SR-413-001 (20)
RMD:RDA:TR:F:\RESOURCE\SHARE\STAFFREPORTS\RDA Annual Report 01-02 .doc
Council Meeting: December 17, 2002 Santa Monica, California
To: Mayor and City Council
Chairperson and Redevelopment Agency
From: City Staff
Subject: Annual Report for Fiscal Year 2001-2002 for the
Redevelopment Agency of the City of Santa Monica
INTRODUCTION
The California Health & Safety Code requires that the Redevelopment Agency present
an annual report to the City Council and file such annual report with the Controller of the
State of California no later than December 31, 2002. This staff report presents the
attached Santa Monica Redevelopment Agency Annual Report for Fiscal Year 2001-
2002, which includes an independent financial audit, pursuant to Section 33080.1 of the
California Health and Safety Code.
BACKGROUND
The purpose of the Annual Report of the Redevelopment Agency is to provide financial
and housing data to the state legislature and interested parties regarding the Agency
and its activities. The attached report includes the following:
1) Annual Report Summary for Fiscal Year 2001-2002, which includes information
which the Agency believes useful in explaining its programs and activities
(Attachment A);
2) An independent financial audit and report conducted in accordance with
generally accepted auditing standards (Attachment B);
1
3) A fiscal statement that provides information on the outstanding indebtedness and
the amount of tax increment revenue generated by the Agency in total and by
each project area (Attachment C); and
4) A description of the Agency’s activities including those affecting housing and
displacement (Attachment D)
DISCUSSION
The accounting firm of KPMG completed an independent financial audit for the financial
year from July 1, 2001 to June 30, 2002, in compliance with standards set out in Section
33080.1 of the California Health and Safety Code. KPMG issued an unqualified audit
report which means that the Agency’s records accurately and fairly represent the
financial position of the various funds and account groups of the Redevelopment
Agency as of June 30, 2002.
The attached annual report provides specific information on housing and other activities
of the Redevelopment Agency in Fiscal Year 2001-2002. Presentation of the annual
report to the City Council is required prior to its transmittal to the State Controller.
The Agency will be conducting a public hearing early in the 2003 calendar year to
review and evaluate the progress of the Agency’s 1999 Implementation Plan.
2
BUDGET/FISCAL IMPACT
There is no budget/fiscal impact resulting from the approval of the Redevelopment
Agency’s Annual Report of Fiscal Year 2001-2002.
RECOMMENDATION
It is recommended that the City Council receive and file the Annual Report for Fiscal
Year 2001-2002 for the Redevelopment Agency of the City of Santa Monica and that
the Redevelopment Agency direct the Executive Director of the Redevelopment Agency
to transmit the report to the Controller of the State of California.
Prepared by: Jeff Mathieu, Director of Resource Management
Mike Dennis, Director of Finance/Agency Controller
Robert Moncrief, Housing and Redevelopment Manager
Tina Rodriguez, Redevelopment Administrator
Martin Kennerly, Administrative Services Officer
Bill Jias, Senior Account
Attachment A - Annual Report Summary for Fiscal Year 2001-2002
Attachment B - KPMG Independent Auditor’s Report for 2001-2002
Attachment C - State Auditor Controller’s Report of Financial Transactions and
Statement of Indebtedness for Tax Year 2001-2002
Attachment D - State Housing and Community Development Department Annual
Report of Housing Activity of Community Redevelopment Agencies
for the Fiscal Year Ended 06/30/2002
3
Attachment A
ANNUAL REPORT SUMMARY
FOR FISCAL YEAR 2001-2002
REDEVELOPMENT AGENCY OF THE CITY OF SANTA MONICA
INTRODUCTION
As required by California Health & Safety Code Section 33080.1, the Redevelopment Agency
must file an annual report with the California State Controller within six months of the end of the
Agency’s fiscal year. The annual report must contain:
1) An independently prepared financial audit report conducted in accordance
with generally accepted auditing standards (Independent Auditor’s Report)
2) A fiscal statement that provides information on the outstanding
indebtedness of, and the tax increment revenue generated by, the agency
and by each project area (State Controller’s Report of Financial
Transactions of Community Redevelopment Agencies and Statement of
Indebtedness)
3) A specific description of the Agency’s activities affecting housing and any
displacements (Annual Report of Housing Activities of Community
Redevelopment Agencies)
4) Any other supplemental information that the Agency believes useful in
explaining its programs and activities.
4
This annual report for the Santa Monica Redevelopment Agency contains information
required by state law and includes a review of the objectives and activities of the
Redevelopment Agency in FY 2001-2002, and previews the Agency’s objectives and
work plan for FY 2002-2003.
