SR-031108-1A~ rYOf City Council Report
Santa Monica
City Council Meeting: March 11, 2008
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: Long-Term Lease and Rehabilitation of the City Owned Property at 1614-
1616Ocean Avenue
Recommended Action
Staff recommends that the City Council authorize staff to solicit proposals to rehabilitate
or reconstruct the City-owned apartment building at 1614-1616 Ocean Avenue as
affordable permanent supportive housing for very-low-income, long-term Santa Monica
homeless persons, pursuant to a long-term lease.
Executive Summary
The Community Priority adopted by City Council in the FY2007-08 Budget addressing
the impacts of homelessness on the community includes a goal to "develop local
supportive housing options for chronically homeless and mentally ill people."
Staff recommends that proposals be solicited to long-term lease, redesign and
rehabilitate or reconstruct the City-owned, rent-controlled, apartment building located at
1614-1616 Ocean Avenue for permanent supportive affordable housing for very low-
income, long-term Santa Monica homeless persons. Staff will solicit proposals from
interested teams of housing/social service providers, to lease, rehabilitate or
reconstruct, manage and provide supportive services at the property for the target
population. Staff will evaluate the proposals and return to Council at a later date with
recommendations.
Eventual selection of a qualified housing provider with supportive housing capability will
provide a basis to complete a conceptual plan for the redesign or reconstruction of the
.building to enhance its compatibility with surrounding public and commercial spaces,
and to better serve and protect the privacy of the target population. Rehabilitation or
reconstruction of the building is expected eventually to require a loan of City housing
trust funds.
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Discussion
There is an urgent need for permanent affordable supportive housing for very low
income (30% of area median income) Santa Monica homeless persons. It is estimated
that on any given day there are between 100 and 300 chronically homeless persons on
the streets of Santa Monica. The recently completed Service Registry project identified
110 of these homeless individuals as Santa Monica's most vulnerable homeless and
they have been prioritized by length of time homeless in Santa Monica. Providing
seventeen units of permanent affordable housing, in conjunction with supportive
services, would begin to address the need for permanent affordable housing for the
chronically homeless members of our community.
1614-16 Ocean Avenue
In 1973, the City purchased 1614-16 Ocean Avenue, a seventeen unit residential rental
property with two commercial units (a total of nineteen units), for the purpose of
expanding highway access to Pacific Coast Highway (PCH). The PCH improvements
were never carried out and the property has remained in City ownership ever since.
Over the past several decades, the Housing Division has overseen the management of
this rent controlled property.
Currently, the building, constructed in 1953, is partially occupied by OPCC's Daybreak
Center, a social services program that provides emergency assistance, counseling and
services for mentally ill homeless women. Daybreak Center currently leases five units
on the first floor to provide day services to its clients. An additional seven units are
occupied by residential tenants and seven units are currently vacant and in the process
of being rehabilitated. Please see next page for 1616 Ocean Ave site location map.
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Site Map
Location of 1616 Ocean Avenue
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Options Evaluated
Given the value of properties in the oceanfront area, as well as opportunities to better
integrate the site with adjacent open space and commercial uses, the City Manager
directed staff to complete a full evaluation of options related to this City-owned property,
prior to soliciting proposals for supportive services.
Staff evaluated several scenarios, including:
1) continue operating 1616 Ocean "as is", filling empty units with homeless persons.
2) transfer responsibility via along-term lease to a special needs housing provider.
3) replace the existing building with a new building on the site.
4) lease or sell the site on the open market for private use and build a new facility
elsewhere or acquire and rehabilitate a replacement project elsewhere.
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In each of the above scenarios, staff evaluated the option of retaining the Daybreak
Center on-site with the proposed supportive housing and the option of permanently
relocating Daybreak to another location separate from the supportive housing. Staff's
analysis also included the financial considerations of a) total development cost, b) City
Housing Trust Funds Subsidy, c) thirty year tax revenue stream to the City, and d) thirty
year rental cost stream for Daybreak.
