SR-0 (6)
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Council Mtg.:
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Santa Monlca, California
May 22, 1984
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Mayor and City Council
~ROM:
City Staff
SUBJECT:
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Appeal From a Decision of the Planning Commission
Approving Development Review 216, Conditional Use
Permit 362 for a 6 Unit Condominium at 1941 Euclid
Street.
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Antappeal~o~ the Planning Commission decision approving this project
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ha$ been filed by the applicant, Michael W. F01onls, based on the
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~a~dship that w~ll allegedly result to the appellant from the
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t~guirement to provide one unlt of the six proposed condominium
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Ul\ata" affordable for low to moderate lncome persons as required by
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lp~ ~ousing Element of the General Plan.
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;~~~~~it construction of a six unit condominium proJect with a
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~:;~~ition that one unlt affordable to households with incomes not
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?.;.:~.;::;:;dlng 120% of the (HUD) Los Angeles County median income be
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;.:-~yided.
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~q~I~rms to all applicable C~ty Code requirements for height,
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~C\f)acks, park~ng, and lot coverage. Current density standards In
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~i~Y Counc~l Resolution 6385 and the draft Land Use and Circulation
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30, 1984 the Plannlng Commission approved DR 216/CUP 362
The project has a recorded Tract Map for 6 units and
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rl~~ent would permit 5 units. However, a sixth unit was approved
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6s=a density bonus in connection with the provisions of one afford-
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able unit under Government Code Sect10n 65915.
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Mayor and City Council
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May 22, 1984
The project has been approved previously. On October 6, 1980 the
P1annlng Commission approved Tentative Tract Map 40150 for a
6 unit condominlum building. The Architectural Review Board
approved building and landscape plans on October 15, 1980. The
City Council approved the Final Tract Map and a building permit
was issued on April 20, 1981 just prior to the adoption of the
Moratorium.
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In October 1981 the appellant entered into an agreement with the
City in connection with the granting of a hardship exemption. The
agreement provided that the Developer would he exempted from the
~~ building. moratorium on the condition that the developer pay the
City of Santa Monica Housing Author~ty 5% of the gross sales price
of the condominium units (approxlmately $
) in lieu of providing
on site l~clusionary units. A copy of the agreement is attached.
Because of difficulties obtainlng funding for the project, the
appellant did not in1tiate construction and the building permit
lapsed. Ord1nance 1251 WhlCh was adopted in June 1982 specifies
that wlthout a valid buildlng permlt a hardship exemption no longer
exempts a project from Development ReVlew and a project is subject
to current requirements.
(Ordinance 1251, Section 4h)
Because the building permit has explred, the project requires a
development permit and 1S subject to current City requirements
including the requ1rement to provide 25 to 30% of the units for
affordable housing. The appellant argues that his actual hardship
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Mayor and City Council
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May 22, 1984
continues and requests that because of the project's history, the
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Counc~l consider hlS circumstances and allow hLm to meet the intent
of providing afforda~le housing by reducing the price of one unit
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~o approximately $132,000 rather than to the $78,000 price set
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by the City's formula.
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fn;;apprOVing the project the Planning Commission indicated that its
'uf{~dictio~~ did not include determining hardship and that it would
~pprove the project according to current requirements to provide
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InJ~nCluS~O~ary unit, the pricing of wh~ch was to be determined
~yi.the demand-based formula applied by the City's Housing Division
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-'i, ~kila; iffojects. This f~rmula prices a typical two bedroom
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5ondominiurn at $78,000 as follows:
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: '.:- four
=
$27,400 (HUD)
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Income range for
"moderate income"
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101-120% of County median income
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Bedroom adjustment
formula
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.95
(2 bedroom unlt)
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~.~~~__~ Formula for establishing sales price (based on the formula
. : used by-the California Coastal Commission)
2.5 x Med~an Income x Income Range x Bedroom Adjustment =
2.5 x $27,400 x 120% x .95 = $78,090
(selling price of a two bedroom un~t affordable to
moderate income persons)
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The appellant proposes instead to honor h1S original agreement with
the City, described above, but rather than paying an in-lieu fee to the
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Mayor and City Council
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May 22, 1984
City, would apply a percentage of profit to reducing the cost of one
unit which would result ~n a sell~ng pr~ce of approximately $132,000,
a price which is contrary to all commonly accepted lending criteria
about what a family of 4 earning $27,000 can afford to pay for housing.