II. DESCRIPTION OF REDEVELOPMENT PROJECT AREAS
On August 13, 1957, the City Council of the City of Santa Monica established the
Redevelopment Agency of the City of Santa Monica, pursuant to Redevelopment Law.
In May 1972, the City Council declared itself the Agency and assumed all the rights,
powers, duties and privileges vested in a redevelopment agency. There are four
redevelopment projects within the city:
Ocean Park Redevelopment Project 1A
o
Ocean Park Redevelopment Project 1B
o
Downtown Redevelopment Project
o
Earthquake Recovery Redevelopment Project
o
Ocean Park Redevelopment Project 1A
The City Council adopted the Redevelopment Plan for the Ocean Park Redevelopment
Project 1A on June 30, 1960. The Redevelopment Plan was amended on November
14, 1967, principally to change the permitted land uses in the project area.
Ocean Park Redevelopment Project 1A is 25 acres bounded by Ocean Park Boulevard
on the north, Neilson Way on the east, Ocean Park Project 1B on the south and the
State beach parking lots and the beach itself on the west. Phase one of the project was
completed in 1980 and phase two was completed in May of 1987.
5
The project contains two 17-story high-rise apartment buildings, known as Santa
Monica Shores. Each tower contains 250 rental apartment units. Also within the Project
Area, on both sides of the apartment complex, is the Sea Colony condominium project.
Sea Colony contains 340 condominium units. Also, located in the center of Project Area
1A, facing the Ocean, is a public park called Ocean View Park.
Ocean Park Redevelopment Project 1B
The City Council adopted the Redevelopment Plan for the Ocean Park Redevelopment
Project 1B on January 24, 1961. The Redevelopment Plan was amended on January
26, 1965, July 13, 1971 and again on September 12, 1972, principally to change the
permitted land uses in the project area.
Ocean Park Redevelopment Project 1B is 8 acres bounded by Ocean Redevelopment
Project 1A on the north, Neilson Way on the east, the City limit on the south and the
State beach parking lots and the beach itself on the west.
Ocean Park Redevelopment Project 1B was completed in 1983.
The project contains two senior citizen residential apartment complexes and a former
utility building. Neilson Villas contains 100 rental apartment units. Barnard Park Villas
contains 61 units. A utility building was adapted in to house offices and art storage for
the Eli Broad Trust Art Foundation.
6
Downtown Redevelopment Project
The City Council adopted the Redevelopment Plan for the Downtown Redevelopment
Project on January 13, 1976.
The Downtown Redevelopment Project encompasses about 9.9 acres of property
located in the downtown core of Santa Monica. The Downtown Redevelopment Project
th
is bounded by Broadway on the north, 4 street on the east, Colorado Avenue on the
nd
south and 2 Street on the west. It was completed in 1980.
It consists of Santa Monica Place owned by Macerich Company and the adjoining
parking structures. The retail portion of the project contains approximately 570,000
square feet of floor area including two major department store anchors and 160
specialty retail shops and food businesses, all of which are linked by a three level
enclosed pedestrian space that extends diagonally across two city blocks. The project
is adjacent two Agency-owned parking structures provide 1,956 parking spaces.
Earthquake Recovery Redevelopment Project
The City Council adopted the Redevelopment Plan for the Earthquake Recovery Project
on June 21, 1994.
Earthquake Recovery Project is 2.89 square miles bounded on the east by Cloverfield
th
and 26 Street, on the west by Pacific Coast Highway/Beach Promenade, on the south
generally by Pico Boulevard and on the north by Montana Avenue. The project area
7
includes the structures predominately damaged in the January 1994 Northridge
earthquake. Approximately 90% of all red-tagged and 60% of all yellow-tagged
buildings in the City were in the project area.
The Earthquake Recovery Project has funded disaster prevention and mitigation,
commercial revitalization, community revitalization and institutional projects.
AGENCY OBJECTIVES AND ACTIVITIES FOR FISCAL YEAR 2001-2002
The Agency’s objectives and activities for the last fiscal year, which implement the 1999
Implementation Plan for Ocean Park 1A, Ocean Park 1B, Downtown and Earthquake Recovery
Redevelopment Project Areas are discussed below.
Non-Housing Objectives and Activities
?
The Civic Center Specific Plan - The Specific Plan went through a preliminary
review with City Council approving in concept the Civic Center Land Use Plan.
rd
The Plan will include Santa Monica Place and will provide for a link to the 3
Street Promenade and the Civic Center Area.
?
Disaster Prevention and Mitigation Programs – Design work on Seismic Retrofit
for Parking Structure 7 has commenced, and is anticipated to be completed by
end of 2002. The seismic retrofit work will commence in early 2003.
?
Construction work for Parking Structure 8 commenced in late April with 60% of
the project completed through October 2002. The seismic retrofit work will
resume in January 2003, after the Holidays, with a completion by April 2003.