Based on the foregoing analysis, staff recommends the transfer of 1616 Ocean, via a
long-term lease, to a housing provider to operate as permanent supportive housing for
long-term Santa Monica homeless persons, retain Daybreak on site and upgrade the
building to be compatible with surrounding uses. The proposed rehabilitation or
reconstruction will include elements designed to enhance the relationship of the
property to current and future open space, commercial and visitor-serving uses and
improve pedestrian circulation on Ocean Avenue in a manner that better protects the
privacy of residents and Daybreak clients entering the facility.
Staff further recommends that upon transfer of the property and completion of the
redesign and rehabilitation, the remaining seven units be leased to very low income
long-term Santa Monica homeless persons. The seven existing tenants would be
allowed to remain in the building. Through attrition, these units will be reoccupied by
long-term homeless persons. The seven existing tenants will be provided all of the
occupancy protections and benefits under City ordinances and Rent Control regulations.
Temporary relocation benefits have been included in the estimated costs of the
remodeling of the building and will be provided to all existing tenants, as necessary.
Alternatives
Alternatives to the recommended action are:
1) Continue to operate 1616 Ocean Avenue as a City-owned, privately managed
property and fill empty units with the target population. This alternative would have no
additional cost to the City; however, staff recommends that it is not in the City's best
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long term interest to manage the 1616 Ocean Ave property, and that a housing
provider is better able to operate 1616 as a "special needs" development.
2) Replace 1616 with a new apartment building. This alternative would be more
architecturally compatible with surrounding buildings; however, a new building would
be a more expensive alternative and take 2 to 4 years. The estimated cost to the City
is $2,000,000.
3) Sell 1616 on the open market for private use and build a new facility elsewhere.. This
alternative, and the likely Ellising of the rent-controlled residences, would be contrary
to the City's efforts to protect rent-controlled housing and would likely necessitate the
relocation of the Daybreak Center. The net estimated cost to the City, after
considering the proceeds of the sale, would be $1.5 million ,and assumes Daybreak
relocation expenses. This alternative would also take 2 to 4 years to implement.
The RFP Process and Anticipated Citv Participation
Subject to City Council approval, staff will solicit proposals from qualified housing
providers with the capacity to develop and manage affordable permanent supportive
housing for the target population. Supportive services may be provided by the owner
directly or subcontracted to a qualified provider.
Staff proposes to identify the following priorities within the solicitation:
• the property must be developed as affordable permanent supportive housing for
very low income (30 percent of the county median income level), long-term Santa
Monica homeless men and women.
• the property must be redesigned and rehabilitated or reconstructed to be
compatible with the surrounding residential and commercial neighborhood and
enhance the relationship between current and future park and commercial uses
• the redesigned facility must include the current on-site Daybreak service for
chronically homeless women and address pedestrian circulation in a manner that
protects the privacy of the clients and the building residents as they enter and
leave the property.
• ground-floor, pedestrian-oriented uses on the Ocean Avenue frontage, as well as
landscaping and other open space elements to enhance the connection between
Palisades Park and the future Palisades Garden Walk, are preferred, in order to
ensure compatibility with existing and planned surrounding uses.
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• the property may contain no less than seventeen (17) rental units with two (2)
commercial units.
• rehabilitation or reconstruction must pay State Prevailing Wages.
• rehabilitation or reconstruction must comply with the City's Sustainable Building
program.
The RFP process, from release to staff recommendation of a nonprofit provider, is
expected to take four to six months. At the end of the RFP process, staff will return to
City Council with a recommended proposal that includes the selection of a qualified
housing provider with supportive housing capability, a conceptual plan for the redesign
of the building, the structure of a long-term lease, the plan for building management, a
supportive services plan, and a financing plan for the rehabilitation or reconstruction of
the property and for the supportive services.
