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SR-417-002 (2)RNID:JM:MK:f:/Word/Staff Reports/RDA-Pl.doc City Council Meeting: January 9, 2002 Santa Monica, California TO: Mayor and City Council Chairperson and Redevelopment Agency Chairperson and Parking Authority of the City of Santa Monica FROM: Redevelopment Agency and Parking Authority Staff SUBJECT: Authorize the negotiation and execution of an Agreement among the City Council, Parking Authority, and Redevelopment Agency for the Transfer of Ownership and Seismic Retrofit of Downtown Parking Garages and a Cooperation Agreement between City Council and Redevelopment Agency, and approve Resolutions Determining and Finding that the actions are of benefit to the Earthquake Recovery Redevelopment Project Area. Intrnrli ir.tinn This report recommends that the City Council, Redevelopment Agency and Parking Authority take certain actions to accomplish the seismic retrofit of the downtown parking structures and to preserve resources for this purpose. Specifically, it recommends that the entities enter into a Sale and Performance Agreement that would transfer ownership of the structures from the City and Parking Authority to the Redevelopment Agency, and require the Agency to retrofit and complete other improvements to the structures. The requested approvals are sought at this time because potential changes in the state law may restrict the City's and/or Parking Authority's ability to take the actions necessary to accomplish the seismic retrofits. The report also recommends that the City Council and Redevelopment Agency execute a Cooperation Agreement requiring the Redevelopment Agency to complete certain public improvements within the project area and expend certain funds consistent with 1 redevelopment law for the purpose of preserving affordable housing within the City of Santa Monica. The report also recommends that the Council and Agency make findings that these actions are of benefit to the Earthquake Recovery Redevelopment Project Area. Backqround The six downtown parking structures owned by the City and the Parking Authority were damaged in the 1994 Northridge earthquake in varying degrees. They are located within the Earthquake Recovery Redevelopment Project Area. While the initial damage caused by the earthquake has been repaired on all parking structures, none of these structures has been seismically retrofitted to protect against future earthquake damage. Since that time staff has worked on plans for retrofitting these structures and the Downtown Parking Task Force has made recommendations that have been approved in concept and will be returned to Council for final approval later this year. This project would facilitate seismic upgrades by transferring ownership to the Redevelopment Agency and requiring the Redevelopment Agency to retrofit and rehabilitate the structures. The Palisades Bluffs also require seismic retrofit and stabilization. A Cooperation Agreement between the City and Redevelopment Agency will ensure that this work will be performed. It is also in the interest of the City to increase, preserve, and improve affordable housing within the City. A Cooperation Agreement requiring the use of -2- Agency funds for affordable housing will assist in the accomplishment of the City's affordable housing goals. flieri iecinn Pursuant to the Sale and Performance Agreement, the Redevelopment Agency will pay to the City $10,836,000 for the City-owned structures and will pay to the Parking Authority $49,164,000 for the Authority-owned structures. The valuations are based on the capitalization of revenue for the structures owned by the respective parties. The Agency will execute promissory notes to the City and Parking Authority, secured by deeds of trust recorded against the Parking Structures. The promissory notes will be paid by the Agency to the Parking Authority and the City from tax increment revenues. The proceeds from the sale will be expended by the City and Parking Authority in a manner which will implement the Redevelopment Plan for the Project Area and facilitate redevelopment of the Project Area. Each of the existing structures will be retrofitted based upon individual requirements. A phasing schedule will be created from an assessment of the individual garage conditions. Once prioritizations have been established, design work and bid documents will be developed. The Sale and Performance Agreement will include a schedule of performance detailing the time frame and scope of work for each structure. It is estimated that the cost of the work, which the Agency is obligated to fund, is approximately $60 million. No expansion of the structures is contemplated with this -3- agreement at this time; and if any expansion or replacement is considered in the future, all necessary environmental analyses will be completed before project approval. Use of redevelopment funds for the acquisition and rehabilitation of publicly owned parking facilities requires the City Council and the Redevelopment Agency Board to make the appropriate determinations and findings. The attached Resolutions (Attachments A and B) determine and find that the Santa Monica Downtown Parking Garage Acquisition and Retrofit Project is of benefit to the Earthquake Recovery