SR-407-009 (6)
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Redevelopme?t Agency MeetIng 5/28/85
Santa Monlca, CalIfornIa
TO:
Cha1rperson and Redevelopment Agency
FROM:
Redevelopment Agency Staff
SUBJECT: Request for Cornmi truent of Funds Prom CIty-WIde HousIng
AcquisItion and RehabIlitatIon Program
INTRODUCTION
ThIS report transmits a request for conmltment of deferred loan
funds from the City-wIde Housing AcqUisitIon and RehabIlItatIon
Program (CHARP) submitted by CommunIty CorporatIon of Santa Monl-
ca (CCSM) for the relocation and rehabIlitatIon of thIrty-two
hous 1 ng uni ts on scattered si tes In the Mld-C 1 ty and Ocean Park
areas. The report reconmlenrls approval of a COmItll tment of program
loan funds and requests author I za tl on to enable the Execu tl ve
DIrector to release funds upon satIsfactIon of all progranl
requIrements.
BACKGROUND
On September 4, 1984 the Agency approved the allocatlon of
FY1984-85 funds from the Downtown, Ocean Park l(a) and l(b) Re-
development ProJects to the CIty-wIde HousIng AcquisItlon and
ecIR~-=<..
MAY 2 8 1985
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Rehablll ta t 1 on Prog ram (CHARP). The CHARP program gu Idel1 nes re-
qUIre that the Redevelopment Agency approve each request for pro-
gram loan funds. This report describes the requested loan for the
relocatIon and rehabIlItatIon of thIrty-two vacant rental unIts,
and analyzes the borrower's proposal relatIve to approved progranl
elIgIbIlIty and fundIng crIterIa.
DescrIptIon of the ProJect
CommunI ty Corporation of Santa MonIca (CCSM) and Santa MonIca
Hospital have been workIng together to relocate and rehabilItate
th 1 rty-two vacant rental uni ts currently owned by the hOSpl tal,
located on 16th Street between Arizona Avenue and Santa Monica
Boulevard. The hospItal has agreed to donate these units to Com-
munIty CorporatIon, to pay for the archItectural and englneerlng
serVIces, and to cover up to $298,090 of the cost of rehabIlItat-
Ing the unIts.
On December 20, 1984 the Rent Control Board granted a removal
permIt for the relocatIon and rehabIlItatIon of these units on
other sItes in the City. In accordance wIth the Category "0" re-
moval permIt regulatIons, the hospItal IS only requIred to make
15% of the relocated hous1ng unIts affordable to low lnCOme ten-
ants. By prOVIding the level of fInancial support indIcated
above, WhICh IS over 53% of the SUbSIdy necessary to make the
proJect feaSIble, the hOspItal is exceedIng this reqUIrement. The
leveragIng of these funds WIth a CHARP loan wlll enable Con~lunlty
CorporatIon to develop all of the unIts for occupancy by low and
moderate-lncome tenants.
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The rehabIlitatIon work proposed for these bUIldIngs Includes
repairIng plumbIng, replacing and repairing flooring, cabinets,
and walls, and reconflguring the bUIldings to prOVIde a greater
number of three and four-bedroom unIts. The rents will be tled to
the SectIon 8 Fair Market Rents, WhICh are affordable to low and
moderate Income households WIthout addItIonal rent SubsIdIes, and
WhiCh make the units affordable even to very-low Income tenants
With the Section 8 program certIfIcates.
Communi ty Corporation has Identi f led three Sl tes su i table for
these mOve-on bUIldIngs. A fourth buildIng will remalO and be
rehabIlItated on-sIte. Two of these SItes, 2405-07 4th Street and
1544 Berkeley, are In escrows that must close WithIn thIrty days.
CommunIty Corporatlon has applIed for a combined construction and
permanent loan from the Bank of AmerIca through the Callfornla
Housing FInance Agency (CHFA) MultIfamIly Housing Bond Program.
Although thlS proJect meets the Bank's underwrIting crIterIa, the
Bank 1 s loan processing tlmellne WIll not approve the loans ln
tIme to meet the escrow closing dates. Therefore, CommunIty Cor-
poratIon has requested a short-term loan of $5113, rJrJrJ for si te
acqul Sl tlon. ThIS loan wi 11 be reduced to a permanent loan of
$260,000 when the Bank of America/CHFA loan IS made, and the (31f-
ference of $250,000 WIll be returned to the CItYWIde HOUSIng Ac-
qUISItIon and RehabIlItation Program account to be used on other
elIgIble proJects. The proJect proforma analysis, presented In
Attachment "Alt summarIzes the SIte locations, development costs
and fund sources.