8
?
The Palisades Bluff project commenced conceptual design work and is currently
going through the environmental review process, including an analysis of how the
project work may be phased.
?
The Municipal Pool was completed on July 11, 2002. The new facility includes a
50-meter pool, and a smaller instructional pool. The original pool had earthquake
damage resulting from the 1994 Northridge Earthquake.
?
Financial - On May 2, 2002 the Agency issued a $19,315,000 Tax Allocation
Bond for the purpose of refunding the Agency’s Ocean Park Redevelopment
Projects 1992 Tax Allocation Bond, including repayment of a City of Santa
Monica Loan and providing funds for improving and preserving the supply of low
and moderate income housing.
?
Financial - On May 2, 2002 the Agency issued a $5,640,000 Lease Revenue
Bond for the purpose of refunding the Agency’s Downtown Lease Revenue 1992
Bond, including repayment of a City of Santa Monica Loan and providing funds
for improving and preserving the supply of low and moderate income housing.
Affordable Housing Objectives and Activities
The Agency continued to increase, preserve and improve the supply of affordable
housing in the City in 2001-2002 fiscal year. Consistent with the Five Year
Implementation Plan for the FY 1999-00 through FY 2003-4, the Agency in FY 2001-
2002 continued with its efforts to accelerate redevelopment revenue for affordable
housing activities. In addition, the Agency has directed all redevelopment funds from
Ocean Park 1A, 1B and Downtown Project Areas, net of debt service and administrative
costs, to fund housing activities. The following scheduled and additional housing
9
activities are consistent with the objectives of the Five Year Implementation Plan. A key
operating goal of the Agency is to secure as many low and moderate housing
opportunities in the city as possible. The strategy to accomplish this was to focus on
funding property acquisitions primarily and subsequently to accomplish building
rehabilitation. A number of the sites listed below have been fully acquired and are still
undergoing rehabilitation work.
th
?
1116/1122 4 Street – Agency participated in funding construction of a 66-unit
apartment building built over a three level subterranean city owned parking
garage. All available units to be for very low income seniors. The project was
completed on March 7, 2002.
Funding source: Ocean Park, Downtown and Earthquake Recovery Projects.
?
2449 Centinela Avenue – The Agency funded the acquisition and part of the
continuing rehabilitation of a 20-unit apartment building. All 20 units are one
bedroom and will be for low-income households at 60% or less of median
income. Project completed June 27, 2002.
Funding source: Earthquake Recovery Project
?
502 Colorado Avenue - The Agency as the owner of the property entered into an
87-year Ground Lease with Community Corporation of Santa Monica (CCSM) as
the Lessee. No Agency funds are designated for this project. The City provided
$5.3 million dollars for the construction of 44 single units at very, very-low income
rents. CCSM incorporated energy-efficient elements into the design of the
building. The project was completed on June 4, 2002.
10
?
1930 Stewart – The Agency provided the City $2,000,000 for use in the
acquisition by the City of the 4.8 acre Mountain View mobile home park. The site
is intended to be maintained for affordable mobile home housing. Agency
funding will be in the form of a grant. The anticipated completion date for Agency
related actions related to the Grant are December 2002.
?
175 Ocean Park Boulevard - The Ocean Park Housing Trust Fund paid $127,900
to subsidize 22 units of housing for very low income senior and family
households through the lease payment made by the Agency on behalf of the 175
Ocean Park Boulevard public housing development operated by the County of
Los Angeles. This has been an ongoing activity of the Redevelopment Agency
for many years.
Source: Ocean Park 1A Project.
III. AGENCY OBJECTIVES FOR FISCAL YEAR 2002-2003
Non-Housing Objectives and Activities
?
Disaster Prevention / Seismic retrofit of Public Parking Structures- The Agency’s
funding of the partial cost of the Library parking is being done in lieu of retrofit
work at the existing library as well as providing parking for the downtown area
while retrofit work is being done at other downtown parking structures.
?
Construction work for Parking Structure 8, will be completed by April 2003.
?
The seismic retrofit for Parking Structure 7 will commence in fiscal 2002-03.
11
?
The seismic retrofit design work on Parking Structure 5 to be completed in fiscal
year 2002-03.
?
The Palisades Bluff project final design work, environmental review, including
phasing plan for the project is to be completed in this fiscal year. Phase one of
the work is anticipated to start in 2004.
?
Pending requests for funding, including a request received from Santa Monica
College, are under consideration.
Affordable Housing Objectives and Activities
rd
?
2907 3 Street – Agency participated in the acquisition and rehabilitation of 11
units (4 one bedroom and 7 two bedroom units). All 11 units will be for very low
income family households at 50% or less median income. Anticipated
completion: December 2002.
