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SR-10-C (5) p .~ /0- (!. Council Meeting: 06/15/93 RM:Housing:JM:JG:lncln202/staffrpt1/pc I . ~ ...~ -1- - -:... ~ ~ ... lJ .~ t.....~ ). ~.... Santa Monica, California TO: Mayor and City council Members FROM: City staff SUBJECT: Recommendations Regarding the Selection of a sponsor and Authorization for City Manager to Enter into an option Agreement to Sell city-owned Land at 2807-09 Lincoln Boulevard to Volunteers of America for Development of Senior Housing INTRODUCTION This report transmits information and recommendations regarding the selection of a sponsor organization to pursue development of a city-owned site at 2807-09 Lincoln Boulevard. Staff is recommending a development of the above site which calls for the production of forty (40) units of affordable senior housing funded by the united states Department of Housing and Urban Development Section 202 Program. BACKGROUND The City owns land located at the northeast corner of Lincoln Boulevard and Ashland Avenue. The City Council authorized the purchase of the land on October 9, 1990, to lend assistance to a project whose primary use would be affordable family housing. This site was originally one parcel, roughly 65,000 square feet, referred to as the "Lincoln/Ashland" site. As part of the development process, the original 65,000 square foot lot was subdivided into two pieces, a "front" and a tlback" section. This arrangement was agreed upon to allow for a 45 unit project of 1 I () ., t!.., JuN 1 2~ '~J> affordable family housing on the rear portion of the lot to proceed independently of the development of the front piece. The "front" parcel was originally planned as a commercial component of the Lincoln Ashland Project. Due to the difficulty in securing commercial financing, the use of the "front" parcel was changed to residential use. In September 1991, after a competitive bidding process, the city council awarded VOA and its development team the exclusive right to develop the rear parcel. The city has made a financial commitment toward the rear parcel project, which will supplement other state and federal sources. The subject of this report concerns the development of the front piece of the land. In 1992, the City was approached by VOA, the developer of the rear portion of the Lincoln-Ashland site, to also develop the front piece of the site. They proposed a forty (40) unit affordable housing complex for low income seniors. This proj ect would be funded through the United states Department of Housing and Urban Development (HUD) section 202 grant program. The section 202 program awards funds on a competitive basis to eligible nonprofit sponsors for the development of affordable senior units. Occupancy is limited to seniors whose households income does not exceed fifty percent (50%) of the area median income. In June 1992, the City Council approved the selection of VOA as the 2 non-profit sponsor to submit an application to HUD for section 202 funding for the front parcel. The proj ect did not receive a funding commitment in the 1992 cycle. Discussion with HUD revealed that the project had a good overall ranking and probably would have been funded if not for a reduced allocation level. DISCUSSION Staff recommends that the City council choose VOA as the sponsor for the development of the front parcel. The choice of VOA takes advantage not only of their extensive experience but also of their ability to integrate this project with the family project on the contiguous parcel. VOA's affiliate organization, Volunteers of America National Housing Corporation, would serve as the project developer. The rest of the development team consists of Diana McIver & Associates, a national consulting firm which specializes in the provision of development services to private, nonprofit organizations developing affordable senior housing, and Killefer Flammang Purtill Architects, who have provided archi tectural services on many affordable multifamily, senior and single-room occupancy projects. Staff believes that the affordable family housing and senior housing side by side will produce a mix of households with an inter-generational character. VOA' s role in the development of the rear lot affords it the opportunity to integrate both the family 3 and senior housing as a single project. VOA is considering the possibility of inter-generational child care and other programs which will take advantage of the neighboring project. VOA also has at its command a vast array of social services and other resources to meet the needs of both low income families and seniors, as well as extensive experience in both senior and family housing. VOA has sponsored 131 housing complexes in cities throughout the nation, including more than 5,000 units developed for seniors under the section 202 program. This organization is considered one of the leading nonprofit providers of housing and services for the elderly in the country. This proposed affordable senior project is at a preliminary stage. However, the developer must establish site control prior to the July S, 1993 HUD application deadline. In order to provide site control, it is necessary for the city to enter into an option agreement to sell the lot to VOA. This action should be conditioned upon VOA's securing a HOD section 202 grant commitment for this development. This arrangement is similar to the manner by which both the Third street and Fourth street Senior housing projects were able to demonstrate site control. The Section 202 program