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ProJect ElIgIbIlIty Under CHARP GuidelInes
The approved CHARP gUldellnes contaIn a number of crIteria for
proJect evaluation. CCSM's proposal for fundIng to relocate and
rehabIlItate these unIts meets the program standards as follows:
- FInancIal FeasIbIllty
The CHARP gUIdelInes establIsh three crIterIa for determIning the
maXlInum loan amount:
(1) The deferred loan should not exceed $15,000 per unit.
(2) The loan amount should not exceed thirty-three percent (33%)
of the total development costs.
(3) The loan shall not exceed the amount necessary to make the
proJect feasIble.
The $260,000 permanent loan requested for thIS project IS equal
to $8,125 per unl t, and represents fIfteen percent (15%) of the
total development costs.
- BenefIt to Low and Moderate Income Households
The CHARP gUIdelInes reqUIre that at least elghty-f 1 ve percent
(85%) of the tenants have low or moderate Incomes. One hundred
percent (100%) of the tenants In these bUIldings wIll have low or
moderate Incomes.
- ProJect LocatIon and RehabIlItation Standards
ConSIstent WIth the CHARP gUIdelInes, the proposed proJect loca-
tIons are free from adverse envIronmental condl tlons. CCSM pro-
poses to brIng the properties up to the Sectlon 8 Housing Quality
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Standards. The rehabIlItatIon work Items are elIgIble under the
CHARP gUIdelInes.
- Tenant PartIcIpatIon
The CHARP gUIdelInes requIre that at least seventy-fIve percent
(75%) of the eXIstIng tenants affIrm their deSIre to particIpate
in the program. Sloce there are no eXIstIng tenants In these
bUIldIngs, thIS crIterIa does not apply to thlS loan request.
In addltlon, the proJect also successfully meets the competltlve
selectIon criterla specifIed In the program gUIdelines. The proJ-
ect provIdes a sIgnIfIcant Increase in affordable housing oppor-
tunl tIes for famIlIes, sIgnIfIcant Improvement to the houslng
stock through rehabIlItatIng buildings wIth health and safety
problems, the leveragIng of other subSIdy programs, and the pro-
VISIon of SIgnIfIcant beneflt to low and moderate Income
households.
FINANCIAL / BUDGETARY IMPACT
The approprIatIon authorIty to fund the requested loan lS 10 the
CltY-Wlde HOUSIng Acqulsltlon and RehabIlItatIon Program ac-
counts, 10 the following account numbers:
$255,000 (16-720-264-000-942)
$186,150 (18-720-264-128-942)
$ 68,850 (18-720-264-129-942)
$510,00'0' Total
No addItIonal budgetary actIon IS reqUIred.
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RECOMMENDATION
It IS reconmlended that the Redevelopment Agency approve the use
of CIty-wIde HousIng AcqUIsItIon and RehabIlitatIon Program funds
for the relocat lon and rehablll ta ti on of th 1 rty-two unl ts as
descrIbed In thIS report, and authorlze the ExecutIve DIrector to
execute all necessary loan documents and to release loan funds of
$510,000.
Prepared By: Ann Sewlll, Houslng Program Manager
Houslng DIVIsIon
Department of CorrmlUnlty and ECOnOITlIC Development
Attachment:
"A" - ProJect Proforma
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Slte and UnIt Dlstrlbutlon
Unlts
10
8
8
6
ProJect Proforma
Development Costs:
Land AcquIsItIon
RehabIlItatIon
ArchItectural
Insurance/Taxes
Title and RecordIng
Bond Fees
TOTAL DEVELOPMENT COSTS
Sources of Funds:
EXlstln9 SIte
1327 16th st.
1325 16th St.
1331 16th st.
1336 16th St.
CombIned ConstructIon and Permanent Loan -
Bank of AmerIca / CHFA
Santa MonIca HospItal Loan
CHARP Loan
TOTAL SOURCES
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Attachment lIAIl
New Slte
2405-07 HollIster
1544 Berkeley
Under NegotIatIon
Same Slte
$ 709,500
$ 953,168
$ 0
$ 36,0010
$ 12,000
$ 810,132
$1,7910,80'10
$1,232,800
$ 298,0'I.HJ
$ 260,0100'
$1,790,800'
Note: CHARP wlll make an short-term loan of $510,01010 to purchase
the 4th Street and HollIster sltes. $250,1000 of thIS loan wIll be
pre-paId when the Bank of America / CHFA loan IS made; the
remaInder of $260,00'0 wIll be a twenty-fIve year loan.