Commission Actions
The Social Service Commission discussed the long-term lease of 1614-1616 Ocean
Avenue as affordable special needs rental housing at their February 25, 2008 meeting
and voted to support the staff recommendation and the use of City-owned property in a
prime location for supportive housing for homeless persons. The Housing Commission
discussed this item at their February 21, 2008 meeting and voted to support staff
recommendations and explore other sites and opportunities that would increase the
total number of homeless persons served. The Commission on the Status of Women
(COSW) considered the issue at their February 13 meeting and voted to support the
concept of permanent supportive housing for vulnerable populations. The COSW
further requested that respondents to the City proposal for site operators address the
feasibility of creating agender-specific housing development and those respondents
who provide a plan for women-only housing receive priority.
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Financial Impact & Budget Actions
There is no direct financial impact associated with authorizing the publication of the
RFP. Staff anticipates that the long-term lease and rehabilitation of the property will
require a commitment of City housing trust funds to be financially feasible. Given that
the City has recently upgraded or replaced various building systems, staff estimates
that, if approved, a City rehabilitation loan for additional work required will be in the
$600,000 to $800,000 range. If reconstruction presents the best option, the trust fund
commitment will be considerably greater.
Prepared by:
Stacy Rowe, Human Services Administrator
Mike Strader, Senior Administrative Analyst, Housing
Approved:
Andy Agle, Director
Housing and Econom evelopment
Approved:
Barbara Stinchfield, Director
Community and Cultural Services
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lint ~ + i zC b
Social Services Commission
7685 Main Street
PO Box 2200
Santa Monica, California 90407-2200
city of
Sa~ata IVdonica`"
March 10, 2008
Honorable Mayor Herb Katz
City Council Members
City of Santa Monica
1685 Main Street
Santa Monica, CA 90401..
Dear Mayor Katz and City Council:
In its role as an advisory body to the City Council and as representatives of the Santa Monica community,
the Social Services Commission felt it was important to provide feedback on the long-term lease and
rehabilitation of the City owned property at 1614-1616 Ocean Avenue for affordable supportive housing
for long-term Santa Monica homeless persons. Our comments are as follows,
First, we strongly support the idea of allowing the property to be converted into supportive housing for
Santa Monica's chronically homeless population. We know, and research consistently tells us, that
supportive housing is a more effective solution for long-term homeless persons who encounter many
obstacles to obtaining and maintaining housing. By focusing on the hardest to serve folks on the streets,
the City affirms its commitment to providing safe and affordable housing to all members of the Santa
Monica community.
Second, increasing the stock of permanent supportive housing ih the City is an important step toward
putting the recommendations of the Urban Institute into action. Further, more affordable housing; and in
particular affordable housing for the chronically homeless; is consistent with the Commission's belief that
housing is a right for all and not a luxury for some. Providing deeply affordable housing connected to
supportive services means that those who have lived on Santa Monica's streets for many years and who
have been for better or for worse, a part of the Santa Monica community for all that time will now have the
opportunity to better themselves and their community.
Lastly, Santa Monica has often been described as a community that is progressive and compassionate..
What better way to highlight. those characteristics than developing supportive housing in a highly visible
and prosperous part of the City -and right on the beach as well! It would be great to bring affordable
housing developers, social service providers, and government officials from all over the State of California
and across the United States to Santa Monica to show off the City's commitment to providing real
solutions to preventing and ending homelessness.
Again, we truly appreciate the time and energy that
develop 1614-1616 Ocean Avenue into affordable
homeless persons. We look forward to your final
opportunities for the Social Services Commission
homelessness in the City of Santa Monica.
went into the recommendation from City staff to
supportive housing for long-term Santa Monica
decision. In addition, we look forward to future
to participate in the dialogue on addressing
Respectfully,
.~.~1'u-~,-~~ ,~u,~.,.~~>~, CAS)
SOCIAL SERVICES COMMISSION
City of Santa Monica
tel: 310458-8701 • fax: 370 458-3380 • TDD: 310 455-8696 ~~;~~~ ~ ~ s.Q~B
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