SR-407-003-010 (2)
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19APR 2. 2 1980
Santa Monica, CalIfornia, April 14, tlU
TO: Mayor and CIty Council
FROM: City Staff
SUBJECT' Draft "Request For Propos a Is" (RFP)
Fifth Street low/Moderate-Income Family Housing Sites
Introduction
This report presents for City CounCil review a draft Request For Proposals for future
dissemination to prospective developers of housing at the Fifth Street location.
Background
On November 27, 1979, the City Council authorized the acquisition of two 11,200
square foot parcels of vacant land located at 2019-25 and 2219-21 Fifth Street.
The acquisition of these sites was accomplished through the use of $884,000 of
Community Development Block Grant funds.
Additionally, on February 26, 1980, the Council approved a resolution authorizing
the City Manager to apply to HUD for "Preapproved SI te Designation" for the tlrJO
parcels. The effect of this action is to ask HUD to reserve funds from their
existing allocation of Section 8 Family New Construction Program monIes, for
possible use by a developer to be selected by the City.
Discussion - Proposed Process
Staff recommends the City follow the same process of developer selection recently
utilized for the 60 unit senior citizens project to be located on Barnard Way. ThiS
recom~endation is based in part on HUD's policy that a competitive selection process
is a prerequisite to the receipt of the HUD controlled Section 8 allocation
This process involves the development and dissemination of a "Request For Proposals"
(RFP) which detaIls the constraints, parameters, format and specific requirements
of the proposals to be submitted by the developers in response to the request
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Mayor and City Council
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April 14, 1980
Once the proposals are received and analyzed, a developer is selected by the
Council for a limited exclusive negotiation period during which time the developer
and City staff seek to negotiate a firm development agreement which describes
in greater detail the exact nature and scope of the proposed development; a
delineation of the process to be followed in advancing the development program;
and, a proposed timetable for the accomplishment of those various steps.
Once the development agreement is negotiated, it is presented to the Council, and
any Commissions which it may designate, for public hearing and consideration.
Proposed RFP
The attached draft RFP has been prepared for City CounCil review and consideration
prior to Its dissemination to prospective developers. The draft RFP seeks to
establish limits of acceptability without unduly restricting innovative or
unconventional proposals. Specific elements of the RFP are discussed below.
A. Non-refundable Proposal Deposit (Page 1)
The draft RFP contains a requirement for a Sl,OOO non-refundable deposit
to accompany each proposal, as did the RFP for the Barnard Way parcel.
Unlike the earlier RFP, this draft RFP exempts non-profit developers
from the depOSit requirement.
The Intended purpose of the deposit requirement is to screen out developers
who are not seriously interested in the proJect, thereby reducing the a~ount
of staff time required to analyze the submitted proposals. An unintended
result may be to discourage capable developers who realize that ultimately
only one developer will be selected and are unable or unwilling to co~mit
$1,000 in addition to their time and direct expenses in preparing a proposal.
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Mayor and City Council
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April 14,1980
The City received eIght proposals for the Barnard Way site, having mailed
RFP's to 35 prospective developers and having received preli~inary expression
of intent from 12 of the developers. Two or three of the developers inquired
about the deposit, but no one indicated that the requirement was a determining
factor in their decision to submit or not submit a proposal
The proposed exemption of the submission deposit for non-profit developers is
intended to encourage participation from such groups.
B. Developer Selection (Page 2)
The draft RFP Indicates the developer selection will be based on
"l. Compliance with Cltyls Development Objectives, 2. Quality of the
development concept; and, 3 Financial capability and experience.'1 Although
these are fairly general descriptions, the City Council ~ay wish to expand or
otherwise modify these criteria, such as expressing a priority for ownership
or rental units.
C. Development Objectives (Page 3)
The development objectives, as currently written, specify that no less than
one-half of the units to be developed must be available for households earning
80% or less of the Los Angeles County median income levels, which is the
el igibllity limit for the Section 8 program
Since the land was acquired with Community Development Block Grant funds, at
least one-half of the new housing units must be available to low and moderate
Income households. Whether any or all of the remaining units should also be
available to low and moderate Income households is a policy decision yet to
be made. The RFP in its present form would allow mixed income proposals to be
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Mayor and CIty Council
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Ap r i 1 14, 1980
conSidered as well as 100% low and moderate income projects, although it does
set an upper limit of 120% of median income for all units.
