sr-081010-8e~® City Council and
°tv °f Redevelopment Agency Report
Santa Monica
City Council and Redevelopment Agency Meeting: August 10, 2010
Agenda Item: ~-~
To: Mayor and City Council
Chairperson and Redevelopment Agency
From: Andy Agle, Director of Housing and Economic Development
Carol Swindell, Director of Finance
Subject: Cooperation Agreement for the Agency's Five-Year Implementation Plan
Projects
Recommended Action
Staff recommends that the City Council (Council):
1) Adopt a resolution (Attachment A) finding the use of funds from the
Redevelopment Agency for the Projects to be of benefit to the Earthquake
Recovery Redevelopment Project, Downtown Redevelopment Project, and
Ocean Park 1A and 1 B Redevelopment Projects (collectively, "the Project
Areas"); and
2) Authorize the City Manager to execute a Cooperation Agreement between the
City and the Redevelopment Agency for payment of the costs associated with the
Projects.
Staff recommends that the Redevelopment Agency (Agency):
1) Adopt a Resolution (Attachment B) finding the use of funds from the
Redevelopment Agency for the Projects to be of benefit to the Earthquake
Recovery Redevelopment Project (ERRPA), Downtown Redevelopment Project,
and Ocean Park 1A and 1B Redevelopment Projects; and,
2) Authorize the Executive Director to execute a Cooperation Agreement between
the Redevelopment Agency and the City for payment of the costs associated with
the Projects.
Executive Summary
This staff report recommends the completion of certain actions by the Council and
Agency, as required by California Redevelopment Law, in order to finance the Projects
as described within this report with redevelopment funds. Specifically, the Council and
Agency must execute a cooperation agreement and adopt resolutions making certain
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findings of benefit. The Cooperation Agreement will provide for the implementation of
redevelopment activities associated with the Projects, and will allow the Agency to make
payments to the City for certain costs related to undertaking the redevelopment
activities on behalf of the Agency.
Background
On November 17, 2009, the Agency adopted its Five-Year Implementation Plan (the
"Plan") for the period of FY 2009-10 through FY 2013-14, with established goals to
support affordable housing, disaster prevention and mitigation, community revitalization,
commercial revitalization, and institutional revitalization.. To implement the programs
and activities (the "Projects") associated with each goal, the Agency made
redevelopment fund allocations totaling approximately $283 million, based on a variety
of assumptions regarding growth in tax increment, borrowing costs, timing of borrowing,
State grabs of local funds, leveraging opportunities and State law.
Discussion
The capital improvements and affordable housing activities associated with the Projects
are considerable undertakings. Specifically, the Projects are comprised, but not limited
to, the following efforts:
• Affordable Housing: In addition to the Project Areas' anticipated 20 percent
housing set-aside increment revenues, invest non-housing funds toward the
preservation and production of affordable housing.
• Disaster Prevention and Mitigation: To fund disaster prevention and
mitigation programs to meet the City's seismic retrofit needs and mitigate
against effects of future disasters. Funds will be used for rehabilitation of the
Santa Monica Civic Auditorium, implementation of the Traffic Signal Master
Plan and property acquisition to support the reconstruction and expansion of
parking resources called for in the Downtown Parking Strategic Plan.
• Community Revitalization: To improve, repair, rebuild and provide parks
and community facilities including: the Palisades Garden Walk and Town
Square parks, open space-and facilities in the Civic Auditorium District, the
Civic Center early childhood education center, the Pico Neighborhood Library,
planning and design for the Civic Center parks and facilities, and the
Memorial Park expansion.
• Commercial Revitalization: To revitalize and promote economic investment
and business expansion in the Project Areas or of benefit to the Project
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Areas, and preserve the area's existing employment base by supporting
improved access to the Project Areas by employees and customers, primarily
by supporting enhancements to the Exposition Light Rail Station Areas.
• Institutional Revitalization: To help achieve community goals associated
with the Santa Monica-Malibu School District's master plan for the Santa
Monica High School campus, including designing and constructing facilities
for joint-use between the school and the broader community.
In considering the Agency's desire to ensure the timely implementation and completion
of the Projects, the Agency wishes to enter into a cooperation agreement with the City
for the pledge of net available tax increment to finance the public improvements and
affordable housing programs outlined in the Agency's current and prospective
implementation plans. The Projects outlined above will constitute the first tier of
improvements the Agency wishes the City to carry out. In the event there are sufficient
net available tax increment funds to finance additional improvements, the Agency
wishes the City to carry out the second tier of improvements listed in the attached
resolutions.
Under California Redevelopment Law, section 33220(e), certain public bodies, including
the City, may aid and cooperate in the planning, undertaking, construction, or operation
of redevelopment projects. To carry out the Projects in accordance with the objectives
and purposes of the Plan, the Agency desires assistance and cooperation in
administering the development, construction, improvement, infrastructure, occupancy,
and use requirements applicable to the Projects. The City agrees to aid the Agency and
cooperate with the Agency to expeditiously implement the Projects in accordance with
the Plan and undertake and complete all actions necessary or appropriate to ensure
that the objectives of the Plan are fulfilled within the time effectiveness of-the Project
Areas.