The appellant contends that the $132,000 price is comparable to prices
0.~ffordable to moderate income households in other jurisdictions;
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~~~w~ver, has offered no proof or comparable data.
~~lanning staff requested an opinion from the City Attorney as to
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~'>wliether, on the basis of the history of this project and the appli-
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~~an~'s claim of continuing hardship, the issue of hardship would
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. justify not requiring conformance to the City's inclusionary housing
requirement. City Attorney Informal Opinion No. 84-27 states:
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Y~~~~In the appeal, the quest~on of hardship may not be raised.
The app11cant's hardsh1p exempt10n has expired. Should the
applicant desire to pursue this matter further, a new appli-
cation for hardship would be required to be flIed. However,
the hardsh1p application would not be of ass1stance to the
applicant at this late stage. The appl1cant's former
conditional use permit has expired. Accord1ngly, in order
to develop the property, a new conditional use permit is
requlred. Accordlngly, the sole remedy of the applicant
1S to obtain a permit within the current proceedlngs.
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~'The DR/CUP have now been approved by the Plann1ng Commission within
current proceedings but the appellant is not willing to accept the
City's requirement in condition #8 (see attached statement of Off1cial
~ction) for~ the terms of providing the affordable unit. The appellant
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argues that by reducing the price on one unit, he complies with the
intent of providing an affordable unit but under pric~ng criter1a
different from the City's criter~a. To do so, however, would be
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Mayor and City Council
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May 22, 1984
lnconsistent with other project approvals, would be contrary to all
conventional underwriting criteria, and contrary to the Housing
_~ Element of the General Plan.
City Council Authority
Under the provisions of Section 6 of Ordinance No. 1251 (CCS) the
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:~City Council may affirm, reverse or modify any determination of
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~the< Planning Commission in regard to an Interim Development Permlt
and the decision of the City Councll shall be final. In approving
~ an .o'appJ ication the Commission or Council must find that:
4. The existing and/or proposed public and/or private health
and safety facillties (including, but not llrnlted to, sanitation,
sewers, storm dralns, fire protection devices, protective services,
and public utilitles) will be adequate to accommodate the anticipated
results of the proposed development.
"-5. The proposed development will not prejudice the ability of
the City to adopt a revlsed land use element.
6. The proposed use and locat1on are 1n accordance with good
zoning practice, in the public lnterest and necessary that
substantlal justlce be done.
~ 7. The proposed use is compatible with existing and potential
uses withln the general area, traffic or parking congestion will
not result, the publlC health, safety and general welfare are
protected and no harm to adjacent properties will result.
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and City Council
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lJIay 22,1984
Flnancial Impact
'~The recommendation presented in this report does not have a budget/
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inancial impact.
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of any credible evidence to support the appellant's
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s~ertio:ii~~t a $132,000 dwelling unit is affordable to low/moderate
~pme per~ons, to maintain consistency with previous Planning
requiring affordable housing to be priced accord-
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n~to the~~ove described formula, it is respectfully recommended
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.~~t the ;_~?1?eal be denied and that the Planning Commission approval
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^~ ~~the p~~~ect according to the original conditions (attached) be
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the affordable unlt to be priced according to the City's
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andard fg.rmula.
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1: .,'.:""<..:pared by:
ff{ktt~achment:-' A.
Carol Haldrop
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Agreement between the City of
Santa Monica and Euclid Habitat.
B. Planning Commisslon Statement of
Official Action.
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Attachment B
AG REe.~ENT
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~E~S AG?X~V~NT, enterec lnto th~s day of
Oc~ober 1981, by and between the City of Santa Monica, a
chartered ~uniclpal corporatlon of the State of Cal~forn~a
(herelnafter "City"), and Euclid Habltat (hereinafter
"Developer") 1S made w;:.th reference to the following:
R Eel TAL S
WHEREAS, on Aprll 22, 1981, City adopted an Emergency
Building Moratoriumj and
WHEREAS, Developer filed a Claim for Vested Right,
Cla~m Number M-Oll, to be exempted from the provisions of
the Emergency Builclng Moratorlum to proceed wlth the
constructl.on of 6 conaoffilnium unl.ts located at 1941 Euclid
Avenue, Santa Monlca, Callforniai and
WP.EREAS, City has granted Developer an exemption from
the Emergency Buildlng Moratorium on the condltion that
Developer pay an in lieu fee to the Houslng Authorlty of
the Clty of Santa Monica ln the amount of flve percent (5%)
of gross sales price of the condoml.niurn unlts and on the
concltlon that Developer enter lnto an agreement w1th Clty
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ensur~ng the payment of such in lieu fee,
NOW, THEREFORE, in conslderatlon of mutual prom~ses
and covenants contalned hereln and the good fa~th perfor-
mance thereof, Clty and Develope= agree as follows:
In Lleu Fee. Develo?er shall pay Clty a fee
,
ln lleu of provldlng on-slte lDcluslonary unlts in the
amount equal to f~ve percent (5%) or the gross sales prlce
obtalned from the sale of the condoffilnlum unlts.