The development objectives contain a statement of the City's preference for
projects which further energy conservation. The Council may wish to include
more specific objectives in this area.
As with the Barnard Way RFP, this draft RFP requires the developer to propose
a method of returning the property to the City within RO ~QCG
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50 years.
This provision may, but need not, discourage certain types of housing
developments; i.e., co-ops or condominiums.
D. Development Guidelines (Page 5)
As noted immediately above, the draft RFP requires at least 50% of the units to
be avaIlable to low and moderate Inco~e households and allows up to 50% of the
units to be for households earning up to 120% of the median Los Angeles County
household income.
Additionally, the draft RFP establishes advisory density guidelines of a maximum
of 12 and a minimum of 5 units per parcel. These limits were derived on the
basis of existing zoning and preliminary HUD findings.
LikeWise, the parking requirement of 1~ spaces per unit is based on existing
zoning and recognition of the general parking shortage in the area. Operating
experience has shown that the parking requirement waivers often granted to low
income elderly housing projects are not Justified for family projects
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Mayor and City CounCIl
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Apri I 14, 1980
E. Purchase and Development Agreement (Page 6)
In order to protect the City's Interest and to encourage the selected developer
to proceed promptly with negotiations and project development, the draft RFP,
as did the Barnard Way RFP, contaIns an additional deposit requirement for the
selected developer. The current requirement is for a letter of Credit In the
amount of five percent (5%) of the ultimate estimated development cost. For
these two parcels, the required letter of Credit would be approximately
$70,000-580,000. This requirement could be an obstacle for some non-profit
developers, but could also be waived when the developer IS actually selected.
Summary
This staff report is intended to outline and highlight the most Important aspects
of the draft RFP Any co~ments, additions, or revisions to the draft RFP will aid
the staff in preparing a final RFP.
Recommendation
It is recommended the City Council approve the attached "Request For Proposals,"
with whatever changes it may deem appropriate, and authorize the distribution of the
RFP.
Prepared by
JH:mh
Attachf'lent
John Hemer
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CITY o~
SANTA MONICA
C-L~LIFORXIA
OFFICE ;::'IF THE CITY.\l.:\i\AGER 3Q3-CJl.):73
1682 ~1"1Il St!:eet. :::a.nta '\'lunl",a. CailL~rTIla GCl-J,Ol
Dear Interested Developer
The enclosed Developer's Package is a solicitation for proposals for
the development of low/moderate-inco~e family housing on Parcels
Fifth Street 'WI and Fifth Street "B" in the City of Santa Monica,
Ca1 ifornia.
This package, which contains the development guidelines, is intended
as an aid to assist the developer In preparing the proposal The
guidel ines are not intended to preclude or unduly li~it an innovative
approach to development of the sites.
The suggested paxi~um nu~ber of uni~s to be developed on Parcels
Fifth Street "A'I and "B" is t'",elve (12) family d','lelling units on
each parcel. Proposals of greater densities will also be accepted.
Land price has not been established by the City. Developers may
wish to submit a proposed land price which will be taken into
consideration with other relevant factors in comparing proposals
which otherwise meet the City's development objectives. All
proposals must provide for an option which will allow the City to
reacquire the parcels within fifty (50) years of the initial transfer.
If you should have questions regarding this package, please contact
Mr. John He~er at (213) 393-9731.
Very truly yours,
CHARLES K. ~cCLAIN
City Manager
C KM : J H : mh
Enclosures
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SANTA
CALIFORNIA
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MONICA
DEVELOPER's PACKAGE
PARCELS FIFTH STREET "A" and FIFTH STREET "B"
LOW/MODERATE-INCOME FAMILY HOUSING DEVELOPMENT PROJECT
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TABLE OF CONTENTS
Introduction
Parcel Description
Developer Selection
Form of Offer . . . . . . . . . . . . . .
Outline for Statement of Developer's Qualifications.
Financial Responsibility and Proposed Development.