will allow a portion of the overall grant to be allocated toward the cost of the land. Thus, if this project is awarded funds, the city would receive some financial consideration for the land. These funds could then be available to 4 offer additional amenities to the development, if desired. staff expects HUD to announce the section 202 awards in late September 1993. If the VOA proposal is awarded a funding commitment, staff will immediately proceed to work with the development team and the neighborhood on design and site planning. It is expected that the project could begin construction in the spring of 1995. As required by the Municipal Code, a notice of public hearing was published in the Outlook on June 5, 1993, ten days prior to this hearing. Notices were also posted on the site, pursuant to regular planning regulations. The notice specified that a public hearing would be held on the proposed sale of the land at 2807-09 Lincoln Boulevard. staff recommends that the sale of the lot without public bidding is in the best interest of the City. The development of both the "front" and tlrear" parcels of the Lincoln Ashland property allows for an inter-generational service program to be provided and coordinated to serve the residents of both the multi-family and senior project components. FINANCIAL/BUDGETARY IMPACT No financial or budgetary action is required at this time. 5 RECOMMENDATIONS staff recommends that the city Council take the following actions: Conduct a public hearing on the sale of the vacant parcel at 2807- 2809 Lincoln Boulevard to VOA, a nonprofit corporation, and upon conclusion of this hearing, adopt the attached resolution authorizing the 1.) sale of the lot to VOAi and 2.) city Manager to negotiate and execute an Option to Purchase agreement with VOA for the exclusive right to purchase the lot at 2807-09 Lincoln Boulevard to develop the section 202 senior housing project. Prepared by: Jeff Mathieu, Director Johanna GUllick, Senior Development Analyst Jim Kemper, Senior Development Analyst Resource Management Department Attachment: Resolution Authorizing an Agreement to sell Property 6 RESOLUTION NO. 8605 (CCS) (City Council Series) RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AUTHORIZING AN AGREEMENT TO SELL PROPERTY AT 2807-09 LINCOLN BOULEVARD TO VOLUNTEERS OF AMERICA, INCORPORATED WHEREAS, the city of Santa Monica (here~nafter "City") owns certain real property located at 2807-09 Lincoln Boulevard in the city of Santa Mon~ca, (hereinafter "Property"); and WHEREAS, the city of Santa Monica deSlres to sell the property to the Volunteers of America, Incorporated ("VOA"), who wlll prepare an application for a United states Department of Housing And Urban Development ("HUD") Section 202 grant to develop affordable senlor hous~ng unlts on the slte; and WHEREAS, the City of Santa Monlca has caused notice of lntent to sell property to be published in a local newspaper and posted notice on the Property providing information on the date and time of a public hearing; and WHEREAS, the City Council has held a public hearing at 6:30 p.m. on June 15, 1993 to hear from the public on the proposed sale of the property. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The City of Santa Monica agrees to sell the Property to VOA subject to: 1 A. VOA/s receipt of a grant commitment from the HUD Section 202 program for purposes of constructing affordable senlor housing on the property; B. Compliance with the provisions of the Californla Environmental Quality Act. C. Execution of an agreement entitled Option to Purchase between the City and VOA. SECTION 2. Municipal Code Section 2.24.110 provides that the sale of real property shall be by notice inviting bids unless the city Council flnds that advertising for bids would not be in the best interests of the city. The City council finds that advertis-ing for bids would not be in the best interests of the City because: (1) The city has determined that the development of rental houslng units for low income seniors is of benefit to the city of Santa Monlca: (2) The city has identified the Hun section 202 grant program as the most suitable source of funding necessary ln order to develop such housing I and thl.s fundlng is avallable only to qualified nonprofit developers; and (3) The ci ty has found VOA to be the most sui table and qualified nonprofit developer, with experience in working with the HUD Section 202 grant program, to develop such hous~ng in Santa Monica. SECTION 3. The city Manager is authorized to negotiate and to execute an agreement entitled Option to Purchase between the City of Santa Monica and VOA regarding the exclusive right to purchase the property, contingent upon VOA I S receipt of a HUD 2 Sectlon 202 grant commitment. SECTION 4. The City Clerk shall certify to the adoption of th1s Resolution, and thenceforth and thereafter the same shall be in full force and effect. A~VE~;S TO FORM: a~~ Joseph Lawrence Acting City Attorney d:\lncln202\ccresoll 3 Adopted and approved this 15th day of June, 1993, ~~. ~ .. J~& iLl ?J ' Mayor I hereby cert~fy that the foregoing Resolution No 8605(CCS) was duly adopted by the City Counell of the Clty of Santa Monica at a meet~ng thereof held on June 15, 1993 by the followlng Councll vote Ayes: Couneilmembers: Abdo, Genser, Holbrook, Olsen, Rosensteln, Vazquez Noes: Coune~lmembers: None J...bstain: Coune~lmembers: None Absent. Coune~lmembers: Greenberg ATTEST: /' . / / ~ // ,r-,.- /{P _ J-----' _ ~ / '-;7~. )-',. _.-- ~W'jAJ.fl j or> r jy <t. - Ci ty Crerk /-