SR-407-003-016
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DEe 1 2 1989
CjED:HSG: jm:wp
City Council: December 12, 1989
santa Monica, California
TO: Mayor and city Council
FROM: city staff
SUBJECT: Recommendation to Approve in Concept Citywide Housing
Trust Fund Loan to Community Corporation of Santa Moni-
ca for Development of 45 units of housing in Mixed-Use
Project at 2827 Lincoln Boulevard/827 Ashland Avenue.
INTRODUCTION
This report transmits information and recommendations regarding
a mixed-use project to be developed by community corporation of
Santa Monica at 2827 Lincoln Boulevardj827 Ashland Avenue (lrproj-
ectlr). The report recommends that the city Council: 1) approve
in concept the development of the Project in accordance with the
development criteria described herein, and 2) authorize the city
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Manager to proceed with processing a preliminary loan commitment
from the citywide Housing Trust Fund for the Project.
BACKGROUND
On October 25, 1988 the City council approved guidelines for the
Citywide Housing Trust Fund ("programlr). Revised guidelines were
adopted March 27, 1989. This Program is funded through developer
in-lieu fee payments made to the City pursuant to the City's in-
clusionary housing program (Ordinance 1448) and office housing
and parks mitigation program (Ordinance 1367).
program guide-
1 ines require City council approval of any proj ect which will
receive a Program loan in excess of $2,000,000.
Approximately
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DEe 1 2 1989
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$4.4 million has been appropriated for expenditure through the
Program.
On September 5, 1989 Community Corporation of Santa Monica sub-
mitted a Program loan application for the Lincoln-Ashland proj-
ect. The application requests a Program loan in the amount of
$60,000 per eligible unit, or approximately $2,700,000 for the
estimated forty-five (45) eligible units to be provided on this
site. The following discusses the proposed Project, including
project design, financing, and compliance with Program
guidelines.
DISCUSSION
The proposed site consists of a 65,000 square foot parcel located
at the northeast corner of Lincoln Boulevard and Ashland Avenue
in the Sunset Park neighborhood. The site is divided into commer-
cially zoned and residentially zoned areas: 46,650 square feet
zoned C-4 which fronts on Lincoln Boulevard, and 18,549 square
feet zoned R-2 which fronts on Ashland Avenue. The site is the
southernmost portion of a larger parcel which previously was the
site of a Pic'n'save discount store. CCSM will purchase the site
from the McDonalds Corporation which is constructing a restaurant
on the northernmost portion of the former pic'n'save site.
CCSM proposes to develop the site with forty-five (45) housing
units for very low, low, and moderate income households, and
18,000 square feet of commercial space. The housing component of
the Project will front on Ashland Avenue, and would include the
residentially zoned area of the site as well as a portion of the
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commercially zoned area. At least fifteen (15) of the residen-
tial units will be three-bedroom units. The balance will be one
and two-bedroom units. CCSM is seeking to lease the commercial
space to a market, or another neighborhood serving use. Two
levels of structured parking will be provided. The number of
parking spaces to be provided will meet or exceed the number re-
quired by the zoning Code. The downward slope of the site toward
Lincoln Boulevard will enable the redevelopment of the property
to take place without significant visual impact to the residen-
tial neighborhood to the east of the property.
The Project is subject to Site Review by the Planning Commission,
and, therefore, the Project will also be subject to the environ-
mental review requirements of the California Environmental Quali-
ty Act. The Project would be required to mitigate any significant
environmental impacts identified through the environmental review
process.
The proposed Project will be the first CCSM development in Sunset
Park. CCSM has presented the proposed Project to, and solicited
comments from the Sunset Park Area Neighbors (SPAN) and the
neighbors living immediately adjacent to the Project site. CCSM
will continue to work with neighborhood residents throughout the
design development phase.
All of the units in the proposed Project will be affordable to
low and moderate income households.
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proqram Eliqibility
The proposed Project meets the eligibility criteria for a City-
wide Housing Trust Fund program loan in terms of financial
feasibility, location, low and moderate income benefit, and
neighborhood review. In addition, the proposed Project meets all
established competitive selection criteria, in that the Project
will: 1) significantly increase affordable housing opportunities
for households who have difficulty finding housing, i.e. large
families; 2) use equity syndication and leverage state housing
subsidy programs to reduce total city SUbsidy requirements ~ 3)
benefit a high percentage of very low and low income households;
and 4) be located in an area where high land costs discourage the
inclusion of affordable housing in non-subsidized developments.
No specific appropriation for this project is required at this
time. After the Project receives conceptual approval from the
city Council, the speciflc funding determinations may be done
administratively in accordance with City Council approved Program
guidelines.
Project Financinq
Total development costs of the Project are estimated to be $9.5
million. Projected commercial income and rental income from the
housing component will enable the Project to carry private debt
of approximately $3.5 million. CCSM proposes to syndicate the
Project by selling Federal and state Low Income Housing Tax
Credits to equity investors who will be the Limited Partners in a
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Limi ted Partnership managed by CCSM. The proj ect will receive
approximately $2.2 million (net) from these Limited Partners.
CCSM will seek state Rental Housing Construction Program funds of
$1.1 million. This will leave a financing gap of approximately
$2.7 million for which CCSM is seeking a loan from the Citywide
Housing Trust Fund. The requested Program loan is equivalent to
$60,000 per eligible unit.
FINANCIAL/BUDGETARY IMPACT
No financial or budgetary action is required at this time. The
proposed project is eligible for funding under Citywide Housing
Trust Fund Program guidelines, and a Program loan may be approved
administratively, assuming Program funds are available and Pro-
gram guidelines met. The city council has previously appropriated
$4.4 million for expenditure pursuant to Program guidelines.
RECOMMENDATIONS
It is recommended that the City Council:
1. Approve in concept the Lincoln-Ashland project, which shall
be developed by CCSM according to the development criteria out-
lined in this report; and
2. Authorize the city Manager to review and commit the use of
citywide Housing Trust Fund loan funds in excess of $2 million in
accordance with City Council approved Program guidelines.
Prepared by: Jeff Mudrick, Acting Housing Program Manager
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