs of each plan. Part 2 - Assessment Dlstrlcts: CSFP fundlng for each commerc1al dlstrlct wlll be cont1ngent upon the establ1shment of an assessment dlstrlct, created by City Council ln cooperatlon wlth the area's property owners and merchants. The assessment dlstr1cts wlll be structured to pay the annual prlncipal and 1nterest on bonds lssued to ralse the lnlt1al cap1tal cost of the streetscape lmprovements. Staff 13 also recommendlng the establlshment of an Operatlons and Malntenance (0 & M) Fee, charged as an add-on to the merchants' Clty BUSlness Llcense, to fund spec1al annual ma1ntenance serVlces above and beyond base levels currently belng provlded by the Clty. Budoet/Flnanclal Imoact The Plann1.ng Grant requ1.res a ten percent local match, Whl ch may be provlded wlth In-kind contrlbutlons. currently budgeted expendltures ln Resource Management Department wlll satlsfy thlS requlrement, A Revenue Account (20-620-263-00000-0359-10000) and an Expendlture Account (20-700-695-00000-4442-00000) ln the amount of $82,300 have been created to recognlze Plannlng Grant revenue and expend1tures An addltlonal $2000.00 lTI plannlng grant funds awarded by the EDA should be approprlated to both revenue and expendlture accounts as above. 5 The Implementatlon Grant comes wlth an EDA requlrement of a 10% local cash match and 1:1 leveraglng, The leverag1ng requirement wlll be satlsfied by the lssue of Assessment Dlstr1ct bonds. Staff lS currently researchlng the acceptablllty of uSlng bond proceeds to satlsfy the local cash match requlrement as well. Staff wlll brlng a speclflc flnanclng proposal back to Councll at a later date, most probably as part of the Maln Street streetscape plan. No addltlonal budget authority 1S requlred at thls tlme. Recommendatlon It lS recommended that Clty Councll authorlze Clty Manager to accept two (2 ) EDA grants, an $84,300 Plannlng Grant and a $3,118,915 Implementation Grant; execute documents necessary to formally accept such Grants for the purposes outllned In thlS Staff Report; and authorlze the approprlatlon of an addltlonal $2,000 to be lncluded wlth the eXlstlng f1scal year 1995/96 revenue and expenditure accounts for the EDA Plannlng Grant. It lS further recommended that Clty Councll establlsh a Commerclal Streets cape Flnanclng Program, to be funded by $3,118,915 ln EDA Implementatlon Grant monles. prepared by: Jeffrey P. Mathleu, Dlrector of Resource Management Howard Roblnson,Real Estate/Economlc Dev. Manager Klrt Lyle, Admlnlstratlve SerVlces Offlcer 6