SR-111307-1Cc7®
~;LYof City Council Report
.Santa Monica
City Council Meeting: November 13, 2007
Agenda Item: ~ -~
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Barbara Stinchfield, Director of Community and Cultural Services
Subject: Housing Trust Fund Loan to Upward Bound House for a Regional
Emergency Shelter for Families with Children located in Culver City
Recommended Action
Staff recommends that the City Council:
1) approve a housing trust fund loan to Upward Bound House in an amount not to
exceed $400,000 for the acquisition of a twenty-unit motel at 12841 West
Washington Boulevard in Culver City as Santa Monica's contribution toward a
regional emergency shelter for homeless families with children; and
2) authorize the City Manager to negotiate and execute all documents necessary to
provide this funding.
Executive Summary
Upward Bound House, a Santa Monica based nonprofit organization, has applied for
Housing Trust Fund financing of $400,000 toward the acquisition of an existing twenty-
unit motel located at 12841 West Washington Boulevard in Culver City for use as a
regional emergency shelter for families. Typically, such financing is approved
administratively pursuant to the Housing Trust Fund Guidelines adopted by the City
Council. However, due to the location of the proposed project outside of the City of
-1-
Santa Monica, Council approval is required. Currently, the City of Beverly Hills, City of
Los Angeles, County of Los Angeles and the State of California have committed funding
for the development. If approved, and pending the conditional use permit from Culver
City, the motel will be purchased and renovated for use as a 72-bed emergency shelter
for homeless families with minor children. The emergency shelter will provide case
management and support services targeted to the goal of permanent housing for
homeless families with minor children and would be deed restricted for a period of at
least 55 years. (See loan terms in Attachment A)
Discussion
The City's current Housing Element and Consolidated Plan have identified homeless
individuals and families in Santa Monica for priority assistance. The action plan to
address homelessness includes working collaboratively with nonprofit agencies and
other jurisdictions in the region to facilitate the provision of emergency, transitional and
permanent housing for the homeless, including homeless families with children.
Addressing homelessness in Santa Monica involves. addressing homelessness in all of
Los Angeles County, including the Westside region. The City of Santa Monica is one
entity in a regional effort that requires the engagement of other public entities and
private area-wide partners. The development of a regional emergency shelter for
families with children in conjunction with Culver City, Beverly Hills, City of Los Angeles
and County of Los Angeles would further a regional "fair share" strategy regarding
homelessness and directly benefit homeless families on the Westside, including those
in Santa Monica.
2
The proposed emergency shelter will be located in an area of Culver City that is
adjacent to Venice, Mar Vista and the unincorporated area of Marina Del Rey. While
relatively close to Santa Monica, this project responds directly to Santa Monica's call for
regional responsibility by locating the facility outside Santa Monica and obtaining capital
and operating support from other jurisdictions and entities. Further, the program and
services provided will be targeted toward the transition from homelessness to
permanent housing as rapidly as possible, an approach known as "Housing First".
If approved, this will be the third City funded homeless facility located outside the City of
Santa Monica and funded jointly with other jurisdictions. In September of 1995 Council
authorized a housing trust fund loan of $400,000 in federal HOME funds to New
Directions, Inc. for the development of a 156 bed facility for homeless veterans on the
grounds of the West Los Angeles Veterans Administration. The New Directions
development is also a regionally funded project, receiving funding from HUD and the
cities of Los Angeles, Beverly Hills, Culver City and Santa Monica. In June of 2006
Council authorized $75,000 in one-time funds to St Joseph Center's Homeless Services
Center located in Venice. St Joseph also received funding from the City of Los Angeles
and the County of Los Angeles to identify and rehabilitate a site on Lincoln Boulevard in
Venice. Other than being outside the City of Santa Monica, The Upward Bound House
homeless facility complies with the City's Housing Trust Fund Guidelines.
3
Developer Backpround
Upward Bound House Inc, located in Santa Monica, is anon-profit organization
established specifically to deal with the unmet housing and social service needs of
homeless families and very low-income elderly. Since 1990, UBH has developed and
operated three projects:
• Family Place, is a transitional housing development for families with children
located in Santa Monica. Constructed in 1997, the twenty one-unit development
provides free housing for families who agree to participate in supportive services
designed to assist them to transition to permanent housing and to remain
permanently housed. Although the length of stay may be up to twelve months,
most families stay six to ten months before moving into their own apartment.
Family Place was financed in part with City of Santa Monica Housing Trust
Funds loan of $990,000.
• Senior Villa, is a permanent housing development for very low-income seniors
located two blocks north of Wilshire Boulevard on 11th Street in Santa Monica.
This 70 unit, three-story structure over subterranean parking was built. in 2000
and financed in part with a HUD 202 grant and a City Housing Trust Fund loan of
$1,851,000. In addition to permanent housing, Senior Villa provides services for
continued independent living and assistance to~the disabled and frail elderly.
• Intergenerational Center, is a program that provides a link between. three
generations. This program builds relationships and community among the
residents of Family Place, Senior Villa and the surrounding neighborhood. A
comprehensive children's program provides educational and recreational
activities to children living at Family Place.
