SR-414-004 (2)
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JUt - 8 2003
F:CMGRStaff Reports:Santa Monica College Liberal Arts Building Replacement 7 -8-03.doc
City Council Meeting: July 8, 2003 Santa Monica, CA
TO: Mayor and City Council
Chairperson and Redevelopment Agency
FROM: Redevelopment Agency Staff
SUBJECT: Public Hearing on the advance of Redevelopment funds from the
Earthquake Recovery Redevelopment Project for Replacement of the
Santa Monica College Liberal Arts Building Damaged During the 1994
Northridge Earthquake and required findings and agreements necessary
to implement the action.
Introduction
This report recommends that the City Council and Redevelopment Agency ("Agency")
hold a public hearing and take certain ~s tD ..... the Agency'sleD"my FeqUired
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payments to SMta Monica College ~.) to .... the. College in rebuilding its
Liberal Arts Building (-Project"), whfh lN88 damaged during the 1994 Nofthridge
Earthquake, including making all determinations required by the Community
Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL"); adopting a
Resolution of Intent that allows future redevelopment tax-exempt bond proceeds to be
used -to reimbuf8e the AfIencY for _ ~ wIh thepqect; an4. authorizing the
Executive Direclor to neQOti8te and ~ 8 ~ Agreement with Santa
Monica College to provide a means for carrying out the Project.
BackQround
The project Area was ac:IopIed in 1* in response to the Northridge Earthquake to
provide for and facilitate the repair, restoration, demolition and/or replacement of
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JUl - 8 2003
facilities damaged as a result of the Northridge Earthquake. The Project Area includes
the College's main campus, which was considered as a candidate for a potential project
in the Redevelopment Agency's 1994 Five-Year Implementation Plan under the
Institutional Revitalization goal, the 1999 Five-Year Implementation Plan, and the
Agency's 2003 Mid-Term Report.
In February of this year the College ~ the necessery dOcumentation for a $10.2
million funding request to be considered by the Agency for the development and
construction of the new Liberal Arts building to replace the existing earthquake-
damaged facility. This documentation included a total development cost budget,
estimates of construction costs, funding sources, conceptual plans, and construction
phasing schedule, Staff has reviewed this documentation and finds that it supports the
use of Agency redevelopment fund"", lot 8 public facility pursuant to the CRL. A
summary report. pursuant to Section ~7~ of the CRL. has.*" prepared by aff and
has been made available to the public.
The Agency provtdes legally requiredl.... ~ payments to the College
from tax increment revenues collected in the Earthquake Recovery Redevelopment
project Area. Lastyeer. the payment ~ $218.038. The College has requested that
the Agency advance. the8eannwal ~tht'OUgh payments to achieve the $10.2 miHion
requested It is anticipated that the advance will reduce the annual payments to the
College over the next 30 years. The CRL provides provisions for the Agency to make
the advance in the manner requested
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Discussion
The Agency, with the consent of the City Council, is allowed to pay all or a part of the
cost of installation and construction of any publicly owned building provided that certain
determinations are made pursuant to Section 33445 of the CRL. Due to potential
issues relating to the Americans with Disabilities Act, environmental conditions, and
damage caused during the 1994 Northridge Earthquake, it has been determined that it
is more cost efficient to demolish the existing Liberal Arts building and replace it rather
than attempt the necessary renovation. The Project will be located on the southeastern
portion of the College's main campus and will consist of a three-level, 59,887 square
feet educational facility, including two subterranean levels, one of which will contain 35
faculty parking spaces. The Project will be built in two phases, with construction of
Phase to commence December 2003 and be completed July 2005. Phase II of the
Project will commence October 2004 and be completed May 2006. The total cost of the
Project and the funding sources are summarized below:
FEMA
State Capital Fund
District Capital Fund
Sub Total
$3,081,147
$4,458,000
$1,218,000
$8,757,147
$10,206,823
$18,963,970
Agency
Total
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Redevelopment Considerations
The City Council and Agency must make the appropriate determinations in order to
authorize the use of redevelopment funds. The attached Resolutions (Attachment A
and B) determine and find that the Project is of benefit to the ProjElct Area; no other
reasonable means of financing the Project are available to the community; the payment
of funds for the Project 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 payment of funds for
the Project is consistent with the Agency's Five-Year Implementation Plan in that it
helps achieve the Institutional Revitalization goals set forth in the Five-Year
Implementation Plan by replacing an earthquake-damaged facility and restoring its use
to the community for educational purposes.