Collectively, the purpose of the Agreement is to facilitate the implementation of the
Projects and to provide funding necessary to effectuate the completion of the Projects
with net available tax increment in this current fiscal year and forthcoming fiscal years,
until the expiration of the Earthquake Recovery Redevelopment Project area in 2042,
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the Downtown Redevelopment Project area in 2029 and the Ocean Park 1A and 16
Redevelopment Project areas in 2022. Net available tax increment is defined as any
available tax increment, net of statutory pass-through payments, set-asides for
affordable housing, debt service payments, and existing contractual obligations. The
pledge of net available tax increment will constitute obligations to make payments
authorized and incurred pursuant to Section 33445. The obligations to be set -forth in
the Agreement, as recommended in this report, will be contractual obligations that, if
breached, could subject the Agency to damages or other liabilities or remedies. In this
regard, the Agreement will provide that actual payment for the Projects will be
contingent upon their preparation in accordance with the applicable provisions of
federal, state and local laws, including the obligation to comply with environmental laws
such as CEQA.
The first component of the financing plan associated with the Agreement will come back
to Council for consideration in the Fall. It is anticipated that among various options to
finance the obligations of the Projects, the financing plan will include pledge of tax
increment from the Earthquake Recovery Redevelopment Project Area to issue bonds.
The proceeds of the bonds secured by a pledge of tax increment will be utilized to make
payments on indebtedness of the Agency or to directly pay the costs of public
infrastructure and other public improvements and activities associated with the Projects
or to refinance the Agency's contractual obligations in the Agreement.
The Agreement will allow the Agency to record the financial obligations as
indebtedness. The resolutions must be adopted in order to make the appropriate
findings as required by the Health and Safety Code Section 33445. The attached
resolutions find that: 1) the use of these funds is a benefit to the Earthquake. Recovery
Redevelopment Project, Downtown Redevelopment Project, and Ocean Park 1A and 1 B
Redevelopment Project areas; 2) no other reasonable means of financing for the
improvements is available; 3) the payment of funds for the Projects will assist in the
elimination of one or more of the conditions resulting from the Earthquake Recovery
Redevelopment Project, Downtown Redevelopment Project, and Ocean Park 1A and
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16 Redevelopment Project Areas; and, 4) the Projects are consistent with the
Redevelopment Agency's Five-Year Implementation Plan.
In accordance with Health and Safety Code Section 33679, the Agency published two
public hearing notices, on July 27 and August 3, 2010, in the Santa Monica Daily Press,
informing the public about this meeting and the availability of a summary report for
review and input. A copy of the summary report is provided in this report as
Attachment C.
Financial and Budget Actions
There are no immediate budgetary impacts associated with the actions recommended
in this report. The Agreement is not intended to, and does not, create any commitment
of the City's General Fund in any manner that would violate the debt limitations under
article XVI, section 18 of the State Constitution or the fiscal provisions of the City's
Charter.
Prepared by: Nia Tang, Senior Development Analyst
Andy Agle, Directc
Housing and Econ
A
a
I
Carol Swindell, rector
Finance
Forwarded to Council:
Rod Gould
City Manager
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Attachments:
Attachment A:
Attachment B:
Attachment C:
City Council Resolution for the Projects
Redevelopment Agency Resolution for the Projects
Section 33679 Summary Report
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A-I-fACFi(VIEI~T C
CiYY o$
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A. Introduction.
B. Project Description
The Agency's adopted FY 2009/10 - FY 33114 Pive-Year Implementation Plan includes
specific programs and goals for the Earkhquake Eieoovery F#edevelopment Project Area.
Ta support the goals of community revitalizatian, disaster prevention and mitigation, and
institutional revitalization, the Agency is proposing to fund, in part or in whole,
construction of the following publicly owned buildings {the "Projects"};
The Pico Library will be located at Virginia Avenue Park and will consist of eons-story.
7,500 square faot public library to provide a community benefit and to support
oommunity revitalization efforts in the Pica Neighborhood. Currently, this project is
estimated to be appraxirnately $12.8 million in 2030 dollars.
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ATT~ICH(NENT C
D. Facts Supporting Section 33445 Findings
Pursuant to Section 33445 of the GRL, a redevelopment agency may, with the oonsent
of the legislative body, pay all or part of the cost of the installation and oanstruotian of
any building, fac'slity, structure or other improvement which. is publicly owned either
within or without the project area, if the legislative body makes certain determinations.
The faots related to the Prajeat supparking these determinations are as follows:
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ATTACHMENT C
1. The Projects are both within and of benefit to the Project Area. The Projects will
support the established goals of the Agency's current Five-Year Implementation
Plan and furkher efforts to meet disaster prevention and mitigation, community
revitalization, and institutional revitalization needs within the Project Area;
E. Redeveiopment Purpase for which Tax Increment is Being Used
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Reference Resolution Nos.
10519 (CCS) and 527
(RAS). Reference
Contract No. 9267 (CCS).