Project Description
The proposed emergency shelter will provide homeless families with 18 units of
emergency housing. Each room, with a maximum of four. individuals per room, will
provide safe shelter for up to 72 adults and children at any one time. Two additional
on-site residential manager apartments will provide 24/7 supervision of the facility.
All families will participate in services designed to prepare them for transitional
housing or "Housing First", a move directly into permanent affordable housing.
4
Families may stay at the facility for up to 90 days, as long as they comply with facility
rules and their agreed upon social service plan. Current maximum incomes for
eligible very low-income families (50% of area median income) will range from
approximately $29,600 for atwo-person household to $42,900 for asix-person
household.
Project Services
The proposed Upward Bound House Culver City emergency family shelter will utilize
a similar service model as Upward Bound House's existing Family Place, but will
serve as an emergency shelter rather than transitional housing, housing families with
minor children for up to 90 days. Upon enrollment into the program, families will
develop a plan to achieve stabilization and either prepare for placement in
transitional or permanent housing. The facility, if approved, will be an additional step
in the continuum of care for homeless families on the Westside and will help
Westside families with children stay in the geographical area facilitating school
attendance, parental employment and proximity to social services. There is
currently no emergency shelter on the Westside of Los Angeles that serves
homeless families in custody of minor children.
Within twenty-four hours of admission to the shelter, Upward Bound House case
managers will work with clients on development of an individualized plan. The plan
will include personal counseling, goal setting, information and referral and a daily
and weekly schedule to chart progress toward their goals. Supportive services to
5
assist clients to meet their goals will include, but not be limited to, employment
assistance, child care and child enrichment activities, health services, legal services,
money management classes, independent living skills, transportation, and housing
placement assistance.
Benefits to Santa Monica
The Upward Bound House Culver City shelter will benefit the City of Santa Monica in
two ways. First, the intake process has been designed to discourage homeless
families from outside from coming to Santa Monica agencies in search of shelter and
secondly, the project can be a source of shelter and services for Santa Monica
families experiencing homelessness.
Upward Bound House will conduct client in-takes for its Culver City shelter at partner
agencies located outside of Santa Monica. This is so that families from outside the
area are not drawn to Santa Monica providers in search of an emergency shelter
bed. If a partner agency located in Santa Monica has a family they think might be
suitable for Upward Bound House's Culver City shelter, they will refer that family to a
partner agency that is located outside of Santa Monica where Upward Bound House
will conduct the client in-take for the Culver City shelter. Upward Bound House will
make every effort to help find appropriate placements outside of Santa Monica for
families not eligible for the Culver City project and for those families put on the wait
list for the project. No agencies based in Santa Monica will be mentioned in any
advertising or literature for the shelter produced by Upward Bound House.
6
Upward Bound House remains committed to serving and supporting Santa Monica
homeless families, as such consideration for the emergency shelter program will be
given to families who are evicted from a Santa Monica address.
Project Funding
Upward Bound House is requesting $400,000 in funding from the City of Santa
Mohica to assist in the purchase of a twenty-unit motel on Washington Boulevard in
Culver City to serve as an emergency family shelter for homeless families with minor
children. The total acquisition and renovation cost of approximately $3,500,000 will
be shared as part of a collaborative "fair share" regional approach to addressing
homeless on the Westside.
Upward Bound House currently has an option to purchase the property for
$3,000,000. ACity-commissioned appraisal of the property was completed in
November 2006 and updated September 13, 2007 and estimated the value of the
property at $2,885;000. The Upward Bound House purchase price is within 3.8% of
the appraised value. Typically, a purchase price within five percent of the appraised
value is acceptable. The total development cost of acquiring and improving the
property is estimated at $3,500,000 or $175,000 per unit, or $48,611 per shelter bed.
The City total commitment of $400,000, if approved, would be $20,000 per unit or,
$5,556 per shelter bed. In addition to the purchase price and estimated cost of the
rehabilitation work, the total cost includes expenses for environmental consultants,
architects, permit fees, community outreach, capitalized replacement reserves and
7
contingency funds. Upward Bound House is not requesting a developer fee. There
will be no bank financing on the development as there will be no rental income from
the shelter to support any debt financing.
Table 1 summarizes the sources and uses of the proposed financing.
Table 1
The structure was built in 1953 and has twenty units of which eighteen are one-
bedroom units and two units are two-bedroom units. The property is in good
physical condition needing only minor renovation to convert to an emergency
8
shelter. The property also contains a laundry room, 16 parking spaces, is on a bus
route and is approximately four miles from Santa Monica.
The rehabilitation and remediation of the property involves exterior and interior
improvements. The exterior work includes roofing repairs, stucco repairs, painting
and landscape improvements. The interior work includes installation of a fire safety
system, carpeting and vinyl flooring, plumbing and light fixtures, painting the unit
interiors, and lead and asbestos removal as needed. The cost of all renovation work
is estimated at $380,000.
The terms of the proposed City financing are summarized in Attachment A and are
consistent with other affordable housing loans. The source of the City of Santa
Monica financing is federal Community Development Block Grant (CDBG) funds.