Develop~ent Objectives
Development Guide] Ines
Purchase and Development Agreement
Notification of Interest
Form of Offer to Negotiate Exclusively
Loca 1 i ty Map
Parcel Boundary Maps
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ATTACHMENT 1
ATTACHMENT 2
ATTACHHENT 3
ATTACHMENT 4
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R E QUE S T FOR PRO P 0 S A L S
CITY OF SANTA MONICA
LOW/MODERATE-INCOME FAMILY HOUSING DEVELOPMENT PROJECT
Introduction
The City of Santa Monica, California, proposes to sell or lease two parcels of
land located at 2019-25 Fifth Street and 2219-21 Fifth Street. The land will be
sold or leased by direct negotiation to a Developer who possesses high qualIfications,
the necessary financial resources, and who provides an adequate de~onstration of
their ability to carry the project to an exoeditious conclusion.
Developers are invited to enter into discussions with the City leading to the
submission of an Offer to Negotiate Exclusively with the City for a 3D-day period
for the purchase or lease and develooment of the subject parcels. All offers must
be in writing and in a for~ substantially the sa~e as the form of the Offer to
Negotiate Exclusively, included herein. The offer must be accompanied by a state~ent
of the Developer's qualifications, financial responsibility, and proposed development.
Offers must be suhmitted to the City on or before
, 1980. Each offer,
unless submitted by a non-profit organization, must contain a non-refundable deposit
of ONE THOUSAND DOLLARS (Sl,OOO). The City reserves the right to refuse offers from
Developers who do not notify the City, prior to
In submitting an offer.
, 1980, of their Interest
Parcel Description
Parcel Fifth Street "A" consists of approximately 11,200 square feet of vacant land
located at 2019-25 Fifth Street, Santa Monica, CalIfornia. The parcel, which is
currently zoned R-3, is within the Coastal Zone. The parcel di~ensions are 80 feet
by 140 feet.
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Parcel Fifth Street IIBil also consists of approximately 11,200 square feet of vacant
land and is located at 2219-21 Fifth Street. The parcel has the same dimensions as
Fifth Street 'W', the same R-3 zoning, and is also located in the Coastal Zone.
Developer Selection
The City intends to award exclusive negotiation rights to qual ified persons or
entitles. If awarded the exclusive right to negotiate, the Developer ~ust, for a
period of 90 days, seek In good faith to negotiate a Purchase and Development
Agree~ent with the City for the subject land. The City's choice of a Developer
will be based primarily upon:
1. Compliance with City's Development ObJectives;
2. QualIty of the development concept, and,
3. FinanCial caoability and experience
Form 0 f 0 ff e r
An outlIne of the data desired is given below. Information is requested regarding
the proposed Developer1s financial and adminIstrative capacities, past performance
record and membership of the proposed development and property management team.
An outlIne of the proposed development also is requested in sufficient physical and
economic detail to assure that the orospective Developer proposes to meet the City's
objectives.
Ten (10) copies of each proposal and supporting documentation is required. An
8~1I X 11" format is requested (exclusive of graphics)
Outline for Statement of Developer1s Qualifications,
Financial Responsibility and Proposed Development
I. Developer's Name and Address
2. Nature of Developer's Business Organization (Corporation, Partnership, Joint
Ventu re, etc.)
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3. Principals of the Developer (set forth corporate officers, principal
stockholders, general or linited partners, etc.) and names of proposed
architect, project manager, and Management entity, if available.
4. Statement of principal's willingness to execute personal guarantees of
performance by the Developer.
5. Describe the relationship of Developer with other entities (parent
corporations, subsidiaries, joint ventures, etc.)
6. Describe anticipated sources of financing. Attach a copy (or copies if
relevant) of current certified financial statements of the proposed
Developer or Its principals to indicate financial capability. Describe
contacts with anticipated sources of financing and their responses
Attach any relevant corresoondence
7. Name and address of bank and other business references.
8. List and describe relevant development experience completed or underway
by the proposed development entity or by its principals during at least
the last three (3) years. Indicate whether described projects are elderly,
family, or mixed.
9. List and describe relevant property nanagement experience with respect
to rental housing proJects, including number, type and location of
nanaged units.
