SR-6-I (111)
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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.
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1 AUG 0 8 1995
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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.
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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.
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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
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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.
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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
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