Operating Budget
Upward Bound House proposes to cover annual property and program operating
costs through grants from a diverse group of funding sources. Anticipated sources
for operating funds include: The Los Angeles County Homeless Initiative Fund, Los
Angeles County Board of Supervisor discretionary funds and other governmental
support including federal, state and local assistance and private foundations and
fundraising. Upward Bound House has successfully funded the operation of its
Family Place transitional development over the last ten years from a combination of
ongoing public and private grants and fundraising. Staff anticipates that Upward
9
Bound House will be successful in fund raising for the operation of the Culver City
shelter.
Commission Action
The Housing Commission, at its September 20, 2007 meeting received information
from staff and Upward Bound House staff, and unanimously supported the proposed
development. The Social Services Commission met on October 20, 2007 and voted
unanimously to support the project.
Environmental Analysis
The acquisition and proposed remodeling using federal funds requires an
environmental analysis. A finding of no significant impact and a request for the use
of CDBG funds was published on October 10, 2007, and transmitted to the local
HUD office on October 26, 2007. Staff anticipates receiving the HUD release of
funds the week of November 12, 2007.
Budget/Financial Impact
The housing trust fund loan amount to be awarded to Upward Bound House is not to
exceed $400,000. Funds are available in account H19005006.589000.
10
Prepared by:
Housing and Human Services Staff
Approved: Approved:
Andy Agle, Director,
Housing and Economic Development
ATTACHMENTS:
Attachment A -Loan Term Details
r~3 ~~ ~,;__"
Barbara Stinchfield, Direct~ore-
Community and Cultural Services
Attachment B -Social Service Commission Letter
11
ATTACHMENT A
Housing Trust Fund Loan Terms
Amount $400,000
Interest Rate Equal to Federal Home Loan Mortgage
Corporation rate for 30-year fixed-rate loan
Term 55-years; a 25-year extension is permitted if the
Regulatory Agreement is similarly extended
Security Promissory Note, Deed of Trust, and Regulatory
Agreement
Affordability Eligible households will be very low income (50%
of median income)
Payments made annually from 50% of "residual
receipts" [net income from operation of the
Repayment property]; If loan term and Regulatory Agreement
are extended 25 years, and the property is
satisfactorily operated for that period, any loan
balance is forgiven.
The loan may be prepaid in whole or in part at any
Prepayment time without penalty, but all covenants will remain
in effect for at least 55 years.
Resale of Not allowed without prior written approval of the
Property City during the term of the Regulatory Agreement.
Attachment B
Social Services Commission
"•--v~ 7685 Main Street
PO Box 2200
Santa Monica, Ca3ifornia 90407-2200
-
C~vily of
~96®~~aB ~Q®Ifl9L'R°•
October 23, 2007
Honorable Mayor and Members of the City Council:
i am writing to you on behalf of the Social Services Commission. The
Commission would like to voice its support of a $400,000 Housing Trust Fund
loan for Upward Bound House's purchase of the Sun Bay Motel in Culver City.
Upward Bound will be converting the facility into an Emergency Family Shelter
for homeless families with children. The shelter will serve approximately 220
children and their parents annually {including residents evicted from Santa
Monica addresses), making it a significant resource and a conscious effort to
place vulnerable children in safe housing.
The Social Services Commission is pleased with Upward Bound's approach #o
serving these families, by providing sfable, temporary housing coupled with the
critical support services that are needed. to move families inte permanent
housing, along with case management, jab skills training, and money
management. It also believes the invelvement and financial contributions of the
cities of Santa Monica, Culver City, Beverly Hills, Los Angeles, and Los Angeles
County represents a truly cellaborative approach to addressing homelessness on
a regional level.
Althcugh the Commission whole heartedly supports this Upward Bound project, it
does have reservations about the strict compliance requirements Upward Bound
places on the participants in the program. The Commission feels that strict
compliance requirements undermine the concept of "housing first" and lead to
"cherry picking" participants who are most likely to succeed. This approach leads
to great success rates, but limits the overall effect on reducing the number of
homeless. This is particularly true ih Santa Monica, because most homeless are
not families, have alcohol or drug problems, or have other issues {such as mental
health issues} which prevent them from meeting Strict compliance requirements.
Since this facility will serve homeless families with small children, the
Commission understands that it will not serve clients with substance abuse
problems or criminal histories. However, the Commission hopes the City of Santa
Monica will support homeless programs that reach homeless populations that are
difficult to serve but are nonetheless worthy of assistance.
Res ectfully r
~~ ~ StxJ
Ts ombe San
tel: 3}0458.8701 ® fax: 350 458.3380 . TDD: 370 458-8696
~~
City of
Santa Monica"
Housing and Economic Development
Interdepartmental Memorandum
DATE: October 25, 2007
TO: Don Patterson
FROM: Claudia Kompa on behalf of Andy Agle
SUBJECT: Response to Upward Bound House Staff Report
In response to the question of Culver City's contribution, they are currently working in the
regulatory environment with a CUP and subsequent to that, they will be discussing
possible operational funding contributions. However, since they will have not done so as
of yet, we should not include it in the staff report. We can answer those questions verbally
if they come up.
Thank you.
Reference Contract
No. 8853 (CCS)