Redevelopment Project Area, no other reasonable means of financing the improvements are available, the payment of funds for the improvements will assist in both the recovery from and the elimination of one or more of the conditions resulting from the 1994 Northridge Earthquake disaster, the payment of funds for the improvements will assist in elimination of one or more blighting conditions inside the Project Area by assisting in the elimination of one or more of the conditions resulting from the 1994 Northridge Earthquake disaster, and the Santa Monica Downtown Parking Garage Acquisition and Retrofit Project is consistent with the Agency's Five- Year Implementation Plan in that it helps achieve the Disaster Prevention and Mitigation goals set forth in the Redevelopment Plan. Pursuant to the Cooperation Agreement, the Redevelopment Agency will be required to complete the work of retrofitting and stabilizing the Palisades Bluffs in an amount not to exceed $20,000,000. The Cooperation agreement will also provide that the Agency expend $30,000,000 at not less than $2,000,000 per year on Permitted Housing -4- Activities to assist the City in its affordable housing goals. The attached resolutions (Attachments D and E) make the required findings for the use of Redevelopment funds for these purposes. Budqet/Financial Impact There are no budgetary impacts at this time. The obligations created by this agreement will be reflected in the annual budgets in future years. Recommendations It is recommended that the City Council take the following actions: 1) Approve transfer of ownership of Parking Structures currently owned by the City to the Redevelopment Agency for the seismic retrofit of the structures; and 2) Adopt the attached Resolution (Attachment A) determining and finding that the Santa Monica Downtown Parking Garage Acquisition and Retrofit Project is of benefit to the Earthquake Recovery Redevelopment Project Area, and authorizing the City Manager to negotiate and execute the Sale and Performance Agreement and related documents to implement this action. 3) Adopt the attached Resolution (Attachment D) determining and finding that the Cooperation Agreement is of benefit to the Earthquake Recovery Redevelopment Project Area, and authorizing the City Manager to negotiate and execute the Cooperation Agreement and related documents to implement this action. -5- It is further recommended that the Parking Authority take the following actions: 1) Approve transfer of ownership of the Parking Structures currently owned by the Parking Authority to the Redevelopment Agency for the seismic retrofit of the structures; and 2) Adopt the attached Resolution (Attachment C) authorizing the Executive Secretary of the Parking Authority to negotiate and execute the Sale and Performance Agreement and related documents to implement this action. It is further recommended that the Redevelopment Agency take the following actions: 1) Approve acceptance of ownership of Parking Structures currently owned by the City and the Parking Authority for the seismic retrofit of the structures; and 2) Adopt the attached Resolution (Attachment B) determining and finding that the Santa Monica Downtown Parking Garage Acquisition and Retrofit Project is of benefit to the Earthquake Recovery Redevelopment Project Area and authorizing the Redevelopment Agency Executive Director to negotiate and execute the Sale and Performance Agreement and related documents to implement this action. 3) Adopt the attached Resolution (Attachment E) determining and finding that the Cooperation Agreement is of benefit to the Earthquake Recovery Redevelopment Project Area, and authorizing the Executive Director to negotiate and execute the Cooperation Agreement and related documents to implement this action. Prepared by: Jeff Mathieu, Director of Resource Management Bob Moncrief, Housing and Redevelopment Manager Martin Kennerly, Administrative Services Officer Tina Rodriguez, Redevelopment Administrator Ryan Moore, Senior Administrative Analyst -6- Attachments: A- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AUTHORIZING EXECUTION OF A SALE AND PERFORMANCE AGREEMENT, CONSENTING TO THE USE OF SANTA MONICA REDEVELOPMENT AGENCY FUNDS FOR THE COMPLETION OF CERTAIN WORK ON SIX PARKING STRUCTURES IN THE CITY OF SANTA MONICA AND MAKING CERTAIN DETERMINATIONS AND FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33445 B- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA AUTHORIZING EXECUTION OF A SALE AND PERFORMANCE AGREEMENT AND MAKING CERTAIN DETERMINATIONS AND FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33445 C- A RESOLUTION OF THE MEMBERS OF THE PARKING AUTHORITY OF THE CITY OF SANTA MONICA AUTHORIZING EXECUTION OF A SALE AND PERFORMANCE AGREEMENT D- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AUTHORIZING EXECUTION OF A COOPERATION AGREEMENT, CONSENTING TO THE USE OF SANTA MONICA REDEVELOPMENT AGENCY FUNDS AND MAKING CERTAIN DETERMINATIONS AND FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTIONS 33445 AND 33334.2(g) E- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA AUTHORIZING EXECUTION OF A COOPERATION AGREEMENT AND MAKING CERTAIN DETERMINATIONS AND FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTIONS 33445 AND 33334.2(g) -7-