SR-09-09-1986-CCRA3C/ED:HSG:JG:jt
Redevelopment Agency Meeting: 9/9/86
TO: Chairperson and Redevelopment Agency
FROM: Redevelopment Agency Staff
SUBJECT: Recommendation to Adopt a Resolution Providing Site
Control on Ocean Park Replacement Housing Sites to Com-
munity Corporation of Santa Monica, and to Increase
Predevelopment Contract with Community Corporation of
Santa Monica
INTRODUCTION
This report transmits for adoption a resolution authorizing the
sale of land to Community Corporation of Santa Monica (CCSM) for
the development of fifty-five (55) units of affordable housing in
Ocean Park contingent on the receipt of a Housing Development
Grant or other favorable financing, the execution of a Develop-
ment and Disposition Agreement, and a public hearing to be held
on the sale of land. The report also recommends that the Re-
development Agency authorize the Executive Director to release
additional funds under the contract with CCSM for predevelopment
costs on the Ocean Park Replacement Housing Project.
BACKGROUND
In April, 1983 the Redevelopment Agency approved a plan for the
campletion of the Ocean Park Redevelopment Project that included
a requirement that the Agency construct fifty-five (55) units of
affordable housing for low and moderate income persons within the
Ocean Park area.
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S~Y ~ 1995
On September 10, 1985 the Redevelopment Agency established
development criteria for the replacement housing and designated
Community Corporation of Santa Monica (CCSM) as the developer.
To date, CCSM has conducted community design workshops, completed
the architectural work including Architectural Review Board ap-
proval, completed engineering and soils work, worked with the
City on applications for financing, developed working drawings
and issued invitations for construction bids.
In order to proceed with the final stages of design and planning,
and securing of financing, two steps must be taken by the
Redevelopment Agency. These actions include (1) adopting a
resolution authorizing the sale of the sites to CCSM for the
development of affordable housing, and (2) increasing the
contract for design and planning services. The following
discusses these actions.
DISCUSSION
Resolution Authorizing the Sale of Land
On July 8, 1986 the City Council authorized the submittal of a
Housing Development Grant (HODAG) for the Ocean Park 43 Coopera-
tive. HUD requires in cases where the local agency owned the
land that a resolution providing site control to the developer be
adopted and transmitted to HUD by September 18, 1986. The at-
tached resolution authorizes the sale of land purchased by the
Redevelopment Agency for the Ocean Park Replacement Housing Proj-
ect to be sold to Community Corporation of Santa Monica contin-
gent upon the receipt of a HODAG or other favorable financing,
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the execution of a Development and Disposition Agreement (DDA),
and the holding of a public hearing. This resolution is suffi-
cient to prove site control for the HODAG application. The actu-
al Development and Disposition Agreement will be submitted to the
Agency in the next several months after HUD notifies the Agency
as to whether or not a HODAG was granted.
Predevelopment Contract and Release of Development Fees
The Redevelopment Agency authorized the disbursal of up to
$215,000 for predevelopment expenses. These funds were budgeted
as follows:
A. Architectural Services for Co-op $142,000
B. Architectural Services for Rentals 49,500
C. Engineering, Planning, Soils Surveys 13,500
D. Payment of Governmental Agency or
Financing Application F ees 10.000
TOTAL $215,000
This budget was based on staff's best estimate of predevelopment
expenses. However, the costs of financing application fees, and
planning and coastal fees were higher than projected. A number
of expenditures have been moved forward in the project timeline
of the project, including the payment of some of the architec-
tural services, sewer and water hookup, and Parks and Recreation
fees which were originally anticipated to be paid during the con-
struction phase. In addition, if the HODAG application is ap-
proved, a number of architectural changes will be required in the
project. Staff recommends that funds to pay for such changes be
added to the predevelopment budget for the project.
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An updated predevelopment budget is presented below:
A. Architectural Services for Co-op $178,377
B. Architectural Services for Rentals 49,600
C. Contingency for archit ectural changes 5,000
D. Engineering, Planning, Soils Surveys 19,480
E. Payment of Plan Check and Permit Fees 72,050
F. Financing Fees 27,500
TOTAL $352,007
The revised contract amount for design .and planning costs of
$352,007 will not change the overall project budget due to other
planned cost savings. The recommended actions will only affect
the timing of the release of already budgeted funds.
In addition to the increase in the contract for predevelopment
expenses it is also recommended that the Redevelopment Agency
approve the CCSM's request for the payment of their development
fee in stages, consistent with the procedure set forth in the
Citywide Housing Acquisition and Rehabilitation Program (CHARP)
Guidelines staff report. The procedure recommended for CHARP
projects, allows for the disbursal of the development fee of one
and one-half percent (1.5%) in stages. CCSM has received all
applicable planning and design approvals and has issued bids for
the OP 55; thus they would be eligible to receive two-thirds of
the total development fee. It is estimated that total develop-
ment costs for the entire fifty-five units is $6,565,113, includ-
ing a developer fee of $97,021.