2. Creatlon of Accour.t. Prlor to C~ty issuing a
certiflcate of occupancy for the condominium units and
prior to the sale of any condorolnlUID unlts, an account
entltled In-Lleu Fee Payment Account (herelnafter "Account")
shall be created at an instltut~on mutually agreed upon
between Clty and Developer under terms and condltlons
necessary to ensure deposits and clsbursements accord~ng
to thlS Agreement. The Account shall be administered,
held and d~sbursed pursuant to the terms of this Agreement.
DepoSl.ts in the'ACCDunt shall-cons~st of all sale pr.oceeds
from~he sale of the condo~inlum unlts.- Developer assigns
trr City:a~ security'for~the due performance 0= this Agreement
all orits r~ght/-title anc l~terest In and to the Account
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and the moneys placed thereln to be helc pursuc~t to the
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te=~s hereof.
C~tyls ~nterest to be subord~nate to pr~or
claims of ~ndebtedness ~or construct~on and a Note of
~arch 26, 1980 secured by a Deed of Trust payable to
Car: Kl~ne In the amount 0: $90,000 taxes and assessments.
3. D~sbursement of Funds in Account. The funds held
1n t~e acco~nt shall be c~sb~rsed 1n the followlng manner
and the following order of pr~CYlty:
a. Flrst, as eac~ un~t 1S sold, the Developer
shall repay that portlon of the princlpal, ~nterest
and loan fees lncurred ~n connectlon wlth the con-
structlon loan for the develop~ent.
b. Second,. as eac~ unlt 1S sold the City shall
recelve a partial payment of the 1n lleu fee 1n the
amo~~t of two percent (2%) of the gross sales
obta~ned from the sale of the condomln~um unit.
c. Thlrd, upo~ sale of the last un1t the Clty
shatl rece~ve the r:maln1ng three percent (3%) of
the in lieu fee unless the amount in the account is
such that this 3% is more than one half of the
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rema~n1ng funds. If the 3% ~s in excess of one half
of the Account, the Clty and Developer shall equally
share the reffialn~ng ~~rds ~n t~e accou~t.
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4. ~l~e for Dlsb~rsemer~s. Disbursements from the
Account shal~ be made ~n the ~anner agreed to by C~ty and
Jeveloper at the tlffie 0: creatlon of the Account, except
that clsbuTsements ~o Developer shall not be made until all
condO~lr.~U~ un~~s have bee~ so:d anc the City has recelved
the entlre payment It 15 en~ltled to recelve pursuant to
thlS Agreement. as se~ ~ort~ In 3.e.
In connectlon wlt~ a~y tra~sfer of development rights,
ceveloper shal~ take suc~ actio~ to blnd the transferee to
the terms of thlS agreewent.
ThlS s~oulc not app:y to ~he sale of ~ndividual
condo~~niUIT unlts by developer.
EUCLID HASITAT, A PAR~~rRSH!p
Clty of Santa Monica
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CHRIS7LNA-CORPORA~IO~
(/(H~JVt-t{~.~<rvV
~o~ert Earr~son, Preslde~t
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CITY OF SANTA MONICA
DI:.PARTMENT OF ENVIRONMENTAL SERVICES · (213) 393.9975 · 1685. Mam Slrecl, ~ta Momca. Cahfomra 90401
October 2 I 1980
Michael W. Fo1onis
A Design Group
1550 18th Street
Santa Monica, CA 90404
Dear Mr. Folonis:
In response to your letter dated September 30, 1980. r regret to inform
you that the City does not have any sites available for the relocation
of the structure you are offering to the City.
