SR-03-02-1997-5C
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California
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C/ED: HD:JG: jt
city council: 2/23/88
Santa Monica,
TO:
Mayor and City council
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MAR , c; 19B'
Recommendation to Adopt Resolution Authorizing the Sale
of Property at 1747 Fifteenth Street to Community Cor-
poration of Santa Monica for Development of Affordable
Housing
city staff
FROM:
SUBJECT:
INTRODUCTION
This report recommends that the City Council adopt a resolution
authorizing the sale of the property at 1747 Fifteenth street,
without public bidding, to community Corporation of Santa Monica
for development of affordable housing.
BACKGROUND
The City acquired a parcel of unimproved real property at 1747
Fifteenth Street in May, 1971, for a cemetery expansion that was
subsequently re-evaluated and cancelled.
The property is cur-
rently being used by the Cemetery Division of the Department of
General Services for dirt storage and equipment maintenance.
After construction of new dirt storage bins and reconstruction of
Palm Avenue at Woodlawn Cemetery in November of this year, the
Cemetery Division will no longer require the use of this site.
The Department of General Services has therefore indicated that
the property is surplus, and that the Department would like to
sell it to generate revenue for the cemetery Perpetual Care Fund.
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MAR 1 5 1988
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DISCUSSION
California Government Code Section 54222(a) requires a local
agency disposing of surplus property to first offer to sell or
lease it nfor the purpose of developing low- and moderate-income
housing." city staff has analyzed the feasibility of developing
affordable housing on the Fifteenth street property and has
determined that it is ideally suited for such development, given
its R-2 zoning and its location in a residential neighborhood.
proposed Project Description
staff is proposing that the property be sold to a non-profit
housing development corporation for development of nine (9) af-
fordable housing units, consisting of two one-bedroom, four two-
bedroom, and three three-bedroom units. The units would be af-
fordable to and occupied by a mix of very low, low, and moderate
income households. These units would be part of the thirty (30)
"Greenwood" affordable housing units which the City is required
to assist in the development of under Ordinance No. 1398 (CCS).
Proposed Financing
The proposed project would be financed with a mixture of private
debt financing, equi ty from sale of the proj act's low income
housing' tax credits, and a City loan of ItGreenwoodlt Development
Agreement funds. The proposed project could support a conven-
tional mortgage of approximately $266,000, syndication of the
project would generate approximately $350,000 in equity funds,
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and the proj ect would be eligible for a City loan of up to
$450,000 of "Greenwood" Development Agreement funds.
Project Developer
staff is proposing that the property be sold for its appraised
market value to Community Corporation of Santa Monica (CCSM), a
local non-profit housing development corporation with extensive
experience in developing and managing affordable housing. CCSM
has proven its capacity to assemble highly leveraged financing
packages, and is in a unique position to take advantage of the
new Federal and state low income housing tax credit.
Proposed Sale
The Fifteenth street property was recently appraised as having a
market value of $281,000. Of the property's sale price, $200,000
of the proceeds from the sale would be appropriated to the Ceme-
teryls Perpetual Care Fund to support perpetual care maintenance
of Woodlawn Cemetery. The remaining $81,000 will be expended by
the cemetery Division to build new dirt storage bins, and to use
the dirt currently stored on the Fifteenth street property to
reconstruct Palm Avenue at the cemetery.
It is anticipated that the construction of the new storage bins
will be completed by the end of November, 1988. The sale of the
property would therefore take place in December of this year.
Approval of the sale at this point in time would provide CCSM
with site control and allow it to proceed with planning for the
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site's development. A Grant Deed containing provisions restrict-
ing the use of the property to development of affordable housing
would be executed by and between the city and CCSM.
PUblic Notice
Section 2508A of the Municipal code, as amended by Ordinance No.
ll25 (CCS), allows for the sale of city-owned property without
pUblic bidding if it is in the best interests of the city. Due
both to CCSM's experience in developing and managing affordable
housing for low and moderate income households, and its demon-
strated ability to put together the required financing, the at-
tached resolution finds it in the best interests of the city to
provide CCSM with an exclusive option to purchase the property
for its market value.
The Municipal Code requires that a public hearing be held prior
to the sale of City-owned property without public bidding. A
notice was therefore published in the Evening Outlook on February
l3th and 20th, and posted in three conspicuous places on the
property itself, specifying the time and place of a public hear-
ing to be held on the proposed sale. In addition, CCSM is work-
ing with the neighbors to inform them of the proposed sale and,
if the sale is approved, will continue to work with both the
neighbors and the Pico Neighborhood Association on the design of
the housing.
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BUDGETARY/FINANCIAL IMPACT
As described herein the property at 1747 Fifteenth Street would
be sold to CCSM for its appraised value of $281,000. This sale
would increase the Cemetery's "Sale of Fixed Assets" revenue ac-
count, #37-913-180-000-000, by $281,000.
A portion of the sale proceeds, $81,000, would be used to finance
appropriation increases for the following purposes:
1. $2,000 at account #37-500-641-000-741 for construction of
new dirt and compost storage bins; and
2. $79,000 at account #37-710-641-000-911 for removal of Myrtle
Avenue and reconstruction of Palm Avenue at the Cemetery.
RECOMMENDATIONS
It is recommended that the City Council:
1. Hold a public hearing on the proposed sale without public
bidding of the property at 1747 Fifteenth street to community
Corporation of Santa Monica for the development of affordable
housing;
2. Adopt the attached resolution authorizing the sale of the
property at 1747 Fifteenth street to Community Corporation of
Santa Monica contingent upon receipt of a financing commit-
ment from a lender, receipt of all necessary planning approv-
als for the development of affordable housing on the site T
and execution of a Grant Deed;
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3. Authorize the City Manager to execute any and all documents
required for the sale of the property as described herein:
4. Increase the revenue budget at account #37-913-180-000-000 by
$281,000: and
5. Appropriate $81,000 as follows:
A. $2,000 at account #37-500-64l-000-741 for construction
of new dirt and compost storage bins; and
B. $79,000 at account #37-710-641-000-911 for removal of
Myrtle Avenue and reconstruction of Palm Avenue at the
Cemetery.
Prepared by: Jack Gardner, Sr. Development Analyst
Candy Rupp, Housing Program Manager
Department of Community & Economic Development
Attachments: 1) Resolution
2) Public Notice
:sale
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