10. Describe briefly in narrative for~ the general concept of the develop~ent
proposed, to comMunicate what the Developer proposes to create in the way
of the general aesthetic and economic enVironment.
11. Describe briefly in narrative form the general concept of proposed
alternative energy features, security and safety measures, provision
of access for the handicapped, and amenities.
12. Outline, in general, the proposed timing of the physical development, plus
the approximate economic character and financial magnitude of the develop-
ment (including the total estimated develop~ent cost, exclusive of land
and proposed land price, if any)
13 Describe process by which residents will be selected. DescrIbe how raCial
and et~nic diversity will be assured during I~itial and subsequent occupancies.
Develop~ent Objectives
The City's objective is to facilitate the developMent of housing units which will
be available to low and moderate income family households in keeping with the City's
overall assisted housing program, and which will be compatible with and sensitive to
the surrounding community. No less than one-half of the units to be developed ~ust
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be available for households earning 80% or less of the Los Angeles County ~edian
incom~ levels. Additionally, the City is supportive of the conservation of energy,
the use of alternative energy sources, and the implementation of design concepts
and materials which further these goals By the establishment of these performance
objectives, the City does not seek to preclude any feasible method of development
nor to endorse any particular approach. Innovative approach to financing methods
or ?hysical deSIgn are soliCited and ~111 be given full consideration As addItional
Jnfor~tjon, but not by way of limitation, the City has applied to the U.S. Department
of Housing and Urban Development (HUD) for the pre-approved site designation of the
Section 8 New Construction program The City's application was submitted in response
to the Notification of Fund Availability, dated September 26, 1979.
While creative a~d practical design IS o~e of the fore~ost consideration of the
City, the CIty does not want expensive drawings and architectural models frop;
prospective developers. Neither will extensive renderings or bUIlding elevations
be accepted with Offers to Negotiate. Rather, the selected Developer should expect
to work closely with the City's staff, commissions, and community groups during the
preparation of the necessary schematic plans and drawings prior to the execution
of a final Agreement to Purchase and Develop the land.
Since the City's ~rimary objective is the deve10Dment of units for occupanv by low
and ~oderate income family households, no land prices will ~e set or suggested.
Rather, the price, jf any, offered for the sale or lease of City Parcels Fifth Street
I'A" and Fifth Street IIB11 '.,li11 be taken into consideration in the overall comparison
and evaluation of the submitted proposals.
Finally, the City, as a condition of transferring the parcels at a below-market rate,
deSires the option of reacquiring the land within no less than fIfty (50) years of
the Initial transfer.
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Development GUidelines
The purpose of the following guidelines is to assist the Developer and his desIgn
personnel in achieving the desired quality level of site development.
I. Required Graphics
One black and white illustration (schematic drawing) of the site
development concept. It should include the follmving items:
A. General land coverage expected for the development.
B. Representative building bulks and their locations for each sIte.
C. Open space and public areas and their interrel~tionshlp.
D. Overall approach to site landscaping.
E. Overall approach to parking.
F. Indications of existing topography, finish grades, drainage,
and utility connections.
No other renderings, elevatIons, plans or other grap~ic ~aterials are
requIred at thiS time.
I I. Standards, Criteria and Restrictions
A. Land Use:
PARCEL FI FTH STREET tWI
Residential units for low and moderate income households.
No less than 50% of the units shall be available to house-
holds earning less than 80% of the Los Angeles County
median annual income. Up to 50% of the units may be
available to households earning no more than 120% of the
Los Angeles County median income.
PARCEL FIFTH STREET "B"
(Same as above.)
B 0 . 1
. enslty
PARCEL FIFTH STREET IWI
No more than t"/elve (12) and no less than five (5)
dwe 11 i ng un i ts .
PARCEL FIFTH STREET "B"
(Same as above.)
IThe density limits Cited above are Intended to be advisory. Proposals of greater
densities will be accepted.
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C. Height limit: None suggested. (Current zoning limits heights to
three stories--40 foot maximum.)
D. Parking: Not less than one and one-half (I!) parking spaces
for each dwelling unit.