Yours truly,
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JOHN HEMER
Director of Redevelopment
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August 2, l~tiu
)Uke Follonis
!UCLID HABITAT
155u 16th street
Santa Mon~ca, Cal~fornia ~u4u4
Dear Mike,
We would like to take this opportunity to thank you
and your firm for donating the house that was located
at 1~41 Eucl~d Street to our church. The house has
been relocated to 714 Echandia Avenue in Boyle Heights
of the city of Los Angeles. We are now in the process
of rehabilitating the house to meet the building codes.
After this house is rehabilitated, ~t will belong to
the Mungcal family. They are members of our church
and they had a housing need. This need was provided
for by our Lord Jesus Christ through your des~re to help.
After the house 18 finished and made into a home, there
w~ll be a celebration and you will be invited to attend.
We again thank you for the opportun~ty of working with
you and hope you can cont~nue to provide needed homes to
the needy.
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BRUCE KItAGEr--
Project Elder
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2JJ 9711600
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Mr. Ml.chael Folon~s
A Design Group
1550 18th Stree't
Santa Monica, Cal~forn~a 904C4
Dear Michael;
It was good news to hear that the Coastal Comm~.~ had
granted approval for removal of the house that you intend
to donate to the Mart~nezl fam~ly. You mentioned on the
telephone that as of December 16 the structure could be
removed.
In rev~ewing all the procedures
appears the earliest date wh~ch
~s the week of January 5, 1981.
of the procedures that would be
the following;
that would be involved, it
we could move the structure
For your informat~on, some
~nvo'. ~d include at least
1. Securing bids from mov~ng contractors.
2. Securing bids from dernol~tion contractors for
demolit~on of exist~ng Mart~nezl residence.
3. Prepare work write-up, cost est~mates and securing
bids for fo~ndation and util~ty hook-ups, new
curb and dr~veway and all proposed rehab~litation
to structure be~ng moved.
4. Prepar~ng loan package and secur~ng loan approval
for Mart~nezl famlly.
On many of the above items, it was impossible for us to begin
the process unt~l the Coas~al CommlSS1on had gr~~ted you
approv~l to remove the structure. WorKing exped~tiously,
however, our best estimate lS the week of January 5 fer
removal of the structure. I request your pat~ent indulgence
in this matter ~n order to allo~ us sufficlent time to follow
through our procedures.
S~ncerely,
c-~}-/. ~(aH4;j)
Raul M. Escobedo
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OCT S 1 !9BO
NJ8 ClIIiI
Mr. M~chae~ w. Fo~onis
A Design Group
1550 18th Street
Santa Mon~ca, California 90404
Dear Mr. Folonis:
Recently you contacted our Agency w~th an offer to donate
a wood-frame, three bedroom house located in the City of
Santa Mon~ca. I am pleased to ~nform you that we have
identified a family in need who is w~lling to accept your
kind donation. The fam~ly ~s Mr. and Mrs. Carlos Martinez
who presently res~de at 311 Gertrudes Street, in the Boyle
Heights community in the C~ty of Los Angeles. The Martinez'
family have seen the house you are offering and are very
pleased and excited. The Mart~nez' family live within our
Boyle He~ghts I Ne~ghborhood Revital~zation Project Area.
The Agency is currently making a concerted effort to
conserve the eX1sting hous1ng ~n this predominantly Spanish
surname, low-income ne1ghborhood through a var1ety of low-
interest hous~ng rehab~litatlon loans.
The Martinez' family presently have two units on one lot
in wh~ch the immediate and extended family reside. Unfor-
tunately, one of the un~ts 15 not rehabilltation feasible
and until your offer was made, the Agency had no solution
to this problem. We are therefore, propos~ng to accept
your offer and move the structure from Santa Monica to the
Martinez' property ~n Boyle Helghts.
Our Ag€ncy will provide a low-interest loan to the ~4rtinez'
family to cover the movlng costs, set-up and hook-up anu to
make approprLate rehabl1ltatlon ~provements. We are anxious
to proceed on this matter pend~ng clearance ~f necessary
regulations and legal channels. The procedures used will be
very similar to those involved ~n the Salvador Mungcal resi-
dence which you prevlously donated to our revltalization
project area.
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Mr. Michael w. Foloni~
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-2- October 31, 1980
We look forward to working with you again and greatly appre-
ciate your sensitivity to conserving and re-using an
~mportantly needed hous~ng stock.
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Sincerely,
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Raul M, Escobedo
Project Manager
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cc: F. Silva
C. Kane
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