Next Steps
Upon notification from HUD regarding the City's HODAG application
the financing for the Ocean Park 55 Replacement Housing Project
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will be finalized. Staff will return to the Agency after Septem-
ber 30th with the financing and site plans, and for review and
approval of the Development and Disposition Agreement (DDA). The
DDA will include the final rent schedule, occupancy requirements,
tenant selection policy, land sale price, and structure of the
cooperative.
FINANCIAL/BUDGETARY IMPACTS
Funds for the increase in the contract for predevelopment expen-
ses and developer fee payment are available in the Ocean Park 55
Replacement Housing Project as follows:
Account No. 18-720-264-128-905 $147,185
Account No. 18-720-264-129-905 $ 54,438
TOTAL: $201,623
No additional budgetary action is required.
RECOMMENDATIONS
It is recommended that the Redevelopment Agency:
1. Adopt the attached Resolution authorizing the Sale of
Land to Community Corporation of Santa Monica for the
Development of Affordable Housing.
2. Approve the increase of $137,007 to the predeveloment
expenses contract by and between the Redevelopment Agency
and Community Corporation of Santa Monica, and authorize
the Executive Director to execute an amendment as
detailed in this report.
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3. Authorize the release of $64,616, two-thirds of the total
development fee estimated at $97,021 to Community Cor-
poration of Santa Monica at this time.
Prepared by: Candy Rupp, Development Analyst
Jack Gardner, Housing Analyst
Department of Community & Economic Development
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DISTRIBUTLON OF RESOLUTION Q ORDINANCE # -
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Council Meeting Date ~p to Introduced:
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Was. it amended? ~r~ *Cross ouE Attorney' s approval
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Abstain:
Absent:
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SAi?TA MONICA, CA 9Q401 TOTAL COPIES ,
RESOLUTION NUMBER 412 (RAS)
(Redevelopment Agency Series)
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA AUTHORIZING THE SALE OF LAND TO
COMMUNITY CORPORATION OF SANTA MONICA FOR THE DEVELOP-
MENT OF AFFORDABLE HOUSING.
WHEREAS, the Redevelopment Agency owns land located at:
3005 Highland Avenue, 2400 Fifth Street, 2207 Sixth Street, 518-
20 Pier Avenue, 642 Marine Street, 504 Ashland Street, and 536
Ashland Street, herein referred to as land; and
WHEREAS, the Redevelopment Agency has approved and is en- -:z,«=a=
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gaged in carrying out the Redevelopment Plan for the Ocean Park -'-
Redevelopment Project; and
• WHEREAS, the Redevelopment Plan for the Ocean Park Re-
development Project requires the construction of fifty-five (55)
units of affordable housing; and
WHEREAS, the Redevelopment Agency has purchased the land for
the development of fifty-five (55) units of affordable housing in
Ocean Park; and
WHEREAS, the Redevelopment Agency held a public hearing on
September 10, 1985 on the proposed sale of land without public
bid as required by California Health and Safety Code Section
33433; and
WHEREAS, the Redevelopment Agency has selected Community
Corporation of Santa Monica to develop the fifty-five (55) units
of affordable housing.
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Adopted and approved this 9th day of September, 1986.
I hereby certify that the foregoing Resolution No. 412(RAS)
was duly adopted by the Redevelopment Agency of the City of Santa
Monica at a meeting thereof held on September 9, 1986 by the
following Agency vote:
Ayes: Agency Members: Conn, Epstein, Jennings, A. Katz,
H. Katz, Zane and Mayor Reed
Noes: Agency Members: None
Abstain: Agency Members: None
Absent: Agency Members: None
ATTEST:
~~ ~~
Secretary
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NOW THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA
MONICA DOES RESOLVE AS FOLLOWS:
SECTION 1. The Redevelopment Agency agrees to sell the land
to Community Corporation of Santa Monica (CCSM) subject to:
A. Receipt of funding commitment from HUD under the Housing
Development Grant Program.
B. ..Execution of a Development and Disposition Agreement
between the Redevelopment Agency and CCSM.
C. A public hearing to be held at such time as the Re- ~--
development Agency is requested to approve the Development and
Disposition Agreement between the Redevelopment Agency and CCSM.
SECTION 2. The Agency Secretary shall certify to the adop-
tion of this resolution, and thenceforth and thereafter the same
shall be in full force and effect.
APPROVED AS TO FORM:
tZ..rfr,_7f ~.. ~-~
Robert M. Myers
Agency Attorney
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