Purchase and Development Agreement
Following receipt of offers, the City staff will review the offers and report their
findings and recommendatIons to the City Council. After a thorough evaluation,
which ~ight include workshop sessions, visits to Developer1s completed projects, and
conferences with prospective Developers, the City will select the offer of one (1)
Developer for the parcels. The selected Developer will be required at that time to
make a good faith deposit in the form of an Irrevocable letter of Credit in an amount
equal to five percent (5%) of the projected development cost.
The City reserves the right to reject, 1~ whole or in Dart, any and all Offers to
Negotiate ExclUSIvely
Further Information may be obtained from John Herner, Acting Director of Environmental
SerVices, at (213) 393-9731.
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ATTACHMENT NO. 1
This is to notify you that the undersigned is interested in submitting an
Offer to Negotiate Exclusively for the purchase and development of City
Parcels Fifth Street "A" and "B1'.
NAME OF DEVELOPMENT COMPANY.
COMPANY.s BUSINESS ADDRESS.
BUSINESS TELEPHONE NUMBER.
SIG~ATURE OF AUTHORIZED 4GENT
AGENT's OFFICIAL TITLE:
DATE:
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ATTACHMENT NO. 2
FORM OF OFFER TO NEGOTIATE
EXCLUSIVELY
Mr. Charles K. McClain, City Manager
City of Santa Monica
1685 Main Street
Santa Monica, CA 90401
ATTENTION. John He~er, Acting Director, Environmental Services
Dear Mr. McClain:
Subject
Offer to Negotiate Exclusively
The (t'Deve 1 oper") has stud i ed
the Developer1s package prepared by the City of Santa Monica and is interested
in negotiating with the City of Santa Monica with respect to the following
pa rce 1 s of 1 and:
FIFTH STREET lINt
FIFTH STREET "B"
(As shown on the parcel ~ap included
In the Developer's Package)
Attached is information indicating the experience and capability of Developer,
as well as a summary of what we believe is the potential for development of
the parcels and the general approach which we suggest for that development.
Also attached is a financial statement of our Company, and a proposed schedule
for the purchase and development of the subject land.
We have considered the City's Developer's package and understand all of its
provisions.
We hereby offer to negotiate with the City of Santa Monica for a ninety (90)
day period beginning on acceptance of this offer. If our offer is accepted, we
agree to negotiate diligently and i~ good faith and to use our best efforts
to arrive at a final purchase and develop~ent agreement which IS ~utually
acceptable. We agree to submit to the City of Santa Monica, within five (5)
days of acceptance hereof, a good faith deposit in the form of an Irrevocable
Letter of Credit In the amount of five percent (5%) of the projected development
cost, which deposit shall be retained by the City if we do not fulfill the
obligations of thIS agreement.
If this offer is accepted, the City agrees to negotiate with Developer concerning
Parcels Fifth Street "A" and Fifth Street "B11 for a period of ninety (90) days
beginning on acceptance, and during that period to negotiate with no one else
regarding the same parcels. City agrees to negotiate in good faith and to use
its best efforts to reach a final purchase and develop~ent agreement which is
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mutually acceptable. City agrees t~at if Developer has fulfilled its obligations
hereunder and after ninety (90) days no agreement has been reached, it will
return the good faith deposit within the five (5) days next succeeding.
This agreement shall terminate without notice at the expiration of the ninety
(90) day period unless extended by mutual agreement.
We understand and agree that the City will not be liable for any real estate or
brokerage fees which may arise in relation to the parcels under consideration.
A non-refundable deposit of ONE THOUSAND DOLLARS ($l,OOO) is enclosed with this
proposal. It is understood that this deposit will be deducted from the additional
deposit required upon the acceptance of this proposal, but will not otherwise
be returned to us. (DELETE THIS PARAGRAPH IF DEVELOPER IS A NON-PROFIT ORGANIZATION.)
Please Indicate your acceptance of the offer by signing and returning the attached
copy to us.
Sincerely,
(DEVELOPER)
By'
Title:
Address.
Phone:
This offer is hereby accepted as of the
day of
, 1980,
under the terms and conditions stated above.
CITY OF SANTA MONICA, CALIFORNIA
By:
CIty Manager
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ATTACHMENT NO 3
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