SR-072286-CC/RA2
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Redevelopment Agency Meeting: 7/22/86
City council Meeting
Santa Monica, California
TO:
Chairperson and Redevelopment Agency Members
Mayor and City council Members
FROM:
city staff
SUBJECT:
Recommendation to Adopt Resolutions Allocating Funds
to the Downtown, Ocean Park 1 (a) and 1 (b)
Redevelopment Projects Low and Moderate Income
Housing Trust Fund; and to Approve Contract with
Community Corporation of Santa Monica
INTRODUCTION
This report transmits for adoption resolutions allocating funds
to the Downtown, Ocean Park l(a) and l(b) Redevelopment Project
Low and Moderate Income Housing Trust Fund for use in the
City-wide Housing Acquisition and Rehabilitation Program as
approved in the Fiscal Year 1986-87 Budget. Also transmitted for
approval is a standard contract for use of "earnest money" funds
from the City-wide Housing Acquisition and Rehabilitation Program
(CHARP) to Community Corporation of Santa Monica (CCSM).
BACKGROUND
At the start of each fiscal year, in order to utilize
redevelopment tax-increment funds appropriated for housing
projects, resolutions finding the activity to be of benefit to
the redevelopment projects must be adopted by the Agency and the
City Council. In addition, it is necessary to execute a contract
with community Corporation of Santa Monica (CCSM) for the
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disbursal of $75,000 from CHARP to be used as earnest money
deposits. The following discusses the actions which the Agency
and the City council must take to implement CHARP for Fiscal Year
1986-87.
DISCUSSION
California Redevelopment Law allows local Redevelopment Agencies
to use tax-increment funds from a redevelopment project for
activities that will be of benefit to the project. Under the
provisions of this law, activities that will increase or improve
the supply of affordable housing for low and moderate income
households are considered to be of benefit to redevelopment
projects. The City Council must concur in finding the allocation
of funds for off-site housing to be of benefit to the
redevelopment proj ect. In order to utilize the redevelopment
tax-increment funds appropriated in the Fiscal Year 1986-87
budget for CHARP the attached resolutions must be adopted by the
Redevelopment Agency and the City Council.
Upon adoption of the attached resolutions, the Controller of the
Agency is responsible for placing the Housing Trust Funds in an
interest bearing account.
Contract for "Earnest Money" Funds
In addition to adopting the resolutions, it is also necessary to
approve and execute a contract with community Corporation of
Santa Monica (CCSM) to use the "Earnest Money" component of the
City-wide Housing Acquisition and Rehabilitation Program. The
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contract amount is $75,000. This contract is the standard
grantee contract form used in the Community Development Program.
It is the same as the contract used in the last three years in
that it permits CCSM to use the funds for deposits on properties
to be purchased for affordable housing projects. In addition,
this year it is recommended that one paragraph be added to the
contract language permitting CCSM to use the earnest funds as "a
revolving fund for reimbursable development expenses associated
with projects which have received prior written approval from the
Agency and that cannot be obtained on a contingency basis;
including architectural and engineering fees, financing fees,
building permit and connection fees, and subcontractor payments
prior to receipt of construction lender payments." This will
permit CCSM to use the funds in it's Earnest Fund account which
are not being used for a deposit or option fee at any given point
in time as a revolving fund for these expenses. These funds will
be returned to CCSM' s Earnest Fund account when CCSM receives
payments from the construction lender on each proj ect, and the
Earnest Fund monies will be returned to the Agency at the end of
the contract term.
Frequently for construction projects CCSM must advance funds for
permits, materials or architectural services, and then be
reimbursed by the private lender within thirty to sixty days. In
the past several years, CCSM has used private foundation funds as
a revolving fund to cover most of these costs, which are minor
amounts, as necessary. Due to a decrease in the availability of
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these funds, CCSM has requested that the Agency permit the use of
the Earnest Funds for this purpose.
There will be no change in the process of proj ect review or
approval authorization, so there will be no risk to the Agency's
funds. As in the past years of the Program, CCSM will apply to
the Agency for a CHARP loan, and the Executive Director and
staff will review the loan application to determine if it meets
all the requirements, and authorize disbursment of loan funds.
Under the terms of the contract, CCSM will only have a greater
flexibility to use the $75,000 "Earnest Funds" to cover costs
that will be reimbursed by a private lender on projects already
approved by the Agency. Therefore, in order to provide the
program with maximum flexibility to permit CCSM to complete
projects successfully, it is recommended that the FY 1986-87
amended contract language be approved.
The contract includes all appropriate provisions of state law
applicable to redevelopment agency activities and the usual
federal and City requirements including accounting procedures,
political activities, and equal emploYment opportunity.
FINANCIAL/BUDGETARY IMPACTS
The Fiscal Year 1986-87 budget includes a total appropriation of
$52l,OOO for the city-wide Housing Acqusition and Rehabilitation
Program. This appropriation is reflected in the following
accounts:
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Funds Requiring Resolutions of Benefit
16-720-264-000-942
18-720-264-128-942
18-720-264-129-942
Downtown Fund $l31,250
Ocean Park l(b) Fund $ 95,813
Ocean Park l(a) Fund $ 35,437
Funds Not Requiring Resolutions of Benefit
Ol-720-264-000-942
l6-720-264-73l-942
General Fund
vitale Gilpin Fund
$l28,500
$l30,000
The adoption of the attached resolutions will have no additional
budgetary impact. The approval of the contract with CCSM will
require the expenditure of $75,000 from the following accounts:
l6-720-264-000-942
18-720-264-128-942
18-720-264-129-942
$37,500
$27,375
$10,125
RECOMMENDATIONS
It is recommended that the Redevelopment Agency:
1. Adopt the attached Resolution of the Redevelopment Agency of
the City of Santa Monica allocating $131,250 into the
Downtown Redevelopment proj ect to provide funds for CHARP,
and finding the provision of such housing to be of benefit to
the Downtown Redevelopment Project.
2. Adopt the attached Resolution of the Redevelopment Agency of
the City of Santa Monica allocating $35,437 into the Ocean
Park Redevelopment Project l(a) to provide funds for CHARP,
and finding the provision of such housing to be of benefit to
the Ocean Park Redevelopment project l(a).
3. Adopt the attached Resolution of the Redevelopment Agency of
the City of Santa Monica allocating $95,813 into the Ocean
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Park Redevelopment Project l(b) to provide funds for CHARP,
and finding the provision of such housing to be of benefit to
the Ocean Park Redevelopment Project l(b).
4 . Approve
the
attached
Contract
by
and
between
the
Redevelopment Agency of the City of Santa Monica, and
Community Corporation of Santa Monica, for $75,000 in CHARP
funds.
It is recommended that the City Council:
1. Adopt the attached Resolution of the City Council of the City
of Santa Monica finding the use of funds in the Downtown
Redevelopment Project Low and Moderate Income Housing Trust
Fund to be of benefit to the Downtown Redevelopment Project.
2. Adopt the attached Resolution of the City Council of the City
of Santa Monica finding the use of funds in the Ocean Park
1 (a) Redevelopment Project Low and Moderate Income Housing
Trust Fund to be of benefit to the Ocean Park lea)
Redevelopment project.
3. Adopt the attached Resolution of the City Council of the City
of Santa Monica finding the use of the funds in the Ocean
Park l(b) Redevelopment Project Low and Moderate Income
Housing Trust Fund to be of benefit to the Ocean Park 1 (b)
Redevelopment Project.
Prepared By:
Candy Rupp, Development Analyst
Ann Sewill, Housing Program Manager
Department of Community & Economic Development
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