Funding source: Earthquake Recovery Project.
th
?
813 9 Street – Agency participated in the acquisition of 10 units (7 one bedroom
and 3 two bedroom). Five units will be for be for very low income households at
50% or less median income and 5 for low income households at 60% or less of
median income. Anticipated completion: January 2003.
Funding source: Ocean Park, Downtown and Earthquake Recovery Projects.
th
?
1052 18 Street – The Agency funded the acquisition and part of the
rehabilitation of a 15-unit apartment building. There are 12 two bedroom and 3
three bedroom units. Eight units will be for very low income (50% or less of
12
median income) and seven for low income households (between 60-70% of
median income). Anticipated Completion: January 2003.
Funding source: Earthquake Recovery Project.
th
?
2243 28 Street- The agency funded the acquisition and rehabilitation of a 12-
unit apartment building. There are 8 one bedroom and 4 two bedroom units. Six
units will be for very low income households at 50% of median income and six
units will be for low income households at 60% of median income. Anticipated
completion: September 2003
Funding source: Earthquake Recovery Project Area
th
?
2428 34 Street – Agency is participating in the acquisition and rehabilitation of
12 units (10 one bedroom and 2 two bedroom units). All units to be for very low
income households at 50% or less of median income. Anticipated completion:
December 2003.
Funding source: Downtown and Earthquake Recovery Projects
?
2411 Centinela – Agency is participating in the acquisition and rehabilitation of 14
units (4 studios and 10 one bedroom units). Eight units will for very low income
households at 50% or less median income and 6 units will be for low income
households at 60% or less of median income. Anticipated completion: December
2003.
Funding source: Ocean Park and Earthquake Recovery Projects.
?
2423 Centinela – Agency is participating in the acquisition and rehabilitation of 8
units (4 studios and 4 one bedroom units). Four units will for very low income
13
households at 50% or less of median income and 4 for low income households at
60% or less of median income. Anticipated completion: December 2003.
?
1943,1945,1955 and 1959 High Place- The Agency funded an acquisition only of
a properties consisting of 14 units. Seven units will be for very low income
households at 50% of median income and seven units will be for low income
households at 60% of median income. The property was acquired in August 16,
2002.
Funding source: Earthquake Recovery and Ocean Park Projects.
th
?
2018 19 Street- Agency funded the acquisition of land for a Habitat for
Humanity proposed affordable ownership housing development targeted to very,
very low income buyers. The project design is anticipated to be completed by
2003.
Funding Source: Earthquake Recovery Project
V. AGENCY ACTIVITIES AFFECTING HOUSING SET ASIDE FUNDS
The Santa Monica Redevelopment Agency did not participate in any activities that
resulted in the displacement, relocation or demolition of housing. The Agency did not
conduct relocation, demolition or displacement activities outside the project areas in FY
2001-2002 and no such activity is expected to occur in FY 2002-2003.
The agency contributed $5,987,007 into its Low & Moderate Housing Fund, reflecting
20% of the tax increment revenues received by the Agency in FY 2001-2002. These
14
funds will be used in support of low and moderate income housing in future years. The
following represents the breakdown of these contributions:
Ocean Park Redevelopment Projects 1A & 1B
In FY 2001-2002 the Ocean Park 1A and 1B Redevelopment Projects received a
combined $ 2,821,330 in tax increment revenue and $564,266 in housing set-aside
revenues. These funds were expended on debt service, associated administrative
costs and deposited in the affordable housing fund.
Downtown Redevelopment Project
In FY 2001-2002, the Downtown Redevelopment Project received $ 1,394,009 in tax
increment revenue and $278,802 in housing set-aside revenues. These funds were
expended on debt service, associated administrative costs and deposited into the
affordable housing fund.
Earthquake Recovery Redevelopment Project
In FY 2001-2002, the Earthquake Recovery Redevelopment Project received
$25,719,694 in tax increment revenue and $5,143,939 in housing set-aside revenues.
AB1290 payments of $5,143,939 will be distributed to other taxing entities including the
City of Santa Monica from tax increment revenues.
Prepared by: Jeff Mathieu, Director of Resource Management
Robert Moncrief, Housing and Redevelopment Manager
Tina Rodriguez, Redevelopment Administrator
Martin Kennerly, Administrative Services Officer
15
Attachment B
KPMG Independent Auditor’s Report
2001-2002
Not Available Electronically
1
Attachment C
State Auditor Controller’s Report of
Financial Transactions and
Statement of Indebtedness for
Tax Year 2001-2002
See Attached File
2
Attachment D
State Housing and Community Development Department
Annual Report of Housing Activity of
Community Redevelopment Agencies for
Fiscal Year Ended 06/30/2002
Not Available Electronically
3