The attached Resolution of Intent (Attachment C) is required by the A!~ency in the event
that a tax-exempt, tax allocation bond is issued in the future. This will allow the Agency
to be reimbursed for advances to the College (pursuant to the Cooperation Agreement)
from the bond proceeds and must be adopted prior to the commitment of funds or start
of construction. Recommendations relative to a bond sale(s) are being evaluated with
consideration to the project area's $95 million bonded indebtedness limitation. This
Resolution authorizes $10.2 million in reimbursement from the bond proceeds for the
Project; however, it does not obligate the Agency to issue bonds for this or any other
projects. Furthermore, as required by California Redevelopment Law, the Agency will
reduce a certain portion of its statutory pass-through payments by the amount the
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Agency will advance to the College towards the development and construction of the
Project.
Earthquake Proiect Area Financial Plan Impact
Earthquake Recovery Redevelopment Project Fund Balance projections are attached
(Attachment D) which depict the financial status of the project area including funding
obligations, Agency funded projects and future tax increment projections. This is
intended to provide a context in which to consider this recommended funding request.
Based on the Fund Balance Projection, the Agency can include the request by the
College in FY03/04 by deferring the budgeting for one year, $2,500,000 of the Palisades
Bluff Capital Improvement project and $1,406,368 from the Seismic Retrofit Project for
Parking Structures 1-6. This deferral will not negatively impact the implementation of
these projects because of the respective schedules of the projects.
In addition, as indicated above, by approving the resolution of intent, the Agency could
consider the issuance of additional bonds under the $95 million bonded indebtedness
limitation. Currently approximately $63 million remains outstanding, leaving at least $32
million available for issuance for projects consistent with the Redevelopment
Implementation Plan.
BudgeUFinanciallmpact
The redevelopment funding commitment to the Project will be authorized for
$10,206,823, Staff recommends that an appropriation from the Earthquake Recovery
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Redevelopment Project Fund (Fund 17) be authorized for $10,206,823 at account
C17069104 for fiscal year 2003-04. In order to make these funds available in fiscal year
2003-2004 the following appropriations must be cancelled: $2,500,000 in the Palisades
Bluff Capital Improvement Project (C17068504), and $1,406,368 in the Seismic Retrofit
Project for Parking Structures 1-6 (C170621 04). Funding for these projects will be
returned to their full amounts upon either the Agency receiving additional tax increment
revenue or through the Agency's future issuance of tax allocation bonds.
Recommendations
It is recommended that the City Council take the following actions:
1) Hold a public hearing on the use of redevelopment funds for the Project;
2) Approve budget actions as set forth in the Budget/Financial Impact section;
3) Consent to payment of Agency redevelopment funds to the College for the Project;
and
4) Adopt the attached Resolution (Attachment A) determining and finding that
redevelopment funds from the Project Area for the Project is of benefit to the Project
Area, as well as other determinations as set forth in the Resolution and described
above.
It is also recommended that the Agency take the following actions:
1) Hold a public hearing on the use of redevelopment funds for the Project;
2) Consent to payment of Agency redevelopment funds to the College for the Project,
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3) Adopt the attached Resolution (Attachment B) determining and finding that
redevelopment funds from the Project Area for the Project is of benefit to the Project
Area, as well as other determinations as set forth in the Resolution and described
above;
4) Adopt a Resolution (Attachment C) of Intent that allows future redevelopment tax-
exempt bond proceeds to be used to reimburse the Agency for costs associated with
the Project; and
5) Authorize the Executive Director to Negotiate and Execute a Cooperation
Agreement with Santa Monica College to provide a means for carrying out the
Project.
Attachments:
A - A Resolution of the City Council of the City Of Santa Monica
Consenting to the Use of Santa Monica Redevelopment Agency
Funds for the Santa Monica College Liberal Arts Building
Replacement Project 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 Consenting to the Use of Santa Monica
Redevelopment Agency Funds for the Santa Monica College
Liberal Arts Building Replacement Project and Making Certain
Determinations and Findings Pursuant to Health and Safety Code
Section 33445
C - A Resolution of the Redevelopment Agency of the City of Santa
Monica Declaring Its Intent to Issue Tax-Exempt Bonds to be used
to Reimburse the Agency for the Santa Monica College Liberal Arts
Building Replacement Project Prior to the Issuance of such Bonds
D - Earthquake Redevelopment Area Fund Balance Projection
Prepared by: Gordon R. Anderson, Assistant City Manager
Jeff Mathieu, Director Resource Management Department
Tina Rodriguez, Redevelopment Administrator
Ryan Moore, Senior Administrative Analyst
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